Exhibit 4.3


 


SILICON GRAPHICS, INC.



6.50% Senior Convertible Notes Due 2009







INDENTURE



Dated as of July  , 2003







U.S. BANK NATIONAL ASSOCIATION

TRUSTEE


 


 


 


 

















 


TABLE OF
CONTENTS1












 


	
   

  	
  PAGE

  
	
   

  	
   

  
	
  Article
  1

  
	
  DEFINITIONS
  AND INCORPORATION BY REFERENCE

  
	
   

  
	
  Section 1.01.  Definitions

  	
  1

  
	
  Section 1.02.  Other Definitions

  	
  7

  
	
  Section 1.03.  Incorporation by Reference of TIA

  	
  8

  
	
  Section 1.04.  Rules of Construction

  	
  8

  
	
   

  	
   

  
	
  Article 2

  
	
  THE SECURITIES

  
	
   

  	
   

  
	
  Section 2.01.  Form and Dating

  	
  9

  
	
  Section 2.02.  Execution And Authentication

  	
  9

  
	
  Section 2.03.  Registrar, Paying Agent and Conversion Agent

  	
  9

  
	
  Section 2.04.  Paying Agent to Hold Money and Securities in Trust

  	
  10

  
	
  Section 2.05.  Securityholder Lists

  	
  10

  
	
  Section 2.06.  Exchange and Registration of Transfer of Securities; Depositary

  	
  11

  
	
  Section 2.07.  Replacement Securities

  	
  13

  
	
  Section 2.08.  Outstanding Securities; Determinations of Holders’ Action

  	
  13

  
	
  Section 2.09.  Temporary Securities

  	
  14

  
	
  Section 2.10.  Cancellation

  	
  15

  
	
  Section 2.11.  Persons Deemed Owners

  	
  15

  
	
  Section 2.12.  Payment of Interest; Interest Rights Preserved

  	
  15

  
	
  Section 2.13.  Computation of Interest

  	
  17

  
	
  Section 2.14.  Preservation of Information; Communications to Holders

  	
  17

  
	
  Section 2.15.  Reduction Of Conversion Price

  	
  17

  
	
  Section 2.16.  Company’s Use Of Proceeds From Sale Of Certain Assets

  	
  18

  
	
  Section 2.17.  Right Of Holders Of 2009 Notes To Appoint Directors

  	
  19

  
	
   

  	
   

  
	
  Article
  3

  
	
  REDEMPTION

  
	
   

  	
   

  
	
  Section 3.01.  Right to Redeem; Notices to Trustee

  	
  19

  
	
  Section 3.02.  Selection of Securities to be Redeemed

  	
  20

  
	
  Section 3.03.  Notice of Redemption

  	
  20

  













1This Table of Contents shall
not, for any purpose, be deemed to be part of the Indenture.


 


 


i

















 


	
  Section 3.04.  Effect of Notice of Redemption

  	
  21

  
	
  Section 3.05.  Deposit of Redemption Price

  	
  21

  
	
  Section 3.06.  Securities Redeemed in Part

  	
  22

  
	
  Section 3.07.  Conversion Arrangement on Call for Redemption

  	
  22

  
	
  Section 3.08.  Redemption at Option of the Holder upon a Fundamental Change

  	
  23

  
	
   

  	
   

  
	
  Article
  4

  
	
  COVENANTS

  
	
   

  
	
  Section 4.01.  Payment of Securities

  	
  26

  
	
  Section 4.02.  SEC Reports

  	
  26

  
	
  Section 4.03.  Compliance Certificate

  	
  26

  
	
  Section 4.04.  Further Instruments and Acts

  	
  26

  
	
  Section 4.05.  Maintenance of Office or Agency

  	
  26

  
	
  Section 4.06.  Restriction on Additional Indebtedness

  	
  27

  
	
  Section 4.07.  Restricted Payments

  	
  28

  
	
   

  	
   

  
	
  Article 5

  
	
  SUCCESSOR CORPORATION

  
	
   

  	
   

  
	
  Section 5.01.  When Company May Merge or Transfer Assets

  	
  29

  
	
   

  	
   

  
	
  Article 6

  
	
  DEFAULTS AND REMEDIES

  
	
   

  	
   

  
	
  Section 6.01.  Events of Default

  	
  30

  
	
  Section 6.02.  Acceleration

  	
  31

  
	
  Section 6.03.  Other Remedies

  	
  31

  
	
  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

  
	
   

  	
   

  
	
  Section 7.01.  Duties of Trustee

  	
  35

  
	
  Section 7.02.  Rights of Trustee

  	
  36

  
	
  Section 7.03.  Individual Rights of Trustee

  	
  36

  



 


 


ii

















 


	
  Section 7.04.  Trustee’s Disclaimer

  	
  36

  
	
  Section 7.05.  Notice of Defaults

  	
  37

  
	
  Section 7.06.  Disqualification; Conflicting Interests

  	
  37

  
	
  Section 7.07.  Compensation and Indemnity

  	
  37

  
	
  Section 7.08.  Replacement of Trustee

  	
  38

  
	
  Section 7.09.  Successor Trustee by Merger

  	
  38

  
	
  Section 7.10.  Eligibility; Disqualification

  	
  39

  
	
  Section 7.11.  Preferential Collection of Claims Against Company

  	
  39

  
	
  Section 7.12.  Reports by Trustee

  	
  39

  
	
   

  	
   

  
	
  Article 8

  
	
  DISCHARGE OF INDENTURE

  
	
   

  
	
  Section 8.01.  Discharge of Liability on Securities

  	
  39

  
	
  Section 8.02.  Repayment to the Company

  	
  39

  
	
   

  	
   

  
	
  Article
  9

  
	
  AMENDMENTS

  
	
   

  	
   

  
	
  Section 9.01.  Without Consent Of Holders

  	
  40

  
	
  Section 9.02.  With Consent of Holders

  	
  40

  
	
  Section 9.03.  Compliance with TIA

  	
  41

  
	
  Section 9.04.  Revocation and Effect of Consents, Waivers and Actions

  	
  41

  
	
  Section 9.05.  Notation on or Exchange of Securities

  	
  41

  
	
  Section 9.06.  Trustee to Sign Supplemental Indentures

  	
  42

  
	
  Section 9.07.  Effect of Supplemental Indentures

  	
  42

  
	
   

  	
   

  
	
  Article 10

  
	
  CONVERSION

  
	
   

  	
   

  
	
  Section 10.01.  Conversion Privilege

  	
  42

  
	
  Section 10.02.  Conversion Procedure

  	
  42

  
	
  Section 10.03.  Fractional Shares

  	
  44

  
	
  Section 10.04.  Taxes on Conversion

  	
  44

  
	
  Section 10.05.  Company to Provide Stock

  	
  44

  
	
  Section 10.06.  Adjustment for Change in Capital Stock

  	
  44

  
	
  Section 10.07.  Adjustment for Rights Issue

  	
  45

  
	
  Section 10.08.  Adjustment for Other Distributions

  	
  46

  
	
  Section 10.09.  When Adjustment May be Deferred

  	
  49

  
	
  Section 10.10.  When no Adjustment Required

  	
  50

  
	
  Section 10.11.  Notice of Adjustment

  	
  50

  
	
  Section 10.12.  Voluntary Decrease

  	
  50

  
	
  Section 10.13.  Notice Of Certain Transactions

  	
  50

  
	
  Section 10.14.  Effect of Reclassification, Consolidation, Merger or Sale

  	
  51

  
	
  Section 10.15.  Company Determination Final

  	
  52

  



 


 


iii

















 


	
  Section 10.16.  Trustee’s Adjustment Disclaimer

  	
  52

  
	
  Section 10.17.  Simultaneous Adjustment

  	
  52

  
	
  Section 10.18.  Successive Adjustments

  	
  52

  
	
  Section 10.19.  Rights Issued in Respect of Common Stock Issued Upon Conversion

  	
  52

  
	
  Section 10.20.  General Considerations

  	
  53

  
	
   

  	
   

  
	
  Article 11

  
	
  MISCELLANEOUS

  
	
   

  	
   

  
	
  Section 11.01.  Conflict with TIA

  	
  53

  
	
  Section 11.02.  Notices

  	
  54

  
	
  Section 11.03.  Communication by Holders with Other Holders

  	
  55

  
	
  Section 11.04.  Certificate And Opinion as to Conditions Precedent

  	
  55

  
	
  Section 11.05.  Statements Required in Certificate or Opinion

  	
  55

  
	
  Section 11.06.  Separability Clause

  	
  55

  
	
  Section 11.07.  Rules by Trustee, Paying Agent, Conversion Agent and Registrar

  	
  55

  
	
  Section 11.08.  Legal Holidays

  	
  56

  
	
  Section 11.09.  Governing Law

  	
  56

  
	
  Section 11.10.  No Recourse Against Others

  	
  56

  
	
  Section 11.11.  Successors

  	
  56

  
	
  Section 11.12.  Multiple Originals

  	
  56

  
	
   

  	
   

  
	
  Exhibit A — Form of Security

  	
  A-1

  



 


 


iv

















 


INDENTURE, dated as of July,
2003, between SILICON GRAPHICS, INC., a Delaware corporation (the “Company”),
and U.S. BANK NATIONAL ASSOCIATION, a national banking association organized
and existing under the laws of the United States of America (the “Trustee”).


Each party agrees as follows
for the benefit of the other party and for the equal and ratable benefit of the
Holders of the Company’s 6.50% Senior Convertible Notes Due 2009 (the “Securities”):


ARTICLE 1

DEFINITIONS AND INCORPORATION BY REFERENCE


Section 1.01. 
Definitions.


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


“Average Life” means, with
respect to any indebtedness, the quotient obtained by dividing the sum of the
products of (1) the number of years from the date of determination to the dates
of each successive scheduled principal payment on such indebtedness, and (2)
the amount of such principal payment, by the sum of all such principal
payments.


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


“Business Day” means each day
of the year on which banking institutions are not required or authorized to
close in The City of New York or at the principal corporate trust office of the
Trustee.


“Capital Stock” means
(1) in the case of a corporation, corporate stock, (2) in the case of
an association or business entity, any and all shares, interests,
participations, rights or other equivalents (however designated) of corporate
stock, (3) in the case of a partnership, partnership interests (whether
general or limited), and (4) any other interest or participation that
confers on a person the right to receive a share of the profits and losses of,
or distribution of assets of, the issuing person.

















 


“Closing Price” means with
respect to any securities on any day the closing sale price regular way on such
day or, in case no such sale takes place on such day, the average of the
reported closing bid and asked prices, regular way, in each case on the New
York Stock Exchange, or, if such security is not listed or admitted to trading
on such Exchange, on the principal national security exchange or quotation
system on which such security is quoted or listed or admitted to trading, or,
if not quoted or listed or admitted to trading on any national securities
exchange or quotation system, the average of the closing bid and asked prices
of such security on the over-the-counter market on the day in question as
reported by the National Quotation Bureau Incorporated, or a similar generally
accepted reporting service, or if not so available, in such manner as furnished
by any New York Stock Exchange member firm selected from time to time by the
Board of Directors for that purpose, or a price determined in good faith by the
Board of Directors or, to the extent permitted by applicable law, a duly
authorized committee thereof, whose determination shall be conclusive.


“Common Stock” means any stock
of any class of the Company which has no preference in respect of dividends or
of amounts payable in the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Company and which is not subject to redemption
by the Company.  Subject to the
provisions of Section 10.14, however, shares issuable on conversion of the
Securities shall include only shares of Common Stock, par value $.00l per
share, of the Company as it exists on the date of this Indenture or shares of
any class or classes resulting from any reclassification or reclassifications
thereof and which have no preference in respect of dividends or of amounts
payable in the event of any voluntary or involuntary liquidation, dissolution
or winding up of the Company and which are not subject to redemption by the
Company; provided
that if at any time there shall be more than one such resulting class, the
shares of each such class then so issuable shall be substantially in the
proportion which the total number of shares of such class resulting from all
such reclassifications bears to the total number of shares of all such classes
resulting from all such reclassifications.


“Company” means the 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, 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 its Chairman of the Board, a Vice Chairman, its President, a Senior
Vice President or a Vice President, and by its Treasurer, an Assistant
Treasurer, its Secretary or an Assistant Secretary, and delivered to the
Trustee.


2

















 


“Conversion Price” has the
meaning specified in Section 10.01


“Current Market Price” per
share of Common Stock at any date shall be the average of the last reported
sale prices for the ten consecutive Trading Days preceding the day before the
record date with respect to any distribution, issuance or other event requiring
such computation.  The last reported
sale price for each day shall be (i) the last reported sale price of Common
Stock on the New York Stock Exchange, or, if such security is not listed or
admitted to trading on such Exchange, on the principal national security
exchange on which such security is listed, or on the Nasdaq National Market or
any similar system of automated dissemination of quotations of securities
prices then in common use, if so quoted, or (ii) if not quoted as described in
clause (i), the mean between the high bid and low asked quotations for Common
Stock as reported by the National Quotation Bureau Incorporated if at least two
securities dealers have inserted both bid and asked quotations for the Common
Stock on at least 5 of the 10 preceding days, or (iii) if the Common Stock is
listed or admitted for trading on any national securities exchange, the last
sale price, or the closing bid price if no sale occurred, of the Common Stock
on the principal securities exchange on which the Common Stock is listed.  If the Common Stock is quoted on a national
securities or central market system, in lieu of a market or quotation system
described above, the last reported sale price shall be determined in the manner
set forth in clause (ii) of the preceding sentence if bid and asked quotations
are reported but actual transactions are not, and in the manner set forth in
clause (iii) of the preceding sentence if actual transactions are
reported.  If none of the conditions set
forth above is met, the last reported sale price of Common Stock on any day or
the average of such last reported sale prices for any period shall be the fair market
value of the Common Stock as determined by a member firm of the New York Stock
Exchange, Inc.  selected by the Company.





“Custodian” means U.S. Bank
National Association, as custodian with respect to any Global Security, or any
successor.


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


“Defaulted Interest” has the
meaning specified in Section 2.12.


“Depositary” means, with
respect to the Securities issuable or issued in whole or in part in global
form, the person specified in Section 2.06 as the Depositary with respect to
the Securities, until a successor Depositary shall have been appointed and
become such pursuant to the applicable provisions of this Indenture, and
thereafter, “Depositary” shall mean or include such successor.


3

















 


“Disqualified Stock” means
Capital Stock that, by its terms (or the terms of any security into which it is
convertible or for which it is exchangeable), or upon the happening of any
event, matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or is redeemable at the option of the holder, in whole
or in part, on or prior to the date that is the Stated Maturity of the New
Notes and the Securities.


“Event of Default” means any
event or condition specified as such in Section 6.01.


“Exchange Act” means the
Securities Exchange Act of 1934, as amended, and the rules and regulations of
the SEC promulgated thereunder.


“Fundamental Change” means the
occurrence of any transaction or event in connection with which all or
substantially all the Common Stock shall be exchanged for, converted into,
acquired for or constitute solely the right to receive (whether by means of an
exchange offer, liquidation, tender offer, consolidation, merger, combination,
reclassification, recapitalization or otherwise) consideration which is not all
or substantially all common stock listed (or, upon consummation of such
transaction or event, will be listed) on a United States national securities
exchange or approved for quotation in the Nasdaq National Market or any similar
system of automated dissemination of quotations of securities prices.


“GAAP” means generally
accepted accounting principles.


“Global Security” means a
Security that is registered in the Security Register in the name of the
Depository or a nominee thereof.


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


“Indenture” means this
Indenture, as amended or supplemented from time to time in accordance with the
terms hereof.


“Interest Payment Date” means
the Stated Maturity of an installment of interest on the Securities.


“Interest Period” shall have
the meaning set forth in Section 10.02.


“Maturity” when used with
respect to any Security, means the date on which the principal of such Security
becomes due and payable as therein or herein provided, whether at the Stated
Maturity or by declaration of acceleration, call for redemption, redemption
upon a Fundamental Change or otherwise.


