PDL
BIOPHARMA, INC.

     

    2.875%
CONVERTIBLE SENIOR NOTES DUE FEBRUARY 15, 2015

     

      
        

      

    

     

    INDENTURE

    DATED AS
OF OCTOBER [    ], 2010

     

      
        

      

    

     

    THE BANK
OF NEW YORK MELLON TRUST COMPANY, N. A.

    AS
TRUSTEE

     

      
        

      

    


    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

    TABLE
OF CONTENTS

     

    
      
        
          
            
              
                
                  	 
      	 
      	 	
                          Page

                        
	 	 	 
	
                          ARTICLE
      1. DEFINITIONS AND INCORPORATION BY REFERENCE

                        	 	
                          1

                        
	 
      	 
      	 	 
      
	
                          SECTION
      1.1

                        	
                          DEFINITIONS

                        	 	
                          1

                        
	
                          SECTION
      1.2

                        	
                          OTHER
      DEFINITIONS

                        	 	
                          7

                        
	
                          SECTION
      1.3

                        	
                          RESERVED

                        	 	
                          7

                        
	
                          SECTION
      1.4

                        	
                          RULES
      OF CONSTRUCTION

                        	 	
                          7

                        
	 
      	 
      	 	 
      
	
                          ARTICLE
      2. THE SECURITIES

                        	 	
                          8

                        
	 
      	 
      	 	 
      
	
                          SECTION
      2.1

                        	
                          FORM
      AND DATING

                        	 	
                          8

                        
	
                          SECTION
      2.2

                        	
                          EXECUTION
      AND AUTHENTICATION

                        	 	
                          10

                        
	
                          SECTION
      2.3

                        	
                          REGISTRAR,
      PAYING AGENT AND CONVERSION AGENT

                        	 	
                          11

                        
	
                          SECTION
      2.4

                        	
                          PAYING
      AGENT TO HOLD MONEY IN TRUST

                        	 	
                          11

                        
	
                          SECTION
      2.5

                        	
                          SECURITYHOLDER
      LISTS

                        	 	
                          12

                        
	
                          SECTION
      2.6

                        	
                          TRANSFER
      AND EXCHANGE

                        	 	
                          12

                        
	
                          SECTION
      2.7

                        	
                          REPLACEMENT
      SECURITIES

                        	 	
                          13

                        
	
                          SECTION
      2.8

                        	
                          OUTSTANDING
      SECURITIES

                        	 	
                          13

                        
	
                          SECTION
      2.9

                        	
                          TREASURY
      SECURITIES

                        	 	
                          14

                        
	
                          SECTION
      2.10

                        	
                          TEMPORARY
      SECURITIES

                        	 	
                          14

                        
	
                          SECTION
      2.11

                        	
                          CANCELLATION

                        	 	
                          15

                        
	
                          SECTION
      2.12

                        	
                          LEGEND;
      ADDITIONAL TRANSFER AND EXCHANGE REQUIREMENTS

                        	 	
                          15

                        
	
                          SECTION
      2.13

                        	
                          CUSIP
      NUMBERS

                        	 	
                          18

                        
	
                          SECTION
      2.14

                        	
                          ADDITIONAL
      SECURITIES

                        	 	
                          18

                        
	 
      	 
      	 	 
      
	
                          ARTICLE
      3. REDEMPTION AND PURCHASES

                        	 	
                          20

                        
	 
      	 
      	 	 
      
	
                          SECTION
      3.1

                        	
                          OPTIONAL
      REDEMPTION

                        	 	
                          20

                        
	
                          SECTION
      3.2

                        	
                          RIGHT
      TO REDEEM; NOTICE TO TRUSTEE

                        	 	
                          20

                        
	
                          SECTION
      3.3

                        	
                          SELECTION
      OF SECURITIES TO BE REDEEMED

                        	 	
                          20

                        
	
                          SECTION
      3.4

                        	
                          NOTICE
      OF REDEMPTION

                        	 	
                          21

                        
	
                          SECTION
      3.5

                        	
                          EFFECT
      OF NOTICE OF REDEMPTION

                        	 	
                          22

                        
	
                          SECTION
      3.6

                        	
                          DEPOSIT
      OF REDEMPTION PRICE

                        	 	
                          22

                        
	
                          SECTION
      3.7

                        	
                          SECURITIES
      REDEEMED IN PART

                        	 	
                          22

                        
	
                          SECTION
      3.8

                        	
                          CONVERSION
      ARRANGEMENT ON CALL FOR REDEMPTION

                        	 	
                          22

                        
	
                          SECTION
      3.9

                        	
                          REPURCHASE
      AT OPTION OF THE HOLDER UPON A FUNDAMENTAL CHANGE

                        	 	
                          23

                        
	
                          SECTION
      3.10

                        	
                          ADJUSTMENT
      TO APPLICABLE CONVERSION RATE UPON A FUNDAMENTAL CHANGE

                        	 	
                          26

                        
	
                          SECTION
      3.11        

                        	
                          PUBLIC
      ACQUIRER CHANGE OF CONTROL

                        	 	
                          27

                        


                

              

            

          

        

      

    


    
      
         


      

      
        i

        
          

        

      

      
         


      

    

    


    
      
        
          	
                  SECTION
      3.12

                	
                  COMPLIANCE
      WITH SECURITIES LAWS UPON PURCHASE OF SECURITIES

                	 	
                  28

                
	
                  SECTION
      3.13

                	
                  REPAYMENT
      TO THE COMPANY

                	 	
                  28

                
	 
      	 
      	 	 
      
	
                  ARTICLE
      4. CONVERSION

                	 	
                  28

                
	 
      	 
      	 	 
      
	
                  SECTION
      4.1

                	
                  CONVERSION
      PRIVILEGE

                	 	
                  28

                
	
                  SECTION
      4.2

                	
                  CONVERSION
      PROCEDURE

                	 	
                  29

                
	
                  SECTION
      4.3

                	
                  FRACTIONAL
      SHARES

                	 	
                  30

                
	
                  SECTION
      4.4

                	
                  TAXES
      ON CONVERSION

                	 	
                  31

                
	
                  SECTION
      4.5

                	
                  COMPANY
      TO PROVIDE STOCK

                	 	
                  31

                
	
                  SECTION
      4.6

                	
                  ANTI-DILUTION
      ADJUSTMENTS

                	 	
                  31

                
	
                  SECTION
      4.7

                	
                  TRUSTEE’S
      DISCLAIMER

                	 	
                  36

                
	 
      	 
      	 	 
      
	
                  ARTICLE
      5. COVENANTS

                	 	
                  36

                
	 
      	 
      	 	 
      
	
                  SECTION
      5.1

                	
                  PAYMENT
      OF SECURITIES

                	 	
                  36

                
	
                  SECTION
      5.2

                	
                  SEC
      REPORTS

                	 	
                  37

                
	
                  SECTION
      5.3

                	
                  COMPLIANCE
      CERTIFICATES

                	 	
                  37

                
	
                  SECTION
      5.4

                	
                  FURTHER
      INSTRUMENTS AND ACTS

                	 	
                  38

                
	
                  SECTION
      5.5

                	
                  MAINTENANCE
      OF CORPORATE EXISTENCE

                	 	
                  38

                
	
                  SECTION
      5.6

                	
                  RULE
      144A INFORMATION REQUIREMENT

                	 	
                  38

                
	
                  SECTION
      5.7

                	
                  STAY,
      EXTENSION AND USURY LAWS

                	 	
                  38

                
	 
      	 
      	 	 
      
	
                  ARTICLE
      6. CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

                	 	
                  39

                
	 
      	 
      	 	 
      
	
                  SECTION
      6.1

                	
                  COMPANY
      MAY CONSOLIDATE, ETC, ONLY ON CERTAIN TERMS

                	 	
                  39

                
	
                  SECTION
      6.2

                	
                  SUCCESSOR
      SUBSTITUTED

                	 	
                  40

                
	 
      	 
      	 	 
      
	
                  ARTICLE
      7. DEFAULT AND REMEDIES

                	 	
                  40

                
	 
      	 
      	 	 
      
	
                  SECTION
      7.1

                	
                  EVENTS
      OF DEFAULT

                	 	
                  40

                
	
                  SECTION
      7.2

                	
                  ACCELERATION

                	 	
                  42

                
	
                  SECTION
      7.3

                	
                  OTHER
      REMEDIES

                	 	
                  43

                
	
                  SECTION
      7.4

                	
                  WAIVER
      OF DEFAULTS AND EVENTS OF DEFAULT

                	 	
                  43

                
	
                  SECTION
      7.5

                	
                  CONTROL
      BY MAJORITY

                	 	
                  43

                
	
                  SECTION
      7.6

                	
                  LIMITATIONS
      ON SUITS

                	 	
                  44

                
	
                  SECTION
      7.7

                	
                  RIGHTS
      OF HOLDERS TO RECEIVE PAYMENT AND TO CONVERT

                	 	
                  44

                
	
                  SECTION
      7.8

                	
                  COLLECTION
      SUIT BY TRUSTEE

                	 	
                  44

                
	
                  SECTION
      7.9

                	
                  TRUSTEE
      MAY FILE PROOFS OF CLAIM

                	 	
                  45

                
	
                  SECTION
      7.10

                	
                  PRIORITIES

                	 	
                  45

                
	
                  SECTION
      7.11

                	
                  UNDERTAKING
      FOR COSTS

                	 	
                  45

                
	 
      	 
      	 	 
      
	
                  ARTICLE
      8. TRUSTEE

                	 	
                  46

                
	 
      	 
      	 	 
      
	
                  SECTION
      8.1          

                	
                  DUTIES
      OF TRUSTEE

                	 	
                  46

                


        

      

    


    
      
         


      

      
        ii

        
          

        

      

      
         


      

    

    


    
      
        
          	
                  SECTION
      8.2

                	
                  RIGHTS
      OF TRUSTEE

                	 	
                  47

                
	
                  SECTION
      8.3

                	
                  INDIVIDUAL
      RIGHTS OF TRUSTEE

                	 	
                  48

                
	
                  SECTION
      8.4

                	
                  TRUSTEE’S
      DISCLAIMER

                	 	
                  48

                
	
                  SECTION
      8.5

                	
                  NOTICE
      OF DEFAULT OR EVENTS OF DEFAULT

                	 	
                  48

                
	
                  SECTION
      8.6

                	
                  RESERVED

                	 	
                  49

                
	
                  SECTION
      8.7

                	
                  COMPENSATION
      AND INDEMNITY

                	 	
                  49

                
	
                  SECTION
      8.8

                	
                  REPLACEMENT
      OF TRUSTEE

                	 	
                  49

                
	
                  SECTION
      8.9

                	
                  SUCCESSOR
      TRUSTEE BY MERGER, ETC

                	 	
                  50

                
	
                  SECTION
      8.10

                	
                  ELIGIBILITY;
      DISQUALIFICATION

                	 	
                  51

                
	
                  SECTION
      8.11

                	
                  PREFERENTIAL
      COLLECTION OF CLAIMS AGAINST COMPANY

                	 	
                  51

                
	
                  SECTION
      8.12

                	
                  MAY
      HOLD SECURITIES

                	 	
                  51

                
	
                  SECTION
      8.13

                	
                  MONEY
      HELD IN TRUST

                	 	
                  51

                
	 
      	 
      	 	 
      
	
                  ARTICLE
      9. SATISFACTION AND DISCHARGE OF INDENTURE

                	 	
                  51

                
	 
      	 
      	 	 
      
	
                  SECTION
      9.1

                	
                  SATISFACTION
      AND DISCHARGE OF INDENTURE

                	 	
                  51

                
	
                  SECTION
      9.2

                	
                  APPLICATION
      OF TRUST MONEY

                	 	
                  52

                
	
                  SECTION
      9.3

                	
                  REPAYMENT
      TO COMPANY

                	 	
                  52

                
	
                  SECTION
      9.4

                	
                  RESERVED

                	 	
                  53

                
	
                  SECTION
      9.5

                	
                  RESERVED

                	 	
                  53

                
	
                  SECTION
      9.6

                	
                  RESERVED

                	 	
                  53

                
	
                  SECTION
      9.7

                	
                  REINSTATEMENT

                	 	
                  53

                
	 
      	 
      	 	 
      
	
                  ARTICLE
      10. AMENDMENTS, SUPPLEMENTS AND WAIVERS

                	 	
                  53

                
	 
      	 
      	 	 
      
	
                  SECTION
      10.1

                	
                  WITHOUT
      CONSENT OF HOLDERS

                	 	
                  53

                
	
                  SECTION
      10.2

                	
                  WITH
      CONSENT OF HOLDERS

                	 	
                  54

                
	
                  SECTION
      10.3

                	
                  RESERVED

                	 	
                  55

                
	
                  SECTION
      10.4

                	
                  REVOCATION
      AND EFFECT OF CONSENTS

                	 	
                  55

                
	
                  SECTION
      10.5

                	
                  NOTATION
      ON OR EXCHANGE OF SECURITIES

                	 	
                  55

                
	
                  SECTION
      10.6

                	
                  TRUSTEE
      TO SIGN AMENDMENTS, ETC

                	 	
                  55

                
	
                  SECTION
      10.7

                	
                  EFFECT
      OF SUPPLEMENTAL INDENTURES

                	 	
                  56

                
	 
      	 
      	 	 
      
	
                  ARTICLE
      11. MISCELLANEOUS

                	 	
                  56

                
	 
      	 
      	 	 
      
	
                  SECTION
      11.1

                	
                  RESERVED

                	 	
                  56

                
	
                  SECTION
      11.2

                	
                  NOTICES

                	 	
                  56

                
	
                  SECTION
      11.3

                	
                  RESERVED

                	 	
                  57

                
	
                  SECTION
      11.4

                	
                  CERTIFICATE
      AND OPINION AS TO CONDITIONS PRECEDENT

                	 	
                  57

                
	
                  SECTION
      11.5

                	
                  RECORD
      DATE FOR VOTE OR CONSENT OF SECURITYHOLDERS

                	 	
                  58

                
	
                  SECTION
      11.6

                	
                  RULES
      BY TRUSTEE, PAYING AGENT, REGISTRAR AND CONVERSION AGENT

                	 	
                  58

                
	
                  SECTION
      11.7        

                	
                  LEGAL
      HOLIDAYS

                	 	
                  58

                


        

      

    


    
      
         


      

      
        iii

        
          

        

      

      
         


      

    

    


    
      
        
          	
                  SECTION
      11.8

                	
                  GOVERNING
      LAW

                	 	
                  58

                
	
                  SECTION
      11.9

                	
                  NO
      ADVERSE INTERPRETATION OF OTHER AGREEMENTS

                	 	
                  59

                
	
                  SECTION
      11.10

                	
                  NO
      RECOURSE AGAINST OTHERS

                	 	
                  59

                
	
                  SECTION
      11.11

                	
                  SUCCESSORS

                	 	
                  59

                
	
                  SECTION
      11.12

                	
                  MULTIPLE
      COUNTERPARTS

                	 	
                  59

                
	
                  SECTION
      11.13

                	
                  SEPARABILITY

                	 	
                  59

                
	
                  SECTION
      11.14

                	
                  TAX
      TREATMENT

                	 	
                  59

                
	
                  SECTION
      11.15

                	
                  DESIGNATED
      SENIOR INDEBTEDNESS

                	 	
                  59

                
	
                  SECTION
      11.16

                	
                  TABLE
      OF CONTENTS, HEADINGS, ETC

                	 	
                  59

                
	
                  SECTION
      11.17      

                	
                  WAIVER
      OF JURY TRIAL

                	 	
                  60

                


        

      

    


    
      
         


      

      
        iv

        
          

        

      

      
         


      

    

     

    THIS
INDENTURE dated as of October [     ], 2010 is between
PDL BioPharma, Inc., a corporation duly organized under the laws of the State of
Delaware (the “Company”), and The Bank of New York Mellon Trust Company, N.A., 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 2.875%
Convertible Senior Notes due February 15, 2015.

