exv10w55



 





EXHIBIT 10.55




EXCHANGE AND REDEMPTION AGREEMENT




     This Exchange and Redemption Agreement (this “Agreement”) is made and entered into as
of this 3rd day of November, 2006, by and between [___] (the “Holder”), and
Ciphergen Biosystems, Inc., a Delaware corporation (the “Company”).



RECITALS




     WHEREAS, the Holder currently holds $                     principal amount of the Company’s 4.50%
Convertible Senior Notes due September 1, 2008 (the “Existing Notes”) issued pursuant to
the Indenture dated as of August 22, 2003 (the “Existing Indenture”) between the Company
and U.S. Bank National Association, as Trustee;



     WHEREAS, the Holder desires to exchange $                     principal amount of the Existing Notes
for $                     principal amount of the Company’s 7.00% Convertible Senior Notes due September 1,
2011 (the “New Notes”) (the “Exchange Transaction”);



     WHEREAS, the New Notes will be issued pursuant to the Indenture, to be entered into by the Company
and the Trustee named therein (the “Indenture”), substantially in the form of Exhibit
A hereto; and



     WHEREAS, the Company desires (i) to issue to the Holder $                     principal amount of New
Notes in exchange for $                     principal amount of the Existing Notes in the Exchange
Transaction, (ii) redeem $                     principal amount of the Existing Notes for $                     in cash and
(iii) pay to the Holder accrued and unpaid interest through and including the day prior to the
Closing (as defined herein) on the Existing Notes;



     WHEREAS, in connection with the issuance of the New Notes, the Company will agree to provide
the Holder registration rights pursuant to the Registration Rights Agreement, to be entered into by
the Company and the Holder and the other holders of Existing Notes exchanging such notes for New
Notes (the “Registration Rights Agreement”), substantially in the form of Exhibit B
hereto; NOW, THEREFORE, in consideration of the premises and the agreements set forth below, and for other
good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties agree as follows:



ARTICLE I



Exchange and Redemption




     Section 1.01 The Exchange and the Redemption. Upon the terms and subject to the
conditions of this Agreement, at the Closing, the Company shall (i) issue to the Holder $                    
principal amount of New Notes in exchange for $                     principal amount of the Existing Notes,
(ii) redeem $                     principal amount of the Existing Notes for $                     in cash (the
“Cash Redemption Payment”) and (iii) pay to the Holder accrued and unpaid interest
through and including the day prior to the Closing on the Existing Notes.



 









 





     Section 1.02 Closing. The closing of the transactions contemplated by this Agreement
(the “Closing”) is anticipated to take place on the third business day after the date
hereof at the offices of the Company, 6611 Dumbarton Circle, Fremont, CA 94555 or on such other
date and at such other place as the parties may agree in writing (the “Closing Date”). At
the Closing, the Holder shall deliver or cause to be delivered to the Company all of such Holder’s
right, title and interest in and to all of the Existing Notes, and all documentation related
thereto pursuant to the Existing Indenture, and whatever documents of conveyance or transfer may be
necessary to transfer to and confirm in the Company all right, title and interest in and to the
Existing Notes, and the Company shall issue to the Holder the New Notes and pay to the Holder in
cash by wire transfer of immediately available funds an amount equal to the sum of (a) accrued and
unpaid interest on the Existing Notes through and including the day prior to the Closing and (b)
the Cash Redemption Payment ((a) and (b), collectively, the “Total Cash Consideration”).



     Section 1.03 Conditions to Closing. (a) The obligation of the Holder hereunder to
consummate the transactions contemplated hereby at the Closing is subject to the satisfaction, at
or before the Closing Date, of each of the following conditions, provided that these conditions are
for the Holder’s sole benefit and may be waived by the Holder at any time in its sole discretion by
providing the Company with prior written notice thereof:




(i) The Company shall have executed and delivered to the Holder this Agreement;




(ii) The Company and the Trustee shall have executed and delivered the Indenture;




(iii) The Company shall have executed and delivered the New Notes in the principal
amount set forth in Section 1.1;




(iv) The Company shall have executed and delivered to the Holder the Registration
Rights Agreement;




(v) The Company shall have delivered to the Holder the Total Cash Consideration;




(vi) The consummation of the sale of the Company’s proteomics instrument business and
accompanying software to BioRad Laboratories, Inc. pursuant to the Asset Purchase
Agreement (the “Asset Purchase Agreement”), dated August 14, 2006, in the
form attached hereto as Exhibit C, pursuant to which no provision thereof
shall have been amended or waived in a manner adverse to the Company or the Holder;




(vii) The Company shall have delivered to the Holder a certificate of the Company,
dated the Closing Date, executed by the secretary of the Company certifying in such
capacity and on behalf of the Company (A) as to the incumbency and signature of the
officer of the Company who executed this Agreement, the Indenture and the New



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Notes;
and (B) as to the adoption of resolutions of the board of directors of the Company
which are in full force and effect on the Closing Date, authorizing (x) the execution
and delivery of this Agreement and the New Notes; and (y) the performance of the
obligations of the Company hereunder and thereunder;




(viii) The representations and warranties of the Company shall be true and correct in
all material respects (except for those representations and warranties that are
qualified by materiality or Material Adverse Effect, which shall be true and correct
in all respects) as of the date when made and as of the Closing Date as though made
at that time (except for representations and warranties that speak as of a specific
date, which shall be true and correct as of such specified date) and the Company
shall have performed, satisfied and complied in all material respects with the
covenants, agreements and conditions required by the Transaction Documents to be
performed, satisfied or complied with by the Company at or prior to the Closing Date.
The Holder shall have received a certificate, executed by the Chief Executive
Officer of the Company, dated as of the Closing Date, to the foregoing effect and as
to such other matters as may be reasonably requested by the Holder in the form
attached hereto as Exhibit D;




(ix) At least $16,500,000 principal amount of Existing Notes held by the Holder
together with the Other Holders (as defined below) shall have been exchanged for New
Notes contemporaneously with the Closing and at least $11,000,000 principal amount of
Existing Notes held by the Holder together with the Other Holders shall have been
redeemed contemporaneously with the Closing, all on the same terms as set forth
herein;




(x) Subsequent to the execution and delivery of this Agreement and prior to the
Closing Date, there shall have been no suspension or material limitation of trading
in the Common Stock on The Nasdaq Capital Market;




(xi) The New Notes shall have been approved for trading on The PORTAL Market of the
National Association of Securities Dealers, Inc., subject only to notice of issuance
at or prior to the time of purchase;




(xii) The Company shall have obtained a Committee on Uniform Securities
Identification Procedures number (CUSIP number) for the New
Notes;

(xiii) The New Notes satisfy the requirements set forth in Rule 144A(d)(3) under the
Securities Act; and

(xiv) The Company shall have delivered to Holder the opinion of Wilson Sonsini
Goodrich & Rosati, Professional Corporation, dated as of the Closing Date, in
substantially the form of Exhibit E attached hereto.



          (b) The obligation of the Company hereunder to consummate the transactions contemplated hereby
at the Closing is subject to the satisfaction, at or before the Closing Date, of
each of the following conditions provided that these conditions are for the Company’s sole
benefit




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and may be waived by the Company at any time in its sole discretion by providing the Holder
with prior written notice thereof:





(i) The Holder shall have executed and delivered to the Company this Agreement;




(ii) The Holder shall have executed and delivered to the Company the Registration
Rights Agreement;




(iii) The Holder shall have delivered, or caused to be delivered, to the Company the
Existing Notes;




(iv) The consummation of the sale of the Company’s proteomics instrument business and
accompanying software to BioRad Laboratories, Inc. pursuant to the Asset Purchase
Agreement ; and




(v) The representations and warranties of the Holder shall be true and correct in all
material respects (except for those representations and warranties that are qualified
by materiality or Material Adverse Effect, which shall be true and correct in all
respects) as of the date when made and as of the Closing Date as though made at that
time (except for representations and warranties that speak as of a specific date,
which shall be true and correct as of such specified date), and the Holder shall have
performed, satisfied and complied in all material respects with the covenants,
agreements and conditions required by this Agreement to be performed, satisfied or
complied with by the Holder at or prior to the Closing Date.



     Section 1.04 Exchange and Redemption of Additional Notes. Simultaneously with the
Closing, the Company may enter one or more agreements substantially identical to this Agreement
(the “Other Agreements”) with one or more holders (the “Other Holders,” and
together with Holder, the “Holders”) of Existing Notes to (i) exchange Existing Notes with
one or more Other Holders for New Notes, subject to the terms of the Indenture, in an aggregate
principal amount that, together with the New Notes issued pursuant to this Agreement, does not
exceed $16,500,000 and (ii) redeem from one or more Other Holders Existing Notes for cash that,
together with the Existing Notes being redeemed pursuant to this Agreement, does not exceed
$11,000,000, plus accrued and unpaid interest thereon, for a redemption price not to exceed 100% of
the principal amount of Existing Notes being redeemed, plus accrued and unpaid interest thereon.
Promptly after the Closing, the Company shall offer to purchase any and all Existing Notes not
exchanged or redeemed hereby on terms identical to the exchange and redemption transactions
described herein pursuant to a tender offer for any and all such Existing Notes.



ARTICLE II



Representations and Warranties of the Holder




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     The Holder hereby makes the following representations and warranties, each of which is true
and correct on the date hereof and shall survive the Closing Date and the transactions contemplated
hereby to the extent set forth herein.



     Section 2.01 Existence and Power.



          (a) The Holder is duly formed, validly existing and in good standing under the laws of the
jurisdiction of its organization and has the power, authority and capacity to execute and deliver
this Agreement, to perform its obligations hereunder, and to consummate the transactions
contemplated hereby.




          (b) The execution of this Agreement by the Holder and the consummation by the Holder of the
transactions contemplated hereby do not and will not constitute or result in a breach, violation or
default under any note, bond, mortgage, deed, indenture, lien, instrument, contract, agreement,
lease or license to which the Holder is a party, whether written or oral, express or implied, or
any statute, law, ordinance, decree, order, injunction, rule, directive, judgment or regulation of
any court, administrative or regulatory body, governmental authority, arbitrator, mediator or
similar body on the part of the Holder or on the part of any other party thereto or cause the
acceleration or termination of any obligation or right of the Holder, except for such conflicts,
defaults, rights or violations which would not, individually or in the aggregate, reasonably be
expected to have a material adverse effect on the ability of the Holder to perform its obligations
hereunder.




     Section 2.02 Valid and Enforceable Agreement; Authorization. This Agreement has been
duly executed and delivered by the Holder and constitutes a legal, valid and binding obligation of
the Holder, enforceable against the Holder in accordance with its terms, except that such
enforcement may be subject to (a) bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting or relating to enforcement of creditors’ rights generally, and (b) general
principles of equity.



     Section 2.03 Title to Existing Notes. The Holder is the sole beneficial owner of and
has good and valid title to the Existing Notes being exchanged or redeemed by such Holder hereby,
free and clear of any mortgage, lien, pledge, charge, security interest, encumbrance, title
retention agreement, option, equity or other adverse claim thereto. The Holder has not, in whole
or in part, (i) assigned, transferred, hypothecated, pledged or otherwise disposed of the Existing
Notes or its rights in such Existing Notes being exchanged or redeemed by such Holder hereby, or
(ii) given any person or entity any transfer order, power of attorney or other authority of any
nature whatsoever with respect to such Existing Notes.



     Section 2.04 Investment Decision. The Holder is either (i) a “qualified institutional
buyer” within the meaning of Rule 144A under the Securities Act of 1933, as amended (the
“Securities Act”) or (ii) an “accredited investor” within the meaning of Rule 501 of
Regulation D under the Securities Act, and in either case was not organized for the purpose of
acquiring the New Notes or the shares of the Company’s common stock (the “Common Stock”),
$0.001 par value per share, into which the New Notes may be converted (the “Underlying Common
Stock”). The Holder (or its



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authorized representative) is familiar with the Company’s
objectives and business plan, has had the
opportunity to review the Company’s filings with the Securities and Exchange Commission (the
“SEC”), including, without limitation, the Company’s Annual Report on Form 10-K filed on
July 14, 2006, the Company’s Quarterly Report on Form 10-Q filed on March 17, 2006, the Company’s
Definitive Proxy Statement filed on April 28, 2006, the Company’s Quarterly Reports on Form 10-Q
filed on May 15, 2006 and August 16, 2006 and the Company’s Current Reports on Form 8-K filed on
January 6, 2006, January 13, 2006, March 23, 2006, April 18, 2006, May 26, 2006, May 31, 2006, June
13, 2006, June 30, 2006, August 18, 2006 and August 25, 2006 (all of such filings with the SEC
referred to, collectively, as the “SEC Documents”), and has had such opportunity to ask
questions of and to obtain from representatives of the Company such information as is necessary to
permit it to evaluate the merits and risks of its investment in the Company and has independently,
without reliance upon any representatives of the Company and based on such information as the
Holder deemed appropriate, made its own analysis and decision to enter into this Agreement. The
Holder has had the opportunity to consult with its accounting, tax, financial and legal advisors to
be able to evaluate the risks involved in the exchange of the Existing Notes pursuant hereto and to
make an informed investment decision with respect to such exchange. The Holder acknowledges that
the Company is relying on the truth and accuracy of the foregoing representations and warranties in
the offering of the New Notes to the Holder without having first registered the New Notes or the
Underlying Common Stock under the Securities Act.



     Section 2.05 No Sale or Distribution. The Holder is acquiring the New Notes for its
own account and not towards, or for resale in connection with, the public sale or distribution
thereof, except pursuant to sales registered or exempted under the Securities Act; provided,
however, that by making the representations herein, the Holder does not agree to hold any of such
New Notes for any minimum or other specific term and reserves the right to dispose of such New
Notes or the Underlying Common Stock at any time in accordance with or pursuant to a registration
statement or an exemption under the Securities Act and pursuant to the applicable terms of this
Agreement. The Holder is acquiring the New Notes to be issued to the Holder hereunder in the
ordinary course of its business. The Holder does not presently have any agreement or understanding,
directly or indirectly, with any person to distribute any of the New Notes to be issued to the
Holder hereunder.



     Section 2.06 Restricted Securities. The Holder understands that neither the New Notes
nor the Underlying Common Stock have been registered under the Securities Act, and are being issued
hereunder by reason of a specific exemption from the registration provisions of the Securities Act
which depends upon, among other things, the bona fide nature of the investment intent and the
accuracy of the Holder’s representations as expressed herein. The Holder understands that the New
Notes (and the Underlying Common Stock) are “restricted securities” under applicable U.S. federal
and state securities laws and that, pursuant to these laws, the Holder must hold the New Notes (and
the Underlying Common Stock) indefinitely unless they are registered with the SEC and qualified by
state authorities, or an exemption from such registration and qualification requirements is
available. The Holder further acknowledges that if an exemption from registration or qualification
is available, it may be conditioned on various requirements including, but not limited to, the time
and manner of sale, the holding period for the New Notes (and the Underlying Common Stock), and on
requirements relating to the Company which may be outside the Holder’s control, and, except as set



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forth in the Registration Rights Agreement, which the Company is under no obligation, and may not
be able, to satisfy.



     Section 2.07 Legends. The Holder understands that the New Notes and any shares of
Underlying Common Stock will bear one or more of the legends required by the Indenture, and the
removal of such legends shall be governed by the terms of the Indenture.



     Section 2.08 No Public Market. The Holder understands that no public market now
exists for the New Notes, and that the Company has made no assurance that a public market will ever
exist for the New Notes.



     Section 2.09 Affiliate Status. The Holder is not, and has not been during the
preceding three months, an “affiliate” of the Company as such term is defined in Rule 144 under the
Securities Act.



ARTICLE III



Representations, Warranties and Covenants of the Company




     The Company hereby makes the following representations, warranties, and covenants each of
which is true and correct on the date hereof and shall survive the date of the Closing and the
transactions contemplated hereby to the extent set forth herein.



     Section 3.01 Existence and Power.



          (a) The Company is a corporation duly organized, validly existing and in good standing under
the laws of the State of Delaware and has the power, authority and capacity to execute and deliver
this Agreement, to perform the Company’s obligations hereunder, and to consummate the transactions
contemplated hereby.




          (b) The execution of this Agreement by the Company and the consummation by the Company of the
transactions contemplated hereby (i) does not require the consent, approval, authorization, order,
registration or qualification of, or filing with, any governmental authority or court, or body or
arbitrator having jurisdiction over the Company other than as contemplated in the Registration
Rights Agreement, state securities regulators, The PORTAL Market and The Depository Trust Company;
and (ii) does not and will not constitute or result in a breach, violation or default under any
note, bond, mortgage, deed, indenture, lien, instrument, contract, agreement, lease or license,
whether written or oral, express or implied, or with the Company’s Certificate of Incorporation or
by-laws, or any statute, law, ordinance, decree, order, injunction, rule, directive, judgment or
regulation of any court, administrative or regulatory body, governmental authority, arbitrator,
mediator or similar body on the part of the Company or on the part of any other party thereto or
cause the acceleration or termination of any obligation or right of the Company or any other party
thereto.




     Section 3.02 Valid and Enforceable Agreement; Authorization. This Agreement has been
duly executed and delivered by the Company and constitutes a legal, valid and binding obligation of



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the Company, enforceable against the Company in accordance with its terms, except that such
enforcement may be subject to (a) bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting or relating to enforcement of creditors’ rights generally, and (b) general
principles of equity.



     Section 3.03 Capitalization. At the Closing, the authorized capital stock of the
Company will consist of 80,000,000 shares of Common Stock, par value $0.001 per share, and
5,000,000 shares of Preferred Stock, par value $0.001 per share. As of the close of business on
September 15, 2006, there were 36,075,017 shares of Common Stock issued and outstanding. All such
issued and outstanding shares have been duly authorized and validly issued, and are fully paid and
non-assessable, and were issued in compliance with all applicable state and federal laws concerning
the issuance of securities and all applicable pre-emptive, participation, rights of first refusal
and other similar rights.



     Section 3.04 Valid Issuance of the New Notes. The New Notes, when issued, sold and
delivered in accordance with the terms and for the consideration set forth in this Agreement and
the Indenture, will constitute legal and binding obligations of the Company, be validly issued and
free of restrictions on transfer other than restrictions on transfer under this Agreement,
applicable state and federal securities laws and liens or encumbrances created by or imposed by the
Holder, and enforceable against the Company in accordance with their terms, except that such
enforcement may be limited by (a) bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting or relating to enforcement of creditors’ rights generally, and (b) general
principles of equity. Assuming the accuracy of the representations of the Holder in Section 2 of
this Agreement and subject to the filing of Form D pursuant to Regulation D under the Securities
Act and state securities laws, the New Notes will be issued in compliance in all material respects
with all applicable federal and state securities laws. The Underlying Common Stock has been duly
reserved for issuance, and upon issuance in accordance with the terms of the Company’s Certificate
of Incorporation, as amended, will be validly issued, fully paid and nonassessable and free of
restrictions on transfer other than restrictions on transfer under applicable federal and state
securities laws and liens or encumbrances created by or imposed by the Holder. Based in part upon
the representations of the Holder in Section 2 of this Agreement, the New Notes and the Underlying
Common Stock, when issued and delivered in accordance with the terms of the New Notes and the
Indenture, will be issued in compliance in all material respects with all applicable federal and
state securities laws.



     Section 3.05 Financial Statements. Except as qualified in the SEC Documents, the
audited and unaudited financial statements and schedules included in the SEC Documents, present
fairly in all material respects the consolidated financial position of the Company and its
subsidiaries as of the dates indicated and the consolidated results of operations and cash flows of
the Company and its subsidiaries for the periods specified; except as qualified in the SEC
Documents, such financial statements and schedules have been prepared in conformity with generally
accepted accounting principles applied on a consistent basis during the periods involved.



     Section 3.06 Legal Proceedings. No legal or governmental proceedings or
investigations are pending or, to the knowledge of the Company, threatened to which the Company is
a party or to which the property of the Company or any of its subsidiaries is subject that are not
described in the



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SEC Documents, except for such proceedings or investigations which would not
reasonably be expected to, singly or in the aggregate, result in a Material Adverse Effect. As
used in this Agreement, the term “Material Adverse Effect” shall mean when used in respect
of any matter relating to the Company a material adverse effect on the business, condition
(financial or otherwise), properties, prospects or results of operations of the Company and its
subsidiaries, considered as one
enterprise, or would materially adversely affect the ability of the Company to perform its
obligations under this Agreement, the Indenture, the Registration Rights Agreement and the New
Notes.



     Section 3.07 Compliance with Laws; Permits. The Company and its subsidiaries possess
all certificates, authorizations and permits issued by the appropriate federal, state or foreign
regulatory authorities necessary to conduct their respective businesses, except where the failure
to have such certificates, authorizations and permits would not reasonably be expected to have a
Material Adverse Effect, and none of the Company and its subsidiaries has received any notice of
proceedings relating to the revocation or modification of any such certificate, authorization or
permit which would reasonably be expected to, singly or in the aggregate, result in a Material
Adverse Effect. The Company and its subsidiaries are and have been in compliance with all
applicable laws, statutes, ordinances, rules, regulations, orders, judgments, decisions, decrees,
standards, and requirements relating to their respective businesses, except where any such
non-compliance would not reasonably be expected to have a Material Adverse Effect.



     Section 3.08 No Material Adverse Effect. Since the respective dates as of which
information is given in the SEC Documents, there has not been any event or occurrence having a
Material Adverse Effect on the Company or its subsidiaries, except as reflected or disclosed in a
subsequent SEC Document.



     Section 3.09 Additional Issuances of Securities.



          (a) For purposes of this Section 3.9, the following definitions shall apply.





               (1) “Convertible Securities” means any stock or securities (other than Options)
convertible into or exercisable or exchangeable for shares of common stock.




               (2) “Options” means any rights, warrants or options to subscribe for or
purchase shares of common stock or Convertible Securities.




               (3) “Common Stock Equivalents” means, collectively, Options and Convertible
Securities.



          (b) From the date hereof until 18 months after the Closing, the Company will not, directly or
indirectly, offer, sell, grant any option to purchase, or otherwise dispose of (or announce any
offer, sale, grant or any option to purchase or other disposition of) any of its or its
subsidiaries’ equity or equity equivalent securities, including without limitation any debt,
preferred stock or other instrument or security that is, at any time during its life and under any
circumstances, convertible into or exchangeable or exercisable for shares of Common Stock or Common
Stock Equivalents (each, a “Subsequent Placement”), unless the Company shall have first
complied with this Section 3.9(b); provided, however, that the Company shall have no
obligation to comply with

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this Section 3.9(b) at any time after Holder, together with its
affiliates, has sold more than 75% of the New Notes it is issued pursuant to Section 1.1 of this
Agreement; provided, further, that the Holder shall not be deemed to have sold New Notes to
the extent such Holder converts any such New Notes in accordance with the terms of the Indenture
and subsequently sells the shares of Common Stock issued upon such conversion.





               (1) Promptly upon beginning a Subsequent Placement for any proposed or intended
issuance or sale or exchange of securities as described in this paragraph, the Company shall
give notice to Holder of such proposed offering. During the offering period, the Company
shall keep the Holder updated as to the status of the offering. At such time as the Company
is aware of the material terms of such Subsequent Placement and pursuant to the notice
provision in clause (ii) below, the Company shall deliver to Holder an irrevocable written
notice (the “Offer Notice”) of the proposed terms of the intended issuance or sale
or exchange (the “Offer”) of the securities being offered (the “Offered
Securities”) as part of any equity or equity-linked financing by the Company other than
a firm commitment, fully underwritten offering with a nationally recognized underwriter
resulting in gross proceeds to the Company of twenty-five million dollars ($25,000,000) or
more, which Offer Notice shall (w) identify and describe the Offered Securities, (x)
describe the price and other terms upon which they are to be issued, sold or exchanged, and
the number or amount of the Offered Securities to be issued, sold or exchanged, (y) identify
the persons or entities (if known) to which or with which the Offered Securities are to be
offered, issued, sold or exchanged and (z) offer to issue and sell to or exchange with the
Holders on a pro-rata basis twenty-five percent (25%) (as determined below) of the Offered
Securities, allocated among Holders (a) based on such Holder’s pro rata portion of the
aggregate principal amount of Notes purchased hereunder (the “Basic Amount”), and
(b) with respect to each of the Holders that elects to purchase its Basic Amount, any
additional portion of the Offered Securities attributable to the Basic Amounts of other
Holders as such Holder shall indicate it will purchase or acquire should the Other Holders
subscribe for less than their Basic Amounts (the “Undersubscription Amount”), which
process shall be repeated until the Holders shall have an opportunity to subscribe for any
remaining Undersubscription Amount.




               (2) To accept an Offer, in whole or in part, such Holder must deliver a written notice
to the Company prior to the end of the third (3rd) business day after such
Holder’s receipt of the Offer Notice (the “Offer Period”). However, in no event
shall the period from the first notification to the Holder (as set forth in the initial
sentence of Section 3.9(b)(i) above to the end of the Offer Period be less than 10 business
days nor more than 15 business days, without the Holder’s prior written consent. At the end
of such period, the Company shall take all actions necessary or appropriate such that the
Holder shall not be in possession of material non-public information. To accept an Offer,
the Holder shall set forth the portion of such Holder’s Basic Amount that such Holder elects
to purchase and, if such Holder shall elect to purchase all of its Basic Amount, the
Undersubscription Amount, if any, that such Holder elects to purchase (in either case, the
“Notice of Acceptance”). If the Basic Amounts subscribed for by Holders are less
than the total of all of the Basic Amounts, then each Holder who has set forth an
Undersubscription Amount in its Notice of Acceptance shall be entitled to purchase, in
addition to the Basic Amounts subscribed for, the



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Undersubscription Amount it has subscribed
for; provided, however, that if the Undersubscription Amounts subscribed for
exceed the difference between the total of all the Basic Amounts and the Basic Amounts
subscribed for (the “Available Undersubscription Amount”), each of the Holders who
has subscribed for any Undersubscription Amount shall be entitled to purchase only that
portion of the Available Undersubscription Amount as the Basic Amount of such Holder bears
to the total Basic Amounts of all Holders that have
subscribed for Undersubscription Amounts, subject to rounding by the Company to the
extent its deems reasonably necessary.




               (3) The Company shall have, in its discretion, up to fifteen (15) business days from
the expiration of the Offer Period above to offer, issue, sell or exchange all or any part
of such Offered Securities as to which a Notice of Acceptance has not been given by the
Holders (the “Refused Securities”), but only to the offerees described in the Offer
Notice (if so described therein) and only upon terms and conditions (including, without
limitation, unit prices and interest rates) that are not more favorable to the acquiring
person or persons or less favorable to the Company than those set forth in the Offer Notice
and to publicly announce (a) the execution of the agreement with respect to the sale of the
Offered Securities (the “Subsequent Placement Agreement”), and (b) either (x) the
consummation of the transactions contemplated by such Subsequent Placement Agreement or (y)
the termination of such Subsequent Placement Agreement, which shall be filed with the SEC on
a Current Report on Form 8-K with such Subsequent Placement Agreement and any documents
contemplated therein filed as exhibits thereto.




               (4) In the event the Company shall propose to sell less than all the Refused Securities
(any such sale to be in the manner and on the terms specified in Section 3.9(b)(iii) above),
then each of the Holders may, at its sole option and in its sole discretion, reduce the
number or amount of the Offered Securities that it intends to purchase and as specified in
its Notice of Acceptance to an amount that shall be not less than the number or amount of
the Offered Securities that such Holder elected to purchase pursuant to Section 3.9(b)(ii)
above multiplied by a fraction, (i) the numerator of which shall be the number or amount of
Offered Securities the Company actually proposes to issue, sell or exchange (including
Offered Securities to be issued or sold to Holders pursuant to Section 3.9(b)(iii) above
prior to such reduction) and (ii) the denominator of which shall be the original amount of
the Offered Securities. In the event that any of the Holders so elects to reduce the number
or amount of Offered Securities that it intends to purchase as specified in its Notice of
Acceptance, the Company may not issue, sell or exchange more than the reduced number or
amount of the Offered Securities unless and until such securities have again been offered to
the Holders in accordance with Section 3.9(b)(i) above.




               (5) Upon the closing of the issuance, sale or exchange of all or less than all of the
Refused Securities, the Holders shall acquire from the Company, and the Company shall issue
to the Holders, the number or amount of Offered Securities specified in the Notices of
Acceptance, as reduced pursuant to Section 3.9(b)(iv) above if the Holders have so elected,
upon the terms and conditions specified in the Offer. Notwithstanding anything to the
contrary contained in this Agreement, if the Company does not consummate



-11-









 







the closing of the
issuance, sale or exchange of all or less than all of the Refused Securities within fifteen
(15) business days of the expiration of the Offer Period, the Company shall issue to the
Holders the number or amount of Offered Securities specified in the Notices of Acceptance,
as reduced pursuant to Section 3.9(b)(iv) above if the Holders have so elected, upon the
terms and conditions specified in the Offer. The purchase by the Holders of any Offered
Securities is subject in all cases to the preparation, execution and delivery by the
Company and the Holders of a purchase agreement relating to such Offered Securities
reasonably satisfactory in form and substance to the Holders and their respective counsel.




               (6) Any Offered Securities not acquired by the Holders or other persons in accordance
with Section 3.9(b)(iii) above may not be issued, sold or exchanged until they are again
offered to the Holders under the procedures specified in this Agreement.




               (7) The Company and the Holders agree that if any of the Holders elect to participate
in the Offer, (x) neither the Subsequent Placement Agreement with respect to such Offer nor
any other transaction documents related thereto (collectively, the “Subsequent Placement
Documents”) shall include any term or provisions whereby any of the Holders shall be
required to agree to any restrictions in trading as to any securities of the Company owned
by such Holder prior to such Subsequent Placement, and (y) any registration rights set forth
in such Subsequent Placement Documents shall be similar in all material respects to the
registration rights contained in the Registration Rights Agreement unless waived by Holders
of New Notes representing a majority in aggregate principal amount of all outstanding New
Notes of Holders participating in such Offer.




               (8) Notwithstanding anything to the contrary in this Section 3.9 and unless otherwise
agreed to by the Holders, the Company shall either confirm in writing to the Holders that
the transaction with respect to the Subsequent Placement has been abandoned or shall
publicly disclose its intention to issue the Offered Securities, in either case in such a
manner such that the Holders will not be in possession of material non-public information,
by the fifteen (15th) business day following delivery of the Offer Notice. If by
the fifteen (15th) business day following delivery of the Offer Notice no public
disclosure regarding a transaction with respect to the Offered Securities has been made, and
no notice regarding the abandonment of such transaction has been received by the Holders,
such transaction shall be deemed to have been abandoned and the Holders shall not be deemed
to be in possession of any material, non-public information with respect to the Company.
Should the Company decide to pursue such transaction with respect to the Offered Securities,
the Company shall provide the Holders with another Offer Notice and the Holders will again
have the right of participation set forth in this Section 3.9(b). The Company shall not be
permitted to deliver more than one such additional Offer Notice to the Holders in any 30 day
period.



          (c) The restrictions contained in subsection (b) of this Section 3.9 shall not apply in
connection with an issuance pursuant to a bona fide firm commitment underwritten public offering
with a nationally recognized underwriter which generates gross proceeds to the Company in

-12-









 








excess of
$25,000,000 (other than an “at the market offering” as defined in Rule 415(a)(4) under the
Securities Act and “equity lines”).




     Section 3.10 Placement Agent Agreement Representations. The representations and
warranties of the Company in the Purchase Agreement dated as of August 18, 2003 by and among the
Company and SG Cowen Securities Corporation (“SG Cowen”) shall be incorporated by
reference in this Agreement as if such representations and warranties were made to the Holder
herein instead of to SG Cowen.



ARTICLE IV



Miscellaneous Provisions




     Section 4.01 Disclosure of Transactions and Other Material Information. On or before
8:30 a.m., New York City time, on the business day following the date of this Agreement, the
Company shall file with the SEC a Current Report on Form 8-K describing the terms of the
transactions contemplated by this Agreement in the form required by the Securities Exchange Act of
1934, as amended, and attaching the material documents relating to the transactions contemplated by
this Agreement (including, without limitation, this Agreement (and all schedules to this
Agreement), the form of the New Notes, the form of the Indenture and the form of the Registration
Rights Agreement) as exhibits to such filing (including all attachments, the “8-K Filing”).
From and after the filing of the 8-K Filing with the SEC, the Holder shall not be in possession of
any material, nonpublic information received from the Company, any of its subsidiaries or any of
their respective officers, directors, employees or agents, which is not disclosed in the 8-K
Filing. The Company shall not, and shall cause each of its subsidiaries and its and each of their
respective officers, directors, employees and agents, not to, provide the Holder with any material,
nonpublic information regarding the Company or any of its Subsidiaries from and after the filing of
the 8-K Filing with the SEC without the express written consent of the Holder. If the Holder has,
or reasonably believes it has, received any such material, nonpublic information regarding the
Company or any of its subsidiaries, it shall provide the Company with written notice thereof. The
Company shall, within five (5) business days of receipt of such notice, make public disclosure of
such material, nonpublic information if it reasonably believes that the Holder is in possession of
material non-public information regarding the Company. Subject to the foregoing, neither the
Company, its subsidiaries nor the Holder or any of the Other Holders shall issue any press releases
or any other public statements with respect to the transactions contemplated hereby; provided,
however, that the Company shall be entitled, without the prior approval of the Holder, to make any
press release or other public disclosure with respect to such transactions (i) in substantial
conformity with the 8-K Filing and contemporaneously therewith and (ii) as is required by
applicable law and regulations (provided that in the case of clause (i) the Holder shall be
consulted by the Company in connection with any such press release or other public disclosure prior
to its release). Without the prior written consent of the Holder, neither the Company nor any of
its subsidiaries or affiliates shall disclose the name of the Holder in any filing, announcement,
release or otherwise.



     Section 4.02 Entire Agreement. This Agreement and the other documents and agreements
executed in connection with the Exchange Transaction embody the entire agreement and



-13-









 







understanding
of the parties hereto with respect to the subject matter hereof and supersede all prior and
contemporaneous oral or written agreements, representations, warranties, contracts, correspondence,
conversations, memoranda and understandings between or among the parties or any of their agents,
representatives or affiliates relative to such subject matter, including, without limitation, any
term sheets, emails or draft documents.



     Section 4.03 Assignment; Binding Agreement. This Agreement and the various rights and
obligations arising hereunder shall inure to the benefit of and be binding upon the parties hereto
and
their successors and assigns; provided, however, that the right granted to the Holder
pursuant to Section 3.9 of this Agreement shall terminate and be of no further force and effect
with respect to New Notes transferred by the initial Holder to a subsequent Holder of the New
Notes. The Company shall not assign this Agreement or any rights or obligations hereunder without
the prior written consent of the Holder.



     Section 4.04 Counterparts. This Agreement may be executed in multiple counterparts,
and on separate counterparts, each of which shall be deemed an original, but all of which taken
together shall constitute one and the same instrument. Any counterpart or other signature hereupon
delivered by facsimile shall be deemed for all purposes as constituting good and valid execution
and delivery of this Agreement by such party.



     Section 4.05 Remedies Cumulative. Except as otherwise provided herein, all rights and
remedies of the parties under this Agreement are cumulative and without prejudice to any other
rights or remedies available at law.