“New Indenture” means that
certain Indenture dated as of July __, 2003 between the Company and the
Trustee, relating to the New Notes.


4

















 


“New Notes” means the
Company’s 11.75% Senior Notes Due 2009.


“Officer” means the Chairman
of the Board, any Vice Chairman, the 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 11.04
and 11.05, signed in the name of the Company by its Chairman of the Board, a
Vice Chairman, its President, a Senior Vice President or a Vice President, and
by its Treasurer, an Assistant Treasurer, its Secretary or an Assistant
Secretary, and delivered to the Trustee.


“Old Notes” means the
Company’s 5.25% Senior Convertible Notes Due 2004.


“Old Notes Indenture” means
that certain Indenture dated as of September 1, 1997 between the Company and
the U.S. Bank National Association, as successor trustee to State Street Bank
and Trust Company of California, N.A., relating to the Old Notes.


“Opinion of Counsel” means a
written opinion signed by legal counsel who may be an employee of or counsel to
the Company and who shall be satisfactory to the Trustee.  Each such opinion shall comply with Section
314 of the Trust Indenture Act and include the information specified in
Sections 11.04 and 11.05.


“Options” means any warrants,
options or other rights to acquire Capital Stock of the Company (but excluding
(i) any options or other rights issued under a plan maintained by the Company
for the benefit of employees, directors and consultants, and (ii) any debt
security that is convertible into or exchangeable for Capital Stock of the
Company).


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


“Predecessor Security” of any
particular Security means every previous Security evidencing all or a portion
of the same debt as that evidenced by such particular Security.  For the purposes of this definition, any Security
authenticated and delivered under Section 2.06 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.


“Redemption Date” shall mean a
date specified for redemption of the Securities (other than redemption upon a
Fundamental Change at the option of the 


5

















 


Securityholder)
in accordance with the terms of the Securities and Section 3.01 of this
Indenture.


“Redemption Price” shall have
the meaning set forth in paragraph 5 of the Securities.


“Regular Record Date” for the
interest payable on any Interest Payment Date means the December 15 or June 15
(whether or not a Business Day), as the case may be, next preceding such
Interest Payment Date.


“SEC” means the Securities and
Exchange Commission.


“Secured Credit Facility”
means that certain Amended and Restated Loan and Security Agreement between the
Company and Foothill Capital Corporation and the Bank of America, N.A. dated
September 24, 2002, as amended by that certain Amendment Number One to Amended
and Restated Loan Agreement, dated as of April 11, 2003, between the Company
and Foothill Capital Corporation, as the same may be amended from time to time.


“Security” or “Securities”
means any of the Company’s 6.50% Senior Convertible Notes Due 2009, as amended
or supplemented from time to time, issued under this Indenture.


“Securities Act” means the
Securities Act of 1933, as amended, and the rules and regulations of the SEC
promulgated thereunder.


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


“Security Register” has the
meaning specified in Section 2.05.


“SGI Japan Secured Debt” means
that Loan Agreement between the Company, Silicon Graphics World Trade B.V. and
SGI Japan, Ltd. as of November 9, 2001, as the same may be amended from time to
time.


“Special Record Date” for the
payment of any Defaulted Interest means a date fixed by the Trustee pursuant to
Section 2.12.


“Stated Maturity” when used
with respect to any Security or any installment of interest thereon, means the
date specified in such Security as the fixed date on which the principal of
such Security or such installment of interest is due and payable, and when used
with respect to any other indebtedness or any installment of interest thereon,
the date specified as the fixed date on which the principal of such debt or
such installment of interest is due and payable as set forth in the
documentation governing that debt, not including any contingent 


6

















 


obligation
to repay, redeem or repurchase prior to the regularly scheduled date for
payment.


“Subsidiary” means a
corporation of which a majority of the capital stock (which for purposes of
this definition means any and all shares, interests, rights to purchase,
warrants, options, participations or other equivalents of or interests in
(however designated) stock issued by such corporation) having voting power
under ordinary circumstances to elect a majority of the board of directors of
such corporation is owned directly or indirectly by (i) the Company, (ii) the
Company and one or more Subsidiaries or (iii) one or more Subsidiaries.


“TIA” means the Trust
Indenture Act of 1939 as in effect on the date of this Indenture, except as
provided in Section 9.03.


“Trading Day” means a day
during which trading in securities generally occurs on the New York Stock
Exchange or, if the applicable security is not listed on the New York Stock
Exchange, on the principal other national or regional securities exchange on
which the applicable security is then listed or, if the applicable security is
not listed on a national or regional securities exchange, on the Nasdaq
National Market or, if the applicable security is not quoted on the Nasdaq
National Market, on the principal other market on which the applicable security
is then traded.


“Trust Officer” means any
officer of the Trustee assigned by the Trustee to administer its corporate
trust matters.


“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.


Section 1.02. 
Other Definitions.  


	
   

  	
  Term

  	
   

  	
  Defined in
  Section

  	
   

  	
   

  
	
   

  	
  2009 Notes

  	
   

  	
  2.15

  	
   

  	
   

  
	
   

  	
  Bankruptcy Law

  	
   

  	
  6.01

  	
   

  	
   

  
	
   

  	
  Company Notice

  	
   

  	
  3.08

  	
   

  	
   

  
	
   

  	
  Conversion Agent

  	
   

  	
  2.03

  	
   

  	
   

  
	
   

  	
  EBITDA

  	
   

  	
  2.15

  	
   

  	
   

  
	
   

  	
  Event of Default

  	
   

  	
  6.01

  	
   

  	
   

  
	
   

  	
  Fundamental Change Repurchase Date

  	
   

  	
  3.08

  	
  (a)

  	
   

  
	
   

  	
  Fundamental Change Redemption Price

  	
   

  	
  3.08

  	
  (a)

  	
   

  
	
   

  	
  Incur

  	
   

  	
  4.06

  	
   

  	
   

  
	
   

  	
  Legal Holiday

  	
   

  	
  11.08

  	
   

  	
   

  
	
   

  	
  Notice of Default

  	
   

  	
  6.01

  	
   

  	
   

  
	
   

  	
  Paying Agent

  	
   

  	
  2.03

  	
   

  	
   

  
	
   

  	
  Registrar

  	
   

  	
  2.03

  	
   

  	
   

  



 


7

















 


Section 1.03. 
Incorporation by Reference of TIA. 
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 Securities” means
the Securities.


“Indenture Security Holder”
means a Securityholder.


“Indenture to be Qualified”
means this Indenture.


“Indenture Trustee” or “Institutional
Trustee” means the Trustee.


“Obligor” on the indenture
securities 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 term has the meaning assigned to it;


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


(c)   “or” is not exclusive;


(d)   “including” means including, without
limitation; and


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


8

















 


ARTICLE 2

The Securities


Section 2.01. 
Form and Dating.  The Securities
and the Trustee’s certificate of authentication shall be substantially in the
form of Exhibit A, which is a part of this Indenture.  The Securities may have notations, legends or endorsements
required by law, stock exchange rule or usage (provided that any such notation,
legend or endorsement required by usage is in a form acceptable to the
Company).  The Company shall provide any
such notations, legends or endorsements to the Trustee in writing.  Each Security shall be dated the date of its
authentication.


Section 2.02. 
Execution And Authentication.  The Securities
shall be executed on behalf of the Company by its Chairman of the Board, one of
its Vice Chairman, its President, one of its Senior Vice Presidents or one of
its Vice Presidents, under its corporate seal reproduced thereon and attested
by its Secretary or one of its Assistant Secretaries.  The signature of any of these officers on the Securities may be
manual or facsimile.


Securities bearing the
manual or facsimile signatures of individuals who were at any time 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 Securities or did not hold such offices at
the date of authentication of such Securities.


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


The Trustee shall
authenticate and deliver Securities for original issue in an aggregate
principal amount of up to $78,000,000 upon a Company Order without any further
action by the Company.  The aggregate
principal amount of Securities outstanding at any time may not exceed the
amount set forth in the foregoing sentence, except as provided in Section 2.07.


Section 2.03. 
Registrar, Paying Agent and Conversion Agent.  The Company shall maintain an office or agency where
Securities may be presented for registration of transfer or for exchange (“Registrar”),
an office or agency where Securities may be presented for purchase or payment
(“Paying
Agent”) and an office or agency where Securities may be presented
for conversion (“Conversion Agent”). 
The Registrar shall keep a register (the “Security Register”) of the
Securities and of their transfer and exchange. 
The Company 


9

















 


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. 
The term Conversion Agent includes any additional conversion agent.


The Company shall enter into
an appropriate agency agreement with any Registrar, Paying Agent, Conversion
Agent or co-registrar (if not 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 7.07. 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 Securities.


Section 2.04. 
Paying Agent to Hold Money and Securities in Trust.  Except as otherwise provided
herein, prior to or on each due date of payments in respect of any Security,
the Company shall deposit with the Paying Agent a sum of money or securities
sufficient to make such payments when so becoming 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 Securityholders or the Trustee all money and
securities held by the Paying Agent for the making of payments in respect of
the Securities 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 and
securities 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 and securities 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 and securities
held by it to the Trustee and to account for any funds and securities disbursed
by it.  Upon doing so, the Paying Agent
shall have no further liability for the money or securities.


Section 2.05. 
Securityholder Lists.  The Trustee
shall preserve in as current a form as is reasonably practicable the most
recent list available to it of the names and addresses of Securityholders.  If the Trustee is not the Registrar, the
Company shall cause to be furnished to the Trustee at least semiannually on
December 15 and June 15 a listing of Holders dated within 15 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 Securityholders.


10

















 


Section 2.06. 
Exchange and Registration of Transfer of Securities; Depositary.  Upon surrender for
registration of transfer of any Security at any office or agency of the Company
designated as Registrar or co-registrar pursuant to Section 2.03 and satisfaction
of the requirements for such transfer set forth in this Section 2.06, the
Company shall execute, and the Trustee shall authenticate and deliver, in the
name of the designated transferee or transferees, one or more new Securities of
any authorized denominations and of a like aggregate principal amount.


Securities may be exchanged
for a like aggregate principal amount of Securities of other authorized
denominations.  Securities to be
exchanged shall be surrendered at any office or agency to be maintained by the
Company designated as Registrar or co-registrar pursuant to Section 2.03 and
the Company shall execute and register and the Trustee shall authenticate and
deliver in exchange therefor the Security or Securities which the
Securityholder making the exchange shall be entitled to receive, bearing
registration numbers not contemporaneously outstanding.


All Securities presented for
registration of transfer or for exchange, purchase, redemption, conversion or
payment shall (if so required by the Company, the Trustee, the Registrar or any
co-registrar) be duly endorsed by, or be accompanied by a written instrument or
instruments of transfer in form satisfactory to the Company and the Trustee,
duly executed by the Holder or his attorney duly authorized in writing.


No service charge shall be
charged to the Securityholder for any exchange or registration of transfer of
Securities, but the Company may require payment of a sum sufficient to cover
any tax, assessments or other governmental charges that may be imposed in
connection therewith.


None of the Company, the
Trustee, the Registrar or any co-registrar shall be required to exchange or
register a transfer of (a) any Securities for a period of 15 days next
preceding any selection of Securities to be redeemed or (b) any Securities or
portions thereof selected or called for redemption or (c) any Securities or
portion thereof surrendered for conversion or (d) any Securities or portion
thereof surrendered for redemption (and not withdrawn) pursuant to Section 3.08.


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


The provisions of Clauses
(a), (b), (c), (d), and (e) below shall apply only to Global Securities:


11

















 


(a)   Each Global Security authenticated under this
Indenture shall be registered in the name of the Depositary designated for such
Global Security or a nominee thereof and delivered to such Depositary or a
nominee thereof or Custodian therefor, and each such Global Security shall
constitute a single Security for all purposes of this Indenture.


(b)   Notwithstanding any other provision in this
Indenture, no Global Security may be exchanged in whole or in part for
Securities registered, and no transfer of a Global Security in whole or in
party may be registered, in the name of any Person other than the Depositary for
such Global Security or a nominee thereof unless (A) such Depositary (i) has
notified the Company that it is unwilling or unable to continue as Depositary
for such Global Security or (ii) has ceased to be a clearing agency registered
under the Exchange Act, or (B) there shall have occurred and be continuing an
Event of Default with respect to such Global Security.


(c)   Subject to 2.06(b) above, any exchange of a
Global Security for other Securities may be made in whole or in part, and all
Securities issued in exchange for a Global Security or any portion thereof
shall be registered in such names as the Depositary for such Global Security
shall direct.


(d)   Every Security authenticated and delivered
upon registration of transfer of, or in exchange for or in lieu of, a Global
Security or any portion thereof whether pursuant to this Article Two or
otherwise, shall be authenticated and delivered in the form of, and shall be, a
Global Security, unless such Security is registered in the name of a Person
other than the Depositary for such Global Security or a nominee thereof.


(e)   The Depositary or its nominee, as registered
own of a Global Security, shall be the Holder of such Global Security for all
purposes under the Indenture and the Securities, and owners of beneficial
interests in a Global Security shall hold such interests pursuant to the
applicable procedures.  Accordingly, any
such owner’s beneficial interest in a Global Security will be shown only on,
and the transfer of such interest shall be effected only through, records
maintained by the Depositary or its nominee or its agent members and such
owners of beneficial interests in a Global Security will not be considered the
owners or holders thereof.


The Depositary shall be a
clearing agency registered under the Exchange Act.  The Company initially appoints The Depository Trust Company to
act as Depositary with respect to the Securities in global form.  Initially, the Global Security shall be
issued to the Depositary, registered in the name of Cede & Co., as the
nominee of the Depositary, and deposited with the Trustee as custodian for
Cede & Co.


12

















 


If at any time the
Depositary for the Global Security notifies the Company that it is unwilling or
unable to continue as Depositary for such Global Security, the Company may
appoint a successor Depositary with respect to such Security.  If a successor Depositary for the Global
Security is not appointed by the Company within 90 days after the Company
receives such notice, the Company will execute, and the Trustee, upon receipt
of a Company Order for authentication and delivery of Securities, will
authenticate and deliver, Securities in definitive form, in an aggregate
principal amount equal to the principal amount of the Global Security, in
exchange for such Security in the global form.


Section 2.07. 
Replacement Securities.  If (i) any
mutilated Security is surrendered to the Trustee, or (ii) the Company and the
Trustee receive evidence to their satisfaction of the destruction, loss or
theft of any Security, and there is delivered to the Company and the Trustee
such security 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 Security has been acquired by a bona fide purchaser, the Company shall
execute and upon its written request the Trustee shall authenticate and
deliver, in exchange for any such mutilated Security or in lieu of any such
destroyed, lost or stolen Security, a new Security of like tenor and principal
amount, bearing a number not contemporaneously outstanding.


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


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


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


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


Section 2.08. 
Outstanding Securities; Determinations of Holders’ Action.  Securities outstanding at
any time are all the Securities authenticated by the Trustee except for those
canceled by it, those delivered to it for cancellation and 


13





















 


those described in this
Section 2.08 as not outstanding.  A
Security does not cease to be outstanding because the Company or an Affiliate
thereof holds the Security; provided, however, that in determining whether the
Holders of the requisite principal amount of Securities have given or concurred
in any request, demand, authorization, direction, notice, consent or waiver
hereunder, Securities owned by the Company or any other obligor upon the
Securities 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 Securities
which the Trustee knows to be so owned shall be so disregarded.  Subject to the foregoing, only Securities
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 Security is replaced
pursuant to Section 2.07, it ceases to be outstanding unless the Trustee
receives proof satisfactory to it that the replaced Security is held by a bona
fide purchaser.


