Exhibit 4.2


 


SILICON GRAPHICS, INC.



11.75% Senior Secured Notes Due 2009





INDENTURE



Dated as of December     , 2003







U.S. BANK NATIONAL ASSOCIATION

TRUSTEE


 


 








 


CROSS-REFERENCE TABLE


 


	
  TIA
  Section

  	
   

  	
  Indenture Section

  
	
   

  	
   

  	
   

  
	
  310

  	
  (a)(1)

  	
   

  	
  7.10

  
	
   

  	
  (a)(2)

  	
   

  	
  7.10

  
	
   

  	
  (a)(3)

  	
   

  	
  N.A.

  
	
   

  	
  (a)(4)

  	
   

  	
  N.A.

  
	
   

  	
  (a)(5)

  	
   

  	
  7.10

  
	
   

  	
  (b)

  	
   

  	
  7.06; 7.08

  
	
   

  	
  (c)

  	
   

  	
  N.A.

  
	
  311

  	
  (a)

  	
   

  	
  7.11

  
	
   

  	
  (b)

  	
   

  	
  7.11

  
	
   

  	
  (c)

  	
   

  	
  N.A.

  
	
  312

  	
  (a)

  	
   

  	
  2.05; 2.14

  
	
   

  	
  (b)

  	
   

  	
  2.14(b); 13.03

  
	
   

  	
  (c)

  	
   

  	
  2.14(c); 13.03

  
	
  313

  	
  (a)

  	
   

  	
  7.12(a)

  
	
   

  	
  (b)

  	
   

  	
  7.12(a)

  
	
   

  	
  (c)

  	
   

  	
  7.12(a)

  
	
   

  	
  (d)

  	
   

  	
  7.12(b)

  
	
  314

  	
  (a)

  	
   

  	
  4.03; 4.04

  
	
   

  	
  (b)

  	
   

  	
  11.05

  
	
   

  	
  (c)(1)

  	
   

  	
  12.04

  
	
   

  	
  (c)(2)

  	
   

  	
  12.04

  
	
   

  	
  (c)(3)

  	
   

  	
  N.A.

  
	
   

  	
  (d)

  	
   

  	
  11.05

  
	
   

  	
  (e)

  	
   

  	
  12.05

  
	
   

  	
  (f)

  	
   

  	
  N.A.

  
	
  315

  	
  (a)

  	
   

  	
  7.01

  
	
   

  	
  (b)

  	
   

  	
  7.05; 13.02

  
	
   

  	
  (c)

  	
   

  	
  7.01

  
	
   

  	
  (d)

  	
   

  	
  7.01

  
	
   

  	
  (e)

  	
   

  	
  6.11

  
	
  316

  	
  (a)(1)(A)

  	
   

  	
  6.02

  
	
   

  	
  (a)(1)(B)

  	
   

  	
  6.04

  
	
   

  	
  (a)(2)

  	
   

  	
  N.A.

  
	
   

  	
  (b)

  	
   

  	
  6.07

  
	
   

  	
  (c)

  	
   

  	
  N.A.

  
	
  317

  	
  (a)(1)

  	
   

  	
  6.08

  
	
   

  	
  (a)(2)

  	
   

  	
  6.09

  
	
   

  	
  (b)

  	
   

  	
  2.04

  
	
  318

  	
  (a)

  	
   

  	
  12.01

  
	
   

  	
  (b)

  	
   

  	
  N.A.

  
	
   

  	
  (c)

  	
   

  	
  12.01

  



 


Note:      This cross-reference table
shall not, for any purpose, be deemed to be a part of the Indenture.


 


 

















 


TABLE
OF CONTENTS(1)


 


	
  ARTICLE
  1

  DEFINITIONS AND INCORPORATION BY REFERENCE

  	
   

  
	
   

  	
   

  
	
  Section
  1.01.  Definitions.

  	
   

  
	
  Section
  1.02.  Other Definitions.

  	
   

  
	
  Section
  1.03.  Incorporation by Reference of TIA

  	
   

  
	
  Section
  1.04.  Rules of Construction

  	
   

  
	
   

  	
   

  
	
  ARTICLE
  2

  THE SECURITIES

  	
   

  
	
   

  	
   

  
	
  Section
  2.01.  Form and Dating

  	
   

  
	
  Section
  2.02.  Execution And Authentication

  	
   

  
	
  Section
  2.03.  Registrar, Paying Agent and
  Conversion Agent

  	
   

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

  	
   

  
	
  Section
  2.05.  Securityholder Lists

  	
   

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

  	
   

  
	
  Section
  2.07.  Replacement Securities

  	
   

  
	
  Section
  2.08.  Outstanding Securities;
  Determinations of Holders’ Action

  	
   

  
	
  Section
  2.09.  Temporary Securities

  	
   

  
	
  Section
  2.10.  Cancellation

  	
   

  
	
  Section
  2.11.  Persons Deemed Owners

  	
   

  
	
  Section
  2.12.  Payment of Interest; Interest Rights
  Preserved

  	
   

  
	
  Section
  2.13.  Computation of Interest

  	
   

  
	
  Section
  2.14.  Preservation of Information;
  Communications to Holders.

