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EXECUTION COPY  


 
  EXHIBIT 4.1    
    


MSC.SOFTWARE
CORPORATION 


21/2%
Senior Subordinated Convertible Notes 


due
2008 




INDENTURE 


Dated
as of May 5, 2003

  


J.P.
MORGAN TRUST COMPANY, NATIONAL ASSOCIATION 


TRUSTEE








 
 
 

Table of Contents    
    



	 
	 
	 	Page

	ARTICLE 1 DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION	 	1
	

SECTION 1.01	

Definitions	
 	

1
	SECTION 1.02	Other Definitions	 	9
	SECTION 1.03	Incorporation by Reference of Trust Indenture Act	 	10
	SECTION 1.04	Rules of Construction	 	10
	SECTION 1.05	Acts of Holders	 	10
	

ARTICLE 2 THE NOTES	
 	

11
	

SECTION 2.01	

Form and Dating	
 	

11
	SECTION 2.02	Execution and Authentication	 	13
	SECTION 2.03	Registrar, Paying Agent and Conversion Agent	 	13
	SECTION 2.04	Paying Agent to Hold Money and Notes in Trust	 	13
	SECTION 2.05	Noteholder Lists	 	14
	SECTION 2.06	Transfer and Exchange	 	14
	SECTION 2.07	Replacement Notes	 	15
	SECTION 2.08	Outstanding Notes; Determinations of Holders' Action	 	15
	SECTION 2.09	Temporary Notes	 	16
	SECTION 2.10	Cancellation	 	16
	SECTION 2.11	Persons Deemed Owners	 	17
	SECTION 2.12	Global Notes	 	17
	SECTION 2.13	CUSIP Numbers	 	20
	SECTION 2.14	Defaulted Interest	 	20
	SECTION 2.15	Registration Default	 	21
	

ARTICLE 3 REDEMPTION AND PURCHASES	
 	

21
	

SECTION 3.01	

Redemption	
 	

21
	SECTION 3.02	Notice of Trustee	 	21
	SECTION 3.03	Selection of Notes to be Redeemed	 	21
	SECTION 3.04	Notice of Redemption	 	22
	SECTION 3.05	Effect of Notice of Redemption	 	22
	SECTION 3.06	Deposit of Redemption Price	 	22
	SECTION 3.07	Notes Redeemed in Part	 	23
	SECTION 3.08	Conversion Arrangement on Call for Redemption	 	23
	SECTION 3.09	Repurchase of Notes at Option of the Holder upon Change in Control	 	23
	SECTION 3.10	Effect of Change in Control Repurchase Notice	 	26
	SECTION 3.11	Deposit of Change in Control Repurchase Price	 	27
	SECTION 3.12	Notes Purchased in Part	 	27
	SECTION 3.13	Covenant to Comply with Securities Laws upon Purchase of Notes	 	27
	SECTION 3.14	Repayment to the Company	 	27
	

ARTICLE 4 COVENANTS	
 	

27
	

SECTION 4.01	

Payment of Principal and Interest on the Notes	
 	

27
	SECTION 4.02	Reports to Holders	 	28
	SECTION 4.03	Compliance Certificate	 	28
	SECTION 4.04	Further Instruments and Acts	 	28
	SECTION 4.05	Maintenance of Office or Agency	 	28
	SECTION 4.06	Delivery of Certain Information	 	29
	SECTION 4.07	No Senior Subordinated Indebtedness	 	29
	 	 	 	 





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	SECTION 4.08	No Amendment of Subordination Provisions in Existing Subordinated Notes	 	29
	

ARTICLE 5 SUCCESSOR CORPORATION	
 	

29
	

SECTION 5.01	

When Company May Merge or Transfer Assets	
 	

29
	

ARTICLE 6 DEFAULTS AND REMEDIES	
 	

30
	

SECTION 6.01	

Events of Default	
 	

30
	SECTION 6.02	Acceleration	 	31
	SECTION 6.03	Other Remedies	 	32
	SECTION 6.04	Waiver of Past Defaults	 	32
	SECTION 6.05	Control by Majority	 	32
	SECTION 6.06	Limitation on Suits	 	32
	SECTION 6.07	Rights of Holders to Receive Payment	 	33
	SECTION 6.08	Collection Suit by Trustee	 	33
	SECTION 6.09	Trustee May File Proofs of Claim	 	33
	SECTION 6.10	Priorities	 	34
	SECTION 6.11	Undertaking for Costs	 	34
	SECTION 6.12	Waiver of Stay, Extension or Usury Laws	 	34
	

ARTICLE 7 TRUSTEE	
 	

34
	

SECTION 7.01	

Duties and Responsibilities of the Trustee; During Default; Prior to Default	
 	

34
	SECTION 7.02	Certain Rights of the Trustee	 	35
	SECTION 7.03	Trustee Not Responsible for Recitals, Disposition of Notes or Application of Proceeds Thereof	 	36
	SECTION 7.04	Trustee and Agents May Hold Notes; Collections, etc	 	36
	SECTION 7.05	Moneys Held by Trustee	 	37
	SECTION 7.06	Compensation and Indemnification of Trustee and Its Prior Claim	 	37
	SECTION 7.07	Right of Trustee to Rely on Officers' Certificate, etc	 	37
	SECTION 7.08	Conflicting Interests	 	37
	SECTION 7.09	Persons Eligible for Appointment as Trustee	 	38
	SECTION 7.10	Resignation and Removal; Appointment of Successor Trustee	 	38
	SECTION 7.11	Acceptance of Appointment by Successor Trustee	 	39
	SECTION 7.12	Merger, Conversion, Consolidation or Succession to Business of Trustee	 	39
	SECTION 7.13	Preferential Collection of Claims Against the Company	 	40
	SECTION 7.14	Reports by the Trustee	 	40
	SECTION 7.15	Trustee to Give Notice of Default, But May Withhold in Certain Circumstances	 	40
	

ARTICLE 8 SATISFACTION AND DISCHARGE OF INDENTURE	
 	

40
	

SECTION 8.01	

Satisfaction and Discharge	
 	

40
	SECTION 8.02	Application of Trust Money	 	41
	SECTION 8.03	Reinstatement	 	41
	

ARTICLE 9. AMENDMENTS	
 	

41
	

SECTION 9.01	

Without Consent of Holders	
 	

41
	SECTION 9.02	With Consent of Holders	 	42
	SECTION 9.03	Compliance with Trust Indenture Act	 	43
	SECTION 9.04	Revocation and Effect of Consents, Waivers and Actions	 	43
	SECTION 9.05	Notation on or Exchange of Notes	 	43
	SECTION 9.06	Trustee to Sign Amendments or Supplemental Indentures	 	43
	SECTION 9.07	Effect of Amendment or Supplemental Indentures	 	43
	 	 	 	 



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ARTICLE 10 CONVERSION	
 	

43
	

SECTION 10.01	

Conversion Right and Conversion Price	
 	

43
	SECTION 10.02	Exercise of Conversion Right	 	44
	SECTION 10.03	Fractions of Shares	 	44
	SECTION 10.04	Adjustment of Conversion Price	 	45
	SECTION 10.05	Notice of Adjustments of Conversion Price	 	52
	SECTION 10.06	Notice Prior to Certain Actions	 	52
	SECTION 10.07	Company to Reserve Common Stock	 	53
	SECTION 10.08	Taxes on Conversions	 	53
	SECTION 10.09	Covenant as to Common Stock	 	53
	SECTION 10.10	Cancellation of Converted Notes	 	53
	SECTION 10.11	Effect of Reclassification, Consolidation, Merger or Sale	 	53
	SECTION 10.12	Adjustment for Other Distributions	 	54
	SECTION 10.13	Responsibility of Trustee for Conversion Provisions	 	55
	

ARTICLE 11 SUBORDINATION	
 	

56
	

SECTION 11.01	

Agreement to Subordinate	
 	

56
	SECTION 11.02	Liquidation; Dissolution; Bankruptcy	 	56
	SECTION 11.03	Default on Designated Senior Indebtedness	 	56
	SECTION 11.04	[Intentionally Deleted]	 	57
	SECTION 11.05	When Distribution Must Be Paid Over	 	57
	SECTION 11.06	Notice by the Company	 	58
	SECTION 11.07	Subrogation	 	58
	SECTION 11.08	Relative Rights	 	58
	SECTION 11.09	Subordination May Not Be Impaired by the Company	 	58
	SECTION 11.10	Distribution or Notice to Representative	 	58
	SECTION 11.11	Rights of Trustee and Paying Agent	 	59
	

ARTICLE 12 SECURITY	
 	

59
	

SECTION 12.01	

Security	
 	

59
	

ARTICLE 13 MISCELLANEOUS	
 	

61
	

SECTION 13.01	

Trust Indenture Act Controls	
 	

61
	SECTION 13.02	Notices	 	61
	SECTION 13.03	Communication by Holders with Other Holders	 	62
	SECTION 13.04	Certificate and Opinion as to Conditions Precedent	 	62
	SECTION 13.05	Statements Required in Certificate or Opinion	 	62
	SECTION 13.06	Separability Clause	 	62
	SECTION 13.07	Rules by Trustee, Paying Agent, Conversion Agent and Registrar	 	62
	SECTION 13.08	Legal Holidays	 	62
	SECTION 13.09	GOVERNING LAW	 	63
	SECTION 13.10	No Recourse Against Others	 	63
	SECTION 13.11	Successors	 	63
	SECTION 13.12	Multiple Originals	 	63





	



EXHIBITS
 
	 
	 	 

	Exhibit A-1	Form of Global Note	 	A-1-1
	Exhibit A-2	Form of Face of Certificated Note	 	A-2-1
	Exhibit B-1	Transfer Certificate	 	B-1-1




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CROSS REFERENCE TABLE    •       
    



	TIA Section
 
	 	Indenture Section

	310(a)(1)	 	7.09
	      (a)(2)	 	7.09
	      (a)(3)	 	N.A.
	      (a)(4)	 	N.A.
	      (a)(5)	 	7.09
	      (b)	 	7.08; 7.09; 7.10;7.11
	      (c)	 	N.A.
	311(a)	 	7.13
	      (b)	 	7.13
	      (c)	 	N.A.
	312(a)	 	2.05
	      (b)	 	13.03
	      (c)	 	13.03
	313(a)	 	7.14
	      (b)(1)	 	7.14
	      (b)(2)	 	7.14
	      (c)	 	7.14, 13.02
	      (d)	 	7.14
	314(a)	 	4.02; 4.03; 13.02
	      (b)	 	12.01(e)
	      (c)(1)	 	13.04
	      (c)(2)	 	13.04
	      (c)(3)	 	N.A.
	      (d)	 	12.01(d)
	      (e)	 	13.05
	      (f)	 	N.A.
	315(a)	 	7.01
	      (b)	 	7.15; 13.02
	      (c)	 	7.01
	      (d)	 	7.01
	      (e)	 	6.11
	316(a) (last sentence)	 	2.08
	      (a)(1)(A)	 	6.05
	      (a)(1)(B)	 	6.04
	      (a)(2)	 	N.A.
	      (b)	 	6.07
	317(a)(1)	 	6.08
	      (a)(2)	 	6.09
	      (b)	 	2.04
	318(a)	 	13.01
	N. A. means Not Applicable	 	 







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







   
        INDENTURE dated as of May 5, 2003 between MSC.SOFTWARE CORPORATION, a Delaware corporation (the "Company"), and J.P. MORGAN TRUST COMPANY, NATIONAL ASSOCIATION a national banking
association, as Trustee hereunder (the "Trustee"). 


RECITALS OF THE COMPANY  


        The Company has duly authorized the creation of an issue of its 21/2% Senior Subordinated Convertible Notes due 2008 (herein called the "Notes") of
substantially the tenor and amount hereinafter set forth, and to provide therefor the Company has duly authorized the execution and delivery of this Indenture. 


        All
things necessary to make the Notes, when the Notes are executed by the Company and authenticated and delivered hereunder, the valid obligations of the Company, and to make this
Indenture a valid agreement of the Company, in accordance with their and its terms, have been done. Further, all things necessary to duly authorize the issuance of the Common Stock of the Company
issuable upon the conversion of the Notes, and to duly reserve for issuance the number of shares of Common Stock issuable upon such conversion, have been done. 


        The
Notes will be partially secured pursuant to the terms of the Collateral Pledge and Security Agreement (as defined herein) by Pledged Securities (as defined herein). 


        This
Indenture is subject to, and shall be governed by, the provisions of the Trust Indenture Act of 1939, as amended, that are required to be a part of and to govern indentures
qualified under the Trust Indenture Act of 1939, as amended. 


NOW, THEREFORE, THIS INDENTURE WITNESSETH:  


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


ARTICLE 1  


 DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION  



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



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


        (2)   all
accounting terms not otherwise defined herein have the meanings assigned to them in accordance with GAAP; and 



        (3)   the
words "herein", "hereof" and "hereunder" and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other
subdivision. 




        "Additional Pledged Securities" has the meaning specified in the Collateral Pledge and Security Agreement. 


        "Affiliate" of any specified person means any other person directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified person. For purposes of this definition, "control" when used with respect to any specified person means the power to direct or cause the direction of 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. 


1





 



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


        "Board of Directors" means either the board of directors of the Company or any duly authorized committee of such board. 


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



        "Business Day" means each day of the year other than a Saturday or a Sunday on which banking institutions are not required or authorized
to close in The City of New York or the city in which the principal corporate trust office of the Trustee is located. 


        "Capital Stock" of any corporation means any and all shares, interests, rights to purchase, warrants, options, participations or other
equivalents of or interests in (however designated) stock issued by that corporation. 


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


        "Closing Price" of any security on any date of determination means: 



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


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


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


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


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




        "Closing Time" has the meaning specified in the Purchase Agreement. 


        "Collateral Account" means an account established with the Collateral Agent pursuant to the terms of the Collateral Pledge and Security
Agreement for the deposit of the Pledged Securities to be purchased by the Company with a portion of the proceeds from the sale of the Notes. 


        "Collateral Agent" means, initially, J.P. MORGAN TRUST COMPANY, NATIONAL ASSOCIATION, a national banking association, as collateral agent
under the Collateral Pledge and Security Agreement. 


        "Collateral Pledge and Security Agreement" means the Collateral Pledge and Security Agreement, dated as of May 5, 2003, among the
Company, the Trustee and the Collateral Agent, as such agreement may be amended, restated, supplemented or otherwise modified from time to time. 


        "Common Stock" means the Common Stock, par value $0.01 per share, of the Company authorized at the date of this instrument as originally
executed. Subject to the provisions of Section 10.11, shares issuable on conversion or repurchase of Notes shall include only shares of Common Stock or shares of any class or classes of common
stock resulting from any reclassification or reclassifications thereof; provided, however, that if at any time there shall be more than one such 


2





 



resulting
class, the shares so issuable on conversion of Notes shall include shares of all such classes, and the shares of each such class then so issuable shall be substantially in the proportion
which the total number of shares of such class resulting from all such reclassifications bears to the total number of shares of all such classes resulting from all such reclassifications. 



        "common stock" means any stock of any class of capital stock which has no preference in respect of dividends or of amounts payable in the
event of any voluntary or involuntary liquidation, dissolution or winding up of the issuer. 


        "Company" means the party named as the "Company" 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. The foregoing sentence shall likewise apply to any subsequent such successor or successors. 



        "Company Request" or "Company Order" means a written request or order signed in the name
of the Company by any two Officers. 


        "Conversion Agent" means any person authorized by the Company to convert Notes in accordance with Article 10 hereof. 


        "Corporate Trust Office" means the principal office of the Trustee at which at any time its corporate trust business shall be
administered, which office at the date hereof is located at 560 Mission Street, 13th Floor, San Francisco, California 94105, or such other address as the Trustee may designate from time
to time by notice to the Holders and the Company, or the principal corporate trust office of any successor Trustee (or such other address as a successor Trustee may designate from time to time by
notice to the Holders and the Company). 


        "Date of Delivery" has the meaning specified in the Purchase Agreement. 


        "Default" means any event which is, or after notice or passage of time or both would be, an Event of Default. 


        "Designated Senior Indebtedness" means the (i) Indebtedness outstanding under the Loan Agreement, and (ii) after payment in
full of all obligations under the Loan Agreement, any other Senior Indebtedness the principal amount of which is $25.0 million or more and that has been designated by the Company as "Designated
Senior Indebtedness" for purposes of this Indenture. 


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


        "GAAP" means United States generally accepted accounting principles as in effect from time to time. 



        "Global Notes" means Notes that are in the form of the Notes attached hereto as Exhibit A-1. 


        "Guarantee" means a guarantee (other than by endorsement of negotiable instruments for collection in the ordinary course of business),
direct or indirect, contingent or otherwise, in any manner (including, without limitation, letters of credit and reimbursement agreements in respect thereof), of all or any part of any Indebtedness. 


        "Holder" or "Noteholder" means a person in whose name a Note is registered on the
Registrar's books. 


        "Indebtedness" means, with respect to any person, without duplication: 



        (9)   all
indebtedness, obligations and other liabilities, contingent or otherwise, of such person for borrowed money (including overdrafts) or for the deferred purchase price
of property or services, excluding any trade payables and other accrued current liabilities incurred in the ordinary 



3





 

course
of business, but including, without limitation, all obligations, contingent or otherwise, of such person in connection with any letters of credit and acceptances issued under letter of credit
facilities, acceptance facilities or other similar facilities; 


        (10) all
obligations of such person evidenced by bonds, credit or loan agreements, notes, debentures or other similar instruments; 


        (11) indebtedness
of such person created or arising under any conditional sale or other title retention agreement with respect to property acquired by such person (even if
the rights and remedies of the seller or lender under such agreement in the event of default are limited to repossession or sale of such property), but excluding trade payables arising in the ordinary
course of business; 


        (12) all
obligations and liabilities, contingent or otherwise, in respect of leases of the person required, in conformity with GAAP, to be accounted for as capitalized lease
obligations on the balance sheet of the person and all obligations and other liabilities, contingent or otherwise, under any lease or related document, including a purchase agreement, in connection
with the lease of real property or improvements thereon which provides that the person is contractually obligated to purchase or cause a third party to purchase the leased property or pay an agreed
upon residual value of the leased property to the lessor and the obligations of the person under the lease or related document to purchase or to cause a third party to purchase the leased property
whether or not such lease transaction is characterized as an operating lease or a capitalized lease in accordance with GAAP, including, without limitations, synthetic lease obligations; 


        (13) all
obligations of such person under or in respect of interest rate agreements, currency agreements or other swap, cap floor or collar agreement, hedge agreement,
forward contract or similar instrument or agreement or foreign currency, hedge, exchange or purchase or similar instrument or agreement; 



        (14) all
indebtedness referred to in (but not excluded from) the preceding clauses (1) through (5) of other persons and all dividends of other persons, the
payment of which is secured by (or for which the holder of such indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on or with respect to property (including,
without limitation, accounts and contract rights) owned by such person, even though such person has not assumed or become liable for the payment of such indebtedness (the amount of such obligation
being deemed to be the lesser of the value of such property or asset or the amount of the obligation so secured); 


        (15) all
guarantees by such person of indebtedness referred to in this definition or of any other person; 



        (16) all
Redeemable Capital Stock of such person valued at the greater of its voluntary or involuntary maximum fixed repurchase price plus accrued and unpaid dividends; 


        (17) the
present value of the obligation of such person as lessee for net rental payments (excluding all amounts required to be paid on account of maintenance and repairs,
insurance, taxes, assessments, water, utilities and similar charges to the extent included in such rental payments) during the remaining term of the lease included in any such sale and leaseback
transaction including any period for which such lease has been extended or may, at the option of the lessor, be extended. Such present value shall be calculated using a discount rate equal to the rate
of interest implicit in such transaction, determined in accordance with GAAP; and 


        (18) any
and all refinancings, replacements, deferrals, renewals, extensions and refundings of or amendments, modifications or supplements to, any indebtedness, obligation
or liability of the kind described in clauses (1) through (9) above. 



4





 





        "Indenture" means this Indenture, as amended or supplemented from time to time in accordance with the terms hereof, including the
provisions of the TIA that are deemed to be a part hereof. 


        "Initial Pledged Securities" has the meaning specified in the Collateral Pledge and Security Agreement. 


        "Initial Purchaser" means Merrill Lynch, Pierce, Fenner & Smith Incorporated. 



        "Interest Payment Date" means the Stated Maturity of an installment of interest on the Notes. 


        "Interest Rate" means 21/2% per annum. 


        "Issue Date" of any Note means the date on which the Note was originally issued or deemed issued as set forth on the face of the Note. 


        "Lien" means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind in respect of
such asset given to secure Indebtedness, whether or not filed, recorded or otherwise perfected under applicable law (including any conditional sale or other title retention agreement, any lease in the
nature thereof, any option or other agreement to sell or give a security interest in and any filing of or agreement to give any financing statement under the Uniform Commercial Code (or equivalent
statutes) of any jurisdiction with respect to any such lien, pledge, charge or security interest). 


        "Liquidated Damages" means the increase in Interest Rate in the event of a Registration Default (as defined in the Registration Rights
Agreement). 


        "Loan Agreement" means the Loan and Security Agreement, dated as of November 18, 2002, between the Company, the Lenders signatory
thereto and Foothill Capital Corporation, as the Arranger and Administrative Agent, as amended from time to time, and all refunding, refinancings and replacements of any Loan Agreement. 


        "Notes" has the meaning ascribed to it in the first paragraph under the caption "Recitals of the Company". 


        "Officer" means the Chairman of the Board, the Vice Chairman, the Chief Executive Officer, the President, any Executive Vice President,
any Senior Vice President, any Vice President, the Treasurer or the Secretary or any Assistant Treasurer or Assistant Secretary of the Company. 


        "Officers' Certificate" means a written certificate containing the information specified in Sections 13.04 and 13.05, signed in the name
of the Company by any two Officers, and delivered to the Trustee. An Officers' Certificate given pursuant to Section 4.03 shall be signed by one authorized financial or
accounting Officer of the Company but need not contain the information specified in Sections 13.04 and 13.05. 



        "144A Global Note" means a permanent Global Note in the form of the Note attached hereto as Exhibit A-1 that is
deposited with and registered in the name of the Depositary, representing Notes sold in reliance on Rule 144A under the Securities Act. 


        "Opinion of Counsel" means a written opinion containing the information specified in Sections 13.04 and 13.05, from legal counsel who is
reasonably acceptable to the Trustee. The counsel may be an employee of, or counsel to, the Company or the Trustee. 



        "Overallotment Option" means the overallotment option granted by the Company to the Initial Purchaser to purchase up to an additional
$15,000,000 aggregate principal amount of Notes to cover overallotments pursuant to the Purchase Agreement. 


5





 



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


        "Pledged Securities" means the U.S. Government Obligations to be purchased by the Company and held in the Collateral Account in accordance
with the Collateral Pledge and Security Agreement. 


        "principal" of a Note means the principal amount due on the Stated Maturity as set forth on the face of the Note. 



        "Purchase Agreement" means the Purchase Agreement, dated as of April 29, 2003, between the Company and the Initial Purchaser. 


        "Redeemable Capital Stock" means any class of the Company's Capital Stock that, either by its terms, by the terms of any securities into
which it is convertible or exchangeable or by contract or otherwise, is, or upon the happening of an event or passage of time would be, required to be redeemed (whether by sinking fund or otherwise)
prior to the date that is 91 days after the Stated Maturity of the Notes or is redeemable at the option of the Holder thereof at any time prior to such date, or is convertible into
or exchangeable for debt securities at any time prior to such date (unless it is convertible or exchangeable solely at the Company's option). 


        "Redemption Date" or "redemption date" means the date specified for redemption of the
Notes in accordance with the terms of the Notes and this Indenture. 



        "Redemption Price" or "redemption price" shall have the meaning set forth in
Section 3.01 of this Indenture and paragraph 5 on the reverse side of the Notes. 


        "Registration Rights Agreement" means the Registration Rights Agreement of even date herewith entered into by the Company and the Initial
Purchaser. 


        "Regular Record Date" means, with respect to the interest payable on any Interest Payment Date, the close of business on April 20
and October 21 (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date. 


        "Responsible Officer" means, when used with respect to the Trustee, any officer within the corporate trust department of the Trustee,
including any vice president, assistant vice president, assistant secretary, assistant treasurer, trust officer or any other officer of the Trustee who customarily performs functions similar to those
performed by the Persons who at the time shall be such officers, respectively, or to whom any corporate trust matter is referred because of such person's knowledge of and familiarity with the
particular subject. 


        "Restricted Note" means a Note required to bear the restrictive legend set forth in the form of Note set forth in Exhibits A-1
and A-2 of this Indenture. 


        "Restriction Termination Date" means, with respect to any Note, the date that is two years after the later of: 



        (1)   the
Issue Date of the Note, or, in the case of Common Stock, the Issue Date of the Note upon the conversion of which such Common Stock was issued; and 



        (2)   the
last date on which any "affiliate," as defined in Rule 144 (or successor provision) under the Securities Act, of the Company was the owner of such Note or
Common Stock. 