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


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


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


If temporary Securities are
issued, the Company will cause definitive Securities to be prepared without
unreasonable delay.  After the preparation
of definitive Securities, the temporary Securities shall be exchangeable for
definitive Securities upon surrender of the temporary Securities at the office
or agency of the Company designated for such purpose pursuant to Section 2.03,
without 


14

















 


charge
to the Holder.  Upon surrender for
cancellation of any one or more temporary Securities the Company shall execute
and the Trustee shall authenticate and deliver in exchange therefor a like
principal amount of definitive Securities of authorized denominations.  Until so exchanged the temporary Securities
shall in all respects be entitled to the same benefits under this Indenture as
definitive Securities.


Section 2.10. 
Cancellation.  All Securities
surrendered for payment, 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 canceled by it.  The Company may at any time deliver to the
Trustee for cancellation any Securities previously authenticated and delivered
hereunder which the Company may have acquired in any manner whatsoever, and all
Securities so delivered shall be promptly canceled by the Trustee.  The Company may not issue new Securities to
replace Securities it has paid or delivered to the Trustee for cancellation or
that any Holder has converted pursuant to Article 10.  No Securities shall be authenticated in lieu of or in exchange
for any Securities canceled as provided in this Section, except as expressly
permitted by this Indenture.  All
canceled Securities held by the Trustee shall be destroyed by the Trustee and
evidence of their destruction delivered to the Company unless the Company directs
by Company Order that the Trustee deliver canceled Securities to the Company.


Section 2.11. 
Persons Deemed Owners.  Prior to due
presentment of a Security 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 Security is registered as the owner of such Security for the
purpose of receiving payment of principal amount, premium, if any, interest,
Redemption Price and Fundamental Change Redemption Price in respect thereof,
for the purpose of conversion and for all other purposes whatsoever, whether or
not such Security be overdue, and none of the Company, the Trustee or any agent
of the Company or the Trustee shall be affected by notice to the contrary.


Section 2.12. 
Payment of Interest; Interest Rights Preserved.  Interest on any Security
which is payable, and is punctually paid or duly provided for, on any Interest
Payment Date shall be paid to the person in whose name that Security (or one or
more Predecessor Securities) is registered at the close of business on the
Regular Record Date for such interest.


Any interest on any Security
which is payable, but is not punctually paid or dully provided for, on any
Interest Payment Date (herein called “Defaulted Interest”) shall forthwith cease
to be payable to the Holder on the relevant Regular Record Date by virtue of
having been such Holder, and such Defaulted Interest may be paid by the
Company, at its election in each case, as provided in (a) or (b) below:


15

















 


(a)   The Company may elect to make payment of any
Defaulted Interest to the Persons in whose names the Securities (or their
respective Predecessor Securities) are registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest, which shall be
fixed in the following manner.  The
Company shall notify the Trustee in writing of the amount of Defaulted Interest
proposed to be paid on each Security and the date of the proposed payment, and at
the same time the Company shall deposit with the Trustee an amount of money
equal to the aggregate amount proposed to be paid in respect of such Defaulted
Interest or shall make arrangements satisfactory to the Trustee for such
deposit on or prior to the date of the proposed payment, such money when
deposited to be held in trust for the benefit of the Persons entitled to such
Defaulted Interest as in this Clause provided. Thereupon the Trustee shall fix
a Special Record Date for the payment of such Defaulted Interest which shall be
not more than 15 days and not less than 10 days prior to the date of the
proposed payment and not less than 10 days after the receipt by the Trustee of
the notice of the proposed payment.  The
Trustee shall promptly notify the Company of such Special Record Date and, in
the name and at the expense of the Company, shall cause notice of proposed
payment of such Defaulted Interest and the Special Record Date therefor to be
mailed, first-class postage prepaid, to each Holder at his address as it
appears in the Security Register, not less than 10 days prior to such Special
Record Date.  Notice of the proposed
payment of such Defaulted Interest and the Special Record Date therefor having
been so mailed, such Defaulted Interest shall be paid to the Persons in whose
names the Securities (or their respective Predecessor Securities) are
registered at the close of business on such Special Record Date and shall no
longer be payable pursuant to the following Clause (b).


(b)   The Company may make payment of any Defaulted
Interest in any other lawful manner not inconsistent with the requirements of
any securities exchange or market on which the Securities may be listed, and
upon such notice as may be required by such exchange or market, if, after
notice given by the Company to the Trustee of the proposed payment pursuant to
this Clause, such manner of payment shall be deemed practicable by the Trustee.


Subject to the foregoing
provisions of this Section, each Security delivered under this Indenture upon
registration of transfer of or in exchange for or in lieu of any other Security
shall carry the rights to interest accrued and unpaid, and to accrue, which
were carried by such other Security.


In the case of any Security
which is converted after any Regular Record Date on or prior to the close of
business on the next succeeding Interest Payment Date (other than any Security
whose Maturity is prior to such Interest Payment Date), interest whose Stated
Maturity is on such Interest Payment Date shall be payable on such Interest
Payment Date notwithstanding such conversion, and such interest (whether or not
punctually paid or dully provided for) shall be paid 


16

















 


to
the Person whose name that Security (or one or more Predecessor Securities) is
registered at the close of business on such Regular Record Date.  Except as otherwise expressly provided in
the immediately preceding sentence, in the case of any Security which is
converted, interest whose Stated Maturity is after the date of conversion of such
Security shall not be payable.


Section 2.13. 
Computation of Interest.  Interest on the
Securities shall be computed on the basis of a 360-day year of twelve 30-day
months.


Section 2.14. 
Preservation of Information; Communications to Holders.


(a)   The Trustee shall preserve, in as current a
form as is reasonably practicable, the names and addresses of Holders contained
in the most recent list furnished to the Trustee as provided in Section 2.05
and the names and addresses of Holders received by the Trustee in its capacity
as Security Registrar.  The Trustee may
destroy any list furnished to it as provided in Section 2.05 upon receipt of a
new list so furnished.


(b)   The rights of Holders to communicate with
other Holders with respect to their rights under this Indenture or under the
Securities, and the corresponding right and duties of the Trustee, shall be as
provided in the TIA.


(c)   Every Holder of Securities, by receiving and
holding the same, agrees with the Company and the Trustee that neither the Company
nor the Trustee nor any agent of either of them shall be held accountable by
reason of the disclosure of information as to names and addresses of the
Holders made pursuant to the TIA.


Section 2.15. 
Reduction Of Conversion Price.  The Conversion
Price of  any Security shall be reduced
in the circumstances described under Section 2.15(c) and (d) below:


(a)   The Company shall maintain EBITDA (as defined
herein) of not less than (i) $0.00  for
the fiscal quarters ending on December 26, 2003 and June 25, 2004, and (ii)
($5,000,000) for the fiscal quarters ending on March 26, 2004 and September 24,
2004.  “EBITDA” shall be defined for
purposes of this Section 2.15 as the Company’s consolidated net earnings (or
loss), plus net interest expense, income taxes, depreciation and amortization
for the relevant fiscal quarter, as determined in accordance with GAAP and as
reported by the Company in the cash flow statement included in its quarterly
report on Form 10-Q filed with the SEC relating to such fiscal quarter.  All non-cash restructuring charges and any
extraordinary losses for the applicable fiscal quarter shall be eliminated in
the calculation of EBITDA for purposes of determining compliance with this
condition.


17

















 


(b)   The Company shall, on or prior to December
31, 2003, reduce the aggregate principal amount of Securities and New
Convertible Notes (together, the “2009 Notes”) outstanding on the date hereof
by $25 million; provided that any purchases by the Company of up to $10 million
principal amount of Old Notes at a price (excluding commissions and other costs
of sale) equal to 85% or less of their principal amount shall be deemed a
reduction by an equal dollar amount of the outstanding principal amount of 2009
Notes. The Company may satisfy this obligation through open market or private
purchases or by initiating a cash tender offer at par (plus accrued interest)
for 2009 Notes and accepting and paying for sufficient 2009 Notes to satisfy
this condition.  In the event that less
than the aggregate principal amount of 2009 Notes required to satisfy this
condition are tendered, the Company’s acceptance of and payment for any and all
New Notes validly tendered will fully satisfy its obligations under this
paragraph.


(c)   If the Company shall not have satisfied the
condition set forth in Section 2.15(a) above in any fiscal quarter to which
such condition applies, the Conversion Price of the Securities shall be reduced
from $1.85 per share of Common Stock to $1.50 per share of Common Stock for the
next succeeding fiscal quarter, subject to adjustment as set forth in Section
10 below.


(d)   If the Company shall have satisfied the
condition set forth in Section 2.15(a) above in any fiscal quarter to which
such condition applies, but the Company has not reduced the outstanding
principal amount of 2009 Notes as required by Section 2.15(b), the Conversion
Price of the Securities shall be reduced from $1.85 per share of Common Stock
to $1.50 per share of Common Stock, subject to adjustment as set forth in
Section 10 below, until it has fully satisfied its obligations under Section
2.15(b).


Section 2.16. 
Company’s Use Of Proceeds From Sale Of Certain Assets.  (a) Until the Company has
complied in full with its obligation set forth in Section 2.15(b) above, it
agrees that it will apply at least 50% of its net cash proceeds from the sale
of (i) businesses, (ii) material fixed assets or patents (other than in
connection with a commercial transaction in which the patents are related to
the subject matter of the transaction) and (iii) its or its Affiliates’ equity
securities to satisfy such obligation; provided, however that amounts from such
sales will be applied first as required by the terms of the Company’s Secured
Credit Facility and thereafter to the satisfaction of its obligation set forth
in Section 2.15(b).  For purposes of
this Section 2.16, “net cash proceeds” shall be deemed, as to any sale
transaction, as an amount equal to (i) the aggregate amount received in cash
(including any cash received by way of deferred payment pursuant to a note
receivable, installment receivable, purchase price adjustment receivable or
otherwise, but only as and when such cash is received) from such sales
transaction, less (ii) the reasonable out-of-pocket expenses and fees incurred
in connection with such sale.


18

















 


(b)   Upon consummation of a sale transaction
described in Section 2.16(a) above, the Company shall provide the Trustee a
certificate signed by its Chief Financial Officer setting forth (i) a
calculation of the net cash proceeds from such transaction, including an
itemization of fees and expenses and (ii) certifying, in accordance with the
provisions of Section 11.05 that the Company has complied with its obligations
under Section 2.16(a) with respect to the application of such proceeds.


Section 2.17. 
Right Of Holders Of 2009 Notes To Appoint Directors.  (a) The Company agrees that it
will, as soon as reasonably practicable after submission to the Corporate
Secretary of a written request executed by the Holders of a majority in
principal amount of the 2009 Notes setting forth the names of two nominees to
serve on the Board of Directors, appoint such nominees, provided that such
nominees are reasonably acceptable to the nominating committee of the Board of
Directors.  The Company will include
such nominees in the slate of candidates for the Board of Directors who have
been nominated for terms of  at least
two years at the next annual meeting of shareholders.  In addition, for any period in which the Company is required to
reduce the Conversion Price pursuant to Section 2.15(c) or (d) above, the
Holders of a majority in interest of the 2009 Notes shall be entitled to name a
third member of the Board of Directors who is reasonably acceptable to the
Board’s nominating committee in accordance with the procedures set forth
above.  The term of such director shall
end automatically, and such director shall promptly submit his or her
resignation from the Board of Directors, when the reduction in Conversion Price
pursuant to Section 2.15(c) or (d) above is no longer in effect.


(b)   In the event of a vacancy on the Board of
Directors created by the death or resignation of a director appointed by the
Holders of the 2009 Notes pursuant to Section 2.17(a) above (other than an
automatic resignation resulting from the expiration of the period during which
the Conversion Price is reduced), such vacancy may be filled, after
consultation with the Holders of 2009 Notes, by the remaining directors or
director named by the Holders of 2009 Notes, provided that such replacement
director is reasonably acceptable to the nominating committee of the Board of
Directors.


ARTICLE 3

Redemption


Section 3.01. 
Right to Redeem; Notices to Trustee. 
The Company, at its option, may redeem the Securities in accordance
with the provisions of paragraph 5 of the Securities.  If the Company elects to redeem Securities pursuant to paragraph
5 of the Securities, it shall notify the Trustee in writing of the Redemption
Date, the principal amount of Securities to be redeemed, the 


19

















 


Redemption Price, and the
amount of accrued interest to, but excluding, the Redemption Date.


The Company shall give the
notice to the Trustee provided for in this Section 3.01 (i) in the case of any
redemption of fewer than all of the Securities, at least 45 days before the
Redemption Date and (ii) in the case of a redemption of all of the Securities,
no later than the Company is required to give notice to the Holders pursuant to
Section 3.03, in each case unless a shorter notice shall be satisfactory to the
Trustee.


Section 3.02. 
Selection of Securities to be Redeemed. 
If less than all the Securities are to be redeemed, the Trustee shall
select the Securities to be redeemed pro rata or by lot or by a method the
Trustee considers fair and appropriate (as long as such method is not
prohibited by the rules of any stock exchange or automated quotation system on
which the Securities are then listed). 
The Trustee shall make the selection at least 10 days, but not more than
60 days, before the Redemption Date from outstanding Securities not previously
called for redemption.  The Trustee may
select for redemption portions of the principal amount of Securities that have
denominations larger than $1,000. 
Securities and portions of Securities selected by the Trustee shall be
in principal amounts of $1,000 or a multiple of $1,000.  Provisions of this Indenture that apply to
Securities called for redemption also apply to portions of Securities called
for redemption.  The Trustee shall
notify the Company promptly of the Securities or portions of Securities to be
redeemed.


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


Section 3.03. 
Notice of Redemption.  At least 30
days but not more than 60 days before a Redemption Date, the Company shall mail
a notice of redemption by first-class mail, postage prepaid, to each Holder of
Securities to be redeemed.


The notice shall identify
the Securities to be redeemed and shall state:


(a)   the Redemption Date;


(b)   the Redemption Price, together with the amount
of accrued interest to, but excluding, the Redemption Date;


(c)   the Conversion Price;


20

















 


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


(e)   that Securities called for redemption may be
converted at any time before the close of business on the last Trading Day
prior to the Redemption Date;


(f)    that Holders who want to convert Securities
must satisfy the requirements set forth in paragraph 7 of the Securities;


(g)   that Securities called for redemption must be
surrendered to the Paying Agent to collect the Redemption Price and accrued
interest to, but excluding, the Redemption Date;


(h)   if fewer than all the outstanding Securities
are to be redeemed, the certificate number and principal amounts of the
particular Securities to be redeemed; and


(i)    that interest on Securities called for
redemption will cease to accrue on and after the Redemption Date.


At the Company’s request,
the Trustee shall give the notice of redemption in the Company’s name and at
the Company’s expense.


Section 3.04. 
Effect of Notice of Redemption.  Once notice of
redemption is given, Securities called for redemption become due and payable on
the Redemption Date and at the Redemption Price, together with accrued interest
to, but excluding, the Redemption Date, stated in the notice except for
Securities which are converted in accordance with the terms of this Indenture.


Upon the later of the
Redemption Date or the date such Securities are surrendered to the Paying Agent,
such Securities shall be paid at the Redemption Price, together with accrued
interest to, but excluding, the Redemption Date, stated in the notice.


Section 3.05. 
Deposit of Redemption Price.  Prior to or on
the Redemption Date, the Company shall deposit with the Paying Agent (or if the
Company or a Subsidiary or an Affiliate of either of them is the Paying Agent,
shall segregate and hold in trust) money sufficient to pay the Redemption Price
and accrued interest to, but excluding, the Redemption Date of all Securities
to be redeemed on that date other than Securities or portions of Securities
called for redemption which prior thereto have been delivered by the Company to
the Trustee for cancellation or have been converted; provided that if such
payment is made on the Redemption Date it must be received by the Trustee or
Paying Agent, as the case may be, by 10:00 a.m.  New York City time, on such Redemption Date.  The Paying Agent shall as promptly as
practicable return to the Company any money, with interest, if any, thereon
(subject to the provisions 


21

















 


of Section 7.01(f)), not
required for that purpose because of conversion of Securities.  If such money is then held by the Company in
trust and is not required for such purpose it shall be discharged from such
trust.