  	
   

  
	
   

  	
   

  
	
  ARTICLE
  3

  REDEMPTION

  	
   

  
	
   

  	
   

  
	
  Section
  3.01.  Right to Redeem; Notices to Trustee

  	
   

  
	
  Section
  3.02.  Selection of Securities to be
  Redeemed

  	
   

  
	
  Section
  3.03.  Notice of Redemption

  	
   

  
	
  Section
  3.04.  Effect of Notice of Redemption

  	
   

  
	
  Section
  3.05.  Deposit of Redemption Price

  	
   

  



 












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


 


 

















 


	
  Section
  3.06.  Securities Redeemed in Part

  	
   

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

  	
   

  
	
   

  	
   

  
	
  ARTICLE
  4

  COVENANTS

  	
   

  
	
   

  	
   

  
	
  Section
  4.01.  Payment of Securities

  	
   

  
	
  Section
  4.02.  SEC Reports

  	
   

  
	
  Section
  4.03.  Compliance Certificate

  	
   

  
	
  Section
  4.04.  Further Instruments and Acts

  	
   

  
	
  Section
  4.05.  Maintenance of Office or Agency

  	
   

  
	
  Section
  4.06.  Restriction on Additional
  Indebtedness

  	
   

  
	
  Section
  4.07.  Restricted Payments

  	
   

  
	
   

  	
   

  
	
  ARTICLE
  5

  SUCCESSOR CORPORATION

  	
   

  
	
   

  	
   

  
	
  Section
  5.01.  When Company May Merge or Transfer
  Assets

  	
   

  
	
   

  	
   

  
	
  ARTICLE
  6

  DEFAULTS AND REMEDIES

  	
   

  
	
   

  	
   

  
	
  Section
  6.01.  Events of Default

  	
   

  
	
  Section
  6.02.  Acceleration

  	
   

  
	
  Section
  6.03.  Other Remedies

  	
   

  
	
  Section
  6.04.  Waiver of Past Defaults

  	
   

  
	
  Section
  6.05.  Control by Majority

  	
   

  
	
  Section
  6.06.  Limitation on Suits

  	
   

  
	
  Section
  6.07.  Rights of Holders to Receive Payment

  	
   

  
	
  Section
  6.08.  Collection Suit by Trustee

  	
   

  
	
  Section
  6.09.  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
  7

  TRUSTEE

  	
   

  
	
   

  	
   

  
	
  Section
  7.01.  Duties of Trustee

  	
   

  
	
  Section
  7.02.  Rights of Trustee

  	
   

  
	
  Section
  7.03.  Individual Rights of Trustee

  	
   

  
	
  Section
  7.04.  Trustee’s Disclaimer

  	
   

  
	
  Section
  7.05.  Notice of Defaults

  	
   

  
	
  Section
  7.06.  Disqualification; Conflicting
  Interests

  	
   

  



 


ii

















 


	
  Section
  7.07.  Compensation and Indemnity

  	
   

  
	
  Section
  7.08.  Replacement of Trustee

  	
   

  
	
  Section
  7.09.  Successor Trustee by Merger

  	
   

  
	
  Section
  7.10.  Eligibility; Disqualification

  	
   

  
	
  Section
  7.11.  Preferential Collection of Claims
  Against Company

  	
   

  
	
  Section
  7.12.  Reports by Trustee.

  	
   

  
	
   

  	
   

  
	
  ARTICLE
  8

  DISCHARGE OF INDENTURE

  	
   

  
	
   

  	
   

  
	
  Section
  8.01.  Discharge of Liability on Securities

  	
   

  
	
  Section
  8.02.  Repayment to the Company

  	
   

  
	
   

  	
   

  
	
  ARTICLE
  9

  AMENDMENTS

  	
   

  
	
   

  	
   

  
	
  Section
  9.01.  Without Consent of Holders

  	
   

  
	
  Section
  9.02.  With Consent of Holders

  	
   

  
	
  Section
  9.03.  Compliance with TIA

  	
   

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

  	
   

  
	