     

    ARTICLE 1.

    DEFINITIONS
AND INCORPORATION BY REFERENCE

     

    SECTION 1.1        DEFINITIONS.

     

    “Additional
Shares Table” means the table set forth in Schedule I hereto.

     

    “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
Conversion Rate” means, at the time any determination thereof is to be made, the
Initial Conversion Rate as adjusted pursuant to Sections 3.10 and
4.6.

     

    “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.

     

    “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” means (a) in the case of a corporation, corporate stock, (b) in
the case of an association or business entity, shares, interests,
participations, rights or other equivalents (however designated) of corporate
stock, (c) in the case of a partnership or limited liability company,
partnership or membership interests (whether general or limited) and
(d) any other interest or participation that confers on a person the right
to receive a share of the profits and losses of, or distribution of the assets
of, the issuing person.

     

    “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 and 3 thereof.

     

    “Closing
Date” means October [     ], 2010.

     

    “Closing
Price” of the Common Stock on any date means 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 ask prices in either case on the Nasdaq National Market
or, if the Common Stock is not listed or admitted to trading or, if not listed
or admitted to trading on the Nasdaq National Market or any national securities
exchange, the last reported sales price of the Common Stock as quoted on NASDAQ
or, in case no reported sales take place, the average of the closing bid and ask
prices as 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 ask
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.

     

    “Common
Stock” means the common stock of the Company, $0.01 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.

     

    “Corporate
Trust Office” means the office of the Trustee at which at any particular time
the trust created by this Indenture shall be administered which office at the
date of the execution of this Indenture is located at 700 South Flower Street,
Suite 500, Los Angeles, California 90017, Attention:  Corporate Trust
Administration 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.

     

    “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 February 15, 2015.


    
      
         


      

      
        2

        
          

        

      

      
         


      

    

     

    “Fundamental
Change” means the occurrence of any of the following at a time after the
Securities are originally issued:

     

    (a)         the
Common Stock (or other common stock into which the Securities are convertible or
American Depository Shares representing such common stock) is neither traded on
the New York Stock Exchange or another United States national securities
exchange nor quoted on The Nasdaq Stock Market or another established automated
over-the-counter trading market in the United States; or

     

    (b)         any
Person acquires beneficial ownership, directly or indirectly, through a
purchase, merger or other acquisition transaction or series of transactions, of
shares of the Company’s Capital Stock entitling the Person to exercise 50% or
more of the total voting power of all shares of the Company’s Capital Stock
entitled to vote generally in elections of directors, other than an acquisition
by the Company, any of its Subsidiaries or any of its employee benefit plans;
or

     

    (c)         the
Company merges or consolidates with or into any other Person (other than a
Subsidiary of the Company), another Person merges with or into the Company, or
the Company conveys, sells, transfers or leases all or substantially all of its
assets to another Person, other than any transaction:

     

    (i)           that
does not result in a reclassification, conversion, exchange or cancellation of
any outstanding Common Stock;

     

    (ii)          pursuant
to which the holders of Common Stock immediately prior to the transaction have
the entitlement to exercise, directly or indirectly, 50% or more of the total
voting power of all shares of the Capital Stock entitled to vote generally in
the election of directors of the continuing or surviving corporation immediately
after the transaction; or

     

    (iii)         that
is effected solely to change the Company’s jurisdiction of incorporation and
results in a reclassification, conversion or exchange of outstanding shares of
Common Stock solely into shares of common stock of the surviving
entity.

     

    For
purposes of this definition, whether a Person is a “beneficial owner” will be
determined in accordance with Rule 13d-3 under the Exchange Act and
“Person” includes any syndicate or group that would be deemed to be a “person”
under Section 13(d)(3) of the Exchange Act.

     

    “Fundamental
Change Repurchase Date” means the date specified as such in the notice delivered
to Holders pursuant to Section 3.9(c) hereof.

     

    “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.


    
      
         


      

      
        3

        
          

        

      

      
         


      

    

     

    “Global
Security” means a permanent Security that is in substantially the form attached
hereto as Exhibit A and that includes the information and schedule called
for by footnotes 1 and 3 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.

     

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

     

    “Indirect
Participant” means an entity that, with respect to any Depositary, clears
through or maintains a direct or indirect, custodial relationship with a
Participant.

     

    “Initial
Conversion Rate” means 140.571 shares of Common Stock per $1,000 principal
amount of Securities.

     

    “Issuance
Date” means the date on which the Securities are first authenticated and
issued.

     

    “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 Controller, the Secretary or any Assistant Controller or
Assistant Secretary of the Company.

     

    “Officers’
Certificate” means a certificate signed by two Officers; provided, however, that
for purposes of Sections 4.7 and 5.3, “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.

     

    “Participant”
means a Person who has an account with the Depositary.

     

    “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.


    
      
         


      

      
        4

        
          

        

      

      
         


      

    

     

    “Public
Acquirer Change of Control” means any event constituting a Fundamental Change
that would otherwise give Holders the right to cause the Company to repurchase
the Securities under Section 3.9 where either (a) the acquirer or
(b) if not the acquirer, a direct or indirect majority-owned Subsidiary of
the acquirer or (c) if not the acquirer or any direct or indirect
majority-owned Subsidiary of the acquirer, a corporation by which the acquirer
is majority-owned has a class of common stock (or American Depository Shares
representing such common stock) traded on a U.S. national securities exchange or
quoted on the Nasdaq Stock Market or which will be so traded or quoted when
issued or exchanged in connection with such Fundamental Change. “Majority-owned”
for the purposes of this definition means having “beneficial ownership” (as
defined in Rule 13d-3 under the Exchange Act) of more than 50% of the total
voting power of the respective Person’s Voting Stock.

     

    “Public
Acquirer Common Stock” means the class of common stock (or American Depository
Shares representing such common stock) of an entity referred to in
sections (a), (b) or (c) of the first sentence of the definition of “Public
Acquirer Change of Control.”

     

    “Redemption
Date” when used with respect to any Security to be redeemed, means the date
fixed for such redemption pursuant to this Indenture.

     

    “Redemption
Price” when used with respect to any Security to be redeemed, means the price
fixed for such redemption pursuant to this Indenture, as set forth in the form
of Security annexed as Exhibit A hereto.

     

    “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 2.875% Convertible Senior Notes due February 15, 2015 or any of
them (each, a “Security”), as amended or supplemented from time to time, that
are issued under this Indenture, including any Exchange Agreement Securities,
any Purchase Agreement Securities and any Additional Securities.

     

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

     

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

     

    “Significant
Subsidiary” means, in respect of any Person, 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.


    
      
         


      

      
        5

        
          

        

      

      
         


      

    

     

    “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 10.3, 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.

     

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

     

    “Transfer
Restricted Security” means a Security that is subject to resale restrictions
pursuant to the Securities Act of 1933, as amended, and the rules and
regulations thereunder.

     

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

     

    “Trust
Officer” when used with respect to the Trustee, means any vice president, any
assistant vice president, any senior trust officer or assistant trust officer,
any trust officer, or any other officer associated with the corporate trust
department of the Trustee customarily performing functions similar to those
performed by any of the above designated officers and also means, with respect
to a particular corporate trust matter, any other officer to whom such matter is
referred because of such person's knowledge of and familiarity with the
particular subject.

     

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

     

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

     

    “Unrestricted
Security” means a Security that is not a Transfer 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, managers or trustees thereof.


    
      
         


      

      
        6

        
          

        

      

      
         


      

    

     

    SECTION 1.2        OTHER
DEFINITIONS.

     

    
      
        
          	
                  Term

                	 
      	
                  Defined
      in Section

                
	
                  “Additional
      Securities”

                	 
      	
                   
      2.14

                
	
                  “Additional
      Shares”

                	 
      	
                   
      3.10

                
	
                  “Agent
      Members”

                	 
      	
                   
      2.1(b)

                
	
                  “Bankruptcy
      Law”

                	 
      	
                   
      7.1

                
	
                  “Company
      Order”

                	 
      	
                   
      2.2

                
	
                  “Conversion
      Agent”

                	 
      	
                   
      2.3

                
	
                  “Conversion
      Date”

                	 
      	
                   
      4.2

                
	
                  “Custodian”

                	 
      	
                   
      7.1

                
	
                  “DTC”

                	 
      	
                   
      2.1

                
	
                  “Depositary”

                	 
      	
                   
      2.1

                
	
                  “Event
      of Default”

                	 
      	
                   
      7.1

                
	
                  “Exchange
      Agreement Securities”

                	 
      	
                   
      2.1

                
	
                  “Fundamental
      Change Repurchase Price”

                	 
      	
                   
      3.9(a)

                
	
                  “Legal
      Holiday”

                	 
      	
                  11.7

                
	
                  “Legend”

                	 
      	
                   
      2.12

                
	
                  “Paying
      Agent”

                	 
      	
                   
      2.3

                
	
                  “Primary
      Registrar”

                	 
      	
                   
      2.3

                
	
                  “Public
      Acquisition Notice”

                	 
      	
                   
      3.11

                
	
                  “Purchase
      Agreement Securities”

                	 
      	
                   
      2.1

                
	
                  “QIB”

                	 
      	
                   
      2.1

                
	
                  “Registrar”

                	 
      	
                   
      2.3

                
	
                  “Restricted
      Shares”

                	 
      	
                   
      5.6

                
	
                  “Stock
      Price”

                	
                    

                	
                   
      3.10(b)

                


        

      

    

     

    SECTION 1.3        RESERVED.

     

    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 either (i) one or more agreements between the Company
and certain purchasers who are acquiring the Securities (A) solely in a cash
purchase or (B) in a combined cash purchase and exchange for other securities of
the Company (such Securities, “Purchase Agreement Securities”), or (ii) one or
more agreements entered into between the Company and certain initial acquirors
who are acquiring the Securities solely in exchange for other securities of the
Company (such Securities, “Exchange Agreement Securities”).

     

    (a)           
Purchase Agreement
Global Securities and Exchange Agreement Global Securities.  All of
the Purchase Agreement Securities issued on the Closing Date 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 Section 4(2)
of the Securities Act, shall be issued initially in the form of one or more
Transfer Restricted Global Securities, which shall be deposited on behalf of the
acquirors of the Purchase Agreement 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
these Transfer 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.

     

    All of
the Exchange Agreement Securities issued on the Closing Date are being offered
and sold in reliance on Section 4(2) of the Securities Act, shall be issued in
the form of one or more Unrestricted Global Securities which shall be deposited
on behalf of the holders of the Exchange Agreement Securities represented
thereby with the Trustee, at its Corporate Trust Office, as custodian for 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 these Unrestricted 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.


    
      
         


      

      
        8

        
          

        

      

      
         


      

    

     

    (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, redemptions, 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 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 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.”


    
      
         


      

      
        9

        
          

        

      

      
         


      

    

     

    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.

     

    On the
Closing Date, the Company shall issue, and the Trustee shall authenticate and
make available for delivery, Exchange Agreement Securities in the aggregate
principal amount of
$[           ] and
Purchase Agreement Securities in the aggregate principal amount of
$[              ]. 
After the Closing Date, the Company may issue, and the Trustee shall
authenticate and make available for delivery, Additional Securities issued
pursuant to Section 2.14.  The Trustee shall so authenticate and make
available for delivery Securities 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
specify whether such Securities will be represented by a Transfer Restricted
Global Security or an Unrestricted Global Security and the date on which each
original issue of Securities is to be authenticated.

     

    The
Company at any time or from time to time may, without the consent of any Holder,
issue Additional Securities pursuant to Section 2.14, which Additional
Securities shall be entitled to all of the benefits of this Indenture. 
Such Additional Securities will be deemed Securities for all purposes hereunder,
including without limitation in determining the necessary Holders who may take
the actions or consent to the taking of actions as specified in this
Indenture.

     

    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.


    
      
         


      

      
        10

        
          

        

      

      
         


      

    

     

    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 5.1 and Article
9).

     

    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 Bank of New York Mellon, an
Affiliate of the Trustee, as agent of the Trustee located at 101 Barclay Street,
Floor 4, New York, New York 10286, Attention:  Corporate Trust
Administration, 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.  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 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.


    
      
         


      

      
        11

        
          

        

      

      
         


      

    

     

    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, 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), 3.6,
3.11, 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 (i) any Securities for a period of 15 days next
preceding any mailing of a notice of Securities to be redeemed, (ii) any
Securities or portions thereof selected or called for redemption (except, in the
case of redemption of a Security in part, the portion thereof not to be
redeemed) or (iii) any Securities or portions thereof in respect of which a
notice pursuant to Section 3.9(d) hereof 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)           
Each Holder agrees to indemnify the Company and the Trustee against any
liability that may result from the transfer, exchange or assignment of such
Holder’s Security in violation of any provision of this Indenture and/or
applicable United States federal or state securities law.


    
      
         


      

      
        12

        
          

        

      

      
         


      

    

     

    The
Trustee shall have no obligation or duty to monitor, determine or inquire as to
compliance with any restrictions on transfer imposed under this Indenture or
under applicable law with respect to any transfer of any interest in any
Security (including any transfers between or among Agent Members or other
beneficial owners of interests in any Global Security) other than to require
delivery of such certificates and other documentation or evidence as are
expressly required by, and to do so if and when expressly required by the terms
of, this Indenture, and to examine the same to determine substantial compliance
as to form with the express requirements hereof.

     

    SECTION 2.7        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 redeemed or purchased by the Company
pursuant to Article 3, the Company in its discretion may, instead of
issuing a new Security, pay, redeem 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 4, those
delivered to it for cancellation or surrendered for transfer or exchange and
those described in this Section 2.8 as not outstanding.


    
      
         


      

      
        13

        
          

        

      

      
         


      

    

     

    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
Redemption Date, a Fundamental Change Repurchase 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) payable on that date, then on and
after such Redemption Date, Fundamental Change Repurchase 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; provided, that if such Securities are to be redeemed, notice of such
redemption has been duly given pursuant to this Indenture or provision therefore
satisfactory to the Trustee has been made.

     

    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.


    
      
         


      

      
        14

        
          

        

      

      
         


      

    

     

    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, redemption, payment or conversion.  The
Trustee and no one else shall cancel, in accordance with its standard
procedures, all Securities surrendered for transfer, exchange, redemption,
payment, conversion or cancellation and shall deliver the canceled Securities to
the Company.  The Company may not issue any new Securities to replace
any Securities that any Holder has converted pursuant to
Article 4.  Without limitation to the foregoing, any Securities
acquired by any investment bankers or other purchasers pursuant to
Section 3.8 shall be surrendered for conversion and thereafter cancelled,
and may not be reoffered, sold or otherwise transferred.

     

    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 for Transfer
Restricted Securities 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 or 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
or that such Securities are not “restricted” within the meaning of
Rule 144; provided that no such evidence need be supplied in connection
with the sale of such Security pursuant to a registration statement that is
effective at the time of such sale.  Upon (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)           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)          The
transfer and exchange of beneficial interests in the Global Securities shall be
effected through the Depositary, in accordance with the provisions of this
Indenture and the Applicable Procedures.