     Section 4.06 Governing Law; Jurisdiction; Jury Trial. This Agreement shall in all
respects be construed in accordance with and governed by the substantive laws of the State of New
York, without reference to any choice of law rules (whether of the State of New York or any other
jurisdictions) that would cause the application of the laws of any jurisdictions other than the
State of New York. Each party hereby irrevocably submits to the jurisdiction of the state and
federal courts sitting in The City of New York, Borough of Manhattan, for the adjudication of any
dispute hereunder or in connection herewith or with any transaction contemplated hereby or
discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or
proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit,
action or proceeding is improper. Each party hereby irrevocably waives personal service of process
and consents to process being served in any such suit, action or proceeding by mailing a copy
thereof to such party at the address for such notices to it under this Agreement and agrees that
such service shall constitute good and sufficient service of process and notice thereof. Nothing
contained herein shall be deemed to limit in any way any right to serve process in any manner
permitted by law. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO
REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR
ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.



-14-









 





     Section 4.07 Survival. Unless this Agreement is terminated, the representations and
warranties of the Company and Holder contained in Sections 2 and 3, and the agreements and
covenants set forth in Articles II and III shall survive the Closing.



     Section 4.08 No Third Party Beneficiaries or Other Rights. Nothing herein shall grant
to or create in any person not a party hereto, or any such person’s dependents or heirs, any right
to any benefits hereunder, and no such party shall be entitled to sue any party to this Agreement
with respect thereto.



     Section 4.09 Waiver; Consent. This Agreement may not be changed, amended, terminated,
augmented, rescinded or discharged (other than in accordance with its terms), in whole or in part,
except by a writing executed by the parties hereto. No waiver of any of the provisions or
conditions of this Agreement or any of the rights of a party hereto shall be effective or binding
unless such waiver shall be in writing and signed by the party claimed to have given or consented
thereto. Except to the extent otherwise agreed in writing, no waiver of any term, condition or
other provision of this Agreement, or any breach thereof shall be deemed to be a waiver of any
other term, condition or provision or any breach thereof, or any subsequent breach of the same
term, condition or provision, nor shall any forbearance to seek a remedy for any noncompliance or
breach be deemed to be a waiver of a party’s rights and remedies with respect to such noncompliance
or breach.



     Section 4.10 Notices. Any notices, consents, waivers or other communications required
or permitted to be given under the terms of this Agreement must be in writing and will be deemed to
have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when sent by
facsimile (provided confirmation of transmission is mechanically or electronically generated and
kept on file by the sending party); or (iii) one business day after deposit with an overnight
courier service, in each case properly addressed to the party to receive the same. The addresses
and facsimile numbers for such communications shall be:


If to the Company:



Ciphergen Biosystems, Inc.

6611 Dumbarton Circle,

Fremont, CA 94555

Telephone: (510) 505-2100

Facsimile: (510) 505-2107

Attention: Chief Executive Officer



with a copy (for informational purposes only) to:



Wilson Sonsini Goodrich & Rosati, P.C.

650 Page Mill Road

Palo Alto, California 94304

Telephone: (650) 493-9300

Facsimile: (650) 493-6811

Attention: Michael J. O’Donnell, Esq.




-15-









 




If to Holder:



[                     ]

[address]

Telephone: ( ) -

Facsimile: ( ) -

Attention: [          ]




-16-









 




or to such other address and/or facsimile number and/or to the attention of such other Person as
the recipient party has specified by written notice given to each other party five (5) days prior
to the effectiveness of such change. Written confirmation of receipt (A) given by the recipient of
such notice, consent, waiver or other communication, (B) mechanically or electronically generated
by the sender’s facsimile machine containing the time, date, recipient facsimile number and an
image of the first page of such transmission or (C) provided by an overnight courier service shall
be rebuttable evidence of personal service, receipt by facsimile or receipt from an overnight
courier service in accordance with clause (i), (ii) or (iii) above, respectively.




     Section 4.11 Word Meanings. The words such as “herein”,
“hereinafter”, “hereof”, and “hereunder” refer to this Agreement as a whole
and not merely to a subdivision in which such words appear unless the context otherwise requires.
The singular shall include the plural, and vice versa, unless the context otherwise requires. The
masculine shall include the feminine and neuter, and vice versa, unless the context otherwise
requires.



     Section 4.12 No Broker. Neither party has engaged any third party as broker or finder
or incurred or become obligated to pay any broker’s commission or finder’s fee in connection with
the transactions contemplated by this Agreement other than such fees and expenses for which it
shall be solely responsible.



     Section 4.13 Further Assurances. The Holder and the Company each hereby agree to
execute and deliver, or cause to be executed and delivered, such other documents, instruments and
agreements, and take such other actions, as either party may reasonably request in connection with
the transactions contemplated by this Agreement.



     Section 4.14 Fees. At Closing, the Company shall pay an expense allowance to Holder
or its designee(s) (in addition to any other expense amounts paid to Holder prior to the date of
this Agreement) for all reasonable costs and expenses incurred in connection with the transactions
contemplated by the Exchange Transaction (including all reasonable legal fees and disbursements in
connection therewith and documentation and implementation of the transactions contemplated by the
Exchange Transaction), in an amount not to exceed $75,000.



     Section 4.15 Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.



     Section 4.16 Severability. If any one or more of the provisions contained herein, or
the application thereof in any circumstance, is held invalid, illegal or unenforceable, the
validity, legality and enforceability of any such provision in every other respect and of the
remaining provisions contained herein shall not be affected or impaired thereby.



     Section 4.17 Independent Nature of Holders’ Obligations and Rights. The obligations
of Holder and each of the Other Holders under this Agreement, the Other Agreements and any other
documents relating to the transactions contemplated by this Agreement and the Other Agreements are
several and not joint with the obligations of the Holder and any of the Other Holders, and the
Holder shall not be responsible in any way for the performance of the obligations of the Other



-17-









 







Holders under the Other Agreements or any documents relating to the transactions contemplated by
the Other Agreements. Nothing contained herein, the Other Agreements or in any other
documents relating to this Agreement or the Other Agreements, and no action taken by any of the
Holders pursuant hereto or thereto, shall be deemed to constitute the Holders as, and the Company
acknowledges that the Holders do not so constitute, a partnership, an association, a joint venture
or any other kind of entity, or create a presumption that the Holders are in any way acting in
concert or as a group, and the Company will not assert any such claim and the Company acknowledges
that the Holders are not acting in concert or as a group with respect to such obligations or the
transactions contemplated by this Agreement, the Other Agreements and the documents relating to the
transactions contemplated by this Agreement and the Other Agreements. The Company acknowledges and
the Holder confirms that it has independently participated in the negotiation of the transactions
contemplated hereby with the advice of its own counsel and advisors. The Holder shall be entitled
to independently protect and enforce its rights, including, without limitation, the rights arising
out of this Agreement or out of any other documents relating to the transactions contemplated by
this Agreement, and it shall not be necessary for any Other Holder to be joined as an additional
party in any proceeding for such purpose.



[THE REMAINDER OF THIS PAGE HAS BEEN LEFT BLANK INTENTIONALLY.]




-18-









 




IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be executed as of the
date first above written.




	 	 	 	 	 	 	 
	 	 	HOLDER:	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	Title:	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	THE COMPANY:	 	 
	 
	 	 	 	 	 	 
	 	 	CIPHERGEN BIOSYSTEMS, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	Title:	 	 	 	 






 









 






Exhibit A




Form of Indenture





 










 





CIPHERGEN BIOSYSTEMS, INC.




as Issuer




7.00% CONVERTIBLE SENIOR NOTES DUE 2011




 






INDENTURE




Dated as of November ___, 2006




 






U.S. BANK NATIONAL ASSOCIATION,




as Trustee




 









 





CROSS-REFERENCE TABLE




	 	 	 	 	 
	Trust Indenture	 	 	 	 
	Act Section	 	 	 	Indenture Section
	310 (a)(1)
	 	 	 	5.11
	(a)(2)
	 	 	 	5.11
	(a)(3)
	 	 	 	N/a
	(a)(4)
	 	 	 	N/a
	(a)(5)
	 	 	 	5.11
	(b)
	 	 	 	5.3, 5.11
	(c)
	 	 	 	N/a
	311 (a)
	 	 	 	5.12
	(b)
	 	 	 	5.12
	(c)
	 	 	 	N/a
	312(a)
	 	 	 	2.10
	(b)
	 	 	 	13.3
	(c)
	 	 	 	13.3
	313(a)
	 	 	 	5.7
	(b)(1)
	 	 	 	N/a
	(b)(2)
	 	 	 	5.7
	(c)
	 	 	 	5.7, 14.2
	(d)
	 	 	 	5.7
	314 (a)(1), (2), (3)
	 	 	 	9.6, 13.6
	(a)(4)
	 	 	 	9.6, 9.7, 13.6
	(b)
	 	 	 	N/a
	(c)(1)
	 	 	 	13.5
	(c)(2)
	 	 	 	13.5
	(c)(3)
	 	 	 	N/a
	(d)
	 	 	 	N/a
	(e)
	 	 	 	13.6
	(f)
	 	 	 	N/a
	315 (a)
	 	 	 	5.1(a)
	(b)
	 	 	 	5.6, 13.2
	(c)
	 	 	 	5.1(b)
	(d)
	 	 	 	5.1(c)
	(e)
	 	 	 	4.14
	316(a)(last sentence)
	 	 	 	2.13
	(a)(1)(A)
	 	 	 	4.5
	(a)(1)(B)
	 	 	 	4.4
	(a)(2)
	 	 	 	N/a
	(b)
	 	 	 	4.7
	(c)
	 	 	 	7.4
	317 (a)(1)
	 	 	 	4.8






4









 






	 	 	 	 	 
	Trust Indenture	 	 	 	 
	Act Section	 	 	 	Indenture Section
	(a)(2)
	 	 	 	4.9
	(b)
	 	 	 	2.5
	318 (a)
	 	 	 	13.1
	(b)
	 	 	 	N/A
	(c)
	 	 	 	13.1








 




	 	 
	“N/a”	  means not applicable.
	 
	*	  This Cross-Reference Table shall not, for any purpose, be deemed to be a part of the Indenture.




5









 










TABLE OF CONTENTS




	 	 	 	 	 
	 	 	Page	 
	ARTICLE I DEFINITIONS AND INCORPORATION BY REFERENCE
	 	 	 	 
	SECTION 1.1 DEFINITIONS
	 	 	1	 
	SECTION 1.2 INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT
	 	 	10	 
	SECTION 1.3 RULES OF CONSTRUCTION
	 	 	11	 
	ARTICLE II THE NOTES
	 	 	 	 
	SECTION 2.1 TITLE AND TERMS
	 	 	11	 
	SECTION 2.2 FORM OF NOTES
	 	 	13	 
	SECTION 2.3 LEGENDS
	 	 	14	 
	SECTION 2.4 EXECUTION, AUTHENTICATION, DELIVERY AND DATING
	 	 	19	 
	SECTION 2.5 REGISTRAR AND PAYING AGENT
	 	 	19	 
	SECTION 2.6 PAYING AGENT TO HOLD ASSETS IN TRUST
	 	 	20	 
	SECTION 2.7 GENERAL PROVISIONS RELATING TO TRANSFER AND EXCHANGE
	 	 	21	 
	SECTION 2.8 BOOK-ENTRY PROVISIONS FOR THE GLOBAL NOTES
	 	 	22	 
	SECTION 2.9 SPECIAL TRANSFER PROVISIONS
	 	 	23	 
	SECTION 2.10 HOLDER LISTS
	 	 	29	 
	SECTION 2.11 PERSONS DEEMED OWNERS
	 	 	29	 
	SECTION 2.12 MUTILATED, DESTROYED, LOST OR STOLEN NOTES
	 	 	30	 
	SECTION 2.13 TREASURY NOTES
	 	 	31	 
	SECTION 2.14 TEMPORARY NOTES
	 	 	31	 
	SECTION 2.15 CANCELLATION
	 	 	31	 
	SECTION 2.16 CUSIP NUMBERS
	 	 	32	 
	SECTION 2.17 DEFAULTED INTEREST
	 	 	32	 
	ARTICLE III SATISFACTION AND DISCHARGE

SECTION 3.1 SATISFACTION AND DISCHARGE OF INDENTURE
	 	 	32	 
	SECTION 3.2 DEPOSITED MONIES TO BE HELD IN TRUST
	 	 	34	 
	SECTION 3.3 RETURN OF UNCLAIMED MONIES
	 	 	34	 
	ARTICLE IV DEFAULTS AND REMEDIES
	 	 	 	 
	SECTION 4.1 EVENTS OF DEFAULT
	 	 	34	 
	 
	 	 	 	 
	 
	 	 	 	 
	i







 









 






	 	 	 	 	 
	 	 	Page	 
	SECTION 4.2 ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT
	 	 	35	 
	SECTION 4.3 OTHER REMEDIES
	 	 	36	 
	SECTION 4.4 WAIVER OF PAST DEFAULTS
	 	 	37	 
	SECTION 4.5 CONTROL BY MAJORITY
	 	 	37	 
	SECTION 4.6 LIMITATION ON SUIT
	 	 	37	 
	SECTION 4.7 UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PAYMENT
	 	 	38	 
	SECTION 4.8 COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY THE TRUSTEE
	 	 	38	 
	SECTION 4.9 TRUSTEE MAY FILE PROOFS OF CLAIM
	 	 	39	 
	SECTION 4.10 RESTORATION OF RIGHTS AND REMEDIES
	 	 	40	 
	SECTION 4.11 RIGHTS AND REMEDIES CUMULATIVE
	 	 	40	 
	SECTION 4.12 DELAY OR OMISSION NOT WAIVER
	 	 	40	 
	SECTION 4.13 APPLICATION OF MONEY COLLECTED
	 	 	40	 
	SECTION 4.14 UNDERTAKING FOR COSTS
	 	 	41	 
	SECTION 4.15 WAIVER OF STAY OR EXTENSION LAWS
	 	 	41	 
	ARTICLE V THE TRUSTEE
	 	 	 	 
	SECTION 5.1 CERTAIN DUTIES AND RESPONSIBILITIES
	 	 	41	 
	SECTION 5.2 CERTAIN RIGHTS OF TRUSTEE
	 	 	43	 
	SECTION 5.3 INDIVIDUAL RIGHTS OF TRUSTEE
	 	 	44	 
	SECTION 5.4 MONEY HELD IN TRUST
	 	 	45	 
	SECTION 5.5 TRUSTEE’S DISCLAIMER
	 	 	45	 
	SECTION 5.6 NOTICE OF DEFAULTS
	 	 	45	 
	SECTION 5.7 REPORTS BY TRUSTEE TO HOLDERS
	 	 	45	 
	SECTION 5.8 COMPENSATION AND INDEMNIFICATION
	 	 	45	 
	SECTION 5.9 REPLACEMENT OF TRUSTEE
	 	 	46	 
	SECTION 5.10
SUCCESSOR TRUSTEE BY MERGER, ETC.
	 	 	47	 
	SECTION 5.11 CORPORATE TRUSTEE REQUIRED; ELIGIBILITY
	 	 	47	 
	SECTION 5.12 COLLECTION OF CLAIMS AGAINST THE COMPANY
	 	 	47	 
	ARTICLE VI CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
	 	 	 	 
	SECTION 6.1 COMPANY MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS
	 	 	47	 
	 
	 	 	 	 
	 
	 	 	 	 
	ii







 









 






	 	 	 	 	 
	 	 	Page	 
	SECTION 6.2 SUCCESSOR CORPORATION SUBSTITUTED
	 	 	48	 
	ARTICLE VII AMENDMENTS, SUPPLEMENTS AND WAIVERS
	 	 	 	 
	SECTION 7.1 WITHOUT CONSENT OF HOLDERS OF NOTES
	 	 	49	 
	SECTION 7.2 WITH CONSENT OF HOLDERS OF NOTES
	 	 	49	 
	SECTION 7.3 COMPLIANCE WITH TRUST INDENTURE ACT
	 	 	51	 
	SECTION 7.4 REVOCATION OF CONSENTS AND EFFECT OF CONSENTS OR VOTES
	 	 	51	 
	SECTION 7.5 NOTATION ON OR EXCHANGE OF NOTES
	 	 	51	 
	SECTION 7.6
TRUSTEE TO SIGN AMENDMENT, ETC.
	 	 	52	 
	ARTICLE VIII MEETING OF HOLDERS OF NOTES

SECTION 8.1 PURPOSES FOR WHICH MEETINGS MAY BE CALLED
	 	 	52	 
	SECTION 8.2 CALL NOTICE AND PLACE OF MEETINGS
	 	 	52	 
	SECTION 8.3 PERSONS ENTITLED TO VOTE AT MEETINGS
	 	 	53	 
	SECTION 8.4 QUORUM; ACTION
	 	 	53	 
	SECTION 8.5 DETERMINATION OF VOTING RIGHTS; CONDUCT AND ADJOURNMENT OF MEETINGS
	 	 	53	 
	SECTION 8.6 COUNTING VOTES AND RECORDING ACTION OF MEETINGS
	 	 	54	 
	ARTICLE IX COVENANTS
	 	 	 	 
	SECTION 9.1 PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST
	 	 	54	 
	SECTION 9.2 MAINTENANCE OF OFFICES OR AGENCIES
	 	 	55	 
	SECTION 9.3 CORPORATE EXISTENCE
	 	 	55	 
	SECTION 9.4 MAINTENANCE OF PROPERTIES
	 	 	56	 
	SECTION 9.5 PAYMENT OF TAXES AND OTHER CLAIMS
	 	 	56	 
	SECTION 9.6 REPORTS
	 	 	56	 
	SECTION 9.7 COMPLIANCE CERTIFICATE; NOTICE OF REGISTRATION DEFAULT
	 	 	56	 
	SECTION 9.8 RESALE OF CERTAIN NOTES
	 	 	57	 
	SECTION 9.9 LIMITATION ON INDEBTEDNESS
	 	 	57	 
	ARTICLE X REDEMPTION OF NOTES
	 	 	 	 
	SECTION 10.1 OPTIONAL REDEMPTION
	 	 	58	 
	SECTION 10.2 NOTICE TO TRUSTEE
	 	 	59	 
	SECTION 10.3 SELECTION OF NOTES TO BE REDEEMED
	 	 	59	 
	 
	 	 	 	 
	 
	 	 	 	 
	iii







 









 






	 	 	 	 	 
	 	 	Page	 
	SECTION 10.4 NOTICE OF REDEMPTION
	 	 	60	 
	SECTION 10.5 EFFECT OF NOTICE OF REDEMPTION
	 	 	61	 
	SECTION 10.6 DEPOSIT OF REDEMPTION PRICE
	 	 	61	 
	SECTION 10.7 NOTES REDEEMED IN PART
	 	 	61	 
	ARTICLE XI REPURCHASE AT THE OPTION OF A HOLDER
	 	 	 	 
	SECTION 11.1 REPURCHASE RIGHT UPON A CHANGE OF CONTROL
	 	 	62	 
	SECTION 11.2 NOTICES; METHOD OF EXERCISING REPURCHASE RIGHT, ETC. UPON CHANGE OF CONTROL
	 	 	62	 
	SECTION 11.3 REPURCHASE UPON SPECIFIED DATES
	 	 	64	 
	ARTICLE XII CONVERSION OF NOTES
	 	 	 	 
	SECTION 12.1 CONVERSION RIGHT AND CONVERSION PRICE
	 	 	68	 
	SECTION 12.2 EXERCISE OF CONVERSION RIGHT
	 	 	68	 
	SECTION 12.3 FRACTIONS OF SHARES
	 	 	69	 
	SECTION 12.4 ADJUSTMENT OF CONVERSION PRICE
	 	 	70	 
	SECTION 12.5 NOTICE OF ADJUSTMENTS OF CONVERSION PRICE
	 	 	78	 
	SECTION 12.6 NOTICE PRIOR TO CERTAIN ACTIONS
	 	 	78	 
	SECTION 12.7 COMPANY TO RESERVE COMMON STOCK
	 	 	79	 
	SECTION 12.8 TAXES ON CONVERSIONS
	 	 	80	 
	SECTION 12.9 COVENANT AS TO COMMON STOCK
	 	 	80	 
	SECTION 12.10 CANCELLATION OF CONVERTED NOTES
	 	 	80	 
	SECTION 12.11 EFFECT OF RECLASSIFICATION, CONSOLIDATION, MERGER OR SALE
	 	 	80	 
	SECTION 12.12 RESPONSIBILITY OF TRUSTEE FOR CONVERSION PROVISIONS
	 	 	82	 
	SECTION 12.13 LIMITATIONS ON CONVERSION RIGHT
	 	 	82	 
	SECTION 12.14 MAKE-WHOLE PAYMENT UPON CERTAIN CHANGES OF CONTROL
	 	 	83	 
	ARTICLE XIII OTHER PROVISIONS OF GENERAL APPLICATION
	 	 	 	 
	SECTION 13.1 TRUST INDENTURE ACT CONTROLS
	 	 	85	 
	SECTION 13.2 NOTICES
	 	 	85	 
	SECTION 13.3 COMMUNICATION BY HOLDERS WITH OTHER HOLDERS
	 	 	86	 
	SECTION 13.4 ACTS OF HOLDERS OF NOTES
	 	 	86	 
	SECTION 13.5 CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT
	 	 	87	 
	 
	 	 	 	 
	 
	 	 	 	 
	iv







 









 






	 	 	 	 	 
	 	 	Page	 
	SECTION 13.6 STATEMENTS REQUIRED IN CERTIFICATE OR OPINION
	 	 	88	 
	SECTION 13.7 EFFECT OF HEADINGS AND TABLE OF CONTENTS
	 	 	88	 
	SECTION 13.8 SUCCESSORS AND ASSIGNS
	 	 	89	 
	SECTION 13.9 SEPARABILITY CLAUSE
	 	 	89	 
	SECTION 13.10 BENEFITS OF INDENTURE
	 	 	89	 
	SECTION 13.11 GOVERNING LAW
	 	 	89	 
	SECTION 13.12 COUNTERPARTS
	 	 	89	 
	SECTION 13.13 LEGAL HOLIDAYS
	 	 	89	 
	SECTION 13.14 RECOURSE AGAINST OTHERS
	 	 	89	 
	 
	 	 	 	 
	EXHIBITS
	 	 	 	 
	 
	 	 	 	 
	EXHIBIT A: Form of Note
	 	 	A-1	 
	EXHIBIT B: Regulation S Certificate
	 	 	B-1	 
	EXHIBIT C: Rule 144A Certificate
	 	 	C-1	 
	 
	 	 	 	 
	 
	 	 	 	 
	v







 









 






          INDENTURE, dated as of November ___, 2006 between CIPHERGEN BIOSYSTEMS, INC., a corporation
duly organized and existing under the laws of the State of Delaware, having its principal office at
6611 Dumbarton Circle, Fremont, CA 94555 (the “Company”), and U.S. Bank National Association, a
national banking association duly organized and existing under the laws of the United States, as
Trustee (the “Trustee”).




RECITALS OF THE COMPANY




          The Company has duly authorized the creation of an issue of its 7.00% Convertible Senior Notes
due 2011 (the “Notes”) of substantially the tenor and amount hereinafter set forth, and to provide
therefor the Company has duly authorized the execution and delivery of this Indenture.




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




          NOW, THEREFORE, THIS INDENTURE WITNESSETH:




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




ARTICLE I




DEFINITIONS AND INCORPORATION BY REFERENCE




     SECTION 1.1 DEFINITIONS.



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




          “Additional Interest” means any and all liquidated damages payable pursuant to Section 3 of
the Registration Rights Agreement.




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




 









 








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




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




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




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




          “Capital Stock” means, with respect to any Person, any and all shares, interests,
participations or other equivalents (however designated, whether voting or non-voting) in equity of
such Person, whether now outstanding or issued after the date of this Indenture, including, without
limitation, all common stock and preferred stock.




          “Cedel” means Cedel Bank Societe Anonyme.




          “Change of Control” means an event or series of events in which:




          (a) any “person,” including any syndicate or group deemed to be a “person” under Section
13(d)(3) of the Exchange Act, acquires beneficial ownership, directly or indirectly, of shares of
Capital Stock of the Company entitling that person to exercise more than 50% of the total voting
power of all shares of the Capital Stock of the Company entitled to vote generally in elections of
directors, other than any acquisition by the Company, any Subsidiary or any employee benefit plan
of the Company; or




          (b) the Company (1) consolidates with or merges into any other corporation or business entity
or conveys or transfers or leases all or substantially all of the assets of the Company to any
other person, corporation or business entity or any other corporation or business entity merges
into the Company, and (2) the holders of the Company’s Capital Stock immediately before such
transaction own, directly or indirectly, less than 50% of the combined voting power of the
outstanding voting securities of the corporation or business entity resulting from such
transaction;



provided, however, that a Change of Control shall not be deemed to occur if either: (x) the Closing
Price per share of the Common Stock for any five Trading Days within the period of 10 consecutive
Trading Days commencing immediately after the announcement of such Change of Control shall equal or
exceed 105% of the conversion price of the Notes in effect on each Trading Day; or (y) at least 90%
of the consideration in the Change of Control transaction consists of shares of common stock traded
on a national securities exchange, including the Nasdaq Global Market, the Nasdaq Global Select
Market and the Nasdaq Capital Market, and as a result the Notes become convertible solely into such
common stock.




2









 








          Beneficial ownership shall be determined in accordance with Rules 13d-3 and 13d-5 promulgated
by the SEC under the Exchange Act (except that a person will be deemed to have beneficial ownership
of all shares that such person has the right to acquire, either immediately or with the passage of
time). The term “person” includes any syndicate or group which would be deemed to be a “person”
under Section 13(d)(3) of the Exchange Act.




          “Closing Date” means November ___, 2006, or such later date on which the Notes may be delivered
pursuant to the Exchange Agreements.




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





	 	(1)	 	the closing sale price (or, if no closing sale
price is reported, the last reported sale price) of such security on
the New York Stock Exchange on such date;
	 
	 	(2)	 	if such security is not listed for trading on
the New York Stock Exchange on any such date, the closing sale price as
reported in the composite transactions for the principal U.S.
securities exchange on which such security is so listed, including the
closing sale price as reported by the Nasdaq Global Market, the Nasdaq
Global Select Market and the Nasdaq Capital Market;
	 
	 	(3)	 	if such security is not so listed, the closing
sale price as quoted on any system of automated dissemination of
quotation of securities prices;
	 
	 	(4)	 	if such security is not so quoted, the last
quoted bid price for such security in the over-the-counter market as
reported by the National Quotation Bureau or similar organization; or
	 
	 	(5)	 	if such bid price is not available, the average
of the mid-point of the last bid and ask prices of such security on
such date from at least three nationally recognized independent
investment banking firms retained for this purpose by the Company.





          “Common Stock” means any stock of any class of the Company which has no preference in respect
of dividends or of amounts payable in the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Company and which is not subject to redemption by the Company.
However, subject to the provisions of Section 12.11 hereof, shares issuable on conversion of Notes
shall include only shares of the class designated as Common Stock, par value $0.001 per share, of
the Company at the date of execution 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

3









 








reclassifications bears to the total number of shares of all such classes resulting from all
such reclassifications.




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




          “Company Notice” has the meaning specified in Section 11.2 hereof.




          “Company Order” means a written request or order signed in the name of the Company by its
Chairman of the Board, its President, its Chief Executive Officer, its Chief Financial Officer or
any Vice President, and delivered to the Trustee.




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




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




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




          “Corporate Trust Office” means the office of the Trustee at which at any particular time its
corporate trust business shall be administered (which at the date of execution of this Indenture is
located c/o U.S. Bank National Association, 60 Livingston Avenue, St. Paul, MN 55107, Attn:
Corporate Trust Department), or at any other time at such other address as the Trustee may
designate from time to time by notice to the Company.




          “Corporation” means a corporation, association, limited liability company, company or business
trust.




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




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




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




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




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




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




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




4









 








          “Euroclear” means Morgan Guaranty Trust Company of New York, Brussels office, as the operator
of the Euroclear System.




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




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




          “Exchange Agreements” means, collectively, the Exchange and Redemption Agreements entered into
by one of the Holders with the Company prior to the date of this Indenture pursuant to which the
Company is issuing Notes to or to the account of such Holder.




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




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




          “FDA Approval Event” shall mean the public disclosure, as part of a Quarterly Report on Form
10-Q or on a Current Report on Form 8-K or otherwise, of the occurrence of an approval or clearance
for commercial sale of any of the Company’s ovarian cancer tests by the U.S. Food and Drug
Administration of the U.S. Department of Health and Human Services.




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




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




          “Indebtedness” means, with respect to any specified Person, any indebtedness of such Person,
whether or not contingent, in respect of: (i) borrowed money; (ii) bonds, notes, debentures or
similar instruments of indebtedness or letters of credit (or reimbursement agreements in respect
thereof); (iii) banker’s acceptances; (iv) capital lease obligations; (v) the balance deferred and
unpaid of the purchase price of any property, except any such balance that constitutes an accrued
expense or trade payable, if and to the extent any of such indebtedness (other than letters of
credit and hedging obligations) would appear as a liability on a balance sheet of the specified
Person prepared in accordance with U.S. Generally Accepted Accounting Principals and (vi) any
direct or indirect liability, contingent or otherwise, of that Person with respect to any
Indebtedness or other obligations of another Person referred to in clauses (i) through (v) above if
the primary purpose or intent of the Person incurring such liability, or the primary effect
thereof, is to provide assurance to the obligee of such liability that such liability will be paid
or discharged, or that any agreements relating thereto will be complied with, or that the holders
of such liability will be protected (in whole or in part) against loss with respect thereto. The
amount of any Indebtedness outstanding as of any date shall be the accreted value thereof, in the
case of any Indebtedness issued with original issue discount.




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




          “Interest Payment Date” means each of March 1 and September 1, beginning March 1, 2007.




5









 








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




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




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




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




          “Officers’ Certificate” means a certificate signed by (a) the Chairman, the President, the
Chief Executive Officer, the Chief Financial Officer or any Vice President of the Company and (b)
the Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary of the Company, and
delivered to the Trustee.




          “Offshore Global Note” has the meaning set forth in Section 2.2.




          “Offshore Physical Note” has the meaning set forth in Section 2.2.




          “Offshore Restriction Date” has the meaning specified in Section 2.3(a)(iii).




          “Opinion of Counsel” means a written opinion of counsel, who may be counsel to the Company
(and may include directors or employees of the Company) and which opinion is acceptable to the
Trustee.




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





	 	(1)	 	previously canceled by the Trustee or delivered
to the Trustee for cancellation;
	 
	 	(2)	 	for the payment or redemption of which money in
the necessary amount has been previously deposited with the Trustee or
any Paying Agent (other than the Company) in trust or set aside and
segregated in trust by the Company (if the Company shall act as its own
Paying Agent) for the Holders of such Notes, provided that if such
Notes are to be redeemed, notice of such redemption has been duly given
pursuant to this Indenture; and
	 
	 	(3)	 	which have been paid, in exchange for or in
lieu of which other Notes have been authenticated and delivered
pursuant to this Indenture, other than any such Notes in respect of
which there shall have been presented to the Trustee proof satisfactory
to it that such Notes are held by a bona fide purchaser in whose hands
such Notes are valid obligations of the Company.




6









 











          “Parity Indebtedness” shall mean any Indebtedness of the Company that is on a parity with the
Notes in terms of priority of payment in the event of a liquidation of the Company.




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




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




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




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




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




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




          “premium” means any premium payable under the terms of the Notes, including, without
limitation, any Make-Whole Premium.




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




          “Quest Diagnostics Indebtedness” means the Indebtedness incurred pursuant to the Credit
Agreement, dated July 22, 2005, between the Company and Quest Diagnostics Incorporated, as in
effect as of the date hereof.




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




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




          “Redemption Price” has the meaning specified in Section 10.1(b) hereof.




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




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




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




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




7









 








          “Registration Rights Agreement” means the Registration Rights Agreement dated as of November
___, 2006 between the Company and the initial beneficial holders, as the same may be amended or
modified from time to time in accordance with the terms thereof.




          “Regular Record Date” for the interest on the Notes (including Additional Interest, if any)
payable means the close of business on the February 15 or August 15 (whether or not a Business
Day), as the case may be, preceding an Interest Payment Date.




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




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




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




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




          “Restricted Securities” means the Notes defined as such in Section 2.3 hereof.




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




          “Restricted Subsidiary” means any direct or indirect Subsidiary of the Company that
constitutes a “significant subsidiary” as defined in Rule 1-02(w) of Regulation S-X promulgated by
the Securities and Exchange Commission, 17 CFR 210 et seq.




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




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




          “SEC” means the Securities and Exchange Commission or any successor thereto.




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




          “Senior Indebtedness” means any Indebtedness of the Company or any Restricted Subsidiary that
is senior to the Notes in terms of priority of payment in the event of a liquidation, including any
Indebtedness secured by any assets of the Company or any Restricted Subsidiary.




          “Shelf Registration Statement” has the meaning set forth in the Registration Rights Agreement.




8









 








          “Significant Subsidiary” has the meaning set forth in Rule 1-02(w) promulgated by the SEC.




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




          “Strategic Indebtedness” means Indebtedness of the Company or any Restricted Subsidiary
incurred with commercial partners the proceeds of which are utilized in connection with an alliance
with such commercial partner(s) to develop technology or products or services that the Board of
Directors of the Company determines to be strategic to the business of the Company or its
Restricted Subsidiaries, provided that the terms of such Indebtedness are similar to the terms of
the Quest Diagnostics Indebtedness.




          “Subsidiary” means a corporation more than 50% of the outstanding Voting Stock of which is
owned, directly or indirectly, by the Company or by one or more other Subsidiaries, or by the
Company and one or more other Subsidiaries.




          “Successor Company” has the meaning specified in Section 6.1.




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




          “Trading Day” means:





	 	(1)	 	if the applicable security is listed or
admitted for trading on the New York Stock Exchange or another national
security exchange (including the Nasdaq Global Market, the Nasdaq
Global Select Market and the Nasdaq Capital Market), a day on which the
New York Stock Exchange or such other national security is open for
business;
	 
	 	(2)	 	if the applicable security is traded or listed
on a national securities exchange, and is quoted on any system of
automated dissemination of quotation of securities prices, a day on
which quotations may be made thereon;
	 
	 	(3)	 	if the applicable security is not so quoted,
any day on which the applicable security is traded regular way in the
over-the-counter market and for which a closing bid and a closing ask
price for the applicable security are available; or
	 
	 	(3)	 	if the applicable security is not so listed,
admitted for trading or quoted, any day other than a Saturday or Sunday
or a day on which banking institutions in the State of New York are
authorized or obligated by law or executive order to close.




9









 











          “Transfer Agent” means any Person, which may be the Company, authorized by the Company to
exchange or register the transfer of Notes, initially U.S. Trust Company, National Association.




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




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




          “U.S. Global Note” has the meaning specified in Section 2.2.




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




          “U.S. Physical Note” has the meaning specified in Section 2.2.




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




          “Voting Stock” means with respect to any Person, Capital Stock of any class or kind ordinarily
having the power to vote for the election of directors, managers or other voting members of the
governing body of such Person.