        "Rule 144A" means Rule 144A under the Securities Act (or any successor provision), as it may be amended from time to time. 


        "SEC" means the Securities and Exchange Commission. 


6





 



        "Securities Act" means the United States Securities Act of 1933 (or any successor statute), as amended from time to time. 


        "Senior Indebtedness" means: 



        (1)   the
indebtedness outstanding under the Loan Agreement and any future line of credit or term loan or other credit facility; 


        (2)   the
indebtedness under the Company's Senior Secured Promissory Note dated June 22, 1999 (originally made by Advanced Enterprise Solutions, and subsequently
assumed by the Company); 


        (3)   the
indebtedness under those Subordinated Promissory Notes made by the Company dated August 1, 2002 in aggregate principal amount at issuance of $20,000,000; 



        (4)   the
principal of and premium, if any, and interest on, and fees, costs, enforcement expenses, collateral protection expenses and other reimbursement or indemnity
obligations in respect of all of the Indebtedness of the Company or obligations to any person for money borrowed that is evidenced by a note, bond, debenture, loan agreement, or similar instrument or
agreement including default interest and interest accruing after a bankruptcy; 


        (5)   commitment
or standby fees due and payable to lending institutions with respect to credit facilities available to the Company; 



        (6)   all
of the Company's noncontingent obligations (i) for the reimbursement of any obligor on any letter of credit, banker's acceptance or similar credit
transaction, (ii) under interest rate swaps, caps, collars,
options and similar arrangements and (iii) under any foreign exchange contract, currency swap agreement, futures contract, currency option contract or other foreign currency hedge; 


        (7)   all
of the Company's obligations under leases for real estate, facilities, equipment or related assets, whether or not capitalized (including, without limitation,
synthetic leases), entered into or leased for financing purposes; 


        (8)   any
liabilities of others described in clauses (1) through (7) above that the Company has guaranteed or which are otherwise the Company's legal liability;
and 


        (9)   renewals,
extensions, refundings, refinancings, restructurings, amendments and modifications of any such indebtedness or guarantee. 




        Notwithstanding
the foregoing, "Senior Indebtedness" shall not include: 



        (b)   Indebtedness
or other obligations of the Company that by its terms ranks equal or junior in right of payment to the Notes; 


        (c)   Indebtedness
evidenced by the Notes; 


        (d)   Indebtedness
of the Company that by operation of law is subordinate to any general unsecured obligations of the Company; 


        (e)   accounts
payable or other liabilities owed or owing by the Company to trade creditors (including guarantees thereof or instruments evidencing such liabilities); 



        (f)    amounts
owed by the Company for compensation to employees or for services rendered to the Company; 


        (g)   Indebtedness
of the Company to any Subsidiary or any other Affiliate of the Company or any of such Affiliate's Subsidiaries, except the Indebtedness described in clauses
(2) and (3) above, each as outstanding on the date hereof; 



7











  



        (h)   Capital
Stock of the Company; 


        (i)    Indebtedness
of the Company evidenced by any Guarantee of any such Indebtedness ranking equal or junior in right of payment to the Notes; and 



        (j)    Indebtedness
of the Company which, when incurred and without respect to any election under Section 1111(b) of Title 11 of the United States Code, is without
recourse to the Company. 




        "Significant Subsidiary" means a Subsidiary of the Company, including the Subsidiaries of such Subsidiary, that meets any of the following
conditions: 



        (1)   the
Company's and its other Subsidiaries' investments in and advances to the Subsidiary exceed 10 percent of the total assets of the Company and its Subsidiaries
consolidated as of the end of the most recently completed fiscal year; or 


        (2)   the
Company's and its other Subsidiaries' proportionate share of the total assets (after intercompany eliminations) of the Subsidiary exceeds 10 percent of the
total assets of the Company and its Subsidiaries consolidated as of the end of the most recently completed fiscal year; or 


        (3)   the
Company's and its other Subsidiaries' equity in the income from continuing operations before income taxes, extraordinary items and cumulative effect of a change in
accounting principles of the Subsidiary exceeds 10 percent of such income of the Company and its Subsidiaries consolidated as of the end of the most recently completed fiscal year. 




        "Stated Maturity", when used with respect to any Note or any installment of interest thereon, means the date specified in such Note as the
fixed date on which the principal of such Note or such installment of interest is due and payable. 


        "Subordinated Indenture" means that certain Indenture by and between The MacNeal-Schwendler Corporation and Chase Manhattan Bank and Trust
Company N.A., Trustee, dated June 17, 1999 relating to the Subordinated Notes. 



        "Subordinated Notes" means those certain 8% Subordinate Promissory Notes due 2009, issued under the Subordinated Indenture. 


        "Subsidiary" means (i) a corporation, a majority of whose Capital Stock with voting power, under ordinary circumstances, to elect
directors is, at the date of determination, directly or indirectly owned by the Company, by one or more Subsidiaries of the Company or by the Company and one or more Subsidiaries of the Company,
(ii) a partnership in which the Company or a Subsidiary of the Company holds a majority interest in the equity capital or profits of such partnership, or (iii) any other person (other
than a corporation) in which the Company, a Subsidiary of the Company or the Company and one or more Subsidiaries of the Company, directly or indirectly, at the date of determination, has
(x) at least a majority ownership interest or (y) the power to elect or direct the election of a majority of the directors or other governing body of such person. 


        "TIA" means the Trust Indenture Act of 1939 as in effect on the date of this Indenture, provided, however, that in the event the TIA is
amended after such date, TIA means, to the extent required by any such amendment, the TIA as so amended. 


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


8





 



        "Trustee" means the party named as the "Trustee" in the first paragraph of this Indenture until a successor replaces it pursuant to the
applicable provisions of this Indenture and, thereafter, shall mean such successor. The foregoing sentence shall likewise apply to any subsequent such successor or successors. 


        "United States" means the United States of America (including the States and the District of Columbia), its territories, its possessions
and other areas subject to its jurisdiction (its "possessions"
including Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island and the Northern Mariana Islands). 



        "U.S. Government Obligations" means securities that are (i) direct obligations of the United States of America, the payment of
which its full faith and credit is pledged or (ii) obligations of a Person controlled or supervised by or acting as an agency or instrumentality of the United States of America, the payment of
which is unconditionally guaranteed as a full faith and credit obligation by the United States of America, which, in either case, are not callable or redeemable at the option of the issuer thereof at
any time prior to the Stated Maturity of the Notes, and shall also include a depository receipt issued by a bank or trust company as custodian with respect to any such U.S. Government Obligation or a
specific payment of interest on or principal of any such U.S. Government Obligation held by such custodian for the account of the holder of a depository receipt;  provided that (except as required by
law) such custodian is not authorized to make any deduction from the amount payable to the holder of such
depository receipt from any amount received by the custodian in respect of the U.S. Government Obligation for the specific payment of interest on or principal of the U.S. Government Obligation
evidenced by such depository receipt. 


        SECTION
1.02    Other Definitions.    



	Term
 
	 	Defined in

Section
	 
	"Act"	 	1.05	(a)
	"Agent Members"	 	2.12	(f)(5)
	"Bankruptcy Law"	 	6.01	 
	"Change in Control"	 	3.09	(a)
	"Change in Control Repurchase Date"	 	3.09	(a)
	"Change in Control Repurchase Notice"	 	3.09	(c)
	"Change in Control Repurchase Price"	 	3.09	(a)
	"Conversion Agent"	 	2.03	 
	"Conversion Price"	 	10.01	 
	"Current Market Price"	 	10.04	(g)
	"Custodian"	 	6.01	 
	"Depositary"	 	2.01	(a)
	"DTC"	 	2.01	(a)
	"Event of Default"	 	6.01	 
	"Exchange Act"	 	3.09	(a)
	"excluded securities"	 	10.04	(d)
	"Expiration Time"	 	10.04	(f)
	"fair market value"	 	10.04	(g)
	"Legal Holiday"	 	13.08	 
	"Legend"	 	2.06	(f)
	"Non-Electing Share"	 	10.11	 
	"Non-Payment Default"	 	11.03	(b)
	"Notice of Default"	 	6.01	 
	"Paying Agent"	 	2.03	 
	"Payment Blockage Period"	 	11.03	(b)
	 	 	 	 






9





 

	"Payment Default"	 	11.03	(a)
	"Permitted Junior Securities"	 	11.02	 
	"Post-Distribution Price"	 	10.12	 
	"Protected Purchaser"	 	2.07	 
	"Purchased Shares"	 	10.04	(f)
	"QIBs"	 	2.01	(a)
	"Record Date"	 	10.04	(g)
	"Reference Period"	 	10.04	(d)
	"Registrar"	 	2.03	 
	"Rights"	 	10.04	(d)
	"Rights Agreement"	 	10.04	(d)
	"Rule 144A Information"	 	4.06	 
	"Trigger Event"	 	10.04	(d)






        SECTION
1.03    Incorporation by Reference of Trust Indenture Act.    Whenever this Indenture refers to a provision of
the TIA, the provision is incorporated by reference in and made a part of this Indenture. The following TIA terms used in this Indenture have the following meanings: 



        "Commission"
means the SEC. 


        "indenture
Notes" means the Notes. 


        "indenture
Note holder" means a Noteholder. 


        "indenture
to be qualified" means this Indenture. 


        "indenture
trustee" or "institutional trustee" means the Trustee. 


        "obligor"
on the indenture Notes means the Company. 




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


        SECTION
1.04    Rules of Construction.    Unless the context otherwise requires: 



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


        (b)   an
accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP as in effect from time to time; 


        (c)   "or"
is not exclusive; 


        (d)   "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. 


        (e)   "including"
means including, without limitation; and 


        (f)    words
in the singular include the plural, and words in the plural include the singular. 




        SECTION
1.05    Acts of Holders.    



        (a)   Any
request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given or taken by Holders may be embodied in and
evidenced by one or more instruments (which may take the form of an electronic writing or message or is otherwise in accordance with customary procedures of the Depositary or the Trustee) of
substantially similar tenor signed by such Holders in person or by their agent duly appointed in writing (which may be in electronic form); and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered to the Trustee and, where it is hereby expressly 


10





 



required,
to the Company. Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the "Act" of Holders signing such instrument or
instruments. Proof of execution of any such instrument or of a writing appointing any such agent (either of which may be in electronic form) shall be sufficient for any purpose of this Indenture and
conclusive in favor of the Trustee and the Company, if made in the manner provided in this Section. 


        (b)   The
fact and date of the execution by any Person of any such instrument or writing may be proved by the affidavit of a witness of such execution (or electronic delivery)
or by a certificate of a notary public or other officer authorized by law to take acknowledgments of deeds, certifying that the individual signing or delivering such instrument or writing acknowledged
to such officer the execution (or electronic delivery) thereof. Where such execution is by a signer acting in a capacity other than such signer's individual capacity, such certificate or affidavit
shall also constitute sufficient proof of such signer's authority. The fact and date of the execution of any such instrument or writing (electronic or otherwise), or the authority of the Person
executing the same, may also be proved in any other manner which the Trustee deems sufficient. 


        The
ownership of Notes shall be proved by the register for the Notes or by a certificate of the Registrar. 



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


        If
the Company shall solicit from the Holders any request, demand, authorization, direction, notice, consent, waiver or other Act, the Company may, at its option, by or pursuant to a
resolution of the Board of Directors, fix in advance a record date for the determination of Holders entitled to give such request, demand, authorization, direction, notice, consent, waiver or other
Act, but the Company shall have no obligation to do so. If such a record date is fixed, such request, demand, authorization, direction, notice, consent, waiver or other Act may be given before or
after such record date, but only the Holders of record at the close of business on such record date shall be deemed to be Holders for purposes of determining whether Holders of the requisite
proportion of outstanding Notes have authorized or agreed or consented to such request, demand, authorization, direction, notice, consent, waiver or other Act, and for that purpose the outstanding
Notes shall be computed as of such record date; provided that no such authorization, agreement or consent by the Holders on such record date shall be
deemed effective unless it shall become effective pursuant to the provisions of this Indenture not later than six months after the record date. 


ARTICLE 2  


 THE NOTES  


        SECTION
2.01    Form and Dating.    The Notes and the Trustee's certificate of authentication to be borne by such
Notes shall be substantially in the form annexed hereto as Exhibits A-1 and A-2, which are incorporated in and made a part of this Indenture. The terms and provisions
contained in the form of Note shall constitute, and are hereby expressly made, a part of this Indenture and to the extent applicable, the Company and the Trustee, by their execution and delivery of
this Indenture, expressly agree to such terms and provisions and to be bound thereby. 


        Any
of the Notes may have such letters, numbers or other marks of identification and such notations, legends and endorsements as the officers executing the same may approve (execution
thereof to be conclusive evidence of such approval) and as are not inconsistent with the provisions of this Indenture, or as may be required to comply with any law or with any rule or regulation made
pursuant 


11





 



thereto
or with any rule or regulation of any securities exchange or automated quotation system on which the notes may be listed or designated for issuance, or to conform to usage. 


        (a)    Global Notes.    Notes offered and sold within the United States to qualified institutional buyers as defined
in Rule 144A ("QIBs") in reliance on Rule 144A shall be issued, initially in the form of a 144A Global Note, which shall be deposited with the Trustee at its Corporate Trust Office, as
custodian for, and registered in the name of, The Depository Trust Company ("DTC") or the nominee thereof (such depositary, or any successor thereto, and any such nominee being hereinafter referred to
as the "Depositary"), duly executed by the Company and authenticated by the Trustee as hereinafter provided. The aggregate principal amount of the 144A Global Notes may from time to time be increased
or decreased by adjustments made on the records of the Trustee and the Depositary as hereinafter provided. 


        (b)    Global Notes in General.    Each Global Note shall represent such of the outstanding Notes as shall be
specified therein and each shall provide that it shall represent the aggregate amount of outstanding Notes from time to time endorsed thereon and that the aggregate amount of outstanding Notes
represented thereby may from time to time be reduced or increased, as appropriate, to reflect exchanges, redemptions and conversions. 


        Any
adjustment of the aggregate principal amount of a Global Note to reflect the amount of any increase or decrease in the amount of outstanding Notes 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. 



        (c)    Book-Entry Provisions.    This Section 2.01(c) shall apply only to Global Notes deposited
with or on behalf of the Depositary. 


        The
Company shall execute and the Trustee shall, in accordance with this Section 2.01(c), authenticate and deliver initially one or more Global Notes that (a) shall be
registered in the name of the Depositary, (b) shall be delivered by the Trustee to the Depositary or pursuant to the Depositary's instructions or held by the Trustee as custodian for the
Depositary and (c) shall bear legends substantially to the following effect: 



"UNLESS
THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF 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. 


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




        (d)    Restrictive Legends.    Until the Restriction Termination Date, all Global Notes and all Certificated Notes
shall bear the Legend, unless such Notes have been transferred pursuant to a registration statement that has been declared effective under the Securities Act. Until the Restriction Termination Date,
the Company covenants that any stock certificate representing shares of Common 


12





 

Stock
delivered by the Company upon conversion of any Notes will bear the Legend, unless such shares have been sold pursuant to a registration statement that has been declared effective under the
Securities Act. 


        (e)    Certificated Notes.    Notes not issued as interests in the Global Notes will be issued in certificated form
substantially in the form of Exhibit A-2 attached hereto. 


        SECTION
2.02    Execution and Authentication.    An Officer shall sign the Notes for the Company by manual or
facsimile signature. 


        Notes
bearing the manual or facsimile signatures of individuals who were at the time of the execution of the Notes the proper Officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery of such Notes or did not hold such offices at the date of authentication
of such Notes. 


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



        The
Trustee shall authenticate and deliver Notes for original issue in an aggregate principal amount of up to $85,000,000, or an aggregate principal amount of up to $100,000,000 if the
Overallotment Option is exercised fully, upon a Company Order without any further action by the Company. The aggregate principal amount of Notes outstanding at any time may not exceed the amount set
forth in the foregoing sentence, except as provided in Section 2.07. 


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



        SECTION
2.03    Registrar, Paying Agent and Conversion Agent.    The Company shall maintain an office or agency where
Notes may be presented for registration of transfer or for exchange ("Registrar"), an office or agency where Notes may be presented for purchase or payment ("Paying Agent") and an office or agency
where Notes may be presented for conversion ("Conversion Agent"). The Registrar shall keep a register of the Notes and of their transfer and exchange. The Company may have one or more
co-registrars, one or more additional paying agents and one or more additional conversion agents. The term Paying Agent includes any additional paying agent, including any named pursuant
to Section 4.05. The term Conversion Agent includes any additional conversion agent, including any named pursuant to Section 4.05. 


        The
Company shall enter into an appropriate agency agreement with any Registrar, Paying Agent, Conversion Agent or co-registrar (other than the Trustee). The agreement shall
implement the provisions of this Indenture that relate to such agent. The Company shall notify the Trustee of the name and address of any such agent. If the Company fails to maintain a Registrar,
Paying Agent or Conversion Agent, the Trustee shall act as such and shall be entitled to appropriate compensation therefor pursuant to Section 7.06. The Company or any Subsidiary or an
Affiliate of either of them may act as Paying Agent, Registrar, Conversion Agent or co-registrar. 


        The
Company initially appoints the Trustee as Registrar, Conversion Agent and Paying Agent in connection with the Notes. 


        SECTION
2.04    Paying Agent to Hold Money and Notes in Trust.    Except as otherwise provided herein, on or prior to
each due date of payments in respect of any Note, the Company shall deposit with the Paying Agent a sum of money (in immediately available funds if deposited on the due date) sufficient to make such
payments when due. The Company shall require each Paying Agent (other than the Trustee) to agree in writing that the Paying Agent shall hold in trust for the benefit of Noteholders 


13





 



or
the Trustee all money held by the Paying Agent for the making of payments in respect of the Notes and shall notify the Trustee of any default by the Company in making any such payment. At any time
during the continuance of any such default, the Paying Agent shall, upon the written request of the Trustee, forthwith pay to the Trustee all money so held in trust. If the Company, a Subsidiary or an
Affiliate of either of them acts as Paying Agent, it shall segregate the money held by it as Paying Agent 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 to account for any funds disbursed by it. Upon doing so, the Paying Agent shall have no further liability for the money. 


        SECTION
2.05    Noteholder 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 Noteholders. If the Trustee is not the Registrar, the Company shall cause to be furnished to the Trustee at least semiannually on
January 1 and July 1 a listing of Noteholders dated within 13 days of the date on which the list is furnished 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 Noteholders. 



        SECTION
2.06    Transfer and Exchange.    Subject to Section 2.12 hereof, 


        (a)   upon
surrender for registration of transfer of any Note, together with a written instrument of transfer satisfactory to the Registrar duly executed by the Noteholder or
such Noteholder's attorney duly authorized in writing, at the office or agency of the company designated as Registrar or co-registrar pursuant to Section 2.03, the Company shall
execute, and the Trustee shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new Notes of any authorized denomination or denominations, of a like
aggregate principal amount. The Company shall not charge a service charge for any registration of transfer or exchange, but the Company may require payment of a sum sufficient to pay all taxes,
assessments or other governmental charges that may be imposed in connection with the transfer or exchange of the Notes from the Noteholder requesting such transfer or exchange. 


        At
the option of the Holder, Notes may be exchanged for other Notes of any authorized denomination or denominations, of a like aggregate principal amount, upon surrender of the Notes to
be exchanged, together with a written instrument of transfer satisfactory to the Registrar duly executed by the Noteholder or such Noteholder's attorney duly authorized in writing, at such office or
agency. Whenever any Notes are so surrendered for exchange, the Company shall execute, and the Trustee shall authenticate and deliver, the Notes which the Holder making the exchange is entitled to
receive. 


        The
Company shall not be required to make, and the Registrar need not register, transfers or exchanges of Notes selected for redemption (except, in the case of Notes to be redeemed in
part, the portion thereof not to be redeemed) or any Notes in respect of which a Change in Control Repurchase Notice (as defined in Section 3.09(c)) has been given and not withdrawn by the
Holder thereof in accordance with the terms of this Indenture (except, in the case of Notes to be purchased in part, the portion thereof not to be purchased) or any Notes for a period of
15 days before the mailing of a notice of redemption of Notes to be redeemed. 



        (b)   Notwithstanding
any provision to the contrary herein, so long as a Global Note remains outstanding and is held by or on behalf of the Depositary, transfers of a Global
Note, in whole or in part, shall be made only in accordance with Section 2.12 and this Section 2.06(b). Transfers of a Global Note shall be limited to transfers of such Global Note in
whole, or in part, to nominees of the Depositary or to a successor of the Depositary or such successor's nominee. 


        (c)   Successive
registrations and registrations of transfers and exchanges as aforesaid may be made from time to time as desired, and each such registration shall be noted on
the register for the Notes. 


14









   
        (d)   Any Registrar appointed pursuant to Section 2.03 hereof shall provide to the Trustee such information as the Trustee may reasonably require in connection with the
delivery by such Registrar of Notes upon transfer or exchange of Notes. 


        (e)   No
Registrar shall be required to make registrations of transfer or exchange of Notes during any periods designated in the text of the Notes or in this Indenture as
periods during which such registration of transfers and exchanges need not be made. 


        (f)    If
Notes are issued upon the transfer, exchange or replacement of Notes subject to restrictions on transfer and bearing the legends set forth on the form of Note
attached hereto as Exhibits A-1 and A-2 setting forth such restrictions (collectively, the "Legend"), or if a request is made to remove the Legend on a Note, the Notes 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, as may be reasonably required by the Company and the Registrar, that neither the Legend nor the restrictions on transfer set forth therein are required to ensure that transfers
thereof comply with the provisions of Rule 144A or Rule 144 under the Securities Act or that such Notes are not "restricted" within the meaning of Rule 144 under the Securities
Act. Upon (i) provision of such satisfactory evidence, or (ii) notification by the Company to the Trustee and Registrar of the sale of such Note 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 Note that does not bear the Legend. If the Legend is removed from the face
of a Note and the Note is subsequently held by an Affiliate of the Company, the Legend shall be reinstated. 



        SECTION
2.07    Replacement Notes.    If (a) any mutilated Note is surrendered to the Trustee, or
(b) the Company and the Trustee receive evidence to their satisfaction of the destruction, loss or theft of any Note, and there is delivered to the Company and the Trustee such Note or
indemnity as may be required by them to save each of them harmless, then, in the absence of notice to the Company or the Trustee that such Note has been acquired by a protected purchaser within the
meaning of Article 8 of the Uniform Commercial Code (a "Protected Purchaser"), the Company shall execute and upon its written request the Trustee shall authenticate and deliver, in exchange for
any such mutilated Note or in lieu of any such destroyed, lost or stolen Note, a new Note of like tenor and principal amount, bearing a number not contemporaneously outstanding. 


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


        Upon
the issuance of any new Notes under this Section 2.07, the Company may require the payment of a sum sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto and any other expenses (including the fees and expenses of the Trustee) connected therewith. 



        Every
new Note issued pursuant to this Section 2.07 in lieu of any mutilated, destroyed, lost or stolen Note shall constitute an original additional contractual obligation of the
Company, whether or not the destroyed, lost or stolen Note 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 Notes duly issued hereunder. 


        The
provisions of this Section 2.07 are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated,
destroyed, lost or stolen Notes. 


        SECTION
2.08    Outstanding Notes; Determinations of Holders' Action.    Notes outstanding at any time are all the
Notes authenticated by the Trustee except for those cancelled by it or delivered to it for cancellation, those paid pursuant to Section 2.07 and those described in this Section 2.08 as
not 


15





 



outstanding.
A Note does not cease to be outstanding because the Company or an Affiliate thereof holds the Note; provided, however, that in determining
whether the Holders of the requisite principal amount of the outstanding Notes have given or concurred in any request, demand, authorization, direction, notice, consent or waiver hereunder, Notes
owned by the Company or any other obligor upon the Notes or any Affiliate of the Company or such other obligor shall be disregarded and deemed not to be outstanding, except that, in determining
whether the Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Notes which a Responsible Officer of the Trustee knows to be
so owned shall be so disregarded. Subject to the foregoing, only Notes outstanding at the time of such determination shall be considered in any such determination (including, without limitation,
determinations pursuant to Articles 6 and 9). 


        If
a Note is replaced pursuant to Section 2.07, it ceases to be outstanding unless the Trustee receives proof satisfactory to it that the replaced Note is held by a Protected
Purchaser unaware that such Note had been replaced, in which case the replacement Note shall be deemed not to be outstanding. 