     

    (i)           Beneficial
interests in any Transfer Restricted Global Security may be transferred to
Persons who take delivery thereof in the form of a beneficial interest in the
same Transfer Restricted Global Security in accordance with the transfer
restrictions set forth in the Legend.  Beneficial interests in any
Unrestricted Global Security may be transferred to Persons who take delivery
thereof in the form of a beneficial interest in the same or any other
Unrestricted Global Security.  No written orders or instructions shall
be required to be delivered to the Registrar to effect the transfers described
in this Section 2.12(c)(i).


    
      
         


      

      
        15

        
          

        

      

      
         


      

    

     

    (ii)           In
connection with all transfers and exchanges of beneficial interests that are not
subject to Section 2.12(c)(i), the transferor of such beneficial interest must
deliver to the Registrar an order from a Participant or an Indirect Participant
given to the Depositary in accordance with the Applicable Procedures directing
the Depositary to credit or cause to be credited a beneficial interest in
another Global Security in an amount equal to the beneficial interest to be
transferred or exchanged and instructions given in accordance with the
Applicable Procedures containing information regarding the Participant account
to be credited with such increase.

     

    (iii)           A
beneficial interest in any Transfer Restricted Global Security may be
transferred to a Person who takes delivery thereof in the form of a beneficial
interest in another Transfer Restricted Global Security if the transfer complies
with the requirements of Section 2.12(c)(ii) and the Registrar receives a duly
executed certificate substantially in the form of Exhibit B hereto.

     

    (iv)           A
beneficial interest in any Transfer Restricted Global Security may be exchanged
for a beneficial interest in an Unrestricted Global Security or transferred to a
Person who takes delivery thereof in the form of a beneficial interest in an
Unrestricted Global Security if (1) the exchange or transfer complies with the
requirements of Section 2.12(c)(ii) and (2) if the Registrar so requests or if
the Applicable Procedures so require, an Opinion of Counsel in form reasonably
acceptable to the Registrar to the effect that such exchange or transfer is in
compliance with the Securities Act and that the restrictions on transfer
contained herein and in the Legend are no longer required in order to maintain
compliance with the Securities Act.

     

    (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 (or any successor provision thereto) or, if
earlier, upon the expiration of the holding period applicable to sales thereof
under Rule 144(d) 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, an
Opinion of Counsel reasonably acceptable to the Company and to the Trustee,
addressed to the Company and to the Trustee and in form acceptable to the
Company and to the Trustee, 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.


    
      
         


      

      
        16

        
          

        

      

      
         


      

    

     

    (e)          As
used in Section 2.12(c) and (d), the term “transfer” encompasses any sale,
pledge, transfer, hypothecation or other disposition of any
Security.

     

    
      (f)         
 (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.  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 book entry 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.


    
      
         


      

      
        17

        
          

        

      

      
         


      

    

     

    (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 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 redemption or 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
redemption or purchase and that reliance may be placed only on the other
identification numbers printed on the Securities, and any such redemption or
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.

     

    
      SECTION 2.14        ADDITIONAL
SECURITIES.

    

     

    If
authorized by a resolution of the Board of Directors, the Company shall be
entitled to issue additional Securities under this Indenture (“Additional
Securities”) which shall have substantially identical terms as the Securities,
other than with respect to the date of issuance, issue price, amount of interest
payable on the first interest payment date applicable thereto, and, if such
Additional Securities shall be issued in the form of Unrestricted Securities or
Transfer Restricted Securities, other than with respect to transfer restrictions
in respect of Securities that are, respectively, Transfer Restricted Securities
or Unrestricted Securities; provided that such issuance shall be made in
compliance with this Indenture; provided, further, that no Additional Securities
may be issued with the same “CUSIP”, “ISIN” or “Common Code” number as other
Securities unless it is so permitted in accordance with applicable
law.  The Securities issued on the Closing Date and any Additional
Securities shall be treated as a single class for all purposes under this
Indenture.


    
      
         


      

      
        18

        
          

        

      

      
         


      

    

     

    With
respect to any Additional Securities, the Company shall set forth in an
Officers’ Certificate, a copy of which shall be delivered to the Trustee, or in
a supplemental indenture, the following information:

     

    (1)           the
aggregate principal amount of Securities outstanding immediately prior to the
issuance of such Additional Securities;

     

    (2)           the
aggregate principal amount of such Additional Securities to be authenticated and
delivered pursuant to this Indenture;

     

    (3)           the
issue price, if any, and the issue date of such Additional Securities and the
amount of interest payable on the first interest payment date applicable
thereto;

     

    (4)           the
“CUSIP”, “ISIN” or “Common Code” number, as applicable, of such Additional
Securities;

     

    (5)           whether
such Additional Securities are Purchase Agreement Securities or Exchange
Agreement Securities; and

     

    (6)           whether
such Additional Securities shall be Transfer Restricted Securities or
Unrestricted Securities.

     

    In
connection with the authentication of any Additional Securities, the Trustee
shall receive, and will be fully protected in relying upon, an Opinion of
Counsel stating:

    


    (1)           if
the form of such Securities has been established by or pursuant to a Board
Resolution as permitted by Section 2.14, that such form has been established in
conformity with the provisions of this Indenture,

     

    (2)           if
the terms of such Securities have been established by or pursuant to a Board
Resolution as permitted by Section 2.14, that such terms have been established
in conformity with the provisions of this Indenture,

     

    (3)           that
such Securities, when authenticated and delivered by the Trustee and issued by
the Company in the manner and subject to any conditions specified in such
Opinion of Counsel, will constitute valid and binding obligations of the Company
enforceable in accordance with their terms, except as the enforceability thereof
may be limited by bankruptcy, insolvency, reorganization, moratorium, or other
laws relating to or affecting creditors' rights and by general principles of
equity; and


    
      
         


      

      
        19

        
          

        

      

      
         


      

    


    (4)           that
all conditions precedent to the execution and delivery by the Company of such
Securities have been complied with, and the issuance of the Securities is in
compliance with the Indenture.

     

    ARTICLE 3.

    REDEMPTION
AND PURCHASES

     

    SECTION 3.1        OPTIONAL
REDEMPTION.

     

    (a)           The
Company shall not have the option to redeem the Securities pursuant to this
Section 3.1 prior to August 15, 2014.  Thereafter, the
Company shall have the option to redeem the Securities, in whole or in part, at
a redemption price equal to 100% of the aggregate principal amount of the
Securities to be redeemed, plus accrued and unpaid interest thereon, to the
Redemption Date.

     

    (b)           Any
redemption pursuant to this Section 3.1 shall be made pursuant to the
provisions of Section 3.2 through 3.8 hereof.

     

    SECTION 3.2        RIGHT
TO REDEEM; NOTICE TO TRUSTEE.

     

    If the
Company elects to redeem Securities pursuant to Section 3.1 and
paragraph 6 of the Securities, it shall notify the Trustee at least
45 days prior to the Redemption Date as fixed by the Company (unless a
shorter notice shall be satisfactory to the Trustee) of the Redemption Date and
the principal amount of Securities to be redeemed.  If fewer than all
of the Securities are to be redeemed, the record date relating to such
redemption shall be selected by the Company and given to the Trustee, which
record date shall not be less than ten days after the date of notice to the
Trustee.

     

    SECTION 3.3        SELECTION
OF SECURITIES TO BE REDEEMED.

     

    If less
than all of the Securities are to be redeemed, unless the procedures of the
Depositary provide otherwise, the Trustee shall, at least 10 days but not
more than 60 days prior to the Redemption Date, select the Securities to be
redeemed.  The Trustee shall make the selection from the Securities
outstanding and not previously called for redemption, by lot, pro rata or
otherwise in accordance with applicable procedures of DTC.  Securities
in denominations of $1,000 may only be redeemed in whole.  The Trustee
may select for redemption portions (equal to $1,000 or any integral multiple
thereof) of the principal of Securities that have denominations larger than
$1,000.  Provisions of this Indenture that apply to Securities called
for redemption also apply to portions of Securities called for
redemption.

     

    If any
Security selected for partial redemption is converted in part before termination
of the conversion right with respect to the portion of the Security so selected,
the converted portion of such Security shall be deemed to be the portion
selected for redemption.  Securities which have been converted during
a selection of Securities to be redeemed (as described in the previous
paragraph) shall be treated by the Trustee as outstanding and thus eligible to
be selected for redemption.


    
      
         


      

      
        20

        
          

        

      

      
         


      

    

     

    SECTION 3.4        NOTICE
OF REDEMPTION.

     

    At least
10 days but not more than 60 days before a Redemption Date, the
Company shall mail or cause to be mailed (or transmitted electronically in
accordance with DTC procedures) a notice of redemption to each Holder of
Securities to be redeemed at such Holder’s address as it appears on the Primary
Registrar’s books.

     

    The
notice shall identify the Securities (including CUSIP numbers) to be redeemed
and shall state:

     

    (1)           the
Redemption Date;

     

    (2)           the
Redemption Price;

     

    (3)           the
Applicable Conversion Rate;

     

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

     

    (5)           that
Securities called for redemption must be presented and surrendered to a Paying
Agent to collect the Redemption Price;

     

    (6)           that
Holders who wish to convert Securities must surrender such Securities for
conversion no later than the close of business on the Business Day immediately
preceding the Redemption Date and must satisfy the other requirements set forth
in paragraph 9 of the Securities;

     

    (7)           that,
unless the Company defaults in making the payment of the Redemption Price,
interest on Securities called for redemption shall cease accruing on and after
the Redemption Date and the only remaining right of the Holder shall be to
receive payment of the Redemption Price plus accrued interest, if any, up to but
not including the Redemption Date, upon presentation and surrender to a Paying
Agent of the Securities; and

     

    (8)           if
any Security is being redeemed in part, the portion of the principal amount of
such Security to be redeemed and that, after the Redemption Date, upon
presentation and surrender of such Security, a new Security or Securities in
aggregate principal amount equal to the unredeemed portion thereof will be
issued.

     

    If any of
the Securities to be redeemed 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 redemptions.  At the
Company’s written request to the Trustee, upon reasonable prior notice (which
shall be no less than 5 Business Days prior to the date of the notice of
redemption), which request shall (i) be irrevocable once given and
(ii) set forth all relevant information required by clauses (1)
through (8) of the preceding paragraph, the Trustee shall give the notice of
redemption in the Company’s name and at the Company’s expense.


    
      
         


      

      
        21

        
          

        

      

      
         


      

    

     

    SECTION 3.5        EFFECT
OF NOTICE OF REDEMPTION.

     

    Once
notice of redemption is mailed, Securities called for redemption become due and
payable on the Redemption Date and at the Redemption Price stated in the notice,
together with accrued interest, if any, except for Securities that are converted
in accordance with the provisions of Article 4.  Upon
presentation and surrender to a Paying Agent, Securities called for redemption
shall be paid at the Redemption Price, plus accrued interest up to but not
including the Redemption Date; provided that if the Redemption Date falls after
an interest payment record date and on or before an interest payment date, then
the interest will be payable to the Holders in whose name the Securities are
registered at the close of business on the interest payment record
date.

     

    SECTION 3.6        DEPOSIT
OF REDEMPTION PRICE.

     

    Prior to
11:00 a.m. New York City time, on the Redemption Date, the Company shall
deposit with a Paying Agent (or, if the Company acts as Paying Agent, shall
segregate and hold in trust) an amount of money (in immediately available funds
if deposited on such Redemption Date) sufficient to pay the Redemption Price of
and accrued interest on all Securities to be redeemed on that date, other than
Securities or portions thereof called for redemption on that date which have
been delivered by the Company to the Trustee for cancellation or have been
converted.  The Paying Agent shall as promptly as practicable return
to the Company any money not required for that purpose because of the conversion
of Securities pursuant to Article 4 or, if such money is then held by the
Company in trust and is not required for such purpose, it shall be discharged
from the trust.

     

    SECTION 3.7        SECURITIES
REDEEMED IN PART.

     

    Upon
presentation and surrender of a Security that is redeemed 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 unredeemed portion of the Security
surrendered.

     

    SECTION 3.8        CONVERSION
ARRANGEMENT ON CALL FOR REDEMPTION.

     

    In
connection with any redemption of Securities, the Company may arrange for the
purchase and conversion of any Securities called for redemption by an agreement
with one or more investment bankers or other purchasers to purchase such
Securities by paying to an agent or directly to the Holders who are selling such
Securities, on or before 11:00 a.m. New York City time on the Redemption
Date, an amount that, together with any amounts deposited with such Paying Agent
by the Company for the redemption of such Securities, is not less than the
Redemption Price, together with interest accrued to, but not including, the
Redemption Date, of such Securities; provided that no later than three Business
Days prior to the Redemption Date, the Company provides to the Trustee (i)
written notice of such purchase of securities, and the aggregate principal
amount to be purchase and (ii) a supplement to the Redemption Notice giving
effect to any such purchase; provided. further that the Company shall provide
the Trustee written confirmation on or prior to 11:00 a.m. New York City
time on the Redemption Date that any such purchase has been
consummated.  Notwithstanding anything to the contrary contained in
this Article 3, the obligation of the Company to pay the Redemption Price
of such Securities, including all accrued interest, shall be deemed to be
satisfied and discharged to the extent such amount is so paid by such
purchasers; provided, however, that nothing in this Section 3.8 shall
relieve the Company of its obligation to pay the Redemption Price, plus accrued
interest to but excluding the relevant Redemption Date, on Securities called for
redemption.  If such an agreement with one or more investment banks or
other purchasers is entered into, any Securities called for redemption and not
surrendered for conversion by the Holders thereof prior to the relevant
Redemption Date may, at the option of the Company upon written notice to the
Trustee, be deemed, to the fullest extent permitted by law, acquired by such
purchasers from such Holders and (notwithstanding anything to the contrary
contained in Article 4) surrendered by such purchasers for conversion, all
as of 11:00 a.m. New York City time on the Redemption Date, subject to
payment of the above amount as aforesaid.


    
      
         


      

      
        22

        
          

        

      

      
         


      

    

     

    SECTION 3.9        REPURCHASE
AT OPTION OF THE HOLDER UPON A FUNDAMENTAL CHANGE.

     

    (a)           Subject
to the satisfaction of the requirements of this Section 3.9, if a
Fundamental Change occurs at any time prior to the Final Maturity Date, each
Holder will, upon receipt of the notice of the occurrence of a Fundamental
Change described in Section 3.9(c), have the right (subject to the
Company’s rights upon delivery of a Public Acquisition Notice, as defined in
Section 3.11) to require the Company to repurchase any or all of such
Holder’s Securities for cash in an amount equal to 100% of the principal amount
of the Securities to be repurchased plus accrued and unpaid interest, if any, to
(but not including) the Fundamental Change Repurchase Date (the “Fundamental
Change Repurchase Price”), unless such Fundamental Change Repurchase Date falls
after an interest payment record date and on or prior to the corresponding
interest payment date, in which case the Fundamental Change Repurchase Price
will include the full amount of accrued and unpaid Interest payable on such
interest payment date to the Holder of record at the close of business on the
corresponding interest payment record date.

