**Exhibit 4.8**

 

deCODE genetics, Inc.

 

 

3.5% Senior Convertible Notes due 2011

 

 

INDENTURE

 

Dated as ofApril 14, 2004 

 

 

The Bank ofNew York

 

TRUSTEE 

 

 

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TABLE OF CONTENTS

 
| ARTICLE I DEFINITIONS AND INCORPORATION BY REFERENCE                               |   |
|------------------------------------------------------------------------------------|--------|
|                                                                               |   |
| Section 1.1 Definitions                                                            |   |
| Section 1.2 Other Definitions                                                      |   |
| Section 1.3 Incorporation by Reference of  Trust Indenture Act                     |   |
| Section 1.4 Rules of Construction                                                  |   |
| Section 1.5 Acts of Holders                                                        |   |
|                                                                               |   |
| ARTICLE II THE SECURITIES                                                          |   |
|                                                                               |   |
| Section 2.1 Form and Dating.                                                       |   |
| Section 2.2 Execution and Authentication.                                          |   |
| Section 2.3 Registrar, Paying Agent and  Conversion Agent.                         |   |
| Section 2.4 Paying Agent to Hold Money and  Securities in Trust.                   |   |
| Section 2.5 Securityholder Lists                                                   |   |
| Section 2.6 Transfer and Exchange                                                  |   |
| Section 2.7 Replacement Securities.                                                |   |
| Section 2.8 Outstanding Securities;  Determinations of Holders’ Action        |   |
| Section 2.9 Temporary Securities.                                                  |   |
| Section 2.10 Cancellation                                                          |   |
| Section 2.11 Persons Deemed Owners                                                 |   |
| Section 2.12 Global Securities.                                                    |   |
| Section 2.13 CUSIP Numbers                                                         |   |
|                                                                               |   |
| ARTICLE III REDEMPTION AND PURCHASES                                               |   |
|                                                                               |   |
| Section 3.1 Company’s Right to Redeem;  Notices to Trustee                    |   |
| Section 3.2 Selection of Securities to Be  Redeemed.                               |   |
| Section 3.3 Notice of Redemption.                                                  |   |
| Section 3.4 Effect of Notice of Redemption                                         |   |
| Section 3.5 Deposit of Redemption Price.                                           |   |
| Section 3.6 Securities Redeemed in Part                                            |   |
| Section 3.7 Purchase of Securities at  Option of the Holder upon Change of Control |   |
| Section 3.8 Effect of Change of Control  Purchase Notice; Withdrawal               |   |
| Section  3.9 Deposit of Change of Control Purchase Price                           |   |
| Section  3.10 Securities Purchased in Part.                                        |   |
| Section  3.11 Covenant to Comply With Securities Laws Upon Purchase of Securities. |   |
| Section  3.12 Repayment to the Company.                                            |   |
|                                                                               |   |
| ARTICLE IV COVENANTS                                                               |   |
|                                                                               |   |
| Section  4.1 Payment of Securities                                                 |   |
| Section  4.2 SEC and Other Reports.                                                |   |

 

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| Section  4.3 Compliance Certificate                                 |   |
|---------------------------------------------------------------------|--------|
| Section  4.4 Further Instruments and Acts.                          |   |
| Section  4.5 Maintenance of Office or Agency                        |   |
| Section  4.6 Delivery of Certain Information                        |   |
| Section  4.7 Treatment of Securities.                               |   |
|                                                                |   |
| ARTICLE V SUCCESSOR CORPORATION                                     |   |
|                                                                |   |
| Section  5.1 When Company May Merge or Transfer Assets              |   |
|                                                                |   |
| ARTICLE VI DEFAULTS AND REMEDIES                                    |   |
|                                                                |   |
| Section  6.1 Events of Default                                      |   |
| Section  6.2 Acceleration.                                          |   |
| Section  6.3 Other Remedies                                         |   |
| Section  6.4 Waiver of Past Defaults                                |   |
| Section  6.5 Control by Majority                                    |   |
| Section  6.6 Limitation on Suits                                    |   |
| Section  6.7 Rights of Holders to Receive Payment.                  |   |
| Section  6.8 Collection Suit by Trustee                             |   |
| Section  6.9 Trustee May File Proofs of Claim                       |   |
| Section  6.10 Priorities.                                           |   |
| Section  6.11 Undertaking for Costs.                                |   |
| Section  6.12 Waiver of Stay, Extension or Usury Laws               |   |
|                                                                |   |
| ARTICLE VII TRUSTEE                                                 |   |
|                                                                |   |
| Section  7.1 Duties of Trustee.                                     |   |
| Section  7.2 Rights of Trustee.                                     |   |
| Section  7.3 Individual Rights of Trustee                           |   |
| Section  7.4 Trustee’s Disclaimer.                             |   |
| Section  7.5 Notice of Defaults.                                    |   |
| Section  7.6 Reports by Trustee to Holders                          |   |
| Section  7.7 Compensation and Indemnity                             |   |
| Section  7.8 Replacement of Trustee                                 |   |
| Section  7.9 Successor Trustee by Merger.                           |   |
| Section  7.10 Eligibility; Disqualification                         |   |
| Section  7.11 Preferential Collection of Claims Against Company     |   |
| Section  7.12 Force Majeure.                                        |   |
|                                                                |   |
| ARTICLE VIII AMENDMENTS                                             |   |
|                                                                |   |
| Section  8.1 Without Consent of Holders                             |   |
| Section  8.2 With Consent of Holders                                |   |
| Section  8.3 Compliance with Trust Indenture Act                    |   |
| Section  8.4 Revocation and Effect of Consents, Waivers and Actions |   |
| Section  8.5 Notation on or Exchange of Securities                  |   |
| Section  8.6 Trustee to Sign Supplemental Indentures                |   |
| Section  8.7 Effect of Supplemental Indentures                      |   |

 

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| ARTICLE IX CONVERSIONS                                                        |                          |
|-------------------------------------------------------------------------------|-------------------------------|
|                                                                          |                          |
| Section  9.1 Conversion Privilege                                             |                          |
| Section  9.2 Conversion Procedure; Conversion Price; Fractional Shares.       |                          |
| Section  9.3 Adjustment of Conversion Price.                                  |                          |
| Section 9.4 Consolidation or Merger of the  Company                           |                          |
| Section 9.5 Notice of Adjustment.                                             |                          |
| Section 9.6 Notice in Certain Events.                                         |                          |
| Section 9.7 Company To Reserve Stock:  Registration; Listing                  |                          |
| Section 9.8 Taxes on Conversion                                               |                          |
| Section 9.9 Conversion After Record Date                                      |                          |
| Section 9.10 Company Determination Final                                      |                          |
| Section 9.11 Responsibility of Trustee for  Conversion Provisions.            |                          |
| Section 9.12 Unconditional Right of Holders  to Convert.                      |                          |
|                                                                          |                          |
| ARTICLE X MISCELLANEOUS                                                       |                          |
|                                                                          |                          |
| Section 10.1 Trust Indenture Act Controls.                                    |                          |
| Section 10.2 Notices                                                          |                          |
| Section 10.3 Communication by Holders with  Other Holders.                    |                          |
| Section 10.4 Certificate and Opinion as to  Conditions Precedent.             |                          |
| Section 10.5 Statements Required in  Certificate or Opinion.                  |                          |
| Section 10.6 Separability Clause                                              |                          |
| Section 10.7 Rules by Trustee, Paying  Agent, Conversion Agent and Registrar. |                          |
| Section 10.8 Legal Holidays.                                                  |                          |
| Section 10.9 Governing Law                                                    |                          |
| Section 10.10 Waiver of Jury Trial.                                           |                          |
| Section 10.11 No Recourse Against Others                                      |                          |
| Section 10.12 Successors.                                                     |                          |
| Section 10.13 Multiple Originals.                                             |                          |
| Section 10.14 Effect of Headings and Table  of Contents.                      |                          |
|                                                                          |                          |
|                                                                          |                          |
| EXHIBIT A                                                                     | Form of Global Security       |   |
|                                                                          |                          |   |
| EXHIBIT B                                                                     | Form of Certificated Security |   |
|                                                                          |                          |   |
| EXHIBIT C                                                                     | Transfer Certificate          |   |

 

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INDENTUREdated as of April 14, 2004 between deCODE genetics, Inc., a Delawarecorporation (“Company”), and THE BANK OF NEW YORK, a New York bankingcorporation (“Trustee”).

 

Each partyagrees as follows for the benefit of the other party and for the equal andratable benefit of the Holders of the Company’s 3.5% Senior Convertible Notesdue 2011:

 

ARTICLE I

 

DEFINITIONS AND INCORPORATION BY REFERENCE

 

Section 1.1 Definitions “144A GlobalSecurity” means a permanent Global Security in the form of the Securityattached hereto as Exhibit A, and that is deposited with and registered in thename of the Depositary, representing Securities sold in reliance on Rule 144Aunder the Securities Act.

 

“AdditionalAmounts” shall have the meaning ascribed to it in the Registration RightsAgreement.

 

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

 

“ApplicableProcedures” means, with respect to any transfer or transaction involving aGlobal Security or beneficial interest therein, the rules and procedures of theDepositary for such Security, in each case to the extent applicable to suchtransaction and as in effect from time to time.

 

“Board ofDirectors” means either the board of directors of the Company or any dulyauthorized committee of such board.

 

“BoardResolution” means a resolution of the Board of Directors.

 

“Business Day”means, with respect to any Security, a day that in The City of New York, is nota day on which banking institutions are authorized by law or regulation toclose.

 

“CapitalStock” for any corporation means any and all shares, interests, rights topurchase, warrants, options, participations or other equivalents of orinterests in (however designated) stock issued by that corporation.

 

“Certificated Securities”means Securities that are in the form of the Securities attached hereto asExhibit B.

 

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“Common Stock”shall mean the Common Stock, $0.001 par value per share, of the Companyexisting on the date of this Indenture or any other shares of Capital Stock ofthe Company into which such Common Stock shall be reclassified or changed.

 

“Company”means the party named as the “Company” in the first paragraph of this Indentureuntil a successor replaces it pursuant to the applicable provisions of this Indentureand, thereafter, shall mean such successor. The foregoing sentence shalllikewise apply to any subsequent such successor or successors.

 

“CompanyRequest” or “Company Order” means a written request or order signed in the nameof the Company by any two Officers.

 

“ConversionPrice” means initially $ 14.00, subject to adjustment as set forth herein.

 

“CorporateTrust Office” means the principal office of the Trustee at which at any timeits corporate trust business shall be administered, which office at the datehereof is located at 101 Barclay Street, Floor 21 West, New York, New York10286, Attention:  Corporate TrustAdministration, or such other address as the Trustee may designate from time totime by notice to the Holders and the Company, or the principal corporate trustoffice of any successor (or such other address as a successor Trustee maydesignate from time to time by notice to the Holders and the Company).

 

“Default”means an event which, with the giving of notice or the lapse of time, or both,would become an Event of Default.

 

“Ex-DividendTime” means, with respect to any issuance or distribution on shares of CommonStock, the first date on which the shares of Common Stock trade regular way onthe principal securities market on which the shares of Common Stock are thentraded without the right to receive such issuance or distribution.

 

“GlobalSecurities” means Securities that are in the form of the Securities attachedhereto as Exhibit A, and that are registered in the register of Securities inthe name of a Depositary or a nominee thereof, and to the extent that suchSecurities are required to bear the Legend required by Section 2.6 hereof, suchSecurities will be in the form of a 144A Global Security.

 

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

 

“Indenture”means this Indenture, as amended or supplemented from time to time inaccordance with the terms hereof, including the provisions of the TIA that aredeemed to be a part hereof.

 

“InitialPurchasers” means Lehman Brothers Inc., J.P. Morgan Securities Inc., PiperJeffrey & Co., Deutsche Bank Securities Inc. and Think Equity Partners LLC.

 

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“Issue Date”of any Security means the date on which the Security was originally issued ordeemed issued as set forth on the face of the Security.

 

“Officer”means the Chairman of the Board, the Vice Chairman, the Chief ExecutiveOfficer, the President, any Executive Vice President, any Senior VicePresident, the Treasurer, the Controller, or the Secretary or any AssistantTreasurer or Assistant Secretary of the Company.

 

“Officers’Certificate” means a written certificate containing the information specifiedin Sections 10.4 and 10.5, signed in the name of the Company by any twoOfficers, and delivered to the Trustee. An Officers’ Certificate given pursuantto Section 4.3 shall be signed by the principal executive Officer, principalfinancial Officer or principal accounting Officer of the Company but need notcontain the information specified in Sections 10.4 and 10.5.

 

“Opinion ofCounsel” means a written opinion containing the information specified inSections 10.4 and 10.5, from legal counsel who is reasonably acceptable to theTrustee. The counsel may be an employee of, or counsel to, the Company.

 

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

 

“RedemptionDate” or “redemption date” shall mean the date specified in a notice ofredemption on which the Securities may be redeemed in accordance with the termsof the Securities and this Indenture.

 

“RedemptionPrice” or “redemption price” shall have the meaning set forth in Section 5 ofthe Securities.

 

“RegistrationRights Agreement” means the Resale Registration Rights Agreement, dated as ofthe date hereof, among the Company, J. P. Morgan Securities Inc. and LehmanBrothers Inc. as representatives of the Initial Purchasers.

 

“ResponsibleOfficer” shall mean, when used with respect to the Trustee, any officer withinthe corporate trust department of the Trustee, including any vice president,assistant vice president, assistant secretary assistant treasurer, trustofficer or any other officer of the Trustee who customarily performs functionssimilar to those performed by the persons who at the time shall be suchofficers, respectively, or to whom any corporate trust matter is referredbecause of such person’s knowledge of and familiarity with the particularsubject and who shall have direct responsibility for the administration of thisIndenture.

 

“RestrictedSecurity” means a Security required to bear the restrictive legend set forth inthe form of Security set forth in Exhibits A and B of this Indenture.

 

“Rule 144A”means Rule 144A under the Securities Act (or any successor provision), as itmay be amended from time to time.

 

“Sale Price”of a security on any date of determination means:

 

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(i)            the closing sales price as reportedby the Nasdaq Stock Market, Inc.;

 

(ii)           if such security is not so reportedon any such date, the closing sale price as reported in the compositetransactions for the principal U.S. securities exchange on which such securityis so listed;

 

(iiii)         if such security is not so reported,the last price quoted by Interactive Data Corporation for such security on suchdate or, if Interactive Data Corporation is not quoting such price, a similarquotation service selected by the Company;

 

(iv)          if such security is not so quoted, theaverage of the mid-point of the last bid and ask prices for such security onsuch date from at least two dealers recognized as market-makers for suchsecurity selected by the Company for this purpose; or

 

(v)           if such security is not so quoted,the average of that last bid and ask prices for such security on such date froma dealer engaged in the trading of convertible securities selected by theCompany for this purpose.

 

“SEC” meansthe Securities and Exchange Commission.

 

“Securities”means any of the Company’s 3.5% Senior Convertible Notes due 2011, as amendedor supplemented from time to time, issued under this Indenture.

 

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

 

“SignificantSubsidiary” shall have the meaning ascribed to such term in Rule 405 of theSecurities Act.

 

“StatedMaturity”, when used with respect to any Security, means April 15, 2011.

 

“Subsidiary”means any Person of which at least a majority of the outstanding Voting Stockshall at the time directly or indirectly be owned or controlled by the Companyor by one or more Subsidiaries or by the Company and one or more Subsidiaries.

 

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

 

“Trading Day”means a day during which trading in securities generally occurs on the NasdaqStock Market, Inc. or, if the Common Stock is not quoted on the Nasdaq StockMarket, Inc., on the principal other national or regional securities exchangeon which the Common Stock then is listed or, if the Common Stock is not tradedon the Nasdaq Stock Market, Inc. or listed on a national or regional securitiesexchange, on the principal other market on which the Common Stock is then tradedor quoted.

 

“Trustee”means the party named as the “Trustee” in the first paragraph of this Indentureuntil a successor replaces it pursuant to the applicable provisions of thisIndenture and,

 

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thereafter, shall mean such successor. Theforegoing sentence shall likewise apply to any subsequent such successor orsuccessors.

 

“Voting Stock”of a Person means Capital Stock of such Person of the class or classes pursuantto which the holders thereof have the general voting power under ordinarycircumstances to elect at least a majority of the board of directors, managersor trustees of such Person (irrespective of whether or not at the time CapitalStock of any other class or classes shall have or might have voting power byreason of the happening of any contingency).

 

Section 1.2 Other Definitions.

 
| **Term:**                                     |   | **Section in  which the term is  defined:** |
|-----------------------------------------------|--------|---------------------------------------------|
|                                          |   |                                        |
| “Act”                               |   | 1.5                                         |
| “Agent Members”                     |   | 2.12(e)                                     |
| “beneficial owner”                  |   | 3.7(a)                                      |
| “Change of Control”                 |   | 3.7(a)                                      |
| “Change of Control Purchase Date”   |   | 3.7(a)                                      |
| “Change of Control Purchase Notice” |   | 3.7(c)                                      |
| “Change of Control Purchase Price”  |   | 3.7(a)                                      |
| “Common Stock Restrictive Legend”   |   | 2.6(f)                                      |
| “Continuing Director”               |   | 3.7(a)                                      |
| “Conversion Agent”                  |   | 2.3                                         |
| “Current Market Price”              |   | 9.3(g)                                      |
| “Depositary”                        |   | 2.1(a)                                      |
| “distributed assets”                |   | 9.3(d)                                      |
| “DTC”                               |   | 2.1(a)                                      |
| “Event of Default”                  |   | 6.1                                         |
| “Exchange Act”                      |   | 2.12(e)                                     |
| “Expiration Time”                   |   | 9.3(f)                                      |
| “Fair Market Value”                 |   | 9.3(g)                                      |
| “issuer tender offer”               |   | 3.11                                        |
| “Legal Holiday”                     |   | 10.8                                        |
| “Legend”                            |   | 2.6(f)                                      |
| “Non-Electing Share”                |   | 9.4                                         |
| “Paying Agent”                      |   | 2.3                                         |
| “QIB”                               |   | 2.1(a)                                      |
| “Record Date”                       |   | 9.3(g)                                      |
| “Reference Period”                  |   | 9.3(d)                                      |
| “Registrar”                         |   | 2.3                                         |
| “Rule 144A Information”             |   | 4.6                                         |
| “Securities Act”                    |   | 2.6(f)                                      |
| “Spin-Off”                          |   | 9.3(d)                                      |
| “transfer”                          |   | 2.12(d)                                     |
| “Trigger Event”                     |   | 9.3(d)                                      |

 

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Section 1.3 Incorporation by Reference ofTrust Indenture Act.   Wheneverthis Indenture refers to a provision of the TIA, the provision is incorporatedby reference in and made a part of this Indenture. The following TIA terms usedin this Indenture have the following meanings:

 

“Commission”means the SEC.

 

“indenturesecurities” means the Securities.

 

“indenturesecurity holder” means a Securityholder.

 

“indenture tobe qualified” means this Indenture.

 

“indenturetrustee” or “institutional trustee” means the Trustee.

 

“obligor” onthe indenture securities means the Company.

 

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

 

Section 1.4 Rules of Construction.Unless the context otherwise requires:

 

(1) a term hasthe meaning assigned to it;

 

(2) anaccounting term not otherwise defined has the meaning assigned to it inaccordance with U.S. generally accepted accounting principles as in effect fromtime to time;

 

(3) “or” isnot exclusive;

 

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

 

(5) words inthe singular include the plural, and words in the plural include the singular.

 

Section 1.5 Acts of Holders.  (a)  Any request, demand, authorization,direction, notice, consent, waiver or other action provided by this Indentureto be given or taken by Holders may be embodied in and evidenced by one or moreinstruments of substantially similar tenor signed by such Holders in person orby an agent duly appointed in writing; and, except as herein otherwiseexpressly provided, such action shall become effective when such instrument orinstruments are delivered to the Trustee and, where it is hereby expresslyrequired, to the Company, as described in Section 10.2.  Such instrument or instruments (and theaction embodied therein and evidenced thereby) are herein sometimes referred toas the “Act” of Holders signing such instrument or instruments.  Proof of execution of any such instrument orof a writing appointing any such agent shall be sufficient for any purpose ofthis Indenture and conclusive in favor of the Trustee and the Company, if madein the manner provided in this Section.

 

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(b) The factand date of the execution by any Person of any such instrument or writing maybe proved by the affidavit of a witness of such execution or by a certificateof a notary public or other officer authorized by law to take acknowledgmentsof deeds, certifying that the individual signing such instrument or writingacknowledged to such officer the execution thereof. Where such execution is bya signer acting in a capacity other than such signer’s individual capacity,such certificate or affidavit shall also constitute sufficient proof of suchsigner’s authority. The fact and date of the execution of any such instrumentor writing, or the authority of the Person executing the same, may also beproved in any other manner that the Trustee deems sufficient.

 

(c) Theprincipal amount and serial number of any Security and the ownership ofSecurities shall be proved by the register for the Securities.

 

(d) Anyrequest, demand, authorization, direction, notice, consent, waiver or other Actof the Holder of any Security shall bind every future Holder of the sameSecurity and the Holder of every Security issued upon the registration oftransfer thereof or in exchange therefor or in lieu thereof in respect of anythingdone, omitted or suffered to be done by the Trustee or the Company in reliancethereon, whether or not notation of such action is made upon such Security.

 

(e) If theCompany shall solicit from the Holders any request, demand, authorization,direction, notice, consent, waiver or other Act, the Company may, at itsoption, by or pursuant to a Board Resolution, fix in advance a record date forthe determination of Holders entitled to give such request, demand,authorization, direction, notice, consent, waiver or other Act, but the Companyshall have no obligation to do so. If such a record date is fixed, suchrequest, demand, authorization, direction, notice, consent, waiver or other Actmay be given before or after such record date, but only the Holders of recordat the close of business on such record date shall be deemed to be Holders forthe purposes of determining whether Holders of the requisite proportion ofoutstanding Securities have authorized or agreed or consented to such request,demand, authorization, direction, notice, consent, waiver or other Act, and forthat purpose the outstanding Securities shall be computed as of such recorddate; provided that no such authorization, agreement or consent by the Holderson such record date shall be deemed effective unless it shall become effectivepursuant to the provisions of this Indenture not later than six months afterthe record date.

 

ARTICLE II

 

THE SECURITIES

 

Section 2.1 Form and Dating.  The Securities and the Trustee’s certificate of authenticationshall be substantially in the form of Exhibits A and B, which are a part ofthis Indenture.  The Securities may havenotations, legends or endorsements required by law, stock exchange rule orusage (provided that any such notation, legend or endorsement required by usageis in a form acceptable to the Company). The Company shall provide any such notations, legends or endorsements tothe Trustee in writing.  Each Securityshall be dated the date of its authentication.

 

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(a) 144AGlobal Securities.  Securitiesoffered and sold within the United States to qualified institutional buyers asdefined in Rule 144A (“QIBs” ) in reliance on Rule 144A shall be issuedinitially in the form of a 144A Global Security, which shall be deposited withthe Trustee at its Corporate Trust Office, as custodian for the Depositary (asdefined below) and registered in the name of The Depository Trust Company(“DTC”) or the nominee thereof (DTC, or any successor thereto, and any suchnominee being hereinafter referred to as the “Depositary”), duly executed bythe Company and authenticated by the Trustee as hereinafter provided.  The aggregate principal amount of the 144AGlobal Securities may from time to time be increased or decreased byadjustments made on the records of the Trustee and the Depositary ashereinafter provided.