          “VWAP” means, on any Trading Day, the volume-weighted average price per share on such date for
the Common Stock as reported in composite transactions on the over-the-counter market or the
principal United States national securities exchange on which the Common Stock is traded or, if the
Common Stock is not traded on the over –the-counter market or listed on a United States national
securities exchange, or as provided in the immediately following sentence herein, in all cases,
from 9:30 a.m. to 4:00 p.m., New York City time, on such Trading Day, as displayed by Bloomberg or
such other comparable service that has replaced Bloomberg. If such volume-weighted average price
is not available, then the Board of Directors will determine the amount to be used as the
volume-weighted average price.




     SECTION 1.2 INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.



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




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




10









 








          “indenture securities” means the Notes;




          “indenture security holder” means a Holder;




          “indenture to be qualified” means this Indenture;




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




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




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




     SECTION 1.3 RULES OF CONSTRUCTION.



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





	 	(1)	 	the terms defined in this Article have the
meanings assigned to them in this Article and include the plural as
well as the singular;
	 
	 	(2)	 	all accounting terms not otherwise defined
herein have the meanings assigned to them in accordance with accounting
principles generally accepted in the United States prevailing at the
time of any relevant computation hereunder; and
	 
	 	(3)	 	the words “herein,” “hereof” and “hereunder”
and other words of similar import refer to this Indenture as a whole
and not to any particular Article, Section or other subdivision.





ARTICLE I




THE NOTES




     SECTION 1.1 TITLE AND TERMS.



          The Notes shall be known and designated as the “7.00% Convertible Senior Notes due 2011” of
the Company. The aggregate principal amount of Notes which may be authenticated and delivered
under this Indenture is limited to $18,000,000; except for Notes authenticated and delivered upon
registration of, transfer of, or in exchange for, or in lieu of other Notes pursuant to Section
2.7, 2.8, 2.9, 2.12, 7.5, 10.7, 11.1 or 12.2 hereof. The Notes shall be issuable in denominations
of $1,000 or integral multiples thereof.




          The Notes shall mature on September 1, 2011.





11









 





          Interest shall accrue from November 1, 2006 at the Interest Rate per annum until the
principal thereof is paid or made available for payment pursuant to the terms of this Indenture.
Interest shall be payable semiannually in arrears on March 1 and September 1 in each year,
commencing March 1, 2007. The “Interest Rate” shall be equal to 7.00% per annum unless and until
an FDA Approval Event shall have occurred, and thereafter, as of the date of public disclosure of
such FDA Approval Event, 4.00% per annum. In the event the interest rate is reduced to 4.00%
because of an FDA Approval Event, the Company shall provide notice of such reduction to the Trustee
in accordance with Section 13.2 of this Indenture.




          Interest on the Notes shall be computed on the basis of a 360-day year comprised of twelve
30-day months, and, in the case of a partial month, the actual number of days elapsed.




          Except as provided below in this paragraph, a Holder of any Note shall not be entitled to
receive any interest (including Additional Interest, if any) that has accrued on such Note if such
Note is converted into Common Stock on any day other than an Interest Payment Date. By delivering
to the Holder of any Note that is converted into Common Stock the number of shares issuable upon
conversion, together with a cash payment, if any, in lieu of fractional shares, the Company shall
be deemed to have satisfied its obligation with respect to such Note. Accordingly, accrued but
unpaid interest shall be deemed to be paid in full rather than canceled, extinguished or forfeited.
If a Holder of any Note converts such Note after a Regular Record Date but prior to the
corresponding Interest Payment Date, such Holder shall be entitled to receive on the Interest
Payment Date interest accrued and paid on such Note, notwithstanding the conversion of such Note
prior to such Interest Payment Date. However, at the time such Holder surrenders such Note for
conversion, such Holder shall pay the Company an amount equal to the interest (including Additional
Interest, if any) that will be paid on the Notes being converted on the Interest Payment Date. The
preceding sentence does not apply to Notes that are converted after being called by the Company for
redemption. In the event that the Company calls any Notes for redemption on a date that is after a
Record Date for an interest payment but prior to the corresponding Interest Payment Date, and prior
to the redemption date a Holder of any Note chooses to convert such Note, such Holder shall not be
required to pay the Company at the time such Holder surrenders such Note for conversion the amount
of interest on such Note such Holder shall be entitled to receive on the date that has been fixed
for redemption. Accrued but unpaid interest will be payable upon any conversion of Notes made
concurrently with or after acceleration of the Notes following an Event of Default.
Notwithstanding anything to the contrary in the foregoing, for any conversion of any Note by a
Holder prior to October 31, 2008, such Holder shall be entitled to receive interest upon such
conversion in accordance with Section 12.1 hereof.




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




          Principal and premium, if any, and interest on maturity, on Physical Notes shall be payable at
the office or agency of the Company maintained for such purpose, initially the Corporate Trust
Office of the Trustee. Interest on Physical Notes (other than at maturity) will be payable by (i)
U.S. Dollar check drawn on a bank in The City of New York mailed to the address of the Holder, or
(ii) upon application to the Registrar not later than the relevant Record Date by




12









 







a Holder, of an aggregate principal amount in excess of $5,000,000, wire transfer in
immediately available funds.




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




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




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




     SECTION 2.2 FORM OF NOTES.



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




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




          Notes offered and sold to QIBs in reliance on Rule 144A shall be issued initially only in the
form of one or more permanent global Notes (each, a “U.S. Global Note”) in registered form without
interest coupons, in substantially the form set forth in Exhibit A and, except as otherwise
provided in Section 2.3(a)(iii), shall contain the Restrictive Securities Legend as set forth in
Section 2.3(a)(i).




          Notes offered and sold in offshore transactions in reliance on Regulation S shall be issued
initially only in the form of one or more permanent global Notes (each, an “Offshore Global Note”
and, together with the U.S. Global Note, the “Global Notes”) in registered form without interest
coupons in substantially the form set forth in Exhibit A and, except as otherwise provided in
Section 2.3(a)(iii), shall contain the Restrictive Securities Legend as set forth in Section
2.3(a)(i). Notes issued pursuant to Section 2.8(d) in exchange for or upon transfer of beneficial
interests in the U.S. Global Note shall be in the form of permanent certificated Notes
substantially in the form set forth in Exhibit A (the “U.S. Physical Notes”), and Notes issued
pursuant to Section 2.8(d) in exchange for or upon transfer of beneficial interests in the Offshore
Global Note shall be in the form of permanent certificated Notes substantially in the form set
forth in Exhibit A (the “Offshore Physical Notes”).




          The Offshore Physical Notes and U.S. Physical Notes are sometimes collectively herein referred
to as the “Physical Notes.”




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          The Global Notes shall be:





	 	(1)	 	duly executed by the Company and authenticated
by the Trustee as hereinafter provided;
	 
	 	(2)	 	registered in the name of the Depositary (or
its nominee) for credit to the respective accounts of the Holders at
the Depositary; and
	 
	 	(3)	 	deposited with the Trustee, as custodian for
the Depositary.





          The Global Notes shall be substantially in the form of the Note set forth in Exhibit A annexed
hereto (including the text and schedule called for by footnote 1 and 2 thereto). The aggregate
principal amount of the Global Notes may from time to time be increased or decreased (which, taken
together with the principal amounts of all other outstanding Global Notes shall not exceed
$18,000,000 in the aggregate at any time) by adjustments made on the records of the Trustee, as
custodian for the Depositary (or its nominee), in accordance with the instructions given by the
Holder thereof, as hereinafter provided.




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




     SECTION 2.3 LEGENDS.



          (a) RESTRICTED SECURITIES LEGENDS.




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




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





               (i) RESTRICTED SECURITIES LEGEND FOR RESTRICTED SECURITIES.



          Except as provided in Section 2.3(a)(iii), until two years after the original issuance date of
any Note, any certificate evidencing such Note (and all securities issued in exchange therefor or
substitution thereof, other than Common Stock, if any, issued upon




14









 







conversion thereof which shall
bear the legend set forth in Section 2.3(a)(ii), if applicable) shall bear a Restricted Securities
Legend in substantially the following form:





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




THE HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) THIS NOTE AND THE
SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION HEREOF MAY BE OFFERED, RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED, ONLY (I) IN THE UNITED STATES TO A PERSON WHOM THE SELLER REASONABLY
BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (II) OUTSIDE THE UNITED STATES
IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE SECURITIES ACT, (III)
PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144
THEREUNDER (IF AVAILABLE), OR (IV) PURSUANT TO AN EFFECTIVE REGISTRATION UNDER THE
SECURITIES ACT, IN EACH OF CASES (I) THROUGH (IV) IN ACCORDANCE WITH ANY APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES, AND (B) THE HOLDER WILL, AND EACH
SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS NOTE FROM IT OF THE RESALE
RESTRICTIONS REFERRED TO IN (A) ABOVE. IN ANY CASE THE HOLDER HEREOF WILL NOT, DIRECTLY OR
INDIRECTLY, ENGAGE IN ANY HEDGING TRANSACTION WITH REGARD TO THE SECURITIES EXCEPT AS
PERMITTED BY THE SECURITIES ACT.




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



15









 






               (ii) RESTRICTED SECURITIES LEGEND FOR COMMON STOCK ISSUED UPON CONVERSION OF
NOTES.



          Except as provided in Section 2(a)(iii), until two years after the original issuance date of
any Note, any stock certificate representing Common Stock issued upon conversion of such Note shall
bear a Restricted Securities Legend in substantially the following form:





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




THE HOLDER OF THIS CERTIFICATE AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) THE SHARES OF
COMMON STOCK REPRESENTED HEREBY MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED
ONLY (I) IN THE UNITED STATES TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A, (II) OUTSIDE THE UNITED STATES IN AN OFFSHORE
TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE SECURITIES ACT, (III) PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF
AVAILABLE), OR (IV) PURSUANT TO AN EFFECTIVE REGISTRATION UNDER THE SECURITIES ACT, IN EACH
OF CASES (I) THROUGH (IV) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF
THE UNITED STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO,
NOTIFY ANY PURCHASER OF THE SECURITIES REPRESENTED HEREBY FROM IT OF THE RESALE RESTRICTIONS
REFERRED TO IN (A) ABOVE. IN ANY CASE THE HOLDER HEREOF WILL NOT, DIRECTLY OR INDIRECTLY,
ENGAGE IN ANY HEDGING TRANSACTION WITH REGARD TO THE SECURITIES EXCEPT AS PERMITTED BY THE
SECURITIES ACT.




THIS CERTIFICATE AND ANY RELATED DOCUMENTATION MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO
TIME TO MODIFY THE RESTRICTIONS ON RESALES AND OTHER TRANSFERS OF THE SECURITIES REPRESENTED
HEREBY TO REFLECT ANY CHANGE IN APPLICABLE LAW OR
REGULATION (OR THE INTERPRETATION THEREOF) OR IN PRACTICES RELATING TO THE RESALE OR
TRANSFER OF RESTRICTED SECURITIES GENERALLY. THE HOLDER OF THIS CERTIFICATE SHALL BE DEEMED
BY



16









 






THE ACCEPTANCE HEREOF TO HAVE AGREED TO SUCH AMENDMENT OR SUPPLEMENT.”




As used herein, the terms “United States” and “U.S. Person” have the meanings given
to them by Regulation S under the Securities Act.”




               (iii) REMOVAL OF THE RESTRICTED SECURITIES LEGENDS.



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





                    (A) two years after the original issuance date of such Note, in the case of
each U.S. Global Note and each U.S. Physical Note, and one year after the original
issue date of each Note, in the case of each Offshore Global Note and each Offshore
Physical Note (such date being referred to as the “Offshore Restriction Date”);




                    (B) such Note or Common Stock has been sold pursuant to a registration
statement that has been declared effective under the Securities Act (and which
continues to be effective at the time of such sale);




                    (C) such Common Stock has been issued upon conversion of Notes that have been
sold pursuant to a registration statement that has been declared effective under the
Securities Act (and which continues to be effective at the time of such sale);




                    (D) the date when holders of such Note or Common Stock are able to sell such
Note or Common Stock immediately without restriction pursuant to the volume
limitation provisions of Rule 144 under the Securities Act;




                    (E) such Note or Common Stock is owned by holders who complete and deliver in a
timely manner the Selling Securityholder Notice and Questionnaire described in the
Registration Rights Agreement and dispose of such Note or Common Stock under the
shelf registration statement described in the Registration Rights Agreement.


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




          Notwithstanding the foregoing, the Restricted Securities Legend may be removed if there is
delivered to the Company such satisfactory evidence, including, at the Company’s request, an
opinion of independent counsel (which may rely as to facts upon a certificate of the
holder of the Notes or Common Stock), as may be reasonably required by the Company that
neither such legend nor the restrictions on transfer set forth therein are required to ensure that
transfers of such Note or Common Stock will not violate the registration requirements of the




17









 







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




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




          Any such Common Stock as to which such restrictions on transfer shall have expired in
accordance with their terms or as to which the conditions for removal of the Restricted Securities
Legend set forth in Section 2.3(a)(ii) as set forth therein have been satisfied may, upon surrender
of the certificates representing such shares of Common Stock for exchange in accordance with the
procedures of the transfer agent for the Common Stock, be exchanged for a new certificate or
certificates for a like aggregate number of shares of Common Stock, which shall not bear the
Restricted Securities Legend required by Section 2.3(a)(ii).




          (b) GLOBAL NOTE LEGEND.




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





“THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER
REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF.
THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A SECURITY REGISTERED,
AND NO TRANSFER OF THIS SECURITY IN WHOLE O R IN PART MAY BE REGISTERED, IN THE NAME
OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE.




UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY (“DTC”), A NEW YORK CORPORATION, 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 DTS (AND
ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN



18









 






AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSONS IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.”



     SECTION 2.4 EXECUTION, AUTHENTICATION, DELIVERY AND DATING.



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




          At any time and from time to time after the execution and delivery of this Indenture, the
Company may deliver Notes executed by the Company to the Trustee for authentication, together with
a Company Order for the authentication and delivery of such Notes, specifying each Note to be
authenticated, the principal amount, the date of the original issue, the registered holder and
delivery instructions and the Trustee in accordance with such Company Order shall authenticate and
deliver such Notes as in this Indenture provided and not otherwise.




          Each Note shall be dated the date of its authentication.




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




          The Trustee may appoint an authenticating agent or agents reasonably acceptable to the Company
with respect to the Notes. Unless limited by the terms of such appointment, an authenticating
agent may authenticate Notes whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent.




     SECTION 2.5 REGISTRAR AND PAYING AGENT.



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




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





19









 









	 	(1)	 	hold all sums held by it for the payment of the
principal of and premium, if any, or interest (including Additional
Interest, if any) on Notes in trust for the benefit of the Persons
entitled thereto until such sums shall be paid to such Persons or
otherwise disposed of as provided in this Indenture;
	 
	 	(2)	 	give the Trustee notice of any Default by the
Company in the making of any payment of principal and premium, if any,
or interest (including Additional Interest, if any); and
	 
	 	(3)	 	at any time during the continuance of any such
Default, upon the written request of the Trustee, forthwith pay to the
Trustee all sums so held in trust by such Paying Agent.





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





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




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



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




     SECTION 2.6 PAYING AGENT TO HOLD ASSETS IN TRUST.



          Not later than 8:00 a.m. (New York City time) on each due date of the principal, premium, if
any, and interest (including Additional Interest, if any) on any Notes, the Company shall deposit
with one or more Paying Agents money in immediately available funds sufficient to pay such
principal, premium, if any, and interest (including Additional Interest, if any) so becoming due.
The Company at any time may require a Paying Agent to pay all money held by it to the Trustee.
Upon payment over to the Trustee, the Paying Agent (if other than the Company) shall have no
further liability for the money so paid over to the Trustee.




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




20









 








     SECTION 2.7 GENERAL PROVISIONS RELATING TO TRANSFER AND EXCHANGE.



          The Notes are issuable only in registered form. A Holder may transfer a Note only by written
application to the Registrar stating the name of the proposed transferee and otherwise complying
with the terms of this Indenture. No such transfer shall be effected until, and such transferee
shall succeed to the rights of a Holder only upon, final acceptance and registration of the
transfer by the Registrar in the Register. Furthermore, any Holder of a Global Note shall, by
acceptance of such Global Note, agree that transfers of beneficial interests in such Global Note
may be effected only through a book-entry system maintained by the Holder of such Global Note (or
its agent) and that ownership of a beneficial interest in the Note shall be required to be
reflected in a book-entry.




          Notwithstanding the foregoing, in the case of a Restricted Security, a beneficial interest in
a Global Note being transferred in reliance on an exemption from the registration requirements of
the Securities Act other than in accordance with Rule 144 and Rule 144A may only be transferred for
a Physical Note.




          Transfer of any shares of Common Stock issued upon conversion of any Note that are Restricted
Securities may only be effected by written application to the transfer agent for the Common Stock
stating the name of the proposed transferee and otherwise complying with the requirements set forth
in Section 2.3(a) and any other requirements put in place by the Company or such transfer agent.
No such transfer shall be effected until, and such transferee shall succeed to the rights of a
holder of such Common Stock only upon, final acceptance and registration of the transfer by the
Company and such transfer agent. Furthermore, any such holder by acceptance of such Common Stock
issued upon conversion of any Restricted Security, agrees that transfers of beneficial interests in
such Common Stock may be effected only through a book-entry system maintained by the holder of such
Common Stock (or its agent) and that ownership of a beneficial interest in the Common Stock shall
be required to be reflected in a book-entry.




          When Notes are presented to the Registrar with a request to register the transfer or to
exchange them for an equal aggregate principal amount of Notes of other authorized denominations,
the Registrar shall register the transfer or make the exchange as requested if its requirements for
such transactions are met (including that such Notes are duly endorsed or accompanied by a written
instrument of transfer duly executed by the Holder thereof or by an attorney who is authorized in
writing to act on behalf of the Holder). Subject to Section 2.4 hereof, to permit registrations of
transfers and exchanges, the Company shall execute and the Trustee shall authenticate Notes at the
Registrar’s request. No service charge shall be made for any registration of transfer or exchange
or redemption of the Notes, but the Company may require payment of a sum sufficient to cover any
transfer tax or similar governmental charge payable in connection therewith (other than any such
transfer taxes or other similar governmental charge payable upon exchanges pursuant to Section
2.14, 7.5 or 10.7 hereof).




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






21









 









	 	(1)	 	for a period of 15 Business Days prior to the
day of any selection of Notes for redemption under Article 10 hereof;
	 
	 	(2)	 	so selected for redemption or, if a portion of
any Note is selected for redemption, such portion thereof selected for
redemption; or
	 
	 	(3)	 	surrendered for conversion or, if a portion of
any Note is surrendered for conversion, such portion thereof
surrendered for conversion.





     SECTION 2.8 BOOK-ENTRY PROVISIONS FOR THE GLOBAL NOTES.



          (a) The Global Notes initially shall:





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




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




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



          Members of, or participants in, the Depositary (“DTC Participants”) shall have no rights under
this Indenture with respect to any Global Note held on their behalf by the Depositary, or the
Trustee as its custodian, or under such Global Note, and the Depositary may be treated by the
Company, the Trustee and any agent of the Company or the Trustee as the absolute owner of such
Global Note for all purposes whatsoever. Notwithstanding the foregoing, nothing contained herein
shall prevent the Company, the Trustee or any agent of the Company or Trustee from giving effect to
any written certification, proxy or other authorization furnished by the Depositary or impair, as
between the Depositary and the DTC Participants, the operation of customary practices governing the
exercise of the rights of a Holder of any Note.




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




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




          (d) If at any time:





          (i) the Depositary notifies the Company in writing that it is no longer willing
or able to continue to act as Depositary for the Global Notes, or the Depositary
ceases to be a “clearing agency” registered under the Exchange Act



22









 






and a successor
depositary for the Global Notes is not appointed by the Company within 90 days of
such notice or cessation;




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




          (iii) an Event of Default has occurred and is continuing and the Registrar has
received a request from the Depositary for the issuance of Physical Notes in
exchange for such Global Note or Global Notes,


the Depositary shall surrender such Global Note or Global Notes to the Trustee for cancellation and
the Company shall execute, and the Trustee, upon receipt of an Officers’ Certificate and Company
Order for the authentication and delivery of Notes, shall authenticate and deliver in exchange for
such Global Note or Global Notes, Physical Notes in an aggregate principal amount equal to the
aggregate principal amount of such Global Note or Global Notes. Such Physical Notes shall be
registered in such names as the Depositary (or any nominee thereof) shall identify in writing as
the beneficial owners of the Notes represented by such Global Note or Global Notes.




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




          (f) Notwithstanding anything in this Indenture to the contrary, to the extent the procedures
of the Depositary shall from time to time conflict with the procedures set forth in this Indenture,
the procedures of the Depositary shall control for so long as the Depositary remains depositary for
the Global Notes.




     SECTION 2.9 SPECIAL TRANSFER PROVISIONS.



          (a) GENERAL. The provisions of this Section 2.9 shall apply to all transfers involving any
Physical Note and any beneficial interest in any Global Note. The Company shall, as promptly as
practicable upon receipt of a written notice from any Holder wishing to effectuate a transfer
pursuant to Regulation S, cause an Offshore Global Note to be executed, authenticated and delivered
as set forth in Section 2.4, in order to facilitate such transfer.




          (b) CERTAIN DEFINITIONS. As used in this Section 2.9 only, “delivery” of a certificate by a
transferee or transferor means the delivery to the Registrar by such transferee or transferor of
the applicable certificate duly completed; “holding” includes both possession of a Physical Note
and ownership of a beneficial interest in a Global Note, as the context requires;
“transferring” a Global Note means transferring that portion of the principal amount of the
transferor’s beneficial interest therein that the transferor has notified the Registrar that it has
agreed to transfer; and “transferring” a Physical Note means transferring that portion of the




23









 







principal amount thereof that the transferor has notified the Registrar that it has agreed to
transfer.




          As used in this Indenture, “Regulation S Certificate” means a certificate substantially in the
form set forth in Exhibit B; “Rule 144A Certificate” means a certificate substantially in the form
set forth in Exhibit C; and “Rule 144 Non-Registration and Supporting Evidence” means a written
opinion of counsel reasonably acceptable to the Company to the effect that, and such other
certification or information as the Company may reasonably require to confirm that, the proposed
transfer is being made pursuant to the exemption from the registration requirements of the
Securities Act provided by Rule 144.




          (c) DEEMED DELIVERY OF A RULE 144A CERTIFICATE IN CERTAIN CIRCUMSTANCES. A Rule 144A
Certificate, if not actually delivered, will be deemed delivered if (A) (i) the transferor advises
the Company and the Trustee in writing that the relevant offer and sale were made in accordance
with the provisions of Rule 144A (or, in the case of a transfer of a Physical Note, the transferor
checks the box provided on the Physical Note to that effect) and (ii) the transferee advises the
Company and the Trustee in writing that (x) it is a qualified institutional buyer within the
meaning of Rule 144A and, if applicable, it holds a reasonable belief that each account for which
it is acting in connection with the relevant transfer is a qualified institutional buyer within the
meaning of Rule 144A, (y) it is aware that the transfer of Notes to it is being made in reliance on
the exemption from the provisions of Section 5 of the Securities Act provided by Rule 144A, and (z)
if at any time the Company is not subject to Section 13 or 15(d) of the Exchange Act, prior to the
proposed date of transfer the transferee has been given the opportunity to obtain from the Company
the information referred to in Rule 144A(d)(4), and has either declined such opportunity or has
received such information (or, in the case of a transfer of a Physical Note, the transferee signs
the certification provided on the Physical Note to that effect); or (B) the transferor holds the
U.S. Global Note and is transferring to a transferee that will take delivery in the form of the
U.S. Global Note.




          (d) PROCEDURES AND REQUIREMENTS.




               (1) if the proposed transfer occurs prior to the Offshore Restriction Date, and the proposed
transferor holds:




                    (A) a U.S. Physical Note which is surrendered to the Registrar, and the
proposed transferee or transferor, as applicable:




                         (i) delivers (or is deemed to have delivered pursuant to clause (d) above) a Rule 144A
Certificate and the proposed transferee requests delivery in the form of a U.S. Physical
Note, then the Registrar shall (x) register such transfer in the name of such transferee and
record the date thereof in its books and records, (y) cancel such surrendered U.S. Physical
Note and (z) deliver a new U.S. Physical Note to such transferee duly registered in the name
of such transferee in principal amount equal to the principal amount being transferred of
such surrendered U.S. Physical Note;




                         (ii) delivers (or is deemed to have delivered pursuant to clause (d) above) a Rule 144A
Certificate and the proposed transferee is or is acting



24









 






through a member of, or participant
in, the Depository (an “Agent Member”) and requests that the proposed transferee receive a
beneficial interest in the U.S. Global Note, then the Registrar shall (x) cancel such
surrendered U.S. Physical Note, (y) record an increase in the principal amount of the U.S.
Global Note equal to the principal amount being transferred of such surrendered U.S.
Physical Note and (z) notify the Depositary in accordance with the procedures of the
Depositary that it approves of such transfer; or




                         (iii) delivers a Regulation S Certificate and the proposed transferee is or is acting
through an Agent Member and requests that the proposed transferee receive a beneficial
interest in an Offshore Global Note, then, if an Offshore Global Note was theretofore
issued, the Registrar shall (x) cancel such surrendered U.S. Physical Note, (y) record an
increase in the principal amount of the Offshore Global Note equal to the principal amount
being transferred of such surrendered U.S. Physical Note and (z) notify the Depositary in
accordance with the procedures of the Depositary that it approves of such transfer.



          In any of the cases described in this Section 2.9(e)(1)(A), the Registrar shall deliver to the
transferor a new U.S. Physical Note in principal amount equal to the principal amount not being
transferred of such surrendered U.S. Physical Note, as applicable.





                    (B) an interest in the U.S. Global Note, and the proposed transferee or
transferor, as applicable:




                         (i) delivers (or is deemed to have delivered pursuant to clause (d) above) a Rule 144A
Certificate and the proposed transferee is or is acting through an Agent Member and requests
that the proposed transferee receive a beneficial interest in the U.S. Global Note, then the
transfer shall be effected in accordance with the procedures of the Depositary therefor; or




                         (ii) delivers a Regulation S Certificate and the proposed transferee is or is acting
through an Agent Member and requests that the proposed transferee receive a beneficial
interest in an Offshore Global Note, then, if an Offshore Global Note was theretofore
issued, the Registrar shall (w) register such transfer in the name of such transferee and
record the date thereof in its books and records, (x) record a decrease in the principal
amount of the U.S. Global Note in an amount equal to the beneficial interest therein being
transferred, (y) record an increase in the principal amount of the Offshore Global Note
equal to the amount of such decrease and (z) notify the Depositary in accordance with the
procedures of the Depositary that it approves of such transfer.




                    (C) an interest in an Offshore Global Note, and the proposed transferee or
transferor, as applicable:




                         (i) delivers (or is deemed to have delivered pursuant to clause (d) above) a Rule 144A
Certificate and the proposed transferee is or is acting
through an Agent Member and requests that the proposed transferee receive a beneficial
interest in the U.S. Global Note, then the Registrar shall (x) record a decrease in the



25









 






principal amount of the Offshore Global Note in an amount equal to the beneficial interest
therein being transferred, (y) record an increase in the principal amount of the U.S. Global
Note equal to the amount of such decrease and (z) notify the Depositary in accordance with
the procedures of the Depositary that it approves of such transfer; or




                         (ii) delivers a Regulation S Certificate and the proposed transferee is or is acting
through an Agent Member and requests that the proposed transferee receive a beneficial
interest in an Offshore Global Note, then, if an Offshore Global Note was theretofore
issued, the transfer shall be effected in accordance with the procedures of the Depositary
therefor; provided, however, that until one year after the original issuance of any Note,
beneficial interests in the Offshore Global Note may be held only in or through accounts
maintained at the Depositary by Euroclear or Cedel (or by Agent Members acting for the
account thereof), and no person shall be entitled to effect any transfer or exchange that
would result in any such interest being held otherwise than in or through such an account.



               (2) If the proposed transfer occurs on or after the Offshore Restriction Date, and the
proposed transferor holds:




                    (D) a U.S. Physical Note which is surrendered to the Registrar, and the
proposed transferee or transferor, as applicable:




                         (i) delivers (or is deemed to have delivered pursuant to clause (d) above) a Rule 144A
Certificate and the proposed transferee requests delivery in the form of a U.S. Physical
Note, then the procedures set forth in Section 2.9(e)(1)(A)(i) shall apply.




                         (ii) delivers (or is deemed to have delivered pursuant to clause (d) above) a Rule 144A
Certificate and the proposed transferee is or is acting through an Agent Member and requests
that the proposed transferee receive a beneficial interest in the Offshore Global Note,
then, if an Offshore Global Note was theretofore issued, the procedures set forth in Section
2.9(e)(1)(A)(ii) shall apply; or




                         (iii) delivers a Regulation S Certificate, then the Registrar shall cancel such
surrendered U.S. Physical Note and at the direction of the transferee, either:




     (x) register such transfer in the name of such
transferee, record the date thereof in its books and records
and deliver a new Offshore Physical Note to such transferee
in principal amount equal to the principal amount being
transferred of such surrendered U.S. Physical Note, or




     (y) if the proposed transferee is or is acting through
an Agent Member, and if an Offshore Global Note was
theretofore issued, record an increase in the principal



26









 






amount of the Offshore Global Note equal to the principal
amount being transferred of such surrendered U.S. Physical
Note and notify the Depositary in accordance with the
procedures of the Depositary that it approves of such
transfer.



          In any of the cases described in this Section 2.9(e)(2)(A)(i), (ii) or (iii)(x), the Registrar
shall deliver to the transferor a new U.S. Physical Note in principal amount equal to the principal
amount not being transferred of such surrendered U.S. Physical Note, as applicable.





                    (E) an interest in the U.S. Global Note, and the proposed transferee or
transferor, as applicable:




                         (i) delivers (or is deemed to have delivered pursuant to clause (d) above) a Rule 144A
Certificate and the proposed transferee is or is acting through an Agent Member and requests
that the proposed transferee receive a beneficial interest in the U.S. Global Note, then the
procedures set forth in Section 2.9(e)(1)(B)(i) shall apply; or




                         (ii) delivers a Regulation S Certificate, then the Registrar shall (x) record a
decrease in the principal amount of the U.S. Global Note in an amount equal to the
beneficial interest therein being transferred, (y) notify the Depositary in accordance with
the procedures of the Depositary that it approves of such transfer and (z) at the direction
of the transferee, if the proposed transferee is or is acting through an Agent Member and if
an Offshore Global Note was theretofore issued,, record an increase in the principal amount
of the Offshore Global Note equal to the amount of such decrease.




                    (F) an Offshore Physical Note which is surrendered to the Registrar, and the
proposed transferee or transferor, as applicable:




                         (i) delivers (or is deemed to have delivered pursuant to clause (d) above) a Rule 144A
Certificate and the proposed transferee is or is acting through an Agent Member and requests
delivery in the form of the U.S. Global Note, then the Registrar shall (x) cancel such
surrendered Offshore Physical Note, (y) record an increase in the principal amount of the
U.S. Global Note equal to the principal amount being transferred of such surrendered
Offshore Physical Note and (z) notify the Depositary in accordance with the procedures of
the Depositary that it approves of such transfer;




                         (ii) where the proposed transferee is or is acting through an Agent Member and, if an
Offshore Global Note was theretofore issued, requests that the proposed transferee receive a
beneficial interest in the Offshore Global Note, then the Registrar shall (x) cancel such
surrendered Offshore Physical Note, (y) record an increase
in the principal amount of the Offshore Global Note equal to the principal amount being
transferred of such surrendered Offshore Physical Note and (z) notify the Depositary in
accordance with the procedures of the Depositary that it approves of such transfer; or



27









 






                         (iii) does not make a request covered by Section 2.9(e)(2)(C)(i) or Section
2.9(e)(2)(C)(ii), then the Registrar shall (x) register such transfer in the name of such
transferee and record the date thereof in its books and records, (y) cancel such surrendered
Offshore Physical Note and (z) deliver a new Offshore Physical Note to such transferee duly
registered in the name of such transferee in principal amount equal to the principal amount
being transferred of such surrendered Offshore Physical Note.



          In any of the cases described in this Section 2.9(e)(2)(C), the Registrar shall deliver to the
transferor a new U.S. Physical Note in principal amount equal to the principal amount not being
transferred of such surrendered U.S. Physical Note, as applicable.





                    (G) an interest in an Offshore Global Note, and the proposed transferee or
transferor, as applicable:




                         (i) delivers (or is deemed to have delivered pursuant to clause (d) above) a Rule 144A
Certificate and the proposed transferee is or is acting through an Agent Member and requests
delivery in the form of the U.S. Global Note, then the Registrar shall (x) record a decrease
in the principal amount of the Offshore Global Note in an amount equal to the beneficial
interest therein being transferred, (y) record an increase in the principal amount of the
U.S. Global Note equal to the amount of such decrease and (z) notify the Depositary in
accordance with the procedures of the Depositary that it approves of such transfer; or




                         (ii) where the proposed transferee is or is acting through an Agent Member, requests
that the proposed transferee receive a beneficial interest in the Offshore Global Note, then
the transfer shall be effected in accordance with the procedures of the Depositary therefor.



          (e) EXECUTION, AUTHENTICATION AND DELIVERY OF PHYSICAL NOTES. In any case in which the
Registrar is required to deliver a Physical Note to a transferee or transferor, the Company shall
execute, and the Trustee shall authenticate and make available for delivery, such Physical Note.




          (f) CERTAIN ADDITIONAL TERMS APPLICABLE TO PHYSICAL NOTES. Any transferee entitled to receive
a Physical Note may request that the principal amount thereof be evidenced by one or more Physical
Notes in any authorized denomination or denominations, and the Registrar shall comply with such
request if all other transfer restrictions are satisfied.




          (g) Transfers Not Covered by Section 2.9(e).





                         (i) The Registrar shall effect and record, upon receipt of a written request from the
Company so to do, a transfer of Notes not otherwise permitted by Section 2.9(e), such
recording to be done in accordance with the otherwise applicable provisions of Section
2.9(e), upon the furnishing by the proposed transferor or transferee of a Rule 144
Non-Registration Opinion and Supporting Evidence.



28









 






                         (ii) Transfers of Common Stock issued upon conversion of any Restricted Security will
be effected according to the policies and procedures of the Company, the Depositary and the
transfer agent for such Common Stock, and may require, but is not limited to, delivery of
certification by the holder of such Common Stock in a form substantially the same as the
Rule 144A Certificate, the Regulation S Certificate and/or Rule 144 Non-Registration and
Supporting Evidence.



          (h) GENERAL. By its acceptance of any Note or shares of Common Stock issuable upon conversion
of the Notes bearing the Restricted Securities Legend, each Holder of such Note or shares of Common
Stock issuable upon conversion of the Notes acknowledges the restrictions on transfer of such Note
and such Common Stock set forth in this Indenture and in the Restricted Securities Legend and
agrees that it will transfer such Note and such Common Stock only as provided in the Indenture.
The Registrar shall not register a transfer of any Note unless such transfer complies with the
restrictions with respect thereto set forth in this Indenture.