     

    (b)           Notwithstanding
the foregoing, Holders will not have the right to require the Company to
repurchase any Securities if a Fundamental Change described in clause (b)
or (c) in the definition of Fundamental Change occurs (and the Company will not
be required to deliver the notice described in Section 3.9(c)), if
either:

     

     (1)           the
Closing Price for any five Trading Days within the period of 10 consecutive
Trading Days ending immediately after the later of the effective date of the
Fundamental Change or the date of the public announcement of the Fundamental
Change, in the case of a Fundamental Change relating to an acquisition of
Capital Stock under clause (b) of the definition of Fundamental Change, or
the period of ten consecutive Trading Days ending immediately before the
effective date of the Fundamental Change, in the case of a Fundamental Change
relating to a merger, consolidation, asset sale or otherwise under
clause (c) of the definition of Fundamental Change, equals or exceeds 105%
of the quotient of $1,000 divided by the Applicable Conversion Rate in effect on
each of those five Trading Days; or


    
      
         


      

      
        23

        
          

        

      

      
         


      

    

     

    (2)           
at least 95% of the consideration paid for the Common Stock (excluding cash
payments for fractional shares and cash payments made pursuant to dissenters’ or
appraisal rights) in a merger or consolidation or a conveyance, sale, transfer
or lease otherwise constituting a Fundamental Change under clause (b)
and/or (c) of the definition of Fundamental Change consists of shares of Capital
Stock (or American Depository Shares representing such Capital Stock) traded on
the New York Stock Exchange or another United States national securities
exchange or quoted on the Nasdaq Stock Market or another established automated
over-the-counter trading market in the United States (or will be so traded or
quoted immediately following the merger or consolidation) and as a result of the
merger or consolidation the Securities become convertible into shares of such
Capital Stock (or American Depository Shares representing such Capital
Stock).

     

    (c)           Subject
to Sections 3.9(b) and 3.11, on or before the 15th day
after the effective date of a Fundamental Change (which Fundamental Change
results in the Holders of such Securities having the right to cause the Company
to repurchase their Securities), the Company will provide to all Holders of the
Securities, the Trustee and the Paying Agent a notice of the occurrence of the
Fundamental Change and of the resulting repurchase right. Such notice shall
state:

     

    (1)           the
events causing the Fundamental Change;

     

    (2)           whether
the Fundamental Change falls under clause (b) or (c) of the definition of
Fundamental Change, in which case the conversion adjustments described in
Section 3.10 will be applicable;

     

    (3)           the
effective date of the Fundamental Change;

     

    (4)           the
last date on which a Holder may exercise its repurchase right;

     

    (5)           the
Fundamental Change Repurchase Price;

     

    (6)           the
Fundamental Change Repurchase Date;

     

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

     

    (8)           the
Applicable Conversion Rate and any adjustments to the Applicable Conversion Rate
and availability of Additional Shares, if and to the extent
applicable;

     

    (9)           that
the Securities with respect to which a Fundamental Change repurchase notice has
been given by the Holder may be converted only if the Holder withdraws the
Fundamental Change repurchase notice as described in clause (d) below;
and

     

    (10)         the
procedures that Holders must follow to require the Company to repurchase their
Securities and to withdraw any repurchase notice.

     

    Substantially
simultaneously with providing such notice, the Company will issue a press
release and publish the information through a public medium customary for such
press releases.


    
      
         


      

      
        24

        
          

        

      

      
         


      

    

     

    (d)          To
exercise the repurchase right in connection with a Fundamental Change, a Holder
must, before the close of business on the second Business Day immediately
preceding the Fundamental Change Repurchase Date, deliver the Securities to be
purchased to the Paying Agent, duly endorsed for transfer, or effect book-entry
transfer of the Securities to the Paying Agent, and must deliver the Fundamental
Change repurchase notice duly completed to the Paying Agent. The Fundamental
Change repurchase notice must state:

     

    (1)           if
the Securities are certificated, the certificate numbers of the Securities to be
delivered for repurchase;

     

    (2)           the
portion of the principal amount of the Securities to be repurchased, which must
be equal to $1,000 or an integral multiple thereof; and

     

    (3)           that
the Securities are to be repurchased by the Company pursuant to the applicable
provisions of the Securities and this Indenture.

     

    If the
Securities are not in certificated form, the repurchase notice must comply with
the Applicable Procedures.

     

    A Holder
may withdraw any Fundamental Change repurchase notice (in whole or in part) by a
written notice of withdrawal delivered to the Paying Agent prior to the close of
business on the Business Day prior to the Fundamental Change Repurchase Date.
The notice of withdrawal must state:

     

    (1)           the
principal amount of the Securities for which the repurchase notice has been
withdrawn;

     

    (2)           if
certificated Securities have been issued, the certificate numbers of the
withdrawn Securities; and

     

    (3)           the
principal amount, if any, that remains subject to the repurchase
notice.

     

    If the
Securities are not in certificated form, the withdrawal notice must comply with
the Applicable Procedures.

     

    (e)           The
Company must repurchase the Securities for which a Fundamental Change repurchase
notice has been delivered and not withdrawn no less than 20 and no more than
35 days after the date of the Company’s notice of the occurrence of the
relevant Fundamental Change, subject to extension to comply with applicable
law.  To receive payment of the Fundamental Change Repurchase Price, a
Holder must either effect book-entry transfer or deliver the Securities,
together with necessary endorsements, to the office of the Paying Agent after
delivery of the repurchase notice.  Holders will receive payment of
the Fundamental Change Repurchase Price promptly following the later of the
Fundamental Change Repurchase Date or the time of book-entry transfer or the
delivery of the Securities.  If the Paying Agent holds money
sufficient to pay the Fundamental Change Repurchase Price of the Securities on
or prior to the Business Day following the Fundamental Change Repurchase Date,
then:


    
      
         


      

      
        25

        
          

        

      

      
         


      

    

     

    (1)           the
Securities will cease to be outstanding and Interest, if any, will cease to
accrue (whether or not book-entry transfer of the Securities is made or whether
or not the Securities are delivered to the Paying Agent); and

     

    (2)           all
other rights of the Holder will terminate (other than the right to receive the
Fundamental Change Repurchase Price upon delivery or transfer of the
Securities).

     

    SECTION 3.10        ADJUSTMENT
TO APPLICABLE CONVERSION RATE UPON A FUNDAMENTAL CHANGE.

     

    (a)           If
and only to the extent that a Holder converts Securities in connection with a
Fundamental Change described in clause (b) or (c) of the definition of
Fundamental Change (and subject to the Company’s rights upon delivery of a
Public Acquisition Notice as defined in Section 3.11), the Company will
increase the Applicable Conversion Rate for the Securities surrendered for
conversion by a number of additional shares (the “Additional Shares”) as
described in this Section 3.10; provided, however, that no increase will be
made in the case of a Fundamental Change if at least 95% of the consideration
paid for the Common Stock (excluding cash payments for fractional shares and
cash payments made pursuant to dissenters’ or appraisal rights) in such
Fundamental Change transaction consists of shares of Capital Stock (or American
Depository Shares representing such Capital Stock) traded on the New York Stock
Exchange or another United States national securities exchange or quoted on the
Nasdaq Stock Market or another established automated over-the-counter trading
market in the United States (or that will be so traded or quoted immediately
following the transaction).

     

    (b)           The
number of Additional Shares will be determined by reference to the Additional
Shares Table, based on the effective date of the Fundamental Change transaction
and the price (the “Stock Price”) paid per share of Common Stock in such
Fundamental Change transaction.  If holders of Common Stock receive
only cash in such Fundamental Change transaction, the Stock Price will be the
cash amount paid per share of Common Stock. Otherwise, the Stock Price will be
the average of the Closing Prices of the Common Stock on each of the five
consecutive Trading Days prior to but not including the effective date of the
Fundamental Change.

     

    (c)           A
conversion of Securities by a Holder will be deemed for these purposes to be “in
connection with” a Fundamental Change if the conversion notice is received by
the Conversion Agent on or subsequent to the effective date of the Fundamental
Change and prior to the 45th day following the effective date of the Fundamental
Change (or, if earlier and to the extent applicable, the close of business on
the second Business Day immediately preceding the Fundamental Change Repurchase
Date).

     

    (d)           The
Stock Prices set forth in the first row of the Additional Shares Table (i.e.,
the column headers) will be adjusted as of any date on which the Applicable
Conversion Rate is adjusted, as described in Section 4.6.  The
adjusted Stock Prices will equal (i) the Stock Prices applicable
immediately prior to such adjustment, multiplied by (ii) a fraction,
(A) the numerator of which is the Applicable Conversion Rate immediately
prior to the adjustment giving rise to the Stock Price adjustment and
(B) the denominator of which is the Applicable Conversion Rate as so
adjusted.  The number of Additional Shares will be adjusted in the
same manner and for the same events as the Applicable Conversion Rate as set
forth in Section 4.6.


    
      
         


      

      
        26

        
          

        

      

      
         


      

    

     

    (e)          The
exact Stock Price and effective date of the Fundamental Change may not be set
forth on the Additional Shares Table; in which case, if the Stock Price
is:

     

    (1)           between
two Stock Price amounts on the Additional Shares Table or the effective date of
the Fundamental Change is between two dates on the Additional Shares Table, the
number of Additional Shares will be determined by straight-line interpolation
between the number of Additional Shares set forth for the higher and lower Stock
Price amounts and the two dates, as applicable, based on a 365-day
year;

     

    (2)           more
than $13.70 per share (subject to adjustment), no Additional Shares will be
issued upon conversion; and

     

    (3)           less
than $5.70 per share (subject to adjustment), no Additional Shares will be
issued upon conversion.

     

    (f)           Notwithstanding
the foregoing, in no event will the total number of shares of Common Stock
issuable upon conversion exceed 175.4386 per $1,000 principal amount of
Securities, subject to adjustment in the same manner and for the same events as
the Applicable Conversion Rate as set forth in Section 4.6.

     

    SECTION 3.11          PUBLIC
ACQUIRER CHANGE OF CONTROL.

     

    (a)           Within
15 Trading Days prior to but not including the expected effective date of a
Public Acquirer Change of Control, the Company will provide a notice (a “Public
Acquisition Notice”) to all Holders, the Trustee, any Paying Agent and any
Conversion Agent describing the anticipated Public Acquirer Change of Control
and stating whether the Company will:

     

    (1)           elect
to adjust the Applicable Conversion Rate and related conversion obligation as
described in this Section 3.11, in which case the Holders will not have the
right to require the Company to repurchase their Securities as described in
Section 3.9 and will not have the right to the Applicable Conversion Rate
adjustment described in Section 3.10; or

     

    (2)           not
elect to adjust the Applicable Conversion Rate and related conversion obligation
as described in this Section 3.11, in which case the Holders will have the
right (if applicable) to require the Company to repurchase their Securities as
described in Section 3.9 and/or the right (if applicable) to an Applicable
Conversion Rate adjustment as described in Section 3.10, in each case in
accordance with the respective provisions of those Sections.

     

    (b)           If
the Public Acquisition Notice indicates that the Company is making the election
described in Section 3.11(a)(1), then the Applicable Conversion Rate and
the related conversion obligation shall be adjusted such that from and after the
effective date of the Public Acquirer Change of Control, Holders of the
Securities will be entitled to convert their Securities into a number of shares
of Public Acquirer Common Stock and the Applicable Conversion Rate will be
adjusted by multiplying the Applicable Conversion Rate in effect immediately
before the Public Acquirer Change of Control by a fraction:


    
      
         


      

      
        27

        
          

        

      

      
         


      

    

     

    (1)           the
numerator of which will be (A) in the case of a consolidation, merger or
binding share exchange, pursuant to which Common Stock is converted into cash,
securities or other property, the average value of all cash and any other
consideration (as determined by the Board of Directors) paid or payable per
share of Common Stock or (B) in the case of any other Public Acquirer
Change of Control, the average of the Closing Price of the Common Stock for the
five consecutive Trading Days prior to but excluding the effective date of such
Public Acquirer Change of Control; and

     

    (2)           the
denominator of which will be the average of the Closing Price of the Public
Acquirer Common Stock for the five consecutive Trading Days prior to but
excluding the effective date of such Public Acquirer Change of
Control.

     

    SECTION 3.12        COMPLIANCE
WITH SECURITIES LAWS UPON PURCHASE OF SECURITIES.

     

    In
connection with any offer to purchase or purchase of Securities under
Section 3.9, 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 3.9 through 3.12 to be exercised in the time and in the manner
specified therein.

     

    SECTION 3.13        REPAYMENT
TO THE COMPANY.

     

    To the
extent that the aggregate amount of cash deposited by the Company pursuant to
Section 3.9 exceeds the aggregate Fundamental Change Repurchase Price
together with interest, if any, thereon of the Securities or portions thereof
that the Company is obligated to purchase, then promptly after the Fundamental
Change Repurchase 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 10 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 last Business Date prior to the Final Maturity Date, at the
Applicable Conversion Rate in effect on the Conversion Date; provided, however,
that, if such Security is called for redemption or submitted or presented for
purchase pursuant to Article 3, such conversion right shall terminate at
the close of business on the Business Day immediately preceding the Redemption
Date or Fundamental Change Repurchase Date, as the case may be, for such
Security or such earlier date as the Holder presents such Security for
redemption or for purchase (unless the Company shall default in making the
redemption payment or Fundamental Change Repurchase 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 redeemed or purchased, as the
case may be).  The Initial Conversion Rate is subject to adjustment as
provided in this Article 4.


    
      
         


      

      
        28

        
          

        

      

      
         


      

    

     

    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 notice pursuant to
Section 3.9 exercising the option of such Holder to require the Company to
purchase such Security may be converted only if such notice is withdrawn by a
written notice of withdrawal delivered to a Paying Agent prior to the close of
business on the Business Day immediately preceding the Fundamental Change
Repurchase Date in accordance with Section 3.9.

     

    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 (or
effect surrender in accordance with book-entry procedures), (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 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; provided, further, that such conversion shall be at the Applicable
Conversion Rate 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.


    
      
         


      

      
        29

        
          

        

      

      
         


      

    

     

    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
called for redemption or presented for purchase upon a Fundamental Change on a
Redemption Date or Fundamental Change Repurchase 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 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.  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.

     

    Except as
otherwise provided in this Section 4.2, the Company’s delivery to the
Holder of the full number of shares of Common Stock into which the Security is
convertible, together with any cash payment for such Holder’s fractional shares
pursuant to Section 4.3, will be deemed to satisfy the Company’s obligation
to pay the principal amount of the Security and accrued but unpaid interest
attributable to the period from the most recent interest payment date to the
conversion date.  As a result, accrued but unpaid interest to the
conversion date is deemed to be paid in full rather than cancelled, extinguished
or forfeited.

     

    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 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.


    
      
         


      

      
        30

        
          

        

      

      
         


      

    

     

    
      
        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 Company (through its stock transfer agent) may
refuse to deliver the certificate representing the Common Stock being issued in
a name other than the Holder’s name until the Company (through its stock
transfer agent) receives a sum sufficient to pay any tax which will be due
because the shares are to be issued in a name other than the Holder’s
name.  Nothing herein shall preclude any tax withholding required by
law or regulation.

     

    SECTION 4.5     
  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 Securities into Common
Stock in accordance with the provisions of this Indenture, the Company covenants
to list such Common Stock issuable upon conversion of the Securities 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 Transfer Restricted Security
will also be a Transfer Restricted Security.