 

(b) GlobalSecurities in General.  Each GlobalSecurity shall represent such of the outstanding Securities as shall bespecified therein and each shall provide that it shall represent the aggregateamount of outstanding Securities from time to time endorsed thereon and thatthe aggregate amount of outstanding Securities represented thereby may fromtime to time be reduced or increased, as appropriate, to reflect exchanges,redemptions, repurchases and conversions.

 

Any adjustmentof the aggregate principal amount of a Global Security to reflect the amount ofany increase or decrease in the amount of outstanding Securities representedthereby shall be made by the Trustee in accordance with instructions given bythe Holder thereof as required by Section 2.12 hereof and shall be made on therecords of the Trustee and the Depositary.

 

(c) Book-EntryProvisions.  This Section 2.1(c)shall apply only to Global Securities deposited with or on behalf of theDepositary.

 

The Companyshall execute and the Trustee shall, in accordance with this Section 2.1(c),authenticate and deliver initially one or more Global Securities that (a) shallbe registered in the name of the Depositary, (b) shall be delivered by theTrustee to the Depositary or pursuant to the Depositary’s instructions and (c)shall be substantially in the form of Exhibit A attached hereto; provided thatthe Legend (other than the first and second paragraphs thereof) may be removedfrom such Global Security on satisfaction of the conditions specified in thisIndenture.

 

(d) CertificatedSecurities.  Securities not issuedas interests in the Global Securities will be issued in certificated formsubstantially in the form of Exhibit B attached hereto; provided that theLegend may be removed from such Securities on satisfaction of the conditionsspecified in this Indenture.

 

Section 2.2 Execution and Authentication.The Securities shall be executed on behalf of the Company by any Officer.  The signature of the Officer on theSecurities may be manual or facsimile.

 

Securitiesbearing the manual or facsimile signatures of individuals who were, at the timeof the execution of the Securities, Officers shall bind the Company,notwithstanding that such individuals or any of them have ceased to hold suchoffices prior to the authentication and

 

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delivery of such Securities or did not holdsuch offices at the date of authentication of such Securities.

 

No Securityshall be entitled to any benefit under this Indenture or be valid or obligatoryfor any purpose unless there appears on such Security a certificate ofauthentication substantially in the form provided for herein duly executed bythe Trustee by manual signature of an authorized signatory, and suchcertificate upon any Security shall be conclusive evidence, and the onlyevidence, that such Security has been duly authenticated and deliveredhereunder.

 

The Trusteeshall authenticate and deliver the Securities for original issue in anaggregate principal amount of $150,000,000 (of which $125,000,000 representsthe original issue and $25,000,000 is issued pursuant to the exercise by theInitial Purchasers of their option to purchase up to $25,000,000 aggregateprincipal amount of additional Securities) upon one or more Company Orderswithout any further action by the Company (other than as contemplated inSection 10.4 and Section 10.5 hereof). The aggregate principal amount of the Securities due at the StatedMaturity thereof outstanding at any time may not exceed the amount set forth inthe foregoing sentence.

 

The Securitiesshall be issued only in registered form without coupons and only indenominations of $1,000 of principal amount and any integral multiple of$1,000.

 

Section 2.3 Registrar, Paying Agent andConversion Agent.  The Company shall maintain an office or agency where Securitiesmay be presented for registration of transfer or for exchange (“Registrar”), anoffice or agency where Securities may be presented for purchase or payment(“Paying Agent”) and an office or agency where Securities may be presented forconversion (“Conversion Agent”).  TheRegistrar shall keep a register of the Securities and of their transfer andexchange.  The Company may have one ormore co-registrars, one or more additional paying agents and one or moreadditional conversion agents.  The termPaying Agent includes any additional paying agent, including any named pursuantto Section 4.5. The term Conversion Agent includes any additional conversionagent, including any named pursuant to Section 4.5.

 

The Companyshall enter into an appropriate agency agreement with any Registrar, PayingAgent, Conversion Agent or co-registrar (in each case, if such Registrar, agentor co-registrar is a Person other than the Trustee).  The agreement shall implement the provisions of this Indenturethat relate to such agent.  The Companyshall notify the Trustee of the name and address of any such agent.  If the Company fails to maintain aRegistrar, Paying Agent or Conversion Agent, the Trustee shall act as such andshall be entitled to appropriate compensation therefor pursuant to Section7.7.  The Company or any Subsidiary oran Affiliate of either of them may act as Paying Agent, Registrar, ConversionAgent or co-registrar.

 

The Companyinitially appoints the Trustee as Registrar, Paying Agent and Conversion Agentin connection with the Securities.

 

Section 2.4 Paying Agent to Hold Money andSecurities in Trust.  Except as otherwise provided herein, on orprior to each due date of payments in respect of any Security, the Companyshall deposit with the Paying Agent a sum of money (in immediately available

 

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funds if deposited on the due date)sufficient to make such payments when so becoming due.  The Company shall require each Paying Agent(other than the Trustee) to agree in writing that the Paying Agent shall hold intrust for the benefit of Securityholders or the Trustee all money held by thePaying Agent for the making of payments in respect of the Securities and shallnotify the Trustee of any default by the Company in making any suchpayment.  At any time during thecontinuance of any such default, the Paying Agent shall, upon the writtenrequest of the Trustee, forthwith pay to the Trustee all money so held intrust.  If the Company, a Subsidiary oran Affiliate of either of them acts as Paying Agent, it shall segregate themoney held by it as Paying Agent and hold it as a separate trust fund.  The Company at any time may require a PayingAgent to pay all money held by it to the Trustee and to account for any fundsand Common Stock disbursed by it.  Upondoing so, the Paying Agent shall have no further liability for the money.

 

Section 2.5 Securityholder Lists.The Trustee shall preserve in as current a form as is reasonably practicablethe most recent list available to it of the names and addresses ofSecurityholders.  If the Trustee is notthe Registrar, the Company shall cause to be furnished to the Trustee at leastsemiannually on April 1 and October 1 a listing of Securityholders dated within15 days of the date on which the list is furnished and at such other times asthe Trustee may request in writing a list in such form and as of such date asthe Trustee may reasonably require of the names and addresses ofSecurityholders.

 

Section 2.6 Transfer and Exchange.(a)  Subject to Section 2.12, uponsurrender for registration of transfer of any Security, together with a writteninstrument of transfer satisfactory to the Registrar duly executed by theSecurityholder or such Securityholder’s attorney duly authorized in writing, atthe office or agency of the Company designated as Registrar or co-registrar pursuantto Section 2.3, the Company shall execute, and the Trustee shall authenticateand deliver, in the name of the designated transferee or transferees, one ormore new Securities of any authorized denomination or denominations, of a likeaggregate principal amount.  The Companyshall not charge a service charge for any registration of transfer or exchange,but the Company may require payment of a sum sufficient to pay all taxes,assessments or other governmental charges that may be imposed in connection withthe transfer or exchange of the Securities from the Securityholder requestingsuch transfer or exchange.

 

At the optionof the Holder, Securities may be exchanged for other Securities of anyauthorized denomination or denominations, of a like aggregate principal amountupon surrender of the Securities to be exchanged, together with a writteninstrument of transfer satisfactory to the Registrar duly executed by theSecurityholder or such Securityholder’s attorney duly authorized in writing, atsuch office or agency.  Whenever anySecurities are so surrendered for exchange, the Company shall execute, and theTrustee shall authenticate and deliver, the Securities which the Holder makingthe exchange is entitled to receive.

 

The Companyshall not be required to make, and the Registrar need not register, transfersor exchanges of Securities selected for redemption (except, in the case ofSecurities to be redeemed in part, the portion thereof not to be redeemed) orany Securities in respect of which a Change of Control Purchase Notice has beengiven and not withdrawn by the Holder thereof in accordance with the terms ofthis Indenture (except, in the case of Securities to be purchased in part, theportion thereof not to be purchased) or any Securities for a period of 15 daysbefore the mailing of a notice of redemption of Securities to be redeemed.

 

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(b)Notwithstanding any provision to the contrary herein, so long as a GlobalSecurity remains outstanding and is held by or on behalf of the Depositary, (i)transfers of beneficial interests in a Global Security, in whole or in part,may be effected only through a book entry system maintained by the Holder ofsuch Global Security (or its agent) in accordance with Applicable Procedures,(ii) ownership of a beneficial interest in the Security shall be required to bereflected in book entry and (iii) transfers of Global Securities or beneficialinterests in Global Securities shall be made only in accordance with Section2.12 and this Section 2.6(b).  Transfersof a Global Security shall be limited to transfers of such Global Security inwhole or in part, to the Depositary, to nominees of the Depositary or to asuccessor of the Depositary or such successor’s nominee.

 

(c) Successiveregistrations and registrations of transfers and exchanges as aforesaid may bemade from time to time as desired, and each such registration shall be noted onthe register for the Securities.

 

(d) AnyRegistrar appointed pursuant to Section 2.3 shall provide to the Trustee suchinformation as the Trustee may reasonably require in connection with thedelivery by such Registrar of Securities upon transfer or exchange ofSecurities.

 

(e) NoRegistrar shall be required to make registrations of transfer or exchange ofSecurities during any periods designated in the text of the Securities or inthis Indenture as periods during which such registration of transfers andexchanges need not be made.

 

(f) IfSecurities are issued upon the transfer, exchange or replacement of Securitiessubject to restrictions on transfer and bearing the legends set forth on theforms of Security attached hereto as Exhibits A and B setting forth suchrestrictions (collectively, the “Legend”), or if a request is made to remove theLegend on a Security, the Securities so issued shall bear the Legend, or theLegend shall not be removed, as the case may be, unless there is delivered tothe Company and the Registrar such satisfactory evidence, which shall includean opinion of counsel, as may be reasonably required by the Company and theRegistrar and the Trustee (if not the same Person as the Trustee), that neitherthe Legend nor the restrictions on transfer set forth therein are required toensure that transfers thereof comply with the provisions of Rule 144A or Rule144 under the Securities Act of 1933, as amended (“Securities Act”) or thatsuch Securities are not “restricted” within the meaning of Rule 144 under theSecurities Act.  Upon (i) provision ofsuch satisfactory evidence, or (ii) notification by the Company to the Trusteeand Registrar of the sale of such Security pursuant to a registration statementthat is effective at the time of such sale, the Trustee, at the writtendirection of the Company, shall authenticate and deliver a Security that doesnot bear the Legend.  If the Legend isremoved from the face of a Security and the Security is subsequently held bythe Company or an Affiliate of the Company, the Legend shall be reinstated.

 

In the eventRule 144(k) as promulgated under the Securities Act is amended to shorten thetwo-year period under Rule 144(k), then, the references in the Legend to “TWOYEARS”, and in the corresponding transfer restrictions described above, will bedeemed to refer to such shorter period, from and after receipt by the Trusteeof an Officers’ Certificate and an Opinion of Counsel to that effect.  As soon as practicable after the Companyknows of the effectiveness of any such amendment to shorten the two-year periodunder Rule 144(k), unless

 

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such changes would otherwise be prohibitedby, or would cause a violation of, the federal securities laws applicable atthe time, the Company will provide to the Trustee an Officers’ Certificate andan Opinion of Counsel as to the effectiveness of such amendment and theeffectiveness of such change to the restrictive legends and transferrestrictions.

 

Until theLegend on any Restricted Security has been removed in compliance with thisSection 2.6(f), all shares of Common Stock (or other securities issuable uponconversion as a result of the provisions of this Indenture) issued uponconversion of such Restricted Security shall bear a legend substantially in theform of the Legend (the “Common Stock Restrictive Legend”) and shall be subjectto the same restrictions on transfer as such Restricted Security.  At any time following the time when therestrictions on transfer set forth in the Common Stock Restrictive Legend shallhave expired in accordance with their terms or shall have terminated underapplicable law, the holder of such Common Stock may, upon a surrender of thecertificate representing such Common Stock exchange to the Company’s transferagent in accordance with such agent’s customary procedures (accompanied, in theevent that such restrictions on transfer have terminated by reason of atransfer in compliance with Rule 144 or any successor provision, by an opinionof counsel having substantial experience in practice under the Securities Actand otherwise reasonably acceptable to the Company, addressed to the Companyand in form acceptable to the Company, to the effect that the transfer of suchCommon Stock has been made in compliance with Rule 144 or such successorprovision), may receive a new certificate representing such Common Stock, inlike amount, which shall not bear the Common Stock Restrictive Legend.

 

Section 2.7 Replacement Securities.  If (a) any mutilated Security is surrenderedto the Trustee, or (b) the Company and the Trustee receive evidence to theirsatisfaction of the destruction, loss or theft of any Security, and there isdelivered to the Company and the Trustee such security or indemnity as may berequired by them to save each of them harmless, then, in the absence of noticeto the Company or the Trustee that such Security has been acquired by a bonafide purchaser, the Company shall execute and upon its written request theTrustee shall authenticate and deliver, in exchange for any such mutilatedSecurity or in lieu of any such destroyed, lost or stolen Security, a newSecurity of like tenor and principal amount, bearing a certificate number notcontemporaneously outstanding.

 

In case anysuch mutilated, destroyed, lost or stolen Security has become or is about tobecome due and payable, or is about to be purchased by the Company pursuant toArticle III hereof, the Company in its discretion may, instead of issuing a newSecurity, pay or purchase such Security, as the case may be.

 

Upon theissuance of any new Securities under this Section 2.7, the Company may requirethe payment of a sum sufficient to cover any tax or other governmental chargethat may be imposed in relation thereto and any other expenses (including thefees and expenses of the Trustee) connected therewith.

 

Every newSecurity issued pursuant to this Section 2.7 in lieu of any mutilated, destroyed, lost or stolen Securityshall constitute an original additional contractual obligation of the Company,whether or not the destroyed, lost or stolen Security shall be at any time

 

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enforceable by anyone, and shall be entitledto all benefits of this Indenture equally and proportionately with any and allother Securities duly issued hereunder.

 

The provisionsof this Section 2.7 are exclusive and shall preclude (to the extent lawful) allother rights and remedies with respect to the replacement or payment ofmutilated, destroyed, lost or stolen Securities.

 

Section 2.8 Outstanding Securities;Determinations of Holders’ Action.   Securitiesoutstanding at any time are all the Securities authenticated by the Trusteeexcept for those cancelled by it, those paid pursuant to  Section 2.7, those delivered to it forcancellation and those described in this Section 2.8 as not outstanding.  A Security does not cease to be outstandingbecause the Company or an Affiliate thereof holds the Security; provided,however, that in determining whether the Holders of the requisite principalamount of Securities have given or concurred in any request, demand,authorization, direction, notice, consent, waiver, or other Act hereunder,Securities owned by the Company or any other obligor upon the Securities or anyAffiliate of the Company or such other obligor shall be disregarded and deemednot to be outstanding, except that, in determining whether the Trustee shall beprotected in relying upon any such request, demand, authorization, direction,notice, consent, waiver or other Act, only Securities which a ResponsibleOfficer of the Trustee actually knows to be so owned shall be sodisregarded.  Subject to the foregoing,only Securities outstanding at the time of such determination shall beconsidered in any such determination (including, without limitation, determinationspursuant to Articles VI and VIII hereof).

 

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

 

If the PayingAgent holds, in accordance with this Indenture, on a Redemption Date, or on theBusiness Day following a Change of Control Purchase Date, or on StatedMaturity, money sufficient to pay Securities payable on that date, thenimmediately after such Redemption Date, Change of Control Purchase Date orStated Maturity, as the case may be, such Securities shall cease to beoutstanding and interest, including Additional Amounts, if any, on suchSecurities shall cease to accrue; provided, that if such Securities are to beredeemed, notice of such redemption has been duly given pursuant to thisIndenture or provision therefor satisfactory to the Trustee has been made.

 

If a Securityis converted in accordance with Article IX, then from and after the time ofconversion on the date of conversion, such Security shall cease to beoutstanding and interest, including Additional Amounts, if any, shall cease toaccrue on such Security.

 

Section 2.9 Temporary Securities.   Pendingthe preparation of definitive Securities, the Company may execute, and uponCompany Order the Trustee shall authenticate and deliver, temporary Securitieswhich are printed, lithographed, typewritten, mimeographed or otherwiseproduced, in any authorized denomination, substantially of the tenor of thedefinitive Securities in lieu of which they are issued and with suchappropriate insertions, omissions, substitutions and other variations as theofficers executing such Securities may determine, as conclusively evidenced bytheir execution of such Securities.

 

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If temporarySecurities are issued, the Company will cause definitive Securities to beprepared without unreasonable delay. After the preparation of definitive Securities, the temporary Securitiesshall be exchangeable for definitive Securities upon surrender of the temporarySecurities at the office or agency of the Company designated for such purposepursuant to Section 2.3, without charge to the Holder. Upon surrender forcancellation of any one or more temporary Securities, the Company shall executeand the Trustee shall authenticate and deliver in exchange therefor a likeprincipal amount of definitive Securities of authorized denominations.  Until so exchanged the temporary Securitiesshall in all respects be entitled to the same benefits under this Indenture asdefinitive Securities.

 

Section 2.10 Cancellation.  If the Company shall acquire any of theSecurities, such acquisition shall not operate as a redemption or satisfactionof the indebtedness represented by such Securities unless the same aredelivered to the Trustee for cancellation. All Securities surrendered for payment, purchase by the Company pursuantto Article III, conversion, redemption or registration of transfer or exchangeshall, if surrendered to any Person other than the Trustee, be delivered to theTrustee and shall be promptly cancelled by it. The Company may at any time deliver to the Trustee for cancellation anySecurities previously authenticated and delivered hereunder which the Companymay have acquired in any manner whatsoever, and all Securities so deliveredshall be promptly cancelled by the Trustee. The Company may not issue new Securities to replace Securities it haspaid or delivered to the Trustee for cancellation or that any Holder hasconverted pursuant to Article IX.  NoSecurities shall be authenticated in lieu of or in exchange for any Securitiescancelled as provided in this Section, except as expressly permitted by thisIndenture.  All cancelled Securitiesheld by the Trustee shall be disposed of by the Trustee in accordance with theTrustee’s customary procedure.

 

Section 2.11 Persons Deemed Owners.  Prior to due presentment of a Security forregistration of transfer, the Company, the Trustee and any agent of the Companyor the Trustee may treat the Person in whose name such Security is registeredas the owner of such Security for the purpose of receiving payment of principalof the Security or the payment of any Redemption Price or Change of ControlPurchase Price in respect thereof, and interest thereon, for the purpose ofconversion and for all other purposes whatsoever, whether or not such Securitybe overdue, and neither the Company, the Trustee nor any agent of the Companyor the Trustee shall be affected by notice to the contrary.

 

Section 2.12 Global Securities.  (a) Notwithstanding any other provisions of this Indenture or theSecurities, (A) transfers of a Global Security, in whole or in part, shall bemade only in accordance with Section 2.6 and Section 2.12(a)(i), (B) transfersor exchanges of a beneficial interest in a Global Security for an interest inthe same or another Global Security shall comply with Section 2.6 and Section2.12(a)(ii) below, (C) transfers or exchanges of a beneficial interest in aGlobal Security for a Certificated Security shall comply with Section 2.6,Section 2.12(a)(iii) below and Section 2.12(e)(i) below, and (D) transfers orexchanges of a Certificated Security shall comply with Section 2.6 and Sections2.12(a)(iv) and (a)(v) below.

 

(i)            Transfer of Global Security.  A Global Security may not be transferred, inwhole or in part, to any Person other than the Depositary or a nominee or anysuccessor thereof, and no such transfer to any such other Person may beregistered; provided that this clause (i) shall not prohibit any transfer of aCertificated Security that

 

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is issued inexchange for a Global Security.  Notransfer of a Global Security to any Person shall be effective under thisIndenture or the Securities unless and until such Security has been registeredin the name of such Person.  Nothing inthis Section 2.12(a)(i) shall prohibit or render ineffective any transfer of abeneficial interest in a Global Security effected in accordance with the otherprovisions of this Section 2.12.

 

(ii)           Transfer orExchange of a Beneficial Interest in a Global Security for a BeneficialInterest in the Same or Another Global Security.

 

(x)  A beneficial interest in a Global Securitymay not be transferred or exchanged for a beneficial interest in another GlobalSecurity except upon satisfaction of the requirements set forth below.  Upon receipt by the Trustee of a request totransfer or exchange of a beneficial interest in a Global Security inaccordance with Applicable Procedures for a beneficial interest in anotherGlobal Security, together with:

 

(A) so long asthe Securities are Restricted Securities, certification in the form set forthin Exhibit C;

 

(B) writteninstructions to the Trustee to make, or direct the Registrar to make, in thecase of a transfer or exchange of a beneficial interest in a Global Securityfor a beneficial interest in another Global Security, an adjustment on itsbooks and records with respect to such Global Securities to reflect a decreaseand increase in the aggregate principal amount of the Securities represented bysuch Global Securities, such instructions to contain information regarding theDepositary accounts to be credited with such decrease and increase; and

 

(C) if theCompany or the Trustee so requests, an Opinion of Counsel or other evidencereasonably satisfactory to it as to the compliance with the restrictions setforth in the Legend,

 

then theTrustee, (1) shall cause, or direct the Registrar to cause, in accordance withthe standing instructions and procedures existing between the Depositary andthe Registrar, the aggregate principal amount of the Securities represented bythe appropriate Global Security to be decreased by the aggregate principalamount that the other Global Security is increased and (2) in accordance withthe standing instructions and procedures existing between the Depositary andthe Registrar and Applicable Procedures, shall debit and credit or cause to bedebited or credited, as appropriate, to the accounts of the persons specifiedin such instructions a beneficial interest in the Global Security or GlobalSecurities, as appropriate, equal to the amount of the beneficial interests sotransferred or exchanged.

 

(y)           Beneficial interestsin a Global Security may be transferred to Persons who take delivery in thesame Global Security in accordance with the Applicable Procedures and, if theGlobal Security is a Restricted Security, in accordance with the transferrestrictions set forth in the Legend. No written

 

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orders orinstructions shall be required to be delivered to the Registrar or the Trusteeto effect the transactions described in this Section 2.12(a)(ii)(y).

 

(z)            Other thantransfers to the Company or to an Affiliate of the Company, beneficialinterests in a Global Security that is not a Restricted Security may not betransferred to Person who takes delivery thereof in the form a beneficialinterest in a Global Security that is a Restricted Security.