        If
the Paying Agent holds, in accordance with this Indenture, on a Redemption Date, or on the Business Day following the Change in Control Repurchase Date, or on Stated Maturity, money
or securities, if permitted hereunder, sufficient to pay Notes payable on that date, then immediately after such Redemption Date, Change in Control Repurchase Date or Stated Maturity, as the case may
be, such Notes shall cease to be outstanding and interest on such Notes shall cease to accrue; provided that, if such Notes are to be redeemed, notice
of such redemption has been duly given pursuant to this Indenture or provision therefor reasonably satisfactory to the Trustee has been made. 


        If
a Note is converted in accordance with Article 10, then from and after the time of conversion on the conversion date, such Note shall cease to be outstanding and interest shall
cease to accrue on such Note. 


        SECTION
2.09    Temporary Notes.    Pending the preparation of definitive Notes, the Company may execute, and upon
Company Order the Trustee shall authenticate and deliver, temporary Notes which are printed, lithographed, typewritten, mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Notes in lieu of which they are issued and with such appropriate insertions, omissions, substitutions and other variations as the officers executing such
Notes may determine, as conclusively evidenced by their execution of such Notes. 


        If
temporary Notes are issued, the Company will cause definitive Notes to be prepared without unreasonable delay. After the preparation of definitive Notes, the temporary Notes shall be
exchangeable for definitive Notes upon surrender of the temporary Notes at the office or agency of the Company designated for such purpose pursuant to Section 2.03, without charge to the
Holder. Upon surrender for cancellation of any one or more temporary Notes the Company shall execute and the Trustee shall authenticate and deliver in exchange therefor a like principal amount of
definitive Notes of authorized denominations. Until so exchanged the temporary Notes shall in all respects be entitled to the same benefits under this Indenture as definitive Notes. 


        SECTION
2.10    Cancellation.    All Notes surrendered for payment, purchase by the Company pursuant to
Article 3, conversion, redemption or registration of transfer or exchange shall, if surrendered to any person other than the Trustee, be delivered to the Trustee and shall be promptly cancelled
by it. The Company may at any time deliver to the Trustee for cancellation any Notes previously authenticated and delivered hereunder which the Company may have acquired in any manner whatsoever, and
all Notes so delivered shall be promptly cancelled by the Trustee. The Company may not reissue, reoffer or resell new Notes to replace Notes it has paid or delivered to the Trustee for cancellation or
that any Holder has converted pursuant to Article 10. No Notes shall be authenticated in lieu of or in exchange for any Notes cancelled as provided in this Section 2.10, except 


16





 



as
expressly permitted by this Indenture. All cancelled Notes held by the Trustee shall be destroyed by the Trustee and the Trustee shall, upon request, deliver a certificate of destruction to the
Company. 


        SECTION
2.11    Persons Deemed Owners.    Prior to due presentment of a Note for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name such Note is registered as the owner of such Note for the purpose of receiving payment of principal
of the Note or the payment of any Redemption Price or Change in Control Repurchase Price in respect thereof, and interest thereon, for the purpose of conversion and for all other purposes whatsoever,
whether or not such Note be overdue, and neither the Company, the Trustee nor any agent of the Company or the Trustee shall be affected by notice to the contrary. 


        SECTION
2.12    Global Notes.    


        (a)   Notwithstanding
any other provisions of this Indenture or the Notes, (A) transfers of a Global Note, in whole or in part, shall be made only in accordance with
Section 2.06 and Section 2.12(a)(i), (B) transfer of a beneficial interest in a Global Note for a Certificated Note shall comply with Section 2.06 and
Section 2.12(a)(ii) below, and (C) transfers of a Certificated Note shall comply with Section 2.06 and Sections 2.12(a)(iii) and (iv) below. 



        (i)    Transfer of Global Note. A Global Note may not be transferred, in whole or in part, to any Person other than the
Depositary or a nominee or any successor thereof, and no such transfer to any such other Person may be registered; provided that this clause (i)
shall not prohibit any transfer of a Note that is issued in exchange for a Global Note but is not itself a Global Note. No transfer of a Note to any Person shall be effective under this Indenture or
the Notes unless and until such Note has been registered in the name of such Person. Nothing in this Section 2.12(a)(i) shall prohibit or render ineffective any transfer of a beneficial
interest in a Global Note effected in accordance with the other provisions of this Section 2.12(a). 


        (ii)   Restrictions on Transfer of a Beneficial Interest in a Global Note for a Certificated Note. A beneficial interest in a
Global Note may not be exchanged for a Certificated Note except upon satisfaction of the requirements set forth below. Upon receipt by the Trustee of a transfer of a beneficial interest in a Global
Note in accordance with Applicable Procedures for a Certificated Note in the form satisfactory to the Trustee, together with: 



        (a)   so
long as the Notes are Restricted Notes, certification, in the form set forth in Exhibit B-1; 


        (b)   written
instructions to the Trustee to make, or direct the Registrar to make, an adjustment on its books and records with respect to such Global Note to reflect a
decrease in the aggregate principal amount of the Notes represented by the Global Note, such instructions to contain information regarding the Depositary account to be credited with such decrease; and 



        (c)   if
the Company or Registrar so requests, an opinion of counsel or other evidence reasonably satisfactory to them as to the compliance with the restrictions set forth in
the Legend, 




then
the Trustee shall cause, or direct the Registrar to cause, in accordance with the standing instructions and procedures existing between the Depositary and the Registrar, the aggregate principal
amount of Notes represented by the Global Note to be decreased by the aggregate principal amount of the Certificated Note to be issued, shall issue such Certificated Note and shall debit or cause to
be debited to the account of the Person specified in such instructions a beneficial interest in the Global Note equal to the principal amount of the Certificated Note so issued. 



17





 

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



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


        (y)   to
exchange such Certificated Notes for an equal principal amount of Certificated Notes of other authorized denominations, 




the
Registrar shall register the transfer or make the exchange as requested if its reasonable requirements for such transaction are met; provided,
however, that the Certificated Notes surrendered for transfer or exchange: 



        (a)   shall
be duly endorsed or accompanied by a written instrument of transfer in form reasonably satisfactory to the Company and the Registrar, duly executed by the Holder
thereof or his attorney duly authorized in writing; and 


        (b)   so
long as such Notes are Restricted Notes, such Notes are being transferred or exchanged pursuant to an effective registration statement under the Securities Act or
pursuant to clause (A), (B) or (C) below, and are accompanied by the following additional information and documents, as applicable: 



        (A)  if
such Certificated Notes are being delivered to the Registrar by a Holder for registration in the name of such Holder, without transfer, a certification from such
Holder to that effect; or 


        (B)  if
such Certificated Notes are being transferred to the Company, a certification to that effect; or 


        (C)  if
such Certificated Notes are being transferred pursuant to an exemption from registration, (i) a certification to that effect (in the form set forth in Exhibits
B-1, if applicable) and (ii) if the Company or Registrar so requests, an opinion of counsel or other evidence reasonably satisfactory to them as to the compliance with the
restrictions set forth in the Legend. 





        (iv)  Restrictions on Transfer of a Certificated Note for a Beneficial Interest in a Global Note. A Certificated Note may not
be exchanged for a beneficial interest in a Global Note except upon satisfaction of the requirements set forth below. Upon receipt by the Trustee of a Certificated Note, duly endorsed or accompanied
by appropriate instruments of transfer, in form reasonably satisfactory to the Trustee, together with: 


        (v)   so
long as the Notes are Restricted Notes, certification, in the form set forth in Exhibit B-1, that such Certificated Note is being transferred to a
QIB in accordance with Rule 144A; and 



        (a)   written
instructions directing the Trustee to make, or to direct the Registrar to make, an adjustment on its books and records with respect to such Global Note to
reflect an increase in the aggregate principal amount of the Notes represented by the Global Note, such instructions to contain information regarding the Depositary account to be credited with such
increase, then the Trustee shall cancel such Certificated Note and cause, or direct the Registrar to cause, in accordance with the standing instructions and procedures existing between the Depositary
and the Registrar, the aggregate principal amount of Notes represented by the Global Note to be increased by the aggregate principal amount of the Certificated Note to be exchanged, and shall credit
or cause to be credited to the account of the Person specified in such instructions a beneficial interest in the Global Note equal to the principal amount of the Certificated Note so cancelled. If no
Global Notes are then outstanding, the Company shall issue and the Trustee shall authenticate, upon written order of 




18





 


the
Company in the form of an Officers' Certificate, a new Global Note in the appropriate principal amount. 





        (b)   Subject
to the succeeding paragraph, every Note shall be subject to the restrictions on transfer provided in the Legend including the delivery of an opinion of counsel,
if so provided. Whenever any Restricted Note is presented or surrendered for registration of transfer or for exchange for a Note registered in a name other than that of the Holder, such Note must be
accompanied by a certificate in substantially the form set forth in Exhibit B-1, dated the date of such surrender and signed by the Holder of such Note, as to compliance with such
restrictions on transfer. The Registrar shall not be required to accept for such registration of transfer or exchange any Note not so accompanied by a properly completed certificate. 


        (c)   The
restrictions imposed by the Legend upon the transferability of any Note shall cease and terminate when such Note has been sold pursuant to an effective registration
statement under the Securities Act or transferred in compliance with Rule 144 under the Securities Act (or any successor provision thereto) or, if earlier, upon the expiration of the holding
period applicable to sales thereof under Rule 144(k) under the Securities Act (or any successor provision). Any Note 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 Note 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 an opinion of counsel having substantial experience in practice
under the Securities Act and otherwise reasonably acceptable to the Company, addressed to the Company and in form acceptable to the Company, to the effect that the transfer of such Note has been made
in compliance with Rule 144 or such successor provision), be exchanged for a new Note, 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 Notes under the Securities Act. 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 Note (including any transfers
between or among DTC participants, members or beneficial owners in any Global Note) 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. 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. 



        (d)   In
the event that Rule 144(k) as promulgated under the Securities Act is amended to shorten the two-year restriction period, then restrictions on
transfer on the Notes and the Common Stock will be deemed to refer to the shortened restriction period. The Company undertakes to inform the Trustee if such change to Rule 144(k) occurs and the
effect (if any) to the restrictions on transfer applicable to the Notes and Common Stock and shall provide additional information (including an Opinion of Counsel and/or an Officers' Certificate) if
so requested by the Trustee. 


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


        (f)    The
provisions of clauses (1), (2), (3) and (4) below shall apply only to Global Notes: 



        (1)   Notwithstanding
any other provisions of this Indenture or the Notes, except as provided in Section 2.12(a)(i), a Global Note shall not be exchanged in whole or in
part for a Note registered in the name of any Person other than the Depositary or one or more nominees thereof, provided that a Global Note may be exchanged for Notes registered in the names of any
person designated by the Depositary in the event that (i) the Depositary has notified the Company that it is unwilling or unable to continue as Depositary for such Global Note or such
Depositary has 



19





 

ceased
to be a "clearing agency" registered under the Exchange Act, and a successor Depositary is not appointed by the Company within 90 days or (ii) an Event of Default has occurred and
is continuing with respect to the Notes. Any Global Note exchanged pursuant to clause (i) above shall be so exchanged in whole and not in part, and any Global Note exchanged pursuant to
clause (ii) above may be exchanged in whole or from time to time in part as directed by the Depositary. Any Note issued in exchange for a Global Note or any portion thereof shall be a Global
Note; provided that any such Note so issued that is registered in the name of a Person other than the Depositary or a nominee thereof shall not be a
Global Note. 


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



        (3)   Subject
to the provisions of clause (5) below, the registered Holder may grant proxies and otherwise authorize any Person, including Agent Members (as defined
below) and persons that may hold interests through Agent Members, to take any action which a holder is entitled to take under this Indenture or the Notes. 


        (4)   In
the event of the occurrence of any of the events specified in clause (1) above, the Company will promptly make available to the Trustee a reasonable supply of
Certificated Notes in definitive, fully registered form, without interest coupons. 



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




        SECTION
2.13    CUSIP Numbers.    The Company in issuing the Notes may use "CUSIP" numbers and, if so, the Trustee
shall use "CUSIP" numbers in notices of redemption 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 Notes or as contained in any notice of a redemption and that reliance may be placed only on the other identification numbers printed on
the Notes, and any such redemption 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    Defaulted Interest.    If the Company defaults in a payment of interest on the Notes, it shall pay, or
shall deposit with the Paying Agent money in immediately available funds 


20





 



sufficient
to pay, the defaulted interest, plus (to the extent lawful) any interest payable on the defaulted interest, to the Persons who are Holders on a subsequent special record date. A special
record date, as used in this Section 2.14 with respect to the payment of any defaulted interest, shall mean the 15th day next preceding the date fixed by the Company for the payment of
defaulted interest, whether or not such day is a Business Day. At least 15 days before the subsequent special record date, the Company shall mail to each Holder and to the Trustee a notice that
states the subsequent special record date, the payment date and the amount of defaulted interest to be paid. 


        SECTION
2.15    Registration Default.    Liquidated Damages shall be payable by the Company upon a Registration
Default (as defined in the Registration Rights Agreement) as provided in the Notes. If a Registration Default occurs, the Company shall deliver to the Trustee an Officers' Certificate stating
(1) the amount of the Liquidated Damages, and (2) when such Liquidated Damages are payable. 


ARTICLE 3  


 REDEMPTION AND PURCHASES  


        SECTION
3.01    Redemption.    The Notes are not redeemable prior to May 5, 2006. On and after May 5,
2006, the Company may, at its option, redeem the Notes in whole at any time or in part from time to time, on any date prior to Stated Maturity, upon notice as set forth in Section 3.04, at a
redemption price equal to 100% of the principal amount (the "Redemption Price"), plus any interest accrued but not paid prior to (but not including) the Redemption Date, if the Closing Price of the
Common Stock has exceeded 140% of the Conversion Price (as defined in Article 10 and as such may be adjusted from time to time) then in effect for at least 20 Trading Days in any consecutive
30-Trading Day period ending on the Trading Day prior to the date of mailing of the notice of optional redemption pursuant to Section 3.04. 



        SECTION
3.02    Notice of Trustee.    If the Company elects to redeem Notes pursuant to the redemption provisions of
Section 3.01 hereof, it shall notify the Trustee at least 30 days prior but not more than 60 days prior to the Redemption Date of such intended Redemption Date, the principal
amount of Notes to be redeemed and the CUSIP numbers of the Notes to be redeemed. 


        SECTION
3.03    Selection of Notes to be Redeemed.    If fewer than all the Notes are to be redeemed, the Trustee
shall select the particular Notes to be redeemed from the outstanding Notes by a method that complies with the requirements of any exchange on which the Notes are listed, or, if the Notes are not
listed on an exchange, on a pro rata basis or by lot or in accordance with any other method the Trustee considers fair and appropriate. Notes and portions thereof that the Trustee selects shall be in
principal amounts equal to $1,000 or any whole multiple thereof. 


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


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


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


21





 



        SECTION
3.04    Notice of Redemption.    Notice of redemption shall be given in the manner provided in
Section 13.02 hereof to the Holders of Notes to be redeemed. Such notice shall be given not less than 20 nor more than 60 days prior to the Redemption Date for redemption pursuant to
Section 3.01. 


        All
notices of redemption shall state: 



        (1)   the
Redemption Date; 


        (2)   the
Redemption Price and interest accrued and unpaid to, but not including, the Redemption Date, if any; 


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


        (4)   that
on the Redemption Date the Redemption Price and interest accrued and unpaid to, but not including, the Redemption Date, if any, will become due and payable upon
each such Note to be redeemed, and that interest thereon shall cease to accrue on and after such date; 


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


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


        (7)   the
CUSIP number of the Notes. 




        The
notice given shall specify the last date on which exchanges or transfers of Notes may be made pursuant to Section 2.06 hereof, and shall specify the serial numbers of Notes
and the portions thereof called for redemption. 


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



        SECTION
3.05    Effect of Notice of Redemption.    Notice of redemption having been given as provided in
Section 3.04 hereof, the Notes so to be redeemed shall, on the Redemption Date, become due and payable at the Redemption Price therein specified and from and after such date (unless the Company
shall default in the payment of the Redemption Price and accrued and unpaid interest) such Notes shall cease to bear interest. Upon surrender of any such Note for redemption in accordance with such
notice, such Note shall be paid by the Company at the Redemption Price plus accrued and unpaid interest, if any, to, but not including, the Redemption Date;  provided, however, that the installments of
interest on Notes whose Stated Maturity is prior to or on the Redemption Date shall be payable to the
Holders of such Notes, or one or more predecessor Notes, registered as such on the relevant Record Date according to their terms and the provisions of Section 2.01 hereof. 


        If
any Note called for redemption shall not be so paid upon surrender thereof for redemption, the principal, shall, until paid, bear interest from the Redemption Date at the Interest
Rate. 


        SECTION
3.06    Deposit of Redemption Price.    Prior to or on any Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent an amount of money sufficient to pay the Redemption Price of all the Notes to be redeemed on that Redemption Date, other than any Notes called for redemption on that
date which have been converted prior to the date of such deposit, and accrued and unpaid interest, if any, on such Notes. 


        If
any Note called for redemption is converted, any money deposited with the Trustee or with a Paying Agent or so segregated and held in trust for the redemption of such Note shall
(subject to any right of the Holder of such Note or any predecessor Note to receive interest as provided in 


22





 



Section 4.01
hereof) be paid to the Company on Company Request or, if then held by the Company, shall be discharged from such trust. 


        SECTION
3.07    Notes Redeemed in Part.    Any Note which is to be redeemed only in part shall be surrendered at an
office or agency of the Company designated for that purpose pursuant to Section 4.05 hereof (with, if the Company or the Trustee so requires, due endorsement by, or a written instrument of
transfer in form satisfactory to the Company and the Trustee duly executed by, the Holder thereof or the Holder's attorney duly authorized in writing), and the Company shall execute, and the Trustee
shall authenticate and deliver to the Holder of such Note without service charge, a new Note or Notes of any authorized denomination as requested by such Holder in aggregate principal amount equal to
and in exchange for the unredeemed portion of the principal of the Note so surrendered. 


        SECTION
3.08    Conversion Arrangement on Call for Redemption.    In connection with any redemption of Notes, the
Company may arrange for the purchase and conversion of any Notes called for redemption
by an agreement with one or more investment banks or other purchasers to purchase such Notes by paying to the Trustee in trust for the Noteholders, on or prior to 11:00 a.m. New York City time
on the Redemption Date, an amount that, together with any amounts deposited with the Trustee by the Company for the redemption of such Notes, is not less than the Redemption Price of such Notes, plus
accrued and unpaid interest. Notwithstanding anything to the contrary contained in this Article 3, the obligation of the Company to pay the Redemption Price of such Notes 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 3.08 shall
relieve the Company of its obligation to pay the Redemption Price, plus accrued and unpaid interest, to but excluding the relevant Redemption Date on Notes called for redemption. If such an agreement
is entered into, any Notes not duly surrendered for conversion by the Holders thereof may, at the option of the Company, 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 10) surrendered by such purchasers for conversion, all as of immediately prior to the close of business on
the Redemption Date, subject to payment of the above amount as aforesaid. The Trustee shall hold and pay to the Holders whose Notes are selected for redemption any such amount paid to it for purchase
and conversion in the same manner as it would moneys deposited with it by the Company for the redemption of Notes. Without the Trustee's prior written consent, no arrangement between the Company and
such purchasers for the purchase and conversion of any Notes shall increase or otherwise affect any of the powers, duties, responsibilities or obligations of the Trustee as set forth in this
Indenture, and the Company agrees to indemnify the Trustee from, and hold it harmless against, any loss, liability or expense arising out of or in connection with any such arrangement for the purchase
and conversion of any Notes between the Company and such purchasers, including the costs and expenses incurred by the Trustee in the defense of any claim or liability arising out of or in connection
with the exercise or performance of any of its powers, duties, responsibilities or obligations under this Indenture, except to the extent such loss, liability, expense or cost results from Trustee's
gross negligence or willful misconduct. 


        SECTION
3.09    Repurchase of Notes at Option of the Holder upon Change in Control.    


        (a)   If
there shall have occurred a Change in Control, all or any portion of the Notes of any Holder equal to $1,000 or a whole multiple of $1,000, not previously called for
redemption, shall be repurchased by the Company, at the option of such Holder, at a repurchase price equal to 100% of the principal amount of the Notes to be repurchased, together with interest
accrued and unpaid to, but excluding, the repurchase date (the "Change in Control Repurchase Price"), on the date (the "Change in Control Repurchase Date") that is 45 days after the Change in
Control Repurchase Notice; provided, however, that installments of interest on Notes whose Stated Maturity is prior to or on the Change in Control
Repurchase Date shall be payable to the Holders of such Notes, or one or more predecessor Notes, registered as such on the relevant Regular Record Date according to their terms. 


23









  





        Whenever in this Indenture (including Sections 2.01, 6.01(a) and 6.07 hereof) or Exhibit A-1 annexed hereto there is a reference, in any context, to the principal of
any Note as of any time, such reference shall be deemed to include reference to the Change in Control Repurchase Price payable in respect to such Note to the extent that such Change in Control
Repurchase Price is, was or would be so payable at such time, and express mention of the Change in Control Repurchase Price in any provision of this Indenture shall not be construed as excluding the
Change in Control Repurchase Price in those provisions of this Indenture when such express mention is not made; provided, however, that, for the
purposes of Article 11 hereof, such reference shall be deemed to include reference to the Change in Control Repurchase Price only to the extent the Change in Control Repurchase Price is payable
in cash. 


        A
"Change in Control" of the Company, or any successor entity who is subject to the terms of this Indenture, shall be deemed to have occurred at such time after the original issuance of
Notes as any of the following events shall occur: 



        (i)    the
acquisition by any person of beneficial ownership, directly or indirectly, through a purchase, merger (except a merger by the Company described in
Section 3.09(a)(ii)(A) or (B)) or other acquisition transaction or series of transactions, of shares of the Capital Stock of the Company entitling that person to exercise 50% or more of the
total voting power of all shares of such Capital Stock entitled to vote generally in elections of directors, other than any acquisition by the Company, any of its Subsidiaries or any employee benefit
plans of the Company; or 


        (ii)   any
consolidation or merger of the Company with or into any other person, any merger of another person into the Company, or any conveyance, transfer, sale, lease or
other disposition of all or substantially all of the Company's properties and assets to another person, other than: 



        (A)  any
transaction (1) that does not result in any reclassification, conversion, exchange or cancellation of outstanding shares of the Capital Stock of the Company
and (2) pursuant to which holders of the Capital Stock of the Company immediately prior to the transaction are entitled to exercise, directly or indirectly, 50% or more of the total voting
power of all shares of the Capital Stock of the Company entitled to vote generally in the election of directors of the continuing or surviving person immediately after the transaction; 


        (B)  any
merger solely for the purpose of changing the Company's jurisdiction of incorporation and resulting in a reclassification, conversion or exchange of outstanding
shares of Common Stock solely into shares of Common Stock of the surviving entity; 




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


        (iv)  the
Company is liquidated or dissolved or a resolution is passed by the Company's stockholders approving a plan of liquidation or dissolution of the Company other than
in a transaction which complies with the provisions described in Article 5 of the Indenture. 




Beneficial
ownership shall be determined in accordance with Rule 13d-3 promulgated by the SEC under the Securities and Exchange Act of 1934, as amended (the "Exchange Act"). The
term "person" shall include any syndicate or group that would be deemed to be a "person" under Section 13(d)(3) of the Exchange Act. 


        (b)   Unless
the Company shall have theretofore called for redemption all of the outstanding Notes, prior to or on the 30th day after the occurrence of a Change in Control,
the Company, or, at the 


24





 



written
request and expense of the Company prior to or on the 30th day after such occurrence, the Trustee, shall give to all Noteholders, in the manner provided in Section 13.02 hereof, notice
of the occurrence of the Change in Control and of the repurchase right set forth herein arising as a result thereof. The Company shall also deliver a copy of such notice of a repurchase right to the
Trustee. The notice shall include a form of Change in Control Repurchase Notice (as defined in Section 3.09(c)) to be completed by the Noteholder and shall state: 



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


        (2)   the
date by which the Change in Control Repurchase Notice pursuant to this Section 3.09 must be given; 


        (3)   the
Change in Control Repurchase Date; 


        (4)   the
Change in Control Repurchase Price; 



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


        (6)   the
Conversion Price and any adjustments thereto; 


        (7)   that
Notes as to which a Change in Control Repurchase Notice has been given may be converted pursuant to Article 10 hereof only if the Change in Control
Repurchase Notice has been withdrawn in accordance with the terms of this Indenture; 


        (8)   that
Notes must be surrendered to the Paying Agent to collect payment; 



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


        (10) briefly,
the procedures the Holder must follow to exercise rights under this Section 3.09; 


        (11) briefly,
the conversion rights of the Notes; 


        (12) the
procedures for withdrawing a Change in Control Repurchase Notice; 


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


        (14) the
CUSIP number of the Notes. 