          In connection with any transfer of Notes, each Holder agrees by its acceptance of the Notes to
furnish the Registrar or the Company such certifications, legal opinions or other information as
either of them may reasonably require to confirm that such transfer is being made pursuant to an
exemption from, or a transaction not subject to, the registration requirements of the Securities
Act. The Registrar shall not be required to determine (but may rely upon a determination made by
the Company) the sufficiency or accuracy of any such certifications, legal opinions, other
information or document.




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




     SECTION 2.10 HOLDER LISTS.



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




     SECTION 2.11 PERSONS DEEMED OWNERS.



          The Company, the Trustee and any agent of the Company or the Trustee may treat the registered
Holder of a Global Note as the absolute owner of such Global Note for the purpose of receiving
payment thereof or on account thereof and for all other purposes whatsoever, whether or not such
Note is overdue, and notwithstanding any notice of ownership or writing thereon, or any notice of
previous loss or theft or other interest therein. The Company, the





29









 







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




     SECTION 2.12 MUTILATED, DESTROYED, LOST OR STOLEN NOTES.



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




          If there is delivered to the Company and the Trustee





	 	(1)	 	evidence to their satisfaction of the destruction, loss or
theft of any Note, and
	 
	 	(2)	 	such Note or indemnity as may be required by either of them to
save each of them and any agent of either of them harmless against any cost,
expense, loss or liability if any replaced Note is subsequently presented or
claimed for payment, then, in the absence of notice to the Company or the
Trustee that such Note has been acquired by a bona fide purchaser, the Company
shall execute and, upon written request, the Trustee shall authenticate and
deliver, in lieu of any such destroyed, lost or stolen Note, a new Note of like
tenor and principal amount and bearing a number not contemporaneously
outstanding.





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




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




30









 








     SECTION 2.13 TREASURY NOTES.



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




     SECTION 2.14 TEMPORARY NOTES.



          Pending the preparation of Notes in definitive form, the Company may execute and the Trustee
shall, upon written request of the Company, authenticate and deliver temporary Notes (printed or
lithographed). Temporary Notes shall be issuable in any authorized denomination, and substantially
in the form of the Notes in definitive form but with such omissions, insertions and variations as
may be appropriate for temporary Notes, all as may be determined by the Company. Every such
temporary Note shall be executed by the Company and authenticated by the Trustee upon the same
conditions and in substantially the same manner, and with the same effect, as the Notes in
definitive form. Without unreasonable delay, the Company will execute and deliver to the Trustee
Notes in definitive form (other than in the case of Notes in global form) and thereupon any or all
temporary Notes (other than any such Notes in global form) may be surrendered in exchange therefor,
at each office or agency maintained by the Company pursuant to Section 9.2 and the Trustee shall
authenticate and deliver in exchange for such temporary Notes an equal aggregate principal amount
of Notes in definitive form. Such exchange shall be made by the Company at its own expense and
without any charge therefor. Until so exchanged, the temporary Notes shall in all respects be
entitled to the same benefits and subject to the same limitations under this Indenture as Notes in
definitive form authenticated and delivered hereunder.




     SECTION 2.15 CANCELLATION.



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




31









 








     SECTION 2.16 CUSIP NUMBERS.



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




     SECTION 2.17 DEFAULTED INTEREST.



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




ARTICLE III




SATISFACTION AND DISCHARGE




     SECTION 3.1 SATISFACTION AND DISCHARGE OF INDENTURE.



When:





	 	(1)	 	the Company shall deliver to the Trustee for cancellation all
Notes previously authenticated (other than any Notes which have been destroyed,
lost or stolen and in lieu of, or in substitution for which, other Notes shall
have been authenticated and delivered) and not previously canceled, or
	 
	 	(2)	 	(A) all the Notes not previously canceled or delivered to the
Trustee for cancellation shall have become due and payable, or are by their
terms to become due and payable within one year or are to be called for
redemption within one year under arrangements satisfactory to the Trustee for
the giving of notice of redemption,






(B) the Company shall deposit with the Trustee, in trust, cash in U.S.
Dollars and/or U.S. Government Obligations which through the payment



32









 






of interest and principal in respect thereof, in accordance with their terms,
will provide (and without reinvestment and assuming no tax liability will be
imposed on such Trustee), not later than one day before the due date of any
payment of money, an amount in cash, sufficient, in the opinion of a
nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, to pay principal of,
premium, if any, or interest (including Additional Interest, if any) on all
of the Notes (other than any Notes which shall have been mutilated,
destroyed, lost or stolen and in lieu of or in substitution for which other
Notes shall have been authenticated and delivered) not previously canceled
or delivered to the Trustee for cancellation, on the dates such payments of
principal, premium, if any, or interest (including Additional Interest, if
any) are due to such date of maturity or redemption, as the case may be, and
(C) the Company shall have delivered to the Trustee an Officers’ Certificate
stating that (i) all conditions to satisfaction and discharge of this
Indenture have been satisfied, and (ii) the deposit was not made by the
Company with the intent of preferring the Holders of Notes over any other
creditors of the Company or with the intent of defeating, hindering,
delaying or defrauding creditors of the Company of others, and




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




     (i) remaining rights of registration of transfer, substitution and
exchange and conversion of Notes, (ii) rights hereunder of Holders to
receive payments of principal of and premium, if any, and interest
(including Additional Interest, if any) on, the Notes and the other rights,
duties and obligations of Holders, as beneficiaries hereof with respect to
the amounts, if any, so deposited with the Trustee, and




     (iii) the rights, obligations and immunities of the Trustee hereunder),
and the Trustee, on written demand of the Company accompanied by an
Officers’ Certificate and an Opinion of Counsel (each stating that all
conditions precedent herein relating to the satisfaction and discharge of
this Indenture have been complied with) and at the cost and expense of the
Company, shall execute proper instruments acknowledging satisfaction of and
discharging this Indenture; provided, however, the Company shall reimburse
the Trustee for all amounts due the Trustee under Section 5.8 hereof and for
any costs or expenses thereafter reasonably and properly incurred by the
Trustee and to compensate the Trustee for any services thereafter reasonably
and properly rendered by the Trustee in connection with this Indenture or
the Notes.



33









 





     SECTION 3.2 DEPOSITED MONIES TO BE HELD IN TRUST.



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




     SECTION 3.3 RETURN OF UNCLAIMED MONIES.



          Anything contained herein to the contrary notwithstanding, and subject to any applicable law,
any money held by the Trustee in trust for the payment and discharge of the principal, interest
(including Additional Interest, if any) or premium, if any, on any of the Notes which remains
unclaimed for two years after the date when each payment of such principal, interest and premium
has become payable shall be repaid within sixty days of such date by the Trustee to the Company as
its absolute property free from trust, and the Trustee shall thereupon be released and discharged
with respect thereto and the Holders shall look only to the Company for the payment of the
principal, interest (including Additional Interest, if any) and premium, if any, on such Notes.
The Company may cause, or, if requested by the Company, the Trustee shall cause notice of such
payment to the Company to be mailed to each Holder of a Note entitled thereto prior to such
payment. The Trustee shall not be liable to the Company or any Holder for interest on funds held
by it for the payment and discharge of the principal, interest (including Additional Interest, if
any) or premium, if any, on of any of the Notes to any Holder. The Company shall not be liable for
any interest on the sums paid to it pursuant to this paragraph and shall not be regarded as a
trustee of such money.




ARTICLE IV




DEFAULTS AND REMEDIES




     SECTION 4.1 EVENTS OF DEFAULT.



          An “Event of Default,” wherever used herein, means any one of the following events (whatever
the reason for such Event of Default and whether it shall be voluntary or involuntary or be
effected by operation of law or pursuant to any judgment, decree or order of any court or any
order, rule or regulation of any administrative or governmental body):




          (a) default in the payment of principal of (or premium, if any, on) any Note at its stated
maturity, upon redemption or exercise of a Repurchase Right or otherwise;




          (b) default in the payment of interest or Additional Interest, if any, on any Note when due
and payable and continuance of such default for a period of 30 days;




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          (c) default in the performance or breach of any term, covenant or agreement of the Company in
this Indenture or under the Notes and continuance of such default or breach for a period of 60
consecutive days after there has been given, by registered or certified mail, to the Company by the
Trustee or to the Company and the Trustee by the Holders of at least 25% in principal amount of the
Outstanding Notes a written notice specifying such default or breach and requiring it to be
remedied and stating that such notice is a “Notice of Default” hereunder;




          (d) failure to comply with Section 9.9 hereof, where such failure continues for a period of 30
consecutive days from the date on which the Company first fails to comply with the provision of
Section 9.9;




          (e) a default occurs under any mortgage, indenture or instrument under which there may be
issued or by which there may be secured or evidenced any indebtedness for money borrowed by the
Company or any of its Significant Subsidiaries, whether such indebtedness now exists or shall be
created hereafter, which default (i) is caused by a failure to pay principal of such indebtedness
prior to the expiration of the applicable grace period, if any, provided in such indebtedness (a
“Payment Default”) or (ii) results in the acceleration of such indebtedness prior to its stated
maturity and, in each case, the principal amount of any such indebtedness, together with the
principal amount of any other such indebtedness under which there is then existing a Payment
Default or the maturity of which has been so accelerated, aggregates $10 million or more;




          (f) a court having jurisdiction in the premises enters a decree or order for (A) relief in
respect of the Company or any Significant Subsidiary in an involuntary case under any applicable
bankruptcy or other similar law now or hereafter in effect, (B) appointment of a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar official of the Company or any
Significant Subsidiary or (C) the winding up or liquidation of the affairs of the Company or any
Significant Subsidiary and, in each case, such decree or order shall remain unstayed and in effect
for a period of 30 consecutive days;




          (g) the Company or any Significant Subsidiary (A) commences a voluntary case under any
applicable bankruptcy or other similar law now or hereafter in effect, or consents to the entry of
an order for relief in an involuntary case under any such law, (B) consents to the appointment of
or taking possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator or
similar official of the Company or any Significant Subsidiary or for all or substantially all of
the property and assets of the Company or any Significant Subsidiary or (C) effects any general
assignment for the benefit of creditors; or




          (h) failure to provide the notice required under this Indenture upon a Change of Control.




     SECTION 4.2 ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.



          (a) If an Event of Default with respect to Outstanding Notes (other than an Event of Default
with respect to the Company specified in Section 4.1(f) or 4.1 (g) hereof) occurs and is
continuing, the Trustee or the Holders of at least 25% in aggregate principal




35









 







amount of the Outstanding Notes, by written notice to the Company specifying such Event of
Default and requiring it to be remedied and stating that such notice is a “Notice of Default”
hereunder, may declare due and payable 100% of the principal amount of all Outstanding Notes plus
any accrued and unpaid interest to the date of payment. Upon a declaration of acceleration, such
principal and accrued and unpaid interest to the date of payment shall be immediately due and
payable.




          (b) If an Event of Default with respect to the Company specified in Section 4.1(f) or 4.1(g)
hereof occurs, all unpaid principal and accrued and unpaid interest (including Additional Interest,
if any) on the Outstanding Notes shall become and be immediately due and payable, without any
declaration or other act on the part of the Trustee or any Holder.




          (c) The Holders, either (a) through the written consent of not less than a majority in
aggregate principal amount of the Outstanding Notes, or (b) by the adoption of a resolution by
Holders of a majority in aggregate principal amount of the Outstanding Notes represented at a
meeting of Holders at which a quorum (as prescribed in Section 8.4) is present, may rescind and
annul an acceleration and its consequences if:





	 	(1)	 	all existing Events of Default, other than the nonpayment of
principal of or interest (including Additional Interest, if any) on the Notes
which have become due solely because of the acceleration, have been remedied,
cured or waived, and
	 
	 	(2)	 	the rescission would not conflict with any judgment or decree
of a court of competent jurisdiction;




provided, however, that in the event of a declaration of acceleration in respect of the Notes
because of an Event of Default specified in Section 4.1(e) shall have occurred and be continuing,
such declaration of acceleration shall be automatically rescinded and annulled if the Indebtedness
that is the subject of such Event of Default has been discharged or the holders thereof have
waived, cured, rescinded or annulled their declaration of acceleration in respect of such
Indebtedness, and written notice of such discharge or waiver, cure, rescission or annullment as the
case may be, shall have been given to the Trustee by the Company and countersigned by the holders
of such Indebtedness or a trustee, fiduciary or agent for such holders, within 30 days after such
declaration of acceleration in respect of the Notes and no other Event of Default has occurred
during such 30-day period which has not been cured or waived during such period.




     SECTION 4.3 OTHER REMEDIES.



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




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




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     SECTION 4.4 WAIVER OF PAST DEFAULTS.



          The Holders, either (a) through the written consent of not less than a majority in aggregate
principal amount of the Outstanding Notes, or (b) by the adoption of a resolution, at a meeting of
Holders of the Outstanding Notes at which a quorum (as prescribed in Section 8.4) is present, by
the Holders of at least a majority in aggregate principal amount of the Outstanding Notes
represented at such meeting, may, on behalf of the Holders of all of the Notes, waive an existing
Default or Event of Default, except a Default or Event of Default:





	 	(1)	 	in the payment of the principal of or premium, if any, or
interest (including Additional Interest, if any) on any Note (provided,
however, that subject to Section 4.7 hereof, the Holders of a majority in
aggregate principal amount of the Outstanding Notes may rescind an acceleration
and its consequences, including any related payment default that resulted from
such acceleration);
	 
	 	(2)	 	in respect of a covenant or provision hereof which, under
Section 7.2 hereof, including Section 7.2(g), cannot be modified or amended
without the consent of the Holders of each Outstanding Note affected.





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




     SECTION 4.5 CONTROL BY MAJORITY.



          The Holders of a majority in aggregate principal amount of the Outstanding Notes (or such
lesser amount as shall have acted at a meeting pursuant to the provisions of this Indenture) shall
have the right to direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee or exercising any trust or power conferred on the Trustee. However, the
Trustee may refuse to follow any direction that:





	 	(1)	 	conflicts with any law or with this Indenture;
	 
	 	(2)	 	the Trustee determines may be unduly prejudicial to the rights
of the Holders not joining therein, or
	 
	 	(3)	 	may expose the Trustee to personal expense or liability. The
Trustee may take any other action deemed proper by the Trustee which is not
inconsistent with such direction.





     SECTION 4.6 LIMITATION ON SUIT.



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




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	 	(1)	 	such Holder has previously given written notice to the Trustee
of an Event of Default that is continuing;
	 
	 	(2)	 	the Holder of at least 25% in aggregate principal amount of the
Outstanding Notes shall have made written request to the Trustee to pursue the
remedy;
	 
	 	(3)	 	such Holder or Holders have offered to the Trustee indemnity
satisfactory to it against any costs, expenses and liabilities incurred in
complying with such request;
	 
	 	(4)	 	the Trustee has failed to comply with the request for 60 days
after its receipt of such notice, request and offer of indemnity; and
	 
	 	(5)	 	during such 60-day period, no direction inconsistent with such
written request has been given to the Trustee by the Holders of a majority in
aggregate principal amount of the Outstanding Notes (or such amount as shall
have acted at a meeting pursuant to the provisions of this Indenture);




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




     SECTION 4.7 UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PAYMENT.



          Notwithstanding any other provision in this Indenture, the Holder of any Note shall have the
right, which is absolute and unconditional, to receive payment of the principal of and premium, if
any, and interest (including Additional Interest, if any) on such Note on the stated maturity
expressed in such Note, in the case of redemption, on the Redemption Date, and in the case of the
exercise of a Repurchase Right, on the Repurchase Date, and to bring suit for the enforcement of
any such payment on or after such respective dates, and such right shall not be impaired or
affected without the consent of such Holder.




     SECTION 4.8 COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY THE TRUSTEE.



          The Company covenants that if:





	 	(1)	 	a default is made in the payment of any interest (including
Additional Interest, if any) on any Note when such interest (including
Additional Interest, if any) becomes due and payable and such default continues
for a period of 30 days, or
	 
	 	(2)	 	a default is made in the payment of the principal of or
premium, if any, on any Note at the maturity thereof,




the Company will, upon demand of the Trustee, pay to it, for the benefit of the Holders of such
Notes, the whole amount then due and payable (as expressed therein or as a result of any




38









 







acceleration effected pursuant to Section 4.2 hereof) on such Notes for principal and premium, if
any, and interest (including Additional Interest, if any) and, to the extent that payment of such
interest shall be legally enforceable, interest on any overdue principal and premium, if any, and
on any overdue interest (including Additional Interest, if any), calculated using the Interest
Rate, and, in addition thereto, such further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation, expenses, disbursements and advances
of the Trustee, its agents and counsel.




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




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




     SECTION 4.9 TRUSTEE MAY FILE PROOFS OF CLAIM.



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





	 	(1)	 	to file and prove a claim for the whole amount of principal and
premium, if any, and interest (including Additional Interest, if any) owing and
unpaid in respect of the Notes 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 of
Notes allowed in such judicial proceeding, and
	 
	 	(2)	 	to collect and receive any moneys or other property payable or
deliverable on any such claim and to distribute the same;




and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official
in any such judicial proceedings is hereby authorized by each Holder of Notes to make such payments
to the Trustee and, in the event that the Trustee shall consent to the making of such payments
directly to the Holders of Notes, to pay to the Trustee any amount due to it for the




39









 







reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and
counsel and any other amounts due the Trustee under Section 5.8.




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




     SECTION 4.10 RESTORATION OF RIGHTS AND REMEDIES.



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




     SECTION 4.11 RIGHTS AND REMEDIES CUMULATIVE.



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




     SECTION 4.12 DELAY OR OMISSION NOT WAIVER.



          No delay or omission of the Trustee or of any Holder of any Note to exercise any right or
remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a
waiver of any such Event of Default or any acquiescence therein. Every right and remedy given by
this Article or by law to the Trustee or to the Holders of Notes may be exercised from time to
time, and as often as may be deemed expedient, by the Trustee or by the Holders of Notes, as the
case may be.




     SECTION 4.13 APPLICATION OF MONEY COLLECTED.



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




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





40










 





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




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




     SECTION 4.14 UNDERTAKING FOR COSTS.



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




     SECTION 4.15 WAIVER OF STAY OR EXTENSION LAWS.



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




THE TRUSTEE




     SECTION 5.1 CERTAIN DUTIES AND RESPONSIBILITIES.




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






	 	(1)	 	The Trustee undertakes to perform such duties
and only such duties as are specifically set forth in this Indenture or
the TIA, and




41









 






	 	 	 	no implied covenants or obligations shall be read into this Indenture
against the Trustee;
	 
	 	(2)	 	In the absence of bad faith on its part, the
Trustee may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Indenture; provided, however, that in the case of any such
certificates or opinions which by any provision hereof are specifically
required to be furnished to the Trustee, the Trustee shall examine the
certificates or opinions to determine whether or not, on their face,
they conform to the requirements to this Indenture (but need not
investigate or confirm the accuracy of any facts stated therein); and
	 
	 	(3)	 	The Trustee shall not be required to give any
bond or surety with respect to the performance of its duties or the
exercise of its powers under this Indenture. Whether or not therein
expressly so provided, every provision of this Indenture relating to
the conduct or affecting the liability of or affording protection to
the Trustee shall be subject to the provisions of this Article V.





          (b) In case an Event of Default actually known to a Responsible Officer of the Trustee has
occurred and is continuing, the Trustee shall exercise such of the rights and powers vested in it
by this Indenture, and use the same degree of care and skill in their exercise, as a prudent person
would exercise or use under the circumstances in the conduct of such person’s own affairs.




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





	 	(1)	 	This paragraph (c) shall not be construed to
limit the effect of paragraph (a) of this Section 5.1;
	 
	 	(2)	 	The Trustee shall not be liable for any error
of judgment made in good faith by a Responsible Officer, unless it
shall be proved that the Trustee was negligent in ascertaining the
pertinent facts; and
	 
	 	(3)	 	The Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in good faith in
accordance with a direction received by it of the Holders of a majority
in principal amount of the Outstanding Notes (or such lesser amount as
shall have acted at a meeting pursuant to the provisions of this
Indenture) relating to the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or




42









 






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





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




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




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




          (g) The Trustee shall not be bound to make any investigation into the facts or matters stated
in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, Note, note, coupon, other evidence of Indebtedness or other paper or
document, but the Trustee, in its discretion, may, but shall have no duty or obligation to, make
such further inquiry or investigation into such facts or matters as it may see fit, and, if the
Trustee shall determine to make such further inquiry or investigation, it shall be entitled to
examine the books, records and premises of the Company, personally or by agent or attorney at the
sole cost of the Company and shall incur no liability or additional liability of any kind by reason
of such inquiry or investigation or lack thereof.




          (h) The Trustee shall not be deemed to have notice or actual knowledge of any Event of Default
unless a Responsible Officer of the Trustee has actual knowledge thereof or unless written notice
of any event which is in fact a Default is received by the Trustee pursuant to Section 13.2 hereof,
and such notice references the Notes and this Indenture.




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




     SECTION 5.2 CERTAIN RIGHTS OF TRUSTEE.



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





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




43









 






	 	(2)	 	Before the Trustee acts or refrains from
acting, it may require an Officers’ Certificate or an Opinion of
Counsel, or both. The Trustee shall not be liable for any action it
takes or omits to take in good faith in reliance on the Officers’
Certificate or Opinion of Counsel.
	 
	 	(3)	 	The Trustee may act through attorneys and
agents and shall not be responsible for the misconduct or negligence of
any attorney or agent appointed with due care.
	 
	 	(4)	 	The Trustee shall not be liable for any action
taken or omitted to be taken by it in good faith which it believed to
be authorized or within the discretion or rights or powers conferred
upon it by this Indenture, unless the Trustee’s conduct constitutes
negligence.
	 
	 	(5)	 	The Trustee may consult with counsel of its
selection and the advice of such counsel as to matters of law shall be
full and complete authorization and protection in respect of any action
taken, omitted or suffered by it hereunder in good faith and in
accordance with the advice or opinion of such counsel.
	 
	 	(6)	 	Unless otherwise specifically provided in this
Indenture, any demand, request, direction or notice from the Company
shall be sufficient if signed by an Officer of the Company.
	 
	 	(7)	 	The permissive rights of the Trustee to do
things enumerated in this Indenture shall not be construed as a duty
unless so specified herein.
	 
	 	(8)	 	Delivery of reports, information and documents
to the Trustee under Article IX (other than Section 9.7) is for
informational purposes only and the Trustee’s receipt of the foregoing
shall not constitute constructive notice of any information contained
therein or determinable from information contained therein, including
Company compliance with any of its covenants hereunder (as to which the
Trustee is entitled to rely exclusively on Officers’ Certificates of
the Company).





     SECTION 5.3 INDIVIDUAL RIGHTS OF TRUSTEE.



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




44









 








     SECTION 5.4 MONEY HELD IN TRUST.



          Money held by the Trustee in trust hereunder shall be segregated from other funds. The
Trustee shall be under no liability for interest on any money received by it hereunder except as
otherwise expressly agreed with the Company.




     SECTION 5.5 TRUSTEE’S DISCLAIMER.



          The recitals contained herein and in the Notes (except for those in the certificate of
authentication) shall be taken as the statements of the Company, and the Trustee assumes no
responsibility for their correctness. The Trustee makes no representations as to the validity,
sufficiency or priority of this Indenture or of the Notes. The Trustee shall not be accountable
for the use or application by the Company of Notes or the proceeds thereof.




     SECTION 5.6 NOTICE OF DEFAULTS.



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




     SECTION 5.7 REPORTS BY TRUSTEE TO HOLDERS.



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




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




     SECTION 5.8 COMPENSATION AND INDEMNIFICATION.



          The Company covenants and agrees to pay to the Trustee from time to time, and the Trustee
shall be entitled to, reasonable compensation (which shall not be limited by any provision of law
in regard to the compensation of a trustee of an express trust) and the Company covenants and
agrees to pay or reimburse the Trustee upon its request for all reasonable expenses, disbursements
and advances incurred or made by or on behalf of it in accordance with any of the provisions of
this Indenture (including the reasonable compensation and the expenses and disbursements of its
counsel and of all agents and other persons not regularly in its employ), except to the extent that
any such expense, disbursement or advance is due to its gross negligence or bad faith. When the
Trustee incurs expenses or renders services in connection with an Event of Default specified in
Section 4.1 hereof, the expenses (including the reasonable




45









 







charges and expenses of its counsel) and the compensation for the services are intended to
constitute expenses of administration under any bankruptcy law. The Company also covenants to
indemnify the Trustee and its officers, directors, employees and agents for, and to hold such
Persons harmless against, any loss, liability or expense incurred by them, arising out of or in
connection with the acceptance or administration of this Indenture or the trusts hereunder or the
performance of their duties hereunder, including the costs and expenses of defending themselves
against or investigating any claim of liability in the premises, except to the extent that any such
loss, liability or expense was due to the gross negligence or willful misconduct of such Persons.
The obligations of the Company under this Section 5.8 to compensate and indemnify the Trustee and
its officers, directors, employees and agents and to pay or reimburse such Persons for expenses,
disbursements and advances shall constitute additional indebtedness hereunder and shall survive the
satisfaction and discharge of this Indenture or the earlier resignation or removal of the Trustee.
Such additional indebtedness shall be a senior claim to that of the Notes upon all property and
funds held or collected by the Trustee as such, except funds held in trust for the benefit of the
Holders of particular Notes, and the Notes are hereby subordinated to such senior claim. “Trustee”
for purposes of this Section 5.8 shall include any predecessor Trustee, but the negligence or
willful misconduct of any Trustee shall not affect the indemnification of any other Trustee.




     SECTION 5.9 REPLACEMENT OF TRUSTEE.



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




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





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




               (ii) the Trustee becomes incapable of acting;




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




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



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




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




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




          A successor Trustee shall deliver a written acceptance of its appointment to the retiring
Trustee and to the Company. Thereupon the resignation or removal of the retiring Trustee shall
become effective, and the successor Trustee shall have all the rights, powers and duties of the
Trustee under this Indenture. The Company shall mail a notice of the successor Trustee’s
succession to the Holders. The retiring Trustee shall promptly transfer all property held by it as
Trustee to the successor Trustee. Notwithstanding replacement of the Trustee pursuant to this
Section 5.9, the Company’s obligations under Section 5.8 hereof shall continue for the benefit of
the retiring Trustee with respect to expenses, losses and liabilities incurred by it prior to such
replacement.




     SECTION 5.10 SUCCESSOR TRUSTEE BY MERGER, ETC.



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




     SECTION 5.11 CORPORATE TRUSTEE REQUIRED; ELIGIBILITY.



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




     SECTION 5.12 COLLECTION OF CLAIMS AGAINST THE COMPANY.



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




ARTICLE VI




CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE




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



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          The Company shall not consolidate with, merge with or into, or sell, convey, transfer, lease
or otherwise dispose of all or substantially all of its property and assets (in one transaction or
a series of related transactions) to any Person unless:





	 	(1)	 	either (A) the Company shall be the resulting,
surviving or transferee Person (the “Successor Company”), or (B) the
Successor Company (if other than the Company) (i) shall be a
corporation organized and existing under the laws of the United States
of America or any state thereof or the District of Columbia, and (ii)
shall expressly assume, by a supplemental indenture, executed and
delivered to the Trustee, in form satisfactory to the Trustee, all of
the Company’s obligations for the due and punctual payment of the
principal of (and premium and Additional Interest, if any) and interest
on all Notes and the performance and observance of every covenant of
this Indenture on the part of the Company to be performed or observed
and shall have provided for conversion rights in accordance with
Section 12.11 hereof;
	 
	 	(2)	 	immediately after giving effect to such
transaction, no Default or Event of Default shall have occurred and be
continuing; and
	 
	 	(3)	 	the Company shall have delivered to the Trustee
an Officer’s 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 provided for herein relating to such transaction
have been complied with.





     SECTION 6.2 SUCCESSOR CORPORATION SUBSTITUTED.



          Upon any consolidation of the Company with or merger of the Company with or into any other
corporation or any conveyance, transfer or lease of all or substantially all of the properties and
assets of the Company to any Person in accordance with Section 6.1, the successor Person formed by
such consolidation or into which the Company is merged or to which such conveyance, transfer or
lease is made shall succeed to, and be substituted for, and may exercise every right and power of,
the Company under this Indenture with the same effect as if such successor Person had been named as
the Company herein, and in the event of any such conveyance or transfer, the Company (which term
shall for this purpose mean the Person named as the “Company” in the first paragraph of this
Indenture or any successor Person which shall theretofore become such in the manner described in
Section 6.1), except in the case of a lease to another Person, shall be discharged of all
obligations and covenants under this Indenture and the Notes.




ARTICLE VII




AMENDMENTS, SUPPLEMENTS AND WAIVERS




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     SECTION 7.1 WITHOUT CONSENT OF HOLDERS OF NOTES.



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




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




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




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




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




          (e) reduce the Conversion Price; provided, that such reduction in the Conversion Price shall
not adversely affect the interest of the Holders of Notes;




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




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




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




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




          (j) comply with the procedures of the Depositary.




     SECTION 7.2 WITH CONSENT OF HOLDERS OF NOTES.



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




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




          (a) change the stated maturity of the principal of, or any installment of interest (including
Additional Interest, if any) on, any Note;




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




          (c) reduce the interest (including Additional Interest, if any) on any Note;




          (d) change the currency of payment of principal of, premium, if any, or interest (including
Additional Interest, if any) on any Note;




          (e) impair the right of any Holder to institute suit for the enforcement of any payment in or
with respect to any Note;




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




          (g) amend the Repurchase Right after the occurrence of a Change of Control or the right to
convert any Note in a manner adverse to the Holders; provided, however, that the execution of a
supplemental indenture solely to permit a Successor Company to assume the Company’s obligations
under the Notes shall not be deemed to be adverse to the Holders;




          (h) modify the redemption payment provisions of the Indenture in a manner adverse to the
Holders of the Notes;




          (i) reduce the percentage of aggregate principal amount of Notes outstanding required to waive
a default or amend or modify this Indenture, except to provide that certain other provisions of
this Indenture cannot be modified or waived without the consent of the Holder of each Outstanding
Note affected thereby;




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




          (k) modify in any manner the calculation of the Make-Whole Premium.




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




     SECTION 7.3 COMPLIANCE WITH TRUST INDENTURE ACT.



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




     SECTION 7.4 REVOCATION OF CONSENTS AND EFFECT OF CONSENTS OR VOTES.



          Until an amendment, supplement or waiver becomes effective, a written consent to it by a
Holder is a continuing consent by the Holder and every subsequent Holder of a Note or portion of a
Note that evidences the same debt as the consenting Holder’s Note, even if notation of the consent
is not made on any Note; provided, however, that unless a record date shall have been established,
any such Holder or subsequent Holder may revoke the consent as to its Note or portion of a Note if
the Trustee receives written notice of revocation before the date the amendment, supplement or
waiver becomes effective.




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




          The Company may, but shall not be obligated to, fix a Record Date for the purpose of
determining the Holders entitled to consent to any amendment, supplement or waiver, which Record
Date shall be not more than 30 days prior to the first solicitation of such consent. If a Record
Date is fixed, then notwithstanding the second sentence of the immediately preceding paragraph,
those Persons who were Holders at such Record Date (or their duly designated proxies), and only
those Persons, shall be entitled to revoke any consent previously given, whether or not such
Persons continue to be Holders after such Record Date. No such consent shall be valid or effective
for more than 90 days after such Record Date unless consents from Holders of the requisite
percentage in principal amount of outstanding Notes required hereunder for the effectiveness of
such consents shall have also been given and not revoked within such 90 day period.




     SECTION 7.5 NOTATION ON OR EXCHANGE OF NOTES.



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




          (a) the Trustee may require the Holder of a Note to deliver such Notes to the Trustee, the
Trustee may place an appropriate notation on the Note about the changed terms and




51









 







return it to the Holder and the Trustee may place an appropriate notation on any Note
thereafter authenticated; or




          (b) if the Company or the Trustee so determines, the Company in exchange for the Note shall
issue and the Trustee shall authenticate a new Note that reflects the changed terms.




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




     SECTION 7.6 TRUSTEE TO SIGN AMENDMENT, ETC.



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




ARTICLE VIII




MEETING OF HOLDERS OF NOTES




     SECTION 8.1 PURPOSES FOR WHICH MEETINGS MAY BE CALLED.



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




     SECTION 8.2 CALL NOTICE AND PLACE OF MEETINGS.



          (a) The Trustee may at any time call a meeting of Holders of Notes for any purpose specified
in Section 8.1 hereof, to be held at such time and at such place in The City of New York as the
Trustee may determine. Notice of every meeting of Holders of Notes, setting forth the time and the
place of such meeting and in general terms the action proposed to be taken at such meeting, shall
be given, in the manner provided in Section 13.2 hereof, not less than 21 nor more than 180 days
prior to the date fixed for the meeting.




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




52









 







meeting and may call such meeting for such purposes by giving notice thereof as provided in
paragraph (a) of this Section.




     SECTION 8.3 PERSONS ENTITLED TO VOTE AT MEETINGS.



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




     SECTION 8.4 QUORUM; ACTION.



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




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




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




     SECTION 8.5 DETERMINATION OF VOTING RIGHTS; CONDUCT AND ADJOURNMENT OF MEETINGS.



          (a) Notwithstanding any other provisions of this Indenture, the Trustee may make such
reasonable regulations as it may deem advisable for any meeting of Holders of Notes in regard to
proof of the holding of Notes and of the appointment of proxies and in regard to the appointment
and duties of inspectors of votes, the submission and examination of proxies, certificates and
other evidence of the right to vote, and such other matters concerning the conduct of the meeting
as it shall deem appropriate. Except as otherwise permitted or required by any such regulations,
the holding of Notes shall be proved in the manner specified in Section 8.3 hereof and the
appointment of any proxy shall be proved in the manner specified in Section 8.3




53









 







hereof. Such regulations may provide that written instruments appointing proxies, regular on
their face, may be presumed valid and genuine without the proof specified in Section 8.3 hereof or
other proof.




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




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




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




     SECTION 8.6 COUNTING VOTES AND RECORDING ACTION OF MEETINGS.



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




ARTICLE IX




COVENANTS




     SECTION 9.1 PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST.



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          The Company will duly and punctually pay the principal of and premium, if any, and interest
(including Additional Interest, if any) in respect of the Notes in accordance with the terms of the
Notes and this Indenture. The Company will deposit or cause to be deposited with the Trustee as
directed by the Trustee, no later than the day prior to the stated maturity of any Note or
installment of interest (including Additional Interest, if any), all payments so due.




     SECTION 9.2 MAINTENANCE OF OFFICES OR AGENCIES.



          The Company shall maintain a Place of Payment for the Notes in the Borough of Manhattan, The
City of New York, which will be an office or agency where Notes may be:





	 	(i)	 	presented or surrendered for payment;
	 
	 	(ii)	 	surrendered for registration of transfer or exchange;
	 
	 	(iii)	 	surrendered for conversion;




and where notices and demands to or upon the Company in respect of the Notes and this Indenture may
be served. The office or agency of the Trustee in the Borough of Manhattan, the City of New York,
shall initially be such office or agency of the Company, unless and until the Company shall
designate and maintain some other office or agency for one or more of such purposes.