     

    In no
event will the Company take any action that would require adjustment to the
Applicable Conversion Rate, nor will the Company adjust the Applicable
Conversion Rate, if such Applicable Conversion Rate adjustment would require the
Company to issue, upon conversion of the Securities, a number of shares of
Common Stock that would require the Company to obtain prior shareholder approval
under the rules and regulations of the Nasdaq National Market, and, if
applicable, the rules of the exchange or quotation system on which the Common
Stock is then traded, without obtaining such prior shareholder
approval.

     

    SECTION 4.6        ANTI-DILUTION
ADJUSTMENTS.

     

    The
Applicable Conversion Rate will be subject to adjustment, without duplication,
upon the occurrence of any of the following events:

     

    
      
        
        

      

      
        31

        
          

        

      

      
        
        

      

    

     

    (a)           the
Company pays a dividend or makes a distribution on the Common Stock, payable
exclusively in shares of Common Stock, in which event, the conversion rate in
effect immediately before the close of business on the record date fixed for
determination of stockholders entitled to receive that dividend will be
increased by multiplying:  (x) the Applicable Conversion Rate; by
(y) a fraction, (1) the numerator of which is the sum of the number of
shares of Common Stock outstanding before the close of business on such record
date and the total number of shares constituting such dividend or other
distribution, and (2) the denominator of which shall be the number of
shares of Common Stock outstanding before the close of business on such record
date;

     

    (b)           the
Company issues to all or substantially all holders of Common Stock rights or
warrants that allow such holders to purchase shares of Common Stock for a period
expiring within 60 days from the date of issuance of the rights or warrants
at less than the current market price; provided that the Applicable Conversion
Rate will be readjusted to the extent that the rights or warrants are not
exercised prior to their expiration and as a result no additional shares are
delivered or issued pursuant to such rights or warrants;

     

    (c)           the
Company:

     

    (1)           subdivides
or splits the outstanding shares of Common Stock into a greater number of
shares, in which event the Applicable Conversion Rate shall be proportionally
increased immediately after the effective date of such subdivision or
split;

     

    (2)           combines
or reclassifies the outstanding shares of Common Stock into a smaller number of
shares, in which event the Applicable Conversion Rate shall be proportionally
reduced immediately after the effective date of such combination or
reclassification; or

     

    (3)           issues
by reclassification of the shares of Common Stock any shares of the Capital
Stock of the Company;

     

    (d)           the
Company distributes to all or substantially all holders of Common Stock
evidences of indebtedness, securities or assets or certain rights to purchase
its securities (provided, however, that if these rights are only exercisable
upon the occurrence of specified triggering events, then the Applicable
Conversion Rate will not be adjusted until the triggering events occur), but
excluding:

     

    (1)           dividends
or distributions described in paragraph (a) above;

     

    (2)           rights
or warrants described in paragraph (b) above;

     

    (3)           dividends
or distributions paid exclusively in cash described in paragraph (f), (g)
or (h) below (the “distributed assets”), in which event (other than in the case
of a spin-off as described below), the conversion rate in effect immediately
before the close of business on the record date fixed for determination of
stockholders entitled to receive that distribution will be increased by
multiplying:

     

    (x)           the
Applicable Conversion Rate; by

     

    
      
        
        

      

      
        32

        
          

        

      

      
        
        

      

    

     

    (y)           a
fraction, (1) the numerator of which is the current market price of the Common
Stock and (2) the denominator of which is the current market price of the Common
Stock minus the fair market value, as determined by the Board of Directors,
whose determination in good faith will be conclusive, of the portion of those
distributed assets applicable to one share of Common Stock.

     

    For
purposes of this paragraph (d) (unless otherwise stated), the “current market
price” of the Common Stock means the average of the Closing Prices of the Common
Stock for the five consecutive Trading Days ending on the Trading Day prior to
the earlier of the record date or the ex-dividend Trading Day for such
distribution, and the new Applicable Conversion Rate shall take effect
immediately after the record date fixed for determination of the stockholders
entitled to receive such distribution.

     

    Notwithstanding
the foregoing, in cases where (x) the fair market value per share of Common
Stock of the distributed assets equals or exceeds the current market price of
the Common Stock, or (y) the current market price of the Common Stock exceeds
the fair market value per share of Common Stock of the distributed assets by
less than $1.00, in lieu of the foregoing adjustment, the Holder will have the
right to receive upon conversion, in addition to shares of Common Stock, the
distributed assets the Holder would have received if the Holder had converted
the Securities immediately prior to the record date.

     

    (e)           In
respect of a dividend or other distribution of shares of Capital Stock of any
class or series, or similar equity interests, of or relating to a Subsidiary of
the Company or other business unit, referred to herein as a “spin-off”, the
Applicable Conversion Rate in effect immediately before the close of business on
the record date fixed for determination of stockholders entitled to receive that
distribution will be increased by multiplying:

     

    (x)           the
Applicable Conversion Rate; by

     

    (y)           an
adjustment factor equal to the sum of the daily adjustments for each of the ten
consecutive Trading Days beginning on the effective day of the
spin-off.

     

    For
purposes of this paragraph (e) (unless otherwise stated), the “daily adjustment”
for any given Trading Day is equal to a fraction, the numerator of which is the
closing price of the Common Stock on that Trading Day plus the closing price of
the portion of those shares of Capital Stock or similar equity interests so
distributed applicable to one share of the Common Stock on that Trading Day, and
the denominator of which is the product of 10 and the closing price of the
Common Stock on that Trading Day.  The adjustment to the Applicable
Conversion Rate in the event of a spin-off will occur on the tenth Trading Day
from, and including, the effective date of the spin-off.

     

    (f)           the
Company makes a distribution consisting exclusively of cash to all or
substantially all holders of outstanding shares of Common Stock, in which event
the Applicable Conversion Rate will be adjusted by multiplying:

     

    (1)           the
Applicable Conversion Rate; by

     

    
      
        
        

      

      
        33

        
          

        

      

      
        
        

      

    

     

    (2)           a
fraction, (A) the numerator of which is the current market price of the Common
Stock, and (B) the denominator of which is the current market price of the
Common Stock, minus the amount per share of such distribution.

     

    Notwithstanding
the foregoing, in cases where (i) the amount per share of Common Stock of such
distribution equals or exceeds the current market price of the Common Stock or
(ii) the current market price of the Common Stock exceeds the amount per share
of Common Stock of such distribution by less than $1.00, in lieu of the
foregoing adjustment, the Holder will have the right to receive upon conversion,
in addition to shares of Common Stock, such distribution the Holder would have
received if the Holder had converted the Securities immediately prior to the
record date.  For purposes of this paragraph (f), the “current market
price” of the Common Stock means the average of the Closing Prices of the Common
Stock for the five consecutive Trading Days ending on the Trading Day prior to
the ex-dividend Trading Day for such cash distribution, and the new Applicable
Conversion Rate shall take effect immediately after the record date fixed for
determination of the stockholders entitled to receive such
distribution.

     

    (g)           the
Company or one of its Subsidiaries makes a payment in respect of a tender offer
or exchange offer for the Common Stock, in which event, to the extent the cash
and value of any other consideration included in the payment per share of the
Common Stock exceeds the Closing Price of the Common Stock on the Trading Day
next succeeding the last date on which tenders or exchanges may be made pursuant
to such tender offer or exchange offer, as the case may be, the Applicable
Conversion Rate will be adjusted by multiplying:

     

    (1)           the
Applicable Conversion Rate; by

     

    (2)           a
fraction, (A) the numerator of which will be the sum of (1) the fair market
value, as determined by the Board of Directors, of the aggregate consideration
payable for all shares of Common Stock the Company or any such Subsidiary
purchases in the tender or exchange offer and (2) the product of (x) the number
of shares of Common Stock outstanding less any such purchased shares and (y) the
Closing Price of the Common Stock on the Trading Day next succeeding the date of
the expiration of the tender or exchange offer, and (B) the denominator of which
will be the product of (1) the number of shares of Common Stock outstanding,
including any such purchased shares, and (2) the Closing Price of the Common
Stock on the Trading Day next succeeding the date of expiration of the tender or
exchange offer.

     

    (h)           the
Company or one of its Subsidiaries makes a payment in respect of a repurchase of
the Common Stock, the consideration for which exceeded the then-prevailing
market price of the Common Stock (such amount being the “repurchase premium”),
and that repurchase, together with any other repurchases of Common Stock by the
Company or a Subsidiary involving a repurchase premium concluded within the
preceding 12 months, resulted in the payment by the Company and its Subsidiaries
of an aggregate consideration exceeding an amount equal to 10% of the market
capitalization of the Common Stock, the Applicable Conversion Rate will be
adjusted by multiplying:

     

    (1)           the
Applicable Conversion Rate; by

     

    
      
        
        

      

      
        34

        
          

        

      

      
        
        

      

    

     

    (2)           a
fraction, (A) the numerator of which is the current market price of the Common
Stock and (B) the denominator of which is (1) the current market price of the
Common Stock, minus (2) the quotient of (x) the aggregate amount of all of the
repurchase premiums paid in connection with such repurchases and (y) the number
of shares of Common Stock outstanding on the day next succeeding the date of the
repurchase triggering the adjustment, as determined by the Board of
Directors;

     

    provided
that no adjustment to the Applicable Conversion Rate shall be made to the extent
the Applicable Conversion Rate is not increased as a result of the above
calculation; and provided further that the repurchases of Common Stock effected
by the Company, its Subsidiaries or their respective agents in conformity with
Rule 10b-18 under the Exchange Act will not be included in any adjustment to the
Applicable Conversion Rate made under this paragraph (h).  For
purposes of this paragraph (h), (i) the market capitalization will be calculated
by multiplying (A) the current market price of the Common Stock by (B) the
number of shares of Common Stock then outstanding on the date of the repurchase
triggering the adjustment, and (ii) the current market price will be the average
of the Closing Prices of the Common Stock for the five consecutive Trading Days
beginning on the Trading Day next succeeding the date of the repurchase
triggering the adjustment, and (iii) in determining the repurchase premium, the
“then-prevailing market price” of the Common Stock will be the average of the
Closing Prices of the Common Stock for the five consecutive Trading Days ending
on the relevant repurchase date.

     

    In
addition to the adjustments set forth above, the Company may increase the
Applicable Conversion Rate as the Board of Directors considers advisable to
avoid or diminish any income tax to holders of Common Stock or rights to
purchase Common Stock resulting from any dividend or distribution of Capital
Stock (or rights to acquire Capital Stock) or from any event treated as such for
income tax purposes.  The Company may also, from time to time, to the
extent permitted by applicable law, increase the Applicable Conversion Rate by
any amount for any period of at least 20 days if the Board of Directors has
determined that such increase would be in the Company’s best
interests.  If the Board of Directors makes such a determination, it
will be conclusive.  The Company will give Holders at least 15 days’
notice of such an increase in the Applicable Conversion Rate.

     

    No
adjustment to the Applicable Conversion Rate or a Holder’s ability to convert
its Securities will be made if the Holder otherwise participated in the
distribution without conversion or in certain other cases.

     

    The
Applicable Conversion Rate will not be adjusted:

     

    (1)           upon
the issuance of any shares of Common Stock pursuant to any present or future
plan providing for the reinvestment of dividends or interest payable on the
Company’s securities and the investment of additional optional amounts in shares
of Common Stock under any plan;

     

    (2)           upon
the issuance of any shares of Common Stock or options or rights to purchase
those shares pursuant to any present or future employee, director or consultant
benefit plan or program of or assumed by the Company or any of its
Subsidiaries;

     

    
      
        
        

      

      
        35

        
          

        

      

      
        
        

      

    

     

    (3)           upon
the issuance of any shares of Common Stock pursuant to any option, warrant,
right or exercisable, exchangeable or convertible security not described in the
preceding clause (2) and outstanding as of the date the Securities were first
issued;

     

    (4)           for
a change in the par value of the Common Stock; or

     

    (5)           for
accrued and unpaid interest, if any.

     

    If a
Holder will receive shares of Common Stock upon conversion of Securities, then
the Holder will also receive any associated rights under any stockholder rights
plan the Company may adopt, whether or not the rights have separated from the
Common Stock at the time of conversion unless, prior to conversion, the rights
have expired, terminated or been redeemed or exchanged.

     

    Substantially
simultaneously with an adjustment of the Applicable Conversion Rate, the Company
will disseminate a press release detailing the new Applicable Conversion Rate
and other relevant information.

     

    SECTION 4.7        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.  In addition, in no event shall the Trustee or Conversion
Agent be responsible for making any calculations under this Indenture or for
determining the Closing Price, the number of Additional Shares to be delivered,
the amounts to be paid or for monitoring any stock price.  For the
avoidance of doubt, the Trustee and Conversion Agent shall rely conclusively on
the calculations and information provided to them by the Company.  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.

     

    The
Trustee shall not be under any responsibility to determine the correctness of
any provisions contained in any supplemental indenture executed pursuant to
Section 6.1, 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 6.1.


     

    ARTICLE 5.

    COVENANTS

     

    SECTION 5.1        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 (including premium, if any) or
interest 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.

     

    
      
        
        

      

      
        36

        
          

        

      

      
        
        

      

    

     

    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 or agency of the Trustee in New York City), in Cash; 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 and the Trustee at least 10 Business Days prior to
the payment date.

     

    SECTION 5.2        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.  It is agreed that the filing of such reports via the SEC’s
EDGAR system shall constitute “filing” of such reports with the Trustee for
purposes of this Section 5.2.

     

    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 5.3        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,
2010), an Officers’ Certificate as to the signer’s knowledge of the Company’s
compliance with all conditions and covenants on its part contained in this
Indenture and stating whether or not the signer knows of any default or Event of
Default.  If such signer knows of such a default or Event of Default,
the Officers’ Certificate shall describe the default or Event of Default and the
efforts to remedy the same.  For the purposes of this Section 5.3,
compliance shall be determined without regard to any grace period or requirement
of notice provided pursuant to the terms of this Indenture.  The
Company shall, within 30 calendar days, upon becoming aware of any Event of
Default, deliver to the Trustee a statement specifying such Event of
Default.

     

    
      
        
        

      

      
        37

        
          

        

      

      
        
        

      

    

     

    SECTION 5.4        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 5.5        MAINTENANCE
OF CORPORATE EXISTENCE.

     

    Subject
to Article 6, the Company will do or cause to be done all things necessary to
preserve and keep in full force and effect its corporate existence.

     

    SECTION 5.6        RULE
144A INFORMATION REQUIREMENT.

     

    Within
the period prior to the expiration of the holding period applicable to sales
thereof under Rule 144, and so long as there are any Transfer Restricted
Securities or any shares of Common Stock issued upon conversion thereof that are
restricted securities under Rule 144 (“Restricted Shares”) outstanding, 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 Transfer Restricted Securities or Restricted
Shares, make available to such Holder or beneficial holder, and any prospective
purchaser of Transfer Restricted Securities or Restricted Shares, 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
Transfer Restricted Securities or Restricted Shares may reasonably request, all
to the extent required from time to time to enable such Holder or beneficial
holder to sell its Transfer Restricted Securities or Restricted Shares without
registration under the Securities Act within the limitation of the exemption
provided by Rule 144A.  Upon the request of any Holder or any
beneficial holder of the Transfer Restricted Securities or Restricted Shares,
the Company will deliver to such Holder or beneficial holder a written statement
as to whether it has complied with such requirements.

     

    SECTION 5.7        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 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.

     

    
      
        
        

      

      
        38

        
          

        

      

      
        
        

      

    

     

    ARTICLE 6.