        (c)   A
Holder may exercise its rights specified in Section 3.09(a) hereof upon delivery of a written notice of purchase (a "Change in Control Repurchase Notice") to
the Paying Agent on or prior to the 30th day after the date of the Company's notice pursuant to 3.09(b) above, stating: 



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


        (2)   the
portion of the principal amount of the Note which the Holder will deliver to be purchased, which portion must be $1,000 or any whole multiple thereof; and 


        (3)   that
such Note shall be purchased pursuant to the terms and conditions specified in paragraph 6 on the reverse side of the Notes. 




        The
delivery of such Note to the Paying Agent prior to, on or after the Change in Control Repurchase Date (together with all necessary endorsements) at the offices of the Paying Agent
shall be a condition to the receipt by the Holder of the Change in Control Repurchase Price therefor; provided, however, that such Change in Control
Repurchase Price shall be so paid pursuant to this Section 3.09 only if the Note so delivered to the Paying Agent shall conform in all respects to the description thereof set forth in the
related Change in Control Repurchase Notice. 


25





 

        The
Company shall purchase from the Holder thereof, pursuant to this Section 3.09, a portion of a Note if the principal amount of such portion is $1,000 or an integral multiple of
$1,000. Provisions of this Indenture that apply to the purchase of all of a Note also apply to the purchase of such portion of such Note. 


        Any
purchase by the Company contemplated pursuant to the provisions of this Section 3.09 shall be consummated by the delivery of the consideration to be received by the Holder
promptly following the later of the Change in Control Repurchase Date and the time of delivery of the Note to the Paying Agent in accordance with this Section 3.09. 



        Notwithstanding
anything herein to the contrary, any Holder delivering to the Paying Agent the Change in Control Repurchase Notice contemplated by this Section 3.09(c) shall have
the right to withdraw such Change in Control Repurchase Notice at any time prior to the close of business on the Change in Control Repurchase Date by delivery of a written notice of withdrawal to the
Paying Agent in accordance with Section 3.10. 


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



        SECTION
3.10    Effect of Change in Control Repurchase Notice.    Upon receipt by the Paying Agent of the Change in
Control Repurchase Notice specified in Section 3.09(c), the Holder of the Note in respect of which such Change in Control Repurchase Notice was given shall (unless such Change in Control
Repurchase Notice is withdrawn as specified in the following two paragraphs) thereafter be entitled to receive solely the Change in Control Repurchase Price with respect to such Note. Such Change in
Control Repurchase Price shall be paid to such Holder, subject to receipt of consideration for the Notes and/or Notes from the Holders by the Paying Agent, promptly following the later of
(x) the Change in Control Repurchase Date with respect to such Note (provided the conditions in Section 3.09(c) have been satisfied) and (y) the time of delivery of such Note to
the Paying Agent by the Holder thereof in the manner required by Section 3.09(c). Notes in respect of which a Change in Control Repurchase Notice has been given by the Holder thereof may not be
converted pursuant to Article 10 hereof on or after the date of the delivery of such Change in Control Repurchase Notice unless such Change in Control Repurchase Notice has first been validly
withdrawn as specified in the following two paragraphs. 


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



        (1)   the
certificate number of the Note in respect of which such notice of withdrawal is being submitted, 


        (2)   the
principal amount of the Note with respect to which such notice of withdrawal is being submitted, and 



        (3)   the
principal amount, if any, of such Note which remains subject to the original Change in Control Repurchase Notice and which has been or will be delivered for purchase
by the Company. 




        There
shall be no repurchase of any Notes pursuant to Section 3.09 if there has occurred (prior to, on or after, as the case may be, the giving, by the Holders of such Notes, of
the required Change in Control Repurchase Notice) and is continuing an Event of Default (other than a default in the payment of the Change in Control Repurchase Price with respect to such Notes). The
Paying Agent will promptly return to the respective Holders thereof any Notes (x) with respect to which a Change in Control Repurchase Notice has been withdrawn in compliance with this
Indenture, or (y) held by it 


26





 

during
the continuance of an Event of Default (other than a default in the payment of the Change in Control Repurchase Price with respect to such Notes) in which case, upon such return, the Change in
Control Repurchase Notice with respect thereto shall be deemed to have been withdrawn. 



        SECTION
3.11    Deposit of Change in Control Repurchase Price.    Prior to 11:00 a.m. (New York City time) on
the Business Day following the Change in Control Repurchase Date the Company shall deposit with the Trustee or with the Paying Agent (or, if the Company or a Subsidiary or an Affiliate of either of
them is acting as the Paying Agent, shall segregate and hold in trust as provided in Section 2.04) an amount of money (in immediately available funds if deposited on such Business Day)
sufficient to pay the aggregate Change in Control Repurchase Price of all the Notes or portions thereof which are to be purchased as of the Change in Control Repurchase Date. 



        SECTION
3.12    Notes Purchased in Part.    Any Note which is to be purchased only in part shall be surrendered at the
office of the Paying Agent (with, if the Company or the Trustee so requires, due endorsement by, or a written instrument of transfer in form satisfactory to the Company and the Trustee duly executed
by, the Holder thereof or such Holder's attorney duly authorized in writing) and the Company shall execute and the Trustee shall authenticate and deliver to the Holder of such Note, without service
charge, a new Note or Notes, of any authorized denomination as requested by such Holder in aggregate principal amount equal to, and in exchange for, the portion of the principal amount of the Note so
surrendered which is not purchased. 


        SECTION
3.13    Covenant to Comply with Securities Laws upon Purchase of Notes.    In connection with any offer to
purchase or repurchase of Notes under Section 3.09 hereof (provided that such offer or purchase constitutes an "issuer tender offer" for purposes of Rule 13e-4 (which term,
as used herein, includes any successor provision thereto) under the Exchange Act at the time of such offer or purchase), the Company shall (i) comply with Rule 13e-4,
Rule 14e-1 and any other tender offer rules under the Exchange Act which may then be applicable, (ii) file the related Schedule TO (or any successor schedule, form or report)
or any other schedule required under the Exchange Act, and (iii) otherwise comply with all federal and state securities laws so as to permit the rights and obligations under Section 3.09
to be exercised in the time and in the manner specified in Section 3.09. 


        SECTION
3.14    Repayment to the Company.    The Trustee and the Paying Agent shall return to the Company any cash
that remains unclaimed as provided in paragraph 12 of the Notes, together with interest, if any, thereon, held by them for the payment of the Change in Control Repurchase Price;  provided, however,
that to the extent that the aggregate amount of cash deposited by the Company pursuant to Section 3.11 exceeds the aggregate
Change in Control Repurchase Price of the Notes or portions thereof which the Company is obligated to purchase as of the Change in Control Repurchase Date then promptly after the Business Day
following the Change in Control Repurchase Date the Trustee shall return any such excess to the Company together with interest, if any, thereon. 


 
 

ARTICLE 4    
    
    COVENANTS    
    


        SECTION
4.01    Payment of Principal and Interest on the Notes.    The Company will duly and punctually pay the
principal of and Liquidated Damages, if any, and interest at the Interest Rate in respect of the Notes in accordance with the terms of the Notes and this Indenture. The Company will deposit or cause
to be deposited with the Trustee as directed by the Trustee, no later than 11:00 a.m., New York time on the day of the Stated Maturity of any Note or installment of interest, all payments so
due. Principal amount, Redemption Price, Change in Control Repurchase Price, and cash interest shall be considered paid on the applicable date due if at 11:00 a.m., New York time on such date
(or, in the case of a Change in Control Repurchase Price on the Business Day following the applicable 


27





 



Change
in Control Repurchase Date) the Trustee or the Paying Agent holds, in accordance with this Indenture, money or securities, if permitted hereunder, sufficient to pay all such amounts then due. 


        The
Company shall, to the extent permitted by law, pay cash interest on overdue amounts at the rate per annum set forth in paragraph 1 on the reverse side of the Notes, compounded
semiannually, which interest shall accrue from the date such overdue amount was originally due to the date payment of such amount, including interest thereon, has been made or duly provided for. All
such overdue interest shall be payable on demand. 


        SECTION
4.02    Reports to Holders.    The Company shall file with the Trustee, within 15 days after it files
such annual and quarterly reports, information, documents and other reports with the SEC, copies of its annual report and of the information, documents and other reports (or copies of such portions of
any of the foregoing as the SEC may by rules and regulations prescribe) which the Company is required to file with the SEC pursuant to Section 13 or 15(d) of the Exchange Act (the "SEC
Reports"). If at any time the Company is not subject to Section 13 or 15(d) of the Exchange Act, the Company shall provide reports containing substantially the same information as that
contained in the SEC Reports (the "Trustee Reports"), such reports to be provided at the same times the Company would have been required to provide the SEC Reports to the Trustee pursuant to the
immediately preceding sentence had it then been subject to section 13 or 15(d) of the Exchange Act, provided that the Trustee Reports need not include any certifications from officers of the
Company. The Company also shall comply with the other provisions of TIA Section 314(a). 


        SECTION
4.03    Compliance Certificate.    The Company shall deliver to the Trustee within 120 days after the
end of each fiscal year of the Company (beginning with the fiscal year ending on December 31, 2003) an Officers' Certificate, stating whether or not to the best knowledge of the signers thereof
the Company is in default in the performance and observance of any of the terms, provisions and conditions of this Indenture (without regard to any period of grace or requirement of notice provided
hereunder) and if the Company shall be in default, specifying all such defaults and the nature and status thereof of which they may have knowledge. 


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



        SECTION
4.05    Maintenance of Office or Agency.    The Company will maintain in The Borough of Manhattan, The City of
New York, an office or agency of the Trustee, Registrar, Paying Agent and Conversion Agent where Notes may be presented or surrendered for payment, where Notes may be surrendered for registration of
transfer, exchange, purchase, redemption or conversion and where notices and demands to or upon the Company in respect of the Notes and this Indenture may be served. The office of J.P.Morgan Chase
Bank, 4 New York Plaza, 1st Floor, New York, New York 10004-2413, attention: Institutional Trust and Securities Window, shall initially be such office or agency for all of
the aforesaid purposes. The Company shall give prompt written notice to the Trustee of the location, and of any change in the location, of any such office or agency (other than a change in the
location of the office of the Trustee). If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such
presentations, surrenders, notices and demands may be made or served at the address of the Trustee set forth in Section 13.02. 


        The
Company may also from time to time designate one or more other offices or agencies where the Notes may be presented or surrendered for any or all such purposes and may from time to
time rescind such designations; provided, however, that no such designation or rescission shall in any manner relieve the Company of its obligation to
maintain an office or agency in the Borough of Manhattan, The City of New York, for such purposes. 


28





 



        SECTION
4.06    Delivery of Certain Information.    At any time when the Company is not subject to Section 13
or 15(d) of the Exchange Act, upon the request of a holder or any beneficial holder of Notes or shares of Common Stock issued upon conversion thereof, the Company will promptly furnish or cause to be
furnished Rule 144A Information (as defined below) to such Holder or any beneficial holder of Notes or holder of shares of Common Stock issued upon conversion of Notes, or to a prospective
purchaser of any such security designated by any such holder, as the case may be, to the extent required to permit compliance by such Holder or holder with Rule 144A under the Securities Act
in connection with the resale of any such security. "Rule 144A Information" shall be such information as is specified pursuant to Rule 144A(d)(4) under the Securities Act. 



        SECTION
4.07    No Senior Subordinated Indebtedness.    The Company will not incur, create, issue, assume, guarantee
or otherwise become liable for any Indebtedness that is subordinate or junior in right of payment to any Senior Indebtedness of the Company and senior in any respect in right of payment to the Notes. 


        SECTION
4.08    No Amendment of Subordination Provisions in Existing Subordinated Notes.    Without the consent of the
Holders of at least a majority in aggregate principal amount of the Notes then outstanding, the Company will not amend, modify or alter the Subordinated Indenture in any way to: 



        (a)   increase
the rate of or accelerate the time for payment of interest on any Subordinated Notes; 


        (b)   increase
the principal of or advance the final maturity date of any Subordinated Notes; 


        (c)   alter
the redemption provisions or the price or terms at which the Company is required to offer to purchase any Subordinated Notes; or 


        (d)   amend
the provisions of Article XIII of the Subordinated Indenture (which relates to subordination). 



 
 

ARTICLE 5    
    
    SUCCESSOR CORPORATION    
    


        SECTION
5.01    When Company May Merge or Transfer Assets.    The Company shall not consolidate with, merge with or
into any other person or convey, transfer or lease its properties and assets substantially as an entirety to any person, unless: 



        (a)   either
(1) the Company shall be the continuing corporation or (2) the person (if other than the Company) formed by such consolidation or into which the
Company is merged or the person which acquires by conveyance, transfer or lease the properties and assets of the Company substantially as an entirety (i) shall be organized and validly existing
as a corporation under the laws of the United States or any state of the United States and (ii) shall expressly assume, by an indenture supplemental hereto, executed and delivered to the
Trustee, in form reasonably satisfactory to the Trustee, all of the obligations of the Company under the Notes and this Indenture; 



        (b)   at
the time of such transaction, no Event of Default and no event which, after notice or lapse of time, would become an Event of Default, shall have happened and be
continuing; and 


        (c)   the
Company shall have delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that such consolidation, merger, conveyance, transfer or
lease and, if a supplemental indenture is required in connection with such transaction, such supplemental indenture, comply with this Article 5 and that all conditions precedent herein provided
for relating to such transaction have been satisfied. 



29





 





        For
purposes of the foregoing, the transfer (by lease, assignment, sale or otherwise) of the properties and assets of one or more Subsidiaries (other than to the Company or another
Subsidiary), which, if such assets were owned by the Company, would constitute all or substantially all of the properties and assets of the Company, shall be deemed to be the transfer of all or
substantially all of the properties and assets of the Company. 



        The
successor person formed by such consolidation or into which the Company is merged or the successor person 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 had been named as the Company herein; and thereafter, except in
the case of a lease and obligations the Company may have under a supplemental indenture pursuant to Section 10.11, the Company shall be discharged from all obligations and covenants under this
Indenture and the Notes. Subject to Section 9.06, the Company, the Trustee and the successor person shall enter into a supplemental indenture to evidence the succession and substitution of such
successor person and such discharge and release of the Company. 


 
 

ARTICLE 6    
    
    DEFAULTS AND REMEDIES    
    


        SECTION
6.01    Events of Default.    An "Event of Default" occurs if: 



        (1)   the
Company fails to pay when due the principal of any of the Notes at maturity, upon redemption or exercise of a repurchase right or otherwise, whether or not such
payment is prohibited by Article 11 of this Indenture; 


        (2)   the
Company fails to pay an installment of interest on, or any Liquidated Damages with respect to, any of the Notes that continues for three (3) Business Days
after the date when due, whether or not such payment is prohibited by Article 11 of this Indenture; 



        (3)   the
Company fails to perform or observe any other term, covenant or agreement contained in the Notes or this Indenture for a period of 60 days after receipt by
the Company of a Notice of Default (as defined in this Section 6.01); 


        (4)   (A)
one or more defaults in the payment of principal of or premium, if any, on any of the Company's Indebtedness aggregating $5.0 million or more, when the same
becomes due and payable at the scheduled maturity thereof, and such default or defaults shall have continued after any applicable grace period and shall not have been cured or waived within a
30-day period after the date of a Notice of Default or (B) any of the Company's Indebtedness aggregating $5.0 million or more shall have been accelerated or otherwise
declared due and payable, or required to be prepaid or repurchased (other than by regularly scheduled required prepayment) prior to the scheduled maturity thereof and such acceleration is not
rescinded or annulled within a 30-day period after a Notice of Default; 


        (5)   the
Company, or any Significant Subsidiary, or any Subsidiaries of the Company which in the aggregate would constitute a Significant Subsidiary pursuant to or under or
within the meaning of any Bankruptcy Law: 



        (A)  commences
a voluntary case or proceeding; 


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


        (C)  consents
to the appointment of a Custodian (as defined in this Section 6.01) of it or for any substantial part of its property; 




30





 





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


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


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




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



        (A)  is
for relief against the Company or any Significant Subsidiary or any Subsidiaries of the Company which in the aggregate would constitute a Significant Subsidiary in an
involuntary case or proceeding, or adjudicates the Company or any Significant Subsidiary or any Subsidiaries of the Company which in the aggregate would constitute a Significant Subsidiary insolvent
or bankrupt; 


        (B)  appoints
a Custodian of the Company or any Significant Subsidiary or any Subsidiaries of the Company which in the aggregate would constitute a Significant Subsidiary or
for any substantial part of its or their properties; or 


        (C)  orders
the winding up or liquidation of the Company or any Significant Subsidiary or any Subsidiaries of the Company which in the aggregate would constitute a
Significant Subsidiary; 




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


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


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


        (7)   the
Collateral Pledge and Security Agreement shall cease to be in full force and effect or enforceable other than in accordance with its terms. 




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


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


        SECTION
6.02    Acceleration.    If an Event of Default (other than an Event of Default specified in
Section 6.01(5) or (6)) occurs and is continuing, the Trustee by written notice to the Company, or the Holders of at least 25% in aggregate principal amount of the Notes at the time outstanding
by notice to the Company and the Trustee, may declare the Notes due and payable at their principal amount together with accrued interest. Upon a declaration of acceleration, such principal and accrued
and unpaid interest to the date of payment shall be immediately due and payable. 


31





 



        If
an Event of Default specified in Section 6.01(5) or (6) above occurs and is continuing, then the principal and the interest on all the Notes shall become and be
immediately due and payable without any declaration or other act on the part of the Trustee or any Noteholders. 



        The
Holders of a majority in aggregate principal amount of the Notes at the time outstanding, by notice to the Trustee (and without notice to any other Noteholder) may rescind or annul
an acceleration and its consequences if the rescission would not conflict with any judgment or decree and if all existing Events of Default have been cured or waived except nonpayment of the principal
and any accrued cash interest that have become due solely as a result of acceleration and if all amounts due to the Trustee under Section 7.06 have been paid. No such rescission shall affect
any subsequent Default or impair any right consequent thereto. 


        SECTION
6.03    Other Remedies.    If an Event of Default occurs and is continuing, the Trustee may pursue any
available remedy to collect the payment of the principal and any accrued cash interest on the Notes or to enforce the performance of any provision of the Notes or this Indenture. 


        The
Trustee may maintain a proceeding even if the Trustee does not possess any of the Notes or does not produce any of the Notes in the proceeding. A delay or omission by the Trustee or
any Noteholder in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of, or acquiescence in, the Event of Default. Except as
set forth in Section 2.07 here of, no remedy is exclusive of any other remedy. All available remedies are cumulative. 



        SECTION
6.04    Waiver of Past Defaults.    The Holders of a majority in aggregate principal amount of the Notes at
the time outstanding, by notice to the Trustee (and without notice to any other Noteholder), may waive an existing Default and its consequences except (1) an Event of Default described in
Section 6.01(1) or (2), (2) a Default in respect of a provision that under Section 9.02 cannot be amended without the consent of each Noteholder affected or (3) a Default
which constitutes a failure to convert any Note in accordance with the terms of Article 10. When a Default is waived, it is deemed cured, but no such waiver shall extend to any subsequent or
other Default or impair any consequent right. This Section 6.04 shall be in lieu of Section 316(a)1(B) of the TIA and such Section 316(a)1(B) is hereby expressly excluded from
this Indenture, as permitted by the TIA. 


        SECTION
6.05    Control by Majority.    The Holders of a majority in aggregate principal amount of the Notes at the
time outstanding may direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or of exercising any trust or power conferred on the Trustee. However, the
Trustee may refuse to follow any direction that conflicts with law or this Indenture or that the Trustee determines in good faith is unduly prejudicial to the rights of other Noteholders or would
involve the Trustee in personal liability unless the Trustee is offered indemnity reasonably satisfactory to it against loss, liability or expense. This Section 6.05 shall be in lieu of
Section 316(a)1(A) of the TIA and such Section 316(a)1(A) is hereby expressly excluded from this Indenture, as permitted by the TIA. 


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



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



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


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



32





 




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


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




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



        SECTION
6.07    Rights of Holders to Receive Payment.    Notwithstanding any other provision of this Indenture, the
right of any Holder to receive payment of the principal amount plus Redemption Price, Change in Control Repurchase Price or any accrued cash interest in respect of the Notes held by such Holder, on or
after the respective due dates expressed in the Notes or any Redemption Date, and to convert the Notes in accordance with Article 10, or to bring suit for the enforcement of any such payment on
or after such respective dates or the right to convert, shall not be impaired or affected adversely without the consent of such Holder. 



        SECTION
6.08    Collection Suit by Trustee.    If an Event of Default described in Section 6.01(1) or
(2) occurs and is continuing, the Trustee may recover judgment in its own name and as trustee of an express trust against the Company for the whole amount owing with respect to the Notes and
the amounts provided for in Section 7.06. 


        SECTION
6.09    Trustee May File Proofs of Claim.    In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other judicial proceeding relative to the Company or any other obligor upon the Notes or the property of the
Company or of such other obligor or their creditors, the Trustee (irrespective of whether the principal amount, Redemption Price, Change in Control Repurchase Price or any accrued cash interest in
respect of the Notes shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Trustee shall have made any demand on the Company for the payment
of any such amount) shall be entitled and empowered, by intervention in such proceeding or otherwise, 



        (a)   to
file and prove a claim for the whole amount of the principal amount, Redemption Price, Change in Control Repurchase Price or any accrued cash interest and to file
such other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel or any other amounts due the Trustee under Section 7.06) and of the Holders allowed in such judicial proceeding, and 


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




and
any custodian, receiver, assignee, trustee, liquidator, sequestrator or similar official in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee
and, in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay the Trustee any amount due it for the reasonable compensation, expenses, disbursements
and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.06. 


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


33







  





        SECTION 6.10    Priorities.    If the Trustee collects any money pursuant to this Article 6, it shall pay out
the money in the following order: 



        (1)   FIRST:
to the Trustee for amounts due under Section 7.06; 


        (2)   SECOND:
to Noteholders for amounts due and unpaid on the Notes for the principal amount, Redemption Price, Change in Control Purchase Price, Liquidated Damages, if any,
or any accrued cash interest as the case may be, ratably, without preference or priority of any kind, according to such amounts due and payable on the Notes; and 


        (3)   THIRD:
the balance, if any, to the Company. 




        The
Trustee may fix a record date and payment date for any payment to Noteholders pursuant to this Section 6.10. At least 15 days before such record date, the Trustee shall
mail to each Noteholder and the Company a notice that states the record date, the payment date and the amount to be paid. 



        SECTION
6.11    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 (other than the Trustee) in the suit of an
undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys' fees and expenses, against any party litigant in the suit, having
due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section 6.11 does not apply to a suit by the Trustee, a suit by a Holder pursuant to
Section 6.07 or a suit by Holders of more than 10% in aggregate principal amount of the Notes at the time outstanding. This Section 6.11 shall be in lieu of Section 315(e) of the
TIA and such Section 315(e) is hereby expressly excluded from this Indenture, as permitted by the TIA. 


        SECTION
6.12    Waiver of Stay, Extension or Usury Laws.    The Company covenants (to the extent that it may lawfully
do so) that it will not at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law or any usury or other law wherever enacted,
now or at any time hereafter in force, which would prohibit or forgive the Company from paying all or any portion of the principal amount, Redemption Price, Change in Control Repurchase Price or any
accrued cash interest in respect of Notes, or any interest on such amounts, as contemplated herein, or which may affect the covenants or the performance of this Indenture; and the
Company (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and covenants that it will not hinder, delay or impede the execution of any power
herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted. 


 
 

ARTICLE 7    
    
    TRUSTEE    
    



        SECTION
7.01    Duties and Responsibilities of the Trustee; During Default; Prior to Default.    The Trustee, prior to
the occurrence of an Event of Default hereunder and after the curing or waiving of all such Events of Default which may have occurred, undertakes to perform such duties and only such duties as are
specifically set forth in this Indenture. In case an Event of Default hereunder has occurred (which has not been cured or waived), the Trustee shall exercise such of the rights and powers vested in it
by this Indenture, and use the same degree of care and skill in their exercise, as a prudent man would exercise or use under the circumstances in the conduct of his own affairs. 


34





 

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



        (a)   prior
to the occurrence of an Event of Default hereunder and after the curing or waiving of all such Events of Default which may have occurred: 



        (i)    the
duties and obligations of the Trustee shall be determined solely by the express provisions of this Indenture, and the Trustee shall not be liable except for the
performance of such duties and obligations as are specifically set forth in this Indenture, and no implied covenants or obligations shall be read into this Indenture against the Trustee; 


        (ii)   in
the absence of bad faith on the part of the Trustee, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions
expressed therein, upon any statements, certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture;
but in the case of any such statements, certificates or opinions which by any provision hereof are specifically required to be furnished to the Trustee, the Trustee shall be under a duty to examine
the same to determine whether or not they conform to the requirements of this Indenture; 




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


        (c)   the
Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the Holders pursuant to
Section 6.05 relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee, under this
Indenture. 