 

(iii)          Transfer or Exchange of aBeneficial Interest in a Global Security for a Certificated Security.  A beneficial interest in a Global Securitymay not be exchanged for a Certificated Security except upon satisfaction ofthe requirements set forth below and in Section 2.12(e)(1) below.  Upon receipt by the Trustee of a transfer ofa beneficial interest in a Global Security in accordance with ApplicableProcedures for a Certificated Security in the form satisfactory to the Trustee,together with:

 

(A) so long asthe Securities are Restricted Securities, certification in the form set forthin Exhibit C;

 

(B) writteninstructions to the Trustee to make, or direct the Registrar to make, anadjustment on its books and records with respect to such Global Security toreflect a decrease in the aggregate principal amount of the Securitiesrepresented by the Global Security, such instructions to contain informationregarding the Depositary account to be credited with such decrease; and

 

(C) if theCompany or the Trustee so requests, an Opinion of Counsel or other evidencereasonably satisfactory to it as to the compliance with the restrictions setforth in the Legend,

 

then the Trustee shall cause, or direct theRegistrar to cause, in accordance with the standing instructions and proceduresexisting between the Depositary and the Registrar, the aggregate principalamount of the Securities represented by the Global Security to be decreased bythe aggregate principal amount of the Certificated Security to be issued, shallissue such Certificated Security and shall debit or cause to be debited to theaccount of the person specified in such instructions a beneficial interest inthe Global Security equal to the principal amount of the Certificated Securityso issued.

 

(iv)          Transfer and Exchange ofCertificated Securities. When Certificated Securities are presented to theRegistrar with a request:

 

(y)           to register the transfer of suchCertificated Securities; or

 

(z)            to exchange such CertificatedSecurities for an equal principal amount of Certificated Securities of otherauthorized denominations,

 

the Registrar shall register the transfer ormake the exchange as requested if its reasonable requirements for suchtransaction are met; provided, however, that the Certificated Securitiessurrendered for transfer or exchange:

 

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

 

(2)           so long as such Securities areRestricted Securities, such Securities are being transferred or exchangedpursuant to an effective registration statement under the Securities Act orpursuant to clause (A), (B) or (C) below, and are accompanied by the followingadditional information and documents, as applicable:

 

(A) if suchCertificated Securities are being delivered to the Registrar by a Holder forregistration in the name of such Holder, without transfer, a certification fromsuch Holder to that effect; or

 

(B) if suchCertificated Securities are being transferred to the Company, a certificationto that effect; or

 

(C) if suchCertificated Securities are being transferred pursuant to an exemption fromregistration, (i) a certification to that effect (in the form set forth inExhibit C, if applicable) and (ii) if the Company so requests, an opinion ofcounsel or other evidence reasonably satisfactory to it as to the compliance withthe restrictions set forth in the Legend.

 

(v)           Transfer of aCertificated Security for a Beneficial Interest in a Global Security.  A Certificated Security may not be exchangedfor a beneficial interest in a Global Security except upon satisfaction of therequirements set forth below.

 

Upon receiptby the Trustee of a Certificated Security, duly endorsed or accompanied byappropriate instruments of transfer, in form satisfactory to the Trustee,together with:

 

(I)            so long as the Securities areRestricted Securities, certification, in the form set forth in Exhibit C, thatsuch Certificated Security is being transferred to a QIB in accordance withRule 144A, or to an institutional accredited investor within the meaning ofRule 501(a)(1), (2), (3) or (7) of Regulation D of the Securities Act; and

 

(II)           written instructions directing theTrustee to make, or to direct the Registrar to make, an adjustment on its booksand records with respect to such Global Security to reflect an increase in theaggregate principal amount of the Securities represented by the GlobalSecurity, such instructions to contain information regarding the Depositaryaccount to be credited with such increase, then the Trustee shall cancel suchCertificated Security and cause, or direct the Registrar to cause, inaccordance with the standing instructions and procedures existing between theDepositary and

 

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the Registrar,the aggregate principal amount of Securities represented by the Global Securityto be increased by the aggregate principal amount of the Certificated Securityto be exchanged, and shall credit or cause to be credited to the account of thePerson specified in such instructions a beneficial interest in the GlobalSecurity equal to the principal amount of the Certificated Security socancelled.  If no Global Securities arethen outstanding, the Company shall issue and the Trustee shall authenticate,upon written order of the Company in the form of an Officers’ Certificate, anew Global Security in the appropriate principal amount.

 

(b) Subject tothe succeeding Section (c), every Security shall be subject to the restrictionson transfer provided in the Legend and herein including the delivery of anopinion of counsel, if so provided. Whenever any Restricted Security is presented or surrendered fortransfer or for exchange, such Security must be accompanied by a certificate insubstantially the form set forth in Exhibit C, dated the date of such surrenderand signed by the Holder of such Security, as to compliance with suchrestrictions on transfer.  The Registrarshall not be required to accept for such transfer or exchange any Security notso accompanied by a properly completed certificate.

 

(c) Therestrictions imposed by the Legend upon the transferability of any Securityshall cease and terminate when such Security has been sold pursuant to aneffective registration statement under the Securities Act or transferred incompliance with Rule 144 under the Securities Act (or any successor provisionthereto) or, if earlier, upon the expiration of the holding period applicableto sales thereof under Rule 144(k) under the Securities Act (or any successorprovision).  Any Security as to whichsuch restrictions on transfer shall have expired in accordance with their termsor shall have terminated may, upon a surrender of such Security for exchange tothe Registrar in accordance with the provisions of this Section 2.12(accompanied, in the event that such restrictions on transfer have terminatedby reason of a transfer in compliance with Rule 144 or any successor provision,by an opinion of counsel having substantial experience in practice under theSecurities Act and otherwise reasonably acceptable to the Company, addressed tothe Company and in form acceptable to the Company, to the effect that thetransfer of such Security has been made in compliance with Rule 144 or suchsuccessor provision), be exchanged for a new Security, of like tenor andaggregate principal amount, which shall not bear the restrictive Legend.  The Company shall inform the Trustee of theeffective date of any registration statement registering the Securities underthe Securities Act.  The Trustee shallnot be liable for any action taken or omitted to be taken by it in good faithin accordance with the aforementioned opinion of counsel or registrationstatement.

 

(d) As used inthe preceding two paragraphs of this Section 2.12, the term “transfer”encompasses any sale, pledge, transfer, loan, hypothecation, or other dispositionof any interest in any Security.

 

(e) Theprovisions of clauses (1), (2), (3) and (4) below shall apply only to GlobalSecurities:

 

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(1)           Notwithstanding any other provisionsof this Indenture or the Securities, a Global Security shall not be exchangedin whole or in part for a Security registered in the name of any Person otherthan the Depositary or one or more nominees thereof, provided that a GlobalSecurity may be exchanged for Securities registered in the names of any Persondesignated by the Depositary in the event that (i) the Depositary has notifiedthe Company that it is unwilling or unable to continue as Depositary for suchGlobal Security or such Depositary has ceased to be a “clearing agency”registered under the Securities Exchange Act of 1934, as amended (the “ExchangeAct”), and a successor Depositary is not appointed by the Company within 90days or (ii) an Event of Default has occurred and is continuing with respect tothe Securities.  Any Global Securityexchanged pursuant to clause (i) above shall be so exchanged in whole and notin part, and any Global Security exchanged pursuant to clause (ii) above may beexchanged in whole or from time to time in part as directed by the Depositary.  Any Security issued in exchange for a GlobalSecurity or any portion thereof shall be a Global Security; provided that anysuch Security so issued that is registered in the name of a Person other thanthe Depositary or a nominee thereof shall not be a Global Security.

 

(2)           Securities issued in exchange for aGlobal Security or any portion thereof shall be issued in definitive, fullyregistered form, without interest coupons, shall have an aggregate principalamount equal to that of such Global Security or portion thereof to be soexchanged, shall be registered in such names and be in such authorizeddenominations as the Depositary shall designate and shall bear the applicablelegends provided for herein.  Any GlobalSecurity to be exchanged in whole shall be surrendered by the Depositary to theTrustee, as Registrar.  With regard toany Global Security to be exchanged in part, either such Global Security shallbe so surrendered for exchange or, if the Trustee is acting as custodian forthe Depositary or its nominee with respect to such Global Security, theprincipal amount thereof shall be reduced, by an amount equal to the portionthereof to be so exchanged, by means of an appropriate adjustment made on therecords of the Trustee.  Upon any suchsurrender or adjustment, the Trustee shall authenticate and deliver theSecurity issuable on such exchange to or upon the order of the Depositary or anauthorized representative thereof.

 

(3)           Subject to the provisions of clause(5) below, the registered Holder may grant proxies and otherwise authorize anyPerson, including Agent Members (as defined below) and Persons that may holdinterests through Agent Members, to take any action which a holder is entitledto take under this Indenture or the Securities.

 

(4)           In the event of the occurrence of anyof the events specified in clause (1) above, the Company will promptly makeavailable to the Trustee a reasonable supply of Certificated Securities indefinitive, fully registered form, without interest coupons.

 

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(5)           Neither any members of, orparticipants in, the Depositary (collectively, the “Agent Members”) nor anyother Persons on whose behalf Agent Members may act shall have any rights underthis Indenture with respect to any Global Security registered in the name ofthe Depositary or any nominee thereof, or under any such Global Security, andthe Depositary or such nominee, as the case may be, may be treated by theCompany, the Trustee and any agent of the Company or the Trustee as theabsolute owner and holder of such Global Security for all purposeswhatsoever.  Notwithstanding theforegoing, nothing herein shall prevent the Company, the Trustee or any agentof the Company or the Trustee from giving effect to any written certification,proxy or other authorization furnished by the Depositary or such nominee, asthe case may be, or impair, as between the Depositary, its Agent Members andany other Person on whose behalf an Agent Member may act, the operation ofcustomary practices of such Persons governing the exercise of the rights of aholder of any Security.

 

(f)            By its acceptance of any Securitybearing the Legend, each Holder of such Security acknowledges the restrictionson transfer of such Security set forth in this Indenture and agrees that itwill transfer such Security only as provided in this Indenture.

 

Section 2.13 CUSIP Numbers.  The Company may issue the Securities withone or more “CUSIP” numbers (if then generally in use), and, if so, the Trusteeshall use “CUSIP” numbers in notices of redemption as a convenience to Holders;provided that any such notice may state that no representation is made as tothe correctness of such numbers either as printed on the Securities or ascontained in any notice of a redemption and that reliance may be placed only onthe other identification numbers printed on the Securities, and any suchredemption shall not be affected by any defect in or omission of suchnumbers.  The Company will promptlynotify the Trustee of any change in the CUSIP numbers.

 

ARTICLE III

 

REDEMPTION ANDPURCHASES

 

Section 3.1 Company’s Right to Redeem;Notices to Trustee. Prior to April 20, 2009, the Securities will not beredeemable at the Company’s option. Beginning on April 20, 2009, the Company, at its option, may redeem theSecurities, subject to and in accordance with the terms and conditions ofSection 5 of the Securities, for cash, as a whole or in part, at a redemptionprice equal to the principal amount of those Securities plus any accrued andunpaid interest, including Additional Amounts, if any, on those Securities tothe Redemption Date.  If the Companyelects to redeem Securities pursuant to Section 5 of the Securities, it shallnotify the Trustee in writing of the Redemption Date, the principal amount ofSecurities to be redeemed and the Redemption Price.

 

The Companyshall give the notice to the Trustee of its intention to exercise its right toredeem the Securities as provided for in this Section 3.1 by a Company Order atleast ten (10) Business Days prior to the day the Redemption Notice is to bemailed.

 

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Section 3.2 Selection of Securities to BeRedeemed. If less than all the Securitiesare to be redeemed, unless the procedures of the Depositary provide otherwise,the Trustee shall select the Securities to be redeemed by lot, on a pro ratabasis or by another method the Trustee considers fair and appropriate (so longas such method is not prohibited by the rules of any stock exchange on whichthe Securities are then listed).  TheTrustee shall make the selection within five Business Days after it receivesthe notice provided for in Section 3.1 from outstanding Securities notpreviously called for redemption. The Trustee may select for redemptionportions of the principal amount of Securities that have denominations largerthan $1,000.

 

Securities andportions of Securities that the Trustee selects shall be in principal amountsof $1,000 or an integral multiple of $1,000. Provisions of this Indenture that apply to Securities called forredemption also apply to portions of Securities called for redemption.  The Trustee shall notify the Companypromptly of the Securities or portions of the Securities to be redeemed.

 

Securities andportions of Securities that are to be redeemed are convertible by the Holderuntil the close of business on the second Business Day prior to the RedemptionDate unless the Company fails to pay the Redemption Price on the RedemptionDate.  If any Security selected forpartial redemption is converted in part before termination of the conversionright with respect to the portion of the Security so selected, the convertedportion of such Security shall be deemed (so far as may be) to be the portionselected for redemption.  Securitieswhich have been converted during a selection of Securities to be redeemed maybe treated by the Trustee as outstanding for the purpose of such selection.

 

Section 3.3 Notice of Redemption.At least 20 days but not more than 60 days before a Redemption Date, theCompany shall mail a notice of redemption by first-class mail, postage prepaid,to each Holder of Securities to be redeemed.

 

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

 

(1)           the Redemption Date;

 

(2)           the Redemption Price;

 

(3)           the Conversion Price;

 

(4)           the name and address of the PayingAgent and Conversion Agent;

 

(5)           that Securities called for redemptionmay be converted at any time before the close of business on the secondBusiness Day prior to the Redemption Date;

 

(6)           that Holders who wish to converttheir Securities must satisfy the requirements set forth in Section 8 of theSecurities;

 

(7)           that Securities called for redemptionmust be surrendered to the Paying Agent to collect the Redemption Price;

 

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(8)           if fewer than all of the outstandingSecurities are to be redeemed, the certificate numbers, if any, and principalamounts of the particular Securities to be redeemed;

 

(9)           that, unless the Company defaults inmaking payment of such Redemption Price, interest, including AdditionalAmounts, if any, on Securities called for redemption will cease to accrueinterest on and after the Redemption Date; and

 

(10)         the CUSIP number(s) of the Securities.

 

At theCompany’s request, the Trustee shall give the notice of redemption in theCompany’s name and at the Company’s expense, provided that the Company makessuch request at least ten Business Days prior to the date by which such noticeof redemption is to be given to Holders in accordance with this Section 3.3,unless the Trustee agrees to a shorter period.

 

Section 3.4 Effect of Notice of Redemption.  Once notice of redemption is given,Securities called for redemption become due and payable on the Redemption Dateand at the Redemption Price stated in the notice except for Securities whichare converted in accordance with the terms of this Indenture. Upon surrender tothe Paying Agent, such Securities shall be paid at the Redemption Price statedin the notice.

 

Section 3.5 Deposit of Redemption Price.Prior to 10:00 a.m., New York City time, on the Redemption Date, the Companyshall deposit with the Paying Agent (or if the Company or a Subsidiary or anAffiliate of either of them is the Paying Agent, shall segregate and hold intrust) money sufficient to pay the applicable Redemption Price of allSecurities to be redeemed on that date other than Securities or portions ofSecurities called for redemption which on or prior thereto have been deliveredby the Company to the Trustee for cancellation or have been converted.  The Paying Agent shall as promptly aspracticable return to the Company any money not required for that purposebecause of conversion of Securities pursuant to Article IX.  If such money is then held by the Company intrust and is not required for such purpose, it shall be discharged from suchtrust.

 

Section 3.6 Securities Redeemed in Part.Upon surrender of a Security that is redeemed in part, the Company shallexecute and the Trustee shall authenticate and deliver to the Holder a newSecurity in an authorized denomination equal in principal amount to theunredeemed portion of the Security surrendered.

 

Section 3.7 Purchase of Securities atOption of the Holder upon Change of Control.(a) (1) If a Change of Control occurs (subject to certain exceptions set forthbelow), the Securities not previously purchased by the Company shall bepurchased by the Company for cash, at the option of the Holder thereof, at apurchase price specified in Section 6 of the Securities (the “Change of ControlPurchase Price”), as of the date that is between 30 and 60 days after the dateof a notice of Change of Control delivered by the Company pursuant to Section3.7(b) (the “Change of Control Purchase Date”), subject to satisfaction by oron behalf of the Holder of the requirements set forth in Section 3.7(c).

 

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A “Change ofControl” will be deemed to have occurred at such time after the Securities areoriginally issued when any of the following events shall occur:

 

(i)            the acquisition byany Person, including any syndicate or group deemed to be a “person” underSection 13(d)(3) of the Exchange Act, of beneficial ownership, directly orindirectly, through a purchase, merger or other acquisition transaction orseries of purchases, mergers or other acquisition transactions of shares of theCapital Stock of the Company entitling that Person to exercise 50% or more ofthe total voting power of all shares of the Capital Stock of the Companyentitled to vote generally in elections of directors, other than anyacquisition by the Company, any of its subsidiaries or any of its employeebenefit plans; or

 

(ii)           the first day onwhich a majority of the members of the board of directors of the Company doesnot consist of Continuing Directors; or

 

(iii)          the Company consolidates or mergeswith or into any other Person, any merger of another Person into the Company,or any conveyance, transfer, sale, lease or other disposition of all or substantiallyall of the Company’s properties and assets to another Person, other than:  (A) any transaction:  (1) that does not result in anyreclassification, conversion, exchange or cancellation of outstanding shares ofthe Company’s Capital Stock; and (2) pursuant to which the holders of 50% ormore of the total voting power of the Company’s Capital Stock entitled to votegenerally in elections of directors immediately prior to the transaction havethe entitlement to exercise, directly or indirectly, 50% or more of the totalvoting power of all shares of Capital Stock entitled to vote generally inelections of directors of the continuing or surviving Person immediately aftergiving effect to such issuance; and (B) any merger primarily for the purpose ofchanging the Company’s jurisdiction of incorporation and resulting in areclassification, conversion or exchange of outstanding shares of Common Stock,if at all, solely into shares of common stock of the surviving entity.

 

A “ContinuingDirector” shall mean, as of any date of determination, any member of the Boardof Directors who:

 

(i)            was a member of theBoard of Directors of the Company on April 14, 2004; or

 

(ii)           was nominated forelection or elected to the Board of Directors with the approval of a majorityof the Continuing Directors who were members of the Board of Directors at thetime of the new director’ss nomination or election.

 

(2)           Notwithstanding theprovisions of Section 3.7(a)(1), the Company shall not be required to purchasethe Securities of the Holders upon a Change of Control pursuant to this Section3.7 (and a Change of Control shall be deemed not to have occurred) if:

 

(i)            the Sale Price per share of CommonStock for any five Trading Days within (1) the period of 10 consecutive TradingDays ending immediately after the later of the Change of Control or the publicannouncement of the Change of Control, in the case of a Change of Control underclause (i) or

 

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(ii) of thedefinition of “Change of Control” above, or (2) the period of 10 consecutiveTrading Days ending immediately before the Change of Control, in the case of aChange of Control under clause (iii) of the definition of “Change of Control”above, equals or exceeds 110% of the Conversion Price of the Securities ineffect on each of those five Trading Days; or

 

(ii)           90% or more of the consideration inthe transaction or transactions (other than cash payments for fractional sharesand cash payments made in respect of dissenters’ appraisal rights) constitutinga Change of Control consists of shares of common stock traded or to be tradedimmediately following a Change of Control on a national securities exchange orthe Nasdaq Stock  Market, Inc., and, asa result of the transaction or transactions, the Securities become convertiblesolely into that common stock (and any rights attached thereto).

 

For the purposes of this Section 3.7, (x)whether a Person is a “beneficial owner” shall be determined in accordance withRule 13d-3 and Rule 13d-5 under the Exchange Act (except that any of thosePersons shall be deemed to have beneficial ownership of all securities it hasthe right to acquire, whether the right is currently exercisable or isexercisable only upon the occurrence of a subsequent condition) and (y) theterm “Person” includes any syndicate or group that would be deemed to be a“person” under Section 13(d)(3) of the Exchange Act.

 

(b) No laterthan 30 days after the occurrence of a Change of Control, the Company shallmail a written notice of the Change of Control by first class mail to theTrustee and to each Holder (and to beneficial owners as required by applicablelaw).  The notice shall include a formof Change of Control Purchase Notice to be completed by the Holder and shall state:

 

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

 

(2)     the date by which the Change of ControlPurchase Notice pursuant to this Section 3.7 must be delivered to the PayingAgent in order for a Holder to exercise the repurchase rights;

 

(3)     the Change of Control Purchase Date;

 

(4)     the Change of Control Purchase Price;

 

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

 

(6)     the Conversion Price and any adjustmentsthereto;

 

(7)     that the Securities as to which a Change ofControl Purchase Notice has been given may be converted if they are otherwiseconvertible pursuant to Article X hereof only if the Change of Control PurchaseNotice has been withdrawn in accordance with the terms of this Indenture;

 

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

 

(9)     that the Change of Control Purchase Pricefor any Security as to which a Change of Control Purchase Notice has been dulygiven and not withdrawn will be paid promptly following the later of the Changeof Control Purchase Date and the time of surrender of such Security asdescribed in clause (8) above;

 

(10)   briefly, the procedures the Holder mustfollow to exercise rights under this Section 3.7;

 

(11)   briefly, the conversion rights of theSecurities;

 

(12)   the procedures for withdrawing a Change ofControl Purchase Notice;

 

(13)   that, unless the Company defaults in makingpayment of such Change of Control Purchase Price, interest, if any, onSecurities surrendered for purchase by the Company will cease to accrue on andafter the Change of Control Purchase Date; and

 

(14)   the CUSIP number(s) of the Securities.

 

Withoutotherwise limiting the Company’s obligations pursuant to this Section 3.7 inany way, the Company shall also issue a press release through Dow Jones &Company, Inc. or Bloomberg Business News containing the relevant informationand otherwise make this information available on the Company’s web site orthrough another public medium as the Company may use at that time.

 

(c) A Holdermay exercise its rights specified in Section 3.7(a) upon delivery of a writtennotice of purchase (a “Change of Control Purchase Notice”) to the Paying Agentat any time on or prior to the close of business on the second Business Daypreceding the Change of Control Purchase Date (unless the Company shall specifya later date), specifying:

 

(1)     the certificate number of the Securitywhich the Holder will deliver to be purchased or the appropriate depositaryprocedures if Certificated Securities have not been issued;

 

(2)     the portion of the principal amount of theSecurity which the Holder will deliver to be purchased, which portion must be$1,000 or an integral multiple of $1,000; and

 

(3)     that such Security shall be purchasedpursuant to the terms and conditions specified in Section 6 of the Securitiesand in this Indenture.

 

The deliveryof such Security to the Paying Agent with the Change of Control Purchase Notice(together with all necessary endorsements) at the offices of the Paying Agentshall be a condition to the receipt by the Holder of the Change of ControlPurchase Price

 

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therefor; provided, however, that such Changeof Control Purchase Price shall be so paid pursuant to this Section 3.7 andSection 3.8 only if the Security so delivered to the Paying Agent shall conformin all respects to the description thereof set forth in the related Change ofControl Purchase Notice.

 

The Companyshall purchase from the Holder thereof, pursuant to this Section 3.7 andSection 3.8, a portion of a Security if the principal amount of such portion is$1,000 or an integral multiple of $1,000. Provisions of this Indenture thatapply to the purchase of all of a Security also apply to the purchase of suchportion of such Security.

 

Any purchaseby the Company contemplated pursuant to the provisions of this Section 3.7 andSection 3.8 shall be consummated by the delivery of the consideration to bereceived by the Holder.

 

Notwithstandinganything herein to the contrary, any Holder delivering to the Paying Agent theChange of Control Purchase Notice contemplated by this Section 3.7(c) shallhave the right to withdraw such Change of Control Purchase Notice at any timeprior to the close of business on the last Business Day immediately precedingthe Change of Control Purchase Date by delivery of a written notice ofwithdrawal to the Paying Agent in accordance with Section 3.8.