          The Company may at any time and from time to time vary or terminate the appointment of any
such office or appoint any additional offices for any or all of such purposes; provided, however,
that until all of the Notes have been delivered to the Trustee for cancellation, or moneys
sufficient to pay the principal of and premium, if any, and interest (including Additional
Interest, if any) on the Notes have been made available for payment and either paid or returned to
the Company pursuant to the provisions of Section 4.13 hereof, the Company will maintain in The
City of New York, an office or agency where Notes may be presented or surrendered for payment,
where Notes may be surrendered for registration of transfer or exchange, where Notes may be
surrendered for conversion and where notices and demands to or upon the Company in respect of the
Notes and this Indenture may be served. The Company will give prompt written notice to the
Trustee, and notice to the Holders in accordance with Section 13.2 hereof, of the appointment or
termination of any such agents and of the location and any change in the location of any such
office or agency.




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




     SECTION 9.3 CORPORATE EXISTENCE.



          Subject to Article 6 hereof, the Company will do or cause to be done all things necessary to
preserve and keep in full force and effect its corporate existence, rights (charter and statutory)
and franchises of the Company and each Significant Subsidiary; provided, however, that the Company
shall not be required to preserve any such right or franchise if the Board of




55









 







Directors shall determine that the preservation thereof is no longer desirable in the conduct
of the business of the Company and its Subsidiaries as a whole and that the loss thereof is not
disadvantageous in any material respect to the Holders.




     SECTION 9.4 MAINTENANCE OF PROPERTIES.



          The Company will cause all properties owned by the Company or any Subsidiary or used or held
for use in the conduct of its business or the business of any Subsidiary to be maintained and kept
in good condition, repair and working order and supplied with all necessary equipment and will
cause to be made all necessary repairs, renewals, replacements, betterments and improvements
thereof, all as in the judgment of the Company may be necessary so that the business carried on in
connection therewith may be properly and advantageously conducted at all times; provided, however,
that nothing in this Section shall prevent the Company from discontinuing the maintenance of any of
such properties if such discontinuance is, in the judgment of the Company, desirable in the conduct
of its business or the business of any Subsidiary and not disadvantageous in any material respect
to the Holders.




     SECTION 9.5 PAYMENT OF TAXES AND OTHER CLAIMS.



          The Company will, and will cause any Significant Subsidiary to, pay or discharge or cause to
be paid or discharged, before the same shall become delinquent, (a) all taxes, assessments and
governmental charges levied or imposed upon the Company or any Subsidiary or upon the income,
profits or property of the Company or any Subsidiary and (b) all claims for labor, materials and
supplies, which, if unpaid, might by law become a lien upon the property of the Company or any
Subsidiary; provided, however, that the Company shall not be required to pay or discharge or cause
to be paid or discharged any such tax, assessment, charge or claim whose amount, applicability or
validity is being contested in good faith by appropriate proceedings.




     SECTION 9.6 REPORTS.



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




     SECTION 9.7 COMPLIANCE CERTIFICATE; NOTICE OF REGISTRATION DEFAULT.



          (a) The Company shall deliver to the Trustee, within 90 days after the end of each fiscal year
of the Company, an Officer’s Certificate signed by two Officers of the Company (at least one of
whom shall be the principal executive officer or the principal financial officer) stating that in
the course of the performance by the signers of their duties as Officers of the




56









 







Company, they would normally have knowledge of any failure by the Company to comply with all
conditions, or Default by the Company with respect to any covenants, under this Indenture, and
further stating whether or not they have knowledge of any such failure or Default and, if so,
specifying each such failure or Default and the nature thereof. In the event an Officer of the
Company comes to have actual knowledge of a Default, regardless of the date, the Company shall
deliver an Officers’ Certificate to the Trustee within five Business Days of obtaining such actual
knowledge specifying such Default and the nature and status thereof.




          (b) When any Registration Default (as defined in the Resale Registration Rights Agreement)
occurs, the Company shall promptly deliver to the Trustee by registered or certified mail or by
telegram, telex or facsimile transmission an Officer’s Certificate specifying the nature of such
Registration Default. In addition, the Company shall deliver to the Trustee on each Interest
Payment Date during the continuance of a Registration Default and on the Interest Payment Date
following the cure of a Registration Default, an Officer’s Certificate specifying the amount of
Additional Interest which have accrued and which are then owing under the Resale Registration
Rights Agreement.




     SECTION 9.8 RESALE OF CERTAIN NOTES.



          During the period of two years after the last date of original issuance of any Notes, the
Company shall not, and shall use its reasonable efforts not to permit any of its “affiliates” (as
defined under Rule 144 under the Securities Act) to, resell any Notes which constitute “restricted
securities” under Rule 144, that are acquired by any of them within the United States or to “U.S.
persons” (as defined in Regulation S) except pursuant to an effective registration statement under
the Securities Act or an applicable exemption therefrom. The Trustee shall have no responsibility
or liability in respect of the Company’s performance of its agreement in the preceding sentence.




     SECTION 9.9 LIMITATION ON INDEBTEDNESS



          The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or
indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly
liable, contingently or otherwise, with respect to (collectively, “incur”) any Senior Indebtedness
or any Parity Indebtedness.




          The first paragraph of this covenant will not prohibit the incurrence of any of the following
items of Senior Indebtedness or Parity Indebtedness (collectively, “Permitted Debt”):




          (a) the incurrence by the Company and any Restricted Subsidiary of any Senior Indebtedness or
Parity Indebtedness; provided that (w) the aggregate principal amount of all such Indebtedness
outstanding at any one time does not exceed $8.0 million, (x) the average yield to maturity of such
Indebtedness does not exceed 12% per annum, (y) such Indebtedness is not convertible, exchangeable
or exercisable into Capital Stock of the Company, and (z) any warrants for Common Stock issued to
the holders of such Indebtedness in connection with the Company’s incurrence thereof shall not be
exercisable into more than the number of shares equal to 15% of the principal amount of such
Indebtedness divided by the exercise price of such warrants;




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          (b) the incurrence by the Company and its Subsidiaries of Indebtedness outstanding on the date
hereof set forth on Schedule I hereto;




          (c) the incurrence by the Company or any of its Restricted Subsidiaries of Strategic
Indebtedness;




          (d) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany
Indebtedness between or among the Company and any of its Restricted Subsidiaries;




          (e) the guarantee by the Company or any of the guarantors of Indebtedness of the Company or a
Restricted Subsidiary of the Company that was permitted to be incurred by another provision of this
section;




          (f) the incurrence of Indebtedness solely in respect of performance, surety and similar bonds
or completion or performance Guarantees, to the extent that such incurrence does not result in the
incurrence of any obligation for the payment of borrowed money to others; and




          (g) the incurrence of Indebtedness arising from the agreements of the Company or a Restricted
Subsidiary of the Company providing for indemnification, adjustment of purchase price or similar
obligations, in each case, incurred or assumed in connection with the disposition of any business,
assets or a Subsidiary; provided, however, that: (a) such Indebtedness is not reflected as a
liability on the balance sheet of the Company or any Restricted Subsidiary of the Company, and (b)
the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the
gross proceeds, including non-cash proceeds (the fair market value of such non-cash proceeds being
measured at the time received and without giving effect to any subsequent changes in value),
actually received by the Company and its Restricted Subsidiaries in connection with such
disposition.




          For purposes of determining any particular amount of Indebtedness under this covenant,
guarantees, liens or obligations in support of letters of credit supporting Indebtedness shall not
be included to the extent such letters of credit are included in the amount of such Indebtedness.




          Accrual of interest and the payment of interest in the form of additional Indebtedness shall
not be deemed to be an incurrence of Indebtedness for purposes of this Section.




ARTICLE X




REDEMPTION OF NOTES




     SECTION 10.1 OPTIONAL REDEMPTION.



          (a) The Company shall not redeem the Notes at any time prior to September 1, 2009.




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          (b) On or after September 1, 2009, the Company may, at its option, redeem the Notes for cash
in whole at any time or in part from time to time, on any date prior to maturity, upon notice as
set forth in Section 10.4 at a redemption price equal to 100% of the principal amount of the Notes
called for redemption (the “Redemption Price”); provided, however, the Company may
only redeem the Notes if, beginning on September 1, 2009, the VWAP of the Common Stock equals or
exceeds 200% of the Conversion Price then in effect for at least 20 Trading Days in any consecutive
30 Trading Day period ending on the Trading Day prior to the date the notice of the redemption
pursuant to this Section 10.1(b) is mailed pursuant to Section 10.4.




          (c) The Company shall pay any interest on the Notes called for redemption pursuant to this
Section 10.1 (including those Notes which are converted into Common Stock after the date the notice
of the redemption is mailed and prior to the Redemption Date) accrued but not paid to, but
excluding, the Redemption Date. Such interest shall be paid to the Holder entitled to the
Redemption Price; provided that if the Redemption Date is an Interest Payment Date, the Company
shall pay the interest to the Holder of the Note at the close of business on the corresponding
Regular Record Date.




     SECTION 10.2 NOTICE TO TRUSTEE.



          If the Company elects to redeem Notes pursuant to the redemption provisions of Section 10.1(a)
or (b) hereof (such election to be evidenced by a resolution of the Company’s board of directors),
it shall notify the Trustee at least 60 days prior to the Redemption Date (unless a shorter notice
shall be satisfactory to the Trustee) of such intended Redemption Date, the principal amount of
Notes to be redeemed and the CUSIP numbers of the Notes to be redeemed.




     SECTION 10.3 SELECTION OF NOTES TO BE REDEEMED.



          If fewer than all the Notes are to be redeemed, the Trustee shall select the particular Notes
to be redeemed from the Outstanding Notes by a method that complies with the requirements of any
exchange on which the Notes are listed, or, if the Notes are not listed on an exchange, on a pro
rata basis or by lot or in accordance with any other method the Trustee considers fair and
appropriate. Notes and portions thereof that the Trustee selects shall be in amounts equal to the
minimum authorized denominations for Notes to be redeemed or any integral multiple thereof.




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




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




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




     SECTION 10.4 NOTICE OF REDEMPTION.



          Notice of redemption shall be given in the manner provided in Section 13.2 hereof to the
Holders of Notes to be redeemed. Such notice shall be given not less than 30 nor more than 60 days
prior to the Redemption Date. All notices of redemption shall state:





	 	(1)	 	the Redemption Date;
	 
	 	(2)	 	the Redemption Price and interest accrued and
unpaid to the Redemption Date, if any;
	 
	 	(3)	 	if fewer than all the Outstanding Notes are to
be redeemed, the aggregate principal amount of Notes to be redeemed and
the aggregate principal amount of Notes which will be outstanding after
such partial redemption;
	 
	 	(4)	 	that on the Redemption Date the Redemption
Price and, as provided in Section 10.1(c), interest accrued and unpaid
to the Redemption Date, and Additional Interest, if any, will become
due and payable upon each such Note to be redeemed, and that interest
thereon shall cease to accrue on and after such date;
	 
	 	(5)	 	the Conversion Price then in effect, the date
on which the right to convert the principal of the Notes to be redeemed
will terminate and the places where such Notes may be surrendered for
conversion;
	 
	 	(6)	 	the place or places where such Notes are to be
surrendered for payment of the Redemption Price and accrued and unpaid
interest, if any; and
	 
	 	(7)	 	the CUSIP number of the Notes.
	 
	 	(8)	 	the last date on which exchanges or transfers
of Notes may be made pursuant to Section 2.7 hereof, and shall specify
the serial numbers of Notes and the portions thereof called for
redemption.





          Notice of redemption of Notes to be redeemed at the election of the Company shall be given by
the Company or, at the Company’s request delivered in writing at least 45 days




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prior to the Redemption Date, accompanied by the form of notice described above, by the
Trustee in the name of and at the expense of the Company.




     SECTION 10.5 EFFECT OF NOTICE OF REDEMPTION.



          Notice of redemption having been given as provided in Section 10.4 hereof, the Notes so to be
redeemed shall, on the Redemption Date, become due and payable at the Redemption Price therein
specified (and, as provided in Section 10.1(c), accrued interest and Additional Interest, if any,
to the Redemption Date) and from and after such date (unless the Company shall default in the
payment of the Redemption Price and accrued and unpaid interest) such Notes shall cease to bear
interest; provided that the Company may specify in such notice conditions to the redemption of the
Notes that must be met on or prior to the Redemption Date, including the receipt of proceeds from
concurrent equity or other financings, in which case the Redemption Date shall not occur, and the
Notes to be redeemed shall not be due and payable at the Redemption Price, until such conditions
are satisfied. Upon surrender of any such Note for redemption in accordance with such notice
(including the satisfaction of all applicable conditions), such Note shall be paid by the Company
at the Redemption Price (and, as provided, in Section 10.1(c), Additional Interest and accrued
interest, if any, to the Redemption Date); provided, however, that the installments
of interest on Notes whose stated maturity is prior to or on the Redemption Date shall be payable
to the Holders of such Notes, or one or more Predecessor Notes, registered as such on the relevant
Record Date according to their terms and the provisions of Section 2.7 hereof.




          If any Note called for redemption shall not be so paid when due upon surrender thereof for
redemption, the principal and premium, if any, shall, until paid, bear interest from the Redemption
Date at the interest rate set forth on the Note.




     SECTION 10.6 DEPOSIT OF REDEMPTION PRICE.



          Prior to or on any Redemption Date, the Company shall deposit with the Trustee or with a
Paying Agent (or, if the Company is acting as its own Paying Agent, segregate and hold in trust) an
amount of money sufficient to pay the Redemption Price of, and accrued and unpaid interest and
Additional Interest, if any, on, all the Notes to be redeemed on that Redemption Date other than
any Notes called for redemption on that date which have been converted prior to the date of such
deposit payable on Notes called for redemption on that date which have been converted prior to the
date of such deposit.




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




     SECTION 10.7 NOTES REDEEMED IN PART.



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




ARTICLE XI




REPURCHASE AT THE OPTION OF A HOLDER




     SECTION 11.1 REPURCHASE RIGHT UPON A CHANGE OF CONTROL.



          In the event that a Change of Control shall occur, each Holder shall have the right (the
“Repurchase Right”), at the Holder’s option to require the Company to repurchase, and upon the
exercise of such right the Company shall repurchase, all of such Holder’s Notes not theretofore
called for redemption, or any portion of the principal amount thereof that is equal to $1,000 or an
integral multiple thereof (provided that no single Note may be repurchased in part unless the
portion of the principal amount of such Note to be Outstanding after such repurchase is equal to
$1,000 or an integral multiple thereof), on a date (the “Repurchase Date”) that is less than 45
days after the date of the Company Notice at a purchase price equal to 105% of the principal amount
of the Notes to be repurchased (the “Repurchase Price”), plus interest accrued and unpaid to, but
excluding, the Repurchase Date.




          Notwithstanding the foregoing, installments of interest on Notes whose stated maturity is
prior to or on the Repurchase Date shall be payable to the Holders of such Notes, or one or more
Predecessor Notes, registered as such at the close of business on the relevant Record Date
according to their terms and the provisions of Section 2.1 hereof.




     SECTION 11.2 NOTICES; METHOD OF EXERCISING REPURCHASE RIGHT, ETC. UPON CHANGE OF CONTROL



          (a) Unless the Company shall have theretofore called for redemption all of the Outstanding
Notes, within 30 days after the Company becomes aware of the occurrence of a Change of Control, the
Company, or, at the written request and expense of the Company within 30 days after the Company
becomes aware of such occurrence, the Trustee, shall give to all Holders of Notes notice, in the
manner provided in Section 13.2 hereof, of the occurrence of the Change of Control and of the
Repurchase Right set forth herein arising as a result thereof (the “Company Notice”). The Company
shall also deliver a copy of such notice of a Repurchase Right to the Trustee. Each notice of a
Repurchase Right shall state:





	 	(1)	 	the Repurchase Date;




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	 	(2)	 	the date by which the Repurchase Right must be
exercised;
	 
	 	(3)	 	the Repurchase Price and accrued and unpaid
interest, if any;
	 
	 	(4)	 	a description of the procedure which a Holder
must follow to exercise a Repurchase Right, and the place or places
where such Notes are to be surrendered for payment of the Repurchase
Price, accrued and unpaid interest and Additional Interest, if any;
	 
	 	(5)	 	that on the Repurchase Date the Repurchase
Price, accrued and unpaid interest and Additional Interest, if any,
will become due and payable upon each such Note designated by the
Holder to be repurchased, and that interest thereon shall cease to
accrue on and after said date;
	 
	 	(6)	 	the Conversion Price then in effect, the date
on which the right to convert the principal of the Notes will terminate
and that accrued and unpaid interest on the Notes is forfeited upon any
conversion after October 31, 2008;
	 
	 	(7)	 	that a Make-Whole Premium is required to be
paid upon any conversion in connection with a Change of Control;
	 
	 	(8)	 	the amount of the Notes to be repurchased will
terminate and the place where such Notes may be surrendered for
conversion, and
	 
	 	(9)	 	the place or places where such Notes, together
with the Option to Elect Repayment Upon a Change of Control certificate
included in Exhibit A annexed hereto are to be delivered for payment of
the Repurchase Price and accrued and unpaid interest, if any.





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




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




          (b) To exercise a Repurchase Right, a Holder shall deliver to the Trustee prior to or on the
first day prior to the Repurchase Date:





	 	(1)	 	written notice of the Holder’s exercise of such
right, which notice shall set forth the name of the Holder, the
principal amount of the Notes to be repurchased (and, if any Note is to
be repurchased in part, the serial number thereof, the portion of the
principal amount thereof to be repurchased) and a statement that an
election to exercise the Repurchase Right is being made thereby, and




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




Such written notice shall be irrevocable, except that the right of the Holder to convert the Notes
with respect to which the Repurchase Right is being exercised shall continue until the close of
business on the Business Day immediately preceding the Repurchase Date. The Company shall not pay
accrued and unpaid interest on any Notes so converted except as provided in Section 12.2.




          (c) In the event a Repurchase Right shall be exercised in accordance with the terms hereof,
the Company shall pay or cause to be paid to the Trustee the Repurchase Price in cash as provided
above, for payment to the Holder on the Repurchase Date, together with Additional Interest, if any,
and accrued and unpaid interest to the Repurchase Date payable in cash with respect to the Notes as
to which the Repurchase Right has been exercised; provided, however, that installments of interest
that mature prior to or on the Repurchase Date shall be payable to the Holders of such Notes, or
one or more Predecessor Notes, registered as such at the close of business on the relevant Regular
Record Date according to their terms and the provisions of Section 2.1 hereof.




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




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




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




     SECTION 11.3 REPURCHASE UPON SPECIFIED DATES



          (a) If an FDA Approval Event has not occurred by September 1, 2009 (the “Put Right Event”),
the Notes shall be purchased in cash, in whole or in part (which must be equal to $1,000 principal
amount or any integral multiple thereof), by the Company, at the option of Holders, in accordance
with the provisions of this Section 11.3 at a cash purchase price equal to 100% of the principal
amount of the surrendered Notes together with accrued but unpaid interest, if any, to but excluding
the Put Right Purchase Date (the “Put Right Purchase Price”).




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          (b) The Company shall give written notice of the occurrence of the Put Right Event by notice
sent by first-class mail to the Trustee and to each Holder (at its address shown in the register of
the Registrar) and to beneficial owners to the extent and in the manner required by applicable law
no later than September 1, 2009 (the “Company Put Right Notice”). The Company Put Right Notice
shall include a form of Put Right Purchase Notice to be completed by a Holder and shall state:





               (i) the Put Right Purchase Price and the Conversion Rate then in effect;




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




               (iii) that Notes as to which a Put Right Purchase Notice has been given may be
converted, if they are otherwise convertible, only in accordance with the Indenture
and only to the extent that the Put Right Purchase Notice has been withdrawn in
accordance with the terms of this Indenture;




               (iv) that Notes must be surrendered to the Paying Agent as a condition to
collecting payment of the Put Right Purchase Price;




               (v) that the Put Right Purchase Price for any Note as to which a Put Right
Purchase Notice has been given and not withdrawn will be paid promptly following the
later of the Put Right Purchase Date and the time of surrender of such Note as
described in subclause (iv) above;




               (vi) the procedures the Holder must follow to exercise rights under this
section and a brief description of those rights;




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




               (viii) the procedures for withdrawing a Put Right Purchase Notice (including a
summary of the terms of paragraph (g) below);




               (ix) that, unless the Company fails to pay such Put Right Purchase Price on
Notes for which a Put Right Purchase Notice has been submitted, such Notes shall no
longer be outstanding and interest on such Notes will cease to accrue on and after
the Put Right Purchase Date; and




               (x) the CUSIP number of the Notes.



          (c) If any of the Notes to be repurchased are in the form of a Global Note, the Company shall
modify such notice to the extent necessary to accord with the Depositary’s applicable procedures
relating to repurchases.




          (d) At the Company’s request, the Trustee shall give such Company Put Right Notice on behalf
of the Company and at the Company’s expense; provided, however, that, in all cases, the
text of such Company Put Right Notice shall be prepared by the Company; provided




65









 







further that the Company shall make such request and deliver the text of such Company Put
Right Notice at least second Business Days prior to the date by which such Company Put Right Notice
must be given in accordance with this section (unless a shorter period shall be satisfactory to the
Trustee).




          (e) To exercise its rights pursuant to this section, the Holder shall deliver to the Paying
Agent a properly completed put right purchase notice (each, a “Put Right Purchase Notice”) at any
time from the opening of business on the Business Day after September 1, 2009 stating:





               (i) if certificated Notes have been issued, the certificate number of the Note
that the Holder will deliver for repurchase (or if the Notes are not certificated,
the Put Right Purchase Notice must comply with the Depositary’s applicable
procedures relating to purchases),




               (ii) the portion of the principal amount of the Note which the Holder will
deliver to be purchased, which portion must be a principal amount of $1,000 or an
integral multiple thereof, and




               (iii) that such Note shall be purchased within 30 days of delivery of the Put
Right Purchase Notice (the “Put Right Purchase Date”) pursuant to the terms and
conditions in this Section and the Notes.



          (f) The Company shall pay the Put Right Purchase Price for all Notes with respect to which a
Put Right Purchase Notice is given and not validly withdrawn, promptly following the delivery of
such Notes to the Paying Agent (together with all necessary endorsements) at the offices of the
Paying Agent (if the Notes are not certificated, such delivery must comply with the Depositary’s
applicable procedures relating to purchases). Delivery of such Note shall be a condition to
receipt by the Holder of the Put Right Purchase Price therefor. The Put Right Purchase Price shall
be paid pursuant to this section only if the Note delivered to the Paying Agent conforms in all
respects to the description thereof in the related Put Right Purchase Notice, as determined by the
Company.




          (g) Notwithstanding anything herein to the contrary, any Holder delivering to the Paying Agent
a Put Right Purchase Notice contemplated by this section shall have the right to withdraw such Put
Right Purchase Notice in whole or in part at any time prior to the close of business on the
Business Day immediately preceding the Put Right Purchase Date by delivery of a written notice of
withdrawal to the Paying Agent specifying:





               (i) the aggregate principal amount of the Note (which must be equal to $1,000
or any integral multiple thereof) with respect to which such notice of withdrawal is
being submitted,




               (ii) the certificate number, if any, of the Note in respect of which such
notice of withdrawal is being submitted (or, if the Notes are not certificated, the
withdrawal notice must comply with the Applicable Procedures relating to
withdrawals), and



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               (iii) the aggregate principal amount, if any, of such Note which remains
subject to the original Put Right Purchase Notice and which has been or will be
delivered for purchase by the Company.



          (h) The Paying Agent shall promptly notify the Company of the receipt by it of any Put Right
Purchase Notice or written notice of withdrawal thereof.




          (i) On or before 12:00 p.m. (noon) New York City time on the applicable Put Right Purchase
Date, the Company shall deposit with the Trustee or with the Paying Agent (or if the Company or an
Affiliate of the Company is acting as the Paying Agent, shall segregate and hold in trust) an
amount of money (in immediately available funds if deposited on or after the tenth Business Day
following such Put Right Purchase Date) sufficient to pay the aggregate Put Right Purchase Price of
all the Notes or portions thereof which are to be purchased as of the Put Right Purchase Date.





               (i) If a Paying Agent holds, in accordance with the terms hereof, money
sufficient to pay the Put Right Purchase Price of any Note for which a Put Right
Notice has been tendered and not withdrawn, then, on the Put Right Purchase Date,
such Note will cease to be outstanding, and interest shall cease to accrue, whether
or not the Note is delivered to the Paying Agent, and the rights of the Holder in
respect of the Note shall terminate (other than the right to receive the Put Right
Purchase Price as aforesaid).




               (ii) The Put Right Purchase Price shall be paid to such Holder with respect to
Notes for which a Put Right Purchase Notice has been tendered and not validly
withdrawn, subject to receipt of funds by the Paying Agent, promptly after the later
of (A) the Business Day following the Put Right Purchase Date with respect to such
Note (provided that the conditions in paragraph (f) above have been satisfied) and
(B) the time of delivery of such Note to the Paying Agent by the Holder thereof in
the manner required by such paragraph (f). Notes in respect of which a Put Right
Purchase Notice has been given by the Holder thereof, may not be converted on or
after the date of the delivery of such Put Right Purchase Notice, unless such Put
Right Purchase Notice has first been validly withdrawn as specified in paragraph (g)
above.




               (iii) To the extent that the aggregate amount of cash deposited by the Company
pursuant to this section exceeds the aggregate Put Right Purchase Price of the Notes
or portions thereof that the Company is obligated to purchase, then promptly after
the Put Right Purchase Date the Trustee or a Paying Agent, as the case may be, shall
return any such excess cash to the Company, or if such money is then held by the
Company in trust, it shall be discharged from the trust.



          (j) The Company shall only be obligated to purchase, pursuant to this section, a portion of a
Note if the principal amount of such portion is $1,000 or an integral multiple of $1,000.
Provisions of this Indenture that apply to the purchase of all of a Note also apply to the purchase
of such portion of such Note.




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ARTICLE XII




CONVERSION OF NOTES




     SECTION 12.1 CONVERSION RIGHT AND CONVERSION PRICE.



          Subject to and upon compliance with the provisions of this Article, at the option of the
Holder thereof, any Outstanding Note or any portion of the principal amount thereof which is $1,000
or an integral multiple of $1,000 may be converted into duly authorized, fully paid and
nonassessable shares of Common Stock, at the Conversion Price, determined as hereinafter provided,
in effect at the time of conversion. Such conversion right shall expire at the close of business
on the Business Day immediately preceding September 1, 2011 unless the Notes or a portion thereof
are called for redemption or are repurchased.




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




          The rate at which shares of Common Stock shall be delivered upon conversion (the “Conversion
Rate”) shall be initially equal to 500 shares per $1,000 principal amount of Notes. The Conversion
Price of the Notes (the “Conversion Price”) shall equal $1,000 divided by the Conversion Rate
(rounded to the nearest cent). The Conversion Price shall be adjusted in certain instances as
provided in Section 12.4 hereof. If a Holder converts all or any portion of its Notes prior to
October 31, 2008, upon such conversion, in addition to the Common Stock such Holder would receive,
the Holder will be entitled to receive with respect to each Note so converted an amount in cash
equal to the difference of (i) the amount of all interest that the Company would be required to pay
on such Note from the date hereof through October 31, 2008 and (ii) the amount of interest actually
paid on such Note by the Company prior to the time of conversion.




     SECTION 12.2 EXERCISE OF CONVERSION RIGHT.



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




          To the extent provided in Section 2.1, Notes surrendered for conversion during the period from
the close of business on any Regular Record Date to the opening of business on the next succeeding
Interest Payment Date (except in the case of any Note whose maturity is prior to such Interest
Payment Date) shall be accompanied by payment in New York Clearing





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House funds or other funds acceptable to the Company of an amount equal to the interest and
Additional Interest, if any, to be received on such Interest Payment Date on the principal amount
of Notes being surrendered for conversion, as well as any taxes or duties payable pursuant to
Section 12.8. To the extent provided in Section 2.1, Notes which have been called for redemption
after November 1, 2008 by the Company in a notice of redemption pursuant to Section 10.4, and are
converted prior to redemption, shall not require such concurrent payment to the Company upon
surrender for conversion, and if converted during the time period set forth in the preceding
sentence, the Holders of such converted Notes shall be entitled to receive (and retain) any accrued
interest on the principal of such surrendered Notes, and Additional Interest, if any.




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




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




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




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




     SECTION 12.3 FRACTIONS OF SHARES.



          No fractional shares of Common Stock shall be issued upon conversion of any Note or Notes. If
more than one Note shall be surrendered for conversion at one time by the same Holder, the number
of full shares which shall be issued upon conversion thereof shall be computed on the basis of the
aggregate principal amount of the Notes (or specified portions thereof) so surrendered. Instead of
any fractional share of Common Stock which would otherwise be issued upon conversion of any Note or
Notes (or specified portions thereof), the Company shall pay a cash adjustment in respect of such
fraction (calculated to the nearest one-




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100th of a share) in an amount equal to the same fraction of the Closing Price of the Common
Stock as of the Trading Day preceding the date of conversion.




     SECTION 12.4 ADJUSTMENT OF CONVERSION PRICE.



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




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





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




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



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




          (c) In case the Company shall issue rights or warrants (other than any rights or warrants
referred to in Section 12.4(d)) to all holders of its outstanding shares of Common Stock entitling
them to subscribe for or purchase shares of Common Stock (or securities convertible into Common
Stock) at a price per share (or having a conversion price per share) less than the Current Market
Price (as defined in Section 12.4(g)) on the Record Date fixed for the determination of
stockholders entitled to receive such rights or warrants, the Conversion Price shall be adjusted so
that the same shall equal the price determined by multiplying the Conversion Price in effect at the
opening of business on the date after such Record Date by a fraction:





               (i) the numerator of which shall be the number of shares of Common Stock
outstanding at the close of business on the Record Date plus the



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number
of shares which the aggregate offering price of the total number of shares so offered for subscription or purchase (or the aggregate conversion price of
the convertible securities so offered) would purchase at such Current Market Price,
and




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


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




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





               (i) the numerator of which shall be the Current Market Price (determined as
provided in Section 12.4(g)) on such date less the fair market value (as determined
by the Board of Directors, whose determination shall be conclusive and set forth in
a Board Resolution) on such date of the portion of the securities so distributed
applicable to one share of Common Stock (determined on



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the basis of the number of shares of the Common Stock outstanding on the Record
Date), and




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


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




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




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





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




               (ii) are not exercisable; and




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


shall be deemed not to have been distributed for purposes of this Section 12.4(d) (and no
adjustment to the Conversion Price under this Section 12.4(d) will be required) until the
occurrence of the earliest Trigger Event. If such right or warrant is subject to subsequent
events, upon the occurrence of which such right or warrant shall become exercisable to purchase
different securities, evidences of indebtedness or other assets or entitle the holder to purchase a
different number or amount of the foregoing or to purchase any of the foregoing at a different
purchase price, then the occurrence of each such event shall be deemed to be the date of issuance
and record date with respect to a new right or warrant (and a termination or expiration of the
existing right or warrant without exercise by the holder thereof). In addition, in the event of
any distribution (or deemed distribution) of rights or warrants, or any Trigger Event or other
event




72









 







(of the type described in the preceding sentence) with respect thereto, that resulted in an
adjustment to the Conversion Price under this Section 12.4(d):





	 	(1)	 	in the case of any such rights or warrants
which shall all have been redeemed or repurchased without exercise by
any holders thereof, the Conversion Price shall be readjusted upon such
final redemption or repurchase to give effect to such distribution or
Trigger Event, as the case may be, as though it were a cash
distribution, equal to the per share redemption or repurchase price
received by a holder of Common Stock with respect to such rights or
warrant (assuming such holder had retained such rights or warrants),
made to all holders of Common Stock as of the date of such redemption
or repurchase, and
	 
	 	(2)	 	in the case of such rights or warrants all of
which shall have expired or been terminated without exercise, the
Conversion Price shall be readjusted as if such rights and warrants had
never been issued.




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





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






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



73









 






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




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



          (e) In case the Company shall, by dividend or otherwise, distribute to all holders of its
Common Stock cash (excluding any cash that is distributed upon a reclassification, change, merger,
combination, sale, conveyance, consolidation or statutory share exchange to which Section 12.11
hereof applies or as part of a distribution referred to in Section 12.4(d) hereof), then and in
each such case, immediately after the close of business on the Record Date of such distribution,
the Conversion Price shall be reduced so that the same shall equal the price determined by
multiplying the Conversion Price in effect immediately prior to the close of business on such
Record Date by a fraction:





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




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



          (f) In case a tender or exchange offer made by the Company or any of its subsidiaries to all
holders of Common Stock for all or any portion of the Common Stock shall expire and such tender or
exchange offer (as amended upon the expiration thereof) shall require the payment to stockholders
(based on the acceptance (up to any maximum specified in the terms of the tender or exchange offer)
of Purchased Shares (as defined below)) of an aggregate consideration having a fair market value
(as determined by the Board of Directors, whose determination shall be conclusive and set forth in
a Board Resolution), as of the expiration of such tender or exchange offer) that, combined together
with the aggregate of the cash plus the fair market value (as determined by the Board of Directors,
whose determination shall be conclusive and set forth in a Board Resolution), as of the expiration
of such tender or exchange offer, of consideration payable in respect of any other tender or
exchange offers, made by the Company or any of its subsidiaries to all holders of Common Stock for
all or any portion of the Common Stock expiring within the 12 months preceding the expiration of
such tender or exchange offer and in respect of which no adjustment pursuant to this Section
12.4(f) has been made, exceeds 10% of the product of the Current Market Price (determined as
provided in Section 12.4(g)) as of the last time (the “Expiration Time”) tenders or exchanges could
have been made pursuant to such tender or exchange offer (as it may be amended) times the number of
shares of Common Stock outstanding (including any tendered or exchanged shares) on the





74









 







Expiration Time, then, and in each such case, immediately prior to the opening of business on
the day after the date of the Expiration Time, the Conversion Price shall be adjusted so that the
same shall equal the price determined by multiplying the Conversion Price in effect immediately
prior to close of business on the date of the Expiration Time by a fraction:





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




               (ii) 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 reduction (if any) shall become effective immediately prior to the opening of business on the
day following the Expiration Time. In the event that the Company is obligated to purchase shares
pursuant to any such tender or exchange offer, but the Company is permanently prevented by
applicable law from effecting any such purchases or all such purchases are rescinded, the
Conversion Price shall again be adjusted to be the Conversion Price which would then be in effect
if such tender or exchange offer had not been made. If the application of this Section 12.4(f) to
any tender or exchange offer would result in an increase in the Conversion Price, no adjustment
shall be made for such tender or exchange offer under this Section 12.4(f).




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





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






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



75









 






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




               (iii) the “ex” date for the issuance or distribution requiring such computation
is prior to the day in question, after taking into account any adjustment required
pursuant to clause (i) or (ii) of this proviso, the Closing Price for each Trading
Day on or after such “ex” date shall be adjusted by adding thereto the amount of any
cash and the fair market value (as determined by the Board of Directors in a manner
consistent with any determination of such value for purposes of Section 12.4(d) or
(f), whose determination shall be conclusive and set forth in a Board Resolution) of
the evidences of indebtedness, shares of capital stock or assets being distributed
applicable to one share of Common Stock as of the close of business on the day
before such “ex” date.