Section 3.06. 
Securities Redeemed in Part.  Upon surrender
of a Security that is redeemed in part, the Company shall execute and the
Trustee shall authenticate and deliver to the Holder a new Security in an
authorized denomination equal in principal amount to the unredeemed portion of
the Security surrendered.


Section 3.07. 
Conversion Arrangement on Call for Redemption.  In connection with any redemption of Securities, the
Company may arrange for the purchase and conversion of any Securities called
for redemption by an agreement with one or more investment bankers or other
purchasers to purchase such Securities by paying to the Paying Agent in trust
for the Securityholders, on or before the close of business on the Redemption
Date, an amount that, together with any amounts deposited with the Paying Agent
by the Company for the redemption of the Securities, is not less than the
Redemption Price, together with interest, if any, accrued to the Redemption
Date, of such Securities. 
Notwithstanding anything to the contrary contained in this Article 3,
the obligation of the Company to pay the Redemption Price of such Securities,
including all accrued interest, shall be deemed to be satisfied and discharged
to the extent such amount is so paid by such purchasers.  If such an agreement is entered into, any
Securities 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 immediately prior to the close of business on the Redemption
Date, subject to payment of the above amount as aforesaid.


The Paying Agent shall hold
and pay to the Holders whose Securities are selected for redemption any such
amount paid to it in the same manner as it would moneys deposited with it by
the Company for the redemption of Securities. 
Without the Paying Agent’s prior written consent, no arrangement between
the Company and such purchasers for the purchase and conversion of any
Securities shall increase or otherwise affect any of the powers, duties,
responsibilities or obligations of the Paying Agent as set forth in this
Indenture, and the Company agrees to indemnify the Paying Agent 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
Securities between the Company and such purchasers, including the costs and
expenses incurred by the Paying Agent 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.


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Section 3.08. 
Redemption at Option of the Holder upon a Fundamental Change.  (a)  If a Fundamental Change
shall occur at any time prior to July 1, 2009, each Holder of Securities shall
have the right, at such Holder’s option, to require the Company to redeem such
Holder’s Securities on the date (the “Fundamental Change Repurchase Date”) (or if
such date is not a Business Day, the next succeeding Business Day) that is 45
days after the date of the Company’s notice of such Fundamental Change.  The Securities will be redeemable in part in
multiples of $1,000 of principal amount. 
Such repayment shall be made at 100% of the principal amount (the “Fundamental
Change Redemption Price”) thereof. In each case, the Company shall
also pay to such Holders accrued interest to, but excluding, the Fundamental
Change Repurchase Date on the redeemed Securities; provided that if such
Fundamental Change Repurchase Date is an Interest Payment Date, then the
interest payable on such date shall be paid to the Holder of the Security on
the next preceding the Regular Record Date.


(b)   On or before the tenth day after the
occurrence of a Fundamental Change, the Company, or, at its written request
(which must be received by the Trustee at least five Business Days prior to the
date the Trustee is requested to give notice as described below), the Trustee
in the name of and at the expense of the Company, shall mail or cause to be
mailed to all Holders of record on the date of the Fundamental Change a notice
(the “Company
Notice”) of the occurrence of such Fundamental Change and of the
redemption right at the option of the Holders arising as a result thereof.  Such notice shall be mailed in the manner
and with the effect set forth in Section 3.03. 
The Company shall also deliver a copy of the Company Notice to the
Trustee at such time as it is mailed to the Holders.


Each Company Notice shall
specify the circumstances constituting the Fundamental Change, the Fundamental
Change Repurchase Date, the Fundamental Change Redemption Price at which the
Company shall be obligated to redeem the Securities, the amount of interest
accrued on each Security to, but excluding, the Fundamental Change Repurchase
Date, the latest time by which the Holder must exercise the redemption right
(the “Fundamental
Change Expiration Time”), that the Holder shall have the right to
withdraw any Notes prior to the Fundamental Change Expiration Time, a description
of the procedure which a Holder must follow to exercise such redemption right
and to withdraw any surrendered Notes and the place or places where the Holder
is to surrender such Holder’s Securities.


No failure of the Company to
give the foregoing notices and no defect therein shall limit the Holders’
redemption rights or affect the validity of the proceedings for the repurchase
of the Securities pursuant to this Section 3.08.


(c)   For a Security to be so redeemed at the
option of the Holder, the Paying Agent must receive such Security with the form
entitled “Option to Elect 


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Redemption Upon a
Fundamental Change” on the reverse thereof duly completed (a “Fundamental
Change Redemption Notice”), together with such Security duly
endorsed for transfer, on or before the 30th day after the date of such Company
Notice (or if such 30th day is not a Business Day, the immediately preceding
Business Day).  All questions as to the
validity, eligibility (including time of receipt) and acceptance of any
Security for redemption shall be determined by the Company, whose determination
shall be final and binding.


(d)   Upon receipt by the Company of the
Fundamental Change Redemption Notice specified in Section 3.08(c), the Holder
of the Security in respect of which such Fundamental Change Redemption Notice
was given shall (unless such Fundamental Change Redemption Notice is withdrawn
as specified in the following two paragraphs) thereafter be entitled to receive
solely the Fundamental Change Redemption Price, together with accrued interest
to, but excluding, the Fundamental Change Repurchase Date, with respect to such
Security.  Such Fundamental Change
Redemption Price together with accrued interest to, but excluding, the Fundamental
Change Repurchase Date, shall be paid to such Holder promptly following the
Fundamental Change Repurchase Date. 
Securities in respect of which a Fundamental Change Redemption Notice
has been given by the Holder thereof may not be converted into shares of Common
Stock on or after the date of the delivery of such Fundamental Change
Redemption Notice, unless such Fundamental Change Redemption Notice has first
been validly withdrawn as specified in the following two paragraphs.


A Fundamental Change Redemption
Notice may be withdrawn by the Holder by means of a written notice of
withdrawal delivered to the office of the Paying Agent at any time prior to the
close of business on the Fundamental Change Repurchase Date to which it relates
specifying:


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


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


(iii)  the principal amount, if
any, of such Security which remains subject to the original Fundamental Change
Redemption Notice and which has been or will be delivered for purchase by the
Company.


There shall be no redemption
pursuant to Section 3.08 if there has occurred prior to, on or after, as the
case may be, the giving, by the Holders of such Securities, of the required
Fundamental Change Redemption Notice and is continuing an Event of Default
(other than a default in the payment of the Fundamental Change Redemption
Price, together with accrued interest to, but 


24

















 


excluding, the Fundamental Change Repurchase Date, with respect to such
Securities).


(e)   On or before the Fundamental Change
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 and/or securities, if permitted hereunder, sufficient
to pay the aggregate Fundamental Change Redemption Price, together with accrued
interest to, but excluding, the Fundamental Change Repurchase Date, of all the
Securities or portions thereof which are to be redeemed as of such Fundamental
Change Repurchase Date; provided that if such payment is made on the
Fundamental Change Repurchase Date it must be received by the Trustee or Paying
Agent, as the case may be, by 10:00 a.m. 
New York City time, on such Fundamental Change Repurchase Date.


(f)    Any Security that is to be redeemed upon a
Fundamental Change 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, upon the Company’s
written direction to the Trustee, the Trustee shall authenticate and deliver to
the Holder of such Security, without service charge, a new Security or
Securities, of any authorized denomination as requested by such Holder in
aggregate principal amount equal to, and in exchange for, the portion of the
principal amount of the Security so surrendered which is not redeemed.


(g)   In connection with any offer to redeem
Securities under Section 3.08 hereof the Company shall comply with all Federal
and state securities laws so as to permit the rights and obligations under
Section 3.08 to be exercised in the time and in the manner specified in Section
3.08.


(h)   The Trustee and the Paying Agent shall return
to the Company any cash that remains unclaimed as provided in paragraph 11 of
the Securities, together with interest or dividends, if any (subject to the
provisions of Section 7.01(f)), thereon, held by them for the payment of a
Fundamental Change Redemption Price, together with accrued interest to, but
excluding, the Fundamental Change Repurchase Date; provided, however that to
the extent that the aggregate amount of cash deposited by the Company pursuant
to Section 3.08 exceeds the aggregate Fundamental Change Redemption Price,
together with accrued interest to, but excluding, the Fundamental Change
Repurchase Date, of the Securities or portions thereof which the Company is
obligated to purchase as of the Fundamental Change Repurchase Date then
promptly after the Business Day following the Fundamental Change Repurchase
Date the Trustee and the 


25

















 


Paying Agent shall return
any such excess to the Company together with interest or dividends, if any,
thereon.


ARTICLE 4

COVENANTS


Section 4.01. 
Payment of Securities.  The Company
shall promptly make all payments in respect of the Securities on the dates and
in the manner provided in the Securities or pursuant to this Indenture.  The principal amount, premium, if any,
accrued interest, Redemption Price and Fundamental Change Redemption Price
shall be considered paid on the applicable date due if on such date the Trustee
or the Paying Agent holds on or before 10:00 a.m.  New York City time on such date, in accordance with this
Indenture, money or securities, if permitted hereunder, sufficient to pay all
such amount then due.


The Company shall pay
interest at the rate set forth in paragraph 1 of the Securities and it shall
pay interest on overdue interest at the same rate compounded semiannually (to
the extent that the payment of such interest shall be legally enforceable),
which interest on overdue interest shall accrue from the date such amounts
became overdue.


Section 4.02. 
SEC Reports.  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.


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 in June 2004) an
Officers’ Certificate stating whether or not the signers know of any Default
that occurred during such period.  If
they do, such Officers’ Certificate shall describe the Default and its status.


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 where Securities may be presented or surrendered for payment,
where 


26

















 


Securities
may be surrendered for registration of transfer, exchange, redemption or
conversion and where notices and demands to or upon the Company in respect of
the Securities and this Indenture may be served.  The office of U.S. Bank Trust National Association, an Affiliate
of the Trustee, at 100 Wall Street, Suite 1600, New York, NY 10005, shall be
such office or agency for all of the aforesaid purposes unless the Company
shall maintain some other office or agency for such purposes and shall give
prompt written notice to the Trustee of the location, and any change in the
location, of such other office or agency. 
If at any time the Company shall fail to maintain any such required
office or agency or shall fail to furnish the Trustee with the address thereof,
such presentations, surrenders, notices and demands may be made or served at
the address of the Trustee set forth in Section 11.02.


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


Section 4.06. 
Restriction on Additional Indebtedness. 
The Company shall not, nor shall it permit any Subsidiary to, directly
or indirectly, create, incur, assume, guaranty or otherwise become directly or
indirectly liable for (“Incur”) any additional indebtedness for
borrowed money (other than additional indebtedness that is (i) in an aggregate
principal amount no greater than $35,000,000, (ii) is subordinate in right of
payment to all amounts payable under the Securities and New Convertible Notes,
(iii) does not have a final Stated Maturity prior to the Stated Maturity of the
Securities and the New Convertible Notes, and (iv) has an Average Life at least
equal to the remaining Average Life of the Securities and the New Convertible
Notes) or issue any Disqualified Stock, except that the Company may, and may
permit any Subsidiary to Incur additional indebtedness


(a)   pursuant to any interest rate swap agreement,
interest rate cap agreement or other agreement designed to protect against
fluctuations in interest rates, any foreign exchange forward contract, currency
swap agreement or other agreement designed to protect against fluctuations in
foreign exchange rates, or any commodity or raw material futures contract or
any other agreement designed to protect against fluctuations in raw material
prices, entered into in the ordinary course of business for the purpose of
limiting risks associated with our business and not for speculation;


(b)   with respect to letters of credit and
bankers’ acceptances issued in the ordinary course of business and not
supporting indebtedness for borrowed money, including letters of credit
supporting performance, surety or appeal bonds, 


27

















 


indemnification obligations,
lease or other contractual deposits, or other similar obligations;


(c)   the proceeds of which, less fees and
expenses, are used to repay, redeem or repurchase, at the option of the
Company, Securities, New Notes, or Old Notes, provided that if any Securities
or New Convertible Notes will remain outstanding, the Stated Maturity of the
indebtedness incurred must be at least 120 days after the Stated Maturity of
the Securities and New Convertible Notes;


(d)   indebtedness incurred to refinance, renew or
replace the SGI Japan Secured Debt, or any extensions or amendments of the SGI
Japan Secured Debt, in each case that do not increase the principal amount
thereof; or


(e)   other indebtedness to banks or other
institutional lenders in the form of revolving credit loans or term loans or
the issuance of letters of credit or bankers’ acceptances or the like,
including the Secured Credit Facility as it may be extended, refinanced,
renewed or replaced, provided that the aggregate principal amount of such other
indebtedness at any time outstanding does not exceed $100 million.


Section 4.07.  Restricted Payments.  The
Company shall not


(a)   declare or pay any dividend or make any
distribution on its Capital Stock, other than dividends or distributions paid
in its or its Subsidiaries’ Capital Stock other than Disqualified Stock;


(b)   purchase, redeem or otherwise acquire or
retire for value any of its Capital Stock or Options, other than (1) the
repurchase of unvested restricted stock in connection with voluntary or
involuntary terminations of employment with an aggregate purchase price less
than $100,000 per fiscal year, or (2) repurchases, redemptions, acquisitions or
retirements paid for with its or its Subsidiaries’ Capital Stock other than
Disqualified Stock or Options to buy Capital Stock other than Disqualified
Stock;


(c)   pay any funds to or for the account of, make
any investment in, lease, sell, transfer or otherwise dispose of any assets,
tangible or intangible, to, or participate in, or effect, any transaction with,
any Affiliate except on an arms-length basis on terms at least as favorable to
the Company as could have been obtained from a third-party that was not an
Affiliate (except that the Company may enter into compensatory arrangements
with and pay such salary, bonus or other compensation to employees, officers
and directors as have been approved by a committee of the Company’s Board of
Directors comprised of independent directors); or


28

















 


(d)   repay, redeem, repurchase, defease or
otherwise acquire or retire for value, any indebtedness subordinated in right
of payment to the Securities or the New Convertible Notes except a payment of
interest or principal when due.


ARTICLE 5

SUCCESSOR CORPORATION


Section 5.01. 
When Company May Merge or Transfer Assets.  Company shall not consolidate with or merge with or
into any other Person (other than in a merger or consolidation in which the
Company is the surviving Person) or convey, transfer or lease its properties
and assets substantially as an entirety to any Person, unless:


(a)   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 a corporation, partnership or
trust organized and validly existing under the laws of the United States or any
State thereof or the District of Columbia and (ii) shall expressly assume, by
an indenture supplemental hereto, executed and delivered to the Trustee, in
form satisfactory to the Trustee, all of the obligations of the Company under
the Securities and this Indenture;


(b)   immediately after giving effect to such
transaction, no Default shall have occurred 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 and that all conditions
precedent herein provided for relating to such transaction have been satisfied.


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 (i) a lease of its
properties and assets substantially as an entirety and (ii) obligations the
Company may have under a supplemental indenture pursuant to Section 10.14, the
Company shall be discharged from all obligations and covenants under this
Indenture and the Securities.