 

The PayingAgent shall promptly notify the Company of the receipt by it of any Change ofControl Purchase Notice or written withdrawal thereof.

 

Section 3.8 Effect of Change of ControlPurchase Notice; Withdrawal. Upon receiptby the Paying Agent of the Change of Control Purchase Notice specified inSection 3.7(c), the Holder of the Security in respect of which such Change ofControl Purchase Notice was given shall (unless such Change of Control PurchaseNotice is withdrawn as specified in the following two paragraphs) thereafter beentitled to receive solely the Change of Control Purchase Price with respect tosuch Security.  Such Change of ControlPurchase Price shall be paid to such Holder, subject to the receipt of funds bythe Paying Agent, promptly following the later of (x) the Change of ControlPurchase Date with respect to such Security (provided the conditions in Section3.7(c) have been satisfied) and (y) the time of delivery of such Security tothe Paying Agent by the Holder thereof in the manner required by Section3.7(c).  Securities in respect of whicha Change of Control Purchase Notice has been given by the Holder thereof maynot be converted pursuant to Article IX hereof on or after the date of thedelivery of such Change of Control Purchase Notice unless such Change ofControl Purchase Notice has first been validly withdrawn as specified in thefollowing two paragraphs.

 

A Change ofControl Purchase Notice may be withdrawn by means of a written notice ofwithdrawal delivered to the office of the Paying Agent in accordance with theChange of Control Purchase Notice, at any time prior to the close of businesson the Change of Control Purchase Date, specifying:

 

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

 

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(2)     the principal amount ofthe Security with respect to which such notice of withdrawal is beingsubmitted, and

 

(3)     the principal amount, ifany, of such Security which remains subject to the original Change of ControlPurchase Notice, and which has been or will be delivered for purchase by theCompany.

 

There shall beno purchase of any Securities pursuant to Section 3.7 if there has occurred(prior to, on or after, as the case may be, the giving, by the Holders of suchSecurities, of the required Change of Control Purchase Notice) and iscontinuing an Event of Default (other than a default in the payment of theChange of Control Purchase Price with respect to such Securities). The PayingAgent will promptly return to the respective Holders thereof any Securities (x)with respect to which a Change of Control Purchase Notice has been withdrawn incompliance with this Indenture, or (y) held by it during the continuance of anEvent of Default (other than a default in the payment of the Change of ControlPurchase Price with respect to such Securities) in which case, upon suchreturn, the Change of Control Purchase Notice with respect thereto shall bedeemed to have been withdrawn.

 

Section 3.9 Deposit of Change of ControlPurchase Price.  Prior to 10:00a.m., New York City time, on the Business Day following the Change of ControlPurchase Date, the Company shall deposit with the Trustee or with the PayingAgent (or, if the Company or a Subsidiary or an Affiliate of either of them isacting as the Paying Agent, shall segregate and hold in trust as provided inSection 2.4) an amount of cash (in immediately available funds if deposited onsuch Business Day) sufficient to pay the aggregate Change of Control PurchasePrice of all the Securities or portions thereof which are to be purchased as ofthe Change of Control Purchase Date.

 

Section 3.10Securities Purchased in Part.  Any Certificated Security which is to bepurchased only in part shall be surrendered at the office of the Paying Agent(with, if the Company or the Trustee so requires, due endorsement by, or awritten instrument of transfer in form satisfactory to the Company and theTrustee duly executed by, the Holder thereof or such Holder’s attorney dulyauthorized in writing) and the Company shall execute and the Trustee shallauthenticate and deliver to the Holder of such Security, without servicecharge, a new Security or Securities, of any authorized denomination asrequested by such Holder in aggregate principal amount equal to, and inexchange for, the portion of the principal amount of the Security sosurrendered which is not purchased.

 

Section 3.11Covenant to Comply WithSecurities Laws Upon Purchase of Securities.  When complying with the provisions of Section 3.7 (provided thatsuch offer or purchase constitutes an “issuer tender offer” for purposes ofRule 13e-4 (which term, as used herein, includes any successor provisionthereto) under the Exchange Act at the time of such offer or purchase), andsubject to any exemptions available under applicable law, the Company shall (i)comply with Rule 13e-4 and Rule 14e-1 (or any successor provision) under theExchange Act, (ii) file the related Schedule TO (or any successor schedule,form or report) under the Exchange Act, and (iii) otherwise comply with all Federaland state securities laws so as to permit the rights and obligations underSection 3.7 to be exercised in the time and in the manner specified in Section3.7.

 

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Section 3.12Repayment to the Company.  The Trustee and the Paying Agent shallreturn to the Company any cash that remains unclaimed as provided in Section 11of the Securities, together with interest or dividends, if any, thereon(subject to the provisions of Section 7.1(f)), held by them for the payment ofthe Change of Control Purchase Price; provided, however, that to the extentthat the aggregate amount of cash deposited by the Company pursuant to Section3.9 exceeds the aggregate Change of Control Purchase Price of the Securities orportions thereof which the Company is obligated to purchase as of the Change ofControl Purchase Date, then, unless otherwise agreed in writing with theCompany, promptly after the Business Day following the Change of ControlPurchase Date, the Trustee shall return any such excess to the Company togetherwith interest thereon (subject to the provisions of Section 7.1(f)).

 

ARTICLE IV

 

COVENANTS

 

Section 4.1Payment of Securities.  The Company shall promptly make all paymentsin respect of the Securities on the dates and in the manner provided in theSecurities or pursuant to this Indenture. Any amounts of cash to be given to the Trustee or Paying Agent, shall bedeposited with the Trustee or Paying Agent by 10:00 a.m., New York City time,by the Company.  Principal amount plusaccrued interest, if any, including Additional Amounts, if any, the RedemptionPrice, the Change of Control Purchase Price and cash interest, if any, shall beconsidered paid on the applicable date due if on such date the Trustee or thePaying Agent holds, in accordance with this Indenture, cash sufficient to payall such amounts then due.

 

Section 4.2SEC and Other Reports.  The Company shall file with the Trustee,within 15 days after it files such annual and quarterly reports, information,documents and other reports with the SEC, copies of its annual report and ofthe information, documents and other reports (or copies of such portions of anyof the foregoing as the SEC may by rules and regulations prescribe) which theCompany is required to file with the SEC pursuant to Section 13 or 15(d) of theExchange Act.  In the event the Companyis at any time no longer subject to the reporting requirements of Section 13 or15(d) of the Exchange Act, it shall continue to provide the Trustee withreports containing substantially the same information as would have beenrequired to be filed with the SEC had the Company continued to have beensubject to such reporting requirements. In such event, such reports shall be provided at the times the Companywould have been required to provide reports had it continued to have beensubject to such reporting requirements. The Company also shall comply with the other provisions of TIA Section314(a).  Delivery of such reports,information and documents to the Trustee is for informational purposes only andthe Trustee’s receipt of such shall not constitute constructive notice of anyinformation contained therein or determinable from information containedtherein, including the Company’s compliance with any of its covenants hereunder(as to which the Trustee is entitled to rely conclusively on Officers’Certificates).

 

Section 4.3Compliance Certificate.  The Company shall deliver to the Trusteewithin 120 days after the end of each fiscal year of the Company (beginningwith the fiscal year ending on December 31, 2004) an Officers’ Certificate,stating whether or not to the knowledge of the signers thereof, the Company isin default in the performance and observance of any of the terms, provisionsand conditions of this Indenture (without regard to any period of grace or

 

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requirement of notice provided hereunder) andif the Company shall be in default, specifying all such defaults and the natureand status thereof of which they may have knowledge.

 

Section 4.4Further Instruments and Acts.  Upon request of the Trustee, the Companywill execute and deliver such further instruments and do such further acts asmay be reasonably necessary or proper to carry out more effectively thepurposes of this Indenture.

 

Section 4.5Maintenance of Office orAgency.  The Company will maintainin the Borough of Manhattan, the City of New York, an office or agency of theTrustee, Registrar, Paying Agent and Conversion Agent where Securities may bepresented or surrendered for payment, where Securities may be surrendered forregistration of transfer, exchange, purchase, redemption or conversion andwhere notices and demands to or upon the Company in respect of the Securitiesand this Indenture may be served.  Theoffice of The Bank of New York, 101 Barclay Street, Floor 21W, New York, NewYork  10286 (Attention:  Corporate Trust Trustee Administration),shall initially be such office or agency for all of the aforesaidpurposes.  The Company shall give promptwritten notice to the Trustee of the location, and of any change in thelocation, of any such office or agency (other than a change in the location ofthe office of the Trustee).  If at anytime the Company shall fail to maintain any such required office or agency orshall fail to furnish the Trustee with the address thereof, such presentations,surrenders, notices and demands may be made or served at the address of theTrustee set forth in Section 10.2.

 

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

 

Section 4.6Delivery of CertainInformation.  At any time when theCompany is not subject to Section 13 or 15(d) of the Exchange Act, upon therequest of a Holder or any beneficial owner of Securities or holder orbeneficial owner of shares of Common Stock issued upon conversion thereof, theCompany will promptly furnish or cause to be furnished Rule 144A Information(as defined below) to such Holder or any beneficial owner of Securities orholder or beneficial owner of shares of Common Stock, or to a prospectivepurchaser of any such security designated by any such holder, as the case maybe, to the extent required to permit compliance by such Holder or holder withRule 144A under the Securities Act in connection with the resale of any suchsecurity. “Rule 144A Information” shall be such information as is specifiedpursuant to Rule 144A(d)(4) under the Securities Act.  Whether a Person is a beneficial owner shall be determined by theCompany to the Company’s reasonable satisfaction.

 

Section 4.7Treatment of Securities.  Each Holder, by acceptance of a Security,and beneficial owner, by acceptance of a beneficial ownership interest in aSecurity, agrees to treat the Securities as indebtedness of the Company forU.S. federal income tax purposes and not to take any action inconsistent withsuch treatment.

 

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ARTICLE V

 

SUCCESSOR CORPORATION

 

Section 5.1When Company May Merge orTransfer Assets.  The Company shallnot consolidate with or merge with or into any other Person or convey,transfer, sell, lease or otherwise dispose of all or substantially all of itsproperties and assets to any Person, unless:

 

(a) either (1)the Company shall be the continuing corporation or (2) the Person (if otherthan the Company) formed by such consolidation or into which the Company ismerged or the Person which acquires by conveyance, transfer or lease all orsubstantially all of the properties and assets of the Company substantially asan entirety (i) shall be organized and validly existing under the laws of theUnited States or any State thereof or the District of Columbia and (ii) shallexpressly assume, by an indenture supplemental hereto, executed and deliveredto the Trustee, in form reasonably satisfactory to the Trustee, all of theobligations of the Company under the Securities and this Indenture;

 

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

 

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

 

For purposesof the foregoing, the transfer (by lease, assignment (excluding the grant of asecurity interest but including any foreclosure thereon), sale or otherwise) ofthe properties and assets of one or more Subsidiaries (other than to theCompany or another Subsidiary), which, if such assets were owned by theCompany, would constitute all or substantially all of the properties and assetsof the Company, shall be deemed to be the transfer of all or substantially allof the properties and assets of the Company.

 

The successorPerson formed by such consolidation or into which the Company is merged or thesuccessor Person to which such conveyance, transfer or lease is made shallsucceed 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 hadbeen named as the Company herein; and thereafter, except in the case of a leaseand obligations the Company may have under a supplemental indenture, theCompany shall be discharged from all obligations and covenants under thisIndenture and the Securities.  Subjectto Section 8.6, the Company, the Trustee and the successor Person shall enterinto a supplemental indenture to evidence the succession and substitution ofsuch successor Person and such discharge and release of the Company.

 

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ARTICLE VI

 

DEFAULTS AND REMEDIES

 

Section 6.1Events of Default.  So long as any Securities are outstanding,each of the following shall be an “Event of Default”:

 

(1) the Company defaults in the payment of the principal amount on anySecurity when the same becomes due and payable at its Stated Maturity;

 

(2) theCompany defaults in its obligation to repurchase any Security, or any portionthereof, upon the exercise by the Holder of such Holder s right to require theCompany to purchase such Securities pursuant to and in accordance with Section3.7 hereof;

 

(3) theCompany defaults in its obligation to redeem any Security, or any portionthereof, called for redemption by the Company pursuant to and in accordancewith Section 3.1 hereof;

 

(4) theCompany defaults in the payment of any accrued and unpaid interest, includingAdditional Amounts, if any, on any Security, in each case when due and payable,and continuance of such default for a period of 30 days;

 

(5) theCompany fails to comply with any of its covenants or agreements in theSecurities or this Indenture (other than those referred to in clauses (1)through (4) above) and such failure continues for 60 days after receipt by theCompany of a Notice of Default;

 

(6) a defaultunder any indebtedness for money borrowed by the Company or any SignificantSubsidiary in an aggregate outstanding principal amount of $5.0 million ormore, for a period of 30 days after written notice of default is given to theCompany by the Trustee or to the Company and the Trustee by Holders of not lessthan 25% in aggregate principal amount of the Securities then outstanding,which default (A) is caused by the failure to pay principal or interest whendue on such indebtedness by the end of the applicable grace period, if any,unless such indebtedness is discharged, or (B) results in the acceleration ofsuch indebtedness, unless such acceleration is waived, cured, rescinded orannulled or unless such indebtedness is discharged;

 

(7) the entryby a court having jurisdiction in the premises of (i) a decree or order forrelief in respect of the Company or any of its Subsidiaries that is a SignificantSubsidiary, in an involuntary case or proceeding under any applicablebankruptcy, insolvency, reorganization or other similar law or (ii) a decree ororder adjudging the Company or any of its Subsidiaries that is a SignificantSubsidiary, as bankrupt or insolvent, or approving as properly filed a petitionseeking reorganization, arrangement, adjustment or composition of or in respectof the Company or any of its Subsidiaries that is a Significant Subsidiary,under any applicable law, or appointing a custodian, receiver, liquidator,assignee, trustee, sequestrator or other similar official of the Company or ofany substantial part of its property, or ordering the winding up or liquidationof its affairs, and the continuance of any such decree or order for relief orany such other decree or order unstayed and in effect for a period of 60consecutive days; or

 

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(8) thecommencement by the Company or any of its Subsidiaries that is a SignificantSubsidiary, of a voluntary case or proceeding under any applicable bankruptcy,insolvency, reorganization or other similar law or of any other case orproceeding to be adjudicated a bankrupt or insolvent, or the consent by theCompany or any of its Subsidiaries that is a Significant Subsidiary, to theentry of a decree or order for relief in respect of the Company or any of itsSubsidiaries that is a Significant Subsidiary, in an involuntary case orproceeding under any applicable bankruptcy, insolvency, reorganization or othersimilar law or to the commencement of any bankruptcy or insolvency case orproceeding against the Company, or the filing by the Company or any of itsSubsidiaries that is a Significant Subsidiary, of a petition or answer orconsent seeking reorganization or relief under any applicable law, or theconsent by the Company to the filing of such petition or to the appointment ofor the taking possession by a custodian, receiver, liquidator, assignee,trustee, sequestrator or other similar official of the Company or of anysubstantial part of its property, or the making by the Company or any of itsSubsidiaries that is a Significant Subsidiary, of an assignment for the benefitof creditors, or the admission by the Company or any of its Subsidiaries that isa Significant Subsidiary, in writing of its inability to pay its debtsgenerally as they become due, or the taking of corporate action by the Companyor any of its Subsidiaries that is a Significant Subsidiary, expressly infurtherance of any such action.

 

A Defaultunder clause (5) above is not an Event of Default until the Trustee notifiesthe Company, or the Holders of at least 25% in aggregate principal amount ofthe Securities at the time outstanding notify the Company and the Trustee, ofthe Default and the Company does not cure such Default (and such Default is notwaived) within the time specified in clause (5) above after actual receipt ofsuch notice. Any such notice must specify the Default, require that it beremedied and state that such notice is a “Notice of Default.”

 

The Trusteeshall, within 90 days of the occurrence of a Default or Event of Default, giveto the Holders of the Securities notice of all uncured Defaults or Events ofDefault known to it, its status and what action the Company is taking orproposes to take with respect thereto; provided, however, the Trustee shall beprotected in withholding such notice if it, in good faith, determines that thewithholding of such notice is in the best interest of such Holders, except inthe case of a Default or Event of Default under clause (1), (2), (3) or (4)above.

 

Section 6.2Acceleration.  If an Event of Default (other than an Eventof Default specified in Section 6.1(7) or (8) with respect to the Company)occurs and is continuing (the Event of Default not having been cured or waivedas provided in this Article VI), the Trustee by notice to the Company, or theHolders of at least 25% in aggregate principal amount of the Securities at thetime outstanding by notice to the Company and the Trustee, may declare theprincipal amount plus accrued and unpaid interest, including AdditionalAmounts, if any, on all the Securities to be immediately due and payable.  Upon such a declaration, such acceleratedamount shall be due and payable immediately.  If an Event of Default specified in Section 6.1(7) or (8) occurs(with respect to the Company) and is continuing, the principal amount plusaccrued and unpaid interest, including Additional Amounts, if any, on all theSecurities shall become and be immediately due and payable without anydeclaration or other act on the part of the Trustee or anySecurityholders.  The Holders of amajority in aggregate principal amount of the Securities at the timeoutstanding, by notice to the Trustee (and without notice to any otherSecurityholder) may rescind an acceleration and its consequences if therescission would not conflict with any

 

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judgment or decree and if all existing Eventsof Default have been cured or waived except nonpayment of the principal amountplus accrued and unpaid interest, including Additional Amounts, if any, thathave become due solely as a result of acceleration and if all amounts due tothe Trustee under Section 7.7 have been paid. No such rescission shall affect any subsequent Default or impair anyright consequent thereto.

 

Section 6.3Other Remedies.  If an Event of Default occurs and iscontinuing, the Trustee may pursue any available remedy to collect the paymentof the principal amount plus accrued and unpaid interest, including AdditionalAmounts, if any, on the Securities or to enforce the performance of anyprovision of the Securities or this Indenture.

 

The Trusteemay maintain a proceeding even if the Trustee does not possess any of theSecurities or does not produce any of the Securities in the proceeding.  A delay or omission by the Trustee or anySecurityholder in exercising any right or remedy accruing upon an Event ofDefault shall not impair the right or remedy or constitute a waiver of, oracquiescence in, the Event of Default. No remedy is exclusive of any other remedy.  All available remedies are cumulative.

 

Section 6.4 Waiver of Past Defaults.  The Holders of a majority in aggregateprincipal amount of the Securities at the time outstanding, by notice to theTrustee (and without notice to any other Securityholder), may waive an existingDefault and its consequences except (i) an Event of Default described inSection 6.1(1), 6.1(2), 6.1(3) or 6.1(4), (ii) a Default in respect of aprovision that under Section 8.2 cannot be amended without the consent of eachSecurityholder affected or (iii) a Default which constitutes a failure toconvert any Security in accordance with the terms of Article IX.  When a Default is waived, it is deemedcured, but no such waiver shall extend to any subsequent or other Default orimpair any consequent right.  ThisSection 6.4 shall be in lieu of Section 316(a)(1)(B) of the TIA and suchSection 316(a)(1)(B) is hereby expressly excluded from this Indenture, aspermitted by the TIA.

 

Section 6.5Control by Majority.  The Holders of a majority in aggregateprincipal amount of the Securities at the time outstanding may direct the time,method and place of conducting any proceeding for any remedy available to theTrustee or of exercising any trust or power conferred on the Trustee. However,the Trustee may refuse to follow any direction that conflicts with law or thisIndenture or that the Trustee determines in good faith is unduly prejudicial tothe rights of other Securityholders or would involve the Trustee in personalliability unless the Trustee is offered indemnity satisfactory to it.  This Section 6.5 shall be in lieu of Section316(a)(1)(A) of the TIA and such Section 316(a)(1)(A) is hereby expresslyexcluded from this Indenture, as permitted by the TIA.

 

Section 6.6Limitation on Suits.  A Securityholder may not pursue any remedywith respect to this Indenture or the Securities unless:

 

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

 

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(2)          the Holders of at least25% in aggregate principal amount of the Securities at the time outstandingmake a written request to the Trustee to pursue the remedy;

 

(3)          such Holder or Holdersoffer to the Trustee security or indemnity satisfactory to the Trustee againstany loss, liability or expense;

 

(4)          the Trustee does notcomply with the request within 60 days after receipt of such notice, requestand offer of security or indemnity; and

 

(5)          the Holders of amajority in aggregate principal amount of the Securities at the timeoutstanding do not give the Trustee a direction inconsistent with the requestduring such 60-day period.

 

ASecurityholder may not use this Indenture to prejudice the rights of any otherSecurityholder or to obtain a preference or priority over any otherSecurityholder.

 

Section 6.7Rights of Holders to ReceivePayment.  Notwithstanding any otherprovision of this Indenture, the right of any Holder to receive payment of theprincipal amount, Redemption Price, Change of Control Purchase Price orinterest, including Additional Amounts, if any, in respect of the Securitiesheld by such Holder, on or after the respective due dates expressed in the Securitiesor any Redemption Date, and to convert the Securities in accordance withArticle IX, or to bring suit for the enforcement of any such payment on orafter such respective dates or the right to convert, shall not be impaired oraffected adversely without the consent of such Holder.

 

Section 6.8Collection Suit by Trustee.  If an Event of Default described in Section6.1(1), (2), (3) or (4) occurs and is continuing, the Trustee may recoverjudgment in its own name and as trustee of an express trust against the Companyfor the whole amount owing with respect to the Securities and the amountsprovided for in Section 7.7.

 

Section 6.9Trustee May File Proofs ofClaim.  In case of the pendency ofany receivership, insolvency, liquidation, bankruptcy, reorganization,arrangement, adjustment, composition or other judicial proceeding relative tothe Company or any other obligor upon the Securities or the property of theCompany or of such other obligor or their creditors, the Trustee (irrespectiveof whether the principal amount, Redemption Price, Change of Control PurchasePrice or interest, including Additional Amounts, if any, in respect of theSecurities shall then be due and payable as therein expressed or by declarationor otherwise and irrespective of whether the Trustee shall have made any demandon the Company for the payment of any such amount) shall be entitled andempowered, by intervention in such proceeding or otherwise,

 

(a) to fileand prove a claim for the whole amount of the principal amount, RedemptionPrice, Change of Control Purchase Price, or interest, including AdditionalAmounts, if any, and to file such other papers or documents as may be necessaryor advisable in order to have the claims of the Trustee (including any claimfor the reasonable compensation, expenses, disbursements and advances of theTrustee, its agents and counsel or any other amounts due the Trustee underSection 7.7) and of the Holders allowed in such judicial proceeding, and

 

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(b) to collectand receive any moneys or other property payable or deliverable on any suchclaims and to distribute the same; and any custodian, receiver, assignee,trustee, liquidator, sequestrator or similar official in any such judicialproceeding is hereby authorized by each Holder to make such payments to theTrustee and, in the event that the Trustee shall consent to the making of suchpayments directly to the Holders, to pay the Trustee any amount due it for thereasonable compensation, expenses, disbursements and advances of the Trustee,its agents and counsel, and any other amounts due the Trustee under Section7.7.