For purposes of any computation under Section 12.4(f), the Current Market Price of the Common Stock
on any date shall be deemed to be the average of the daily Closing Prices per share of Common Stock
for such day and the next two succeeding Trading Days; provided, however, that if the “ex” date for
any event (other than the tender or exchange offer requiring such computation) that requires an
adjustment to the Conversion Price pursuant to Section 12.4(a), (b), (c), (d), (e) or (f) occurs on
or after the Expiration Time for the tender or exchange offer requiring such computation and prior
to the day in question, the Closing Price for each Trading Day on and after the “ex” date for such
other event shall be adjusted by multiplying such Closing Price by the reciprocal of the fraction
by which the Conversion Price is so required to be adjusted as a result of such other event. For
purposes of this paragraph, the term “ex” date, when used:





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




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




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


Notwithstanding the foregoing, whenever successive adjustments to the Conversion Price are called
for pursuant to this Section 12.4, such adjustments shall be made to the Current Market





76









 







Price as may be necessary or appropriate to effectuate the intent of this Section 12.4 and to avoid
unjust or inequitable results as determined in good faith by the Board of Directors.





	 	(2)	 	“fair market value” shall mean the amount which
a willing buyer would pay a willing seller in an arm’s length
transaction.
	 
	 	(3)	 	“Record Date” shall mean, with respect to any
dividend, distribution or other transaction or event in which the
holders of Common Stock have the right to receive any cash, securities
or other property or in which the Common Stock (or other applicable
security) is exchanged for or converted into any combination of cash,
securities or other property, the date fixed for determination of
stockholders entitled to receive such cash, securities or other
property (whether such date is fixed by the Board of Directors or by
statute, contract or otherwise).





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




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




          Adjustment to the Conversion Price is not necessary if Holders may participate in the
transactions otherwise giving rise to an adjustment on a basis and with notice that the Board of
Directors determines to be fair and appropriate. In cases where the fair market value of the
portion of assets, debt securities or rights, warrants or options to purchase securities of the
Company applicable to one share of Common Stock distributed to stockholders exceeds the average
sale price per share of Common Stock, or the average sale price per share of options on Common
Stock so distributed by less than $1.00, rather than being entitled to an adjustment in the
Conversion Price, a Holder, upon conversion of a Note, will be entitled to receive (in addition to
the shares of Common Stock into which such Note is convertible) the kind and amounts of assets,
debt securities or rights, options or warrants comprising the distribution that such Holder would
have received if such Holder had converted such Note immediately prior to the record date for
determining the stockholders entitled to receive such distribution.




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





77









 







however, that any adjustments which by reason of this Section 12.4(i) are not required to be
made shall be carried forward and taken into account in any subsequent adjustment. All
calculations under this Article 12 shall be made by the Company and shall be made to the nearest
cent or to the nearest one-ten thousandth (1/10,000th) of a share, as the case may be.
No adjustment need be made for a change in the par value or no par value of the Common Stock.




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




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




          (l) If the distribution date for the rights provided in the Company’s rights agreement, if
any, occurs prior to the date a Note is converted, (i) the Holder of the Note who converts such
Note after the distribution date is entitled to receive the rights that would otherwise be attached
(but for the date of conversion) to the shares of Common Stock received upon such conversion and
(ii) no adjustment shall be made to the Conversion Price pursuant to clause 12.4(b).




     SECTION 12.5 NOTICE OF ADJUSTMENTS OF CONVERSION PRICE.



          Whenever the Conversion Price is adjusted as herein provided (other than in the case of an
adjustment pursuant to the second paragraph of Section 12.4(h) for which the notice required by
such paragraph has been provided), the Company shall promptly file with the Trustee and any
Conversion Agent other than the Trustee an Officers’ Certificate setting forth the adjusted
Conversion Price and showing in reasonable detail the facts upon which such adjustment is based;
provided that the Trustee shall have no duty or obligation to verify the accuracy of the adjusted
Conversion Price. Promptly after delivery of such Officers’ Certificate, the Company shall prepare
a notice stating that the Conversion Price has been adjusted and setting forth the adjusted
Conversion Price and the date on which each adjustment becomes effective, and shall mail such
notice to each Holder at the address of such Holder as it appears in the Register within 20 days of
the effective date of such adjustment. Failure to deliver such notice shall not effect the
legality or validity of any such adjustment.




     SECTION 12.6 NOTICE PRIOR TO CERTAIN ACTIONS.



          In case at any time after the date hereof:




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	 	(1)	 	the Company shall declare a dividend (or any
other distribution) on its Common Stock payable otherwise than in cash
out of its capital surplus or its consolidated retained earnings;
	 
	 	(2)	 	the Company shall authorize the granting to the
holders of its Common Stock of rights or warrants to subscribe for or
purchase any shares of capital stock of any class (or of securities
convertible into shares of capital stock of any class) or of any other
rights;
	 
	 	(3)	 	there shall occur any reclassification of the
Common Stock of the Company (other than a subdivision or combination of
its outstanding Common Stock, a change in par value, a change from par
value to no par value or a change from no par value to par value), or
any merger, consolidation, statutory share exchange or combination to
which the Company is a party and for which approval of any shareholders
of the Company is required, or the sale, transfer or conveyance of all
or substantially all of the assets of the Company; or
	 
	 	(4)	 	there shall occur the voluntary or involuntary
dissolution, liquidation or winding up of the Company;





     the Company shall cause to be filed at each office or agency maintained for the purpose of
conversion of securities pursuant to Section 9.2 hereof, and shall cause to be provided to the
Trustee and all Holders in accordance with Section 13.2 hereof, at least 20 days (or 10 days in any
case specified in clause (1) or (2) above) prior to the applicable record or effective date
hereinafter specified, a notice stating:




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




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



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




     SECTION 12.7 COMPANY TO RESERVE COMMON STOCK.



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




     SECTION 12.8 TAXES ON CONVERSIONS.



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




     SECTION 12.9 COVENANT AS TO COMMON STOCK.



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




     SECTION 12.10 CANCELLATION OF CONVERTED NOTES.



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




     SECTION 12.11 EFFECT OF RECLASSIFICATION, CONSOLIDATION, MERGER OR SALE.



          If any of following events occur, namely:





               (i) any reclassification or change of the outstanding shares of Common Stock
(including a compulsory share exchange but other than changes resulting from a
subdivision or combination), as a result of which holders of Common Stock shall be
entitled to receive stock, securities or other property or assets (including cash or
any combination thereof) with respect to or in exchange for such Common Stock,




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



80









 






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


the Company or the successor or purchasing corporation, as the case may be, shall execute with the
Trustee a supplemental indenture (which shall comply with the TIA as in force at the date of
execution of such supplemental indenture if such supplemental indenture is then required to so
comply) providing that each Note shall be convertible into the kind and amount of shares of stock
and other securities or property or assets (including cash or any combination thereof) which the
Holder thereof would have been entitled to receive upon such reclassification, change, merger,
consolidation, statutory share exchange, combination, sale or conveyance had such Notes been
converted into Common Stock immediately prior to such reclassification, change, merger,
consolidation, statutory share exchange, combination, sale or conveyance assuming such holder of
Common Stock did not exercise its rights of election, if any, as to the kind or amount of
securities, cash or other property receivable upon such merger, consolidation, statutory share
exchange, sale or conveyance (provided that, if the kind or amount of securities, cash or other
property receivable upon such merger, consolidation, statutory share exchange, sale or conveyance
is not the same for each share of Common Stock in respect of which such rights of election shall
not have been exercised (“Non-Electing Share”), then for the purposes of this Section 12.11 the
kind and amount of securities, cash or other property receivable upon such merger, consolidation,
statutory share exchange, sale or conveyance for each Non-Electing Share shall be deemed to be the
kind and amount so receivable per share by a plurality of the Non-Electing Shares). The Trustee
shall be entitled to rely on an Opinion of Counsel as to whether any such supplemental indenture is
required to and does comply with the TIA. Such supplemental indenture shall provide for
adjustments which shall be as nearly equivalent as may be practicable to the adjustments provided
for in this Article 12. If, in the case of any such reclassification, change, merger,
consolidation, statutory share exchange, combination, sale or conveyance, the stock or other
securities and assets receivable thereupon by a holder of shares of Common Stock includes shares of
stock or other securities and assets of a corporation other than the successor or purchasing
corporation, as the case may be, in such reclassification, change, merger, consolidation, statutory
share exchange, combination, sale or conveyance, then such supplemental indenture shall also be
executed by such other corporation and shall contain such additional provisions to protect the
interests of the Holders of the Notes as the Board of Directors shall reasonably consider necessary
by reason of the foregoing, including to the extent practicable the provisions providing for the
Repurchase Rights set forth in Article 11 hereof.




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




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




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




     SECTION 12.12 RESPONSIBILITY OF TRUSTEE FOR CONVERSION PROVISIONS.



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




     SECTION 12.13 LIMITATIONS ON CONVERSION RIGHT.



          Notwithstanding anything to the contrary in this Article, any Holder of a Note who (together
with such Holder’s affiliates) holds more than $10 million in aggregate principal amount of Notes
shall not have the right to convert any Note to the extent that, after giving effect to such
conversion, the Holder (together with the Holder’s affiliates), as set forth on the applicable
conversion notice, would beneficially own in excess of 4.99% of the number of shares of Common
Stock outstanding immediately after giving effect to such conversion. For purposes of the
foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and its
affiliates shall include the number of shares of Common Stock issuable upon conversion of the Note
with respect to which the determination of such sentence is being made, but shall exclude the
number of shares of Common Stock which would be issuable upon (A) conversion of the remaining,
nonconverted portion of the Note beneficially owned by the Holder or any of its affiliates and (B)
exercise or conversion of the unexercised or nonconverted portion of any other securities of the
Company (including, without limitation, any other notes) subject to a limitation on conversion or
exercise analogous to the limitation contained herein, beneficially owned by the Holder or any of
its affiliates. Except as set forth in the preceding sentence, for purposes of this Section 12.13,
beneficial ownership shall be calculated in accordance with Section 13(d) of the Securities
Exchange Act of 1934, as amended. For purposes of this Section 12.13, in determining the number of
outstanding shares of Common Stock, the Holder may rely on the number of outstanding shares of
Common Stock as reflected in (x) the Company’s most recent Quarterly Report on Form 10-Q or Annual
Report on Form 10-K, as the case may be, (y) a more recent public announcement by the Company or (Z) any subsequent notice by the Company or
the Company’s transfer agent setting forth the number of shares of common Stock outstanding.





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In any case, the number of outstanding shares of Common Stock shall be determined after giving effect
to the conversion or exercise of securities of the Company, including the Note, by the Holder or
its affiliates since the date as of which such number of outstanding shares of Common Stock was
reported.




     SECTION 12.14 MAKE-WHOLE PAYMENT UPON CERTAIN CHANGES OF CONTROL



          If there shall have occurred a Change of Control (including any a transaction that, but for
the 105% trading price exception contained in clause (x) of the proviso to such definition would be
a Change of Control), the Company shall pay a “Make-Whole Premium” to the Holders of the Notes who
surrender their Notes for conversion during the period beginning 10 trading days before the
anticipated effective date of the Change of Control transaction (the “Effective Date” which shall
be announced by the Company in any notice or release announcing the applicable change of control
transaction) and ending at the close of business on 30th business day immediately
following such Effective Date (the “Change of Control Conversion Period”). The “Make-Whole
Premium” shall be paid on the Effective Date of the Change of Control (or in the event that Notes
are converted after the Effective Date but during the Change of Control Conversion Period, on the
third business day following the end of the Change of Control Conversion Period) (such date, the
“Make-Whole Delivery Date”). The Make-Whole premium shall be equal to the principal amount of
Notes to be converted divided by $1,000 and multiplied by the applicable number of shares of Common
Stock determined by reference to the table below (the “Make-Whole Premium Table”) and is based on
the Effective Date and the Stock Price in such transaction on such Effective Date; provided that if
the Stock Price or Effective Date are not set forth on the table: (i) if the actual Stock Price on
the Effective Date is between two Stock Prices on the table or the actual Effective Date is between
two Effective Dates on the table, the Make-Whole Premium will be determined by a straight-line
interpolation between the Make-Whole Premiums set forth for the two Stock Prices and the two
Effective Dates on the table based on a 365-day year, as applicable, (ii) if the Stock Price on the
Effective Date equals or exceeds $8.00 per share (the “Stock Price Cap”), subject to adjustment as
set forth herein, no Make-Whole Premium will be paid, and (iii) if the Stock Price on the Effective
Date is less than $1.10 per share (the “Stock Price Threshold”), subject to adjustment as set forth
herein, no Make-Whole Premium will be paid. “Stock Price” means the price paid per share of Common
Stock in the transaction constituting the Change of Control, determined as follows (A) if Holders
of the Common Stock receive only cash in the Change of Control transaction, the Stock Price shall
be the cash amount paid per share of the Common Stock in connection with the Change of Control
transaction and (B) otherwise, the Stock Price shall be equal to the average Closing Prices of the
Common Stock for each of the 10 trading days immediately preceding, but not including, the
applicable Effective Date.




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Effective	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Date	 	$1.10	 	$2.00	 	$2.20	 	$2.40	 	$2.80	 	$2.90	 	$3.00	 	$3.20	 	$3.40	 	$3.60	 	$3.80	 	$4.00	 	$5.00	 	$6.00	 	$7.00	 	$8.00
	11/08/06
	 	 	409.091	 	 	 	195.384	 	 	 	169.406	 	 	 	148.498	 	 	 	117.210	 	 	 	111.005	 	 	 	105.304	 	 	 	95.207	 	 	 	86.564	 	 	 	79.106	 	 	 	72.621	 	 	 	66.946	 	 	 	46.915	 	 	 	35.085	 	 	 	27.492	 	 	 	22.311	 
	11/08/07
	 	 	408.069	 	 	 	159.890	 	 	 	135.679	 	 	 	116.501	 	 	 	88.470	 	 	 	83.028	 	 	 	78.068	 	 	 	69.386	 	 	 	62.071	 	 	 	55.856	 	 	 	50.536	 	 	 	45.950	 	 	 	30.390	 	 	 	21.791	 	 	 	16.578	 	 	 	13.192	 
	11/08/08
	 	 	397.842	 	 	 	109.647	 	 	 	88.006	 	 	 	71.561	 	 	 	49.002	 	 	 	44.877	 	 	 	41.202	 	 	 	34.986	 	 	 	29.986	 	 	 	25.929	 	 	 	22.610	 	 	 	19.874	 	 	 	11.603	 	 	 	7.826	 	 	 	5.854	 	 	 	4.701	 
	09/15/09
	 	 	0.000	 	 	 	0.000	 	 	 	0.000	 	 	 	0.000	 	 	 	0.000	 	 	 	0.000	 	 	 	0.000	 	 	 	0.000	 	 	 	0.000	 	 	 	0.000	 	 	 	0.000	 	 	 	0.000	 	 	 	0.000	 	 	 	0.000	 	 	 	0.000	 	 	 	0.000	 






83









 






          The Stock Prices set forth in the first row of the Make-Whole Premium Table will be
adjusted as of any date on which the Conversion Rate of the Securities is adjusted. The adjusted
Stock Prices will equal the Stock Prices applicable immediately prior to such adjustment multiplied
by a fraction, the numerator of which is the Conversion Rate immediately prior to the adjustment
giving rise to the Stock Price adjustment and the denominator of which is the Conversion Rate as so
adjusted. The number of additional shares set forth in the table above will be adjusted in the same
manner as the Conversion Rate as set forth in Section 12.05 hereof, other than as a result of an
adjustment of the Conversion Rate by adding the Make-Whole Premium as described above.




          The Company shall pay the Make-Whole Premium solely in shares of Common Stock (other than cash
paid in lieu of fractional shares) or in the same form of consideration into which all or
substantially all of the shares of Common Stock have been converted or exchanged in connection with
the Change of Control. If holders of the Common Stock receive or have the right to receive more
than one form of consideration in connection with such Change of Control, then, for purposes of the
foregoing, the forms of consideration in which the Make-Whole Premium shall be paid shall be in
proportion to the different forms of consideration paid to holders of Common Stock in connection
with such Change of Control.




          The Company shall, from time to time, appoint an independent nationally recognized investment
bank to serve as calculation agent with respect to calculation of the Make-Whole Premium (the
“Calculation Agent”). The Calculation Agent shall, on behalf of and on request by the Company,
calculate (i) the Stock Price and (ii) the Make-Whole Premium with respect to such Stock Price,
based on the Effective Date specified by the Company, and shall deliver its calculation of the
Stock Price and Make-Whole Premium to the Company and the Trustee within three business days of the
request by the Company or the Trustee. In making such calculation, in no event may the Calculation
Agent make any changes to, or deviate from the calculations required by, the Make-Whole Premium
Table. The Company or, at the Company’s request, the Trustee, in the name and at the expense of the
Company, (x) shall notify the Holders of the Stock Price and Make-Whole Premium with respect to a
Change of Control as part of the Company Notice and (y) shall notify the Holders, promptly upon the
opening of business on the Effective Date of the number of shares of Common Stock (or such other
securities, assets or property (including cash) into which all or substantially all of the shares
of Common Stock have been converted as of the Effective Date as described above) to be paid in
respect of the Make-Whole Premium in connection with such Change of Control in the manner provided
in this Indenture. The Company shall verify, in writing, all calculations made by the Calculation
Agent pursuant to this Section.




          Notwithstanding the foregoing paragraphs, in no event will the total number of shares of
Common Stock issuable upon conversion of a Note exceed 909.091 per $1,000 principal amount of
Notes, subject to proportional adjustment in the same manner as the Conversion Price as set forth
in clauses (a) through (c) of Section 12.5 hereof.




84









 








          On or prior to the Make-Whole Delivery Date, the Company shall deposit with the Trustee or
with one or more Paying Agents (or, if the Company or an Affiliate or Subsidiary of the Company is
acting as the Paying Agent, set aside, segregate and hold in trust) a number of shares of Common
Stock (or, in the case of a Change of Control in which all or substantially all of the shares of
Common Stock have been, as of the Effective Date, converted into or exchanged for the right to
receive securities or other assets or property (including cash), an amount of such other securities
or other assets or property (including cash)) sufficient to pay the Make-Whole Premium with respect
to all the Notes converted in connection with such Change of Control.




          Promptly after determination of the actual number of shares of Common Stock to be issued in
respect of the Make-Whole Premium, the Company shall publish a notice containing this information
in a newspaper published in the English language, customarily published each Business Day and of
general circulation in the City of New York or publish such information on the Company’s website or
through such other public medium as the Company may use at that time.




          Whenever the Conversion Rate shall be adjusted from time to time by the Company pursuant to
Section 12.3, the Stock Price Threshold and the Stock Price Cap shall be adjusted and each of the
Stock Prices set forth in the Make-Whole Premium Table shall be adjusted. The adjusted Stock Price
Threshold, Stock Price Cap and Stock Prices set forth in the Make-Whole Premium Table shall equal
the Stock Price Threshold, Stock Price Cap and such Stock Prices, as the case may be, immediately
prior to such adjustment multiplied by a fraction, the numerator of which is the Conversion Rate
immediately prior to the adjustment giving rise to such adjustment and the denominator of which is
the Conversion Rate as so adjusted. Each of the share amounts set forth in the body of the
Make-Whole Premium Table shall also be adjusted in the same manner and at the same time.




          By delivering the Make-Whole Premium issuable on conversion to the Trustee, the Company will
be deemed to have satisfied its obligation to pay the principal amount of the Notes so converted
and its obligation to pay accrued and unpaid interest attributable to the period from the most
recent Interest Payment Date through the date of conversion (which amount will be deemed paid in
full rather than cancelled, extinguished or forfeited).




ARTICLE XIII




OTHER PROVISIONS OF GENERAL APPLICATION




     SECTION 13.1 TRUST INDENTURE ACT CONTROLS.



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




     SECTION 13.2 NOTICES.



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





	 	(a)	 	if to the Company:




85









 










Ciphergen Biosystems, Inc.

6611 Dumbarton Circle

Fremont, CA 94555

Attention: Chief Financial Officer



with a copy to:



Wilson Sonsini Goodrich & Rosati, Professional Corporation

650 Page Mill Road

Palo Alto, CA 94304

Attention: Michael J. O’Donnell





	 	(b)	 	if to the Trustee:




U.S. Bank National Association

60 Livingston Avenue

St. Paul, MN 55107

Attention: Corporate Trust Department




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




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




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




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




     SECTION 13.3 COMMUNICATION BY HOLDERS WITH OTHER HOLDERS.



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




     SECTION 13.4 ACTS OF HOLDERS OF NOTES.



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




86









 









	 	(1)	 	one or more instruments of substantially
similar tenor signed by such Holders in person or by agent or proxy
duly appointed in writing;
	 
	 	(2)	 	the record of Holders of Notes voting in favor
thereof, either in person or by proxies duly appointed in writing, at
any meeting of Holders of Notes duly called and held in accordance with
the provisions of Article 8; or
	 
	 	(3)	 	a combination of such instruments and any such
record. Except as herein otherwise expressly provided, such action
shall become effective when such instrument or instruments or record or
both are delivered to the Trustee and, where it is hereby expressly
required, to the Company. Such instrument or instruments and record
(and the action embodied therein and evidenced thereby) are herein
sometimes referred to as the “Act” of the Holders of Notes signing such
instrument or instruments and so voting at such meeting. Proof of
execution of any such instrument or of a writing appointing any such
agent or proxy, or of the holding by any Person of a Note, shall be
sufficient for any purpose of this Indenture and (subject to Section
5.1 hereof) conclusive in favor of the Trustee and the Company if made
in the manner provided in this Section. The record of any meeting of
Holders of Notes shall be proved in the manner provided in Section 8.6
hereof.





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




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




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




     SECTION 13.5 CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.



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





87









 







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




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




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




     SECTION 13.6 STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.



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





	 	(1)	 	a statement that each individual signing such
certificate or opinion on behalf of the Company has read such covenant
or condition and the definitions herein relating thereto;
	 
	 	(2)	 	a brief statement as to the nature and scope of
the examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
	 
	 	(3)	 	a statement that, in the opinion of each such
individual, he has made such examination or investigation as is
necessary to enable him to express an informed opinion as to whether or
not such covenant or condition has been complied with; and
	 
	 	(4)	 	a statement as to whether, in the opinion of
each such individual, such condition or covenant has been complied
with.





     SECTION 13.7 EFFECT OF HEADINGS AND TABLE OF CONTENTS.



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




88









 








     SECTION 13.8 SUCCESSORS AND ASSIGNS.



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




     SECTION 13.9 SEPARABILITY CLAUSE.



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




     SECTION 13.10 BENEFITS OF INDENTURE.



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




     SECTION 13.11 GOVERNING LAW.



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




     SECTION 13.12 COUNTERPARTS.



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




     SECTION 13.13 LEGAL HOLIDAYS.



          In any case where any Interest Payment Date, Redemption Date or stated maturity of any Note
shall not be a Business Day at any Place of Payment, then (notwithstanding any other provision of
this Indenture or of the Notes) payment of interest (including Additional Interest, if any) or
principal or premium, if any, need not be made at such Place of Payment on such day, but may be
made on the next succeeding Business Day at such Place of Payment with the same force and effect as
if made on the Interest Payment Date or Redemption Date or at the stated maturity, provided, that
in the case that payment is made on such succeeding Business Day, no interest shall accrue on the
amount so payable for the period from and after such Interest Payment Date, Redemption Date or
stated maturity, as the case may be.




     SECTION 13.14 RECOURSE AGAINST OTHERS.



          No recourse for the payment of the principal of or premium, if any, or interest (including
Additional Interest, if any) on any Note, or for any claim based thereon or otherwise in respect
thereof, shall be had against any incorporator, shareholder, officer or director, as such, past,
present or future, of the Company or of any successor corporation, whether by virtue of any
constitution, statute or rule of law or by the enforcement of any assessment or penalty or





89









 







otherwise, all such liability being, by the acceptance thereof and as part of the
consideration for the issue thereof, expressly waived and released.




90









 








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




	 	 	 	 	 
	 	 	CIPHERGEN BIOSYSTEMS, INC.
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	Name:
	 

	 	Title:
	 
	 	 	 	 
	 	 	U.S. BANK NATIONAL ASSOCIATION
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	Name:
	 

	 	Title:






91









 





SCHEDULE I




Outstanding Indebtedness




92









 





EXHIBIT A




Form of Note




[FORM OF FACE OF SECURITY]



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



THE HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) THIS NOTE AND THE SHARES OF
COMMON STOCK ISSUABLE UPON CONVERSION HEREOF MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED, ONLY (I) IN THE UNITED STATES TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A, (II) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN
ACCORDANCE WITH RULE 904 UNDER THE SECURITIES ACT, (III) PURSUANT TO AN EXEMPTION FROM REGISTRATION
UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE), OR (IV) PURSUANT TO AN
EFFECTIVE REGISTRATION UNDER THE SECURITIES ACT, IN EACH OF CASES (I) THROUGH (IV) IN ACCORDANCE
WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES, AND (B) THE HOLDER WILL, AND
EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS NOTE FROM IT OF THE RESALE
RESTRICTIONS REFERRED TO IN (A) ABOVE. IN ANY CASE THE HOLDER HEREOF WILL NOT, DIRECTLY OR
INDIRECTLY, ENGAGE IN ANY HEDGING TRANSACTION WITH REGARD TO THE NOTE AND THE COMMON STOCK ISSUABLE
UPON CONVERSION HEREOF EXCEPT AS PERMITTED BY THE SECURITIES ACT.



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




93









 







NOTE AND ANY SUCH SHARES TO HAVE AGREED TO SUCH AMENDMENT OR SUPPLEMENT.]



[INCLUDE
IF NOTE IS A GLOBAL SECURITY — THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF
THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE
THEREOF. THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A SECURITY REGISTERED, AND NO
TRANSFER OF THIS SECURITY IN WHOLE O R IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER
THAN SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
INDENTURE.



UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (“DTC”), A NEW YORK CORPORATION, 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 DTS (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 PERSONS IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]




94









 





CIPHERGEN BIOSYSTEMS, INC.




7.00% Convertible Senior Note due 2011




CUSIP NO.                     




			
	 	 	 
	No.                     
	 	$                    






          CIPHERGEN BIOSYSTEMS, INC., a Delaware corporation (the “Company”, which term includes any
successor corporation under the Indenture hereinafter referred to), for value received, hereby
promises to pay to                     , as nominee for The Depository Trust Company, or its registered
assigns, the principal sum of                      U.S. Dollars ($                    ) on September 1, 2011.




          Interest Payment Dates: March 1 and September 1, commencing March 1, 2007.




          Regular Record Dates: February 15 and August 15.




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




95









 








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




Dated: __________, 2006




	 	 	 	 	 
	 	 	CIPHERGEN BIOSYSTEMS, INC.
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	Name:
	 

	 	 	 	Title:
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	Name:
	 

	 	 	 	Title:






96









 





TRUSTEE’S CERTIFICATE OF AUTHENTICATION



This is one of the 7.00% Convertible Senior Notes due 2011 described in
the within-named Indenture.




	 	 	 	 	 
	 	 	U.S. BANK NATIONAL ASSOCIATION,
	 	 	as Trustee
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	Authorized Signatory
	 
	 	 	 	 
	 	 	Dated: __________, 2006







97










 





[FORM OF REVERSE OF NOTE]




CIPHERGEN BIOSYSTEMS, INC.




7.00% Convertible Senior Note due 2011




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




1. Principal and Interest.




          Ciphergen Biosystems, Inc., a Delaware corporation (the “Company”), promises to pay interest
on the principal amount of this Note at the rate of 7.00% per annum, except as described in the
immediately following sentence, from the date of issuance until repayment at maturity, redemption
or repurchase. If an FDA Approval Event (as defined in the Indenture) shall have occurred, the
interest rate on this Note shall be reduced to 4.00% per annum at all times thereafter. The
Company will pay interest on this Note semiannually in arrears on March 1 and September 1 of each
year (each an “Interest Payment Date”), commencing March 1, 2007.




          Interest on the 7.00% Convertible Senior Notes due 2011 (the “Notes”) shall be computed on the
basis of a 360-day year comprised of twelve 30-day months, and, in the case of a partial month, the
actual number of days elapsed.




          A Holder of any Note at the close of business on a Regular Record Date shall be entitled to
receive interest on such Note on the corresponding Interest Payment Date. A Holder of any Note
which is converted after the close of business on a Regular Record Date and prior to the
corresponding Interest Payment Date (other than any Note whose maturity is prior to such Interest
Payment Date) shall be entitled to receive interest on the principal amount of such Note (including
Additional Interest, if any), notwithstanding the conversion of such Note prior to such Interest
Payment Date. However, any such Holder which surrenders any such Note for conversion during the
period between the close of business on such Regular Record Date and ending with the opening of
business on the corresponding Interest Payment Date shall be required to pay the Company an amount
equal to the interest on the principal amount of such Note so converted (including Additional
Interest, if any), which is payable by the Company to such Holder on such Interest Payment Date, at
the time such Holder surrenders such Note for conversion. Notwithstanding the foregoing, in the
event that, after November 1, 2008, the Company calls any Notes for redemption on a date that is
after a Regular Record Date for an interest payment but prior to the corresponding Interest Payment
Date, and prior to the Redemption Date a Holder of any Note chooses to convert such Note, any
Holder which surrenders for conversion any such Note shall be entitled to receive (and retain) such
interest (including Additional Interest, if any) and need not pay the Company an amount equal to
the interest (including Additional Interest, if any) on the principal amount of such Note so
converted at the time such Holder surrenders such Note for conversion. Interest will be paid to,
but not including, the Redemption Date to the Person entitled to receive payment of principal on
such Note or Notes.




98









 








          In accordance with the terms of the Registration Rights Agreement, dated November ___, 2006
(the “Registration Rights Agreement”), between the Company and the initial beneficial Holders, upon
the occurrence of a Registration Default (as defined in the Registration Rights Agreement) the
Company has agreed to pay liquidated damages (“Additional Interest”) with respect to this Note in
the amounts described in the Registration Rights Agreement.




          All accrued Additional Interest shall be paid in arrears to Record Holders by the Issuer as
specified in the Registration Rights Agreement. The accrual of any Additional Interest hereunder
will cease in accordance with the terms of the Registration Rights Agreement. The Holder of this
Note is entitled to the benefits of the Registration Rights Agreement.




2. Method of Payment.




          Interest on any Note 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 Note (or one or more
Predecessor Notes) is registered at the close of business on the Regular Record Date for such
interest.




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




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




3. Paying Agent and Registrar.




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




4. Indenture.




          The Company issued this Note under an Indenture, dated as of November ___, 2006 (the
“Indenture”), between the Company and U.S. Bank National Association, as trustee (the “Trustee”).
The terms of the Note include those stated in the Indenture and those made part of the Indenture by
reference to the Trust Indenture Act of 1939, as amended (“TIA”). This Note is subject to all such
terms, and Holders are referred to the Indenture and the TIA for a statement of all such terms. To
the extent permitted by applicable law, in the event of any inconsistency between the terms of this
Note and the terms of the Indenture, the terms of the Indenture shall control.




5. Provisional Redemption.




          The Company may not redeem the Notes at any time prior to September 1, 2009.




99









 








          On or after September 1, 2009, the Company may, at its option, redeem the Notes for cash in
whole at any time or in part from time to time, on any date prior to maturity, upon notice as set
forth in Section 10.4 of the Indenture, at a redemption price equal to 100% of the principal amount
of the Notes called for redemption; provided, however, the Company may only redeem
the Notes if, beginning on September 1, 2009, the VWAP of the Common Stock equals or exceeds 200%
of the Conversion Price then in effect for at least 20 Trading Days in any consecutive 30 Trading
Day period ending on the Trading Day prior to the date the notice of the redemption pursuant to
Section 10.1(b) of the Indenture is mailed pursuant to Section 10.4 of the Indenture.




          The Company shall pay any interest on the Notes called for redemption (including those Notes
which are converted into Common Stock after the date the notice of the redemption is mailed and
after the Record Date for the next succeeding Interest Payment Date but prior to the Redemption
Date) accrued but not paid to the Redemption Date, pursuant to the terms of the Indenture.




          Notes in original denominations larger than $1,000 may be redeemed in part. If any Note
selected for partial redemption is converted in part before termination of the conversion right
with respect to the portion of the Note so selected, the converted portion of such Note shall be
deemed to be the portion selected for redemption (provided, however, that the Holder of such Note
so converted and deemed redeemed shall not be entitled to any additional interest payment as a
result of such deemed redemption than such Holder would have otherwise been entitled to receive
upon conversion of such Note as described in the prior paragraph). Notes which have been converted
during a selection of Notes to be redeemed may be treated by the Trustee as Outstanding for the
purpose of such selection.




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




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




6. Repurchase Right of a Holder.




          Repurchase Right Upon a Change of Control




          If a Change of Control occurs, the Holder of Notes, at the Holder’s option, shall have the
right, subject to the conditions and in accordance with the provisions of the Indenture, to require
the Company to repurchase the Notes (or any portion of the principal amount hereof that is at least
$1,000 or an integral multiple thereof, provided that the portion of the principal amount of this
Note to be Outstanding after such repurchase is at least equal to $1,000) at a repurchase price in
cash equal to 105%, plus any interest accrued and unpaid to, but excluding, the Repurchase Date.




100









 








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




          A Company Notice will be given by the Company to the Holders as provided in the Indenture. To
exercise a Repurchase Right, a Holder must deliver to the Trustee a written notice as provided in
the Indenture (the form of which is attached to this Note).




          Repurchase After Specified Date




          If an FDA Approval Event has not occurred by September 1, 2009, the Notes shall be purchased
in cash in whole or in part (which must be equal to $1,000 principal amount or any integral
multiple thereof) by the Company, at the option of Holders, in accordance with the provisions of
Section 11.3 of the Indenture for cash at a purchase price equal to 100% of the principal amount of
the surrendered Notes together with accrued but unpaid interest, if any, to but excluding the Put
Right Purchase Date.




7. Conversion Rights.




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




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




          The Conversion Rate shall be initially equal to 500 shares of Common Stock per $1,000
principal amount of Notes. The Conversion Price shall be adjusted under certain circumstances as
provided in the Indenture. If a Holder converts all or any portion of its Notes prior to October
31, 2008, upon such conversion, in addition to the Common Stock such Holder would receive, the
Holder will be entitled to receive with respect to each Note so converted an amount in cash equal
to the difference of (i) the amount of all interest that the Company would be required to pay on
such Note from the date hereof through October 31, 2008 and (b) the amount of interest actually
paid on such Note by the Company prior to the time of conversion.




          To exercise the conversion right, the Holder must surrender the Note (or portion thereof) duly
endorsed or assigned to the Company or in blank, at the office of the Conversion Agent, accompanied
by a duly signed conversion notice to the Company (the form of which is





101









 







attached to this Note). Any Note surrendered for conversion during the period from the close
of business on any Regular Record Date to the opening of business on the corresponding Interest
Payment Date (other than any Note whose maturity is prior to such Interest Payment Date or which is
called for redemption on a date after November 1, 2008 and that is after such Regular Record Date
but prior to such corresponding Interest Payment Date), shall also be accompanied by payment in New
York Clearing House funds or other funds acceptable to the Company of an amount equal to the
interest (including Additional Interest, if any) payable on such Interest Payment Date on the
principal amount of the Notes being surrendered for conversion.