        None
of the provisions contained in this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur personal financial liability in the performance of any of
its duties or in the exercise of any of its rights or powers. 


        The
provisions of this Section 7.01 are in furtherance of and subject to Sections 315 and 316 of the TIA. 



        SECTION
7.02    Certain Rights of the Trustee.    In furtherance of and subject to the TIA and subject to
Section 7.01: 



        (a)   the
Trustee may rely, and shall be protected in acting or refraining from acting upon, any resolution, Officers' Certificate or any other certificate, statement,
instrument, opinion, report, notice, request, consent, order, bond, debenture, note, coupon, Note or other paper or document believed by it to be genuine and to have been signed or presented by the
proper party or parties; 


        (b)   any
request, direction, order or demand of the Company mentioned herein shall be sufficiently evidenced by an Officers' Certificate (unless other evidence in respect
thereof be herein specifically prescribed); and any resolution of the Board of Directors may be evidenced to the Trustee by a copy thereof certified by the secretary or an assistant secretary of the
Company; 


        (c)   the
Trustee may consult with counsel of its selection and any advice or Opinion of Counsel shall be full and complete authorization and protection in respect of any
action taken, suffered or omitted to be taken by it hereunder in good faith and in accordance with such advice or Opinion of Counsel; 



        (d)   the
Trustee shall be under no obligation to exercise any of the trusts or powers vested in it by this Indenture with the request, order or direction of any of the
Noteholders pursuant to the provisions of this Indenture, unless such Noteholders shall have offered to the Trustee reasonable 



35





 




security
or indemnity against the costs, expenses and liabilities which might be incurred therein or thereby; 



        (e)   the
Trustee shall not be liable for any action taken or omitted by it in good faith and believed by it to be authorized or within the discretion, rights or powers
conferred upon it by this Indenture; 


        (f)    prior
to the occurrence of an Event of Default hereunder and after the curing or waiving of all such Events of Default, 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, consent, order, approval, appraisal, bond, debenture, note,
coupon, security, or other paper or document unless requested in writing to do so by the Holders of not less than a majority in aggregate principal amount of the Notes then outstanding but the Trustee
in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit; provided that, if the payment within a
reasonable time to the Trustee of the costs, expenses or liabilities likely to be incurred by it in the making of such investigation is, in the opinion of the Trustee, not reasonably assured to the
Trustee by the security afforded to it by the terms of this Indenture, the Trustee may require reasonable indemnity against such expenses or liabilities as a condition to proceeding; the reasonable
expenses of every such investigation shall be paid by the Company or, if paid by the Trustee or any predecessor trustee, shall be repaid by the Company upon demand; and 



        (g)   the
Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys not regularly in its
employ and the Trustee shall not be responsible for any misconduct or negligence on the part of any such agent or attorney appointed with due care by it hereunder. 


        (h)   the
Trustee shall not be deemed to have knowledge of any Default or Event of Default under Article 6 unless it has actual knowledge thereof or has received
written notice thereof from the Company or any Holder. Except as otherwise expressly provided herein, the Trustee shall not be bound to ascertain or inquire as to the performance or observance of any
of the terms, conditions, covenants or agreements herein or of any of the documents executed in connection with Notes or as to the existence of an Event of Default hereunder. 


        (i)    whether
or not therein expressly so provided, every provision of this Indenture that in any way relates to the Trustee including all activity undertaken in its role as
Registrar, Paying Agent, Collateral Agent or Conversion Agent, is subject to this Article. The provisions of this Article shall survive the termination of this Indenture or the earlier resignation or
removal of the Trustee. 


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



        (k)   the
protections from liability provided to the Trustee hereunder, including the right to indemnification, shall extend to its directors, officers, employees and agents. 




        SECTION
7.03    Trustee Not Responsible for Recitals, Disposition of Notes or Application of Proceeds Thereof.    The
recitals contained herein and in the Notes, except the Trustee's certificates of authentication, shall be taken as the statements of the Company, and the Trustee assumes no responsibility for the
correctness of the same. The Trustee makes no representation as to the validity or sufficiency of this Indenture or of the Notes. The Trustee shall not be accountable for the use or application by the
Company of any of the Notes or of the proceeds thereof. 


        SECTION
7.04    Trustee and Agents May Hold Notes; Collections, etc.    The Trustee or any agent of the Company or the
Trustee, in its individual or any other capacity, may become the owner or pledgee of Notes with the same rights it would have if it were not the Trustee or such agent and, subject to 


36





 



Sections
7.08 and 7.13, if operative, may otherwise deal with the Company and receive, collect, hold and retain collections from the Company with the same rights it would have if it were not the
Trustee or such agent. 


        SECTION
7.05    Moneys Held by Trustee.    Subject to the provisions of Section 8.02 hereof, all moneys
received by the Trustee shall, until used or applied as herein provided, be held in trust for the purposes for which they were received, but need not be segregated from other funds except to the
extent required by mandatory provisions of law. Neither the Trustee nor any agent of the Company or the Trustee shall be under any liability for interest on any moneys received by it hereunder. 



        SECTION
7.06    Compensation and Indemnification of Trustee and Its Prior Claim.    The Company covenants and agrees
to pay to the Trustee from time to time, and the Trustee shall be entitled to, such compensation (which shall not be limited by any provision of law in regard to the compensation of a trustee of an
express trust) to be agreed to in writing by the Trustee and the Company, and the Company covenants and agrees to pay or reimburse the Trustee and each predecessor Trustee upon its request for all
reasonable expenses, disbursements and advances incurred or made by or on behalf of it in accordance with any of the provisions of this Indenture (including the reasonable compensation and the
expenses and disbursements of its counsel and of all agents and other persons not regularly in its employ) except any such expense, disbursement or advance as may arise from its negligence or bad
faith. 


        The
Company also covenants to indemnify the Trustee and each predecessor Trustee for, and to hold it harmless against, any loss, liability or expense incurred without negligence or bad
faith on its part, arising out of or in connection with the acceptance or administration of this Indenture or the trusts hereunder and its duties hereunder, including the reasonable costs and expenses
of defending itself against or investigating any claim of liability in connection with the performance of the Trustee's duties hereunder, and the Trustee has the right to seek such indemnification
from the Company before proceeding to exercise any right or power under the indenture at the request of the Company or the Noteholders. The obligations of the Company under this Section 7.06 to
compensate and indemnify the Trustee and each predecessor Trustee and to pay or reimburse the Trustee and each predecessor Trustee for expenses, disbursements and advances shall constitute additional
indebtedness hereunder and shall survive the satisfaction and discharge of this Indenture. Such additional indebtedness shall be a senior claim to that of the Notes upon all property and funds held or
collected by the Trustee as such, except funds held in trust for the benefit of the Holders of particular Notes, and the Notes are hereby effectively subordinated to such senior claim to such extent.
The provisions of this Section 7.06 shall survive the termination of this Indenture. When the Trustee incurs expenses or renders services in connection with an Event of Default specified in
Section 6.01 or in connection with Article Six hereof, the expenses (including the reasonable fees and expenses of its counsel) and the compensation for services in connection therewith are to
constitute expenses of administration under any bankruptcy law. 


        SECTION
7.07    Right of Trustee to Rely on Officers' Certificate, etc.    Subject to Sections 7.01 and 7.02, whenever
in the administration of the trusts of this Indenture the Trustee shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering or omitting any action
hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may, in the absence of negligence or bad faith on the part of the Trustee, be deemed to be
conclusively proved and established by an Officers' Certificate delivered to the Trustee at the Trustee's request. 


        SECTION
7.08    Conflicting Interests.    If the Trustee has or shall acquire a conflicting interest within the
meaning of the TIA, the Trustee shall either eliminate such interest or resign, to the extent and in the manner provided by, and subject to the provisions of, the TIA. Notwithstanding anything in this
Indenture to the contrary, the Company and the Trustee acknowledge that the Trustee is acting as trustee both under this Indenture and under the Subordinated Indenture and upon a Default or an 


37





 



Event
of Default under either or both indentures, a conflict of interest may arise which would require the Trustee to resign as Trustee from either or both indentures. 


        SECTION
7.09    Persons Eligible for Appointment as Trustee.    The Trustee (or its parent holding company) shall at
all times be a corporation or banking association having a combined capital and surplus of at least $50,000,000. If such corporation or banking association publishes reports of condition at least
annually, pursuant to law or to the requirements of the aforesaid supervising or examining authority, then, for the purposes of this Section 7.09, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. In case at any time the Trustee shall cease to be eligible in
accordance with the provisions of
this Section 7.09, the Trustee shall resign immediately in the manner and with the effect specified in Section 7.10. 



        SECTION
7.10    Resignation and Removal; Appointment of Successor Trustee.    


        (a)   The
Trustee, or any trustee or trustees hereafter appointed, may at any time resign with respect to one or more or all series of Notes by giving written notice of
resignation to the Company and by mailing notice thereof by first class mail to the Holders of Notes at their last addresses as they shall appear on the Note register. Upon receiving such notice of
resignation, the Company shall promptly appoint a successor trustee or trustees by written instrument in duplicate, executed by authority of the Board of Directors, one copy of which instrument shall
be delivered to the resigning Trustee and one copy to the successor trustee or trustees. If no successor trustee shall have been so appointed and have accepted appointment within 30 days after
the mailing of such notice of resignation, the resigning trustee may petition any court of competent jurisdiction for the appointment of a successor trustee, or any Noteholder who has been a bona fide
Holder of a Note for at least six months may, subject to the provisions of Section 7.11, on behalf of himself and all others similarly situated, petition any such court for the appointment of a
successor trustee. Such court may thereupon, after such notice, if any, as it may deem proper and prescribe, appoint a successor trustee. 


        (b)   In
case at any time any of the following shall occur: 



        (i)    the
Trustee shall fail to comply with the provisions of Section 7.08 with respect to any Notes after written request therefor by the Company or by any Noteholder
who has been a bona fide Holder of a Note for at least six months; or 


        (ii)   the
Trustee shall cease to be eligible in accordance with the provisions of Section 7.09 and shall fail to resign after written request therefor by the Company
or by any Noteholder; or 


        (iii)  the
Trustee shall become incapable of acting or shall be adjudged a bankrupt or insolvent, or a receiver or liquidator of the Trustee or of its property shall be
appointed, or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation; 




then,
in any such case, the Company may remove the Trustee and appoint a successor trustee by written instrument, in duplicate, executed by order of the Board of Directors of the Company, one copy of
which instrument shall be delivered to the Trustee so removed and one copy to the successor trustee, or, subject to the provisions of Section 7.11, any Noteholder who has been a bona fide
Holder of a Note for at least six months may on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee and the appointment of
a successor trustee. Such court may thereupon, after such notice, if any, as it may deem proper and prescribe, remove the Trustee and appoint a successor trustee. If no successor trustee shall have
been appointed and have accepted appointment within 30 days after a notice of removal has been given, the removed trustee may petition a court of competent jurisdiction for the appointment of a
successor trustee. 


38





 

        (c)   The
Holders of a majority in aggregate principal amount of the Notes at the time outstanding may at any time remove the Trustee and appoint a successor trustee by
delivering to the Trustee so removed, to the successor trustee so appointed and to the Company the evidence provided for in Section 1.05 of the action in that regard taken by the Noteholders. 


        (d)   Any
resignation or removal of the Trustee and any appointment of a successor trustee pursuant to any of the provisions of this Section 7.10 shall become effective
upon acceptance of appointment by the successor trustee as provided in Section 7.11. 


        SECTION
7.11    Acceptance of Appointment by Successor Trustee.    Any successor trustee appointed as provided in
Section 7.10 shall execute and deliver to the Company and to its predecessor trustee an instrument accepting such appointment hereunder, and thereupon the resignation or removal of the
predecessor trustee shall become effective and such successor trustee, without any further act, deed or conveyance, shall become vested with all rights, powers, duties and obligations of its
predecessor hereunder, with like effect as if originally named as trustee hereunder; but, nevertheless, on the written request of the Company or of the successor trustee, upon payment of its charges
then unpaid, the trustee ceasing to act shall pay over to the successor trustee all moneys at the time held by it hereunder and shall execute and deliver an instrument transferring to such successor
trustee all such rights, powers, duties and obligations. Upon request of any such successor trustee, the Company shall execute any and all instruments in writing for more fully and certainly vesting
in and confirming to such successor trustee all such rights and powers. Any trustee ceasing to act shall, nevertheless, retain a prior claim upon all property or funds held or collected by such
trustee to secure any amounts then due it pursuant to the provisions of Section 7.06. 


        No
successor trustee shall accept appointment as provided in this Section 7.11 unless at the time of such acceptance such successor trustee shall be qualified under the provisions
of Section 7.08 and eligible under the provisions of Section 7.09. 


        Upon
acceptance of appointment by any successor trustee as provided in this Section 7.11, the Company shall mail notice thereof by first class mail to the Holders of Notes at
their last addresses as they shall appear in the register. If the acceptance of appointment is substantially contemporaneous with the resignation, then the notice called for by the preceding sentence
may be combined with the notice called for by Section 7.10. If the Company fails to mail such notice within ten days after acceptance of appointment by the successor trustee, the successor
trustee shall cause such notice to be mailed at the expense of the Company. 


        SECTION
7.12    Merger, Conversion, Consolidation or Succession to Business of Trustee.    Any corporation or banking
association into which the Trustee may be merged or converted or with which it may be consolidated, or any corporation or banking association resulting from any merger, conversion or consolidation to
which the Trustee shall be a party, or any corporation or banking association succeeding to all or substantially all of the corporate trust business of the Trustee, by sale or otherwise, shall be the
successor of the Trustee hereunder, provided that such corporation or banking association shall be qualified under the provisions of Section 7.08 and eligible under the provisions of
Section 7.09, without the execution or filing of any paper or any further act on the part of any of the parties hereto, anything herein to the contrary notwithstanding. In case at the time such
successor to the Trustee shall succeed to the trusts created by this Indenture any of the Notes shall have been authenticated but not delivered, any such successor to the Trustee may adopt the
certificate of authentication of any predecessor Trustee and deliver such Notes so authenticated; and, in case at that time any of the Notes shall not have been authenticated, any successor to the
Trustee may authenticate such Notes either in the name of any predecessor hereunder or in the name of the successor Trustee; and in all such cases such certificate shall have the full force and effect
that this Indenture provides for the certificate of authentication of the Trustee; provided, that the right to adopt the certificate of authentication
of any 


39





 



predecessor
Trustee or to authenticate Notes in the name of any predecessor Trustee shall apply only to its successor or successors by merger, conversion or consolidation. 



        SECTION
7.13    Preferential Collection of Claims Against the Company.    The Trustee shall comply with the provisions
of Section 311 of the TIA. A Trustee who has resigned or been removed shall be subject to TIA Section 311(a) to the extent provided therein. 


        SECTION
7.14    Reports by the Trustee.    


        (a)   Within
60 days after each May 15 beginning with the May 15 following the date of this Indenture, and for so long as Notes remain outstanding, the
Trustee will mail to the Holders of the Notes a brief report dated as of such reporting date that complies with TIA Section 313(a) (but if no event described in TIA Section 313(a) has
occurred within the twelve months preceding the reporting date, no report need be transmitted). The Trustee also will comply with TIA Section 313(b)(2). The Trustee will also transmit by mail
all reports as required by TIA Section 313(c). 


        (b)   A
copy of each such report shall, at the time of such transmission to Noteholders, be furnished to the Company and be filed by the Trustee with each stock exchange upon
which the Notes are listed and also with the SEC. The Company agrees to notify the Trustee when and as the Notes become admitted to trading on any national securities exchange. 



        SECTION
7.15    Trustee to Give Notice of Default, But May Withhold in Certain Circumstances.    The Trustee shall
transmit to the Noteholders, as the names and addresses of such Holders appear on the Note register, notice by mail of all Defaults which have occurred of which it has actual knowledge, such notice to
be transmitted within 90 days after the occurrence thereof, unless such Defaults shall have been cured before the giving of such notice; provided
that, except in the case of Default in the payment of the principal of, interest on, or other similar obligation with respect to, any of the Notes, the Trustee shall be protected in withholding such
notice if and so long as the board of directors, the executive committee, or a trust committee of directors or trustees and/or Responsible Officers of the Trustee in good faith determines that the
withholding of such notice is in the best interests of the Noteholders. 


 
 

ARTICLE 8    
    
    SATISFACTION AND DISCHARGE OF INDENTURE    
    


        SECTION
8.01    Satisfaction and Discharge.    This Indenture will be discharged and will cease to be of further
effect as to all Notes issued hereunder, when: 



        (a)   either:




        (1)   all
Notes that have been authenticated (except lost, stolen or destroyed Notes that have been replaced or paid and Notes for whose payment money has theretofore been
deposited in trust and thereafter repaid to the Company) have been delivered to the Trustee for cancellation; or 



        (2)   all
Notes that have not been delivered to the Trustee for cancellation have become due and payable by reason of the making of a notice of redemption or otherwise or will
become due and payable within one year and the Company has irrevocably deposited or caused to be deposited with the Trustee as trust funds in trust solely for the benefit of the Holders, cash in U.S.
dollars, non-callable U.S. Government Obligations, or a combination thereof, in such amounts as will be sufficient without consideration of any reinvestment of interest, to pay and
discharge the entire indebtedness on the Notes not delivered to the Trustee for cancellation for principal and Liquidated Damages, if any, and accrued interest to the date of maturity or redemption; 




40





 






        (b)   no
Default or Event of Default has occurred and is continuing on the date of such deposit or will occur as a result of such deposit and such deposit will not result in a
breach or violation of, or constitute a default under, any other instrument to which the Company is a party or by which the Company is bound; 


        (c)   the
Company has paid or caused to be paid all sums payable by it under this Indenture; and 



        (d)   the
Company has delivered irrevocable instructions to the Trustee under this Indenture to apply the deposited money toward the payment of the Notes at maturity or the
redemption date, as the case may be. 




        In
addition, the Company must deliver an Officers' Certificate and an Opinion of Counsel to the Trustee stating that all conditions precedent to satisfaction and discharge have been
satisfied. 


        Notwithstanding
the satisfaction and discharge of this Indenture, if money has been deposited with the Trustee pursuant to subclause (2) of clause (a) of this Section, the
provisions of Sections 2.02, 2.03, 2.04, 2.05, 2.06, 2.07, 2.09, 2.13, 2.14, 3.07, 3.09, 4.05, 7.01, 7.02, 7.03, 7.04, Article 10, the last paragraph of Section 4.02 and this
Article 8 will survive until the Notes have been paid in full. In addition, nothing in this Section 8.01 will be deemed to discharge those provisions of Sections 7.06 and 8.03 hereof,
that, by their terms, survive the satisfaction and discharge of this Indenture. 


        SECTION
8.02    Application of Trust Money.    All money deposited with the Trustee pursuant to Section 11.01
shall be held in trust and applied by it, in accordance with the provisions of the Notes and this Indenture, to the payment, either directly or through any Paying Agent (including the Company acting
as its own Paying Agent) as the Trustee may determine, to the Persons entitled thereto, of the principal and interest for whose payment such money has been deposited with the Trustee; but such money
need not be segregated from other funds except to the extent required by law. 


        SECTION
8.03    Reinstatement.    If the Trustee or Paying Agent is unable to apply any money or U.S. Government
Obligations in accordance with Section 8.01 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, the Company's obligations under this Indenture and the Notes shall be revived and reinstated as though no deposit had occurred pursuant to Section 8.01;  provided that
if the Company has made any payment of principal of or interest on any Notes because of the reinstatement of its obligations, the Company
shall be subrogated to the rights of the Holders of such Notes to receive such payment from the money or Government Securities held by the Trustee or Paying Agent. 


 
 

ARTICLE 9.    
    
    AMENDMENTS    
    


        SECTION
9.01    Without Consent of Holders.    The Company and the Trustee may amend this Indenture or the Notes
without the consent of any Noteholder for the purposes of, among other things: 



        (1)   adding
to the Company's covenants for the benefit of the Holders; 


        (2)   surrendering
any right or power conferred upon the Company; 


        (3)   providing
for conversion rights of Holders if any reclassification or change of Common Stock or any consolidation, merger or sale of all or substantially all of the
Company's assets occurs; 


        (4)   reducing
the Conversion Price, provided that the reduction will not adversely affect the interests of Holders in any material respect; 



41





 




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



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


        (7)   curing
any ambiguity, omission, inconsistency or correcting or supplementing any defective provision contained in this Indenture;  provided that such modification or amendment does not, in the good faith
opinion of the Board of Directors and the Trustee, adversely affect the
interests of the Holders in any material respect; 


        (8)   adding
or modifying any other provisions which the Company and the Trustee may deem necessary or desirable and which will not adversely affect the interests of the
Holders in any material respect; 


        (9)   complying
with Article 5; or 


        (10) providing
for uncertificated Notes in addition to the Certificated Notes so long as such uncertificated Notes are in registered form for purposes of the Internal
Revenue Code of 1986, as amended. 




        SECTION
9.02    With Consent of Holders.    With the written consent of the Holders of at least a majority in
aggregate principal amount of the Notes at the time outstanding or by the adoption of a resolution at a meeting of Holders at which a quorum is present by at least a majority in aggregate principal
amount of the Notes represented at the meeting, the Company may modify and amend this Indenture or the Notes and waive noncompliance by the Company. However, without the consent of each Noteholder
affected, a modification, amendment or waiver to this Indenture or the Notes may not: 



        (1)   change
the maturity of the principal of or any installment of interest on, or any Liquidated Damages with respect to, any Note; 


        (2)   reduce
the principal amount of or interest on, or any Liquidated Damages with respect to, any Note; 


        (3)   reduce
the Interest Rate or interest on, or any Liquidated Damages with respect to, any Note; 


        (4)   change
the currency of payment of principal of or interest on any Note; 


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


        (6)   except
as otherwise permitted or contemplated by provisions of this Indenture concerning corporate reorganizations, adversely affect the repurchase option of Holders
upon a Change in Control or the conversion rights of Holders; 


        (7)   modify
the provisions of this Indenture relating to the pledge of securities as contemplated in Article 12 in a manner adverse to the Holders; or 



        (8)   reduce
the percentage in aggregate principal amount of Notes outstanding necessary to modify or amend this Indenture or to waive any past default. 




        Furthermore,
without the consent of Holders of at least 75% in aggregate principal amount of the Notes outstanding, a modification, amendment or waiver to this Indenture may not modify
the subordination provisions of the Notes in a manner adverse to the Holders. 


42







  





        It shall not be necessary for the consent of the Holders under this Section 9.02 to approve the particular form of any proposed amendment, but it shall be sufficient if such
consent approves the substance thereof. 


        Promptly
after an amendment under this Section 9.02 becomes effective, the Company shall mail to each Holder a notice briefly describing the amendment. 


        SECTION
9.03    Compliance with Trust Indenture Act.    Every amendment, supplement or waiver to this Indenture or the
Notes executed pursuant to this Article shall comply with the TIA. 


        SECTION
9.04    Revocation and Effect of Consents, Waivers and Actions.    Until an amendment, waiver or other action
by Holders becomes effective, a consent thereto by a Holder of a Note hereunder is a continuing consent by the Holder and every subsequent Holder of that Note or portion of the Note that evidences the
same obligation as the consenting Holder's Note, even if notation of the consent, waiver or action is not made on the Note. However, any such Holder or subsequent Holder may revoke the consent, waiver
or action as to such Holder's Note or portion of the Note if the Trustee receives the notice of revocation before the date the amendment, waiver or action becomes effective. After an amendment, waiver
or action becomes effective, it shall bind every Noteholder. 


        SECTION
9.05    Notation on or Exchange of Notes.    Notes authenticated and delivered after the execution of any
amendment or supplemental indenture pursuant to this Article may, and shall if required by the Trustee, bear a notation in form approved by the Trustee as to any matter provided for in such amendment
or supplemental indenture. If the Company shall so determine, new Notes so modified as to conform, in the opinion of the Board of Directors, to any such amendment or supplemental indenture may be
prepared and executed by the Company and authenticated and delivered by the Trustee in exchange for outstanding Notes. 


        SECTION
9.06    Trustee to Sign Amendments or Supplemental Indentures.    The Trustee shall sign any amendment or
supplemental indenture authorized pursuant to this Article 9 if the amendment contained therein does not adversely affect the rights, duties, liabilities or immunities of the Trustee. If it
does, the Trustee may, but need not, sign such amendment or supplemental indenture. In signing such amendment or supplemental indenture the Trustee shall be entitled to receive, and (subject to the
provisions of Section 7.01) shall be fully protected in relying upon, an Officers' Certificate and an Opinion of Counsel stating that such amendment is authorized or permitted by this
Indenture. 