    CONSOLIDATION,
MERGER, CONVEYANCE, TRANSFER OR LEASE

     

    SECTION 6.1        COMPANY
MAY CONSOLIDATE, ETC, ONLY ON CERTAIN TERMS.

     

    The
Company shall not consolidate with or merge into any other Person (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, unless:

     

    (1)           in
case the Company shall consolidate with or merge into another 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, 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 organized and validly existing under the laws of the United States
of America, any State thereof or the District of Columbia and 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, and no event
which, after notice or lapse of time or both, would become an Event of Default,
shall have happened and be continuing; and

     

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

     

    In the
case of a reclassification, consolidation, merger, sale or transfer of assets or
other transactions pursuant to which all or substantially all of the Common
Stock would be converted into other securities, cash or property, the right to
convert Securities into Common Stock will be changed into a right to convert
Securities into the kind and amount of other securities, cash or property that
the Holder would have received had the Holder converted such Securities
immediately prior to the transaction, except that if the Company has exercised
its option under Section 3.11(a)(1), the right to convert Securities into Common
Stock will instead be changed into a right to convert Securities into Public
Acquiror Common Stock in accordance with Section 3.11.

     

    
      
        
        

      

      
        39

        
          

        

      

      
        
        

      

    

     

    SECTION 6.2        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 6.1, there shall
be an adjustment to the Applicable Conversion Rate and 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.

     

    ARTICLE 7.

    DEFAULT
AND REMEDIES

     

    SECTION 7.1        EVENTS
OF DEFAULT.

     

    An “Event
of Default” shall occur if:

     

    (1)           the
Company defaults in the payment of any interest on any Security when the same
becomes due and payable and the default continues for a period of 30
days;

     

    (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, upon redemption, on a Fundamental Change
Repurchase Date or otherwise);

     

    (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 defaults in the payment of the purchase price of any Security when the
same becomes due and payable;

     

    (5)           the
Company fails to provide notice of a Fundamental Change to the Trustee and to
each Holder if required by Section 3.9 for a period of 30 days after notice of
failure to do so; or

     

    (6)           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
an aggregate outstanding principal amount then outstanding in excess of
$25,000,000, 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 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

     

    
      
        
        

      

      
        40

        
          

        

      

      
        
        

      

    

     

    (7)           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;

     

    (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

     

    (8)           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 7.1
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 7.1 is
cured, it ceases.

     

    
      
        
        

      

      
        41

        
          

        

      

      
        
        

      

    

     

    The
Trustee shall not be charged with knowledge of any Event of Default unless
written notice from the Company, a Paying Agent, or any Holder thereof shall
have been received by a Trust Officer at the Corporate Trust Office of the
Trustee, and such notice references this Indenture.

     

    SECTION 7.2        ACCELERATION.

     

    If an
Event of Default (other than an Event of Default specified in clause (7) or (8)
of Section 7.1) 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 (7) or (8) of
Section 7.1 occurs, 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 and
overdue principal, which has become due otherwise than by such declaration of
acceleration, has been paid; (c) the rescission would not conflict with any
judgment or decree of a court of competent jurisdiction; and (d) all payments
due to the Trustee and any predecessor Trustee under Section 8.7 have been
made.  No such rescission shall affect any subsequent default or
impair any right consequent thereto.

     

    Notwithstanding
the foregoing, the Company may, at its option, elect that the sole remedy for an
Event of Default relating to its failure to comply with the Company’s obligation
to file reports with the SEC in accordance with Section 5.2 (a “Filing Failure”)
shall for the first one hundred eighty (180) days after the occurrence of such
Event of Default (the “Extension Period”) consist exclusively of the right of
Holders to receive a fee (the “Extension Fee”) accruing at the rate of 1.00% per
annum of the aggregate principal amount of Securities that are then outstanding,
on the terms and in the manner described below.  Any Extension Fee
shall be paid at the same times and in the same manner as interest shall be paid
in accordance with this Indenture.  The Extension Fee shall accrue on
the Securities that are then outstanding from the first day of the Event of
Default to, but excluding, the earlier of (i) the date on which the Company has
made the filings initially giving rise to the Filing Failure and (ii) the date
that is one hundred eighty (180) days after the occurrence of the Event of
Default.  The Company must give written notice of its election to pay
the Extension Fee prior to the occurrence of the Event of Default.  On
the 181st day
after such Event of Default (if the Event of Default relating to the reporting
obligations is not cured or waived prior to such 181st day),
the Securities shall be subject to acceleration as provided in this Section
7.2.  This right shall not affect the rights of Holders of Securities
if any other Event of Default occurs under the Indenture.  If the
Company does not pay the Extension Fee on a timely basis in accordance with this
Section 7.2, the Securities shall be subject to acceleration as provided in this
Section 7.2.  Notwithstanding the foregoing, if an additional Filing
Failure occurs during an Extension Period, the Securities will be subject to
acceleration for such additional Filing Failure at the end of the Extension
Period for the first Filing Failure to the extent it has not been remedied
before the end of the first Extension Period, provided, however, that to the extent the
Company has agreed to pay an additional Extension Fee in accordance with the
terms of this Section 7.2 as to such additional Filing Failure, and the first
Filing Failure has been remedied before the end of the first Extension Period,
the Securities will not be subject to acceleration until the end of the
additional Extension Period as to such additional Filing Failure.  For
the avoidance of doubt, notwithstanding the occurrence of multiple overlapping
Filing Failures, the aggregate amount of all Extension Fees paid in a year shall
not exceed 1.00% per annum of the aggregate principal amount of the Securities
that are outstanding as of the beginning of such year.

     

    
      
        
        

      

      
        42

        
          

        

      

      
        
        

      

    

     

    SECTION 7.3        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 7.4        WAIVER
OF DEFAULTS AND EVENTS OF DEFAULT.

     

    Subject
to Sections 7.7 and 10.2, 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 in accordance with the provisions of the Securities and this
Indenture or any default or Event of Default in respect of any provision of this
Indenture or the Securities which, under Section 10.2, 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 7.5        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.

     

    
      
        
        

      

      
        43

        
          

        

      

      
        
        

      

    

     

    SECTION 7.6        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 or for the
conversion of the Securities pursuant to Article 4) unless:

     

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

     

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

     

    (3)           such
Holder or Holders offer to the Trustee reasonable 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 7.7        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, on or after
the respective due dates expressed in the Security and this Indenture, to
convert such Security in accordance with Article 4 and to bring suit for the
enforcement of any such payment on or after such respective dates or the right
to convert, is absolute and unconditional and shall not be impaired or affected
without the consent of the Holder.

     

    SECTION 7.8        COLLECTION
SUIT BY TRUSTEE.

     

    If an
Event of Default in the payment of principal or interest specified in clause (1)
or (2) of Section 7.1 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.

     

    
      
        
        

      

      
        44

        
          

        

      

      
        
        

      

    

     

    SECTION 7.9        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 8.7, 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 such proceedings, whether in liquidation or under
any plan of reorganization or arrangement or otherwise.  Nothing
herein contained shall be deemed to authorize the Trustee to authorize or
consent to, or, on behalf of any Holder, to authorize, accept or adopt any plan
of reorganization, arrangement, adjustment or composition affecting the
Securities or the rights of any Holder thereof, or to authorize the Trustee to
vote in respect of the claim of any Holder in any such proceeding.

     

    SECTION 7.10        PRIORITIES.

     

    If the
Trustee collects any money pursuant to this Article 7, it shall pay out the
money in the following order:

     

    First, to
the Trustee for amounts due under Section 8.7;

     

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

     

    Third,
the balance, if any, to the Company or to such other person a court of competent
jurisdiction may determine.

     

    The
Trustee may fix a record date and payment date for any payment to Holders
pursuant to this Section 7.10.

     

    SECTION 7.11        UNDERTAKING
FOR COSTS.

     

    In any
suit for the enforcement of any right or remedy under this Indenture or in any
suit against the Trustee for any action taken or omitted by it as Trustee, a
court in its discretion may require the filing by any party litigant in the suit
of an undertaking to pay the costs of the suit, and the court in its discretion
may assess reasonable costs, including reasonable attorneys’ fees and expenses,
against any party litigant in the suit, having due regard to the merits and good
faith of the claims or defenses made by the party litigant.  This
Section 7.11 does not apply to a suit made by the Trustee, a suit by a Holder
pursuant to Section 7.7, or a suit by Holders of more than 10% in aggregate
principal amount of the Securities then outstanding.

     

    
      
        
        

      

      
        45

        
          

        

      

      
        
        

      

    

     

    ARTICLE 8.

    TRUSTEE

     

    SECTION 8.1        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 no implied covenants or obligations shall be read
into this Indenture against the Trustee; and

     

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

     

    (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
8.1;

     

    (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
7.5.

     

    (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 8.1.

     

    
      
        
        

      

      
        46

        
          

        

      

      
        
        

      

    

     

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

     

    SECTION 8.2        RIGHTS
OF TRUSTEE.

     

    Subject
to Section 8.1:

     

    (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
11.4(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
of Counsel.

     

    (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 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.

     

    
      
        
        

      

      
        47

        
          

        

      

      
        
        

      

    

     

    (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.

     

    (j)           In
no event shall the Trustee be responsible or liable for special, indirect, or
consequential loss or damage of any kind whatsoever (including, but not limited
to, loss of profit) irrespective of whether the Trustee has been advised of the
likelihood of such loss or damage and regardless of the form of
action.

     

    (k)          The
Trustee may request that the Company deliver a certificate setting forth the
names of individuals and/or titles of officers authorized at such time to take
specified actions pursuant to this Indenture.

     

    (l)           In
no event shall the Trustee be responsible or liable for any failure or delay in
the performance of its obligations hereunder arising out of or caused by,
directly or indirectly, forces beyond its control, including, without
limitation, strikes, work stoppages, accidents, acts of war or terrorism, civil
or military disturbances, nuclear or natural catastrophes or acts of God, and
interruptions, loss or malfunctions of utilities, communications or computer
(software and hardware) services; it being understood that the Trustee shall use
reasonable efforts which are consistent with accepted practices in the banking
industry to resume performance as soon as practicable under the
circumstances.

     

    SECTION 8.3       
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 8.10 and
8.11.

     

    SECTION 8.4       
TRUSTEE’S DISCLAIMER.

     

    The
Trustee makes no representation as to the validity, priority 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 recitals contained herein or the Securities other than its
certificate of authentication.

     

    SECTION 8.5       
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 is known to the
Trustee.  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.


    
      
         


      

      
        48

        
          

        

      

      
         


      

    

     

    SECTION 8.6       
RESERVED.

     

    SECTION 8.7       
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 8.7 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 without its 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 8.7, 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.

     

    When the
Trustee incurs expenses or renders services after an Event of Default specified
in clause (7) or (8) of Section 7.1 occurs, the expenses and the compensation
for the services are intended to constitute expenses of administration under any
Bankruptcy Law.  The obligations of the Company under this Section 8.7
shall survive the termination or satisfaction and discharge of this Indenture or
the resignation or removal of the Trustee for any reason.

     

    SECTION 8.8       
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, appoint a successor Trustee.  The Company may remove
the Trustee if:

     

    (1)           the
Trustee fails to comply with Section 8.10;


    
      
         


      

      
        49

        
          

        

      

      
         


      

    

     

    (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 8.10, 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 8.8, the Company’s
obligations under Section 8.7 shall continue for the benefit of the retiring
Trustee.

     

    SECTION 8.9       
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, by sale or otherwise, the resulting,
surviving or transferee corporation, without any further act, shall be the
successor Trustee, provided such transferee corporation shall qualify and be
eligible under Section 8.10.  Such successor Trustee shall promptly
mail notice of its succession to the Company and each Holder.


    
      
         


      

      
        50

        
          

        

      

      
         


      

    

     

    SECTION 8.10      ELIGIBILITY;
DISQUALIFICATION.

     

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

     

    SECTION 8.11      PREFERENTIAL
COLLECTION OF CLAIMS AGAINST COMPANY.

     

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

     

    SECTION 8.12      MAY HOLD SECURITIES.

     

    The
Trustee, any Paying Agent or any other agent of the Company, in its individual
or any other capacity, may become the owner or pledgee of Securities and may
otherwise deal with the Company with the same rights it would have if it were
not Trustee, Paying Agent or such other agent.

     

    SECTION 8.13      MONEY HELD IN TRUST.

     

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

     

    ARTICLE 9.

    SATISFACTION
AND DISCHARGE OF INDENTURE

     

    SECTION 9.1        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 Securities which
have been destroyed, lost or stolen and which have been replaced or paid as
provided in Section 2.7) have been delivered to the Trustee for cancellation;
or

     

    (B)         all
such Securities not theretofore delivered to the Trustee for
cancellation

     

    (i)           have
become due and payable, or


    
      
         


      

      
        51

        
          

        

      

      
         


      

    

     

    (ii)          will
become due and payable at the Final Maturity Date within one year,
or

     

    (iii)         are
to be called for redemption within one year under arrangements satisfactory to
the Trustee for the giving of notice of redemption by the Trustee in the name,
and at the expense, of the Company,

     

    and the
Company, in the case of clause (i), (ii) or (iii) above, has irrevocably
deposited or caused to be irrevocably deposited with the Trustee or a Paying
Agent (other than the Company or any of its Affiliates) as trust funds in cash
in an amount sufficient to pay and discharge the entire indebtedness on such
Securities not theretofore delivered to the Trustee for cancellation, for
principal (including premium, if any) and interest to the date of such deposit
(in the case of Securities which have become due and payable) or to the Final
Maturity Date or Redemption Date, as the case may be;

     

    (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 provided for relating
to the satisfaction and discharge of this Indenture have been complied
with.

     

    Notwithstanding
the satisfaction and discharge of this Indenture, the obligations of the Company
to the Trustee under Section 8.7 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, 3.9, 3.10,
3.11, 3.12 and 11.5, Article 4, the last paragraph of Section 5.2 and this
Article 9, shall survive until the Securities have been paid in
full.

     

    SECTION 9.2        APPLICATION
OF TRUST MONEY.

     

    Subject
to the provisions of Section 9.3, the Trustee or a Paying Agent shall hold in
trust, for the benefit of the Holders, all money deposited with it pursuant to
Section 9.1 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.

     

    SECTION 9.3        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 9.1 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.  In the absence of a
written request from the Company to return unclaimed funds to the Company, the
Trustee shall from time to time deliver all unclaimed funds to or as directed by
applicable escheat authorities, as determined by the Trustee in its sole
discretion, in accordance with the customary practices and procedures of the
Trustee.  Any unclaimed funds held by the Trustee pursuant to this
Section 9.3 shall be held uninvested and without any liability for
interest.


    
      
         


      

      
        52

        
          

        

      

      
         


      

    

     

    SECTION 9.4        RESERVED.

     

    SECTION 9.5        RESERVED.

     

    SECTION 9.6        RESERVED.

     

    SECTION 9.7        REINSTATEMENT.

     

    If the
Trustee or any Paying Agent is unable to apply any money in accordance with
Section 9.2 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 9.1 until such time as the Trustee or
such Paying Agent is permitted to apply all such money in accordance with
Section 9.2; 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 10.

    AMENDMENTS,
SUPPLEMENTS AND WAIVERS

     

    SECTION 10.1      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 Section 6.1;

     

    (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;

     

    (f)           to
secure the Company’s obligations with respect to the Securities;
or


    
      
         


      

      
        53

        
          

        

      

      
         


      

    

     

    (g)           to
appoint a successor Trustee.