 

Nothing hereincontained shall be deemed to authorize the Trustee to authorize or consent toor accept or adopt on behalf of any Holder any plan of reorganization,arrangement, adjustment or composition affecting the Securities or the rightsof any Holder thereof, or to authorize the Trustee to vote in respect of theclaim of any Holder in any such proceeding.

 

Section 6.10Priorities.  If the Trustee collects any money pursuantto this Article VI, it shall pay out the money in the following order:

 

FIRST: to theTrustee for amounts due under Section 7.7;

 

SECOND: toSecurityholders for amounts due and unpaid on the Securities for the principalamount, Redemption Price, Change of Control Purchase Price or interest,including Additional Amounts, if any, as the case may be, ratably, withoutpreference or priority of any kind, according to such amounts due and payableon the Securities; and

 

THIRD: thebalance, if any, to the Company.

 

The Trusteemay fix a record date and payment date for any payment to Securityholderspursuant to this Section 6.10.  At least15 days before such record date, the Trustee shall mail to each Securityholderand the Company a notice that states the record date, the payment date and theamount to be paid.

 

Section 6.11Undertaking for Costs.  In any suit for the enforcement of any rightor remedy under this Indenture or in any suit against the Trustee for anyaction taken or omitted by it as Trustee, a court in its discretion may requirethe filing by any party litigant (other than the Trustee) in the suit of anundertaking to pay the costs of the suit, and the court in its discretion mayassess reasonable costs, including reasonable attorneys’ fees and expenses,against any party litigant in the suit, having due regard to the merits andgood faith of the claims or defenses made by the party litigant. This Section6.11 does not apply to a suit by the Trustee, a suit by a Holder pursuant toSection 6.7 or a suit by Holders of more than 10% in aggregate principal amountof the Securities at the time outstanding. This Section 6.11 shall be in lieu of Section 315(e) of the TIA and suchSection 315(e) is hereby expressly excluded from this Indenture, as permittedby the TIA.

 

Section 6.12Waiver of Stay, Extension orUsury Laws.  The Company covenants(to the extent that it may lawfully do so) that it will not at any time insistupon, or plead, or in any manner whatsoever claim or take the benefit oradvantage of, any stay or extension law or any usury or other law whereverenacted, now or at any time hereafter in force, which would prohibit or forgivethe Company from paying all or any portion of the principal amount, RedemptionPrice or Change of Control Purchase Price in respect of Securities, or anyinterest,

 

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including Additional Amounts, if any, on suchamounts, as contemplated herein, or which may affect the covenants or theperformance of this Indenture; and the Company (to the extent that it maylawfully do so) hereby expressly waives all benefit or advantage of any suchlaw, and covenants that it will not hinder, delay or impede the execution ofany power herein granted to the Trustee, but will suffer and permit theexecution of every such power as though no such law had been enacted.

 

ARTICLE VII

 

TRUSTEE

 

Section 7.1Duties of Trustee.  (a) If an Event of Default has occurred and is continuing, the Trustee shallexercise the rights and powers vested in it by this Indenture and use the samedegree of care and skill in its exercise as a prudent person would exercise oruse under the circumstances in the conduct of such person’s own affairs.

 

(b) Except duringthe continuance of an Event of Default:

 

(1)          the Trustee need performonly those duties that are specifically set forth in this Indenture and noothers; and

 

(2)          in the absence of badfaith on its part, the Trustee may conclusively rely, as to the truth of thestatements and the correctness of the opinions expressed therein, uponcertificates or opinions furnished to the Trustee and conforming to therequirements of this Indenture, but in the case of any such certificates oropinions which by any provision hereof are specifically required to befurnished to the Trustee, the Trustee shall examine the certificates andopinions to determine whether or not they conform to the requirements of thisIndenture, but need not confirm or investigate the accuracy of mathematicalcalculations or other facts stated therein. This Section 7.1(b) shall be in lieu of Section 315(a) of the TIA andsuch Section 315(a) is hereby expressly excluded from this Indenture, aspermitted by the TIA.

 

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

 

(1)          this Section (c) doesnot limit the effect of Section (b) of this Section 7.1;

 

(2)          the Trustee shall not beliable for any error of judgment made in good faith by a Responsible Officerunless it is proved that the Trustee was negligent in ascertaining thepertinent facts; and

 

(3)          the Trustee shall not beliable with respect to any action it takes or omits to take in good faith inaccordance with a direction received by it pursuant to Section 6.5.

 

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Subparagraphs(c)(1), (2) and (3) shall be inlieu of Sections 315(d)(1), 315(d)(2) and 315(d)(3) of the TIA and suchSections 315(d)(1), 315(d)(2) and 315(d)(3) are hereby expressly excluded fromthis Indenture, as permitted by the TIA.

 

(d) Everyprovision of this Indenture that in any way relates to the Trustee is subjectto paragraphs (a), (b), (c), (e) and (f) of this Section 7.1.

 

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

 

(f) Money heldby the Trustee in trust hereunder need not be segregated from other fundsexcept to the extent required by law. The Trustee (acting in any capacity hereunder) shall be under noliability for interest on any money received by it hereunder unless otherwiseagreed in writing with the Company.

 

Section 7.2Rights of Trustee.  Subject to its duties and responsibilitiesunder the TIA,

 

(a) theTrustee may conclusively rely and shall be protected in acting or refrainingfrom acting upon any resolution, certificate, statement, instrument, opinion,report, notice, request, direction, consent, order, bond, debenture, note,other evidence of indebtedness or other paper or document believed by it to begenuine and to have been signed or presented by the proper party or parties;

 

(b) wheneverin the administration of this Indenture the Trustee shall deem it desirablethat a matter be proved or established prior to taking, suffering or omittingany action hereunder, the Trustee (unless other evidence be herein specificallyprescribed) may, in the absence of bad faith on its part, conclusively relyupon an Officers Certificate;

 

(c) theTrustee may execute any of the trusts or powers hereunder or perform any dutieshereunder either directly or by or through agents or attorneys and the Trusteeshall not be responsible for any misconduct or negligence on the part of anyagent or attorney appointed with due care by it hereunder;

 

(d) theTrustee shall not be liable for any action taken, suffered, or omitted to betaken by it in good faith which it believes to be authorized or within itsrights or powers conferred under this Indenture;

 

(e) theTrustee may consult with counsel selected by it and any advice or Opinion ofCounsel shall be full and complete authorization and protection in respect ofany action taken or suffered or omitted by it hereunder in good faith and inaccordance with such advice or Opinion of Counsel;

 

(f) theTrustee shall be under no obligation to exercise any of the rights or powersvested in it by this Indenture at the request, order or direction of any of theHolders, pursuant to the provisions of this Indenture, unless such Holdersshall have offered to the Trustee security or

 

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indemnity satisfactory to it against thecosts, expenses and liabilities which may be incurred therein or thereby;

 

(g) anyrequest or direction of the Company mentioned herein shall be sufficientlyevidenced by a Company Request or Company Order and any resolution of the Boardof Directors may be sufficiently evidenced by a Board Resolution;

 

(h) theTrustee shall not be bound to make any investigation into the facts or mattersstated in any resolution, certificate, statement, instrument, opinion, report,notice, request, direction, consent, order, bond, debenture, note, otherevidence of indebtedness or other paper or document, but the Trustee, in itsdiscretion, may make such further inquiry or investigation into such facts ormatters as it may see fit, and, if the Trustee shall determine to make suchfurther inquiry or investigation, it shall be entitled to examine the books,records and premises of the Company, personally or by agent or attorney at thesole cost of the Company and shall incur no liability or additional liabilityof any kind by reason of such inquiry or investigation;

 

(i) theTrustee shall not be deemed to have notice of any Default or Event of Defaultunless a Responsible Officer of the Trustee has actual knowledge thereof orunless written notice of any event which is in fact such a default is receivedby the Trustee at the Corporate Trust Office of the Trustee, and such noticereferences the Securities and this Indenture;

 

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

 

(k) in noevent shall the Trustee be responsible or liable for special, indirect orconsequential loss of damage of any kind whatsoever (including, but not limitedto, loss of profit) irrespective of whether the Trustee has been advised of thelikelihood of such loss or damage and regardless of the form of action; and

 

(l) theTrustee may request that the Company deliver an Officers’ Certificate settingforth the names of individuals and/or titles of officers authorized at suchtime to take specified actions pursuant to this Indenture, which Officers’Certificate may be signed by any Person authorized to sign an Officers’Certificate, including any Person specified as so authorized in any suchcertificate previously delivered and not superseded.

 

Section 7.3Individual Rights of Trustee.  The Trustee in its individual or any othercapacity may become the owner or pledgee of Securities and may otherwise dealwith the Company or its Affiliates with the same rights it would have if itwere not Trustee.  Any Paying Agent,Registrar, Conversion Agent or co-registrar may do the same with likerights.  However, the Trustee mustcomply with Sections 7.10 and 7.11.

 

Section 7.4Trustee’s Disclaimer.  The Trustee makes no representation as tothe validity or adequacy of this Indenture or the Securities, it shall not beaccountable for the Company’s use or application of the proceeds from theSecurities, it shall not be responsible for

 

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any statement in the registration statementfor the Securities under the Securities Act or in any offering document for theSecurities, the Indenture or the Securities (other than its certificate ofauthentication), or the determination as to which beneficial owners areentitled to receive any notices hereunder.

 

Section 7.5Notice of Defaults.  If a Default occurs and if it is known tothe Trustee, the Trustee shall give to each Securityholder notice of theDefault within 90 days after it occurs or, if later, within 15 days after it isknown to the Trustee, unless such Default shall have been cured or waivedbefore the giving of such notice. Notwithstanding the preceding sentence, except in the case of a Defaultdescribed in Section 6.1(1), (2), (3) or (4), the Trustee may withhold thenotice if and so long as a committee of its Responsible Officers in good faithdetermines that withholding the notice is in the interest of theSecurityholders.  The preceding sentenceshall be in lieu of the proviso to Section 315(b) of the TIA and such provisois hereby expressly excluded from this Indenture, as permitted by the TIA.  The Trustee shall not be deemed to haveknowledge of a Default unless a Responsible Officer of the Trustee has receivedwritten notice of such Default, which notice specifically references this Indentureand the Securities.

 

Section 7.6Reports by Trustee to Holders.  Within 60 days after each May 15 beginningwith the May 15 following the date of this Indenture, the Trustee shall mail toeach Securityholder a brief report dated as of such May 15 that complies withTIA Section 313(a), if required by such Section 313(a).  The Trustee also shall comply with TIASection 313(b).

 

A copy of eachreport at the time of its mailing to Securityholders shall be filed with theSEC and each securities exchange, if any, on which the Securities are listed.The Company agrees to notify the Trustee promptly whenever the Securitiesbecome listed on any securities exchange and of any delisting thereof.

 

Section 7.7Compensation and Indemnity.  The Company agrees:

 

(a) to pay tothe Trustee from time to time such compensation as the Company and the Trusteeshall from time to time agree in writing for all services rendered by ithereunder (which compensation shall not be limited (to the extent permitted bylaw) by any provision of law in regard to the compensation of a trustee of anexpress trust);

 

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

 

(c) toindemnify the Trustee or any predecessor Trustee and their agents for, and tohold them harmless against, any loss, damage, claim, liability, cost or expense(including attorney’s fees and expenses, and taxes (other than taxes basedupon, measured by or determined by the income of the Trustee and any and allfranchise taxes of the Trustee)) incurred without negligence or bad faith onits part, arising out of or in connection with the acceptance or administrationof this trust, including the costs and expenses of defending itself against anyclaim

 

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(whether asserted by the Company or anyHolder or any other Person) or liability in connection with the exercise orperformance of any of its powers or duties hereunder.

 

To secure theCompany’s payment obligations in this Section 7.7, the Trustee shall have alien prior to the Securities on all money or property held or collected by theTrustee, except that held in trust to pay the principal amount, RedemptionPrice, Change of Control Purchase Price or interest, including AdditionalAmounts, if any, as the case may be, on particular Securities.

 

The Company’spayment obligations pursuant to this Section 7.7 shall survive the discharge ofthis Indenture and the resignation or removal of the Trustee.  When the Trustee incurs expenses or rendersservices after the occurrence of a Default specified in Section 6.1(6) or (7),the expenses including the reasonable charges and expenses of its counsel, andthe compensation for the services are intended to constitute expenses ofadministration under any bankruptcy law.

 

Section 7.8Replacement of Trustee.  The Trustee may resign by so notifying theCompany; provided, however, no such resignation shall be effective until asuccessor Trustee has accepted its appointment pursuant to this Section7.8.  The Holders of a majority inaggregate principal amount of the Securities at the time outstanding may removethe Trustee by so notifying the Trustee and the Company. The Company shallremove the Trustee if:

 

(1) theTrustee fails to comply with Section 7.10;

 

(2) theTrustee is adjudged bankrupt or insolvent;

 

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

 

(4) theTrustee otherwise becomes incapable of acting.

 

If the Trusteeresigns or is removed or if a vacancy exists in the office of Trustee for anyreason, the Company shall promptly appoint, by resolution of its Board ofDirectors, a successor Trustee.

 

A successorTrustee shall deliver a written acceptance of its appointment to the retiringTrustee and to the Company satisfactory in form and substance to the retiringTrustee and the Company. Thereupon the resignation or removal of the retiringTrustee shall become effective, and the successor Trustee shall have all therights, powers and duties of the Trustee under this Indenture.  The successor Trustee shall mail a notice ofits succession to Securityholders.  Theretiring Trustee shall promptly transfer all property held by it as Trustee tothe successor Trustee, subject to the lien provided for in Section 7.7.

 

If a successorTrustee does not take office within 30 days after the retiring Trustee resignsor is removed, the retiring Trustee, the Company or the Holders of a majorityin aggregate principal amount of the Securities at the time outstanding maypetition any court of competent jurisdiction at the expense of the Company forthe appointment of a successor Trustee.

 

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If the Trusteefails to comply with Section 7.10, any Securityholder may petition any court ofcompetent jurisdiction for the removal of the Trustee and the appointment of asuccessor Trustee.

 

Section 7.9Successor Trustee by Merger.  If the Trustee consolidates with, merges orconverts into, or transfers all or substantially all its corporate trustbusiness or assets to, another corporation, the resulting, surviving ortransferee corporation without any further act shall be the successor Trustee.

 

Section 7.10Eligibility; Disqualification.  The Trustee shall at all times satisfy therequirements of TIA Sections 310(a)(1) and 310(b).  The Trustee (or its parent holding company) shall have a combinedcapital and surplus of at least $50,000,000 as set forth in its most recentpublished annual report of condition. Nothing herein contained shall preventthe Trustee from filing with the Commission the application referred to in thepenultimate paragraph of TIA Section 310(b).

 

Section 7.11Preferential Collection ofClaims Against Company.  The Trusteeshall comply with TIA Section 311(a), excluding any creditor relationshiplisted in TIA Section 311(b).  A Trusteewho has resigned or been removed shall be subject to TIA Section 311(a) to theextent indicated therein.

 

Section 7.12Force Majeure.  In no event shall the Trustee be responsibleor liable for any failure or delay in the performance of its obligations underthis Indenture arising out of or caused by, directly or indirectly, forcesbeyond its reasonable control, including without limitation strikes, workstoppages, accidents, acts of war or terrorism, civil or military disturbances,nuclear or natural catastrophes or acts of god, and interruptions, loss ormalfunctions or utilities, communications or computer (software or hardware)services.

 

ARTICLE VIII

 

AMENDMENTS

 

Section 8.1Without Consent of Holders.  The Company and the Trustee may amend,modify or supplement this Indenture or the Securities without the consent ofany Securityholder to:

 

(a) add to thecovenants of the Company for the benefit of the Holders of Securities;

 

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

 

(c) providefor conversion rights of Holders of Securities if any reclassification orchange of the Common Stock or any consolidation, merger or sale of all orsubstantially all of the Company’s assets occurs;

 

(d) providefor the assumption of the Company’s obligations to the Holders of Securities inthe case of a merger, consolidation, conveyance, transfer or lease pursuant toArticle V hereof;

 

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(e) reduce theConversion Price; provided, however: (i) that the Conversion Price shall not bereduced below $10.37, (ii) that such reduction in the Conversion Price shallnot adversely affect the interests of the Holders of Securities (after takinginto account tax and other consequences of such reduction), and (iii) that theConversion Price shall not be reduced without seeking and obtaining the consentof the holders of the Common Stock, if such consent is required pursuant to therules of the Nasdaq Stock Market, Inc. or any exchange or other market on whichthe Common Stock is then listed or traded;

 

(f) complywith the requirements of the SEC in order to effect or maintain thequalification of this Indenture under the TIA;

 

(g) cure anyambiguity, to correct or supplement any provision herein which may beinconsistent with any other provision herein or which is otherwise defective;provided, however, that such action pursuant to this clause (g) does not, inthe good faith opinion of the Board of Directors of the Company (as evidencedby a Board Resolution), adversely affect the interests of the Holders ofSecurities in any material respect; and

 

(h) add ormodify any other provisions herein with respect to matters or questions arisinghereunder which the Company and the Trustee may deem necessary or desirable andthat will not, in the good faith opinion of the Board of Directors of theCompany (as evidenced by a Board Resolution), adversely affect the interests ofthe Holders of Securities.

 

Section 8.2With Consent of Holders.  Except as provided below in this Section8.2, this Indenture or the Securities may be amended, modified or supplemented,and noncompliance in any particular instance with any provision of thisIndenture or the Securities may be waived, in each case with the writtenconsent of the Holders of at least a majority of the principal amount of theSecurities at the time outstanding.

 

Without thewritten consent or the affirmative vote of each Holder of Securities affectedthereby, an amendment or waiver under this Section 8.2 may not:

 

(a) change thematurity of the principal amount of, or the date any installment of interest,including Additional Amounts, is due on, any Security;

 

(b) reduce theprincipal amount of, or interest, including Additional Amounts payable on, orthe Redemption Price or Change of Control Purchase Price of, any Security;

 

(c) change thecurrency of any amount owed or owing under the Security or any interest thereonfrom U.S. Dollars;

 

(d) impair theright of any Holder to institute suit for the enforcement of any payment orwith respect to, or conversion of, any Security;

 

(e) modify theobligation of the Company to maintain an office or agency in The City of NewYork pursuant to Section 4.5;

 

(f) except asotherwise permitted or contemplated by the provisions of this Indenture,adversely affect the repurchase right of the Holders of the Securities asprovided in

 

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Article III or the right of the Holders of the Securities to convert anySecurity as provided in Article IX;

 

(g) modify theprovisions of Article V in a manner adverse to the Holders of the Securities;

 

(h) modify anyof the provisions of this Section 8.2, or reduce the principal amount ofoutstanding Securities required to waive a default, except to provide thatcertain other provisions of this Indenture cannot be modified or waived withoutthe consent of the Holder of each outstanding Security affected thereby; or

 

(i) reduce thepercentage of the principal amount of the outstanding Securities the consent ofwhose Holders is required for any such supplemental indenture or the consent ofwhose Holders is required for any waiver provided for in this Indenture.

 

It shall notbe necessary for the consent of the Holders under this Section 8.2 to approvethe particular form of any proposed amendment, but it shall be sufficient ifsuch consent approves the substance thereof.

 

After anamendment under this Section 8.2 becomes effective, the Company shall mail toeach Holder a notice briefly describing the amendment.

 

Nothing inthis Section 8.2 shall impair the ability of the Company and the Trustee toamend this Indenture or the Securities without the consent of any Securityholderto provide for the assumption of the Company’s obligations to the Holders ofSecurities in the case of a merger, consolidation, conveyance, transfer orlease pursuant to Article V hereof.

 

Section 8.3Compliance with Trust IndentureAct.  Every supplemental indentureexecuted pursuant to this Article shall comply with the TIA.

 

Section 8.4Revocation and Effect ofConsents, Waivers and Actions. Until an amendment, waiver or other action by Holders becomes effective,a consent thereto by a Holder of a Security hereunder is a continuing consentby the Holder and every subsequent Holder of that Security or portion of theSecurity that evidences the same obligation as the consenting Holder sSecurity, even if notation of the consent, waiver or action is not made on theSecurity.  However, any such Holder orsubsequent Holder may revoke the consent, waiver or action as to such Holder’sSecurity or portion of the Security if the Trustee receives the notice ofrevocation before the date the amendment, waiver or action becomeseffective.  After an amendment, waiveror action becomes effective, it shall bind every Securityholder.

 

Section 8.5Notation on or Exchange ofSecurities.  Securitiesauthenticated and delivered after the execution of any supplemental indenturepursuant to this Article may, and shall if required by the Trustee, bear anotation in form approved by the Trustee as to any matter provided for in suchsupplemental indenture. If the Company shall so determine, new Securities somodified as to conform, in the opinion of the Trustee and the Board ofDirectors, to any such supplemental indenture may be prepared and executed bythe Company and authenticated and delivered by the Trustee in exchange foroutstanding Securities.

 

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Section 8.6Trustee to Sign SupplementalIndentures.  The Trustee shall signany supplemental indenture authorized pursuant to this Article VIII if theamendment contained therein does not adversely affect the rights, duties,liabilities or immunities of the Trustee. If it does, the Trustee may, but need not, sign such supplementalindenture.  In signing such supplementalindenture the Trustee shall receive, and (subject to the provisions of Section7.1) shall be fully protected in relying upon, an Officers’ Certificate and anOpinion of Counsel stating that such amendment is authorized or permitted bythis Indenture.

 

Section 8.7Effect of SupplementalIndentures.  Upon the execution ofany supplemental indenture under this Article, this Indenture shall be modifiedin accordance therewith, and such supplemental indenture shall form a part ofthis Indenture for all purposes; and every Holder of Securities theretofore orthereafter authenticated and delivered hereunder shall be bound thereby.

 

ARTICLE IX

 

CONVERSIONS

 

Section 9.1Conversion Privilege.  (a) Subject to and upon compliance with the provisions of this Article IX, aHolder of a Security shall have the right, at such Holder’s option, to convertall or any portion (if the portion to be converted is $1,000 or an integralmultiple of $1,000) of such Security into shares of Common Stock at theConversion Price in effect on the date of conversion, at any time prior to theclose of business on the Business Day prior to the Stated Maturity of theSecurities.

 

Section 9.2Conversion Procedure;Conversion Price; Fractional Shares. (a)  Each Security shall beconvertible at the office of the Conversion Agent into fully paid andnonassessable shares (calculated to the nearest 1/100th of a share) of CommonStock.  The Security will be convertedinto shares of Common Stock at the Conversion Price therefor.  No payment or adjustment shall be made inrespect of dividends on the Common Stock or accrued interest on a converted Security,except as described in Section 9.9 hereof. The Company shall not issue any fraction of a share of Common Stock inconnection with any conversion of Securities, but instead shall, subject toSection 9.3(k) hereof, make a cash payment (calculated to the nearest cent)equal to such fraction multiplied by the Sale Price of the Common Stock on thelast Trading Day prior to the date of conversion.  Notwithstanding the foregoing, a Security in respect of which aHolder has delivered a Change of Control Purchase Notice exercising suchHolder’s option to require the Company to repurchase such Security may beconverted only if such notice of exercise is withdrawn in accordance with theSection 3.8 hereof.