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




          Notwithstanding anything to the contrary in this Note, any holder of this Note who (together
with such Holder’s affiliates) purchases more than $10 million in aggregate principal amount of
Notes shall not have the right to convert this Note to the extent that, after giving effect to such
conversion, the Holder (together with the Holder’s affiliates), as set forth on the applicable
conversion notice, would beneficially own in excess of 4.99% of the number of shares of Common
Stock outstanding immediately after giving effect to such conversion. For purposes of the
preceding sentence, beneficial ownership shall be calculated as set forth in the Indenture




8. Denominations; Transfer; Exchange.




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




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




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




9. Persons Deemed Owners.




          The registered Holder of this Note shall be treated as its owner for all purposes.




102









 








10. Unclaimed Money.




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




11. Discharge Prior to Redemption or Maturity.




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




12. Amendment; Supplement; Waiver.




          The Indenture permits, with certain exceptions as therein provided, the amendment thereof and
the modification of the rights and obligations of the Company and the rights of the Holders of the
Notes under the Indenture at any time by the Company and the Trustee with the consent of the
Holders of a majority in aggregate principal amount of the Outstanding Notes (or such lesser amount
as shall have acted at a meeting pursuant to the provisions of the Indenture). The Indenture also
contains provisions permitting the Holders of specified percentages in principal amount of the
Notes at the time Outstanding, on behalf of the Holders of all the Notes, to waive compliance by
the Company with certain provisions of the Indenture and certain past defaults under the Indenture
and their consequences. Any such consent or waiver by the Holder of this Note shall be conclusive
and binding upon such Holder and upon all future Holders of this Note and of any Note issued upon
registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation
of such consent or waiver is made upon this Note or such other Note. The Indenture also contains
provisions permitting the Trustee to make certain amendments to the Indenture and the Notes without
the consent of any Holders of Notes.




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




13. Defaults and Remedies.




103









 








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




          (a) default in the payment of principal of (or premium, if any, on) any of the Notes at its
stated maturity, upon redemption or exercise of a Repurchase Right or otherwise;




          (b) default in the payment of interest or Additional Interest, if any, on any of the Notes
when due and payable and continuance of such default for a period of 30 days;




          (c) default in the performance or breach of any term, covenant or agreement of the Company in
the Indenture or this Note and continuance of such default or breach for a period of 60 consecutive
days after there has been given, by registered or certified mail, to the Company by the Trustee or
to the Company and the Trustee by the Holders of at least 25% in principal amount of the
Outstanding Notes a written notice specifying such default or breach and requiring it to be
remedied and stating that such notice is a “Notice of Default” hereunder;




          (d) failure to comply with Section 9.9 of the Indenture, where such failure continues for a
period of 30 consecutive days from the date on which the Company first fails to comply with the
provisions of such Section 9.9;




          (e) a default occurs under any mortgage, indenture or instrument under which there may be
issued or by which there may be secured or evidenced any indebtedness for money borrowed by the
Company or any of its Significant Subsidiaries, whether such indebtedness now exists or shall be
created hereafter, which default (i) is caused by a failure to pay principal of such indebtedness
prior to the expiration of the applicable grace period provided in such indebtedness (a “Payment
Default”), unless such indebtedness is discharged, or (ii) results in the acceleration of such
indebtedness prior to its stated maturity, unless such acceleration is waived, cured, rescinded or
amended, and, in each case, the principal amount of any such indebtedness, together with the
principal amount of any other such indebtedness under which there is then existing a Payment
Default or the maturity of which has been so accelerated, aggregates $10 million or more;




          (f) a court having jurisdiction in the premises enters a decree or order for (A) relief in
respect of the Company or any Significant Subsidiary in an involuntary case under any applicable
bankruptcy or other similar law now or hereafter in effect, (B) appointment of a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar official of the Company or any
Significant Subsidiary or (C) the winding up or liquidation of the affairs of the Company or any
Significant Subsidiary and, in each case, such decree or order shall remain unstayed and in effect
for a period of 30 consecutive days;




          (g) the Company or any Significant Subsidiary (A) commences a voluntary case under any
applicable bankruptcy or other similar law now or hereafter in effect, or consents to the entry of
an order for relief in an involuntary case under any such law, (B) consents to the appointment of
or taking possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator or
similar official of the Company or any Significant Subsidiary or for all or substantially all of
the property and assets of the Company or any Significant Subsidiary or (C) effects any general
assignment for the benefit of creditors; or




104









 





          (h) failure to provide the notice required upon a Change in Control.




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




     14. Authentication.



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




15. Abbreviations.




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




16. Additional Rights of Holders of Transfer Restricted Notes.




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




17. CUSIP Numbers.




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




18. Governing Law.




          The Indenture and this Note shall be governed by, and construed in accordance with, the laws
of the State of New York.




     19. Successor Corporation.



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




105









 








ASSIGNMENT FORM




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




 





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




 





 





 





 





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



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




	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	Dated:	 	 	 	Your Name:
	 

	 	 
	 	 
	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	(Print our name exactly as it appears on the face of this
Note)
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	Your Signature
	 

	 	 	 	 
	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	(Sign exactly as your name appears on the face of this Note)
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	Signature Guarantee*:
	 

	 	 	 	 	 
	 	 







 




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




106









 









In connection with any transfer of this Note occurring prior to the date which is the end of the
period referred to in Rule 144(k) under the Securities Act (other than a transfer pursuant to an
effective registration statement under the Securities Act) , the undersigned confirms that without
utilizing any general solicitation or general advertising that:




          [Check One]



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




          or


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




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




	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	Dated: 
	 	 	 	 	 	 
	 

	 


	 	 	 	 
	 

	 	 	 	NOTICE: The signature to this assignment must correspond	 	 
	 

	 	 	 	with the name as written upon the face of the	 	 
	 

	 	 	 	within-mentioned instrument in every particular, without	 	 
	 

	 	 	 	alteration or any change whatsoever.	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	Signature Guarantee:	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Signature must be guaranteed by a participant in a recognized	 	 
	 

	 	 	 	signature guaranty medallion program or other signature	 	 
	 

	 	 	 	guarantor acceptable to the Trustee.	 	 






107









 






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




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




	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	Dated: 
	 	 	 	 	 	 
	 

	 
	 	 	 	 
	 

	 	 	 	NOTICE: To be executed by an executive officer	 	 






108









 






CONVERSION NOTICE




	 	 	 
	TO:

	 	CIPHERGEN BIOSYSTEMS, INC.
	 

	 	6611 Dumbarton Circle
	 

	 	Fremont, CA 94555






          The undersigned registered owner of this Note hereby irrevocably exercises the option to
convert this Note, or the portion hereof (which is $1,000 principal amount or an integral multiple
thereof) below designated, into shares of Common Stock in accordance with the terms of the
Indenture referred to in this Note, and directs that the shares issuable and deliverable upon such
conversion, together with any check in payment for fractional shares and any Notes 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 Note 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. To the extent provided in the Indenture, any amount
required to be paid to the undersigned on account of interest (including Additional Interest, if
any), accompanies this Note.




	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	Dated: 	 	 	 	Your Name:
	 

	 	 	 
	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	(Print your name exactly as it appears
on the face of this Note)
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	Your Signature:
	 

	 	 	 	 
	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	(Sign exactly as your name appears on the
face of this Note)
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	Signature Guarantee*:
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	Social Security or other Taxpayer
	 	 	 	 	Identification Number:
	 

	 	 	 	 	 	 	 	 





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






 




			
	*	 	Participant in a recognized Signature Guarantee Medallion Program (or other signature
guarantor acceptable to the Trustee).




109









 









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




 

(Name)



 

(Street Address)



 

(City, State and Zip Code)




110









 








NOTICE OF EXERCISE OF REPURCHASE RIGHT




	 	 	 
	TO:

	 	CIPHERGEN BIOSYSTEMS, INC.
	 

	 	6611 Dumbarton Circle
	 

	 	Fremont, CA 94555






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




	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	Dated:

	 	 	 	Your Name:	 	 
	 

	 	 	 	 

	 
	 	 	 	 	 	 
	 

	 	 	 	(Print your name exactly as it appears
on the face of this Note)	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	Your Signature:	 	 
	 

	 	 	 	 

	 
	 	 	 	 	 	 
	 

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

	 	 	 	Signature Guarantee*:	 	 
	 

	 	 	 	 

	 
	 	 	 	 	 	 
	 

	 	 	 	Social Security or other Taxpayer

Identification Number:	 	 
	 

	 	 	 	 






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






 




			
	*	 	Participant in a recognized Signature Guarantee Medallion Program (or other signature
guarantor acceptable to the Trustee).





111









 





SCHEDULE OF EXCHANGES FOR PHYSICAL NOTES2




          The following exchanges of a part of this Global Note for Physical Notes have been made:




	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	Principal Amount of	 
	 	 	 	 	 	 	 	 	 	 	This Global Note	 
	 	 	Amount of decrease	 	 	Amount of increase	 	 	following such	 
	 	 	in Principal Amount	 	 	in Principal Amount	 	 	Decrease (or	 
	Date of Exchange	 	of This Global Note	 	 	of This Global Note	 	 	Increase)	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 







 




			
	2	 	This schedule should be included only if the Note is issued in global form.




112









 










EXHIBIT B




Regulation S Certificate




                                        ,                     




U.S. Bank National Association

60 Livingston Avenue

St. Paul, MN 55107-2292

Attention: Corporate Trust Department

Fax: (651) 495-8097




	 	 	 
	Re:

	 	Ciphergen Biosystems, Inc. (the “Company”)
	 

	 	7.00% Convertible Senior Notes Due 2011 (the “Notes”)






Ladies and Gentlemen:




          In connection with our proposed sale of $[___] aggregate Principal Amount of the Notes,
we confirm that such sale has been effected pursuant to and in accordance with Regulation S under
the Securities Act of 1933, as amended (the “Securities Act”), and, accordingly, we represent that:





     1. the offer of the Notes was not made to a Person in the United States;




     2. either (a) at the time the buy offer was originated, the transferee was outside the
United States or we and any Person acting on our behalf reasonably believed that the
transferee was outside the United States, or (b) the transaction was executed in, on or
through the facilities of a designated off-shore securities market and neither we nor any
Person acting on our behalf knows that the transaction has been pre-arranged with a buyer in
the United States;




     3. no directed selling efforts have been made in the United States in contravention of
the requirements of Rule 903(a) or Rule 904(a) of Regulation S, as applicable (or applicable
successor rules);




     4. the transaction is not part of a plan or scheme to evade the registration
requirements of the Securities Act and the conditions of Rule 903(b) or 904(b) of Regulation
S, as applicable (or applicable successor rules) have been satisfied; and




     5. we have advised the transferee of the transfer restrictions applicable to the Notes.



          You and the Company are entitled to rely upon this letter and are irrevocably authorized to
produce this letter or a copy hereof to any interested party, in any administrative or legal
proceedings or official inquiry with respect to the matters covered hereby. Terms used in this
certificate have the meanings set forth in Regulation S.




113









 








	 	 	 	 	 	 	 
	 	 	Very truly yours,	 	 
	 
	 	 	 	 	 	 
	 	 	[Name of Transferor]	 	 
	 
	 	 	 	 	 	 
	 

	 	By	 	 	 	 
	 

	 	 	 	 

Authorized Signature
	 	 






114









 





EXHIBIT C




Rule 144A Certificate




                                        ,                     




U.S. Bank National Association

60 Livingston Avenue

St. Paul, MN 55107-2292

Attention: Corporate Trust Department

Fax: (651) 495-8097




	 	 	 
	Re:

	 	Ciphergen Biosystems, Inc. (the “Company”)
	 

	 	7.00% Convertible Senior Notes Due 2011 (the “Notes”)






Ladies and Gentlemen:




          In connection with our proposed sale of $[___] aggregate Principal Amount of the Notes,
we confirm that such sale has been effected pursuant to and in accordance with Rule 144A under the
Securities Act of 1933, as amended (the “Securities Act”), and, accordingly, we represent that:




          1. the transferee is purchasing this Note for its own account or an account with respect to
which it exercises sole investment discretion, in each case for investment and not with a view to
distribution;




          2. the transferee, and any account of the transferee referred to in paragraph (1) above, is a
“Qualified Institutional Buyer” within the meaning of Rule 144A under the Securities Act of 1933;
and




          3. the transferee has received such information regarding the Company as the transferee has
requested pursuant to Rule 144A, or the transferee has determined not to request such information.




          You and the Company are entitled to rely upon this letter and are irrevocably authorized to
produce this letter or a copy hereof to any interested party, in any administrative or legal
proceedings or official inquiry with respect to the matters covered hereby.




	 	 	 	 	 	 	 
	 	 	Very truly yours,	 	 
	 
	 	 	 	 	 	 
	 	 	[Name of Transferor]	 	 
	 
	 	 	 	 	 	 
	 

	 	By	 	 	 	 
	 

	 	 	 	 

Authorized Signature
	 	 







115









 





Exhibit B




Form of Registration Rights Agreement




 









 





REGISTRATION RIGHTS AGREEMENT




CIPHERGEN BIOSYSTEMS, INC.




and




The Initial Purchasers of Ciphergen Biosystems, Inc.’s




7.00% CONVERTIBLE SENIOR NOTES DUE 2011




Dated as of November ___, 2006




 









 





     REGISTRATION RIGHTS AGREEMENT, dated as of November ___, 2006 among Ciphergen Biosystems, Inc.,
a Delaware corporation (together with any successor entity, herein referred to as the “Company”),
and the initial purchasers of the Company’s Notes (as such term is defined below) named in Annex A
hereto (each, and “Initial Purchaser,” and collectively, the “Initial Purchasers”) under those
separate Exchange Agreements (as defined below).



     Pursuant to those certain Exchange Agreements, each dated as of November ___, 2006, between the
Company and each of the Initial Purchasers (collectively, the “Exchange Agreements”), the Initial
Purchasers have agreed to purchase from the Company a total of up to $16,500,000 in aggregate
principal amount of 7.00% Convertible Senior Notes Due 2011 (the “Notes”). The Notes will be
convertible into fully paid, nonassessable shares of common stock, no par value per share, of the
Company (the “Common Stock”). The Notes will be convertible on the terms, and subject to
the conditions, set forth in the Indenture (as defined herein).



     The parties hereby agree as follows:



     1. Definitions. As used in this Agreement, the following capitalized terms shall have the
following meanings:



     “Affiliate”: of any specified person means any other person which, directly or indirectly, is
in control of, is controlled by or is under common control with, such specified person. For
purposes of this definition, control of a person means the power, direct or indirect, to direct or
cause the direction of the management and policies of such person whether by contract or otherwise;
and the terms “controlling” and “controlled” have meanings correlative to the foregoing.



     “Agreement”: This Registration and Investor Rights Agreement.



     “Amendment Effectiveness Deadline Date”: has the meaning set forth in Section 2(e) hereof.



     “Blue Sky Application”: As defined in Section 6(a)(i) hereof.



     “Business Day”: The definition of “Business Day” in the Indenture.



     “Commission”: Securities and Exchange Commission.



     “Common Stock”: As defined in the preamble hereto.



     “Company”: As defined in the preamble hereto.



- 1 -









 





     “EDGAR”: Electronic Data Gathering and Retrieval System.



     “Effectiveness Period”: As defined in Section 2(a)(iii) hereof.



     “Effectiveness Target Date”: As defined in Section 2(a)(ii) hereof.



     “Exchange Act”: Securities Exchange Act of 1934, as amended.



     “Exchange Agreements”: As defined in the preamble hereto.



     “Holder”: A Person who owns, beneficially or otherwise, Transfer Restricted Securities.



     “Indemnified Holder”: As defined in Section 6(a) hereof.



     “Indenture”: The Indenture, dated as of November ___, 2006 between the Company and U.S. Bank
National Association, as trustee (the “Trustee”), pursuant to which the Notes are to be issued, as
such Indenture is amended, modified or supplemented from time to time in accordance with the terms
thereof.



     “Initial Purchasers”: As defined in the preamble hereto.



     “Liquidated Damages”: As defined in Section 3(a) hereof.



     “Majority of Holders”: Holders holding over 50% of the aggregate principal amount of Notes
outstanding; provided that, for the purpose of this definition, a holder of shares of Common Stock
which constitute Transfer Restricted Securities and issued upon conversion of the Notes shall be
deemed to hold an aggregate principal amount of Notes (in addition to the principal amount of Notes
held by such holder) equal to the product of (x) the number of such shares of Common Stock held by
such holder and (y) the conversion rate in effect at the time of such conversion as determined in
accordance with the Indenture.



     “NASD”: National Association of Securities Dealers, Inc.



     “Notes”: As defined in the preamble hereto.



     “Notice Holder”: means, on any date, any Holder that has delivered a Selling Securityholder
Questionnaire to the Company on such date.



     “Person”: An individual, partnership, corporation, company, unincorporated organization,
trust, joint venture or a government or agency or political subdivision thereof.



- 2 -









 





     “Prospectus”: The prospectus included in a Shelf Registration Statement, as amended or
supplemented by any prospectus supplement and by all other
amendments thereto, including post-effective amendments, and all material incorporated by
reference into such prospectus.



     “Registration Default”: As defined in Section 3(a) hereof.



     “Securities Act”: Securities Act of 1933, as amended.



     “Selling Securityholder Questionnaire”: means a written notice executed by the respective
Holder and delivered to the Company containing substantially the information called for by the
Selling Securityholder Questionnaire attached as Annex B hereto.



     “Shelf Filing Deadline”: As defined in Section 2(a)(i) hereof.



     “Shelf Registration Statement”: As defined in Section 2(a)(i) hereof.



     “Suspension Notice”: As defined in Section 4(c) hereof.



     “Suspension Period”: As defined in Section 4(b)(i) hereof.



     “TIA”: Trust Indenture Act of 1939, as amended, and the rules and regulations of the
Commission thereunder, in each case, as in effect on the date the Indenture is qualified under the
TIA.



     “Transfer Restricted Securities”: Each Note and each share of Common Stock issued upon
conversion of Notes until the earlier of:




     (i) the date on which such Note or such share of Common Stock issued upon conversion
has been effectively registered under the Securities Act and disposed of in accordance
with the Shelf Registration Statement;




     (ii) the date on which such Note or such share of Common Stock issued upon
conversion is transferred in compliance with Rule 144 under the Securities Act or may be
sold or transferred by a person who is not an affiliate of the Company pursuant to Rule
144(k) under the Securities Act (or any other similar provision then in force); or




     (iii) the date on which such Note or such share of Common Stock issued upon
conversion ceases to be outstanding (whether as a result of redemption, repurchase and
cancellation, conversion or otherwise).



- 3 -









 





     Unless the context otherwise requires, the singular includes the plural, and words in the
plural include the singular.



     2. Shelf Registration.




     (a) The Company shall:




     (i) use its reasonable best efforts to cause to be filed as promptly as
practicable, but in any event not later than 30 days after the date hereof (the
“Shelf Filing Deadline”), a registration statement on Form S-3 (the “Shelf
Registration Statement”), which Shelf Registration Statement shall provide for
resales of all Transfer Restricted Securities held by Holders that have provided
the information required pursuant to the terms of Section 2(b) hereof (in the
event that Form S-3 is unavailable for such a registration, the Company shall
use such other form as is available for such a registration on another
appropriate form; provided, that the Company shall undertake to register the
Transfer Restricted Securities on Form S-3 as soon as such form is available,
provided, further, that the Company shall maintain the effectiveness of the
Shelf Registration Statement then in effect until such time as a Shelf
Registration Statement on Form S-3 covering the Transfer Restricted Securities
has been declared effective by the SEC);




     (ii) use its reasonable efforts to cause the Shelf Registration Statement
to be declared effective by the Commission not later than: (a) if the Shelf
Registration Statement receives a “no-review” status from the Commission, 90
days after the date hereof, or (b) if the Shelf Registration Statement is
reviewed by the Commission, 120 days after the date hereof (the “Effectiveness
Target Date”); and




     (iii) subject to Section 4(b)(i) hereof, use its reasonable efforts to keep
the Shelf Registration Statement continuously effective, supplemented and
amended as required by the provisions of Section 4(b) hereof to the extent
necessary to ensure that (A) it is available for resales by the Holders of
Transfer Restricted Securities entitled, subject to Section 2(b), to the benefit
of this Agreement and (B) conforms with the requirements of this Agreement and
the Securities Act and the rules and regulations of the Commission promulgated
thereunder as



- 4 -









 







announced from time to time, for a period (the “Effectiveness
Period”) until the earliest of:




     (1) two years following the date hereof;




     (2) the date when the Holders of Transfer Restricted
Securities are able to sell all such Transfer Restricted
Securities immediately without restriction pursuant to Rule
144(k) under the Securities Act or any successor rule thereto;
or




     (3) the date when all of the Transfer Restricted
Securities are registered under the Shelf Registration
Statement and disposed of in accordance with the Shelf
Registration Statement.




     (b) At the time the Shelf Registration Statement is declared effective, each Holder
that became a Notice Holder on or prior to the date five (5) Business Days prior to such
time of effectiveness shall be named as a selling securityholder in the Shelf Registration
Statement and the related Prospectus in such a manner as to permit such Holder to deliver
such Prospectus to purchasers of Transfer Restricted Securities in accordance with
applicable law. None of the Company’s security holders (other than the Holders of
Transfer Restricted Securities) shall have the right to include any of the Company’s
securities in the Shelf Registration Statement.




     (c) If the Shelf Registration Statement ceases to be effective for any reason at any
time during the Effectiveness Period (other than because all Transfer Restricted
Securities registered thereunder shall have been resold pursuant thereto or shall have
otherwise ceased to be Transfer Restricted Securities), the Company shall use its
reasonable efforts to obtain the prompt withdrawal of any order suspending the
effectiveness thereof, and in any event shall within fifteen (15) days of such cessation
of effectiveness amend the Shelf Registration Statement in a manner reasonably expected to
obtain the withdrawal of the order suspending the effectiveness thereof.




     (d) The Company shall supplement and amend the Shelf Registration Statement if
required by the rules, regulations or instructions applicable to the registration form
used by the Company for such Shelf Registration Statement, if required by the Securities
Act or as reasonably



- 5 -









 







requested by the Holders or by the Trustee on behalf of the Holders
of the Transfer Restricted Securities covered by such Shelf Registration Statement.




     (e) Each Holder agrees that if such Holder wishes to sell Transfer Restricted
Securities pursuant to a Shelf Registration Statement and related Prospectus, it will do
so only in accordance with this Section 2(e) and Section 4(b). Each Holder wishing to sell Transfer Restricted Securities
pursuant to a Shelf Registration Statement and related Prospectus agrees to deliver a
Selling Securityholder Questionnaire to the Company at least five (5) Business Days prior
to the effectiveness of the Shelf Registration Statement. From and after the date the
Shelf Registration Statement is declared effective, the Company shall, within a reasonably
practicable period of time after the date a Selling Securityholder Questionnaire is
delivered, and in any event within the later of ten (10) Business Days after such date or
ten (10) Business Days after the expiration of the Suspension Period (1) in effect when
the Notice and Questionnaire is delivered or (2) put into effect within ten (10) Business
Days of such delivery date:




     (i) if required by applicable law, file with the SEC a post-effective
amendment to the Shelf Registration Statement or prepare and, if required by
applicable law, file a supplement to the related Prospectus or a supplement or
amendment to any document incorporated therein by reference or file any other
required document so that the Holder delivering such Selling Securityholder
Questionnaire is named as a selling securityholder in the Shelf Registration
Statement and the related Prospectus in such a manner as to permit such Holder
to deliver such Prospectus to purchasers of the Transfer Restricted Securities
in accordance with applicable law and, if the Company shall file a
post-effective amendment to the Shelf Registration Statement, use its reasonable
efforts to cause any such post-effective amendment to be declared effective
under the Securities Act as promptly as is practicable, but in any event by the
date (the “Amendment Effectiveness Deadline Date”) that is thirty (30) days
after the date such post-effective amendment is filed; and




     (ii) notify such Holder as promptly as practicable after the effectiveness
under the Securities Act of any post-effective amendment filed pursuant to
Section 2(e)(i);



- 6 -









 




provided that if such Selling Securityholder Questionnaire is delivered during a Suspension Period,
the Company shall so inform the Holder delivering such Selling Securityholder Questionnaire and
shall take the actions set forth in clauses (i) and (ii) above upon expiration of the Suspension
Period in accordance with Section 4(b). Notwithstanding anything contained herein to the contrary,
(i) the Company shall be under no obligation to name any Holder that is not a Notice Holder as a
selling securityholder in any Registration Statement or related Prospectus and (ii) the Amendment
Effectiveness Deadline Date shall be extended by up to ten (10) Business Days from the expiration
of a Suspension Period (and
the Company shall incur no obligation to pay Liquidated Damages during such extension) if such
Suspension Period shall be in effect on the Amendment Effectiveness Deadline Date; and provided
further, that after the date of effectiveness of the Shelf Registration Statement, the Company
shall not be obligated to file more than one post-effective amendment in any 60-day period
(measured from the date any previous post-effective amendment has been filed, or in the case of the
first post-effective amendment, the date the first Selling Securityholder Questionnaire is
delivered to the Company after the date of effectiveness) for the purpose of naming Holders as
selling securityholders who were not so named in the Shelf Registration Statement at the time of
effectiveness.




     3. Liquidated Damages.




     If:




     (i) the Shelf Registration Statement is not filed with the Commission prior
to or on the Shelf Filing Deadline;




     (ii) the Shelf Registration Statement has not been declared effective by
the Commission prior to or on the Effectiveness Target Date;




     (iii) the Company has failed to perform its obligations set forth in
Section 2(e) within the time period required therein;




     (iv) any post-effective amendment to a Shelf Registration filed pursuant to
Section 2(e)(i) has not become effective under the Securities Act on or prior to
the Amendment Effectiveness Deadline Date;




     (v) except as provided in Section 4(b)(i) hereof, the Shelf Registration
Statement is filed and declared effective but, during the Effectiveness Period,
shall thereafter cease to be effective or fail to be usable for its intended
purpose; or



- 7 -









 






     (vi) (A) prior to or on the 30th under the provisions of Section 4(b), of
any Suspension Period, such suspension has not been terminated or (B) Suspension
Periods exceed an aggregate of 60 days in any 360 day period,


(each such event referred to in foregoing clauses (i) through (v), a “Registration Default”), the
Company hereby agrees to pay interest as partial relief for the damages (“Liquidated Damages”) with
respect to the Transfer Restricted Securities from and including the day following the Registration
Default to but excluding the earlier of (1) the day on which the Registration Default has been cured and (2) the
date the Shelf Registration Statement is no longer required to be kept effective, in an amount in
cash equal to one and one-half percent (1.5%) of the aggregate outstanding principal amount of
Notes on each of the following days: (i) the day of the Registration Default and on every thirtieth
day (pro rated for periods totaling less than thirty days) thereafter until such Registration
Default is cured; provided that in no event shall Liquidated Damages exceed 10% of the Holder’s
initial investment in the Notes in the aggregate and provided, further, that Liquidated Damages
shall only accrue with respect to clauses (iii) and (iv) above with respect to Notes for which the
Company has failed to perform its obligations under Section 2(e) above, and with respect to clauses
(v) and (vi) above only for Notes for which a Holder is named as a selling securityholder on the
Shelf Registration Statement. Liquidated Damages shall be paid within five (5) Business Days of
the day of the Registration Default, and thereafter on the earlier of (I) the last day of the
calendar month during which such Liquidated Damages are incurred and (II) the third Business Day
after the event or failure giving rise to the Liquidated Damages is cured. In the event the
Company fails to pay Liquidated Damages in a timely manner, such Liquidated Damages shall bear
interest at the rate of one and one-half percent (1.5%) per month (prorated for partial months)
until paid in full.




     All obligations of the Company set forth in this Section 3 that are outstanding with respect
to any Transfer Restricted Security at the time such security ceases to be a Transfer Restricted
Security shall survive until such time as all such obligations with respect to such Transfer
Restricted Security shall have been satisfied in full.



     Nothing shall preclude a Holder from pursuing or obtaining any other remedies at law or in
equity, including specific performance, with respect to this Agreement.



     The parties hereto agree that the liquidated damages provided for in this Section 3
constitutes a reasonable estimate of the damages that may be incurred by Holders of Transfer
Restricted Securities by reason of the failure of the Shelf



- 8 -









 







Registration Statement to be filed or
declared effective or available for effecting resales of Transfer Restricted Securities in
accordance with the provisions hereof.



     4. Registration Procedures.




     (a) In connection with the Shelf Registration Statement, the Company shall comply
with all the provisions of Section 4(b) hereof and shall prepare and file with the
Commission a Shelf Registration Statement relating to the registration on any appropriate
form under the Securities Act in accordance with Section 2 hereof; provided that before
filing any Shelf Registration Statement or Prospectus or any amendments or supplements (other
than a prospectus supplement filed solely to update the selling securityholder information
in the Prospectus) thereto with the SEC, the Company shall furnish to the Holders and
counsel for the Holders copies of all such documents proposed to be filed which documents
(other than a prospectus supplement filed solely to update the selling securityholder
information in the Prospectus) will be subject to the review of such counsel for a period
of three (3) Business Days, and the Company will not file the Shelf Registration Statement
or Prospectus or any amendment or supplement thereto (other than documents incorporated by
reference) to which such counsel shall reasonably object within three (3) Business Days
after the receipt thereof.




     (b) In connection with the Shelf Registration Statement and any Prospectus required
by this Agreement to permit the sale or resale of Transfer Restricted Securities, the
Company shall:




     (i) Subject to any notice by the Company in accordance with this Section
4(b) of the existence of any fact or event of the kind described in Section
4(b)(iii)(D), use its reasonable efforts to keep the Shelf Registration
Statement continuously effective during the Effectiveness Period; upon the
occurrence of any event that would cause the Shelf Registration Statement or the
Prospectus contained therein (A) to contain a material misstatement or omission
or (B) not to be effective and usable for resale of Transfer Restricted
Securities during the Effectiveness Period, the Company shall file promptly an
appropriate amendment to the Shelf Registration Statement, a supplement to the
Prospectus or a report filed with the Commission pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act, in the case of clause (A), correcting
any such misstatement or omission, and, in the case of either clause (A) or (B),
use its reasonable efforts to cause such amendment to be



- 9 -









 







declared effective and the Shelf Registration Statement and the related Prospectus to become usable for
resale of Transfer Restricted Securities during the Effectiveness Period as soon
as practicable thereafter. Notwithstanding the foregoing, the Company may
suspend the use of the Prospectus and may elect to suspend the effectiveness of
the Shelf Registration Statement by written notice to the Holders for a period
not to exceed an aggregate of 30 days in any 90-day period (each such period, a
“Suspension Period”) if:




     (x) an event occurs and is continuing as a result of which
the Shelf Registration Statement, the Prospectus, any amendment or
supplement thereto, or any document incorporated by reference
therein would, in the Company’s judgment, contain an untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading; and




     (y) the Company determines in good faith that the
disclosure of such event at such time would be seriously
detrimental to the Company and its subsidiaries;




provided, however, that Suspension Periods shall not exceed an aggregate of 60
days in any 360-day period. The Company shall not be required to specify in the
written notice to the Holders the nature of the event giving rise to the
Suspension Period and the Company agrees that it will not specify in the written
notice to the Holders any material non-public information.




     (ii) Prepare and file with the Commission such amendments and
post-effective amendments to the Shelf Registration Statement as may be
necessary to keep the Shelf Registration Statement effective during the
Effectiveness Period; cause the Prospectus to be supplemented by any required
Prospectus supplement, and as so supplemented to be filed pursuant to Rule 424
under the Securities Act, and to comply fully with the applicable provisions of
Rules 424 and 430A under the Securities Act in a timely manner; and comply with
the provisions of the Securities Act with respect to the disposition of all
securities covered by the Shelf Registration Statement during the applicable
period in accordance with the intended method or



- 10 -









 







methods of distribution by the sellers thereof set forth in the Shelf Registration Statement or supplement to
the Prospectus.




     (iii) Advise the selling Holders promptly and, if requested by such selling
Holders, to confirm such advice in writing:




     (A) when the Prospectus or any Prospectus supplement or
post-effective amendment has been filed, and, with respect to the
Shelf Registration Statement or
any post-effective amendment thereto, when the same has become
effective;




     (B) of any request by the Commission or any other federal or
state governmental authority for amendments to the Shelf Registration
Statement or amendments or supplements to the Prospectus or for
additional information relating thereto;




     (C) of the issuance by the Commission or any other federal or
state governmental authority of any stop order suspending the
effectiveness of the Shelf Registration Statement under the Securities
Act or of the suspension by any state securities commission of the
qualification of the Transfer Restricted Securities for offering or
sale in any jurisdiction, or the initiation of any proceeding for any
of the preceding purposes;




     (D) of the receipt by the Company of any notification with
respect to the suspension of the qualification or exemption from
qualification of any of the Transfer Restricted Securities for sale in
any jurisdiction or the initiation or threatening of any proceeding
for such purpose; or




     (E) of the existence (but not the substance) of any fact, other
than material non-public information, or the happening of any event
during the Effectiveness Period, that makes any statement of a
material fact made in the Shelf Registration Statement, the
Prospectus, any amendment or supplement thereto, or any document
incorporated by reference therein untrue, or that requires the making
of any additions to or changes in the Shelf



- 11 -









 







Registration Statement or the Prospectus in order to make the statements therein not misleading.




If at any time the Commission shall issue any stop order suspending the
effectiveness of the Shelf Registration Statement, or any state securities
commission or other regulatory authority shall issue an order suspending the
qualification or exemption from qualification of the Transfer Restricted
Securities under state securities or Blue Sky laws, the Company shall use its
reasonable efforts to obtain the withdrawal or lifting of such order at the
earliest possible time and will provide to each Holder who
is named in the Shelf Registration Statement prompt notice of the withdrawal of
any such order.




     (iv) Make available at reasonable times for inspection by one or more
representatives of the selling Holders, and one attorney or accountant retained
by such selling Holders, all financial and other records, pertinent corporate
documents and properties of the Company as shall be reasonably necessary to
enable them to conduct a reasonable investigation within the meaning of Section
11 of the Securities Act, and cause the Company’s officers, directors, managers
and employees to supply all information reasonably requested by any such
representative or representatives of the selling Holders, attorney or accountant
in connection therewith; provided, however, that the Company shall have no
obligation to deliver information to any selling Holder or representative
pursuant to this Section 4(b)(iv) unless such selling Holder or representative
shall have executed and delivered a confidentiality agreement in a form
reasonably acceptable to the Company relating to such information.




     (v) If requested by any selling Holders, promptly incorporate in the Shelf
Registration Statement or Prospectus, pursuant to a supplement or post-effective
amendment if necessary, such information as such selling Holders may reasonably
request to have included therein, including, without limitation, information
relating to the “Plan of Distribution” and “Selling Securityholders” of the
Transfer Restricted Securities.




     (vi) Furnish to each selling Holder upon such Holder’s written request,
without charge, at least one copy of the Shelf Registration Statement, as first
filed with the Commission, and of each amendment thereto (and any documents
incorporated by



- 12 -









 







reference therein or exhibits thereto (or exhibits incorporated
in such exhibits by reference) as such Person may request).