     

    SECTION 10.2      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 10.4, without the written consent of each Securityholder affected, an
amendment, supplement or waiver, including a waiver pursuant to Section 7.4, may
not:

     

    (a)           change
the stated maturity of the principal of, or 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 Fundamental Change in a manner adverse to Holders;

     

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

     

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

     

    (i)           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

     

    (j)           modify
any of the provisions of this Section or Section 7.4, 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 10.2 to
approve the particular form of any proposed amendment, supplement or waiver, but
it shall be sufficient if such consent approves the substance
thereof.


    
      
         


      

      
        54

        
          

        

      

      
         


      

    

     

    After an
amendment, supplement or waiver under this Section 10.2 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.

     

    To the
extent that the Company or any of the Subsidiaries hold any Securities, such
Securities shall be disregarded for purposes of voting in connection with any
notice, waiver, consent or direction requiring the vote or concurrence of
Securityholders.

     

    SECTION 10.3      RESERVED.

     

    SECTION 10.4      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
(j) of Section 10.2.  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 10.5      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 10.6      TRUSTEE
TO SIGN AMENDMENTS, ETC.

     

    The
Trustee shall sign any amendment or supplemental indenture authorized pursuant
to this Article 10 if the amendment or supplemental indenture does not adversely
affect the rights, duties, liabilities or immunities of the
Trustee.  If it does, the Trustee may, in its sole discretion, but
need not sign it.  In signing or refusing to sign such amendment or
supplemental indenture, the Trustee shall be entitled to receive and, subject to
Section 8.1, 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.


    
      
         


      

      
        55

        
          

        

      

      
         


      

    

     

    SECTION 10.7      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 11.

    MISCELLANEOUS

     

    SECTION 11.1      RESERVED.

     

    SECTION 11.2      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:

     

    PDL
BioPharma, Inc.

    932
Southwood Boulevard

    Incline
Village, Nevada 89451

    Attention:  Chief
Financial Officer or General Counsel

    Facsimile
No.:  [           ]

    Phone
No.:  (775) 832-8500

     

    If to the
Trustee, to:

     

    The Bank
of New York Mellon Trust Company, N.A.

    700 South
Flower St., Suite 500

    Los
Angeles, California  90017

    Attention:  Corporate
Trust Administration

    Facsimile
No.:  (213) 630-6298

    Phone
No.:  (213) 630-6256

     

    Such
notices or communications shall be effective when received.

     

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

     

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


    
      
         


      

      
        56

        
          

        

      

      
         


      

    

     

    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.

     

    The
Trustee agrees to accept and act upon instructions or directions pursuant to
this Indenture sent by unsecured e-mail, facsimile transmission or other similar
unsecured electronic methods (including pdf files).  If the party
elects to give the Trustee e-mail or facsimile instructions (or instructions by
a similar electronic method) and the Trustee in its discretion elects to act
upon such instructions, the Trustee’s understanding of such instructions shall
be deemed controlling.  The Trustee shall not be liable for any
losses, costs or expenses arising directly or indirectly from the Trustee’s
reliance upon and compliance with such instructions notwithstanding such
instructions conflict or are inconsistent with a subsequent written
instruction.  The party providing electronic instructions agrees to
assume all risks arising out of the use of such electronic methods to submit
instructions and directions to the Trustee, including without limitation the
risk of the Trustee acting on unauthorized instructions, and the risk or
interception and misuse by third parties.

     

    SECTION 11.3      RESERVED.

     

    SECTION 11.4      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;


    
      
         


      

      
        57

        
          

        

      

      
         


      

    

     

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

     

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

     

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

     

    SECTION 11.5      RECORD
DATE FOR VOTE OR CONSENT OF SECURITYHOLDERS.

     

    The
Company (or, in the event deposits have been made pursuant to Section 9.1, 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 10.4, 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 11.6      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 11.7      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 11.8      GOVERNING
LAW.

     

    This
Indenture and the Securities shall be governed by, and construed in accordance
with, the laws of the State of New York.


    
      
         


      

      
        58

        
          

        

      

      
         


      

    

     

    SECTION 11.9      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 11.10   NO
RECOURSE AGAINST OTHERS.

     

    All
liability described in paragraph 19 of the Securities of any director, officer,
employee or shareholder, as such, of the Company is waived and
released.

     

    SECTION 11.11   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.

     

    SECTION 11.12   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 11.13   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 11.14   TAX
TREATMENT.

     

    The
Company agrees, and by acceptance of beneficial ownership in the Securities each
beneficial holder of the Securities will be deemed to have agreed, for United
States federal income tax purposes to treat the Securities as indebtedness that
is not subject to the contingent payment debt instrument regulations under
Treas. Reg. Sec. 1.1275-4.

     

    SECTION 11.15   DESIGNATED
SENIOR INDEBTEDNESS.

     

    The
Company’s indebtedness under the Securities is “designated senior indebtedness”
for purposes of the Indenture, dated as of July 14, 2003, between the Company
and The Bank of New York Mellon Trust Company, N.A. (as successor to J.P. Morgan
Trust Company, National Association).

     

    SECTION 11.16   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.


    
      
         


      

      
        59

        
          

        

      

      
         


      

    

     

    SECTION 11.17   WAIVER
OF JURY TRIAL

     

    EACH OF
THE COMPANY AND THE TRUSTEE HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE, THE SECURITIES OR THE
TRANSACTION CONTEMPLATED HEREBY.

     

    [SIGNATURE
PAGE FOLLOWS]


    
      
         


      

      
        60

        
          

        

      

      
         


      

    

     

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

    


    
      
        	 
      	
                PDL
      BIOPHARMA, INC.

              
	 
      	 
      
	 
      	
                By:
      ______________________________

              
	 
      	 
      
	 
      	
                Name:

              
	 
      	
                Title:

              
	 
      	 
      
	 
      	
                THE
      BANK OF NEW YORK MELLON 

                TRUST
      COMPANY, N.A.

              
	 
      	 
      
	 
      	
                By:
      ______________________________

              
	 
      	 
      
	 
      	
                Name:

              
	 
      	
                Title:

              


      

    


    
      
         


      

      
        61

        
          

        

      

      
         


      

    

     

    Schedule
I

     

    Additional Shares
Table

     

    The
following table sets forth the hypothetical Stock Price and number of Additional
Shares per $1,000 principal amount of Securities:

    


    
      
        
          
            
              
                	
                        Effective
      Date

                      	 	$	5.700	 	 	$	6.700	 	 	$	7.700	 	 	$	8.700	 	 	$	9.700	 	 	$	10.700	 	 	$	11.700	 	 	$	12.700	 	 	$	13.700	 
	
                        November
      1, 2010

                      	 	 	34.8676	 	 	 	23.7126	 	 	 	16.8706	 	 	 	12.4750	 	 	 	9.3568	 	 	 	7.3729	 	 	 	5.5914	 	 	 	4.4369	 	 	 	3.3560	 
	
                        February
      15, 2011

                      	 	 	34.8676	 	 	 	20.2082	 	 	 	12.9370	 	 	 	9.5663	 	 	 	7.1752	 	 	 	5.6538	 	 	 	4.2877	 	 	 	3.4024	 	 	 	2.5735	 
	
                        February
      15, 2012

                      	 	 	34.8676	 	 	 	16.7038	 	 	 	9.0035	 	 	 	6.6576	 	 	 	4.9935	 	 	 	3.9348	 	 	 	2.9840	 	 	 	2.3679	 	 	 	1.7910	 
	
                        February
      15, 2013

                      	 	 	34.8676	 	 	 	13.1995	 	 	 	5.0699	 	 	 	3.7490	 	 	 	2.8119	 	 	 	2.2157	 	 	 	1.6803	 	 	 	1.3334	 	 	 	1.0085	 
	
                        February
      15, 2014

                      	 	 	34.8676	 	 	 	9.6951	 	 	 	1.1364	 	 	 	0.8403	 	 	 	0.6303	 	 	 	0.4966	 	 	 	0.3766	 	 	 	0.2989	 	 	 	0.2261	 
	
                        February
      15, 2015

                      	 	 	34.8676	 	 	 	8.6827	 	 	 	0.0000	 	 	 	0.0000	 	 	 	0.0000	 	 	 	0.0000	 	 	 	0.0000	 	 	 	0.0000	 	 	 	0.0000	 


              

            

          

        

      

    


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    


    EXHIBIT
A

     

    [FORM
OF FACE OF SECURITY]

     

    [UNLESS
THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE
OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE &
CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF,
CEDE & CO., HAS AN INTEREST HEREIN. THIS NOTE 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 NOTE 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 NOTES IN DEFINITIVE
FORM, THIS NOTE 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
NOTE AND ANY COMMON STOCK ISSUABLE UPON THE CONVERSION OF THIS NOTE HAVE NOT
BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), AND MAY NOT BE SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE
OF SUCH REGISTRATION OR ANY APPLICABLE EXEMPTION THEREFROM.  EACH
PURCHASER OF THIS NOTE IS HEREBY NOTIFIED THAT THE SELLER OF THIS NOTE MAY BE
RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT
PROVIDED BY RULE 144A THEREUNDER]2

     

    [THIS
NOTE AND ANY COMMON STOCK ISSUABLE UPON THE CONVERSION OF THIS NOTE MAY NOT BE
OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A) (1) TO A PERSON WHO
THE TRANSFEROR REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE
MEANING OF RULE 144A UNDER THE SECURITIES ACT ACQUIRING FOR ITS OWN ACCOUNT OR
FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A

    


    
      
 


    
      	
               
      

            	
              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 Transfer Restricted
      Security.

            


    


    
      
         


      

      
        A-1

        
          

        

      

      
         


      

    

     

      
        

      

    

     

    TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A, (2) PURSUANT TO AN EXEMPTION FROM
REGISTRATION RIGHTS UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF
AVAILABLE), (3) TO AN INSTITUTIONAL INVESTOR THAT IS AN ACCREDITED INVESTOR
WITHIN THE MEANING OF RULE 501(a)(1), (2), (3) OR (7) OF REGULATION D UNDER THE
SECURITIES ACT (IF AVAILABLE) OR (4) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT, AND (B) IN ACCORDANCE WITH ALL APPLICABLE
SECURITIES LAWS OF THE STATES OF THE UNITED STATES AND OTHER
JURISDICTIONS.]2

     

    [THIS
NOTE, ANY SHARES OF COMMON STOCK ISSUABLE UPON ITS CONVERSION AND ANY RELATED
DOCUMENTATION MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO TIME TO MODIFY THE
RESTRICTIONS ON RESALES AND OTHER TRANSFERS OF THIS NOTE AND ANY SUCH SHARES TO
REFLECT ANY CHANGE IN APPLICABLE LAW OR REGULATION (OR THE INTERPRETATION
THEREOF) OR IN PRACTICES RELATING TO THE RESALE OR TRANSFER OF RESTRICTED
SECURITIES GENERALLY.  THE HOLDER OF THIS NOTE AND SUCH SHARES SHALL
BE DEEMED BY THE ACCEPTANCE OF THIS NOTE AND ANY SUCH SHARES TO HAVE AGREED TO
ANY SUCH AMENDMENT OR SUPPLEMENT.]2


    
      
         


      

      
        A-2

        
          

        

      

      
         


      

    

     

    PDL
BIOPHARMA, INC.

     

    CUSIP
No.:

     

    2.875%
CONVERTIBLE SENIOR NOTES DUE FEBRUARY 15, 2015

     

    PDL
BIOPHARMA, 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 Cede & Co., or registered assigns, the principal
sum of
                         Dollars
($                   )
on February 15, 2015, or such greater or lesser amount as is indicated on the
Schedule of Exchanges of Notes on the other side of this Note.

    


    
      
        
          	
                  Interest
      Payment Dates:

                	
                  February
      15 and August 15, commencing 

                  February
      15, 2011

                
	 	 
	
                  Record
      Dates:

                	
                  February
      1 and August 1

                


        

      

    

     

    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.

     

    SIGNATURE
PAGE FOLLOWS


    
      
         


      

      
        A-3

        
          

        

      

      
         


      

    

     

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

     

    
      
        
          
            	
                    PDL
      BIOPHARMA, INC.

                  
	 
	
                    By:

                  	
                       

                  
	 
      	
                    Name:

                  
	 
      	
                    Title:

                  


          

        

      

    

     

    
      
        
          
            	
                    Attest:

                  	 
      
	 	 
	
                    By:

                  	
                       

                  
	 
      	
                    Name:

                  
	 
      	
                    Title:

                  
	 	 
	 
      	
                    Dated:

                  


          

        

      

    

     

    TRUSTEE’S
CERTIFICATE OF AUTHENTICATION

    This is
one of the Securities referred to

    in the
within-mentioned Indenture.

     

    The
Bank of New York Mellon Trust Company, N.A., as Trustee

    


    
      
        	
                   

              	 
      
	
                Authorized
      Signatory

              	 
      


      

    

     

    
      
         


      

      
        A-4

        
          

        

      

      
         


      

    

     

    [FORM
OF REVERSE SIDE OF SECURITY]

     

    PDL
BIOPHARMA, INC.

    2.875%
CONVERTIBLE SENIOR NOTES DUE FEBRUARY 15, 2015

     

    
      	
              1.

            	
              INTEREST

            


    

     

    PDL
BioPharma, 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 Security at the rate of 2.875%
per annum.  The Company shall pay interest semiannually on February 15
and August 15 of each year, commencing on February 15, 2011.  Interest
on the Securities shall accrue from the most recent date to which interest has
been paid or, if no interest has been paid, from October [   ],
2010; provided, however, that if there is not an existing default in the payment
of interest and if this Security 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.

     

    
      	
              2.

            	
              METHOD
      OF PAYMENT

            


    

     

    The
Company shall pay interest on this Security (except defaulted interest) to the
person who is the Holder of this Security at the close of business on February 1
or August 1, as the case may be, next preceding the related interest payment
date.  The Holder must surrender this Security to a Paying Agent to
collect payment of principal.  The Company will pay principal and
interest in money of the United States that at the time of payment is legal
tender for payment of public and private debts.  The Company may,
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 and the Trustee at least 10
Business Days prior to the payment date.

     

    
      	
              3.

            	
              PAYING
      AGENT, REGISTRAR AND CONVERSION
AGENT

            


    

     

    Initially,
The Bank of New York Mellon Trust Company, N.A. (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
Security is one of a duly authorized issue of Securities of the Company
designated as its 2.875% Convertible Senior Securities due February 15, 2015
(the “Securities”), issued under an Indenture, dated as of October
[    ], 2010 (together with any supplemental indentures
thereto, the “Indenture”), between the Company and the Trustee.  The
terms of this Security include, and are subject to, the terms of the
Indenture.  The Securities are unsecured obligations of the
Company.  The Indenture does not limit other debt of the Company,
secured or unsecured.


    
      
         


      

      
        B-1

        
          

        

      

      
         


      

    

     

    
      	
              5.

            	
              OPTIONAL
      REDEMPTION

            


    

     

    The
Securities are subject to redemption, at any time on or after August 15, 2014,
on at least 10 days and no more than 60 days notice, in whole or in part, at the
election of the Company, at a redemption price equal to 100% of the aggregate
principal amount of the Securities to be redeemed together with accrued
interest up to but not including the Redemption Date; provided that if the
redemption date falls after an interest payment record date and on or before an
interest payment date, interest will be payable to the Holders in whose names
the Securities are registered at the close of business on the relevant record
dates.