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


 
 

ARTICLE 10    
    
    CONVERSION    
    


        SECTION
10.01    Conversion Right and Conversion Price.    Subject to and upon compliance with the provisions of this
Article, at the option of the Holder thereof, any Note or any portion of the principal amount thereof which is $1,000 or a whole multiple of $1,000 may be converted at the principal amount thereof, or
of such portion thereof, into duly authorized, fully paid and nonassessable shares of Common Stock, at the Conversion Price, determined as hereinafter provided, in effect at the time of conversion.
Such conversion right shall expire at the close of business on the Business Day prior to the Stated Maturity of the Notes. 


        In
case a Note or portion thereof is called for redemption, such conversion right in respect of the Note or the portion so called shall expire at the close of business on the Business
Day preceding the 


43





 



Redemption
Date, unless the Company defaults in making the payment due upon redemption. In the case of a Change in Control for which the Holder exercises its repurchase right with respect to a Note or
portion thereof, such conversion right in respect of the Note or portion thereof shall expire at the close of business on the Business Day immediately preceding the Change in Control Repurchase Date. 


        The
price at which shares of Common Stock shall be delivered upon conversion (the "Conversion Price") shall be initially equal to $8.515 per share of Common Stock. The Conversion Price
shall be adjusted in certain instances as provided in paragraphs (a), (b), (c), (d), (e), (f), (h) and (i) of Section 10.04 and Section 10.12 hereof. 



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


        Except
as described below, no payment or adjustment will be made for accrued interest on, or Liquidated Damages with respect to, a converted Note or for dividends on any Common Stock
issued on conversion. Notes surrendered for conversion 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
shall be accompanied by payment in New York Clearing House funds or other funds acceptable to the Company of an amount equal to the interest to be received on such Interest Payment Date on the
principal amount of Notes being surrendered for conversion. 


        Notes
shall be deemed to have been converted immediately prior to the close of business on the day of surrender of such Notes for conversion in accordance with the foregoing provisions,
and at such time the rights of the Holders of such Notes as Holders shall cease, and the Person or Persons entitled to receive the Common Stock issuable upon conversion shall be treated for all
purposes as the record holder or holders of such Common Stock at such time. As promptly as practicable on or after the conversion date, the Company shall cause to be issued and delivered to such
Conversion Agent a certificate or certificates for the number of full shares of Common Stock issuable upon conversion, together with payment in lieu of any fraction of a share as provided in
Section 10.03 hereof. 


        In
the case of any Note which is converted in part only, upon such conversion the Company shall execute and the Trustee shall authenticate and deliver to the Holder thereof, at the
expense of the Company, a new Note or Notes of authorized denominations in aggregate principal amount equal to the unconverted portion of the principal amount of such Notes. 



        If
shares of Common Stock to be issued upon conversion of a Restricted Note, or securities to be issued upon conversion of a Restricted Note in part only, are to be registered in a name
other than that of the Holder of such Restricted Note, such Holder must deliver to the Conversion Agent a certificate in substantially the form set forth in the form of Note set forth in
Exhibit B-1 annexed hereto, dated the date of surrender of such Restricted Note and signed by such Holder, as to compliance with the restrictions on transfer applicable to such
Restricted Note. Neither the Trustee nor any Conversion Agent, Registrar or Transfer Agent shall be required to register in a name other than that of the Holder shares of Common Stock or Notes issued
upon conversion of any such Restricted Note not so accompanied by a properly completed certificate. 


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


        SECTION
10.03    Fractions of Shares.    No fractional shares of Common Stock shall be issued upon conversion of any
Note or Notes. If more than one Note shall be surrendered for conversion at one time by the same Holder, the number of full shares which shall be issued upon conversion thereof shall be computed on
the basis of the aggregate principal amount of the Notes (or specified portions 


44





 



thereof)
so surrendered. Instead of any fractional share of Common Stock which would otherwise be issued upon conversion of any Note or Notes (or specified portions thereof), the Company shall pay a
cash adjustment in respect of such fraction (calculated to the nearest one-100th of a share) in an amount equal to the same fraction of the quoted price of the Common Stock as of the
Trading Day preceding the date of conversion. 


        SECTION
10.04    Adjustment of Conversion Price.    The Conversion Price shall be subject to adjustments, calculated
by the Company, from time to time as follows: 



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



        (1)   the
numerator of which shall be the number of shares of Common Stock outstanding at the close of business on the Record Date (as defined in Section 10.4(g)) fixed
for such determination, and 


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




Such
reduction shall become effective immediately after the opening of business on the day following the Record Date. If any dividend or distribution of the type described in this
Section 10.04(a) is declared but not so paid or made, the Conversion Price shall again be adjusted to the Conversion Price which would then be in effect if such dividend or distribution had not
been declared. 


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


        (c)   In
case the Company shall issue rights or warrants (other than any rights or warrants referred to in Section 10.04(d)) to all holders of its outstanding shares of
Common Stock entitling them to subscribe for or purchase shares of Common Stock (or securities convertible into Common Stock) at a price per share (or having a conversion price per share) less than
the Current Market Price (as defined in Section 10.04(g)) on the Record Date fixed for the determination of stockholders entitled to receive such rights or warrants, the Conversion Price shall
be adjusted so that the same shall equal the price determined by multiplying the Conversion Price in effect at the opening of business on the date after such Record Date by a fraction: 



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



        (2)   the
denominator of which shall be the number of shares of Common Stock outstanding on the close of business on the Record Date plus the total number of additional 




45





 





shares
of Common Stock so offered for subscription or purchase (or into which the convertible securities so offered are convertible). 




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


        (d)   In
case the Company shall, by dividend or otherwise, distribute to all holders of its Common Stock shares of any class of capital stock of the Company (other than any
dividends or distributions to which Section 10.04(a) applies) or evidences of its indebtedness or other assets, including securities, but excluding (1) any rights or warrants referred to
in Section 10.04(c), (2) any dividends or distributions in connection with a reclassification, change, merger, consolidation, statutory share exchange, combination, sale or conveyance to
which Section 10.11 hereof applies and (3) dividends and distributions paid exclusively in cash (the securities described in foregoing clauses (1), (2) and (3) hereinafter
in this Section 10.04(d) called the "excluded securities"), then, in each such case, subject to the second succeeding paragraph of this Section 10.04(d), the Conversion Price shall be
adjusted so that the same shall be equal to the price determined by multiplying the Conversion Price in effect immediately prior to the close of business on the Record Date (as defined in
Section 10.04(g)) with respect to such distribution by a fraction: 



        (1)   the
numerator of which shall be the Current Market Price (determined as provided in Section 10.04(g)) on such date less the fair market value (as determined by
the Board of Directors, whose determination shall be conclusive and set forth in a Board Resolution) on such date of the portion of the securities so distributed (other than excluded securities)
applicable to one share of Common Stock (determined on the basis of the number of shares of the Common Stock outstanding on the Record Date), and 


        (2)   the
denominator of which shall be such Current Market Price. 




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



46





 

        If
the Board of Directors determines the fair market value of any distribution for purposes of this Section 10.04(d) by reference to the actual or when issued trading market for
any securities comprising all or part of such distribution (other than excluded securities), it must in doing so consider the prices in such market over the same period (the "Reference Period") used
in computing the Current Market Price pursuant to Section 10.04(g) to the extent possible, unless the Board of Directors in a Board Resolution determines in good faith that determining the fair
market value during the Reference Period would not be in the best interest of the Holder. 



        With
respect to any shareholder rights plan existing on the date hereof or in the event that the Company implements any other shareholder rights plan (in each case, a "Rights
Agreement"), such rights plan shall provide, subject to customary exceptions and limitations, that upon conversion of the Notes the Holders will receive, in addition to the Common Stock issuable upon
such conversion, the rights (the "Rights") issued under such Rights Agreement (notwithstanding the occurrence of an event causing such Rights to separate from the Common Stock at or prior to the time
of conversion); provided, a Holder who is a holder of Common Stock (or direct or indirect interests therein) at the time of conversion, but who is not
entitled as such a holder to such Rights pursuant to the terms of any such Rights Agreement, shall not be eligible to receive any such Rights hereunder. Any distribution of Rights pursuant to a Rights
Agreement complying with the requirements set forth in the immediately preceding sentence of this paragraph shall not constitute a distribution of rights or warrants for the purposes of this
Section 10.04(d). 


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



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


         (ii)  are
not exercisable; and 


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




shall
be deemed not to have been distributed for purposes of this Section 10.04(d) (and no adjustment to the Conversion Price under this Section 10.04(d) will be required) until the
occurrence of the earliest Trigger Event. If such right or warrant is subject to subsequent events, upon the occurrence of which such right or warrant shall become exercisable to purchase different
securities, evidences of indebtedness or other assets or entitle the holder to purchase a different number or amount of the foregoing or to purchase any of the foregoing at a different purchase price,
then the occurrence of each such event shall be deemed to be the date of issuance and record date with respect to a new right or warrant (and a termination or expiration of the existing right or
warrant without exercise by the holder thereof). In addition, in the event of any distribution (or deemed distribution) of rights or warrants, or any Trigger Event or other event (of the type
described in the preceding sentence) with respect thereto, that resulted in an adjustment to the Conversion Price under this Section 10.04(d): 



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




47





 


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




        For
purposes of this Section 10.04(d) and Sections 10.04(a), 10.04(b) and 10.04(c), any dividend or distribution to which this Section 10.04(d) is applicable that also
includes shares of Common Stock, a subdivision or combination of Common Stock to which Section 10.04(b) applies, or rights or warrants to subscribe for or purchase shares of Common Stock to
which Section 10.04(c) applies (or any combination thereof), shall be deemed instead to be: 



        (3)   a
dividend or distribution of the evidences of indebtedness, assets, shares of capital stock, rights or warrants other than such shares of Common Stock, such subdivision
or combination or such rights or warrants to which Sections 10.04(a), 10.04(b) and 10.04(c) apply, respectively (and any Conversion Price reduction required by this Section 10.04(d) with
respect to such dividend or distribution shall then be made), immediately followed by 



        (4)   a
dividend or distribution of such shares of Common Stock, such subdivision or combination or such rights or warrants (and any further Conversion Price reduction
required by Sections 10.04(a), 10.04(b) and 10.04(c) with respect to such dividend or distribution shall then be made), except: 



        (A)  the
Record Date of such dividend or distribution shall be substituted as (x) "the date fixed for the determination of stockholders entitled to receive such
dividend or other distribution", "Record Date fixed for such determinations" and "Record Date" within the meaning of Section 10.04(a), (y) "the day upon which such subdivision becomes
effective" and "the day upon which such combination becomes effective" within the meaning of Section 10.04(b), and (z) as "the date fixed for the determination of stockholders entitled
to receive such rights or warrants", "the Record Date fixed for the determination of the stockholders entitled to receive such rights or warrants" and such "Record Date" within the meaning of
Section 10.04(c), and 


        (B)  any
shares of Common Stock included in such dividend or distribution shall not be deemed "outstanding at the close of business on the date fixed for such determination"
within the meaning of Section 10.04(a) and any reduction or increase in the number of shares of Common Stock resulting from such subdivision or combination shall be disregarded in connection
with such dividend or distribution. 





        (e)   In
case the Company shall, by dividend or otherwise, distribute to all holders of its Common Stock cash (excluding any cash that is distributed upon a reclassification,
change, merger, consolidation, statutory share exchange, combination, sale or conveyance to which Section 10.11 hereof applies or as part of a distribution referred to in
Section 10.04(d) hereof), in an aggregate amount that, combined together with: (1) the aggregate amount of any other such distributions to all holders of Common Stock made exclusively in
cash within the 12 months preceding the date of payment of such distribution, and in respect of which no adjustment pursuant to this Section 10.04(e) has been made, and (2) the
aggregate of any cash plus the fair market value (as determined by the Board of Directors, whose determination shall be conclusive and set forth in a Board Resolution) of consideration payable in
respect of any tender offer or exchange offer by the Company or any of its Subsidiaries for all or any portion of the Common Stock concluded within the 12 months preceding the date of such
distribution, and in respect of which no adjustment pursuant to Section 10.04(f) hereof has been made, exceeds 5% of the product of the Current Market Price (determined as provided in
Section 10.04(g)) on the Record Date with respect to such distribution times the number of shares of Common Stock outstanding on such date, then and in each such case, immediately after the
close of business on such date, the Conversion Price shall 



48





 

be
reduced so that the same shall equal the price determined by multiplying the Conversion Price in effect immediately prior to the close of business on such Record Date by a fraction: 



          (i)  the
numerator of which shall be equal to the Current Market Price on the Record Date less an amount equal to the quotient of (x) the excess of such combined
amount over such 5% and (y) the number of shares of Common Stock outstanding on the Record Date, and 


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




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


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



        (1)   the
aggregate of the cash plus the fair market value (as determined by the Board of Directors, whose determination shall be conclusive and set forth in a Board
Resolution), as of the expiration of such tender offer or exchange offer, of consideration payable in respect of any other tender offers or exchange offers, by the Company or any of its Subsidiaries
for all or any portion of the Common Stock expiring within the 12 months preceding the expiration of such tender offer or exchange offer and in respect of which no adjustment pursuant to this
Section 10.04(f) has been made, and 


        (2)   the
aggregate amount of any distributions to all holders of the Company's Common Stock made exclusively in cash within 12 months preceding the expiration of such
tender offer or exchange offer and in respect of which no adjustment pursuant to Section 10.04(e) has been made, 




exceeds
5% of the product of the Current Market Price (determined as provided in Section 10.04(g)) as of the last time (the "Expiration Time") tenders or exchanges could have been made pursuant
to such tender offer or exchange offer (as it may be amended) times the number of shares of Common Stock outstanding (including any tendered shares or exchanged shares) on the Expiration Time, then,
and in each such case, immediately prior to the opening of business on the day after the date of the Expiration Time, the Conversion Price shall be adjusted so that the same shall equal the price
determined by multiplying the Conversion Price in effect immediately prior to close of business on the date of the Expiration Time by a fraction: 



        (3)   the
numerator of which shall be the number of shares of Common Stock outstanding (including any tendered or exchanged shares) at the Expiration Time multiplied by the
Current Market Price of the Common Stock on the Trading Day next succeeding the Expiration Time, and 




49





 


        (4)   the
denominator shall be the sum of (x) the fair market value (determined as aforesaid) of the aggregate consideration payable to stockholders based on the
acceptance (up to any maximum specified in the terms of the tender offer or exchange offer) of all shares validly tendered or exchanged and not withdrawn as of the Expiration Time (the shares deemed
so accepted, up to any such maximum, being referred to as the "Purchased Shares") and (y) the product of the number of shares of Common Stock
outstanding (less any Purchased Shares) on the Expiration Time and the Current Market Price of the Common Stock on the Trading Day next succeeding the Expiration Time. 




Such
reduction (if any) shall become effective immediately prior to the opening of business on the day following the Expiration Time. In the event that the Company is obligated to purchase shares
pursuant to any such tender offer or exchange offer, but the Company is permanently prevented by applicable law from effecting any such purchases or all such purchases are rescinded, the Conversion
Price shall again be adjusted to be the Conversion Price which would then be in effect if such tender offer or exchange offer had not been made. If the application of this Section 10.04(f) to
any tender offer or exchange offer would result in an increase in the Conversion Price, no adjustment shall be made for such tender offer or exchange offer under this Section 10.04(f). 


        (g)   For
purposes of this Section 10.04, the following terms shall have the meanings indicated: 



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



          (i)  the
"ex" date (as hereinafter defined) for any event (other than the issuance or distribution requiring such computation) that requires an adjustment to the Conversion
Price pursuant to Section 10.04(a), (b), (c), (d), (e) or (f) occurs during such ten consecutive Trading Days, the Closing Price for each Trading Day prior to the "ex" date for
such other event shall be adjusted by multiplying such Closing Price by the same fraction by which the Conversion Price is so required to be adjusted as a result of such other event; 


         (ii)  the
"ex" date for any event (other than the issuance or distribution requiring such computation) that requires an adjustment to the Conversion Price pursuant to
Section 10.04(a), (b), (c), (d), (e) or (f) occurs on or after the "ex" date for the issuance or distribution requiring such computation and prior to the day in question, the
Closing Price for each Trading Day on and after the "ex" date for such other event shall be adjusted by multiplying such Closing Price by the reciprocal of the fraction by which the Conversion Price
is so required to be adjusted as a result of such other event; and 


        (iii)  the
"ex" date for the issuance or distribution requiring such computation is prior to the day in question, after taking into account any adjustment required pursuant
to clause (i) or (ii) of this proviso, the Closing Price for each Trading Day on or after such "ex" date shall be adjusted by adding thereto the amount of any cash and the fair market
value (as determined by the Board of Directors in a manner consistent with any determination of such value for purposes of Section 10.04(d) or (f), whose determination shall be conclusive and
set forth in a Board Resolution) of the evidences of indebtedness, shares of capital stock or assets being distributed applicable to one share of Common Stock as of the close of business on the day
before such "ex" date. 





For
purposes of any computation under Section 10.04(f), the Current Market Price of the Common Stock on any date shall be deemed to be the average of the daily Closing Prices per share of
Common Stock for such day and the next two succeeding Trading Days; provided, 



50





 

however,
that if the "ex" date for any event (other than the tender offer requiring such computation) that requires an adjustment to the Conversion Price pursuant to Section 10.04(a), (b), (c),
(d), (e) or (f) occurs on or after the Expiration Time for the tender or exchange offer requiring such computation and prior to the day in question, the Closing Price for each Trading
Day on and after the "ex" date for such other event shall be adjusted by multiplying such Closing Price by the reciprocal of the fraction by which the Conversion Price is so required to be adjusted as
a result of such other event. For purposes of this paragraph, the term "ex" date, when used: 



        (A)  with
respect to any issuance or distribution, means the first date on which the Common Stock trades regular way on the relevant exchange or in the relevant market from
which the Closing Price was obtained without the right to receive such issuance or distribution; 


        (B)  with
respect to any subdivision or combination of shares of Common Stock, means the first date on which the Common Stock trades regular way on such exchange or in such
market after the time at which such subdivision or combination becomes effective, and 


        (C)  with
respect to any tender or exchange offer, means the first date on which the Common Stock trades regular way on such exchange or in such market after the Expiration
Time of such offer. 




Notwithstanding
the foregoing, whenever successive adjustments to the Conversion Price are called for pursuant to this Section 10.04, such adjustments shall be made to the Current Market Price
as may be necessary or appropriate to effectuate the intent of this Section 10.04 and to avoid unjust or inequitable results as determined in good faith by the Board of Directors. 



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


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




        (h)   The
Company may make such reductions in the Conversion Price, in addition to those required by Section 10.04(a), (b), (c), (d), (e) or (f), as the Board of
Directors considers to be advisable to avoid or diminish any income tax to holders of Common Stock or rights to purchase Common Stock resulting from any dividend or distribution of stock (or rights to
acquire stock) or from any event treated as such for income tax purposes. 



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



51











  




        (i)    No
adjustment in the Conversion Price shall be required unless such adjustment would require an increase or decrease of at least 1% in the Conversion Price then in
effect; provided, however, that any adjustments which by reason of this Section 10.04(i) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All calculations under this Article 10 shall be made by the Company and shall be made to the nearest cent or to the nearest one
hundredth of a share, as the case may be. No adjustment need be made for a change in the par value or no par value of the Common Stock. 


        (j)    In
any case in which this Section 10.04 provides that an adjustment shall become effective immediately after a Record Date for an event, the Company may defer
until the occurrence of such event (i) issuing to the Holder of any Note converted after such Record Date and before the occurrence of such event the additional shares of Common Stock issuable
upon such conversion by reason of the adjustment required by such event over and above the Common Stock issuable upon such conversion before giving effect to such adjustment and (ii) paying to
such holder any amount in cash in lieu of any fraction pursuant to Section 10.03 hereof. 


        (k)   For
purposes of this Section 10.04, the number of shares of Common Stock at any time outstanding shall not include shares held in the treasury of the Company but
shall include shares issuable in respect of scrip certificates issued in lieu of fractions of shares of Common Stock. The Company will not pay any dividend or make any distribution on shares of Common
Stock held in the treasury of the Company. 




        SECTION
10.05    Notice of Adjustments of Conversion Price.    Whenever the Conversion Price is adjusted as herein
provided (other than in the case of an adjustment pursuant to the second paragraph of Section 10.04(h) for which the notice required by such paragraph has been provided), the Company shall
promptly file with the Trustee and any Conversion Agent other than the Trustee an Officers' Certificate setting forth the adjusted Conversion Price and showing in reasonable detail the facts upon
which such adjustment is based. Promptly after delivery of such Officers' Certificate, the Company shall prepare a notice stating that the Conversion Price has been adjusted and setting forth the
adjusted Conversion Price and the date on which each adjustment becomes effective, and shall mail such notice to each Holder at the address of such Holder as it appears in the Register within
20 days of the effective date of such adjustment. Failure to deliver such notice shall not effect the legality or validity of any such adjustment. 


        SECTION
10.06    Notice Prior to Certain Actions.    In case at any time after the date hereof: 



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


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


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


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




the
Company shall cause to be filed at each office or agency maintained for the purpose of conversion of Notes pursuant to Section 4.05 hereof, and shall cause to be provided to the Trustee and
all Holders 


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in
accordance with Section 13.02 hereof, at least 20 days (or 10 days in any case specified in clause (1) or (2) above) prior to the applicable record or effective
date hereinafter specified, a notice stating: 



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


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




        Neither
the failure to give such notice nor any defect therein shall affect the legality or validity of the proceedings or actions described in clauses (1) through (4) of
this Section 10.06. 


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


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


        SECTION
10.09    Covenant as to Common Stock.    The Company covenants that all shares of Common Stock which may be
issued upon conversion of Notes will upon issue be fully paid and nonassessable and, except as provided in Section 10.08, the Company will pay all taxes, liens and charges with respect to the
issue thereof. 


        SECTION
10.10    Cancellation of Converted Notes.    All Notes delivered for conversion shall be delivered to the
Trustee to be canceled by or at the direction of the Trustee, which shall dispose of the same as provided in Section 2.10. 


        SECTION
10.11    Effect of Reclassification, Consolidation, Merger or Sale.    If any of following events occur,
namely: 



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


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



53





 




        (3)   any
sale or conveyance of the properties and assets of the Company as, or substantially as, an entirety to any other corporation as a result of which holders of Common
Stock shall be entitled to receive stock, securities or other property or assets (including cash) with respect to or in exchange for such Common Stock, the Company or the successor or purchasing
corporation, as the case may be, shall execute with the Trustee a supplemental indenture (which shall comply with the TIA as in force at the date of execution of such supplemental indenture if such
supplemental indenture is then required to so comply) providing that such Note shall be convertible into the kind and amount of shares of stock and other securities or property or assets (including
cash or any combination thereof) which such Holder would have been entitled to receive upon such reclassification, change, merger, consolidation, statutory share exchange, combination, sale or
conveyance had such Notes been converted into Common Stock immediately prior to such reclassification, change, merger, consolidation, statutory share exchange, combination, sale or conveyance assuming
such holder of Common Stock did not exercise its rights of election, if any, as to the kind or amount of securities, cash or other property receivable upon such reclassification, change, merger,
consolidation, statutory share exchange, combination, sale or conveyance (provided that, if the kind or amount of securities, cash or other property receivable upon such reclassification, change,
merger, consolidation, statutory share exchange, combination, sale or conveyance is not the same for each share of Common Stock in respect of which such rights of election shall not have been
exercised ("Non-Electing Share"), then for the purposes of this Section 10.11 the kind and amount of securities, cash or other property receivable upon such reclassification,
change, merger, consolidation, statutory share exchange, combination, sale or conveyance for each Non-Electing Share shall be deemed to be the kind and amount so receivable per share by a
plurality of the Non-Electing Shares). Such supplemental indenture shall provide for adjustments which shall be as nearly equivalent as may be practicable to the adjustments provided for
in this Article 10. If, in the case of any such reclassification, change, merger, consolidation, statutory share exchange, combination, sale or conveyance, the stock or other securities and
assets receivable thereupon by a holder of shares of Common Stock includes shares of stock or other securities and assets of a corporation other than the successor or purchasing corporation, as the
case may be, in such reclassification, change, merger, consolidation, statutory share exchange, combination, sale or conveyance, then such supplemental indenture shall also be executed by such other
corporation and shall contain such additional provisions to protect the interests of the Holders of the Notes as the Board of Directors shall reasonably consider necessary by reason of the foregoing,
including to the extent practicable the provisions providing for the repurchase rights set forth in Section 3.09 hereof. 




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


        The
above provisions of this Section 10.11 shall similarly apply to successive reclassifications, mergers, consolidations, statutory share exchanges, combinations, sales and
conveyances. 


        If
this Section 10.11 applies to any event or occurrence, Section 10.04 hereof shall not apply. 



        SECTION
10.12    Adjustment for Other Distributions.    If, after the Issue Date of the Notes, the Company pays a
dividend or makes a distribution to all holders of its Common Stock consisting of 


54





 



Capital
Stock of any class or series, or similar equity interests, of or relating to a Subsidiary or other business unit of the Company, the Conversion Price shall be adjusted in accordance with the
formula: 


        P' =
P × 1/(1 + F/M) 


where: 


        P' =
the adjusted Conversion Price. 