 

(b) Before anyHolder of a Security shall be entitled to convert the same into Common Stock,such Holder shall, in the case of Global Securities, comply with the proceduresof the Depositary in effect at that time, and in the case of CertificatedSecurities, surrender such Securities, duly endorsed to the Company or inblank, at the office of the Conversion Agent, and shall give written notice tothe Company at said office or place that such Holder elects to convert the sameand shall state in writing therein the principal amount of Securities to beconverted and the name or names (with addresses) in which such Holder wishesthe certificate or certificates for Common Stock to be issued.

 

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Before anysuch conversion, a Holder also shall pay all funds required, if any, relatingto interest on the Securities, as provided in Section 9.9, and all taxes orduties, if any, as provided in Section 9.8.

 

If more thanone Security shall be surrendered for conversion at one time by the sameHolder, the number of full shares of Common Stock which shall be deliverableupon conversion shall be computed on the basis of the aggregate principalamount of the Securities (or specified portions thereof to the extent permittedthereby) so surrendered.  Subject to thenext succeeding sentence, the Company will, as soon as practicable thereafter,issue and deliver at said office or place to such Holder of a Security, or tosuch Holder’s nominee or nominees, certificates for the number of full sharesof Common Stock to which such Holder shall be entitled as aforesaid, togetherwith cash in lieu of any fraction of a share to which such Holder wouldotherwise be entitled.  The Companyshall not be required to deliver certificates for shares of Common Stock whilethe stock transfer books for such stock or the security register are dulyclosed for any purpose, but certificates for shares of Common Stock shall beissued and delivered as soon as practicable after the opening of such books orsecurity register.

 

(c) A Securityshall be deemed to have been converted as of the close of business on the dateof the surrender of such Securities for conversion as provided above, and thePerson or Persons entitled to receive the Common Stock issuable upon suchconversion shall be treated for all purposes as the record Holder or Holders ofsuch Common Stock as of the close of business on such date.

 

(d) In caseany Security shall be surrendered for partial conversion, the Company shallexecute and the Trustee shall authenticate and deliver to or upon the writtenorder of the Holder of the Security so surrendered, without charge to suchHolder (subject to the provisions of Section 9.8 hereof), a new Security orSecurities in authorized denominations in an aggregate principal amount equalto the unconverted portion of the surrendered Securities.

 

Section 9.3Adjustment of Conversion Price.  The Conversion Price shall be adjusted fromtime to time as follows:

 

(a) In casethe Company shall, at any time or from time to time while any of the Securitiesare outstanding, pay a dividend or make a distribution in shares of CommonStock to all holders of its outstanding shares of Common Stock, then theConversion Price in effect at the opening of business on the date following therecord date fixed for the determination of stockholders entitled to receivesuch dividend or other distribution shall be reduced by multiplying suchConversion Price by a fraction:

 

(1) thenumerator of which shall be the number of shares of Common Stock outstanding atthe close of business on the Record Date fixed for such determination; and

 

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

 

Such reductionshall become effective immediately after the opening of business on the dayfollowing the Record Date fixed for such determination.  If any dividend or distribution of the typedescribed in this Section 9.3(a) is declared but not so paid or made, the

 

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Conversion Price shall again be adjusted tothe Conversion Price which would then be in effect if such dividend ordistribution had not been declared.

 

(b) In casethe Company shall, at any time or from time to time while any of the Securitiesare outstanding, subdivide its outstanding shares of Common Stock into agreater number of shares of Common Stock, then the Conversion Price in effectat the opening of business on the day following the day upon which suchsubdivision becomes effective shall be proportionately reduced, and conversely,in case the Company shall, at any time or from time to time while any of theSecurities are outstanding, combine its outstanding shares of Common Stock intoa smaller number of shares of Common Stock, then the Conversion Price in effectat the opening of business on the day following the day upon which suchcombination becomes effective shall be proportionately increased.

 

Such reductionor increase, as the case may be, shall become effective immediately after theopening of business on the day following the day upon which such subdivision orcombination becomes effective.

 

(c) In casethe Company shall, at any time or from time to time while any of the Securitiesare outstanding, issue rights or warrants (other than any rights or warrantsreferred to in Section 9.3(d)) to all or substantially all holders of itsshares of Common Stock entitling them to subscribe for or purchase, for aperiod of up to 45 days, shares of Common Stock (or securities convertible intoshares of Common Stock) at a price per share (or having a conversion price pershare) less than the Sale Price on the Business Day immediately preceding thedate of the announcement of such issuance (treating the conversion price pershare of the securities convertible into Common Stock as equal to (x) the sumof (i) the price for a unit of the security convertible into Common Stock and(ii) any additional consideration initially payable upon the conversion of suchsecurity into Common Stock divided by (y) the number of shares of Common Stockinitially underlying such convertible security), then the Conversion Priceshall be adjusted so that the same shall equal the price determined bymultiplying the Conversion Price in effect at the opening of business on thedate after such date of announcement by a fraction:

 

(1)           the numerator of which shall be thenumber of shares of Common Stock outstanding on the close of business on thedate of announcement, plus the number of shares or securities which the aggregateoffering price of the total number of shares or securities so offered forsubscription or purchase (or the aggregate conversion price of the convertiblesecurities so offered) would purchase at such Sale Price of the Common Stock;and

 

(2)           the denominator of which shall be thenumber of  shares of Common Stockoutstanding at the close of business on the date of announcement, plus thetotal number of additional shares of Common Stock so offered for subscriptionor purchase (or into which the convertible securities so offered areconvertible).

 

Suchadjustment shall become effective immediately after the opening of business onthe day following the date of announcement of such issuance.  To the extent that shares of Common Stock(or securities convertible into shares of Common Stock) are not deliveredpursuant to such rights or warrants, upon the expiration or termination of suchrights or warrants,

 

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the Conversion Price shall be readjusted tothe Conversion Price which would then be in effect had the adjustments madeupon the issuance of such rights or warrants been made on the basis of thedelivery of only the number of shares of Common Stock (or securitiesconvertible into shares of Common Stock) actually delivered.  In the event that such rights or warrantsare not so issued, the Conversion Price shall again be adjusted to be theConversion Price which would then be in effect if the date fixed for thedetermination of stockholders entitled to receive such rights or warrants hadnot been fixed.  In determining whetherany rights or warrants entitle the holders to subscribe for or purchase sharesof Common Stock at less than such Sale Price, and in determining the aggregateoffering price of such shares of Common Stock, there shall be taken intoaccount any consideration received for such rights or warrants, the value ofsuch consideration if other than cash, to be determined by the Board ofDirectors.

 

(d) In casethe Company shall, at any time or from time to time while any of the Securitiesare outstanding, by dividend or otherwise, distribute to all or substantiallyall holders of its shares of Common Stock (including any such distribution madein connection with a consolidation or merger in which the Company is thecontinuing corporation and the Common Stock is not changed or exchanged), cash(other than any dividends or distributions consisting exclusively of cash towhich Section 9.3(e) applies), shares of Common Stock (other than any dividendsor distributions to which Section 9.3(a) applies), evidences of itsindebtedness or other assets, including securities, but excluding (i) anyrights or warrants referred to in Section 9.3(c) and (ii) dividends ordistributions of stock, securities or other property or assets (including cash)in connection with a reclassification, consolidation, merger, statutory shareexchange, combination, sale or conveyance to which Section 9.4 applies (suchcapital stock, evidence of its indebtedness, and other assets or securitiesbeing distributed hereinafter in this Section 9.3(d) called the distributedassets ), then, in each such case, subject to the second and third succeedingparagraphs and the last paragraph of this Section 9.3(d), the Conversion Priceshall be reduced so that the same shall be equal to the price determined bymultiplying the Conversion Price in effect immediately prior to the close ofbusiness on the Record Date with respect to such distribution by a fraction:

 

(1)           the numerator of which shall be theCurrent Market Price of the Common Stock, less the Fair Market Value on suchdate of the portion of the distributed assets so distributed applicable to oneshare of Common Stock (determined on the basis of the number of shares ofCommon Stock outstanding on the record date)(determined as provided in Section9.3(g)); and

 

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

 

Such reduction shall become effectiveimmediately prior to the opening of business on the day following the RecordDate for such distribution.  In theevent that such dividend or distribution is not so paid or made, the ConversionPrice shall again be adjusted to be the Conversion Price which would then be ineffect if such dividend or distribution had not been declared.

 

If the Boardof Directors determines the Fair Market Value of any distribution for purposesof this Section 9.3(d) by reference to the actual or when issued trading marketfor any distributed assets comprising all or part of such distribution, it mustin doing so consider the prices in such market over the same period (theReference Period ) used in computing the

 

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Current Market Price pursuant to Section9.3(g) to the extent possible, unless the Board of Directors determines in goodfaith that determining the Fair Market Value during the Reference Period wouldnot be in the best interest of the Holders. In the event any such distribution consists of shares of capital stockof, or similar equity interests in, one or more of the Company’s Subsidiaries(a “Spin-Off”), the Conversion Price shall be reduced so that the same shall beequal to the price determined by multiplying the Conversion Price in effectimmediately prior to the close of business on the Record Date with respect tosuch distribution by a fraction:

 

(1)           the numerator of which shall be theCurrent Market Price on such date; and

 

(2)           the denominator of which shall be theCurrent Market Price of the Common Stock, plus the Fair Market Value on suchdate of the portion of the distributed assets so distributed applicable to oneshare of Common Stock (determined on the basis of the number of shares ofCommon Stock outstanding on the record date) (determined as set forth in thesecond and third succeeding sentences).

 

Such reduction shall become effectiveimmediately prior to the opening of business on the day following the RecordDate for such distribution.  In theevent that such dividend or distribution is not so paid or made, the ConversionPrice shall again be adjusted to be the Conversion Price which would then be ineffect if such dividend or distribution had not been declared.  In the case of a Spin-Off, the Fair MarketValue of the securities to be distributed shall equal the average of theclosing sale prices of such securities on the principal securities market onwhich such securities are traded for the five consecutive Trading Dayscommencing on and including the sixth day of trading of those securities afterthe effectiveness of the Spin-Off, and the Current Market Price shall bemeasured for the same period.  In theevent, however, that an underwritten initial public offering of the securitiesin the Spin-Off occurs simultaneously with the Spin-Off, Fair Market Value ofthe securities distributed in the Spin-Off shall mean the initial publicoffering price of such securities and the Current Market Price shall mean theSale Price for the Common Stock on the same Trading Day.

 

Rights orwarrants distributed by the Company to all holders of its shares of CommonStock entitling them to subscribe for or purchase shares of the Company’scapital stock (either initially or under certain circumstances), which rightsor warrants, until the occurrence of a specified event or events (“TriggerEvent”), (i) are deemed to be transferred with such shares of Common Stock,(ii) are not exercisable and (iii) are also issued in respect of futureissuances of shares of Common Stock shall be deemed not to have beendistributed for purposes of this Section 9.3(d) (and no adjustment to theConversion Price under this Section 9.3(d) will be required) until theoccurrence of the earliest Trigger Event. If such right or warrant is subject to subsequent events, upon theoccurrence of which such right or warrant shall become exercisable to purchasedifferent distributed assets, evidences of indebtedness or other assets, orentitle the holder to purchase a different number or amount of the foregoing orto purchase any of the foregoing at a different purchase price, then theoccurrence of each such event shall be deemed to be the date of issuance andrecord date with respect to a new right or warrant (and a termination orexpiration of the existing right or warrant without exercise by the holderthereof).  In addition, in the event of anydistribution (or deemed distribution) of rights or warrants, or any

 

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Trigger Event or other event (of the typedescribed in the preceding sentence) with respect thereto, that resulted in anadjustment to the Conversion Price under this Section 9.3(d)):

 

(1)           in the case of any such rights orwarrants which shall all have been redeemed or repurchased without exercise byany holders thereof, the Conversion Price shall be readjusted upon such finalredemption 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 pershare redemption or repurchase price received by a holder of shares of CommonStock with respect to such rights or warrants (assuming such holder hadretained such rights or warrants), made to all holders of shares of CommonStock as of the date of such redemption or repurchase; and

 

(2)           in the case of such rights orwarrants which shall have expired or been terminated without exercise, theConversion Price shall be readjusted as if such rights and warrants had neverbeen issued.

 

For purposesof this Section 9.3(d) and Section 9.3(a), 9.3(b) and 9.3(c), any dividend ordistribution to which this Section 9.3(d) is applicable that also includes (i)shares of Common Stock, (ii) a subdivision or combination of shares of CommonStock to which Section 9.3(b) applies or (iii) rights or warrants to subscribefor or purchase shares of Common Stock to which Section 9.3(c) applies (or anycombination thereof), shall be deemed instead to be:

 

(1)           a dividend or distribution of theevidences of indebtedness, assets, shares of capital stock, rights or warrants,other than such shares of Common Stock, such subdivision or combination or suchrights or warrants to which Section 9.3(a), 9.3(b) and 9.3(c) apply,respectively (and any Conversion Price reduction required by this Section9.3(d) with respect to such dividend or distribution shall then be made),immediately followed by

 

(2)           a dividend or distribution of suchshares of Common Stock, such subdivision or combination or such rights orwarrants (and any further Conversion Price reduction required by Sections9.3(a), 9.3(b), and 9.3(d) with respect to such dividend or distribution shallthen be made), except:

 

(A)          the Record Date of such dividend ordistribution shall be substituted as (i)“the date fixed for the determinationof stockholders entitled to receive such dividend or other distribution,”“Record Date fixed for such determinations” and “Record Date” within themeaning of Section 9.3(a) and 9.3(b), (ii) “the day upon which such subdivisionbecomes effective” and “the day upon which such combination becomes effective”within the meaning of Section 9.3(b), and (iii) as “the date fixed for thedetermination of stockholders entitled to receive such rights or warrants,”“the Record Date fixed for the determination of the stockholders entitled toreceive such rights or warrants” and such “Record Date” within the meaning ofSection 9.3(c); and

 

(B)           any shares of Common Stock includedin such dividend or distribution shall not be deemed “outstanding at the closeof business on the date

 

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fixed for suchdetermination” within the meaning of Section 9.3(a) and any reduction orincrease in the number of shares of Common Stock resulting from suchsubdivision or combination shall be disregarded in connection with suchdividend or distribution.

 

In the eventof any distribution referred to in this Section 9.3(d) in which (i) the valueof such distributions per share of Common Stock equals or exceeds the averageof the Sale Prices of the Common Stock over the ten consecutive Trading Dayperiod ending on the Record Date for such distribution, or (ii) such average ofthe Sale Prices of the Common Stock exceeds the Fair Market Value applicable toone share of Common Stock (as determined by the Board of Directors) by lessthan $1.00, then, in each such case, in lieu of an adjustment to the ConversionPrice, adequate provision shall be made so that each Holder shall have theright to receive upon conversion of a Security, in addition to shares of CommonStock, the kind and amount of such distribution such Holder would have receivedhad such Holder converted such Security immediately prior to the Record Datefor determining the shareholders entitled to receive the distribution.

 

No adjustmentto the Conversion Price or the ability of a Holder of a Security to convertwill be made if the Holder will otherwise participate in such distributionwithout conversion.

 

(e) In casethe Company shall, by dividend or otherwise, distribute to all or substantiallyall holders of its Common Stock cash (excluding any dividend or distribution inconnection with the liquidation, dissolution or winding up of the Company,whether voluntary or involuntary), then, in such case, the Conversion Priceshall be reduced so that the same shall equal the rate determined by dividingthe Conversion Price in effect on the applicable record date by a fraction,

 

(1)           the numerator of which shall be theCurrent Market Price on such record date; and

 

(2)           the denominator of which shall be theCurrent Market Price minus the amount distributed per ordinary share of CommonStock.

 

Such adjustmentshall become effective immediately after the opening of business on the dayfollowing the Record Date fixed for the determination of the stockholdersentitled to receive such cash dividend or other distribution consistingexclusively of cash.  If any dividend ordistribution of the type described in this Section 9.3(e) is declared but notso paid or made, the Conversion Price shall again be adjusted to the ConversionPrice which would then be in effect if such dividend or distribution had notbeen declared.

 

(f) In case atender or exchange offer made by the Company or any Subsidiary for all or anyportion of the Common Stock shall expire and such tender or exchange offer (asamended upon the expiration thereof) shall require the payment to stockholdersof consideration per share of Common Stock having a Fair Market Value (asdetermined by the Board of Directors, whose determination shall be conclusiveand described in a resolution of the Board of Directors) that as of the lasttime (the “Expiration Time”) tenders or exchanges may be made

 

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pursuant to such tender or exchange offer (asit may be amended) exceeds the Closing Sale Price of a share of Common Stock onthe Trading Day next succeeding the Expiration Time, the Conversion Price shallbe reduced so that the same shall equal the price determined by multiplying theConversion Price in effect immediately prior to the Expiration Time by afraction,

 

(1) thenumerator of which shall be the number of shares of Common Stock outstanding(including any tendered or exchanged shares) at the Expiration Time multipliedby the Sale Price of a share of Common Stock on the Trading Day next succeedingthe Expiration Time such adjustment to become effective immediately prior tothe opening of business on the day following the Expiration Time; and

 

(2) thedenominator of which shall be the sum of (x) the Fair Market Value (determinedas aforesaid) of the aggregate consideration payable to stockholders based onthe acceptance (up to any maximum specified in the terms of the tender orexchange offer) of all shares validly tendered or exchanged and not withdrawnas of the Expiration Time (the shares deemed so accepted up to any suchmaximum, being referred to as the “Purchased Shares”) and (y) the product ofthe number of shares of Common Stock outstanding (less any Purchased Shares) atthe Expiration Time and the Sale Price of a share of Common Stock on theTrading Day next succeeding the Expiration Time.

 

If the Company is obligated to purchaseshares pursuant to any such tender or exchange offer, but the Company ispermanently prevented by applicable law from effecting any such purchases orall such purchases are rescinded, the Conversion Price shall again be adjustedto be the Conversion Price that would then be in effect if such tender orexchange offer had not been made.

 

(g) Forpurposes of this Article IX, the following terms shall have the meaningsindicated:

 

“CurrentMarket Price” on any date means the average of the daily Sale Prices per shareof Common Stock for the ten consecutive Trading Days immediately prior to suchdate; provided, however, that if:

 

(1)           the “ex” date (as hereinafterdefined) for any event (other than the issuance or distribution requiring suchcomputation) that requires an adjustment to the Conversion Price pursuant toSection 9.3(a), (b), (c), (d), (e) or (f) occurs during such ten consecutiveTrading Days, the Sale Price for each Trading Day prior to the “ex” date forsuch other event shall be adjusted by dividing such Sale Price by the samefraction by which the Conversion Price is so required to be adjusted as aresult of such other event;

 

(2)           the “ex” date for any event (otherthan the issuance or distribution requiring such computation) that requires anadjustment to the Conversion Price pursuant to Section 9.3(a), (b), (c), (d),(e) or (f) occurs on or after the “ex” date for the issuance or distributionrequiring such computation and prior to the day in question, the Sale Price foreach Trading Day on and after the “ex” date for such other event shall beadjusted by

 

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dividing suchSale Price by the reciprocal of the fraction by which the Conversion Price isso required to be adjusted as a result of such other event; and

 

(3)           the “ex” date for the issuance ordistribution requiring such computation is prior to the day in question, aftertaking into account any adjustment required pursuant to clause (1) or (2) ofthis proviso, the Sale Price for each Trading Day on or after such “ex” dateshall be adjusted by adding thereto the amount of any cash and the Fair MarketValue (as determined by the Board of Directors in a manner consistent with anydetermination of such value for purposes of Section 9.3(d), (e) or (f)) of theevidences of indebtedness, shares of capital stock or assets being distributedapplicable to one share of Common Stock as of the close of business on the daybefore such “ex” date.

 

For purposes of any computation under Section9.3(f), if the “ex” date for any event (other than the tender offer requiringsuch computation) that requires an adjustment to the Conversion Price pursuantto Section 9.3(a), (b), (c), (d), (e) or (f) occurs on or after the ExpirationTime for the tender or exchange offer requiring such computation and prior tothe day in question, the Sale Price for each Trading Day on and after the “ex”date for such other event shall be adjusted by dividing such Sale Price by thereciprocal of the fraction by which the Conversion Price is so required to beadjusted as a result of such other event. For purposes of this paragraph, the term “ex” date, when used:

 

(1)           with respect to any issuance ordistribution, means the first date on which the shares of Common Stock traderegular way on the relevant exchange or in the relevant market from which theSale Price was obtained without the right to receive such issuance ordistribution;

 

(2)           with respect to any subdivision orcombination of shares of Common Stock, means the first date on which the sharesof Common Stock trade regular way on such exchange or in such market after thetime at which such subdivision or combination becomes effective; and

 

(3)           with respect to any tender orexchange offer, means the first date on which the shares of Common Stock traderegular way on such exchange or in such market after the Expiration Time ofsuch offer.

 

Notwithstanding the foregoing, wheneversuccessive adjustments to the Conversion Price are called for pursuant to thisSection 9.3, such adjustments shall be made to the Current Market Price as maybe necessary or appropriate to effectuate the intent of this Section 9.3 and toavoid unjust or inequitable results as determined in good faith by the Board ofDirectors.

 

“Fair MarketValue” shall mean the amount that a willing buyer would pay a willing seller inan arm’s-length transaction (as determined by the Board of Directors, whosedetermination shall be conclusive).

 

“Record Date”shall mean, with respect to any dividend, distribution or other transaction orevent in which the holders of shares of Common Stock have the right to receiveany cash, securities or other property or in which the shares of Common Stock(or other applicable security) is exchanged for or converted into anycombination of cash, securities or

 

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other property, the date fixed fordetermination of stockholders entitled to receive such cash, securities orother property (whether such date is fixed by the Board of Directors or bystatute, contract or otherwise).

 

(h) TheCompany shall be entitled to make such additional reductions in the ConversionPrice, in addition to those required by Section 9.3(a), (b), (c), (d), (e) or(f), as shall be necessary in order that any dividend or distribution of CommonStock, any subdivision, reclassification or combination of shares of CommonStock or any issuance of rights or warrants referred to above shall not betaxable to the holders of Common Stock for United States Federal income taxpurposes.

 

(i) To theextent permitted by applicable law, the Company may, from time to time, reducethe Conversion Price by any amount for any period of time, if such period is atleast 20 days and the reduction is irrevocable during the period.  Whenever the Conversion Price is reduced pursuantto the preceding sentence, the Company shall mail to the Trustee and eachHolder at the address of such Holder as it appears in the register of theSecurities maintained by the Registrar, at least 15 days prior to the date thereduced Conversion Price takes effect, a notice of the reduction stating thereduced Conversion Price and the period during which it will be in effect.

 

(j) In anycase in which this Section 9.3 shall require that any adjustment be madeeffective as of or retroactively immediately following a Record Date, theCompany may elect to defer (but only for five Trading Days following the filingof the statement referred to in Section 9.5) issuing to the Holder of anySecurities converted after such Record Date the shares of Common Stock issuableupon such conversion over and above the shares of Common Stock issuable uponsuch conversion on the basis of the Conversion Price prior to adjustment;provided, however, that the Company shall deliver to such Holder a due bill orother appropriate instrument evidencing such Holder’s right to receive suchadditional shares upon the occurrence of the event requiring such adjustment.