     

    No
sinking fund is provided for the Securities.

     

    
      	
              6.

            	
              NOTICE
      OF REDEMPTION

            


    

     

    Notice of
redemption will be mailed by first-class mail at least 10 days but not more than
60 days before the Redemption Date to each Holder of Securities to be redeemed
at its registered address.  Securities in denominations larger than
$1,000 may be redeemed in part, but only in whole multiples of
$1,000.  On and after the Redemption Date, subject to the deposit with
the Paying Agent of funds sufficient to pay the Redemption Price plus accrued
interest, if any, accrued to, but excluding, the Redemption Date, interest shall
cease to accrue on Securities or portions of them called for
redemption.

     

    
      	
              7.

            	
              REPURCHASE
      OF NOTES AT OPTION OF HOLDER UPON A FUNDAMENTAL
  CHANGE

            


    

     

    Subject
to the terms and conditions of the Indenture (including the rights of the
Company upon delivery of a Public Acquisition Notice as described in Section
3.11 of the Indenture and Section 8 hereof), if a Fundamental Change occurs at
any time prior to the Final Maturity Date, each Holder will, upon receipt of the
notice of the occurrence of a Fundamental Change, have the right to require the
Company to repurchase any or all of such Holder’s Securities for cash in an
amount equal to 100% of the Principal Amount of the Securities to be purchased
plus accrued and unpaid interest, if any, to (but not including) the Fundamental
Change Repurchase Date, unless such Fundamental Change Repurchase Date falls
after an interest payment record date and on or prior to the corresponding
interest payment date, in which case the Fundamental Change Repurchase Price
will include the full amount of accrued and unpaid interest payable on such
interest payment date to the Holder of record at the close of business on the
corresponding interest payment record date.  Subject to Sections
3.9(b) and 3.11 of the Indenture, on or before the 15th day after the effective
date of a Fundamental Change, the Company will provide to all Holders of the
Securities and the Trustee and Paying Agent a notice of the occurrence of the
Fundamental Change and of the resulting repurchase right.  To exercise
the repurchase right, a Holder must deliver the Fundamental Change repurchase
notice duly completed to the Paying Agent as described in the
Indenture.

     

    Notwithstanding
the foregoing, the Holders will not have the right to require the Company to
repurchase any Securities if a Fundamental Change described in clause (b), (c)
or (d) in the definition of Fundamental Change occurs (and the Company will not
be required to deliver the notice described in Section 3.9(c) of the Indenture),
if either:


    
      
         


      

      
        B-2

        
          

        

      

      
         


      

    

     

    (1)           the
Closing Price for any five Trading Days within the period of 10 consecutive
Trading Days ending immediately after the later of the effective date of the
Fundamental Change or the date of the public announcement of the Fundamental
Change, in the case of a Fundamental Change relating to an acquisition of
Capital Stock under clause (b) of the definition of Fundamental Change, or the
period of ten consecutive Trading Days ending immediately before the effective
date of the Fundamental Change, in the case of a Fundamental Change relating to
a merger, consolidation, asset sale or otherwise under clause (c) of the
definition of Fundamental Change, equals or exceeds 105% of the quotient of
$1,000 divided by the Applicable Conversion Rate in effect on each of those five
Trading Days; or

     

    (2)           at
least 95% of the consideration paid for the Common Stock (excluding cash
payments for fractional shares and cash payments made pursuant to dissenters’ or
appraisal rights) in a merger or consolidation or a conveyance, sale, transfer
or lease otherwise constituting a Fundamental Change under clause (b) and/or (c)
of the definition of Fundamental Change consists of shares of Capital Stock (or
American Depository Shares representing such Capital Stock) traded on the New
York Stock Exchange or another United States national securities exchange or
quoted on the Nasdaq Stock Market or another established automated
over-the-counter trading market in the United States (or will be so traded or
quoted immediately following the merger or consolidation) and as a result of the
merger or consolidation the Securities become convertible into shares of such
Capital Stock (or American Depository Shares representing such Capital
Stock).

     

    Holders
have the right to withdraw any Fundamental Change repurchase notice, in whole or
in part, by delivering to the Paying Agent a written notice of withdrawal in
accordance with the provisions of the Indenture.

     

    If cash
sufficient to pay the Fundamental Change Repurchase Price of all Securities or
portions thereof to be purchased as of the Fundamental Change Repurchase Date,
has been deposited with the Paying Agent on or prior to the Business Day
following the Fundamental Change Repurchase Date, all interest shall cease to
accrue on such Securities (or portions thereof) immediately after such
Fundamental Change Repurchase Date and the Holder thereof shall have no other
rights as such other than the right to receive the Fundamental Change Repurchase
Price, upon surrender of such Securities.

     

    
      	
              8.

            	
              PUBLIC
      ACQUIRER CHANGE OF CONTROL

            


    

     

    Within
fifteen Trading Days prior to but not including the expected effective date of a
Fundamental Change that is also a Public Acquirer Change of Control, the Company
will provide a Public Acquisition Notice to all Holders, the Trustee, any Paying
Agent and any Conversion Agent describing the anticipated Public Acquirer Change
of Control and stating whether the Company will:


    
      
         


      

      
        B-3

        
          

        

      

      
         


      

    

     

    (i)           elect
the adjust the Applicable Conversion Rate and related conversion obligation as
described in Section 3.11 of the Indenture, in which case the Holders will not
have the right to require the Company repurchase their Securities as described
in Section 3.9 of the Indenture and will not have the right to the Applicable
Conversion Rate adjustment described in Section 3.10 of the Indenture;
or

     

    (ii)           not
elect to adjust the Applicable Conversion Rate and related conversion obligation
as described in Section 3.11 of the Indenture, in which case the Holders will
have the right to require the Company to repurchase their Securities as
described in Section 3.9 of the Indenture and/or the right to an Applicable
Conversion Rate adjustment as described in Section 3.10 of the Indenture, in
each case in accordance with the respective provisions of those
Sections.

     

    If the
Public Acquisition Notice indicates that the Company is making the election
described in clause (i) above, then the Applicable Conversion Rate and the
related conversion obligation shall be adjusted such that from and after the
effective date of the Public Acquirer Change of Control, Holders of the
Securities will be entitled to convert their Securities into a number of shares
of Public Acquirer Common Stock pursuant to Section 3.11 of the
Indenture.

     

    
      	
              9.

            	
              CONVERSION

            


    

     

    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 last
Business Day prior to the Final Maturity Date, at the Applicable Conversion Rate
in effect on the Conversion Date; provided, however, that, if such Security is
called for redemption or submitted or presented for purchase pursuant to Article
3 of the Indenture, such conversion right shall terminate at the close of
business on the Business Day immediately preceding the Redemption Date or
Fundamental Change Repurchase Date, as the case may be, for such Security or
such earlier date as the Holder presents such Security for redemption or for
purchase (unless the Company shall default in making the redemption payment or
Fundamental Change Repurchase 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 redeemed or purchased, as the case may
be).

     

    The
Initial Conversion Rate means 140.571 shares of Common Stock per $1,000
principal amount of Securities, subject to adjustment under certain
circumstances as provided in the Indenture.  No fractional shares will
be issued upon conversion; in lieu thereof, an amount will be paid in cash based
upon the Closing Price (as defined in the Indenture) of the Common Stock on the
Trading Day immediately prior to the Conversion Date.


    
      
         


      

      
        B-4

        
          

        

      

      
         


      

    

     

    To
convert a Security, 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 Security to a Conversion Agent, and (c) furnish appropriate
endorsements and transfer documents if required by a Registrar or a Conversion
Agent.  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 called for redemption or subject to purchase upon
a Fundamental Change on a Redemption Date or Fundamental Change Repurchase 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 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.  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 Security
equal to $1,000 or any integral multiple thereof.

     

    A
Security in respect of which a Holder had delivered a Fundamental Change
repurchase notice exercising the option of such Holder to require the Company to
purchase such Security may be converted only if the Fundamental Change
repurchase notice is withdrawn in accordance with the terms of the
Indenture.

     

    
      	
              10.

            	
              CONVERSION
      ARRANGEMENT ON CALL FOR REDEMPTION

            


    

     

    Any
Securities called for redemption, unless surrendered for conversion before the
close of business on the Business Day immediately preceding the Redemption Date,
may be deemed to be purchased from the Holders of such Securities at an amount
not less than the Redemption Price, together with accrued interest, if any, to,
but not including, the Redemption Date, by one or more investment bankers or
other purchasers who may agree with the Company to purchase such Securities from
the Holders, to convert them into Common Stock of the Company and to make
payment for such Securities to the Paying Agent in trust for such
Holders.

     

    
      	
              11.

            	
              DENOMINATIONS,
      TRANSFER, EXCHANGE

            


    

     

    The
Securities 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 Securities 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.

     

    
      	
              12.

            	
              PERSONS
      DEEMED OWNERS

            


    

     

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

     

    
      	
              13.

            	
              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.


    
      
         


      

      
        B-5

        
          

        

      

      
         


      

    

     

    
      	
              14.

            	
              AMENDMENT,
      SUPPLEMENT AND WAIVER

            


    

     

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

     

    
      	
              15.

            	
              SUCCESSOR
      ENTITY

            


    

     

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

     

    
      	
              16.

            	
              DEFAULTS
      AND REMEDIES

            


    

     

    Under the
Indenture, an Event of Default includes:  (i) default for 30 days in
payment of any interest on any Securities; (ii) default in payment of any
principal (including, without limitation, premium, if any) on the Securities
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 Securities;
(iv) default in the payment of certain indebtedness of the Company or a
Significant Subsidiary; (v) the Company fails to provide a notice of a
Fundamental Change within 30 days after notice of failure to timely deliver the
same; 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 Securities then outstanding may declare
all unpaid principal to the date of acceleration on the Securities 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 Securities 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 Securities
except as provided in the Indenture.  The Trustee may require
indemnity satisfactory to it before it enforces the Indenture or the
Securities.  Subject to certain limitations, Holders of a majority in
aggregate principal amount of the Securities then outstanding may direct the
Trustee in its exercise of any trust or power.  The Trustee may
withhold from Holders notice of any continuing default (except a default in
payment of principal or interest) if 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.

     

    
      	
              17.

            	
              TRUSTEE
      DEALINGS WITH THE COMPANY

            


    

     

    The Bank
of New York Mellon Trust Company, N.A., 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.


    
      
         


      

      
        B-6

        
          

        

      

      
         


      

    

     

    
      	
              18.

            	
              NO
      RECOURSE AGAINST OTHERS

            


    

     

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

     

    
      	
              19.

            	
              AUTHENTICATION

            


    

     

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

     

    
      	
              20.

            	
              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).

     

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

     

    
      	
              21.

            	
              INDENTURE
      TO CONTROL; GOVERNING LAW

            


    

     

    In the
case of any conflict between the provisions of this Security and the Indenture,
the provisions of the Indenture shall control.  This Security 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:  PDL
BioPharma, Inc., 932 Southwood Boulevard, Incline Village, Nevada 89451,
Attention:  Investor Relations.


    
      
         


      

      
        B-7

        
          

        

      

      
         


      

    

     

    ASSIGNMENT
FORM

     

    To assign
this Note, fill in the form below:

     

    I or we
assign and transfer this Security to

    


    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            	
                                       

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

                                  
	 
	 
      
	
                                       

                                  
	 
	 
	 
	 
	
                                       

                                  
	
                                       

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

                                  
	 
      
	
                                    and
      irrevocably appoint

                                  
	
                                       

                                  
	 
	
                                    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.

            


    


    
      
         


      

      
        B-8

        
          

        

      

      
         


      

    

     

    CONVERSION
NOTICE

     

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

     

    To
convert only part of this Security, 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.

            


    

     

    
      
        
          	
                   

                
	
                  Participant
      Name and Number

                


        

      

    


    
      
         


      

      
        B-9

        
          

        

      

      
         


      

    

     

    OPTION
TO ELECT REPURCHASE

    UPON
A FUNDAMENTAL CHANGE

     

    To:          PDL
BioPharma, Inc.

     

    The
undersigned registered owner of this Security hereby irrevocably acknowledges
receipt of a notice from PDL BioPharma, Inc. (the “Company”) as to the
occurrence of a Fundamental Change with respect to the Company and requests and
instructs the Company to redeem 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
Note at the Fundamental Change Repurchase 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 redeemed

    (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.

    


    
      
        	
                   

              
	
                Participant
      Name and Number

              


      

    

     

    
      
         


      

      
        B-10

        
          

        

      

      
         


      

    

     

    SCHEDULE
OF EXCHANGES OF SECURITY3

     

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

     

    
      
        	
                
                  Principal Amount

                  of this Global Security

                  Following
      Such

                  Decrease Date

                  of Exchange (or Increase)

                

              	
                
                    

                

              	
                
                  Authorized

                  Signatory
      of

                  Securities

                  Custodian

                

              	
                
                    

                

              	
                
                  Amount of Decrease in

                  Principal
      Amount

                  of this Global Security

                

              	
                
                    

                

              	
                
                  Amount of

                  Increase in

                  Principal Amount

                  of this Global Security

                

              
	 
      	 
      	 
      	 
      	 
      	 
      	 
      


      

    

     

    
      

    

     

     

      
        

      

    

    3                         
  This schedule should be included only if the Security is a Global
Security.


    
      
         


      

      
        B-11

        
          

        

      

      
         


      

    

     

    EXHIBIT
B

     

    CERTIFICATE
TO BE DELIVERED UPON EXCHANGE OR REGISTRATION

    OF
TRANSFER OF TRANSFER RESTRICTED SECURITIES(4)

     

    
      	
              Re:

            	
              2.875%
      Convertible Senior Securities due February 15, 2015 (the “Securities”) of
      PDL BioPharma, Inc.

            


    

     

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

     

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

     

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

     

    In
connection with such request and in respect of each such Security, the
Transferor does hereby certify that the Transferor is familiar with transfer
restrictions relating to the Securities as provided in Section 2.12 of the
Indenture dated as of October [   ], 2010 between PDL BioPharma,
Inc. and The Bank of New York Mellon Trust Company, N.A., as trustee (the
“Indenture”), and the transfer of such Security is being made pursuant to an
effective registration statement under the Securities Act of 1933, as amended
(the “Securities Act”) (check applicable box) or the transfer or exchange, as
the case may be, of such Security does not require registration under the
Securities Act because (check applicable box):

     

    
      	
               
      

            	
               ̈

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

            


    

     

    
      	
               
      

            	
               ̈

            	
              Such
      Security is being transferred outside the United States in an offshore
      transaction in accordance with Rule 904 under the Securities
      Act.

            


    

     

    
      	
               
      

            	
               ̈

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

            


    

     

    
      	
               
      

            	
               ̈

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

            


    

     

    
      	
               
      

            	
               ̈

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

            


    

     

    
      
        

      

    

    (4)  This
certificate should only be included if this Security is a Transfer Restricted
Security.


    
      
         


      

      
        B-1

        
          

        

      

      
         


      

    

     

    
      	
               
      

            	
               ̈

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

            


    

     

    
      	
               
      

            	
               ̈

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

            


    

     

    
      
        	
                Date:

              	
                   

              	 
      	
                   

              
	 
      	 
      	
                (Insert
      Name of Transferor)

              


      

    

     

    
      
         


      

      
        B-2