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ARTICLE 6

DEFAULTS AND REMEDIES


Section 6.01. 
Events of Default.  “Event of
Default” occurs if:


(a)   the Company defaults in the payment of the
principal amount of, premium, if any, Redemption Price or Fundamental Change
Redemption Price on any Security when the same becomes due and payable at its
Stated Maturity, upon redemption, upon declaration or otherwise;


(b)   the Company defaults in the payment of any
installment of interest upon any of the Securities as and when the same shall
become due and payable, and continuance of such default for 30 days;


(c)   the Company fails to comply with any of its
agreements in the Securities or this Indenture (other than those referred to in
clause (a) or (b) above and those set forth in Section 2.15(a) and (b) hereof,
as to which the exclusive remedy is set forth in Section 2.15) and such failure
continues for 60 days after receipt by the Company of a Notice of Default;


(d)   a decree or order by a court having
jurisdiction in the premises shall have been entered adjudging the Company a
bankrupt or insolvent, or approving as properly filed a petition seeking
reorganization of the Company under any Bankruptcy Law, and such decree or
order shall have continued undischarged and unstayed for a period of 60
consecutive days; or a decree or order of a court having jurisdiction in the
premises of the appointment of a receiver or liquidator or trustee or assignee
in bankruptcy or insolvency of the Company or of its property, or for the
winding-up or liquidation of its affairs, shall have been entered, and such
decree or order shall have remained in force undischarged and unstayed of a
period of 60 consecutive days; or


(e)   the Company shall institute proceedings to be
adjudicated a voluntary bankrupt, or shall consent to the filing of a
bankruptcy proceeding against it, or shall file a petition or answer or consent
seeking reorganization under any Bankruptcy Law, or shall consent to the filing
of any such petition, or shall consent to the appointment of a receiver or
liquidator or trustee or assignee in bankruptcy or insolvency of it or of its
property or shall make an assignment for the benefit of creditors, or shall
admit in writing its inability to pay its debts generally as they become due.


(f)    an event of default under the Secured Credit
Facility, the Old Notes Indenture or the New Convertible Indenture shall have
occurred which results in the principal amount and accrued interest on that
debt becoming immediately due and payable.


30

















 


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


A Default under (c) above is
not an Event of Default until the Trustee notifies the Company, or the Holders
of at least 25% in aggregate principal amount of the Securities 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) above after actual receipt of such notice (a “Notice of
Default”).  Any such notice
must specify the Default, demand that it be remedied and state that such notice
is a Notice of Default.


Section 6.02. 
Acceleration.  If an Event of
Default (other than an Event of Default specified in Section 6.01(d) or (e))
occurs and is continuing, the Trustee by notice to the Company, or the Holders
of at least 25% in aggregate principal amount of the Securities at the time
outstanding by notice to the Company and the Trustee, may declare the principal
amount and premium, if any, on all the Securities and the interest accrued
thereon to be immediately due and payable. 
Upon such a declaration, such principal amount, premium, if any, and
interest accrued thereon shall be due and payable immediately.  If an Event of Default specified in Section
6.01(d) or (e) occurs and is continuing, the principal amount and premium, if
any, on all the Securities and the interest accrued thereon shall become and be
immediately due and payable without any declaration or other act on the part of
the Trustee or any Securityholders.  The
Holders of a majority in aggregate principal amount of the Securities at the
time outstanding, by notice to the Trustee (and without notice to any other
Securityholder) may rescind 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
amount, premium, if any, and interest accrued thereon that has become due
solely as a result of acceleration and if all amounts due to the Trustee under
Section 7.07 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 amount and premium, if any, on the
Securities and interest accrued thereon or to enforce the performance of any
provision of the Securities or this Indenture.


The Trustee may maintain a
proceeding even if the Trustee does not possess any of the Securities or does
not produce any of the Securities in the proceeding.  A delay or omission by the Trustee or any Securityholder in
exercising any right or remedy accruing upon an Event of Default shall not
impair the right or remedy or constitute a waiver of, or acquiescence in, the
Event of 


31

















 


Default.  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 Securities at the time
outstanding, by notice to the Trustee (and without notice to any other
Securityholder), may waive an existing Default and its consequences except (1)
an Event of Default described in Section 6.01(a) or 6.01(b), (2) a Default in
respect of a provision that under Section 9.02 cannot be amended without the
consent of each Securityholder affected, or (3) a Default that constitutes a
failure to convert any Security 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.


Section 6.05. 
Control by Majority.  The Holders of
a majority in aggregate principal amount of the Securities 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 Securityholders or would involve the Trustee in personal
liability unless the Trustee is offered indemnity satisfactory to it.


Section 6.06. 
Limitation on Suits.  A
Securityholder may not pursue any remedy with respect to this Indenture or the
Securities unless:


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


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


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


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


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


32

















 


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


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, premium, if any, accrued
interest, Redemption Price or Fundamental Change Redemption Price in respect of
the Securities held by such Holder, on or after the respective due dates
expressed in the Securities or any Redemption Date or Fundamental Change
Repurchase Date, as the case may be, and to convert the Securities 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 each such Holder.


Section 6.08. 
Collection Suit by Trustee.  If an Event of
Default described in Section 6.01(a) or 6.01(b) 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 Securities
and the amounts provided for in Section 7.07.


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
Securities or the property of the Company or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal amount, premium,
if any, accrued interest, Redemption Price or Fundamental Change Redemption
Price in respect of the Securities shall then be due and payable as therein
expressed or by declaration or otherwise and irrespective of whether the
Trustee shall have made any demand on the Company for the payment of 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, premium, if any, accrued interest, Redemption
Price or Fundamental Change Redemption Price 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) 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;


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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 7.07.


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 Securities or the rights of any Holder
thereof, or to authorize the Trustee to vote in respect of the claims of any Holder
in any such proceeding.


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:


First:  to the Trustee for amounts due under Section
7.07;


Second:  to Securityholders for amounts due and
unpaid on the Securities for the principal amount, premium, if any, accrued
interest, Redemption Price or Fundamental Change Redemption Price, as the case
may be, ratably, without preference or priority of any kind, according to such amounts
due and payable on the Securities; and


Third:  the balance, if any, to the Company.


The Trustee may fix a record
date and payment date for any payment to Securityholders pursuant to this
Section 6.10.  At least 15 days before
such record date, the Company shall mail to each Securityholder and the Trustee
a notice that states the record date, the payment date and 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, 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
Securities at the time outstanding.


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 


34

















 


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, premium, if
any, accrued interest, Redemption Price or Fundamental Change Redemption Price
in respect of Securities 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 laws 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 of Trustee.  (a)  If
an Event of Default has occurred and is continuing, the Trustee shall exercise
the rights and powers vested in it by this Indenture and use the same degree of
care and skill in its exercise as a prudent man would exercise or use under the
circumstances in the conduct of his own affairs.


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


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


(ii)   in the absence of bad faith
on its part, the Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Trustee and conforming to the
requirements of this Indenture. However, the Trustee shall examine the
certificates and opinions to determine whether or not they conform to the
requirements of this Indenture.


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


(i)    this paragraph (c) does not
limit the effect of  paragraph (b) of
this Section 7.01;


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


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(iii)  the Trustee shall not be
liable with respect to any action it takes or omits to take in good faith in
accordance with a direction received by it pursuant to Section 6.05.


(d)   Every provision of this Indenture that in any
way relates to the Trustee is subject to paragraphs (a), (b), (c) and (e) of
this Section 7.01.


(e)   The Trustee may refuse to perform any duty or
exercise any right or power or extend or risk its own funds or otherwise incur
any financial liability unless it receives indemnity satisfactory to it against
any loss, liability or expense.


(f)    Money held by the Trustee in trust hereunder
need not be segregated from other funds except to the extent required by law.


Section 7.02. 
Rights of Trustee.  (a) The Trustee
may rely on any document believed by it to be genuine and to have been signed
or presented by the proper person.  The
Trustee need not investigate any fact or matter stated in the document.


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


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


(d)   Subject to the provisions of Section 7.01(c),
the Trustee shall not be liable for any action it takes or omits to take in
good faith which it believes to be authorized or within its rights or powers.


Section 7.03. 
Individual Rights of Trustee.  The Trustee in
its individual or any other capacity may become the owner or pledgee of
Securities and may otherwise deal with the Company or its Affiliates with the
same rights it would have if it were not Trustee.  Any Paying Agent, Registrar, Conversion Agent or co-registrar may
do the same with the like rights. 
However, the Trustee must comply with Section 7.10.


Section 7.04. 
Trustee’s Disclaimer.  The Trustee
makes no representation as to the validity or adequacy of this Indenture or the
Securities, it shall not be accountable for the Company’s use of the proceeds
from the Securities, it shall not be responsible for any statement in the
Prospectus for the Securities or in the Indenture of the Securities (other than
its certificate of authentication), the acts of an prior Trustee hereunder, or
the determination as to which beneficial owners are entitled to receive any
notices hereunder.


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Section 7.05. 
Notice of Defaults.  If a Default
occurs and is continuing and if it is known to the Trustee, the Trustee shall
give to each Securityholder notice of the Default within 90 days after it
occurs.  Except in the case of a Default
described in Section 6.01(a) or 6.01(b), the Trustee may withhold the notice if
and so long as a committee of its Trust Officers in good faith determines that
withholding the notice is in the interests of Securityholders.  The Trustee shall not give notice of a
Default pursuant to Section 6.01(c) until at least sixty (60) days have passed
since its occurrence.


Section 7.06. 
Disqualification; Conflicting Interests.  If the Trustee has or shall acquire any conflicting
interest within the meaning of the TIA, it shall either eliminate such
conflicting interest or resign, to the extent and in the.  manner provided by, and subject to the provisions
of the TIA and this Indenture.


Section 7.07.  Compensation and Indemnity.  The
Company agrees:


(a)   to pay to the Trustee from time to time
reasonable compensation for all services rendered by it hereunder (which
compensation shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust);


(b)   to reimburse the Trustee upon its request for
all reasonable expenses, disbursements and advances incurred or made by the
Trustee in accordance with any provision of this Indenture (including the
reasonable compensation and the expense, advances and disbursements of its
agents and counsel), except any such expense, disbursement or advance as may be
attributable to its negligence or bad faith; and


(c)   to indemnify the 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 trust, including the costs and expenses of defending
itself against any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder.


To secure the Company’s
payment obligations in this Section 7.07, the Trustee shall have a lien prior
to the Securities on all money or property held or collected by the Trustee,
except that held in trust to pay the principal amount, premium, if any, accrued
interest, Redemption Price or Fundamental Change Redemption Price, as the case
may be, on particular Securities.


The Company’s payment
obligations pursuant to this Section 7.07 shall survive the discharge of this
Indenture.  When the Trustee incurs
expenses after the occurrence of a Default specified in Section 6.01(d) or (e),
the expenses are intended to constitute expenses of administration under any
Bankruptcy Law.


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Section 7.08. 
Replacement of Trustee.  The Trustee may
resign by so notifying the Company; provided, however, no such resignation
shall be effective until a successor Trustee has accepted its appointment
pursuant to this Section 7.08.  The
Holders of a majority in aggregate principal amount of the Securities at the
time outstanding may remove the Trustee by so notifying the Trustee and may
appoint a successor Trustee.  The
Company shall remove the Trustee if:


(a)   the Trustee fails to comply with, or ceases
to be eligible under, Section 7.10;


(b)   the Trustee is adjudged bankrupt or
insolvent;


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


(d)   the Trustee otherwise becomes incapable of
acting.


If the Trustee resigns or is
removed or if a vacancy exists in the office of Trustee for any reason, the
Company shall promptly appoint, by resolution of its Board of Directors, a
successor Trustee.


A successor Trustee shall
deliver a written acceptance of its appointment to the retiring Trustee and to
the Company.  Thereupon the resignation
or removal of the retiring Trustee shall become effective, and the successor
Trustee shall have all the rights, powers and duties of the Trustee under this
Indenture.  The successor Trustee shall
mail a notice of its succession to Securityholders.  The retiring Trustee shall promptly transfer all property held by
it as Trustee to the successor Trustee, subject to the lien provided for in
Section 7.07.


If a successor Trustee does
not take office within 30 days after the retiring Trustee resigns or is
removed, the retiring Trustee, the Company or the Holders of a majority in
aggregate principal amount of the Securities at the time outstanding may
petition any court of competent jurisdiction for the appointment of a successor
Trustee.


If the Trustee fails to
comply with Section 7.10, any Securityholder may petition any court of
competent jurisdiction for the removal of the Trustee and the appointment of a
successor Trustee.


Section 7.09. 
Successor Trustee by Merger.  If the Trustee
consolidates with, merges or converts into, or transfers all or substantially
all its corporate trustee business or assets (including the administration of
the trust created by this Indenture) to, another corporation, the resulting,
surviving or transferee corporation without any further act shall be the
successor Trustee.


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Section 7.10. 
Eligibility; Disqualification.  The Trustee (or
if a Trustee is a member of a bank holding company, its bank holding company)
shall have a combined capital and surplus of at least $50,000,000 as set forth
in its most recent published annual report of conditions.  If at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section, it shall resign
immediately in the manner and with the effect hereinafter specified in this Article.


Section 7.11. 
Preferential Collection of Claims Against Company.  If and when the Trustee
shall be or become a creditor of the Company (or any other obligor upon the
Securities), the Trustee shall be subject to the provisions of the TIA
regarding the collection of claims against the Company (or any such other
obligor).


Section 7.12. 
Reports by Trustee.


(a)   The Trustee shall transmit to Holders such
reports concerning the Trustee and its actions under this Indenture as may be
required pursuant to the TIA at the times and in the manner provided pursuant
thereto.


(b)   A copy of each such report shall, at the time
of such transmission to Holders, be filed by the Trustee with each stock
exchange or market upon which the Securities are listed, with the Commission
and with the Company.  The Company will
notify the Trustee when the Securities are listed on any stock exchange or
market.


ARTICLE 8

DISCHARGE OF INDENTURE


Section 8.01. 
Discharge of Liability on Securities. 
When (i) the Company delivers to the Trustee all outstanding Securities
(other than Securities replaced pursuant to Section 2.07) for cancellation or
(ii) all outstanding Securities have become due and payable and the Company
deposits with the Trustee cash and/or securities, as permitted by the terms
hereof, sufficient to pay at Stated Maturity the principal amount of all
outstanding Securities (other than Securities replaced pursuant to Section
2.07), and if in either case the Company pays all other sums payable hereunder
by the Company, then this Indenture shall, subject to Section 7.07, cease to be
of further effect.  The Trustee shall
join in the execution of a document prepared by the Company acknowledging
satisfaction and discharge of this Indenture on demand of the Company
accompanied by an Officers’ Certificate and Opinion of Counsel and at the cost
and expense of the Company.


Section 8.02. 
Repayment to the Company.  The Trustee and
the Paying Agent shall return to the Company upon written request any money or
securities held by them for the payment of any amount with respect to the
Securities that 


39

















 


remains
unclaimed for two years, provided, however, that the Trustee or such Paying
Agent, before being required to make any such return, shall at the expense of
the Company cause to be published once in a newspaper of general circulation in
The City of New York or mail to each such Holder notice that such money or
securities remains unclaimed and that, after a date specified therein, which
shall not be less than 30 days from the date of such publication or mailing,
any unclaimed money or securities then remaining will be returned to the
Company.  After return to the Company,
Holders entitled to the money or securities must look to the Company for
payment as general creditors unless an applicable abandoned property law
designates another person.


ARTICLE 9

AMENDMENTS


Section 9.01. 
Without Consent Of Holders.  The Company and
the Trustee may amend this Indenture or the Securities without the consent of
any Securityholder:


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


(b)   to comply with Article 5 or Section 10.14;


(c)   to provide for uncertificated Securities in
addition to certificated Securities so long as such uncertificated Securities
are in registered form for purposes of the Internal Revenue Code of 1986, as
amended;


(d)   to make any change that does not adversely
affect the right of any Securityholder; or


(e)   to make any change to comply with the TIA, or
any amendment thereto, or to comply with any requirement of the SEC in connection
with the qualification, if any, of the Indenture under the TIA.