 

(k) Allcalculations under this Section 9.3 shall be made to the nearest cent orone-hundredth of a share, with one-half cent and 0.005 of ashare, respectively, being rounded upward.

 

(l) In theevent that at any time, as a result of an adjustment made pursuant to thisSection 9.3, the Holder of any Securities thereafter surrendered for conversionshall become entitled to receive any shares of stock of the Company other thanshares of Common Stock into which the Securities originally were convertible,the Conversion Price of such other shares so receivable upon conversion of anysuch Security shall be subject to adjustment from time to time in a manner andon terms as nearly equivalent as practicable to the provisions with respect toCommon Stock contained in subparagraphs (a) through (k) of this Section 9.3,and the provision of Sections 9.1, 9.2 and 9.4 through 9.9 with respect to theCommon Stock shall apply on like or similar terms to any such other shares andthe determination of the Board of Directors as to any such adjustment shall beconclusive.

 

(m) Noadjustment shall be made pursuant to this Section 9.3 (i) if the effect thereofwould be to reduce the Conversion Price below $10.37, or (ii) if the Holders ofthe

 

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Securities may participate in the transactionthat would otherwise give rise to an adjustment pursuant to this Section 9.3,or (iii) if the consent of the holders of the Common Stock would be requiredfor the issuance of, or the Company’s agreement to issue, the Common Stock atthe adjusted Conversion Price pursuant to the rules of the Nasdaq Stock Market,Inc. or any exchange or other market on which the Common Stock is then listedor traded and the Company has not obtained such consent in compliance with theapplicable rules.

 

Section 9.4 Consolidation or Merger of theCompany. If any of the following eventsoccurs, namely:

 

(1)           any reclassificationor change of the outstanding Common Stock (other than a change in par value, orfrom par value to no par value, or from no par value to par value, or as aresult of a subdivision or combination);

 

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

 

(3)           any sale orconveyance of the properties and assets of the Company as, or substantially as,an entirety to any other corporation as a result of which holders of CommonStock shall be entitled to receive stock, securities or other property orassets (including cash) with respect to or in exchange for such Common Stock;

 

the Company or the successor or purchasingcorporation, as the case may be, shall execute with the Trustee a supplementalindenture (which shall comply with the Trust Indenture Act as in force at thedate of execution of such supplemental indenture, if such supplementalindenture is then required to so comply) providing that such Securities shallbe convertible into the kind and amount of shares of stock and other securitiesor property or assets (including cash) which such Holder would have beenentitled to receive upon such reclassification, change, merger, consolidation,statutory share exchange, combination, sale or conveyance had such Securitiesbeen converted into Common Stock immediately prior to such reclassification,change, merger, consolidation, statutory share exchange, combination, sale orconveyance assuming such holder of Common Stock did not exercise its rights ofelection, if any, as to the kind or amount of securities, cash or otherproperty receivable upon such merger, consolidation, statutory share exchange,sale or conveyance (provided, that if the kind or amount of securities, cash orother property receivable upon such merger, consolidation, statutory shareexchange, sale or conveyance is not the same for each share of Common Stock inrespect of which such rights of election shall not have been exercised (Non-Electing Share ), then for the purposes of this Section 9.4, the kind andamount of securities, cash or other property receivable upon such merger,consolidation, statutory share exchange, sale or conveyance for eachNon-Electing Share shall be deemed to be the kind and amount so receivable pershare by a plurality of the Non-Electing Shares).  Such supplemental indenture shall provide for adjustments whichshall be as nearly equivalent as may be practicable to the adjustments providedfor in this Article IX.  If, in the caseof any such reclassification, change, merger, consolidation, statutory shareexchange, combination, sale or conveyance, the stock or other securities andassets receivable thereupon by a holder of Common Stock includes shares ofstock or other securities and assets of a corporation

 

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other than the successor or purchasingcorporation, as the case may be, in such reclassification, change, merger,consolidation, statutory share exchange, combination, sale or conveyance, thensuch supplemental indenture shall also be executed by such other corporationand shall contain such additional provisions to protect the interests of theHolders of the Securities as the Board of Directors shall reasonably considernecessary by reason of the foregoing, including to the extent practicable theprovisions providing for the conversion rights set forth in this Article IX.

 

The Companyshall cause notice of the execution of such supplemental indenture to be mailedto each Holder, at the address of such Holder as it appears on the register ofthe Securities maintained by the Registrar, within 20 days after executionthereof.  Failure to deliver such noticeshall not affect the legality or validity of such supplemental indenture.

 

The aboveprovisions of this Section 9.4 shall similarly apply to successive reclassifications,mergers, consolidations, statutory share exchanges, combinations, sales andconveyances.

 

If thisSection 9.4 applies to any event or occurrence, Section 10.3 shall not apply.

 

Section 9.5 Notice of Adjustment.Whenever an adjustment in the Conversion Price with respect to the Securitiesis required:

 

(1)           the Company shallforthwith place on file with the Trustee and any Conversion Agent for suchsecurities a certificate of the Treasurer of the Company, stating the adjustedConversion Price determined as provided herein and setting forth in reasonabledetail such facts as shall be necessary to show the reason for and the mannerof computing such adjustment; and

 

(2)           a notice statingthat the Conversion Price has been adjusted and setting forth the adjustedConversion Price shall forthwith be given by the Company or, at the Company’srequest, by the Trustee in the name and at the expense of the Company, to eachHolder in the manner provided in Section 10.2. Any notice so given shall be conclusively presumed to have been dulygiven, whether or not the Holder receives such notice.

 

In addition, whenever an adjustment in theConversion Price with respect to the Securities is required, the Company willissue a press release through Dow Jones & Company, Inc. or BloombergBusiness News containing the relevant information and make this informationavailable on the Company’s web site or through another public medium as it mayuse at that time.

 

Section 9.6 Notice in Certain Events.In case:

 

(1)           of a consolidationor merger to which the Company is a party and for which approval of anystockholders of the Company is required, or of the sale or conveyance toanother Person or entity or group of Persons or entities acting in concert as apartnership, limited partnership, syndicate or other group (within the meaningof Rule 13d-3 under the Exchange Act) of all or substantially all of theproperty and assets of the Company; or

 

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(2)           of the voluntary orinvoluntary dissolution, liquidation or winding up of the Company; or

 

(3)           of any actiontriggering an adjustment of the Conversion Price referred to in clauses (x) or(y) below;

 

then, in each case, the Company shall causeto be filed with the Trustee and the Conversion Agent, and shall cause to begiven, to the Holders of the Securities in the manner provided in Section 10.2,at least 15 days prior to the applicable date hereinafter specified, a noticestating (x) the date on which a record is to be taken for the purpose of anydistribution or grant of rights or warrants triggering an adjustment to theConversion Price pursuant to this Article IX, or, if a record is not to be taken, the date as of which the holdersof record of Common Stock entitled to such distribution, rights or warrants areto be determined, or (y) the date on which any reclassification, consolidation,merger, sale, conveyance, dissolution, liquidation or winding up triggering anadjustment to the Conversion Price pursuant to this Article IX is expected tobecome effective, and the date as of which it is expected that holders ofCommon Stock of record shall be entitled to exchange their Common Stock forsecurities or other property deliverable upon such reclassification,consolidation, merger sale, conveyance, dissolution, liquidation or winding up.

 

Failure togive such notice or any defect therein shall not affect the legality orvalidity of the proceedings described in clause (1), (2) or (3) of this Section9.6.

 

Section 9.7 Company To Reserve Stock:Registration; Listing.

 

(a) TheCompany shall, in accordance with the laws of the State of Delaware, at alltimes reserve and keep available, free from preemptive rights, out of itsauthorized but unissued shares of Common Stock, for the purpose of effectingthe conversion of the Securities, such number of its duly authorized shares ofCommon Stock as shall from time to time be sufficient to effect the conversionof all Securities then outstanding into such Common Stock at any time (assumingthat, at the time of the computation of such number of shares or securities,all such Securities would be held by a single Holder); provided, however, thatnothing contained herein shall preclude the Company from satisfying itsobligations in respect of the conversion of the Securities by delivery ofpurchased shares of Common Stock which are then held in the treasury of theCompany.  The Company covenants that allshares of Common Stock which may be issued upon conversion of Securities willupon issue be fully paid and nonassessable and free from all liens and chargesand, except as provided in Section 9.8, taxes with respect to the issuethereof.

 

(b) If anyshares of Common Stock which would be issuable upon conversion of Securitieshereunder require registration with or approval of any governmental authoritybefore such shares or securities may be issued upon such conversion, theCompany will in good faith and as expeditiously as possible endeavor to causesuch shares or securities to be duly registered or approved, as the case maybe.  The Company further covenants thatso long as the Common Stock shall be listed on the Nasdaq Stock Market, Inc.,the Company will, if permitted by the rules of such exchange, list and keeplisted all Common Stock issuable upon conversion of the Securities, and theCompany will endeavor to list the shares of Common Stock required to be

 

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delivered upon conversion of the Securitiesprior to such delivery upon any other national securities exchange upon whichthe outstanding Common Stock is listed at the time of such delivery.

 

Section 9.8 Taxes on Conversion.The issue of stock certificates on conversion of Securities shall be madewithout charge to the converting Holder for any documentary, stamp or similarissue or transfer taxes in respect of the issue thereof, and the Company shallpay any and all documentary, stamp or similar issue or transfer taxes that maybe payable in respect of the issue or delivery of shares of Common Stock on conversionof Securities pursuant hereto. The Company shall not, however, be required topay any such tax which may be payable in respect of any transfer involved inthe issue or delivery of shares of Common Stock or the portion, if any, of theSecurities which are not so converted in a name other than that in which theSecurities so converted were registered, and no such issue or delivery shall bemade unless and until the Person requesting such issue has paid to the Companythe amount of such tax or has established to the satisfaction of the Companythat such tax has been paid.

 

Section 9.9 Conversion After Record Date.Except as provided below, if any Securities are surrendered for conversion onany day other than an Interest Payment Date, the Holder of such Securitiesshall not be entitled to receive any interest that has accrued on suchSecurities since the prior Interest Payment Date.  By delivery to the Holder of the number of shares of Common Stockor other consideration issuable upon conversion in accordance with this ArticleIX, any accrued and unpaid interest on such Securities will be deemed to havebeen paid in full.

 

If anySecurities are surrendered for conversion subsequent to the Record Datepreceding an Interest Payment Date but on or prior to****such Interest Payment Date, the Holder of such Securities atthe close of business on such Record Date shall receive the interest payable onsuch Securities on such Interest Payment Date notwithstanding the conversionthereof.  Securities surrendered for conversionduring the period from the close of business on any Record Date preceding anyInterest Payment Date to the opening of business on such Interest Payment Dateshall (except in the case of Securities which have been called for redemptionon a Redemption Date between such Record Date and the third Business Day aftersuch Interest Payment Date) be accompanied by payment by Holders, for theaccount of the Company, in New York Clearing House funds or other funds of anamount equal to the interest payable on such Interest Payment Date on theSecurities being surrendered for conversion. Except**as provided in thisSection 9.9, no adjustments in respect of payments of interest on Securitiessurrendered for conversion or**anydividends or distributions or interest on the Common Stock issued uponconversion shall be made upon the conversion of any Securities.

 

Section 9.10 Company Determination Final.    Any determination that the Company or theBoard of Directors must make pursuant to this Article IX shall be conclusive ifmade in good faith and in accordance with the provisions of this Article,absent manifest error, and set forth in a Board Resolution.

 

Section 9.11 Responsibility of Trustee forConversion Provisions. The Trustee has noduty to determine when an adjustment under this Article IX should be made, howit should be made or what it should be. The Trustee makes no representation as to the validity or

 

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value of any securities or assets issued uponconversion of Securities.  The Trusteeshall not be responsible for any failure of the Company to comply with thisArticle IX.  Each Conversion Agent otherthan the Company shall have the same protection under this Section 9.11 as theTrustee.

 

The rights, privileges,protections, immunities and benefits given to the Trustee under the Indentureincluding, without limitation, its rights to be indemnified, are extended to,and shall be enforceable by, the Trustee in each of its capacities hereunder,and each Paying Agent or Conversion Agent acting hereunder.

 

Section 9.12 Unconditional Right ofHolders to Convert. Notwithstanding anyother provision in this Indenture, the Holder of any Security shall have theright, which is absolute and unconditional, to convert its Security inaccordance with this Article IX and to bring an action for the enforcement ofany such right to convert, and such rights shall not be impaired or affectedwithout the consent of such Holder.

 

ARTICLE X

 

MISCELLANEOUS

 

Section 10.1 Trust Indenture Act Controls.If any provision of this Indenture limits, qualifies, or conflicts with anotherprovision which is required to be included in this Indenture by the TIA, therequired provision shall control.

 

Section 10.2 Notices. Anyrequest, demand, authorization, notice, waiver, consent or communication shallbe in writing and delivered in person or mailed by first-class mail, postageprepaid, addressed as follows or transmitted by facsimile transmission(confirmed by guaranteed overnight courier) to the following facsimile numbers:

 

if to theCompany:

 

deCODEgenetics Inc.

Sturlungata 8

Reykjavik,Iceland

Attention:              Corporate Counsel

FacsimileNo.:   +354-570-1806

 

With acopy  to:

 

Stevens &Lee, P.C.

600 CollegeRoad East

Suite 4400

Attention:              Marsha E. Novick

FacsimileNo.:  (610) 371-7929

 

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if to theTrustee:

 

The Bank ofNew York

101 BarclayStreet, Floor 21 West

New York, NewYork 10286

Facsimile No.(212) 815-5707

Attention:  Corporate Trust Administration

 

The Company orthe Trustee by notice given to the other in the manner provided above maydesignate additional or different addresses for subsequent notices orcommunications.

 

Any notice orcommunication given to a Securityholder shall be mailed to the Securityholder,by first-class mail, postage prepaid, at the Securityholder’s address as itappears on the registration books of the Registrar and shall be sufficientlygiven if so mailed within the time prescribed.

 

Failure tomail a notice or communication to a Securityholder or any defect in it shallnot affect its sufficiency with respect to other Securityholders.  If a notice or communication is mailed inthe manner provided above, it is duly given, whether or not received by theaddressee; provided that all notices to the Trustee shall be deemed effectiveupon actual receipt thereof.

 

If the Companymails a notice or communication to the Securityholders, it shall mail a copy tothe Trustee and each Registrar, Paying Agent, Conversion Agent or co-registrar.

 

Section 10.3 Communication by Holders withOther Holders. Securityholders maycommunicate pursuant to TIA Section 312(b) with other Securityholders withrespect to their rights under this Indenture or the Securities.  The Company, the Trustee, the Registrar, thePaying Agent, the Conversion Agent and anyone else shall have the protection ofTIA Section 312(c).

 

Section 10.4 Certificate and Opinion as toConditions Precedent. Upon any request orapplication by the Company to the Trustee to take any action under thisIndenture, the Company shall furnish to the Trustee:

 

(1) anOfficers’ Certificate stating that, in the opinion of the signatories, allconditions precedent, if any, provided for in this Indenture relating to theproposed action have been complied with; and

 

(2) an Opinionof Counsel stating that, in the opinion of such counsel, all such conditionsprecedent have been complied with.

 

Section 10.5 Statements Required inCertificate or Opinion. Each Officers’Certificate or Opinion of Counsel with respect to compliance with a covenant orcondition provided for in this Indenture shall include:

 

(1) astatement that each Person making such Officers’ Certificate or Opinion ofCounsel has read such covenant or condition;

 

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(2) a briefstatement as to the nature and scope of the examination or investigation uponwhich the statements or opinions contained in such Officers’ Certificate orOpinion of Counsel are based;

 

(3) astatement that, in the opinion of each such Person, he or she has made suchexamination or investigation as is necessary to enable such Person to expressan informed opinion as to whether or not such covenant or condition has beencomplied with; and

 

(4) astatement that, in the opinion of such Person, such covenant or condition hasbeen complied with.

 

Section 10.6 Separability Clause.In case any provision in this Indenture or in the Securities shall be invalid,illegal or unenforceable, the validity, legality and enforceability of theremaining provisions shall not in any way be affected or impaired thereby.

 

Section 10.7 Rules by Trustee, PayingAgent, Conversion Agent and  Registrar.The Trustee may make reasonable rules for action by or a meeting ofSecurityholders. The Registrar, the Conversion Agent and the Paying Agent maymake reasonable rules for their functions.

 

Section 10.8 Legal Holidays. A“Legal Holiday” is any day other than a Business Day. If any specified date(including a date for giving notice) is a Legal Holiday, the action shall betaken on the next succeeding day that is not a Legal Holiday, and, if theaction to be taken on such date is a payment in respect of the Securities, nointerest, if any, shall accrue for the intervening period.

 

Section 10.9 Governing Law. THISINDENTURE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OFTHE STATE OF NEW YORK.

 

Section 10.10 Waiver of Jury Trial.EACH OF THE COMPANY AND THE TRUSTEE HEREBY IRREVOCABLY WAIVE, TO THE FULLESTEXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANYLEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE, THE SECURITIESOR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

Section 10.11 No Recourse Against Others.A director, officer, employee or stockholder, as such, of the Company shall nothave any liability for any obligations of the Company under the Securities orthis Indenture or for any claim based on, in respect of or by reason of suchobligations or their creation.  Byaccepting a Security, each Securityholder shall waive and release all suchliability.  The waiver and release shallbe part of the consideration for the issue of the Securities.

 

Section 10.12 Successors. Allagreements of the Company in this Indenture and the Securities shall bind itssuccessor.  All agreements of theTrustee in this Indenture shall bind its successor.

 

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Section 10.13 Multiple Originals.The parties may sign any number of copies of this Indenture. Each signed copyshall be an original, but all of them together represent the sameagreement.  One signed copy is enough toprove this Indenture.

 

Section 10.14 Effect of Headings and Tableof Contents. The Article and Sectionheadings herein and the Table of Contents are for convenience only and shallnot affect the construction hereof.

 

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IN WITNESS WHEREOF, the undersigned, beingduly authorized, have executed this Indenture on behalf of the respectiveparties hereto as of the date first above written.

 
|   | deCODE genetics, Inc. |   |
|--------|-----------------------|--------|
|   |                  |   |
|   |                  |   |
|   | By:                   |   |   |
|   |                  | Name:  |
|   |                  | Title: |
|   |                  |
|   |                  |   |
|   | THE BANK OF NEW YORK  |   |
|   | As Trustee            |   |
|   |                  |   |
|   |                  |   |
|   | By:                   |   |   |
|   |                  | Name:  |
|   |                  | Title: |
|        |                       |        |  |  |

 

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EXHIBIT A

 

[FORM OF FACE OF GLOBAL SECURITY]

 

UNLESS THISCERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORYTRUST COMPANY TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER,EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OFCEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZEDREPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS MADETO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZEDREPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHERUSE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THEREGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

 

TRANSFERS OFTHIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS TO NOMINEES OF THEDEPOSITORY TRUST COMPANY, OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEEAND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERSMADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN ARTICLE TWO OF THEINDENTURE REFERRED TO ON THE REVERSE HEREOF.

 

THE SECURITYEVIDENCED BY THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACTOF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS, ANDMAY NOT BE OFFERED OR SOLD EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BYACQUISITION HEREOF, THE HOLDER:

 

(1)                                REPRESENTSTHAT IT IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A UNDER THESECURITIES ACT;

 

(2)                                  AGREESTHAT IT WILL NOT WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THIS SECURITYRESELL OR OTHERWISE TRANSFER THE SECURITY EVIDENCED HEREBY OR THE COMMON STOCKISSUABLE UPON CONVERSION OF SUCH SECURITY EXCEPT (A) TO THE COMPANY OR ANYSUBSIDIARY THEREOF, (B) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITHRULE 144A UNDER THE SECURITIES ACT, (C) TO A NON-U.S. PERSON OUTSIDE THE UNITEDSTATES IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT, (D) PURSUANTTO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIESACT, IF AVAILABLE, (E) TO AN INSTITUTIONAL INVESTOR THAT IS AN ACCREDITEDINVESTOR WITHIN THE MEANING OF RULE 501(a)(1), (2), (3) OR (7) OF REGULATION DUNDER THE SECURITIES ACT PURSUANT TO AN EXEMPTION FROM

 

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REGISTRATIONUNDER THE SECURITIES ACT, IF AVAILABLE, OR (F) PURSUANT TO A REGISTRATIONSTATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT AND WHICHCONTINUES TO BE EFFECTIVE AT THE TIME OF SUCH TRANSFER; AND

 

(3)                                  AGREESTHAT IT WILL DELIVER TO EACH PERSON TO WHOM THE SECURITY EVIDENCED HEREBY ISTRANSFERRED (OTHER THAN A TRANSFER PURSUANT TO CLAUSE 2(F) ABOVE) A NOTICESUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.

 

The foregoinglegend may be removed from this Security on satisfaction of the conditionsspecified in the Indenture.

 

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deCODE genetics, Inc.

 

3.5% Senior Convertible Notes due 2011

 
| No.:                                |   | CUSIP:   243586AA2                                                                                                                                                                                  |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Issue Date: April 14, 2004                                                                                                                                                           |   | ISIN:   US243586AA22                                                                                                                                                                                |
|                                                                                                                                                                                 |   | Principal Amount:   $                              |

 

deCODEgenetics, Inc., a Delaware corporation, promises to pay to Cede & Co. orregistered assigns, the principal amount of                                        dollars($              )on April 15, 2011.

 

InterestPayment Dates:  April 15 and October 15,commencing October 15, 2004.

 

RecordDates:  April 1 and October 1.

 

Reference ishereby made to the further provisions of this Security set forth on the reverseside of this Security, which further provisions shall for all purposes have thesame effect as if set forth at this place.

 

IN WITNESSWHEREOF, the Company has caused this instrument to be duly executed under itscorporate seal.

 
| Dated:                ,  200      | deCODE genetics, Inc. |
|---------------------------------------------------------------------------------------------------------------------------------------|-----------------------|
|                                                                                                                                  |                  |
|                                                                                                                                  |                  |
|                                                                                                                                  | By:                   |   |
|                                                                                                                                  |                  | Title: |

 

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

 

THE BANK OF NEW YORK,

as Trustee, certifies that thisis one

of the Securities referred toin the

within mentioned Indenture.
| By:                                                                                                                                                                                             |                  |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------|--------|
|                                                                                                                                                                                            | Authorized  Signatory |
| Dated:                        ,  200      |

 

A – 3

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[FORM OF REVERSE OF GLOBAL SECURITY]

 

3.5% Senior Convertible Notes due 2011

 

This Securityis one of a duly authorized issue of the 3.5% Senior Convertible Notes due 2011(the “Securities”) of deCODE genetics, Inc., a Delaware corporation (includingany successor corporation under the Indenture hereinafter referred to, the“Company”), issued under an Indenture, dated as of April 14, 2004 (the“Indenture”), between the Company and The Bank of New York, as trustee (the“Trustee”).  The terms of the Securityinclude those stated in the Indenture, those made part of the Indenture byreference to the Trust Indenture Act of 1939, as amended (“TIA”), and those setforth in this Security.  This Securityis subject to all such terms, and Holders are referred to the Indenture and theTIA for a statement of all such terms. To the extent permitted by applicable law, in the event of anyinconsistency between the terms of this Security and the terms of theIndenture, the terms of the Indenture shall control.  Capitalized terms used but not defined herein have the meaningsassigned to them in the Indenture referred to below unless otherwise indicated.