        P =
the current Conversion Price. 


        M =
the average of the Post-Distribution Prices of the Common Stock for the 10 trading days commencing on and including the fifth trading day after the date on which
"ex-dividend trading" commences for such dividend or distribution on the principal United States exchange or market which such securities are then listed or quoted (the
"Ex-Dividend Date"). 


        F =
the fair market value of the securities distributed in respect of each share of Common Stock shall mean the number of securities distributed in respect of each share of Common
Stock multiplied by the average of the Post-Distribution Prices of those securities distributed for the 10 trading days commencing on and including the fifth trading day after the
Ex-Dividend Date. 


        "Post-Distribution
Price" of Capital Stock or any similar equity interest on any date means the closing per unit sale price (or, if no closing sale price is reported, the
average of the bid and ask prices or, if more than one in either case, the average of the average bid and the average ask prices) on such date for trading of such units on a "when issued" basis
without due bills (or similar concept) as reported in the composite transactions for the principal United States securities exchange or market on which such Capital Stock or equity interest is traded
or, if the Capital Stock or equity interest, as the case may be, is not listed on a United States national or regional securities exchange or market, as reported by the National Association of
Securities Dealers Automated Quotation System or by the National Quotation Bureau Incorporated; provided that if on any date such units have not traded
on a "when issued" basis, the Post-Distribution Price shall be the closing per unit sale price (or, if no closing sale price is reported, the average of the bid and ask prices or, if more
than
one in either case, the average of the average bid and the average ask prices) on such date for trading of such units on a "regular way" basis without due bills (or similar concept) as reported in the
composite transactions for the principal United States securities exchange on which such Capital Stock or equity interest is traded or, if the Capital Stock or equity interest, as the case may be, is
not listed on a United States national or regional securities exchange, as reported by the National Association of Securities Dealers Automated Quotation System or by the National Quotation Bureau
Incorporated. In the absence of such quotation, the Company shall be entitled to determine the Post-Distribution Price on the basis of such quotations, which reflect the
post-distribution value of the Capital Stock or equity interests as it considers appropriate. 


        SECTION
10.13    Responsibility of Trustee for Conversion Provisions.    The Trustee, subject to the provisions of
Section 7.01 hereof, and any Conversion Agent shall not at any time be under any duty or responsibility to any Holder of Notes to determine whether any facts exist which may require any
adjustment of the Conversion Price, or with respect to the nature or intent of any such adjustments when made, or with respect to the method employed, or herein or in any supplemental indenture
provided to be employed, in making the same. Neither the Trustee, subject to the provisions of Section 7.01 hereof, nor any Conversion Agent shall be accountable with respect to the validity or
value (of the kind or amount) of any Common Stock, or of any other securities or property, which may at any time be issued or delivered upon the conversion of any Note; and it or they do not make any
representation with respect thereto. Neither the Trustee, subject to the provisions of Section 7.01 hereof, nor any Conversion Agent shall be responsible for any failure of the Company to make
any cash payment or to issue, transfer or deliver any shares of stock or share certificates or other securities or property upon the surrender of any Note for the purpose of conversion; and the
Trustee, subject to 


55





 



the
provisions of Section 7.01 hereof, and any Conversion Agent shall not be responsible or liable for any failure of the Company to comply with any of the covenants of the Company contained in
this Article. 


 
 

ARTICLE 11    
    
    SUBORDINATION    
    


        SECTION
11.01    Agreement to Subordinate.    The Company agrees, and each Holder by accepting a Note agrees, that the
Indebtedness, interest and other obligations of any kind evidenced by the Notes and this Indenture are subordinated in right of payment, to the extent and in the manner provided in this
Article 11, to the prior payment in full in cash or cash equivalents of all Senior Indebtedness (whether
outstanding on the date hereof or hereafter created, incurred, assumed or guaranteed), and that the subordination is for the benefit of the holders of Senior Indebtedness. 


        SECTION
11.02    Liquidation; Dissolution; Bankruptcy.    In the event of any insolvency or bankruptcy case or
proceeding, or any receivership, liquidation, reorganization or other similar case or proceeding in connection therewith, relating to the Company or to its assets, or any liquidation, dissolution or
other winding-up of the Company, whether voluntary or involuntary, or any assignment for the benefit of creditors or other marshaling of assets or liabilities of the Company (except in
connection with the consolidation or merger of the Company or its liquidation or dissolution following the conveyance, transfer or lease of its properties and assets substantially upon the terms and
conditions described in Article 5), the holders of Senior Indebtedness will be entitled to receive payment in full in cash or cash equivalents of all Senior Indebtedness, or provision shall be
made for such payment in full, before the Noteholders will be entitled to receive any payment or distribution of any kind or character (other than (i) payments made pursuant to the Collateral
Pledge and Security Agreement, and (ii) any payment or distribution in the form of equity securities or subordinated securities of the Company or any successor obligor that, in the case of any
such subordinated securities, are subordinated in right of payment to all Senior Indebtedness that may at the time be outstanding to at least the same extent as the Notes are so subordinated (such
equity securities or subordinated securities hereinafter being "Permitted Junior Securities")) on account of principal of, or Liquidated Damages, if any, or interest on the Notes; and any payment or
distribution of assets of the Company of any kind or character, whether in cash, property or securities (other than (x) any payments made pursuant to the Collateral Pledge and Security
Agreement or (y) a payment or distribution in the form of Permitted Junior Securities), by set-off or otherwise, to which the Noteholders or the Trustee would be entitled but for
the provisions of this Article 11 shall be paid by the liquidating trustee or agent or other person making such payment or distribution, whether a trustee in bankruptcy, a receiver or
liquidating trustee or otherwise, directly to the holders of Senior Indebtedness or their representative or representatives ratably according to the aggregate amounts remaining unpaid on account of
the Senior Indebtedness to the extent necessary to make payment in full of all Senior Indebtedness remaining unpaid, after giving effect to any concurrent payment or distribution to the holders of
such Senior Indebtedness. 


        SECTION
11.03    Default on Designated Senior Indebtedness.    


        (a)   No
payment or distribution of any assets of the Company of any kind or character, whether in cash, property or securities (other than (i) any payments made
pursuant to the Collateral Pledge and Security Agreement or (ii) payments in the form of Permitted Junior Securities), may be made by or on behalf of the Company on account of principal of or
interest or Liquidated Damages, if any, on the Notes or on account of the purchase, redemption or other acquisition of Notes upon the occurrence of any Payment Default until such Payment Default shall
have been cured or waived in writing or shall have ceased to exist or such Designated Senior Indebtedness shall have been discharged or paid in full in cash or cash equivalents. "Payment Default"
shall mean a default in payment, whether at scheduled 


56





 



maturity,
upon scheduled installment, by acceleration or otherwise, of principal of, or premium, if any, or interest on Designated Senior Indebtedness beyond any applicable grace period. 



        (b)   No
payment or distribution of any assets of the Company of any kind or character, whether in cash, property or securities (other than (i) any payments made
pursuant to the Collateral Pledge and Security Agreement or (ii) payments in the form of Permitted Junior Securities), may be made by or on behalf of the Company on account of principal of or
interest or Liquidated Damages, if any, on the Notes or on account of the purchase, redemption or other acquisition of Notes during a Payment Blockage Period (as defined below), arising as a result of
any default or event of default with respect to any Designated Senior Indebtedness other than any Payment Default pursuant to which the maturity thereof may be accelerated (a "Non-Payment
Default") and receipt by the Trustee of written notice thereof from the trustee or other representative of holders of Designated Senior Indebtedness. 


        The
Payment Blockage Period shall mean the period (each, a "Payment Blockage Period") that will commence upon the date of receipt by the Trustee of written notice from the trustee or
such other representative of the holders of the Designated Senior Indebtedness in respect of which the Non-Payment Default exists and shall end on the earliest of: 



          (i)  179 days
thereafter (provided that any Designated Senior Indebtedness as to which notice was given shall not theretofore have been accelerated); 


         (ii)  the
date on which such Non-Payment Default is cured, waived or ceases to exist; 


        (iii)  the
date on which such Designated Senior Indebtedness is discharged or paid in full; or 


        (iv)  the
date on which such Payment Blockage Period shall have been terminated by written notice to the Trustee or the Company from the trustee or such other representative
initiating such Payment Blockage Period, 




after
which the Company will resume making any and all required payments in respect of the Notes, including any missed payments. In any event, not more than one Payment Blockage Period may be
commenced during any period of 365 consecutive days. No Non-Payment Default that existed or was continuing on the date of the commencement of any Payment Blockage Period will be, or can be
made, the basis for the commencement of a subsequent Payment Blockage Period, unless such Non-Payment Default has been cured or waived for a period of not less than 90 consecutive days
subsequent to the commencement of such initial Payment Blockage Period. 


        SECTION
11.04    [Intentionally Deleted]    



        SECTION
11.05    When Distribution Must Be Paid Over.    In the event that, notwithstanding the provisions of Sections
11.02 and 11.03, any payment or distribution of any kind or character, whether in cash, property or securities, shall be received by the Trustee or any Noteholder which is prohibited by such
provisions, then and in such event such payment shall be held in trust for the benefit of, and shall be paid over and delivered by such Trustee or Noteholder to the trustee or any other representative
of holders of Senior Indebtedness, as their interest may appear, for application to Senior Indebtedness remaining unpaid until all such Senior Indebtedness has been paid in full in cash or cash
equivalents after giving effect to any concurrent distribution to or for the holders of Senior Indebtedness. 



        With
respect to the holders of Senior Indebtedness, the Trustee undertakes to perform only such obligations on the part of the Trustee as are specifically set forth in this
Article 11, and no implied covenants or obligations with respect to the holders of Senior Indebtedness shall be read into this Indenture against the Trustee. The Trustee shall not be deemed to
owe any fiduciary duty to the holders of Senior Indebtedness, and shall not be liable to any such holders if the Trustee shall pay over or distribute to or on behalf of Noteholders or the Company or
any other Person money or assets to which any holders of Senior Indebtedness shall be entitled by virtue of this Article 11, except if such payment is made as a result of the willful misconduct
or gross negligence of the Trustee. 


57





 



        SECTION
11.06    Notice by the Company.    The Company shall promptly notify the Trustee and the Paying Agent of any
facts known to the Company that would cause a payment of any obligations with respect to the Notes to violate this Article 11, but failure to give such notice shall not affect the subordination
of the Notes to the Senior Indebtedness as provided in this Article 11. 



        SECTION
11.07    Subrogation.    After all Senior Indebtedness is paid in full and until the Notes are paid in full,
Noteholders shall be subrogated (equally and ratably with all other Indebtedness that is equal in right of payment to the Notes) to the rights of holders of Senior Indebtedness to receive
distributions applicable to Senior Indebtedness to the extent that distributions otherwise payable to the Noteholders have been applied to the payment of Senior Indebtedness. A distribution made under
this Article 11 to holders of Senior Indebtedness that otherwise would have been made to Noteholders is not, as between the Company and Noteholders, a payment by the Company of the Notes. 



        SECTION
11.08    Relative Rights.    This Article 11 defines the relative rights of Holders and holders of
Senior Indebtedness. Nothing in this Indenture shall: (i) impair, as between the Company and Holders, the obligation of the Company, which is absolute and unconditional, to pay principal of,
Liquidated Damages, if any, and interest on the Notes in accordance with their terms; (ii) affect the relative rights of Holders and creditors of the Company other than their rights in relation
to holders of Senior Indebtedness; or (iii) prevent the Trustee or any Holder from exercising its available remedies upon a Default or Event of Default, subject to the rights of holders and
owners of Senior Indebtedness to receive distributions and payments otherwise payable to Holders of Notes. If the Company fails because
of this Article 11 to pay principal of or interest on, or Liquidated Damages with respect to, a Note on the Stated Maturity date, the failure is still a Default or Event of Default. 


        SECTION
11.09    Subordination May Not Be Impaired by the Company.    No right of any holder of Senior Indebtedness to
enforce the subordination of the Indebtedness evidenced by the Notes shall be impaired by any act or failure to act by the Company or any Holder or by the failure of the Company or any Holder to
comply with this Indenture. 


        Without
in any way limiting the generality of this Section 11.09, the holders of Senior Indebtedness may, at any time and from time to time, without the consent of or notice to
the Trustee or the Holders, without incurring responsibility to the Trustee or the Holders and without impairing or releasing the subordination provided in this Article 11 or the obligations
hereunder of the Holders to the holders of Senior Indebtedness, do any one or more of the following: (a) change the manner, place or terms of payment or extend the time of payment of, or renew
or alter, Senior Indebtedness, or any instrument evidencing the same or any agreement under which Senior Indebtedness is outstanding or secured; (b) sell, exchange, release, foreclose against
or otherwise deal with any property pledged, mortgaged or otherwise securing Senior Indebtedness; (c) release any Person liable in any manner for the collection of Senior Indebtedness; and
(d) exercise or refrain from exercising any rights against the Company, and Subsidiary thereof or any other Person. 


        SECTION
11.10    Distribution or Notice to Representative.    Whenever a distribution is to be made or a notice given
to holders of any Senior Indebtedness, the distribution may be made and the notice given to their trustee or representative. 


        Upon
any payment or distribution of assets of the Company referred to in this Article 11, the Trustee and the Holders of Notes shall be entitled to rely upon any order or decree
made by any court of competent jurisdiction or upon any certificate of such representative(s) or of the liquidating trustee or agent or other Person making any distribution to the Trustee or to the
Holders for the purpose of ascertaining the Persons entitled to participate in such distribution, all holders of the Senior Indebtedness and other Indebtedness of the Company, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this Article 11. 


58





 



        SECTION
11.11    Rights of Trustee and Paying Agent.    Notwithstanding the provisions of this Article 11 or
any other provision of this Indenture, the Trustee shall not be charged with knowledge of the existence of any facts that would prohibit the making of any payment or distribution by the Trustee, and
the Trustee and the Paying Agent may continue to make payments on the Notes, unless a Responsible Officer of the Trustee shall have received at its Corporate Trust Office at least three Business Days
prior to the date of such payment written notice of facts that would cause the payment of any
obligations with respect to the Notes to violate this Article 11. Only the Company or representative may give the notice. Nothing in this Article 11 shall impair the claims of, or
payments to, the Trustee under or pursuant to Section 7.06. 


        The
Trustee in its individual or any other capacity may hold Senior Indebtedness with the same rights it would have if it were not Trustee. 


 
 

ARTICLE 12    
    
    SECURITY    
    


        SECTION
12.01    Security.    


        (a)   At
the Closing Time, the Company shall (i) enter into the Collateral Pledge and Security Agreement and comply with the terms and provisions thereof and
(ii) purchase the Initial Pledged Securities to be pledged to the Collateral Agent for the benefit of the Trustee and the ratable benefit of the Holders in such amount as will be sufficient
upon receipt of scheduled interest and principal payments of such Initial Pledged Securities, as computed by the Company and verified for mathematical accuracy by KPMG LLP, independent public
accountants, or another nationally recognized firm of independent public accountants selected by the Company, to provide for payment in full of all scheduled interest payments due on the Notes. The
Initial Pledged Securities shall be pledged by the Company to the Collateral Agent for the benefit of the Trustee and the ratable benefit of the Holders and shall be held by the Collateral Agent in
the Collateral Account pending disposition pursuant to the Collateral Pledge and Security Agreement. 


        (b)   On
each relevant Date of Delivery (if such Date of Delivery is different from the Closing Time), the Company shall (i) enter into a supplement to the Collateral
Pledge and Security Agreement and comply with the terms and provisions thereof and (ii) purchase the Additional Pledged Securities to be pledged to the Collateral Agent for the benefit of the
Trustee and the ratable benefit of the Holders in such amount as will be sufficient upon receipt of scheduled interest and principal payments of such Additional Pledged Securities, as computed by the
Company and verified for mathematical accuracy by KPMG LLP, independent public accountants, or another nationally recognized firm of independent public accountants selected by the Company, to provide
for payment in full of all scheduled interest payments due on the Notes issued in connection therewith. The Additional Pledged Securities shall be pledged by the Company to the Collateral Agent for
the benefit of the Trustee and the ratable benefit of the Holders and shall be held by the Collateral Agent in the Collateral Account pending disposition pursuant to the Collateral Pledge and Security
Agreement. 


        (c)   Each
Holder, by its acceptance of a Note, consents and agrees to the terms of the Collateral Pledge and Security Agreement (including, without limitation, the provisions
providing for foreclosure and release of the Pledged Securities) as the same may be in effect or may be amended from time to time in writing by the parties thereto (provided that no amendment that
would materially adversely affect the rights of the Holders may be effected without the consent of each Holder affected thereby), and authorizes and directs the Trustee and the Collateral Agent to
enter into the Collateral Pledge and Security Agreement and to perform its respective obligations and exercise its respective rights thereunder in accordance therewith. The Company will do or cause to
be done all such acts and things as may be necessary or proper, or as may be required by the provisions of the Collateral Pledge and Security Agreement, to assure and confirm to the Trustee and the
Collateral Agent the security interest 


59





 

in
the Pledged Securities contemplated hereby, by the Collateral Pledge and Security Agreement or any part thereof, as from time to time constituted, so as to render the same available for the
security and benefit of this Indenture and of the Notes secured hereby, according to the intent and purpose herein expressed. The Company shall take, or shall cause to be taken, upon request of the
Trustee or the Collateral Agent, any and all actions reasonably required to cause the Collateral Pledge and Security Agreement to create and maintain, as security for the obligations of the Company
under this Indenture and the Notes as provided in the Collateral Pledge and Security Agreement, valid and enforceable first priority perfected liens in and on all the Pledged Securities, in favor of
the Collateral Agent for the benefit of the Trustee and the ratable benefit of the Holders, superior to and prior to the rights of third Persons and subject to no other Liens. 


        (d)   The
release of any Pledged Securities pursuant to the Collateral Pledge and Security Agreement will not be deemed to impair the security under this Indenture in
contravention of the provisions hereof if and to the extent the Pledged Securities are released pursuant to this Indenture and the Collateral Pledge and Security Agreement. To the extent applicable,
the Company shall cause Section 314(d) of the TIA relating to the release of property or securities from the Lien and security interest of the Collateral Pledge and Security Agreement and
relating to the substitution therefor of any property or securities to be subjected to the Lien and security interest of the Collateral Pledge and Security Agreement to be complied with. Any
certificate or opinion required by Section 314(d) of the TIA may be made by an Officer of the Company, except in cases where Section 314(d) of the TIA requires that such certificate or
opinion be made by an independent Person, which Person shall be an independent engineer, appraiser or other expert selected by the Company. 



        (e)   The
Company shall cause Section 314(b) of the TIA, relating to opinions of counsel regarding the Lien under the Collateral Pledge and Security Agreement, to be
complied with. The Trustee may, to the extent permitted by Section 7.01 and 7.02 hereof, accept as conclusive evidence of compliance with the foregoing provisions the appropriate statements
contained in such Opinions of Counsel. 


        (f)    The
Trustee and the Collateral Agent each may, in its sole discretion and without the consent of the Holders, on behalf of the Holders, take all reasonable actions it
deems necessary or appropriate in order to (i) enforce any of the terms of the Collateral Pledge and Security Agreement and (ii) collect and receive any and all amounts payable in
respect of the obligations of the Company thereunder. The Trustee and the Collateral Agent shall have the power to institute and maintain such suits and proceedings as the Trustee and the Collateral
Agent may reasonably deem expedient to preserve or protect its interests and the interests of the Holders in the Pledged Securities (including the power to institute and maintain suits or proceedings
to restrain the enforcement of, or compliance with, any legislative or other governmental enactment, rule or order that may be unconstitutional or otherwise invalid if the enforcement of, or
compliance with, such enactment, rule or order would impair the security interest hereunder or be prejudicial to the interests of the Holders, the Collateral Agent or the Trustee). 



        (g)   Beyond
the exercise of reasonable care in the custody and preservation thereof, the Trustee and the Collateral Agent shall have no duty as to any Pledged Securities in
their possession or any income thereon or as to preservation of rights against prior parties or any other rights pertaining thereto, and the Trustee and the Collateral Agent shall not be responsible
for filing any financing or continuation statements or recording any documents or instruments in any public office at any time or times or otherwise perfecting or maintaining the perfection of any
security interest in the Pledged Securities. The Trustee and the Collateral Agent shall be deemed to have exercised reasonable care in the custody and preservation of the Pledged Securities in its
possession if the Pledged Securities are accorded treatment substantially equal to that which it accords its own property or property held in similar accounts and shall not be liable or responsible
for any loss or diminution in the value of any of the Pledged Securities, by reason of the act or omission of the Collateral Agent, any carrier, forwarding agency or other agent or bailee selected by
the Trustee in good faith. 


60





 



        (h)   The
Trustee shall not be responsible for the existence, genuineness or value of any of the Pledged Securities or for the validity, perfection, priority or enforceability
of the Liens in any of the Pledged Securities, whether impaired by operation of law or otherwise, for the validity or sufficiency of the Pledged Securities or any agreement or assignment contained
therein, for the validity of the title of the Company to the Pledged Securities, for insuring the Pledged Securities or for the payment of taxes, charges, assessments or Liens upon the Pledged
Securities or otherwise as to the maintenance of the Pledged Securities. The Trustee shall have no duty to ascertain or inquire as to the performance or observance of any of the terms of this
Indenture or the Collateral Pledge and Security Agreement by the Company or the Collateral Agent. 


 
 

ARTICLE 13    
    
    MISCELLANEOUS    
    


        SECTION
13.01    Trust Indenture Act Controls.    If any provision of this Indenture limits, qualifies, or conflicts
with another provision which is required to be included in this Indenture by the TIA, the required provision shall control. 


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



	if to the Company:
	

 	
 	

MSC.Software Corporation

2 MacArthur Place

Santa Ana, California 92707
	 	 	Attention:	 	Chief Financial Officer
	 	 	Telephone No.:	 	(714) 540-8900
	 	 	Facsimile No.:	 	(714) 784-4155
	

with a copy of any notice given pursuant to Article 6 to:
	

 	
 	

O'Melveny & Myers LLP

400 South Hope Street

Los Angeles, California 90071
	 	 	Attention:	 	Richard A. Boehmer, Esq.
	 	 	Facsimile No.:	 	(213) 430-6407
	

if to the Trustee:
	

 	
 	

J.P. Morgan Trust Company, National Association

560 Mission Street, 13th Floor

San Francisco, California 94105
	 	 	Attention:	 	Mitch Gardner
	 	 	Telephone No.:	 	(415) 315-7745
	 	 	Facsimile No.:	 	(415) 315-7585






        The
Company or the Trustee by notice given to the other in the manner provided above may designate additional or different addresses for subsequent notices or communications. 


        Any
notice or communication given to a Noteholder shall be delivered to the Noteholder, by first-class mail, postage prepaid, or by courier guaranteeing overnight delivery, at the
Noteholder's address 


61





 



as
it appears on the registration books of the Registrar and shall be sufficiently given if so sent within the time prescribed. 


        Failure
to give a notice or communication to a Noteholder or any defect in it shall not affect its sufficiency with respect to other Noteholders. If a notice or communication is given in
the manner provided above, it is duly given, whether or not received by the addressee. 


        If
the Company mails a notice or communication to the Noteholders, it shall mail a copy to the Trustee and each Registrar, Paying Agent, Conversion Agent or co-registrar. 



        SECTION
13.03    Communication by Holders with Other Holders.    Noteholders may communicate pursuant to TIA
Section 312(b) with other Noteholders with respect to their rights under this Indenture or the Notes. The Company, the Trustee, the Registrar, the Paying Agent, the Conversion Agent and anyone
else shall have the protection of TIA Section 312(c). 


        SECTION
13.04    Certificate and Opinion as to Conditions Precedent.    Upon any request or application by the Company
to the Trustee to take any action under this Indenture, the Company shall furnish to the Trustee, if reasonably requested: 



        (1)   an
Officers' Certificate stating that, in the opinion of the signers, all conditions 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 have been complied with. 




        SECTION
13.05    Statements Required in Certificate or Opinion.    Each Officers' Certificate or Opinion of Counsel
with respect to compliance with a covenant or condition provided for in this Indenture shall include, to the extent required by the Trustee: 



        (1)   a
statement that each person making such Officers' Certificate or Opinion of Counsel 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 Officers' Certificate or Opinion
of Counsel are based; 


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


        (4)   a
statement that, in the opinion of such person, such covenant or condition has been complied with. 




        SECTION
13.06    Separability Clause.    In case any provision in this Indenture or in the Notes 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
13.07    Rules by Trustee, Paying Agent, Conversion Agent and Registrar.    The Trustee may make reasonable
rules for action by or a meeting of Noteholders. The Registrar, Conversion Agent and the Paying Agent may make reasonable rules for their functions. 