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 Securities at the time outstanding, the Company and the Trustee
may amend this Indenture or the Securities. 
However, without the consent of each Securityholder affected, an
amendment or supplement to this Indenture or the Securities may not:


(a)   make any change to the manner or rate of
accrual in connection with interest, reduce the rate of interest referred to in
paragraph 1 of the Securities or extend the time for payment of interest on any
Security;


(b)   reduce the Redemption Price or extend the
Stated Maturity;


40

















 


(c)   reduce the Redemption Price or Fundamental
Change Redemption -Price of any Security;


(d)   make any Security payable in money or
securities other than that stated in the Security;


(e)   make any change in Section 6.04, Section 6.07
or this Section 9.02, except to increase any such percentage;


(f)    make any change that adversely affects the
right to convert any Security; or


(g)   make any change that adversely affects the
right to require the Company to redeem the Securities upon a Fundamental Change
in accordance with the terms thereof and this Indenture;


and
no such amendment or supplement to this Indenture may reduce the aforesaid
percentage of Securities whose Holders must consent to any such amendment or
supplemental indenture, without the consent of the Holders of all the
Securities then outstanding.


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 or supplemental indenture, but it
shall be sufficient if such consent approves the substance thereof.


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 TIA.  Every
supplemental indenture executed pursuant to this Article shall comply with the
TIA as then in effect.


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


Section 9.05. 
Notation on or Exchange of Securities. 
Securities authenticated and delivered after the execution of any
supplemental indenture 


41

















 


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 supplemental
indenture.  If the Company shall so
determine, new Securities so modified as to conform, in the opinion of the
Trustee and the Board of Directors, to any such supplemental indenture may be
prepared and executed by the Company and authenticated and delivered by the
Trustee in exchange for outstanding Securities,


Section 9.06. 
Trustee to Sign Supplemental Indentures.  The Trustee shall sign any supplemental indenture
authorized pursuant to this Article 9 if the amendment does not adversely
affect the rights, duties, liabilities or immunities of the Trustee.  If it does, the Trustee may, but need not,
sign such supplemental indenture.  In
signing such 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 supplemental indenture is authorized or permitted by this Indenture.


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


ARTICLE 10

CONVERSION


Section 10.01. 
Conversion Privilege.  A Holder of a
Security may convert such Security into Common Stock at any time during the
period stated in paragraph 7 of the Securities.  The conversion price per share of Common Stock (the “Conversion
Price”) shall be that set forth in paragraph 7 in the Securities,
subject to adjustment as herein set forth and subject to reduction as set forth
in Section 2.15.


A Holder may convert a
portion of the principal amount of a Security if the portion is $1,000 or a
multiple of $1,000.  Provisions of this
Indenture that apply to conversion of all of a Security also apply to conversion
of a portion of a Security.


Section 10.02. 
Conversion Procedure.  To convert a
Security a Holder must satisfy the requirements in paragraph 7 of the
Securities.  The date on which the
Holder satisfies all those requirements is the conversion date (the “Conversion
Date”).  Securities
surrendered for conversion during the period from the close of business on any
Regular Record Date to the close of business on the Trading Day immediately
prior to the next succeeding Interest Payment Date 


42

















 


(the
“Interest
Period”) shall (except in the case of Securities or portions thereof
which have been called for redemption on a Redemption Date within such Interest
Period) be accompanied by payment in New York Clearing House funds or other
funds acceptable to the Company of an amount equal to the interest payable on
such Interest Payment Date on the principal amount of Securities being
surrendered for conversion.  Subject to
the provisions of Section 3.07 relating to the payment of Defaulted Interest by
the Company, the interest payment with respect to a Security surrendered for
conversion during the Interest Period (except in the case of Securities or
portions thereof which have been called for redemption on a Redemption Date within
the Interest Period) shall be payable on such Interest Payment Date to the
Holder of such Securities at the close of business on such Regular Record Date
notwithstanding the conversion of such Securities during such Interest Period.


As soon as practicable after
the Conversion Date, the Company shall deliver to the Holder, through the
Conversion Agent, a certificate for the number of full shares of Common Stock
issuable upon the conversion and cash in lieu of any fractional share
determined pursuant to Section 10.03. 
The person in whose name the certificate is registered shall be treated
as a stockholder of record on and after the Conversion Date; provided, however,
that no surrender of a Security on any date when the stock transfer books of
the Company shall be closed shall be effective to constitute the person or
persons entitled to receive the shares of Common Stock upon such conversion as
the record holder or holders of such shares of Common Stock on such date, but
such surrender shall be effective to constitute the person or persons entitled
to receive such shares of Common Stock as the record holder or holders thereof
for all purposes at the close of business on the next succeeding day on which
such stock transfer books are open; such conversion shall be at the Conversion
Price in effect on the date that such Security shall have been surrendered for
conversion, as if the stock transfer books of the Company had not been
closed.  Upon conversion of a Security,
such person shall no longer be a Holder of such Security.


No payment or adjustment
will be made for dividends on or other distribution with respect to any Common
Stock except as provided in this Article 10.


If the Holder converts more
than one Security at the same time, the number of shares of Common Stock
issuable upon the conversion shall be based on the total principal amount of
the Securities converted.


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


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If the last day on which a
Security may be converted is a Legal Holiday in a place where a Conversion
Agent is located, the Security may be surrendered to that Conversion Agent on
the next succeeding day that it is not a Legal Holiday.


Section 10.03. 
Fractional Shares.  The Company
will not issue a fractional share of Common Stock upon conversion of a
Security.  Instead, the Company will
deliver cash for the current market value of the fractional share.  The current market value of a fractional
share shall be determined to the nearest 1/10,000th of a share by multiplying
the last reported sale price (determined as set forth in the definition of
Current Market Price), on the last Trading Day prior to the Conversion Date, of
a full share by the fractional amount and rounding the product to the nearest
whole cent.


Section 10.04. 
Taxes on Conversion.  If a Holder
converts a Security, the Company shall pay any documentary, stamp or similar
issue or transfer tax due on the issue of shares of Common Stock upon the
conversion.  However, the Holder shall
pay any such tax which is due because the Holder requests the shares to be
issued in a name other than the Holder’s name. 
The Conversion Agent may refuse to deliver the certificates representing
the Common Stock being issued in a name other than the Holder’s name until the
Conversion Agent receives a sum sufficient to pay any tax which will be due
because the shares are to be issued in a name other than the Holder’s
name.  Nothing herein shall preclude any
tax withholding required by law or regulations.


Section 10.05. 
Company to Provide Stock.  The Company
shall, prior to issuance of any Securities hereunder, and from time to time as
may be necessary, reserve out of its authorized but unissued Common Stock a
sufficient number of shares of Common Stock to permit the conversion of the
Securities.


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


The Company will endeavor
promptly to comply with all Federal and state securities laws regulating the
offer and delivery of shares of Common Stock upon conversion of Securities, if
any, and will endeavor promptly, if permitted by the rules of such exchange,
over-the-counter market or other market, to list or cause to have quoted such
shares of Common Stock on each national Securities exchange or in the
over-the-counter market or such other market on which the Common Stock is then
listed or quoted.


Section 10.06. 
Adjustment for Change in Capital Stock. 
In case the Company shall (i) pay a dividend, or make a distribution,
in shares of its Common Stock, on its Common Stock, (ii) subdivide its
outstanding Common Stock into a 


44

















 


greater
number of shares, or (iii) combine its outstanding Common Stock into a smaller
number of shares, the Conversion Price in effect immediately prior thereto
shall be adjusted so that the holder of any Security thereafter surrendered for
conversion shall be entitled to receive the number of shares of Common Stock of
the Company which he would have owned or have been entitled to receive after
the happening of any of the events described above had such Security been converted
immediately prior to the happening of such event.  If any dividend or distribution of the type described in clause
(i) above is 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.  An
adjustment made pursuant to this Section 10.06 shall become effective
immediately after the record date in the case of a dividend and shall become
effective immediately after the effective date in the case of subdivision or
combination.


Section 10.07. 
Adjustment for Rights Issue.  In case the
Company shall issue rights or warrants to all holders of its Common Stock
entitling them (for a period expiring within 45 days after the record date
mentioned below) to subscribe for or purchase Common Stock at a price per share
less than the Current Market Price per share of Common Stock at the record date
for the determination of stockholders entitled to receive such rights or
warrants, the Conversion Price in effect immediately prior thereto shall be
adjusted so that the same shall equal the Conversion Price determined by
multiplying the Conversion Price in effect immediately prior to the date of
issuance of such rights or warrants by a fraction of which the numerator shall
be the number of shares of Common Stock outstanding on the date of issuance of
such rights or warrants plus the number of shares which the aggregate offering
price of the total number of shares so offered would purchase at such Current
Market Price, and of which the denominator shall be the number of shares of
Common Stock outstanding on the date of issuance of such rights or warrants
plus the number of additional shares of Common Stock offered for subscription
or purchase.  Such adjustment shall be
made successively whenever any such rights or warrants are issued, and shall
become effective immediately after the opening of business on the day following
the record date for the determination of the stockholders entitled to receive
such rights or warrants.  To the extent
that shares of Common Stock are not delivered after the expiration 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 delivery of only the
number of shares of Common Stock actually delivered.  If 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 record date 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 


45

















 


Market
Price, and in determining the aggregate offering price of such shares of Common
Stock, there shall be taken into account any consideration received by the
Company for such rights or warrants, the value of such consideration, if other
than cash, to be determined by the Board of Directors.


Section 10.08. 
Adjustment for Other Distributions. 
(a) In case the Company shall distribute to all holders of its Common
Stock (excluding any distribution in connection with the liquidation,
dissolution or winding up of the Company, whether voluntary or involuntary) any
shares of any class of capital stock of the Company (other than Common Stock)
or evidences of its indebtedness or assets (other than cash) or rights or
warrants to subscribe for or purchase any of its securities (excluding those
referred to in Section 10.07 hereof) (any of the foregoing hereinafter in this
Section 10.08(a) called the “Distributed Securities”), then, in each
case, the Conversion Price shall be adjusted so that the same shall equal the
Conversion Price determined by multiplying the Conversion Price in effect
immediately prior to the date of such distribution by a fraction of which the
numerator shall be the Current Market Price per share of the Common Stock on
the record date mentioned below less the fair market value on such record date
(as determined by the Board of Directors of the Company, whose determination
shall be conclusive, and described in a certificate filed with the Trustee) of
the Distributed Securities so distributed applicable to one share of Common
Stock, and the denominator shall be the Current Market Price per share of the
Common Stock on such record date.  Such
adjustment shall become effective immediately after the record date for the
determination of stockholders entitled to receive such distribution.  Notwithstanding the foregoing, in the event
the then fair market value (as so determined) of the portion of the Distributed
Securities so distributed applicable to one share of Common Stock is equal to
or greater than the Current Market Price of the Common Stock on the relevant
record date, in lieu of the foregoing adjustment, adequate provision shall be
made so that each Securityholder shall have the right to receive upon
conversion the amount of Distributed Securities such Holder would have received
had such Holder converted each Security on such record date.  In the event that such distribution is not
so paid or made, the Conversion Price shall again be adjusted to the Conversion
Price which would then be in effect if such distribution had not been
declared.  If the Board of Director
determines the fair market value of any distribution for purposes of this
Section 10.08(a) by reference to the actual or when issued trading market for
any securities, it must in doing so consider the prices in such market over the
same period used in computing the Current Market Price of the Common Stock.


Notwithstanding the
foregoing provisions of this Section 10.08(a), no adjustment shall be made
thereunder for any distribution of Distributed Securities if the Company makes
proper provision so that each Holder of a Security who converts such Security
(or any portion thereof) after the record date for such distribution shall be
entitled to receive upon such conversion, in addition to the 


46

















 


shares
of Common Stock issuable upon such conversion, the amount and kind of
Distributed Securities that such Holder would have been entitled to receive if
such Holder had, immediately prior to such record date, converted such Security
into Common Stock, provided that, with respect to any
Distributed Securities that are convertible, exchangeable or exercisable, the
foregoing provision shall only apply to the extent (and so long as) the
Distributed Securities receivable upon conversion of such Security would be
convertible, exchangeable or exercisable, as applicable, without any loss of
rights or privileges for a period of at least 60 days following conversion of
such Security.


(b)   In case the Company shall, by dividend or
otherwise, distribute to all holders of its Common Stock cash (excluding (x)
any quarterly cash dividend on the Common Stock to the extent the aggregate cash
dividend per share of Common Stock in any fiscal quarter does not exceed the
greater of (A) the amount per share of Common Stock of the next preceding
quarterly cash dividend on the Common Stock to the extent such preceding
quarterly dividend did not require any adjustment of the Conversion Price
pursuant to this Section 10.08(b) (as adjusted to reflect subdivisions or
combinations of the Common Stock), and (B) 3.75% of the average of the last
reported sales prices of the Common Stock (determined as provided in the
definition of Current Market Price) during the ten Trading Days next preceding
the date of declaration of such dividend and (y) any dividend or distribution
in connection with the liquidation, dissolution or winding up of the Company,
whether voluntary or involuntary), then, in such case, unless the Company
elects to reserve such cash for distribution to the holders of the Securities
upon the conversion of the Securities so that any such holder converting
Securities will receive upon such conversion, in addition to the shares of
Common Stock to which such holder is entitled, the amount of cash which such
holder would have received if such holder had, immediately prior to the record
date for such distribution of cash, converted its Securities into Common Stock,
the Conversion Price shall be decreased so that the same shall equal the
Conversion Price determined by multiplying the Conversion Price in effect
immediately prior to the record date by a fraction of which the numerator shall
be the Current Market Price of the Common Stock on the record date less the
amount of cash so distributed (and not excluded as provided above) applicable
to one share of Common Stock, and the denominator shall be such Current Market
Price of the Common Stock, such decrease to be effective immediately prior to
the opening of business on, the day following the record date; provided,
however, that in the event the portion of the cash so distributed applicable to
one share of Common Stock is equal to or greater than the Current Market Price
of the Common Stock on the record date, in lieu of the foregoing adjustment,
adequate provision shall be made so that each Securityholder shall have the
right to receive upon conversion the amount of cash such holder would have
received had such holder converted each Security on the record date.  If such dividend or distribution is not so
paid or made, the Conversion Price shall again be adjusted to be the Conversion
Price 


47

















 


which
would then be in effect if such dividend or distribution had not been
declared.  If any adjustment is required
to be made as set forth in this Section 10.08(b) as a result of a distribution
that is a quarterly dividend, such adjustment shall be based upon the amount by
which such distribution exceeds the amount of the quarterly cash dividend
permitted to be excluded pursuant hereto. 
If an adjustment is required to be made as set forth in this Section
10.08(b) above as a result of a distribution that is not a quarterly dividend,
such adjustment shall be based upon the full amount of the distribution.


(c)   In case a tender or exchange offer made by
the Company or any Subsidiary of the Company for all or any portion of the
Common Stock shall expire and such tender or exchange offer shall involve the
payment by the Company or such Subsidiary of consideration per share of Common
Stock having a fair market value (as determined by the Board of Directors or,
to the extent permitted by applicable law, a duly authorized committee thereof,
whose determination shall be conclusive, and described in a resolution of the
Board of Directors or such duly authorized committee thereof, as the case may
be, at the last time (the “Expiration Time”) tenders or exchanges may
be made pursuant to such tender or exchange offer (as it shall have been
amended)) that exceeds the Current Market Price of the Common Stock on the
Trading Day next succeeding the Expiration Time, the Conversion Price shall be
decreased so that the same shall equal the Conversion Price determined by
multiplying the Conversion Price in effect immediately prior to the Expiration
Time by a fraction of which the numerator shall be the number of shares of
Common Stock outstanding (including any tendered or exchanged shares) on the
Expiration Time multiplied by the Current Market Price of the Common Stock on
the Trading Day next succeeding the Expiration Time, and 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 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 decrease to 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 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 effect if such
tender or exchange offer had not been made.