     (vii) Deliver to each selling Holder, without charge, as many copies of the
Prospectus (including each preliminary Prospectus) and any amendment or
supplement thereto as such Persons reasonably may request; subject to any notice
by the Company in accordance with this Section 4(b) of the existence of any fact
or event of the kind described in Section 4(b)(iii)(D) or 4(b)(i), the Company
hereby consents to the use of the Prospectus and any amendment or supplement
thereto by each of the selling Holders in connection with the offering and the
sale of the Transfer Restricted Securities covered by the Prospectus or any
amendment or supplement thereto.




     (viii) Before any public offering of Transfer Restricted Securities,
cooperate with the selling Holders and their counsel in connection with the
registration and qualification of the Transfer Restricted Securities under the
securities or Blue Sky laws of such jurisdictions in the United States as the
selling Holders may reasonably request and do any and all other acts or things
necessary or advisable to enable the disposition in such jurisdictions of the
Transfer Restricted Securities covered by the Shelf Registration Statement;
provided, however, that the Company shall not be required (A) to register or
qualify as a foreign corporation or a dealer of securities where it is not now
so qualified or to take any action that would subject it to the service of
process in any jurisdiction where it is not now so subject or (B) to subject
itself to general or unlimited service of process or to taxation in any such
jurisdiction if it is not now so subject.




     (ix) Cooperate with the selling Holders to facilitate the timely
preparation and delivery of certificates representing Transfer Restricted
Securities to be sold and not bearing any restrictive legends (unless required
by applicable securities laws); and enable such Transfer Restricted Securities
to be in such denominations and registered in such names as the Holders may
reasonably request at least two (2) Business Days before any sale of Transfer
Restricted Securities made by such Holders.




     (x) Subject to Section 4(b)(i) hereof and the provision in clause (viii)
above, use its reasonable efforts to cause the Transfer Restricted Securities
covered by the Shelf Registration



- 13 -









 







Statement to be registered with or approved by
such other U.S. governmental agencies or authorities as may be necessary to
enable the seller or sellers thereof to consummate the disposition of such
Transfer Restricted Securities.




     (xi) Subject to Section 4(b)(i) hereof, if any fact or event contemplated
by Section 4(b)(iii)(D) hereof shall exist or have occurred, use its reasonable
efforts to prepare a supplement or post-effective amendment to the Shelf
Registration Statement or related Prospectus or any document incorporated
therein by reference or file any other required document so that, as thereafter
delivered to the purchasers of Transfer Restricted Securities, the Prospectus
will not contain an untrue statement of a material fact
or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances in which
they are made, not misleading.




     (xii) Provide CUSIP numbers for all Transfer Restricted Securities not
later than the effective date of the Shelf Registration Statement and provide
the Trustee under the Indenture with certificates for the Notes that are in a
form eligible for deposit with The Depository Trust Company.




     (xiii) Subject to Section 4(b)(i) hereof, otherwise use its reasonable
efforts to comply with all applicable rules and regulations of the Commission
and all reporting requirements under the rules and regulations of the Exchange
Act.




     (xiv) Cause the Indenture to be qualified under the TIA not later than the
effective date of the Shelf Registration Statement required by this Agreement,
and, in connection therewith, cooperate with the Trustee and the holders of
Notes to effect such changes to the Indenture as may be required for such
Indenture to be so qualified in accordance with the terms of the TIA; and
execute and use its reasonable efforts to cause the Trustee thereunder to
execute all documents that may be required to effect such changes and all other
forms and documents required to be filed with the Commission to enable such
Indenture to be so qualified in a timely manner.




     (xv) Cause all Common Stock covered by the Shelf Registration Statement to
be listed or quoted, as the case may be,



- 14 -









 







on each securities exchange or automated quotation system on which Common Stock is then listed or quoted, if
any.




     (xvi) Provide to each Holder upon written request each document filed with
the Commission pursuant to the requirements of Section 13 and Section 15 of the
Exchange Act after the effective date of the Shelf Registration Statement,
unless such document is available through the Commission’s EDGAR system.




     (xvii) Comply with all applicable rules and regulations of the Commission
and make generally available to its securityholders earning statements (which
need not be audited) satisfying the provisions of Section 11(a) of the
Securities Act and Rule 158 thereunder (or any similar rule promulgated under
the Securities Act) no later than 45 days after the end of any 12-month period
(or 90 days after the end of any 12-month period if such period is a fiscal
year) commencing on the first day of the first fiscal quarter of the Company
commencing after the effective date of a Shelf Registration Statement, which
statements shall cover said 12-month periods.




     (c) Each Holder agrees by acquisition of a Transfer Restricted Security that, upon
receipt of any notice (a “Suspension Notice”) from the Company of the existence of any
fact of the kind described in Section 4(b)(iii)(D) or 4(b)(i) hereof, such Holder will
forthwith discontinue disposition of Transfer Restricted Securities pursuant to the Shelf
Registration Statement until:




     (i) such Holder has received copies of the supplemented or amended
Prospectus contemplated by Section 4(b)(xi) hereof; or




     (ii) such Holder is advised in writing by the Company that the use of the
Prospectus may be resumed, and has received copies of any additional or
supplemental filings that are incorporated by reference in the Prospectus.




If so directed by the Company, each Holder will deliver to the Company (at the Company’s
expense) all copies, other than permanent file copies then in such Holder’s possession, of
the Prospectus covering such Transfer Restricted Securities that was current at the time
of receipt of such Suspension Notice.



- 15 -









 






     (d) Each Holder agrees, by acquisition of the Transfer Restricted Securities, that no
Holder shall be entitled to sell any of such Transfer Restricted Securities pursuant to a
Registration Statement or to receive a Prospectus relating thereto, unless such Holder has
furnished the Company with a Selling Securityholder Questionnaire as required pursuant to
Section 2(e) hereof (including the information required to be included in such Selling
Securityholder Questionnaire) and the information set forth in the next sentence. Each
Notice Holder agrees promptly to furnish to the Company all information required to be
disclosed in order to make the information previously furnished to the Company by such
Notice Holder not misleading and any other information regarding such Notice Holder and
the distribution of such Transfer Restricted Securities. Any sale of any Transfer
Restricted Securities by any Holder shall constitute a representation and warranty by such
Holder that the information relating to such Holder and its plan of distribution is
as set forth in the Prospectus delivered by such Holder in connection with such
disposition, that such Prospectus does not as of the time of such sale contain any untrue
statement of a material fact relating to or provided by such Holder or its plan of
distribution and that such Prospectus does not as of the time of such sale omit to state
any material fact relating to or provided by such Holder or its plan of distribution
necessary to make the statements in such Prospectus, in the light of the circumstances
under which they were made, not misleading.



     5. Registration Expenses.



     All expenses incident to the Company’s performance of or compliance with this Agreement shall
be borne by the Company regardless of whether a Shelf Registration Statement becomes effective,
including, without limitation:




     (i) all registration and filing fees and expenses;




     (ii) all fees and expenses of compliance with federal securities and state
Blue Sky or securities laws;




     (iii) all expenses of printing (including printing of Prospectuses and
certificates for the Common Stock to be issued upon conversion of the Notes) and
the Company’s expenses for messenger and delivery services and telephone;




     (iv) all fees and disbursements of counsel to the Company;



- 16 -









 






     (v) all reasonable fees and disbursements of one counsel chosen by the
Holders of a majority of Transfer Restricted Securities;




     (vi) all application and filing fees in connection with listing (or
authorizing for quotation) the Common Stock on a national securities exchange or
automated quotation system pursuant to the requirements hereof, if any; and




     (vii) all fees and disbursements of independent certified public
accountants of the Company.



     The Company shall bear its internal expenses (including, without limitation, all salaries and
expenses of their officers and employees performing legal, accounting or other duties), the
expenses of any annual audit and the fees and expenses of any Person, including special experts,
retained by the Company.



     6. Indemnification and Contribution.




     (a) The Company agrees to indemnify, defend and hold harmless each Holder of Transfer
Restricted Securities, such Holder’s directors, officers, members, agents, and employees
and each person, if any, who controls any such Holder within the meaning of the Securities
Act (each, an “Indemnified Holder”), against any loss, claim, damage, liability, action,
cost or expense, joint or several, or any action in respect thereof (including, but not
limited to, any loss, claim, damage, liability, action, cost or expense relating to
resales of the Transfer Restricted Securities), to which such Indemnified Holder may
become subject, insofar as any such loss, claim, damage, liability, action, cost or
expense arises out of, or is based upon:




     (i) any untrue statement or alleged untrue statement of a material fact
contained in (A) the Shelf Registration Statement as originally filed or in any
amendment thereof, in any Prospectus, or in any amendment or supplement thereto
or (B) any blue sky application or other document or any amendment or supplement
thereto prepared or executed by the Company (or based upon written information
furnished by or on behalf of the Company expressly for use in such blue sky
application or other document or amendment on supplement) filed in any
jurisdiction specifically for the purpose of qualifying any or all of the
Transfer Restricted Securities under the securities law of any state or other



- 17 -









 







jurisdiction (such application or document being hereinafter called a “Blue Sky
Application”); or




     (ii) the omission or alleged omission to state therein any material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading,




and agrees to reimburse each Indemnified Holder promptly upon demand for any legal or
other expenses reasonably incurred by such Indemnified Holder in connection with
investigating, defending, settling, compromising or paying any such loss, claim, damage,
liability, action, cost or expense; provided, however, that the Company shall not be
liable in any such case to the extent that any such loss, claim, damage, liability,
action, cost or expense arises out of, or is based upon, any untrue statement or alleged
untrue statement or omission or alleged omission made in reliance upon and in conformity
with written information furnished to the Company by or on behalf of such Holder (or its
related Indemnified Holder) specifically for use therein. The foregoing indemnity
agreement is in addition to any liability which the Company may otherwise have.




     (b) Each Holder, severally and not jointly, agrees to indemnify and hold harmless the
Company, its directors, officers and employees and each person, if any, who controls the
Company within the meaning of the Securities Act to the same extent as the foregoing
indemnity from the Company to each such Holder, but only with reference to written
information relating to such Holder furnished to the Company by or on behalf of such
Holder specifically for inclusion in the documents referred to in the foregoing indemnity.
This indemnity agreement set forth in this Section shall be in addition to any
liabilities which any such Holder may otherwise have. In no event shall any Holder, its
directors, officers or any person who controls such Holder be liable or responsible for
any amount in excess of the amount by which the net proceeds received by such Holder with
respect to its sale of Transfer Restricted Securities pursuant to a Shelf Registration
Statement exceeds the amount of any damages that such Holder, its directors, officers or
any person who controls such Holder has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission.




     (c) Promptly after receipt by an indemnified party under this Section 6 of notice of
any claim or the commencement of any action, the indemnified party shall, if a claim in
respect thereof is to be made against



- 18 -









 







the indemnifying party under this Section 6, notify
the indemnifying party in writing of the claim or the commencement of that action;
provided, however, that the failure to notify the indemnifying party shall not relieve it
from any liability which it may have under this Section 6 except to the extent it has been
materially prejudiced by such failure and, provided, further, that the failure to notify
the indemnifying party shall not relieve it from any liability which it may have to an
indemnified party otherwise than under this Section 6. If any such claim or action is
brought against an indemnified party, and it notifies the indemnifying party thereof, the
indemnifying party shall be entitled to participate therein and, to the extent that it
wishes, jointly with any other similarly notified indemnifying party, to assume the
defense thereof with counsel satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume the defense of such
claim or action, the indemnifying party shall not be liable to the indemnified party under
this Section 6 for any legal or other expenses subsequently incurred by the indemnified
party in connection with the defense thereof other than reasonable costs of investigation;
provided, however, that the indemnified party shall have the right to employ a separate
counsel to represent such indemnified party and its officers, employees and controlling
persons who may be subject to liability arising out of any claim in respect of which indemnity
may be sought by the indemnified parties against the indemnifying party under this Section
6 (i) if the indemnifying party has failed within a reasonable time after receipt of
notice to assume defense of a proceeding to retain counsel reasonably satisfactory to the
indemnified party and (ii) if the indemnified party shall have been advised by legal
counsel that there may be one or more legal defenses available to such indemnified party
and their respective officers, employees and controlling persons that are different from
or additional to those available to the indemnifying party, and in that event, the fees
and expenses of such separate counsel shall be paid by the indemnifying party. No
indemnifying party shall:




     (i) without the prior written consent of the indemnified parties (which
consent shall not be unreasonably withheld) settle or compromise or consent to
the entry of any judgment with respect to any pending or threatened claim,
action, suit or proceeding in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified parties are actual or
potential parties to such claim or action), unless such settlement, compromise
or consent includes



- 19 -









 







an unconditional release of such indemnified party from all
liability arising out of such claim, action, suit or proceeding, or




     (ii) be liable for any settlement of any such action effected without its
written consent (which consent shall not be unreasonably withheld), but if
settled with its written consent or if there be a final judgment for the
plaintiff in any such action, the indemnifying party agrees to indemnify and
hold harmless any indemnified party from and against any loss of liability by
reason of such settlement or judgment in accordance with this Section 6.




     (d) The indemnifying party under this Section shall not be liable for any settlement
of any proceeding effected without its written consent, which shall not be withheld
unreasonably, but if settled with such consent or if there is a final judgment for the
plaintiff, the indemnifying party agrees to indemnify the indemnified party against any
loss, claim, damage, liability or expense by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an indemnified party shall have
validly requested an indemnifying party to reimburse the indemnified party for fees and
expenses of counsel as contemplated by Section 6(c) hereof, the indemnifying party agrees
that it shall be liable for any settlement of any proceeding effected without its written
consent if (i) such settlement is entered into more than 30 days after receipt by such
indemnifying party of the aforesaid valid request and (ii) such indemnifying party
shall not have reimbursed the indemnified party in accordance with such valid request
prior to the date of such settlement. No indemnifying party shall, without the prior
written consent of the indemnified party, effect any settlement, compromise or consent to
the entry of judgment in any pending or threatened action, suit or proceeding in respect
of which any indemnified party is or could have been a party and indemnity was or could
have been sought hereunder by such indemnified party, unless such settlement, compromise
or consent (x) includes an unconditional release of such indemnified party from all
liability on claims that are the subject matter of such action, suit or proceeding and (y)
does not include a statement as to or an admission of fault, culpability or a failure to
act by or on behalf of any indemnified party.




     (e) If the indemnification provided for in this Section 6 shall for any reason be
unavailable or insufficient to hold harmless an indemnified party under Section 6(a) or
6(b) in respect of any loss, claim, damage or liability (or action in respect thereof)
referred to therein, each indemnifying party shall, in lieu of indemnifying such
indemnified party,



- 20 -









 







contribute to the amount paid or payable by such indemnified party as a
result of such loss, claim, damage or liability (or action in respect thereof):




     (i) in such proportion as is appropriate to reflect the relative benefits
received by the Company from the offering and sale of the Transfer Restricted
Securities on the one hand and a Holder with respect to the sale by such Holder
of the Transfer Restricted Securities on the other, or




     (ii) if the allocation provided by Section (6)(e)(i) is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in Section 6(e)(i) but also the relative fault of
the Company on the one hand and the Holders on the other in connection with the
statements or omissions or alleged statements or alleged omissions that resulted
in such loss, claim, damage or liability (or action in respect thereof), as well
as any other relevant equitable considerations.




The relative benefits received by the Company on the one hand and a Holder on the other
with respect to such offering and such sale shall be deemed to be in the same proportion
as the total net proceeds from the offering of the Notes purchased under the Exchange
Agreements (before deducting expenses) received by the Company, on the one hand, bear to
the net proceeds received by such Holder with respect to its sale of Transfer Restricted
Securities on the other. The relative fault of the parties shall be determined by
reference to whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information supplied by
the Company on the one hand or the Holders on the other, the intent of the parties and
their relative knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company and each Holder agree that it would not be just and
equitable if the amount of contribution pursuant to this Section 6(e) were determined by
pro rata allocation or by any other method of allocation that does not take into account
the equitable considerations referred to in the first sentence of this paragraph (e).




     The amount paid or payable by an indemnified party as a result of the loss, claim,
damage or liability, or action in respect thereof, referred to above in this Section 6
shall be deemed to include, for purposes of this Section 6, any legal or other expenses
reasonably incurred by such



- 21 -









 







indemnified party in connection with investigating or
defending or preparing to defend any such action or claim.




     Notwithstanding the provisions of this Section 6, no Holder shall be required to
contribute any amount in excess of the amount by which the net proceeds received by such
Holder with respect to its sale of Transfer Restricted Securities exceeds the amount of
any damages which such Holder has otherwise been required to pay by reason of any untrue
or alleged untrue statement or omission or alleged omission. No Person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any Person who was not guilty of such fraudulent
misrepresentation. The Holders’ obligations to contribute as provided in this Section
6(d) are several and not joint.




     (f) The provisions of this Section 6 shall remain in full force and effect,
regardless of any investigation made by or on behalf of any Holder or the Company or any
of the officers, directors or controlling persons referred to in Section 6 hereof, and
will survive the sale by a Holder of Transfer Restricted Securities.



     7. Rule 144A and Rule 144. The Company agrees with each Holder, for so long as any Transfer
Restricted Securities remain outstanding and during any period in which the Company (i) is not
subject to Section 13 or 15(d) of the Exchange Act, to make available, upon request of any Holder,
to such Holder or beneficial owner of Transfer Restricted Securities in connection with any sale
thereof and any prospective purchaser of such Transfer Restricted Securities designated by
such Holder or beneficial owner, the information required by Rule 144A(d)(4) under the Securities
Act in order to permit resales of such Transfer Restricted Securities pursuant to Rule 144A, and
(ii) is subject to Section 13 or 15 (d) of the Exchange Act, to make all filings required thereby
in a timely manner in order to permit resales of such Transfer Restricted Securities pursuant to
Rule 144.



     8. Miscellaneous.




     (a) Remedies. The Company acknowledges and agrees that any failure by the Company to
comply with its obligations under Section 2 hereof may result in material irreparable
injury to the Holders for which there is no adequate remedy at law, that it will not be
possible to measure damages for such injuries precisely, and that, in the event of any
such failure, any Holder may seek such relief as may be required to specifically enforce
the Company’s obligations under Section 2 hereof.



- 22 -









 






     (b) No Inconsistent Agreements. The Company will not on or after the date hereof,
enter into any agreement with respect to its securities that is inconsistent with the
rights granted to the Holders in this Agreement or otherwise conflicts with the provisions
hereof. In addition, the Company shall not grant to any of its securityholders (other
than the Holders of Transfer Restricted Securities in such capacity) the right to include
any of its securities in the Shelf Registration Statement provided for in this Agreement
other than the Transfer Restricted Securities. The Company has not previously entered
into any agreement (which has not expired or been terminated) granting any registration
rights with respect to its securities to any Person, which rights conflict with the
provisions hereof.




     (c) Amendments and Waivers. This Agreement may not be amended, modified or
supplemented, and waivers or consents to or departures from the provisions hereof may not
be given, unless the Company has obtained the written consent of a Majority of Holders.
Notwithstanding the foregoing, a waiver or consent to depart from the provisions hereof,
with respect to a matter, which relates exclusively to the rights of Holders whose
securities are being sold pursuant to a Shelf Registration Statement and does not directly
or indirectly adversely affect the rights of other Holders, may be given by the Majority
Holders, determined on the basis of Notes being sold rather than registered under such
Shelf Registration Statement.




     (d) Notices. All notices and other communications provided for or permitted
hereunder shall be made in writing by hand-delivery, first-class mail (registered or
certified, return receipt requested), telex, facsimile transmission, or air courier
guaranteeing overnight delivery:




     (i) if to a Holder, at the address set forth on the records of the
registrar under the Indenture or the transfer agent of the Common Stock, as the
case may be; and




     (ii) if to the Company, initially at its address set forth in the Exchange
Agreements,



- 23 -









 




With a copy to:



Wilson Sonsini Goodrich & Rosati, P.C.

650 Page Mill Road

Palo Alto, California 94304

Fax No.: (650) 493-6811

Attn: Michael O’Donnell





     All such notices and communications shall be deemed to have been duly given: at the
time delivered by hand, if personally delivered; five Business Days after being deposited
in the mail, postage prepaid, if mailed; when answered back, if telexed; when receipt
acknowledged, if transmitted by facsimile; and on the next Business Day, if timely
delivered to an air courier guaranteeing overnight delivery.




     Any party hereto may change the address for receipt of communications by giving
written notice to the others.




     (e) Successors and Assigns. This Agreement shall inure to the benefit of and be
binding upon the successors, assigns and transferees of each of the parties, including
without limitation and without the need for an express assignment, subsequent Holders of
Transfer Restricted Securities, provided, however, that nothing contained herein shall be
deemed to permit any assignment, transfer or other disposition of Transfer Restricted
Securities in violation of the terms of the Exchange Agreements or the Indenture. If any
transferee of any Holder shall acquire Transfer Restricted Securities, in any manner,
whether by operation of law or otherwise, such Transfer Restricted Securities shall be
held subject to all the terms of this Agreement except for Section 8 hereof, and by taking
and holding such Transfer Restricted Securities such person shall be conclusively deemed
to have agreed to be bound by and to perform all of the terms and provisions of this
Agreement.




     (f) Counterparts. This Agreement may be executed in any number of counterparts and
by the parties hereto in separate counterparts, each of which when so executed shall be
deemed to be an original and all of which taken together shall constitute one and the same
agreement.




     (g) Notes Held by the Company or Their Affiliates. Whenever the consent or approval
of Holders of a specified percentage of Transfer Restricted Securities is required
hereunder, Transfer Restricted Securities held by the Company or its Affiliates (other
than subsequent Holders if such subsequent Holders are deemed to be Affiliates solely by
reason of



- 24 -









 







their holding of such Notes) shall not be counted in determining whether such
consent or approval was given by the Holders of such required percentage.




     (h) Headings. The headings in this Agreement are for convenience of reference only
and shall not limit or otherwise affect the meaning hereof.




     (i) Governing Law. This Agreement shall be governed by and construed in accordance
with the law of the State of New York without regard to conflict of law principles that
would result in the application of any law other than the law of the State of New York.
Each party hereby irrevocably submits to the jurisdiction of the state and federal courts
sitting in The City of New York, Borough of Manhattan, for the adjudication of any dispute
hereunder or in connection herewith or with any transaction contemplated hereby or
discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit,
action or proceeding, any claim that it is not personally subject to the jurisdiction of
any such court, that such suit, action or proceeding is brought in an inconvenient forum
or that the venue of such suit, action or proceeding is improper. Each party hereby
irrevocably waives personal service of process and consents to process being served in any
such suit, action or proceeding by mailing a copy thereof to such party at the address for
such notices to it under this Agreement and agrees that such service shall constitute good
and sufficient service of process and notice thereof. Nothing contained herein shall be
deemed to limit in any way any right to serve process in any manner permitted by law. If
any provision of this Agreement shall be invalid or unenforceable in any jurisdiction,
such invalidity or unenforceability shall not affect the validity or enforceability of the
remainder of this Agreement in that jurisdiction or the validity or enforceability of any
provision of this Agreement in any other jurisdiction. EACH PARTY HEREBY IRREVOCABLY
WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION
OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY
TRANSACTION CONTEMPLATED HEREBY.




     (j) Severability. If any one or more of the provisions contained herein, or the
application thereof in any circumstance, is held invalid, illegal or unenforceable, the
validity, legality and enforceability of any such provision in every other respect and of
the remaining provisions contained herein shall not be affected or impaired thereby, it
being



- 25 -









 







intended that all of the rights and privileges of the parties shall be enforceable
to the fullest extent permitted by law.




     (k) Independent Nature of Holders’ Obligations and Rights. The obligations of each
Holder under this Agreement are several and not joint with the obligations of any other
Holder, and no Holder shall be responsible in any way for the performance of the
obligations of any other Holder under this Agreement. Nothing contained herein, and no
action taken by any Holder pursuant hereto, shall be deemed to constitute the Holder as a
partnership, an association, a joint venture or any other kind of entity, or create a
presumption that the Holders are in any way acting in concert or as a group with respect
to such obligations or the transactions contemplated by this Agreement. Each Holder
confirms that it has independently participated in the negotiation of the transaction
contemplated hereby with the advice of its own counsel and advisors. Each Holder shall be
entitled to independently protect and enforce its rights, including, without limitation,
the rights arising out of this Agreement, and it shall not be necessary for any other
Holder to be joined as an additional party in any proceeding for such purpose.




     (l) Entire Agreement. This Agreement, together with the Exchange Agreements and the
Indenture, is intended by the parties as a final expression of their agreement and
intended to be a complete and exclusive statement of the agreement and understanding of
the parties hereto in respect of the subject matter contained herein. There are no
restrictions, promises, warranties or undertakings, other than those set forth or referred
to herein with respect to the registration rights granted by the Company with respect to
the Transfer Restricted Securities. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter.



- 26 -









 





     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written
above.



	 	 	 	 	 
	 	CIPHERGEN BIOSYSTEMS, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 




 









 





     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written
above.



	 	 	 	 	 
	 	[HOLDER]

 	 
	 	By:  	 	 
	 	Name:  	 	 	 
	 	Title:  	 	 	 



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ANNEX A




LIST OF INITIAL PURCHASERS




	 	 	 	 	 	 	 	 	 
	Name of Initial Purchaser	 	 	 	 	 	Principal Amount of Notes
	 
	 	 	 	 	 	 	 	 





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ANNEX B




-4-









 





ANNEX B




SELLING SECURITYHOLDER QUESTIONNAIRE




          The undersigned beneficial owner (the “Selling Securityholder”) of the 7.00% Convertible
Senior Notes due 2011 (the “Notes”) of Ciphergen Biosystems, Inc. (the “Company”) or the shares of
the Company’s Common Stock, par value $0.001 per share, issuable upon conversion of the Notes (the
“Common Stock” and, together with the Notes, the “Registrable Securities”) hereby gives notice to
the Company of its intention to sell or otherwise dispose of Registrable Securities beneficially
owned by it and listed below in Item 3 (unless otherwise specified under Item 3) pursuant to the
Shelf Registration Statement. The undersigned, by signing and returning this Selling
Securityholder Questionnaire, understands that it will be bound by the terms and conditions of this
Selling Securityholder Questionnaire and the Registration Rights Agreement.




          Pursuant to the Registration Rights Agreement, the undersigned has agreed to indemnify and
hold harmless the Company’s directors, the Company’s officers and each person, if any, who controls
the Company within the meaning of either Section 15 of the Securities Act or Section 20 of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), from and against certain losses
arising in connection with statements concerning the undersigned made in the Shelf Registration
Statement or the related prospectus in reliance upon the information provided in this Selling
Securityholder Questionnaire. The undersigned hereby acknowledges its obligations under the
Registration Rights Agreement to indemnify and hold harmless certain persons set forth therein.




          The undersigned hereby provides the following information to the Company and represents and
warrants that such information is accurate and complete:





	(1) 	(a)	 	 Full Legal Name of Selling Securityholder:
	 
	 	 	 	 

	 
	 	(b)	 	Full Legal Name of Registered Holder (if not the same as (a) above) through which
Registrable Securities listed in (3) below are held:
	 
	 	 	 	 

	 
	 	(c)	 	Full Legal Name of DTC Participant (if applicable and if not the same as (b) above)
through which Registrable Securities listed in (3) below are held:
	 
	 	 	 	 







	(2)	 	Address for Notices to Selling Securityholder:
	 
	 	 	 

	 
	 	 	 





 









 






	 	 	Telephone (including area code):

 




	 
	 	 	Fax (including area code):

 




	 
	 	 	Contact Person:

 




	 
	(3)	 	Beneficial Ownership of Registrable Securities:
	 
	 	 	 







	 	(a)	 	Type and Principal Amount/Number of Registrable Securities beneficially owned:
	 
	 	 	 	 

	 
	 	(b)	 	CUSIP No(s). of such Registrable Securities beneficially owned:
	 
	 	 	 	 







	(4)	 	Beneficial Ownership of Other Securities of the Company Owned by the Selling Securityholder:
	 
	 	 	Except as set forth below in this Item (4), the undersigned is not the beneficial or registered owner of any securities of the
Company other than the Registrable Securities listed above in Item (3).






	 	(a)	 	Type and Amount of Other Securities beneficially owned by the Selling Securityholder:
	 
	 	 	 	 

	 
	 	(b)	 	CUSIP No(s). of such Other Securities beneficially owned:
	 
	 	 	 	 







	(5)	 	Relationship with the Company:
	 
	 	 	Except as set forth below, neither the undersigned nor any of its affiliates, officers, directors or principal equity holders
(5% or more) has held any position or office or has had any other material relationship with the Company (or its predecessors
or affiliates) during the past three years.
	 
	 	 	State any exceptions here:

 




	 
	(6)	 	Is the Selling Securityholder a registered broker-dealer?
	 
	 	 	Yes        ̈
	 
	 	 	No         ̈
	 
	 	 	If “Yes”, please answer subsection (a) and subsection (b):






	 	(a)	 	Did the Selling Securityholder acquire the Registrable Securities as compensation for underwriting/broker-dealer activities
to the Company?




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	 	 	 	      Yes       ̈
	 
	 	 	 	      No        ̈
	 
	 	(b)	 	If you answered “No” to question 6(a), please explain your reason for acquiring the Registrable Securities:






	 	 	 	 

	 
	 	 	 	 







	(7)	 	Is the Selling Securityholder an affiliate of a registered broker-dealer?
	 
	 	 	Yes       ̈
	 
	 	 	No        ̈
	 
	 	 	If “Yes”, please identify the registered broker-dealer(s), describe the nature of the affiliation(s) and answer subsection (a)
and subsection (b):






	 	 	 	 







	 	(a)	 	Did the Selling Securityholder purchase the Registrable Securities in the ordinary course of business (if no, please
explain)?
	 
	 	 	 	      Yes      ̈
	 
	 	 	 	     No        ̈            Explain:                                         
	 
	 	(b)	 	Did the Selling Securityholder have an agreement or understanding, directly or indirectly, with any person to distribute
the Registrable Securities at the same time the Registrable Securities were originally purchased (if yes, please explain)?
	 
	 	 	 	     Yes      ̈           Explain:                                         
	 
	 	 	 	     No       ̈






	(8)	 	Is the Selling Securityholder a non-public entity?
	 
	 	 	Yes       ̈
	 
	 	 	No        ̈
	 
	 	 	If “Yes”, please answer subsection (a):






	 	(a)	 	Identify the natural person or persons that have voting or investment control over the Registrable Securities that the
non-public entity owns:






	 	 	 	 

	 
	 	 	 	 





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	(9)	 	Plan of Distribution:
	 
	 	 	Except as set forth below, the undersigned Selling Securityholder (including its donees and pledgees) intends to distribute the
Registrable Securities listed above in Item (3) pursuant to the Shelf Registration Statement only as follows (if at all): Such
Registrable Securities may be sold from time to time directly by the undersigned Selling Securityholder or, alternatively, in
accordance with the Registration Rights Agreement, through underwriters, broker-dealers or agents. If the Registrable
Securities are sold through underwriters or broker-dealers, the Selling Securityholders will be responsible for underwriting
discounts or commissions or agent commissions. Such Registrable Securities may be sold in one or more transactions at fixed
prices, at prevailing market prices at the time of sale, at varying prices determined at the time of sale, or at negotiated
prices. Such sales may be effected in transactions (which may involve cross or block transactions) (i) on any national
securities exchange or quotation service on which the Registrable Securities may be listed or quoted at the time of sale, (ii)
in the over-the-counter market, (iii) in transactions otherwise than on such exchanges or services or in the over-the-counter
market, or (iv) through the writing of options. In connection with sales of the Registrable Securities or otherwise, the
undersigned Selling Securityholder may enter into hedging transactions with broker-dealers, which may in turn engage in short
sales of the Registrable Securities in the course of hedging positions they assume. The undersigned Selling Securityholder may
also sell Registrable Securities short and deliver Registrable Securities to close out short positions, or loan or pledge
Registrable Securities to broker-dealers that in turn may sell such securities.
	 
	 	 	State any exceptions here:

 









Note: In no event will such method(s) of distribution take the form of an underwritten offering of the Registrable Securities without the
prior agreement of the Company.




          The undersigned Selling Securityholder acknowledges that it understands its obligations
to comply with the provisions of the Securities Exchange Act of 1934, as amended, and the rules
thereunder relating to stock manipulation, particularly Regulation M thereunder (or any successor
rules or regulations), in connection with any offering of Registrable Securities pursuant to the
Shelf Registration Agreement. The undersigned agrees that neither it nor any person acting on its
behalf will engage in any transaction in violation of such provisions.




          Pursuant to the Registration Rights Agreement, the Company has agreed under certain
circumstances to indemnify the Selling Securityholder against certain liabilities.




          In the event the undersigned transfers all or any portion of the Registrable Securities listed
in Item (3) above after the date on which such information is provided to the Company other than
pursuant to the Shelf Registration Statement, the undersigned agrees to notify the transferee(s) at
the time of the transfer of its rights and obligations under this Selling Securityholder
Questionnaire and the Registration Rights Agreement.




          In accordance with the undersigned’s obligation under the Registration Rights Agreement to
provide such information as may be required by law or by the staff of the




-4-









 







Commission for inclusion in the Shelf Registration Statement, the undersigned agrees to
promptly notify the Company of any inaccuracies or changes in the information provided herein that
may occur subsequent to the date hereof at anytime while the Shelf Registration Statement remains
effective. All notices hereunder and pursuant to the Registration Rights Agreement shall be made
in writing, by hand-delivery, first-class mail, or air courier guaranteeing overnight delivery to
the address set forth below.




          By signing below, the undersigned consents to the disclosure of the information contained
herein in its answers to Items (1) through (9) above and the inclusion of such information in the
Shelf Registration Statement and the related prospectus. The undersigned understands that such
information will be relied upon by the Company in connection with the preparation or amendment of
the Shelf Registration Statement and the related prospectus.




          Once this Selling Securityholder Questionnaire is executed by the undersigned and received by
the Company, the terms of this Selling Securityholder Questionnaire, and the representations,
warranties and agreements contained herein, shall be binding on, shall inure to the benefit of and
shall be enforceable by the respective successors, heirs, personal representatives, and assigns of
the Company and the undersigned with respect to the Registrable Securities beneficially owned by
the undersigned and listed in Item (3) above. This Selling Securityholder Questionnaire shall be
governed in all respects by the laws of the State of New York.




          IN WITNESS WHEREOF, the undersigned, by authority duly given, has caused this Selling
Securityholder Questionnaire to be executed and delivered either in person or by its duly
authorized agent.




	 	 	 	 	 	 
	Dated:                                         
	 	 	 	 
	 
	 	 	 	 
	 	 	 
	 	 	Beneficial Owner
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	 	 	 
	 

	 	Title:	 	 
	 

	 	 	 	 





PLEASE RETURN THE COMPLETED AND EXECUTED SELLING SECURITYHOLDER QUESTIONNAIRE TO THE COMPANY AT:




CIPHERGEN BIOSYSTEMS, INC.

6611 Dumbarton Circle

Fremont, California 94555

Tel: (650)                     

Fax: (650)                     

Attn:                     




-5-









 





Exhibit C




Asset Purchase Agreement





 









 








Exhibit D




Form of Officer’s Certificate




 









 








Exhibit E




Form of Opinion of Wilson Sonsini Goodrich & Rosati, P.C.