        SECTION
13.08    Legal Holidays.    A "Legal Holiday" is any day other than a Business Day. If any specified date
(including a date for giving notice) is a Legal Holiday, the action shall be taken on the next succeeding day that is not a Legal Holiday, and, if the action to be taken on such date is a payment in
respect of the Notes, no interest, if any, shall accrue for the intervening period. 


62





 



        SECTION
13.09    GOVERNING LAW.    THIS INDENTURE AND THE NOTES WILL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK. 


        SECTION
13.10    No Recourse Against Others.    A director, officer, employee, agent, representative, stockholder or
equity holder, as such, of the Company shall not have any liability for any obligations of the Company under the Notes or this Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. By accepting a Note, each Noteholder shall waive and release all such liability. The waiver and release shall be part of the consideration for the issue of the Notes. 


        SECTION
13.11    Successors.    All agreements of the Company in this Indenture and the Notes shall bind its
successor. All agreements of the Trustee in this Indenture shall bind its successor. 


        SECTION
13.12    Multiple Originals.    The parties may sign any number of copies of this Indenture. Each signed copy
shall be an original, but all of them together represent the same agreement. One signed copy is enough to prove this Indenture. 


63







        IN
WITNESS WHEREOF, the undersigned, being duly authorized, have executed this Indenture on behalf of the respective parties hereto as of the date first above written. 



	 	 	MSC.SOFTWARE CORPORATION
	

 	
 	

By:	
 	

/s/  LOUIS A. GRECO      
 Louis A. Greco

Executive Vice President, Chief Financial Officer and Corporate Secretary
	

 	
 	

J.P. MORGAN TRUST COMPANY, NATIONAL ASSOCIATION,

as Trustee
	

 	
 	

By:	
 	

/s/  MITCH GARDNER      

	 	 	 	 	Name:	 	Mitch Gardner
	 	 	 	 	Title:	 	Vice President








  



 
 

EXHIBIT A-1    
    
    [FORM OF FACE OF GLOBAL NOTE]    




        UNLESS
THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF 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. 



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


        THIS
SECURITY AND THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION OF THIS SECURITY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR
ANY STATE SECURITIES LAWS. NEITHER THIS SECURITY, THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION OF THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN OR THEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION. EACH PURCHASER OF
THIS SECURITY IS HEREBY NOTIFIED THAT THE SELLER OF THIS SECURITY MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. 


        THE
HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF, AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE "RESALE RESTRICTION TERMINATION DATE") WHICH IS
TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH MSC.SOFTWARE CORPORATION OR ANY AFFILIATE OF MSC.SOFTWARE CORPORATION WAS THE OWNER OF THIS SECURITY (OR ANY
PREDECESSOR OF SUCH SECURITY) ONLY (A) TO MSC.SOFTWARE CORPORATION OR ANY SUBSIDIARY THEREOF, (B) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON
IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO
WHICH NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (C) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT OR
(D) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO MSC.SOFTWARE CORPORATION'S AND THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE
OR TRANSFER PURSUANT TO CLAUSE (D) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM, AND IN EACH OF THE FOREGOING CASES, A
CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THE OTHER SIDE OF THIS SECURITY IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE TRUSTEE. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER
AFTER THE RESALE RESTRICTION TERMINATION DATE. 


A-1-1





 
MSC.SOFTWARE CORPORATION 


21/2%
Senior Subordinated Convertible Notes due 2008 


        CUSIP
NO. 553531 AD 6 


No.:
1 


Issue
Date: May 5, 2003 


        MSC.SOFTWARE
CORPORATION. a Delaware corporation, promises to pay to Cede & Co. or registered assigns, the principal sum of One Hundred Million Dollars ($100,000,000) on
May 5, 2008. 


        This
Note shall bear interest as specified on the other side of this Note. 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. 



	Dated: May 5, 2003	 	MSC.SOFTWARE CORPORATION
	

 	

 	
 	

By	

 
	 	 	 	 	
 Louis A. Greco
 Executive Vice President, Chief Financial Officer and Corporate Secretary
	

TRUSTEE'S CERTIFICATE OF AUTHENTICATION	
 	

 	

 
	

J.P. Morgan Trust Company, National Association as Trustee, certifies that this is one of the Notes referred to in the within-mentioned Indenture (as defined on the other side of this Note).	
 	

 	

 
	

By	

 	
 	

 	

 
	 	
 Authorized Signatory	 	 	 
	

Dated: May 5, 2003	
 	

 	

 




A-1-2






   
[FORM OF REVERSE SIDE OF NOTE] 


21/2% Senior Subordinated Convertible Note due 2008  


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


1.    Cash Interest.    



        MSC.Software
Corporation, a Delaware corporation (the "Company"), which term shall include any successor corporation under the Indenture referred to herein, promises to pay interest at
the rate of 21/2% per annum (the "Interest Rate") in cash on the principal amount of this Note. The Company will pay cash interest semiannually in arrears on May 5 and
November 5 of each year (each an "Interest Payment Date"), beginning on November 5, 2003, to Holders of record at the close of business on the preceding April 20 and
October 21 (whether or not a business day) (each a "Regular Record Date"), as the case may be, immediately preceding such Interest Payment Date. Cash interest on the Notes will accrue from the
most recent date to which interest has been paid or duly provided or, if no interest has been paid, from the Issue Date. Cash interest will be computed on the basis of a 360-day year of
twelve 30-day months. The Company shall pay cash interest on overdue principal, or if shares of Common Stock (or cash in lieu of fractional shares) in respect of a conversion of this Note
in accordance with the terms of Article 10 of the Indenture are not delivered when due, at the rate borne by the Notes, and it shall pay interest in cash on overdue installments of cash
interest at the same rate to the extent lawful. All such overdue cash interest shall be payable on demand. 


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



        (A)  the
91st day after the earliest date of original issuance of any of the Notes, if the Shelf Registration Statement (as defined in the Registration Rights
Agreement) is not filed with the SEC; 


        (B)  the
181st day following the earliest date of original issuance of any of the Notes, if the Shelf Registration Statement is not declared effective; 


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


        (D)  the
day after the 45th day in any consecutive three-month period or the day after the 90th day in any consecutive 12-month
period, as the case may be, that the prospectus contained in the Shelf Registration Statement has been suspended, if such suspension has not been terminated. 




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


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


2.    Method of Payment.    


        Subject
to the terms and conditions of the Indenture, the Company will make payments in respect of the principal of and cash interest on this Note and in respect of Redemption Prices and
Change in Control Repurchase Prices to Holders who surrender Notes to a Paying Agent to collect such payments in respect of the Notes. The Company will pay cash amounts in money of the United States
that at the 


A-1-3





 



time
of payment is legal tender for payment of public and private debts. However, the Company may make such cash payments by check payable in such money. A Holder with an aggregate principal amount in
excess of $5,000,000 will be paid by wire transfer in immediately available funds at the election of such Holder. Any payment required to be made on any day that is not a Business Day will be made on
the next succeeding Business Day. 


3.    Paying Agent, Conversion Agent and Registrar.    


        Initially,
J.P. Morgan Trust Company, National Association (the "Trustee"), will act as Paying Agent, Conversion Agent and Registrar. The Company may appoint and change any Paying Agent,
Conversion Agent, Registrar or co-registrar without notice, other than notice to the Trustee except that the Company will maintain at least one Paying Agent in the State of New York, City
of New York, The Borough of Manhattan, which shall initially be an office or agency of the Trustee. The Company or any of its Subsidiaries or any of their Affiliates may act as Paying Agent,
Conversion Agent, Registrar or co-registrar. 


4.    Indenture.    


        The
Company issued the Notes under an Indenture dated as of May 5, 2003 (the "Indenture"), between the Company and the Trustee. The terms of the Notes include those stated in the
Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939, as in effect from time to time (the "TIA"). Capitalized terms used herein and not defined herein have
the meanings ascribed thereto in the Indenture. The Notes are subject to all such terms, and holders of Notes are referred to the Indenture and the TIA for a statement of those terms. 



        The
Notes are general unsecured obligations of the Company (except as provided in Paragraph 17 hereof) limited to $85,000,000 aggregate principal amount, or $100,000,000 aggregate
principal amount if the Overallotment Option is exercised fully (subject to Section 2.07 of the Indenture). The Indenture does not limit other indebtedness of the Company, secured or unsecured. 


5.    Redemption.    


        This
Note is not redeemable prior to May 5, 2006. This Note may be redeemed in whole or in part, upon not less than 20 nor more than 60 days notice, at any time on or after
May 5, 2006 and prior to Stated Maturity, at the option of the Company, at the redemption price equal to 100% of the principal amount (the "Redemption Price"), plus any interest accrued but not
paid prior to (but not including) the Redemption Date, if the Closing Price of the Common Stock has exceeded 140% of the Conversion Price (as set forth in Section 8) then in effect for at least
20 Trading Days in any consecutive 30-Trading Day period ending on the Trading Day prior to the date of mailing of the notice of optional redemption pursuant to Section 3.04. 


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


        On
and after the Redemption Date, interest ceases to accrue on Notes or portions of Notes called for redemption, unless the Company defaults in the payment of the Redemption Price and
accrued and unpaid interest. 


        Notice
of redemption will be given by the Company to the Holders as provided in the Indenture. 


A-1-4





 



        No
sinking fund is provided for the Notes. 


6.    Repurchase by the Company at the Option of the Holder.    



        If
a Change in Control occurs, the Holder, at the Holder's option, shall have the right, in accordance with the provisions of the Indenture, to require the Company to repurchase the
Notes (or any portion of the principal amount hereof that is at least $1,000 or any whole multiple thereof, provided that the portion of the principal amount of this Note to be outstanding after such
repurchase is at least equal to $1,000) at the Change in Control Repurchase Price in cash or Common Stock or a combination thereof, plus any interest accrued and unpaid to the Change in Control
Repurchase Date. 



        A
Change in Control Repurchase Notice will be given by the Company to the Holders as provided in the Indenture. To exercise a repurchase right, a Holder must deliver to the Paying Agent
a written notice as provided in the Indenture. 


        Holders
have the right to withdraw any Change in Control Repurchase Notice by delivering to the Paying Agent a written notice of withdrawal in accordance with the provisions of the
Indenture. 


7.    Notice of Redemption.    



        Notice
of an optional redemption will be mailed at least 20 days but not more than 60 days before the Redemption Date to each Holder of Notes to be redeemed at the Holder's
registered address. If
money sufficient to pay the Redemption Price of all Notes (or portions thereof) to be redeemed, plus any accrued but unpaid interest, on the Redemption Date is deposited with the Paying Agent prior to
or on the Redemption Date, immediately after such Redemption Date interest ceases to accrue on such Notes or portions thereof. Notes in denominations larger than $1,000 of principal amount may be
redeemed in part but only in whole multiples of $1,000 of principal amount. 


8.    Conversion.    



        Subject
to the next two succeeding sentences, a Holder of a Note may convert it into Common Stock of the Company at any time before the close of business on the Business Day preceding
May 5, 2008. If the Note is called for redemption, the Holder may convert it at any time before the close of business on the Business Day preceding the Redemption Date. A Note in respect of
which a Holder has delivered a Change in Control Repurchase Notice exercising the option of such Holder to require the Company to purchase such Note may be converted only if such notice of exercise is
withdrawn in accordance with the terms of the Indenture. 



        The
initial Conversion Price shall be equal to $8.515 per share of Common Stock, subject to adjustment in certain events described in the Indenture. The Company shall pay a cash
adjustment as provided in the Indenture in lieu of any fractional share of Common Stock. 


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


9.    Conversion Arrangement on Call for Redemption.    


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


A-1-5





 



10.    Denominations; Transfer; Exchange.    


        The
Notes are in fully registered form, without coupons, in denominations of $1,000 of principal amount and whole multiples of $1,000. A Holder may transfer or exchange Notes in
accordance with the Indenture. The Registrar may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and to pay any taxes and fees required by law or
permitted by the Indenture. The Registrar need not transfer or exchange any Notes selected for redemption (except, in the case of a Note to be redeemed in part, the portion of the Note not to be
redeemed) or any Notes in respect of which a Change in Control Repurchase Notice has been given and not withdrawn (except, in the case of a Note to be purchased in part, the portion of the Note not to
be purchased) or any Notes for a period of 15 days before the mailing of a notice of redemption of Notes to be redeemed. 


11.    Persons Deemed Owners.    



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


12.    Unclaimed Money or Notes.    


        The
Trustee and the Paying Agent shall return to the Company upon written request any money or Notes held by them for the payment of any amount with respect to the Notes that remains
unclaimed for two years, subject to applicable unclaimed property law. After return to the Company, Holders entitled to the money or Notes 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 shall be held uninvested and without any liability for interest. 


13.    Amendment; Waiver.    


        Subject
to certain exceptions set forth in the Indenture, (i) the Indenture or the Notes may be amended with the written consent of the Holders of at least a majority in aggregate
principal amount of the Notes at the time outstanding and (ii) certain Defaults may be waived with the written consent of the Holders of a majority in aggregate principal amount of the Notes at
the time outstanding. Subject to certain exceptions set forth in the Indenture, without the consent of any Noteholder, the Company and the Trustee may amend the Indenture or the Notes, among other
things, to cure any ambiguity, omission, defect or inconsistency, or to comply with Article 5 of the Indenture, to provide for uncertificated Notes in addition to or in place of certificated
Notes or to make any change that does
not adversely affect the rights of any Noteholder, or to comply with any requirement of the SEC in connection with the qualification of the Indenture under the TIA. 


14.    Defaults and Remedies.    



        Under
the Indenture, Events of Default include (1) the Company fails to pay when due the principal of any of the Notes at maturity, upon redemption or exercise of a repurchase
right or otherwise, whether or not such payment is prohibited by Article 11 of the Indenture; (2) the Company fails to pay an installment of interest on, or Liquidated Damages with
respect to, any of the Notes that continues for three (3) Business Days after the date when due, whether or not such payment is prohibited by Article 11 of the Indenture; (3) the
Company fails to perform or observe any other term, covenant or agreement contained in the Notes or the Indenture for a period of 60 days after written notice of such failure, requiring the
Company to remedy the same, shall have been given to the Company by the Trustee or to the Company and the Trustee by the Holders of at least 25% in aggregate principal amount of the Notes then
outstanding; (4) (A) one or more defaults in the payment 


A-1-6





 



of
principal of or premium, if any, on any of the Company's Indebtedness aggregating $5.0 million or more, when the same becomes due and payable at the scheduled maturity thereof, and such
default or defaults shall have continued after any applicable grace period and shall not have been cured or waived within a 30-day period after the date of a Notice of Default or
(B) any of the Company's Indebtedness aggregating $5.0 million or more shall have been accelerated or otherwise declared due and payable, or required to be prepaid or repurchased (other
than by regularly scheduled required prepayment) prior to the scheduled maturity thereof and such acceleration is not rescinded or annulled within a 30-day period after the date of a
Notice of Default; (5) certain events of bankruptcy, insolvency or reorganization with respect to the Company or any Significant Subsidiary or any Subsidiaries of the Company which in the
aggregate would constitute a Significant Subsidiary; (6) the Company's filing of, or any Significant Subsidiary's filing of, a voluntary petition seeking liquidation, reorganization
arrangement, readjustment of debts or for any other relief under the federal bankruptcy code; and (7) the Collateral Pledge and Security Agreement shall cease to be in full force and effect or
enforceable other than in accordance with its terms. If an Event of Default (other than an Event of Default specified in clause (5) or (6) of Section 6.01 of the Indenture) occurs
and is continuing, the Trustee, or the Holders of at least 25% in aggregate principal amount of the Notes at the time outstanding, may declare all the Notes to be due and payable immediately. Certain
events of bankruptcy or insolvency are Events of Default which will result in the Notes becoming due and payable immediately upon the occurrence of such Events of Default. 


        Noteholders
may not enforce the Indenture or the Notes, except as provided in the Indenture. The Trustee may refuse to enforce the Indenture or the Notes unless it receives reasonable
indemnity or security. Subject to certain limitations, Holders of a majority in aggregate principal amount of the Notes at the time outstanding may direct the Trustee in its exercise of any trust or
power. The Trustee may withhold from Noteholders notice of any continuing Default (except a Default in payment of amounts specified in clause (1) or (2) above) if it determines that
withholding notice is in their interests. 


15.    Subordination.    


        The
payment of principal of and interest on the Notes will be subordinated in right of payment, as set forth in the Indenture, to the prior payment in full in cash or cash equivalents of
all Senior Indebtedness whether outstanding on the date of the Indenture or thereafter incurred. 


16.    Trustee Dealings with the Company.    


        Subject
to certain limitations imposed by the TIA, the Trustee under the Indenture, in its individual or any other capacity, may become the owner or pledgee of Notes and may otherwise
deal with and collect obligations owed to it by the Company or its Affiliates and may otherwise deal with the Company or its Affiliates with the same rights it would have if it were not Trustee. 


17.    Security.    



        The
Company has entered into the Collateral Pledge and Security Agreement and purchased and pledged to the Collateral Agent for the benefit of the Trustee and the ratable benefit of the
Holders Pledged Securities in an amount sufficient upon receipt of scheduled interest and principal payments on such securities to provide for the payment in full of all scheduled interest payments
due on the Notes. The Pledged Securities will be pledged by the Company to the Collateral Agent for the benefit of the Trustee and the ratable benefit of the Holders and will be held by the Collateral
Agent in the Collateral Account pending disbursement pursuant to the Collateral Pledge and Security Agreement. 


18.    No Recourse Against Others.    



        A
director, officer, employee, agent, representative, stockholder or equity holder, as such, of the Company shall not have any liability for any obligations of the Company under the
Notes or the 


A-1-7





 



Indenture
or for any claim based on, in respect of or by reason of such obligations or their creation. By accepting a Note, each Noteholder waives and releases all such liability. The waiver and
release are part of the consideration for the issue of the Notes. 


19.    Authentication.    



        This
Note shall not be valid until an authorized signatory of the Trustee manually signs the Trustee's Certificate of Authentication on the other side of this Note. 


20.    Abbreviations.    


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



21.    GOVERNING LAW.    


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





        The
Company will furnish to any Noteholder upon written request and without charge a copy of the Indenture which has in it the text of this Note in larger type. Requests may be made to: 




MSC.Software
Corporation

2 MacArthur Place

Santa Ana, California 92707

Attention: Chief Financial Officer 




A-1-8










  



	ASSIGNMENT FORM	 	CONVERSION NOTICE
	

To assign this Note, fill in the form below:	
 	

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

I or we assign and transfer this Note to	
 	

o
	

	
 	

To convert only part of this Note, state the principal amount to be converted (which must be $1,000 or an integral
	
	 	multiple of $1,000):
	(Insert assignee's social sec. or tax ID no.)	 	 
	

	
 	

$                              
	

	
 	

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

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


	

 	
 	

 (Insert other person's social sec. or tax ID no.)
	

And irrevocably appoint                        agent to transfer this

Note on the books of the Company. The agent may substitute

another to act for him.	
 	

    
    
    
 (Print or type other person's name,
address and zip code)





	

	

Date:	
 	

 	
 	

Your Signature:	
 	

 
	 	 	
	 	 	 	

	

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






A-1-9






  



 
 

EXHIBIT A-2    
    
    [Form of Certificated Note]    
    



        "THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"). THE HOLDER HEREOF, BY PURCHASING THIS SECURITY, AGREES
FOR THE BENEFIT OF THE COMPANY THAT THIS SECURITY MAY NOT BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED (X) PRIOR TO THE EXPIRATION OF THE HOLDING PERIOD UNDER RULE 144(k) (OR ANY SUCCESSOR
THERETO) UNDER THE SECURITIES ACT WHICH IS APPLICABLE TO THIS SECURITY OR (Y) BY ANY HOLDER THAT WAS AN "AFFILIATE" (WITHIN THE MEANING OF RULE 144 UNDER THE SECURITIES ACT) OF THE COMPANY AT
ANY TIME DURING THE THREE MONTHS PRECEDING THE DATE OF SUCH TRANSFER, IN EITHER CASE, OTHER THAN (1) TO THE COMPANY, (2) SO LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE
144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A, PURCHASING FOR ITS OWN ACCOUNT OR FOR
THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (3) PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 (IF APPLICABLE) UNDER THE SECURITIES ACT OR (4) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH CASE
IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. THE HOLDER HEREOF, BY PURCHASING THIS SECURITY, REPRESENTS AND AGREES FOR THE BENEFIT OF THE COMPANY THAT IT IS A
QUALIFIED INSTITUTIONAL BUYER AND THAT IT IS HOLDING THIS SECURITY FOR INVESTMENT PURPOSES AND NOT FOR DISTRIBUTION. IN ANY CASE THE HOLDER HEREOF WILL NOT, DIRECTLY OR INDIRECTLY, ENGAGE IN ANY
HEDGING TRANSACTION WITH REGARD TO THIS SECURITY OR ANY COMMON STOCK ISSUABLE UPON CONVERSION OF THIS SECURITY EXCEPT AS PERMITTED BY THE SECURITIES ACT." 


A-2-1





 
 
 

MSC.SOFTWARE CORPORATION    
    
    21/2% Senior Subordinated Convertible Notes due 2008    
    


CUSIP NO. 553531 AD 6  


No.:



Issue
Date: May 5, 2003 


        MSC.SOFTWARE
CORPORATION, a Delaware corporation, promises to pay to Cede & Co. or registered assigns, the principal sum of
[                        ]DOLLARS
($[                        ]) on May 5, 2008. 


        This
Note shall bear interest as specified on the other side of this Note. 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. 



	 	 	 	 	Dated:    MSC.SOFTWARE CORPORATION
	

 	
 	

 	
 	

By	
 	

 
	 	 	 	 	 	 	

	 	 	 	 	 	 	Name:
	 	 	 	 	 	 	Title:
	TRUSTEE'S CERTIFICATE OF AUTHENTICATION	 	 	 	 
	

 as Trustee, certifies that this is one of the Notes referred to in the within-mentioned Indenture (as defined on the other side of this Note).	
 	

 	
 	

 
	

By	
 	

 	
 	

 	
 	

 
	 	 	
	 	 	 	 
	Authorized Signatory	 	 	 	 
	

Dated: May 5, 2003	
 	

 	
 	

 




A-2-2





 
[Text of Reverse Side of Note]  


 Use Exhibit A-1 Text  


A-2-3








  



 
 

EXHIBIT B-1    
    
    Transfer Certificate    




        In
connection with any transfer of any of the Notes within the period prior to the expiration of the holding period applicable to the sales thereof under Rule 144(k) under the
Securities Act of 1933, as amended (the "Securities Act") (or any successor provision), the undersigned registered owner of this Note hereby certifies with respect to
$                        principal amount
of the above-captioned Notes presented or surrendered on the date hereof (the "Surrendered Notes") for registration of transfer, or for exchange or conversion where the Notes issuable upon such
exchange or conversion are to be registered in a name other than that of the undersigned registered owner (each such transaction being a "transfer"), that such transfer complies with the restrictive
legend set forth on the face of the Surrendered Notes for the reason checked below: 



	o
	A
transfer of the Surrendered Notes is made to the Company or any Subsidiaries; or



	o
	The
transfer of the Surrendered Notes complies with Rule 144A under the Securities Act; or



	o
	The
transfer of the Surrendered Notes is pursuant to an effective registration statement under the Securities Act, or



	o
	The
transfer of the Surrendered Notes is pursuant to another available exemption from the registration requirement of the Securities Act. 






and
unless the box below is checked, the undersigned confirms that, to the undersigned's knowledge, such Notes are not being transferred to an "affiliate" of the Company as defined in Rule 144
under the Securities Act (an "Affiliate"). 



	o
	The
transferee is an Affiliate of the Company. 




DATE: 













Signature(s)














(If
the registered owner is a corporation, partnership or

fiduciary, the title of the Person signing on behalf of

such registered owner must be stated.) 


B-1-1









QuickLinks



EXHIBIT 4.1


Table of Contents

CROSS REFERENCE TABLE •



ARTICLE 4 COVENANTS

ARTICLE 5 SUCCESSOR CORPORATION

ARTICLE 6 DEFAULTS AND REMEDIES


ARTICLE 7 TRUSTEE

ARTICLE 8 SATISFACTION AND DISCHARGE OF INDENTURE

ARTICLE 9. AMENDMENTS


ARTICLE 10 CONVERSION


ARTICLE 11 SUBORDINATION

ARTICLE 12 SECURITY

ARTICLE 13 MISCELLANEOUS


EXHIBIT A-1 [FORM OF FACE OF GLOBAL NOTE]


EXHIBIT A-2 [Form of Certificated Note]

MSC.SOFTWARE CORPORATION 21/2% Senior Subordinated Convertible Notes due 2008


EXHIBIT B-1 Transfer Certificate