(d)   In case of a tender or exchange offer made by
a Person other than the Company or any Subsidiary for an amount which increases
the offeror’s 


48

















 


ownership
of Common Stock to more than 25% of the Common Stock outstanding and shall
involve the payment by such person of consideration per share of Common Stock
having a fair market value (as determined by the Board of Directors, whose
determination shall be conclusive, and described in a resolution of the Board
of Directors) at the last time (the “Offer Expiration Time”) tenders or
exchanges may be made pursuant to such tender or exchange offer (as it shall
have been amended) that exceeds the Current Market Price of the Common Stock on
the Trading Day next succeeding the Offer Expiration Time, and in which, as of
the Offer Expiration Time the Board of Directors is not recommending rejection
of the offer, the Conversion Price shall be decreased so that the same shall
equal the Conversion Price determined by multiplying the Conversion Price in
effect immediately prior to the Offer Expiration Time by a fraction of which
the numerator shall be the number of shares of Common Stock outstanding
(including any tendered or exchanged shares) on the Offer Expiration Time
multiplied by the Current Market Price of the Common Stock on the Trading Day
next succeeding the Offer Expiration Time, and 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 or exchange offer) of all shares
validly tendered or exchanged and not withdrawn as of the Offer Expiration Time
(the shares deemed so accepted, up to any such maximum, being referred to as
the “Accepted
Purchased Shares”) and (y) the product of the number of shares of
Common Stock outstanding (less any Accepted Purchased Shares) on the Offer
Expiration Time and the Current Market Price of the Common Stock on the Trading
Day next succeeding the Expiration Time, such decrease to become effective
immediately prior to the opening of business on the day following the Offer
Expiration Time.  In the event that such
Person is obligated to purchase shares pursuant to any such tender or exchange
offer, but such Person is permanently prevented by applicable law from
effecting any such purchases or all such purchases are rescinded, the
Conversion Price shall again be adjusted to be the Conversion Price which would
then be in effect if such tender or exchange offer had not been made.  Notwithstanding the foregoing, the
adjustment described in this Section 10.08(d) shall not be made if as of the
Offer Expiration Time, the offering documents with respect to such offer
disclose a plan or intention to cause the Company to engage in any transaction
described in Article 5.


Section 10.09. 
When Adjustment May be Deferred. 
No adjustment in the Conversion Price need be made unless the
adjustment would require an increase or decrease of at least 1% in the
Conversion Price.  Any adjustments that
are not made shall be carried forward and taken into account in any subsequent
adjustment.


All calculations under this
Article 10 shall be made to the nearest cent or to the nearest 1/10,000th of a
share, as the case may be.


49

















 


Section 10.10. 
When no Adjustment Required.  No adjustment
need be made for rights to purchase Common Stock pursuant to a Company plan for
reinvestment of dividends or interest.


No adjustment need be made
for a change in the par value or no par value of the Common Stock.


To the extent the Securities
become convertible into cash, assets, property or securities (other than
capital stock of the Company), no adjustment need be made thereafter as to the
cash, assets, property or such securities. 
Interest will not accrue on the cash.


Section 10.11. 
Notice of Adjustment.  Whenever the
Conversion Price is adjusted, the Company shall promptly mail to Securityholders
a notice of the adjustment.  The Company
shall file with the Trustee and the Conversion Agent such notice.  The certificate shall, absent manifest
error, be conclusive evidence that the adjustment is correct.  Neither the Trustee nor any Conversion Agent
shall be under any duty or responsibility with respect to any such certificate
except to exhibit the same to any Holder desiring inspection thereof.


Section 10.12. 
Voluntary Decrease.  The Company may
make such decreases in the Conversion Price, in addition to those required by
Sections 10.06, 10.07 and 10.08, 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 decrease the Conversion
Price by any amount for any period of time if the period is at least 20 days,
the decrease is irrevocable during the period and the Board of Directors shall
have made a determination that such decrease would be in the best interests of
the Company, which determination shall be conclusive.  Whenever the Conversion Price is so decreased, the Company shall
mail to Securityholders and file with the Trustee and the Conversion Agent a
notice of the decrease.  The Company
shall mail the notice at least 15 days before the date the decreased Conversion
Price takes effect.  The notice shall
state the decreased Conversion Price and the period it will be in effect.


Section 10.13.  Notice Of Certain Transactions. 
If:


(a)   the Company makes any distribution or
dividend that would require an adjustment in the Conversion Price pursuant to
Section 10.06, 10.07 or 10.08; or


(b)   the Company takes any action that would
require a supplemental indenture pursuant to Section 10.14; or


50

















 


(c)   there is a liquidation or dissolution of the
Company;


then
the Company shall mail to Securityholders and file with the Trustee and the
Conversion Agent a notice referencing this Section 10.13 and stating the
proposed record date for a dividend or distribution or the proposed effective
date of a subdivision, combination, reclassification, consolidation, merger,
sale, transfer, dissolution, liquidation or winding-up, and if applicable, the
new Conversion Price.  The Company shall
file and mail the notice at least 15 days before such date.  Failure to file or mail the notice or any
defect in it shall not affect the validity of the transaction.  Unless and until the Trustee shall receive a
notice pursuant to this Section 10.13, it shall not be deemed to have knowledge
of any event required to be described in a notice pursuant to this
Section 10.13.


Section 10.14. 
Effect of Reclassification, Consolidation, Merger or Sale.  If any of the following
events occur, namely (i) any reclassification or change of outstanding shares
of Common Stock (other than a change in par value, or from par value to no par
value, or from no par value to par value, or as a result of a subdivision or
combination), (ii) any consolidation, merger 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 (iii) 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,
then the Company or the successor or purchasing corporation, as the case may
be, shall execute with the Trustee a supplemental indenture providing that each
Security shall be convertible into the kind and amount of shares of stock and
other securities or property or assets (including cash) receivable upon such
reclassification, change, consolidation, merger, combination, sale or
conveyance by a holder of a number of shares of Common Stock issuable upon
conversion of such Securities immediately prior to such reclassification,
change, consolidation, merger, combination, sale or conveyance.  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.


The Company shall cause
notice of the execution of such supplemental indenture to be mailed to each
holder of Securities at his address appearing on the Security register provided
for in Section 2.03 of this Indenture.


The above provisions of this
Section shall similarly apply to successive reclassifications, consolidations,
mergers, combinations, and sales.


If this Section applies,
neither Section 10.06, 10.07 nor 10.08 applies.


51

















 


Section 10.15. 
Company Determination Final.  Any
determination that the Company or the Board of Directors must make pursuant to
Section 10.03, 10.06, 10.07, 10.08, 10.09, 10.10, 10.14 or 10.17 is conclusive.


Section 10.16. 
Trustee’s Adjustment Disclaimer. 
The Trustee has no duty to determine when an adjustment under this
Article 10 should be made, how it should be made or what it should be.  The Trustee has no duty to determine whether
a supplemental indenture under Section 10.14 need be entered into or whether
any provisions of any supplemental indenture are correct.  The Trustee shall not be accountable for and
makes no representation as to the validity or value of any securities or assets
issued upon conversion of Securities. 
The Trustee shall not be responsible for the Company’s failure to comply
with this Article 10.  Each Conversion
Agent shall have the same protection under this Section 10.16 as the Trustee.


Section 10.17. 
Simultaneous Adjustment.  In the event
that this Article 10 requires adjustments to the Conversion Price under more
than one of Sections 10.06, 10.07, 10.08(a) or 10.08(b), and the record dates
for the distributions giving rise to such adjustments shall occur on the same
date, then such adjustments shall be made by applying, first, the provisions of
Section 10.08(a), second, the provisions of Section 10.08(b), third the
provisions of Section 10.06 and, fourth, the provisions of Section 10.07.


Section 10.18. 
Successive Adjustments.  After an
adjustment to the Conversion Price under this Article 10, any subsequent event
requiring an adjustment under this Article 10 shall cause an adjustment to the
Conversion Price as so adjusted.


Section 10.19. 
Rights Issued in Respect of Common Stock Issued Upon Conversion.  Each share of Common Stock
issued upon conversion of Securities pursuant to this Article 10 shall be
entitled to receive the appropriate number of Rights (as defined below), if
any, and the certificates representing the Common Stock issued upon such
conversion shall bear such legends, if any, in each case as provided by and
subject to the terms of the agreement governing such Rights (the “Rights
Agreement”) as in effect at the time of such conversion.  If the Rights are separated from the Common
Stock in accordance with the provisions of the Rights Agreement such that the
Holders of Securities would thereafter not be entitled to receive any such
Rights in respect to the Common Stock issuable upon conversion of such
Securities, the Conversion Price will be adjusted as provided in Section
10.08(a) on the separation date; provided that if such Rights expire, terminate
or are redeemed by the Company, the Conversion Price shall again be adjusted to
be the Conversion Price which would then be in effect if such separation had
not occurred.  In lieu of any such
adjustment, the Company may amend the Rights Agreement to provide that upon
conversion of the Securities the Holders will receive, in addition to the
Common Stock issuable upon such 


52

















 


conversion,
the Rights which would have attached to such shares of Common Stock if the
Rights had not become separated from the Common Stock pursuant to the
provisions of the Rights Agreement.


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”):


(a)   are deemed to be transferred with such shares
of Common Stock,


(b)   are not exercisable, and


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


(“Rights”)
shall not be deemed distributed for purposes of Section 10.08(a) until the
occurrence of the earliest Trigger Event. 
In addition, in the event of any distribution of rights or warrants, or
any Trigger Event with respect thereto, that shall have resulted in an
adjustment to the Conversion Price under Section 10.08(a), (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 warrants (assuming such
holder had retained such rights or warrants), made to all holders of Common
Stock as of the date of such redemption or repurchase, and (2) in the case of
any such rights or warrants all of which shall have expired without exercise by
any holder thereof, the Conversion Price shall be readjusted as if such
issuance had not occurred.


Section 10.20. 
General Considerations.  Whenever
successive adjustments to the Conversion Price are called for pursuant to this
Article 10, such adjustments shall be made to the Current Market Price as may
be necessary or appropriate to effectuate the intent of this Article and to avoid
unjust or inequitable results as determined in good faith by the Board of
Directors.


ARTICLE 11

Miscellaneous


Section 11.01. 
Conflict with TIA.  If any
provision hereof limits, qualifies or conflicts with a provision of the TIA
that is required under the TIA to be a part of and govern this Indenture, the
latter provision shall control.  If any
provision of 


53

















 


this
Indenture modifies or excludes any provision of the TIA that may be so modified
or excluded, the latter provision shall be deemed to apply to this Indenture as
so modified or excluded, as the case may be.


Section 11.02. 
Notices.  Any request,
demand, authorization, notice, waiver, consent or communication shall be in
writing and delivered in person or mailed by first class mail, postage prepaid,
addressed as follows or transmitted by facsimile transmission (confirmed by
overnight courier) to the following facsimile numbers:


if
to the Company:


Silicon Graphics, Inc.

1600 Amphitheatre Parkway

Mountain View, California 94043

Attn:  General Counsel

Telephone Number:  (415) 960-1980

Facsimile Number:  (415) 969-6289


if
to the Trustee:


U.S. Bank National
Association

550 South Hope Street, 5th Floor

Los Angeles, California 90071

Attention:  Corporate Trust Services
(Silicon Graphics, Inc.)

Telephone Number:  (213) 533-8418

Telefax Number:  (213) 533-8729


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


Any notice or communication
given to a Securityholder shall be mailed to the Securityholder, by first class
mail, postage prepaid, at the Securityholder’s address as it appears on the
registration books of the Registrar and shall be sufficiently given if so mailed
within the time prescribed.


Failure to mail a notice or
communication to a Securityholder or any defect in it shall not affect its
sufficiency with respect to other Securityholders.  If a notice or communication is mailed 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 Securityholders, it shall mail a copy to the
Trustee and each Registrar, Paying Agent, Conversion Agent or co-registrar.


54

















 


Section 11.03. 
Communication by Holders with Other Holders.  Securityholders may communicate pursuant to TIA
Section 312(b) with other Securityholders with respect to their rights under
this Indenture or the Securities.  The
Company, the Trustee, the Registrar, the Paying Agent, the Conversion Agent and
anyone else shall have the protection of TIA Section 312(c).


Section 11.04. 
Certificate And Opinion as to Conditions Precedent.  Upon any request or
application by the Company to the Trustee to take any action under this
Indenture, the Company shall furnish to the Trustee:


(a)   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


(b)   an Opinion of Counsel stating that, in the
opinion of such counsel, all such conditions precedent have been complied with.


Section 11.05. 
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:


(a)   a statement that each person making such
Officers’ Certificate or Opinion of Counsel has read such covenant or
condition,


(b)   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;


(c)   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


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


Section 11.06. 
Separability Clause.  In case any
provision in this Indenture or in the Securities shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.


Section 11.07. 
Rules by Trustee, Paying Agent, Conversion Agent and Registrar.  The Trustee may make
reasonable rules for action by or a meeting of Securityholders.  The Registrar, Conversion Agent and the Paying
Agent may make reasonable rules for their functions.


55

















 


Section 11.08. 
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, to the extent applicable, no
interest, if any, shall accrue for the intervening period.


Section 11.09. 
Governing Law.  THE LAWS OF THE
STATE OF NEW YORK SHALL GOVERN THIS INDENTURE AND THE SECURITIES.


Section 11.10. 
No Recourse Against Others.  A director,
officer, employee or stockholder, as such, of the Company shall not have any
liability for any obligations of the Company under the Securities or this
Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation.  By
accepting a Security, each Securityholder shall waive and release all such
liability.  The waiver and release shall
be part of the consideration for the issue of the Securities.


Section 11.11. 
Successors.  All agreements
of the Company in this Indenture and the Securities shall bind its
successor.  All agreements of the
Trustee in this Indenture shall bind its successor.


Section 11.12. 
Multiple 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.


56

















 


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


 


	
   

  	
  SILICON GRAPHICS, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Jeffrey Zellmer

  
	
   

  	
   

  	
  Title:

  	
  Chief Financial Officer

  
	
   

  	
   

  	
   

  	
   

  
	
  Attest:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  [SEAL]

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  U.S. BANK NATIONAL
  ASSOCIATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Paula M. Oswald

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  



 


57

















 


EXHIBIT A


[FORM OF FACE OF SECURITY]


[FORM OF LEGEND FOR GLOBAL
SECURITY:


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


SILICON GRAPHICS, INC.


$________ 6.50% SENIOR
CONVERTIBLE NOTE DUE 2009


	
  REGISTERED

  	
   

  	
  CUSIP
  No. 827056 AE 2

  
	
  No. 1

  	
   

  	
   

  



 


Silicon Graphics, Inc., a
Delaware corporation, promises to pay to or registered assigns, the principal
amount of_____________ Dollars ($) on July 1, 2009 and to pay interest
thereon from  [the date after expiration
of the exchange offer], 2003 or from the most recent Interest Payment Date to
which interest has been paid or duly provided for, semi-annually on
January 1 and July 1 in each year, commencing January 1, 2004,
at the rate of 6.50% per annum until the principal hereof is paid or made
available for payment.  The interest so
payable, and punctually paid or duly provided for, on any Interest Payment Date
will, as provided in such Indenture, be paid to the Person in whose name this
Security (or one or more Predecessor Securities) is registered at the close of
business on the Regular Record Date for such interest, which shall be the
December 15 or June 15 (whether or not a Business Day), as the case
may be, next preceding such Interest Payment Date. Any such interest not so
punctually paid or duly provided for will forthwith cease to be payable to the
Holder on such Regular Record Date and may either be paid to the Person in
whose name this Security (or one or more Predecessor Securities) is registered
at the close of business on a Special Record Date for the payment of such
Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to
Holders of Securities not less than 10 days prior to such Special Record
Date, or be paid at any time in any other lawful manner not 


A-1

















 


inconsistent
with the requirements of any securities exchange or other market on which the
Securities may be listed, and upon such notice as may be required by such
exchange or market, all as more fully provided in said Indenture.  Payment of the principal of (and premium, if
any) and interest on this Security will be made at the Corporate Trust Office
or the office or agency of the Company maintained for that purposes in the
Borough of Manhattan, The City of New York, New York in such coin or currency
of the United States of America as at the time of payment is legal tender for
payment of public and private debts; provided, however, that at the option of
the Company payment of interest may be made by check mailed to the address of,
or by wire transfer to the account of, the Person entitled thereto as such
address shall appear in the Security Register.