 

1.               Interest

 

The Companypromises to pay interest on the principal amount of the Securities at theinterest rate of 3.5% (the “Interest Rate”) from the date of issuance untilrepayment in full at April 15, 2011, or until an earlier conversion, redemptionor repurchase.  The Company will payinterest on this Security semi-annually in arrears on April 15 and October 15of each year (each, an “interest payment date”), commencing October 15, 2004.

 

The Securitiesshall bear interest from April 14, 2004 until the principal amount thereof ispaid or made available for payment, or until such date on which the Securitiesare converted, redeemed or purchased as provided herein at a rate of 3.5% perannum.

 

Interest onthe Securities shall be computed (i) for any full semi-annual period for whicha particular Interest Rate is applicable, on the basis of a 360-day year oftwelve 30-day months and (ii) for any period for which a particular InterestRate is applicable for less than a full semiannual period for which interest iscalculated, on the basis of a 30-day month and, for such periods of less than amonth, the actual number of days elapsed over a 30-day month.

 

If thisSecurity is redeemed or repurchased by the Company on a date that is after therecord date and prior to the corresponding interest payment date, interest andAdditional Amounts, if any, accrued and unpaid hereon to but not including theapplicable Redemption Date or Change of Control Purchase Date, as the case maybe, will be paid to the same Holder to whom the Company pays the principal ofthis Security.

 

Interest onSecurities converted after a record date but prior to the correspondinginterest payment date will be paid to the Holder of the Securities on therecord date but, upon conversion, the Holder must pay the Company the interestand Additional Amounts, if any, which have accrued and will be paid on suchinterest payment date; provided, that no such

 

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payment need be made with respect toSecurities which will be redeemed by the Company after a record date and priorto the third Business Day after the corresponding interest payment date.

 

If theprincipal amount hereof or any portion of such principal amount or anyinterest, including Additional Amounts, if any, on any Security is not paidwhen due (whether upon acceleration pursuant to Section 6.2 of the Indenture,upon the date set for payment of the Redemption Price pursuant to Section 5hereof or the Change of Control Purchase Price pursuant to Section 6 hereof orupon the Stated Maturity of this Security), then in each such case the overdueamount shall, to the extent permitted by law, bear interest at the InterestRate, compounded semi-annually, which interest shall accrue from the date onwhich such overdue amount was originally due until the date on which payment ofsuch amount, including interest thereon, has been made or duly providedfor.  All such interest shall be payableon demand.

 

2.               Methodof Payment.

 

Except asprovided below, interest will be paid (i) on the Global Securities to TheDepository Trust Company (“DTC”) or its nominee in immediately available funds,(ii) on any definitive Securities having an aggregate principal amount of$5,000,000 or less, by check mailed to the Holders of such Securities, and(iii) on any definitive Securities having an aggregate principal amount of morethan $5,000,000, by wire transfer in immediately available funds at theelection of the Holders of such Securities.

 

At StatedMaturity, the Company will pay interest on definitive Securities at theCompany’s office or agency in New York City, which initially will be theCorporate Trust Office of the Trustee in New York City.

 

Principal onGlobal Securities will be paid to DTC or its nominee in immediately availablefunds.  Principal on definitiveSecurities will be payable, upon Stated Maturity or when due, at the office oragency of the Company in New York City, maintained for such purpose, initiallythe Corporate Trust Office of the Trustee in New York City.

 

Subject to theterms and conditions of the Indenture, the Company will make payments in cashin respect of Redemption Prices, Change of Control Purchase Prices and atStated Maturity to Holders who surrender Securities to a Paying Agent tocollect such payments in respect of the Securities. The Company will pay cashamounts in money of the United States that at the time of payment is legaltender for payment of public and private debts. However, the Company may makesuch cash payments by check payable in such money.

 

3.               PayingAgent, Conversion Agent and Registrar.

 

Initially, TheBank of New York will act as Paying Agent, Conversion Agent and Registrar. TheCompany may appoint and change any Paying Agent, Conversion Agent or Registrarwithout notice, other than notice to the Trustee; provided that the Companywill maintain at least one Paying Agent in the State of New York, City of NewYork, Borough of Manhattan, which shall initially be an office or agency of theTrustee. The Company or any of its Subsidiaries or any of their Affiliates mayact as Paying Agent, Conversion Agent or Registrar.

 

A – 5

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4.               Indenture.

 

The Securitiesare senior unsecured obligations of the Company limited to $150,000,000aggregate principal amount (of which $125,000,000 represents the original issueand $25,000,000 is issued pursuant to the exercise by the Initial Purchasers oftheir option to purchase up to $25,000,000 aggregate principal amount ofadditional Securities).  The Indenturedoes not limit other indebtedness of the Company, secured or unsecured.

 

5.               Redemptionat the Option of the Company.

 

No sinkingfund is provided for the Securities. The Securities are not redeemable by theCompany prior to April 20, 2009.  TheSecurities are redeemable for cash at the option of the Company, in whole or inpart, at any time or from time to time, on or after April 20, 2009 upon notless than 20 nor more than 60 days’ notice (the “Redemption Notice”) by mailfor a redemption price equal to the principal amount of those Securities plusaccrued and unpaid interest, including Additional Amounts, if any, up to theRedemption Date.

 

6.               PurchaseBy the Company at the Option of the Holder.

 

At the optionof the Holder and subject to the terms and conditions of the Indenture, theCompany shall become obligated to offer to purchase the Securities held by suchHolder within 30 days after the occurrence of a Change of Control of theCompany for a Change of Control Purchase Price equal to the principal amountplus accrued and unpaid interest, including Additional Amounts, if any, of suchSecurity on the Change of Control Purchase Date.  The Change of Control Purchase Date shall be between 30 and 60days of the Company’s delivery of the notice described in the precedingsentence. The Change of Control Purchase Price shall be paid in cash.

 

Holders havethe right to withdraw any Change of Control Purchase Notice, as the case maybe, by delivering to the Paying Agent a written notice of withdrawal inaccordance with the provisions of the Indenture.

 

If cashsufficient to pay the Change of Control Purchase Price of all Securities, orportions thereof to be purchased as of the Change of Control Purchase Date, isdeposited with the Paying Agent on the Business Day following the Change ofControl Purchase Date, interest will cease to accrue on such Securities (orportions thereof) immediately after such Change of Control Purchase Date, andthe Holder thereof shall have no other rights as such other than the right toreceive the Change of Control Purchase Price upon surrender of such Security.

 

7.               Noticeof Redemption.

 

Notice of redemptionpursuant to Section 5 of this Security will be mailed at least 20 days but notmore than 60 days before the Redemption Date to each Holder of Securities to beredeemed at the Holder’s registered address. If money sufficient to pay theRedemption Price of all Securities (or portions thereof) to be redeemed on theRedemption Date is deposited with the Paying Agent prior to or on theRedemption Date, immediately after such Redemption Date interest ceases toaccrue on such Securities or portions thereof. Securities in denominations

 

A – 6

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larger than $1,000 of principal amount may beredeemed in part but only in integral multiples of $1,000 of principal amount.

 

8.               Conversion.

 

Subject to andin compliance with the provisions of the Indenture, a Holder is entitled, atsuch Holder’s option, to convert the Holder’s Security (or any portion of theprincipal amount thereof that is $1,000 or an integral multiple of $1,000),into fully paid and nonassessable shares of Common Stock at the ConversionPrice in effect at the time of conversion.

 

A Security inrespect of which a Holder has delivered a Change of Control Purchase Notice,exercising the option of such Holder to require the Company to purchase suchSecurity, may be converted only if such Change of Control Purchase Notice iswithdrawn in accordance with the terms of the Indenture.

 

The initialConversion Price is $14.00, subject to adjustment in certain events describedin the Indenture. No fractional shares of Common Stock shall be issued uponconversion of any Security. A Holder that surrenders Securities for conversionwill receive cash or a check in lieu of any fractional share of Common Stock.

 

To surrender aSecurity for conversion, a Holder must (i) complete and manually sign theconversion notice below (or complete and manually sign a facsimile of suchnotice) and deliver such notice to the Conversion Agent, (ii) surrender theSecurity to the Conversion Agent, (iii) furnish appropriate endorsements andtransfer documents and (iv) pay any transfer or similar tax, if required by theIndenture.

 

If the Company(i) is a party to a consolidation, merger or binding share exchange, (ii)reclassifies the Common Stock or (iii) conveys, transfers or leases its propertiesand assets substantially as an entirety to any Person, the right to convert aSecurity into shares of Common Stock may be changed into a right to convert itinto securities, cash or other assets of the Company or such other Person, ineach case in accordance with the Indenture.

 

9.               Denominations;Transfer; Exchange.

 

The Securitiesare in fully registered form, without coupons, in denominations of $1,000 ofprincipal amount and integral multiples of $1,000.  A Holder may transfer or exchange Securities in accordance withthe Indenture.  The Registrar mayrequire a Holder, among other things, to furnish appropriate endorsements andtransfer documents and to pay any taxes and fees required by law or permittedby the Indenture.  The Registrar need nottransfer or exchange any Securities selected for redemption (except, in thecase of a Security to be redeemed in part, the portion of the Security not tobe redeemed) or any Securities in respect of which a Change of Control PurchaseNotice has been given and not withdrawn (except, in the case of a Security tobe purchased in part, the portion of the Security not to be purchased) or anySecurities for a period of 15 days before the mailing of a notice of redemptionof Securities to be redeemed.

 

A – 7

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10.         PersonsDeemed Owners.

 

The registeredHolder of this Security may be treated as the owner of this Security for allpurposes.

 

11.  UnclaimedMoney or Securities.

 

The Trusteeand the Paying Agent shall return to the Company upon written request any moneyheld by them for the payment of any amount with respect to the Securities thatremains unclaimed for two years, subject to applicable unclaimed propertylaw.  After return to the Company,Holders entitled to the money or securities must look to the Company forpayment as general creditors unless an applicable abandoned property lawdesignates another Person.

 

12.  Amendment;Waiver.

 

Subject tocertain exceptions set forth in the Indenture, (i) the Indenture or theSecurities may be amended with the written consent of the Holders of at least amajority in aggregate principal amount of the outstanding Securities and (ii)certain Defaults may be waived with the written consent of the Holders of amajority in aggregate principal amount of the outstanding Securities.  The Indenture and the Securities may also beamended by the Company and the Trustee, without the consent of any Holder, incertain circumstances set forth in the Indenture; provided, that certain provisionsof the Indenture and the Securities may not be amended without the consent ofeach affected  Holder.

 

13.  Defaultsand Remedies.

 

If any Eventof Default with respect to Securities shall occur and be continuing, theprincipal of all the Securities may be declared due and payable in the mannerand with the effect provided in the Indenture.

 

14.  TrusteeDealings with the Company.

 

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

 

15.  NoRecourse Against Others.

 

A director,officer, employee or shareholder, as such, of the Company shall not have anyliability for any obligations of the Company under the Securities or theIndenture or for any claim based on, in respect of or by reason of suchobligations or their creation.  Byaccepting a Security, each Securityholder waives and releases all suchliability. The waiver and release are part of the consideration for the issueof the Securities.

 

A – 8

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16.  Treatmentof Securities.

 

Each holder,by acceptance of a Security, and beneficial owner, by acceptance of abeneficial ownership interest in a Security, agrees to treat the Securities asindebtedness of the Company for U.S. federal income tax purposes and to nottake any action inconsistent with such treatment.

 

17.  Authentication.

 

This Securityshall not be valid until an authorized signatory of the Trustee manually signsthe Trustee’s Certificate of Authentication on the other side of this Security.

 

18.  Abbreviations.

 

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

 

19.  GOVERNINGLAW.

 

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

 

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

 

deCODEgenetics, Inc.

Sturlungata 8

Reykjavik,Iceland

Attn:Corporate Counsel

FacsimileNo.:  +354-570-1806

 

20.  RegistrationRights.

 

The Holders ofthe Securities are entitled to the benefits of the Registration RightsAgreement, dated as of April 14, 2004, among the Company, and J. P. MorganSecurities Inc. and Lehman Brothers Inc., as representatives of the InitialPurchasers including the receipt of Additional Amounts upon a registrationdefault (as defined in such agreement).

 

A – 9

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| ASSIGNMENT FORM                                                                                                                                                                                                                                                                                     |   | CONVERSION NOTICE                                                            |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                |   |                                                                         |
| To assign this Security, fill in the  form below:                                                                                                                                                                                                                                                   |   | To convert this Security into  Common Stock of the Company,  check the box o |
|                                                                                                                                                                                                                                                                                                |   |                                                                         |
|                                                                                                                                                                                                                                                                                                |   |                                                                         |
| I or we assign and transfer this                                                                                                                                                                                                                                                                    |   | To convert only part of this                                                 |
| Security to                                                                                                                                                                                                                                                                                         |   |  Security, state the principal                                          |
|                                                                                                                                                                                                                                                                                                |   | amount to be converted (which                                                |
|                                                                                                                                                                                                                                                                                                |   | must be $1,000 or an integral                                                |
| (Insert assignee’s soc. sec. or tax ID no.)                                                                                                                                                                                                                                                    |   | multiple of $1,000):                                                         |
|                                                                                                                                                                                                                                                                                                |   |                                                                         |
|                                                                                                                                                                                                                                                                                                |   | $                                                                            |   |   |
|                                                                                                                                                                                                                                                                                                |   |                                                                         |
|                                                                                                                                                                                                                                                                                                |   | If you want the stock certificate                                            |
| (Print or type assignee’s name,                                                                                                                                                                                                                                                                |   | made out in another person’s name                                       |
| address and zip code)                                                                                                                                                                                                                                                                               |   | fill in the form below:                                                      |
|                                                                                                                                                                                                                                                                                                |   |                                                                         |
|                                                                                                                                                                                                                                                                                                |   |                                                                         |   |
| and irrevocably appoint                                                                                                                                                                                                                                                                             |   |                                                                         |   |
|                                                                                                                                                                                                                                                                                                |   | (Insert the other person’s soc. sec. tax ID  no.)                       |
|                                                agent  to |   |                                                                         |
| transfer this Security on the books of                                                                                                                                                                                                                                                              |   |                                                                         |   |
| the Company.  The agent may                                                                                                                                                                                                                                                                    |   |                                                                         |   |
| substitute another to act for him.                                                                                                                                                                                                                                                                  |   |                                                                         |   |
|                                                                                                                                                                                                                                                                                                |   |                                                                         |   |
|                                                                                                                                                                                                                                                                                                |   |                                                                         |   |
|                                                                                                                                                                                                                                                                                                |   | (Print or type other person’s name,                                     |
|                                                                                                                                                                                                                                                                                                |   | address and zip code)                                                        |

 
| Date:                                                                   |                  |   | Your Signature: |   |   |
|-------------------------------------------------------------------------|-----------------------|--------|-----------------|--------|--------|
|                                                                    |
|                                                                    |                  |
| (Sign  exactly as your name appears on the other side of this Security) |
|                                                                    |
| Signature Guaranteed                                                    |
|                                                                    |
|                                                                    |                  |
| Participant in a Recognized Signature  Guarantee Medallion Program      |
|                                                                    |
| By:                                                                     |                  |   |
|                                                                    | Authorized  Signatory |   |
|                                                                         |                       |        |                 |        |        |  |  |  |  |

 

A – 10

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SCHEDULE OF INCREASES AND DECREASES OF GLOBAL SECURITY

 

Initial Principal Amount of Global Security:                  ($                ).

 
| **Date** |   | **Amount of  Increase in  Principal  Amount of  Global Security** |   | **Amount of  Decrease in  Principal  Amount of  Global Security** |   | **Principal  Amount of  Global Security  After Increase or  Decrease** |   | **Notation  by  Registrar or  Security  Custodian** |
|----------|--------|-------------------------------------------------------------------|--------|-------------------------------------------------------------------|--------|------------------------------------------------------------------------|--------|-----------------------------------------------------|
|     |   |                                                              |   |                                                              |   |                                                                   |   |                                                |
|     |   |                                                              |   |                                                              |   |                                                                   |   |                                                |
|     |   |                                                              |   |                                                              |   |                                                                   |   |                                                |
|     |   |                                                              |   |                                                              |   |                                                                   |   |                                                |
|     |   |                                                              |   |                                                              |   |                                                                   |   |                                                |
|     |   |                                                              |   |                                                              |   |                                                                   |   |                                                |
|     |   |                                                              |   |                                                              |   |                                                                   |   |                                                |
|     |   |                                                              |   |                                                              |   |                                                                   |   |                                                |
|     |   |                                                              |   |                                                              |   |                                                                   |   |                                                |
|     |   |                                                              |   |                                                              |   |                                                                   |   |                                                |
|     |   |                                                              |   |                                                              |   |                                                                   |   |                                                |
|     |   |                                                              |   |                                                              |   |                                                                   |   |                                                |
|     |   |                                                              |   |                                                              |   |                                                                   |   |                                                |
|     |   |                                                              |   |                                                              |   |                                                                   |   |                                                |
|     |   |                                                              |   |                                                              |   |                                                                   |   |                                                |
|     |   |                                                              |   |                                                              |   |                                                                   |   |                                                |
|     |   |                                                              |   |                                                              |   |                                                                   |   |                                                |
|     |   |                                                              |   |                                                              |   |                                                                   |   |                                                |
|     |   |                                                              |   |                                                              |   |                                                                   |   |                                                |
| `        |   |                                                              |   |                                                              |   |                                                                   |   |                                                |

 

A – 11

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EXHIBIT B

 

[FORM OF FACE OF CERTIFICATED SECURITY]

 

THE SECURITYEVIDENCED BY THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACTOF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS, ANDMAY NOT BE OFFERED OR SOLD EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE, BYACQUISITION HEREOF, THE HOLDER:

 

(1)                                  REPRESENTSTHAT IT IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A UNDER THESECURITIES ACT;

 

(2)                                  AGREESTHAT IT WILL NOT WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THIS SECURITYRESELL OR OTHERWISE TRANSFER THE SECURITY EVIDENCED HEREBY OR THE COMMON STOCKISSUABLE UPON CONVERSION OF SUCH SECURITY EXCEPT (A) TO THE COMPANY OR ANYSUBSIDIARY THEREOF, (B) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITHRULE 144A UNDER THE SECURITIES ACT,  (C)TO A NON-U.S. PERSON OUTSIDE THE UNITED STATES IN COMPLIANCE WITH REGULATION SUNDER THE SECURITIES ACT, (D) PURSUANT TO THE EXEMPTION FROM REGISTRATIONPROVIDED BY RULE 144 UNDER THE SECURITIES ACT, IF AVAILABLE, (E) TO ANINSTITUTIONAL INVESTOR THAT IS AN ACCREDITED INVESTOR WITHIN THE MEANING OFRULE 501(a)(1), (2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES ACTPURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT, IFAVAILABLE, OR (F) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLAREDEFFECTIVE UNDER THE SECURITIES ACT AND WHICH CONTINUES TO BE EFFECTIVE AT THETIME OF SUCH TRANSFER; AND

 

(3)                                  AGREESTHAT IT WILL DELIVER TO EACH PERSON TO WHOM THE SECURITY EVIDENCED HEREBY ISTRANSFERRED (OTHER THAN A TRANSFER PURSUANT TO CLAUSE 2(F) ABOVE) A NOTICESUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.

 

The foregoinglegend may be removed from this Security on satisfaction of the conditionsspecified in the Indenture.

 

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deCODE genetics, Inc.

 

3.5% Senior Convertible Notes due 2011

 
| No.:                   |   |   |   | CUSIP:   243586AA2   |
|------------------------|--------|--------|--------|---------------------------|
| Issue Date: [ • ] |   |   |   | ISIN:   US243586AA22 |
|                   |   |   |   | Principal Amount:  $ |   |   |

 

deCODEgenetics, Inc., a Delaware corporation, promises to pay to                                     .or registered assigns, the principal amount of[                   dollars($                  )]on [ •].

 

InterestPayment Dates:  April 15 and October 15,commencing October 15, 2004.

 

RecordDates:  April 1 and October 1.

 

Reference ishereby made to the further provisions of this Security set forth on the reverseside of this Security, which further provisions shall for all purposes have thesame effect as if set forth at this place.

 

IN WITNESSWHEREOF, the Company has caused this instrument to be duly executed under itscorporate seal.

 
| Dated:         , 200   | deCODE genetics, Inc. |
|---------------------------------------------------------------------|-----------------------|
|                                                                |                  |
|                                                                |                  |
|                                                                | By:                   |   |   |
|                                                                |                  | Title: |

 

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

 

THE BANK OF NEW YORK,

as Trustee,certifies that this

is one of theSecurities referred

to in thewithin-mentioned Indenture.

 
| By:    |                 |   |
|--------|----------------------|--------|
|   | Authorized Signatory |

 

B-2

 

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[FORM OFREVERSE OF CERTIFICATED SECURITY IS IDENTICAL TO EXHIBIT A]

 

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EXHIBIT C

 

3.5% Senior Convertible Notes due 2011

 

Transfer Certificate

 

In connectionwith any transfer of any of the Securities or beneficial interest in a GlobalSecurity that is a Restricted Security within the period prior to theexpiration of the holding period applicable to the sales thereof under Rule144(k) under the Securities Act of 1933, as amended (the Securities Act ) (orany successor provision), the undersigned registered owner or beneficial ownerof this Security hereby certifies with respect to$                      principal amount of the above-captioned Securities (the “SurrenderedSecurities”) presented or surrendered on the date hereof for registration oftransfer, or for exchange or conversion where the securities issuable upon suchexchange or conversion are to be registered in a name other than that of theundersigned registered or beneficial owner (each such transaction being a“transfer”), that such transfer complies with the restrictive legend set forthon the face of the Surrendered Securities for the reason checked below:

 

o                                    A transfer of theSurrendered Securities is made to the Company or any subsidiaries; or

 

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

 

o                                    The transfer of theSurrendered Securities complies with Rule 501(a)(1), (2), (3) or (7) ofRegulation D under the Securities Act; or

 

o                                    The transfer of theSurrendered Securities is pursuant to an effective registration statement underthe Securities Act; or

 

o                                    The transfer of theSurrendered Securities is pursuant to another available exemption from theregistration requirement of the Securities Act;

 

and unless the box below is checked, theundersigned confirms that, to the undersigned’s knowledge, such Securities arenot being transferred to an “affiliate” of the Company as defined in Rule 144under the Securities Act (an “Affiliate”).

 

o                                    The transferee isan Affiliate of the Company.

 
| Dated:                ,  200     |         |
|----------------------------------------------------------------------------------------------------------------------------|--------------|
|                                                                                                                       | Signature(s) |

 

 

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| Signature Guarantee:                  |
|---------------------------------------|
|                                  |
|                                  |   |
| Signature must be guaranteed by a     |
| participant in a recognized signature |
| guaranty medallion program or other   |
| signature guarantor acceptable to the |
| Trustee.                              |

 

C-2

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