Additional provisions of
this Security are set forth on the other side of this Security.


 


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IN WITNESS WHEREOF, Silicon
Graphics, Inc.  has caused this
instrument to be duly executed under its corporate seal.


	
   

  	
   

  	
  SILICON GRAPHICS, INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  [SEAL]

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Attest:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  TRUSTEE’S CERTIFICATE OF
  AUTHENTICATION

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  This is one of the
  Securities referred to in the within

  mentioned Indenture.

  

  U.S. BANK NATIONAL ASSOCIATION, as Trustee,

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Authorized Signatory

  	
   

  	
   

  
						



 


 


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[FORM OF REVERSE SIDE OF
SECURITY]


SILICON GRAPHICS, INC.


6.50% SENIOR CONVERTIBLE
NOTE DUE 2009


1.             Interest


This Security shall bear
interest at 6.50% per annum in the manner set forth in the Indenture and the
face of this Security.  In the event
that principal hereof or any portion of such principal is not paid when due
(whether upon acceleration pursuant to Section 6.02 of the Indenture, upon the
date set for payment of the Redemption Price pursuant to paragraph 5 hereof, upon
the date set for payment of a Fundamental Change Redemption Price pursuant to
paragraph 6 hereof or upon the Stated Maturity of this Security), then in each
such case the overdue amount shall bear interest at the rate of 6.50% per
annum, compounded semiannually (to the extent that the payment of such interest
shall be legally enforceable), which interest shall accrue from the date such
overdue amount was due to the date payment of such amount, including interest
thereon, has been made or duly provided for. 
All such interest shall be payable on demand.


2.             Method
of Payment


Subject to the terms and
conditions of the Indenture, the Company will make payments in respect of the
Securities to the persons who are registered Holders of Securities at the close
of business on the Redemption Date, Fundamental Change Repurchase Date or
Stated Maturity, as the case may be. 
Holders must surrender Securities to a Paying Agent to collect such
payments in respect of the Securities. 
The Company will pay cash amounts in money of the United States that at
the time of payment is legal tender for payment of public and private
debts.  However, the Company may make
such cash payments by check mailed to the address of, or by wire transfer to
the account of, the person entitled to such payment.


3.             Paying
Agent, Conversion Agent and Registrar


Initially, U.S. Bank
National Association, a national banking 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.  The Company or any of its
Subsidiaries or any of their Affiliates may act as Paying Agent, Conversion
Agent, Registrar or co-registrar.


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4.             Indenture


The Company issued the
Securities under an Indenture dated as of July __, 2003 (the “Indenture”),
between the Company and the Trustee. 
Capitalized terms used herein and not defined herein have the meanings
ascribed thereto in the Indenture.  The
Securities are subject to all such terms, and Securityholders are referred to
the Indenture for a statement of those terms.


The Securities are general
unsecured obligations of the Company limited to $78,000,000 aggregate principal
amount (subject to Sections 2.02 and 2.07 of the Indenture).


5.             Redemption
at the Option of the Company


Prior to the second
anniversary of the original issuance of the Securities, the Securities will not
be redeemable at the option of the Company. 
Beginning on the second anniversary of the original issuance of the
Securities, the Company may redeem the Securities for cash as a whole at any
time, or from time to time in part, upon not less than 10 days’ nor more than
60 days’ notice at the a price equal to 100% of the principal amount (the “Redemption
Price”) thereof, together with accrued and unpaid interest to, but
excluding, the Redemption Date, provided that during the year beginning on the
first anniversary of the original issuance of the Securities, the Company may
only redeem the Securities if the Closing Price of the Company’s Common Stock
has been at least 150% of the then-applicable Conversion Price for the 20
consecutive Trading Days ending two Trading Days prior to the notice of
redemption.


If
any Redemption Date is an Interest Payment Date, then the interest payable on
such date shall be paid to the Holder of the Security on the next preceding
Regular Record Date.  No Securities may
be redeemed by the Company if an Event of Default with respect to the payment
of interest on the Securities has occurred and is continuing.


No sinking fund is provided
for the Securities.


Notice of redemption at the
option of the Company will be mailed at least 30 days but not more than 60 days
before the Redemption Date to each Holder of Securities to be redeemed at the
Holder’s registered address.  If money
sufficient to pay the Redemption Price, together with accrued interest to, but
excluding, the Redemption Date, of all Securities (or portions thereof) to be
redeemed on the Redemption Date is deposited with the Paying Agent prior to or
on the Redemption Date, on and after such date interest ceases to accrue on
such Securities or portions thereof. 
Securities in denominations larger than $1,000 of principal amount may
be redeemed in part but only in multiples of $1,000 of principal amount.


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6.             Redemption
at the Option of the Holder Upon a Fundamental Change


(a)           At the option of the Holder and subject
to the terms and conditions of the Indenture, the Company shall become
obligated to redeem the Securities held by such Holder on the date (the “Fundamental
Change Repurchase Date”) (or if such date is not a Business Day, the
next succeeding Business Day) that is 45 days after the date of the Company’s
notice of such Fundamental Change (as defined in the Indenture) occurring on or
prior to July 1, 2009 at 100% of the principal amount.  In each case, the Company shall also pay
accrued but unpaid interest, if any, on such Securities to, but excluding, the
Fundamental Change Repurchase Date; provided that if such Fundamental Change
Repurchase Date is an Interest Payment Date, then the interest payable on such
date shall be paid to the Holder of the Security on the next preceding Regular
Record Date.  Securities in
denominations larger than $1,000 of principal amount may be redeemed in part in
connection with a Fundamental Change, but only in multiples of $1,000 of principal
amount.


(b)           Holders have the right to withdraw
any Fundamental Change Redemption Notice by delivering to the Paying Agent a
written notice of withdrawal in accordance with the provisions of the
Indenture.


(c)           If cash sufficient to pay the
Fundamental Change Redemption Price, together with accrued interest to, but
excluding, the Fundamental Change Repurchase Date, of all Securities or
portions thereof to be purchased as of the Fundamental Change Repurchase Date
is deposited with the Paying Agent on or prior to the Fundamental Change Repurchase
Date, interest ceases to accrue on such Securities (or portions thereof) on and
after the Fundamental Change Repurchase Date, and the Holder thereof shall have
no other rights as such (other than the right to receive the Fundamental Change
Redemption Price, together with accrued interest to, but excluding, the
Fundamental Change Repurchase Date, upon surrender of such Security).


7.             Conversion


Subject to the next two
succeeding sentences, a Holder of a Security may convert it into Common Stock
of the Company at any time after issuance and before the close of business on
July 1, 2009.  If the Security is called
for redemption, the Holder may convert it at any time before the close of the
last Trading Day prior to the Redemption Date. 
In the event the Security is surrendered during the period from the
close of business on any Regular Record Date next preceding any Interest
Payment Date to the close of business on the Trading Day immediately preceding
the next succeeding Interest Payment Date (except in the case of Security to be
redeemed within such period), such Securities must be accompanied by payment in
New York Clearing House funds or other funds acceptable to the Company of an
amount equal to the interest payable on 


A-6

















 


such
Interest Payment Date on the principal amount of this Security then being
converted.  Subject to the aforesaid
requirement for payment and, in the case of a conversion after the Regular
Record Date next preceding any Interest Payment Date and on or before such
Interest Payment Date, to the right of the Holder of this Security (or any
Predecessor Security) of record at such Regular Record Date to receive an
installment of interest payable on such Interest Payment Date (except in the case
of Securities whose Maturity is prior to such Interest Payment Date), no
payment or adjustment is to be made on conversion for interest accrued hereon
or for dividends on the Common Stock issued on conversion.  A Security in respect of which a Holder has
delivered a notice of exercise of the option to redeem such Security in the
event of a Fundamental Change may be converted only if the notice of exercise
is withdrawn in accordance with the terms of the Indenture.


The initial Conversion Price
is $1.85 per share of Common Stock, subject to adjustment or reduction in
certain events described in Sections 2 and 10 of the Indenture.  The Company will deliver cash or a check in
lieu of any fractional share of Common Stock.


To convert a Security a
Holder must (1) complete and manually sign the conversion notice on the back of
the Security (or complete and manually sign a facsimile of such notice) and
deliver such notice to the Conversion Agent, (2) surrender the Security to a
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.


A Holder may convert a
portion of a Security if the principal amount of such portion is $1,000 or a
multiple of $1,000.  No payment or
adjustment will be made for dividends on the Common Stock except as provided in
the indenture.


The Conversion Price is
subject to adjustment or reduction as provided in the Indenture.  In addition, in the case of (i) any
reclassification of the Common Stock, or (ii) a consolidation or merger
involving the Company or a sale or
conveyance to another corporation of the property and assets of the
Company as an entirety (or substantially as an entirety), in each case as a result
of which holders of Common Stock shall be
entitled to receive stock, securities, other property or assets
(including cash) with respect to or in exchange for such Common Stock, as set
forth in the Indenture, or upon certain distributions described in the
Indenture, the right to convert a Security into Common Stock may be changed; as
set forth in the Indenture, into a right to convert it into securities, cash or
other assets of the Company or another person.


A-7

















 


8.             Conversion
Arrangement on Call for Redemption


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


9.             Denominations;
Transfer; Exchange


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


10.          Persons
Deemed Owners


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


11.          Unclaimed
Money or Securities


The Trustee and the Paying
Agent shall return to the Company upon written request any money or securities
held by them for the payment of any amount with respect to the Securities that
remains unclaimed for two years, provided, however, that the Trustee or such
Paying Agent, before being required to make any such return, shall at the
expense of the Company cause to be published once in a newspaper of general
circulation in The City of New York or mail to each such Holder notice that
such money or securities remains unclaimed and that, after a date specified
therein, which shall not be less than 30 days from the date of such publication
or mailing, any unclaimed money or securities then remaining will be returned
to the Company.  After return to the
Company, Holders entitled to the money or securities must look to the Company
for payment 


A-8

















 


as
general creditors unless an applicable abandoned property law designates
another person.


12.          Amendment;
Waiver


Subject to certain
exceptions set forth in the Indenture, (i) the Indenture or the Securities may
be amended with the written consent of the Holders of at least a majority in
aggregate principal amount of the Securities at the time outstanding and (ii)
certain defaults or noncompliance with certain provisions may be waived with
the written consent of the Holders of a majority in aggregate principal amount
of the Securities at the time outstanding. 
Subject to certain exceptions set forth in the Indenture, without the
consent of any Securityholder, the Company and the Trustee may amend the
Indenture or the Securities to cure any ambiguity, defect or inconsistency, or
to comply with Article 5 or Section 10.14 of the Indenture, to provide for
uncertificated Securities in addition to or in place of certificated Securities
or to make any change that does not adversely affect the rights of any
Securityholder or to comply with any requirement of the SEC in connection with
the qualification of the Indenture under the TIA.


13.          Defaults
and Remedies


Under the Indenture, Events
of Default include (i) default in payment of the principal amount, Redemption
Price or Fundamental Change Redemption Price, as the case may be, in respect of
the Securities when the same becomes due and payable; (ii) default for 30 days
in the payment of any installment of interest on the Securities; (iii) failure
by the Company to comply with other agreements in the Indenture or the
Securities, subject to notice and lapse of time; provided, that the Company’s
failure to comply with its agreement set forth in Section 2.15(a) or (b) shall
not constitute an Event of Default under the Securities or under the Indenture
and thus, Holders shall not be entitled to exercise the remedies set forth
herein or in Article 6 of the Indenture, but shall be limited to the remedy set
forth in Section 2.15 of the Indenture; (iv) an event of default under the
Secured Credit Facility, the Old Notes Indenture or the New Indenture shall
have occurred that results in the principal amount of and accrued interest on
that debt becoming immediately due and payable, and (v) certain events of
bankruptcy or insolvency.  If an Event
of Default occurs and is continuing, the Trustee, or the Holders of at least
25% in aggregate principal amount of the Securities at the time outstanding,
may declare all the Securities to be due and payable immediately.  Certain events of bankruptcy or insolvency
are Events of Default which will result in the Securities being declared due
and payable immediately upon the occurrence of such Events of Default.


Securityholders may not
enforce the Indenture or the Securities except as provided in the
Indenture.  The Trustee may refuse to
enforce the Indenture or the Securities unless it receives reasonable indemnity
or security.  Subject to certain 


A-9

















 


limitations,
Holders of a majority in aggregate principal amount of the Securities at the
time outstanding may direct the Trustee in its exercise of any trust or
power.  The Trustee may withhold from
Securityholders notice of any continuing Default (except a Default in payment
of amounts specified in clause (i) or (ii) above) if it determines that
withholding notice is in their interests.


14.          Trustee
Dealings with the Company


The Trustee under the Indenture,
in its individual or any other capacity, may become the owner or pledgee of
Securities 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.


15.          No
Recourse Against Others


A director, officer,
employee or stockholder, as such, of the Company shall not have any liability
for any obligations of the Company under the Securities or the Indenture or for
any claim based on, in respect of or by reason of such obligations or their
creation.  By accepting a Security, each
Securityholder waives and releases all such liability.  The waiver and release are part of the
consideration for the issue of the Securities.


16.          Authentication


This Security shall not be
valid until an authorized officer of the Trustee manually signs the Trustee’s
Certificate of Authentication on the other side of this Security.


17.          Abbreviations


Customary abbreviations may
be used in the name of a Securityholder 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).


18.          Governing
Law


THE LAWS OF THE STATE OF NEW
YORK SHALL GOVERN THE INDENTURE AND THIS SECURITY.












A-10

















 


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


Silicon Graphics, Inc.

1600 Amphitheatre Parkway

Mountain View, California 94043

Attn:  General Counsel


 


A-11

















 


[FORM OF CONVERSION NOTICE]


CONVERSION NOTICE


To:  Silicon Graphics, Inc.


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


Dated:


	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Signature(s)

  



 


 


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  Fill in for registration
  of shares if to be delivered, and Securities if to be issued other than to
  and in the name of the registered bolder:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  (Name)

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  (Street
  Address)

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  (City,
  State and zip code)

  	
   

  
	
   

  	
   

  
	
  Please
  print name and address

  	
   

  
	
   

  	
   

  
	
   

  	
  principal
  amount to be converted

  (if less than all):

  

  $_____,000

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Social
  Security or Other

  Taxpayer Identification Number

  



 


 


A-13

















 


[FORM OF OPTION TO ELECT
REDEMPTION

UPON A FUNDAMENTAL CHANGE]


To:          Silicon Graphics, Inc.


The undersigned registered
holder of this Security hereby acknowledges receipt of a notice from Silicon
Graphics, Inc.  (the “Company”)
as to the occurrence of a Fundamental Change with respect to the Company and
requests and instructs the Company to redeem this Security, or the portion
hereof (which is $1,000 principal amount or a multiple thereof) below
designated, in accordance with the terms of the Indenture referred to in this
Security.


	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Signature(s)

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  principal
  amount to be redeemed

  (if less than all):

  

  $__________

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Social
  Security or Other

  Taxpayer Identification Number

  



 


 


A-14

















 


[FORM OF ASSIGNMENT]


For value received ________________________________________________
hereby sell(s), assign(s) and

transfer(s) unto
_________________________________________________________________________

(Please insert social security or other taxpayer identification number of
assignee.)


 


the within Security and hereby irrevocably
constitutes and appoints

________________________ attorney to transfer the said Security on the books of
the

Company, with full power of substitution in the premises.


 


	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Signature(s)

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Signature(s)
  must be guaranteed by a commercial bank or trust company or a member firm of
  a major stock exchange.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Signature
  Guarantee

  



 


NOTICE: 
The above signatures of the holder(s) hereof must correspond with the
name as written upon the face of the Security in every particular without
alteration or enlargement or any change whatever.


 


 


A-15