  Section
  9.05.  Notation on or Exchange of Securities

  	
   

  
	
  Section
  9.06.  Trustee to Sign Supplemental
  Indentures

  	
   

  
	
  Section
  9.07.  Effect of Supplemental Indentures

  	
   

  
	
   

  	
   

  
	
  ARTICLE
  10

  RANKING OF NOTE LIENS

  	
   

  
	
   

  	
   

  
	
  Section
  10.01.  Agreement for the Benefit of Holders
  of Senior Priority Liens

  	
   

  
	
  Section
  10.02.  Securities not Subordinated

  	
   

  
	
  Section
  10.03.  Relative Rights

  	
   

  
	
   

  	
   

  
	
  ARTICLE
  11

  COLLATERAL AND SECURITY

  	
   

  
	
   

  	
   

  
	
  Section
  11.01.  Junior Priority Security Documents.

  	
   

  
	
  Section
  11.02.  Trustee’s Rights and Obligations with
  Respect to the Collateral.

  	
   

  
	
  Section
  11.03.  Authorization of Actions to be Taken.

  	
   

  
	
  Section
  11.04.  Release of Junior Priority Liens.

  	
   

  
	
  Section
  11.05.  Filing, Recording and Opinions.

  	
   

  
	
   

  	
   

  
	
  ARTICLE
  12

  MISCELLANEOUS

  	
   

  
	
   

  	
   

  
	
  Section
  12.01.  Conflict with TIA

  	
   

  
	
  Section
  12.02.  Notices

  	
   

  



 


iii

















 


	
  Section
  12.03.  Communication by Holders with Other
  Holders

  	
   

  
	
  Section
  12.04.  Certificate and Opinion as to
  Conditions Precedent

  	
   

  
	
  Section
  12.05.  Statements Required in Certificate or
  Opinion

  	
   

  
	
  Section
  12.06.  Separability Clause

  	
   

  
	
  Section
  12.07.  Rules By Trustee, Paying Agent,
  Conversion Agent and Registrar

  	
   

  
	
  Section
  12.08.  Legal Holidays

  	
   

  
	
  Section
  12.09.  Governing Law

  	
   

  
	
  Section
  12.10.  No Recourse Against Others

  	
   

  
	
  Section
  12.11.  Successors

  	
   

  
	
  Section
  12.12.  Multiple Originals

  	
   

  
	
   

  	
   

  
	
  Exhibit A — Form of Security

  	
   

  



 


iv

















 


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


 


Each party agrees as follows for the benefit
of the other party and for the equal and ratable benefit of the Holders of the
Company’s 11.75% Senior Secured Notes Due 2009 (the “Securities”):


 


 


ARTICLE 1

DEFINITIONS AND INCORPORATION BY REFERENCE


 


Section 1.01.  Definitions.


 


“Administrative Agent” means Wells Fargo
Foothill, Inc., as administrative agent for the lenders under the Secured
Credit Facility, and any successor thereto “exercising substantially the same
rights and powers and representative of lender to whom the Company has granted
a Senior Priority Lien on the collateral as permitted under this Indenture.


 


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


 


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


 


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


 


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


 


“Capital Lease” means a lease that is
required to be capitalized for financial reporting purposes in accordance with
GAAP.


 

















 


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


 


“Code” means the New York Uniform Commercial
Code, as in effect from time to time.


 


“Collateral” means all assets of the Company
that secure the Securities pursuant to the Junior Priority Security Documents
as amended from time to time.


 


“Common Stock” means any stock of any class
of the Company which has no preference in respect of dividends or of amounts
payable in the event of any voluntary or involuntary liquidation, dissolution
or winding up of the Company and which is not subject to redemption by the
Company.


 


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


 


“Company Request” or “Company Order” means a
written request or order signed in the name of the Company by its Chairman of
the Board, a Vice Chairman, its President, a Senior Vice President or a Vice
President, and by its Treasurer, an Assistant Treasurer, its Secretary or an
Assistant Secretary, and delivered to the Trustee.


 


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


 


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


 


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


 


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


 


2

















 


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


 


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


 


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


 


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


 


“GAAP” means generally accepted accounting
principles.


 


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


 


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


 


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


 


“Intellectual Property Security Agreement”
means an intellectual property security agreement executed and delivered
pursuant to the terms of the Security Agreement by the Company and Trustee, the
form and substance of which is satisfactory to the Trustee.


 


“Intercreditor Agreement” means (i) the
intercreditor agreement dated as of the date hereof among the Company, the
Trustee and Wells Fargo Foothill, Inc., as Administrative Agent under the
Secured Credit Facility and (ii) any agreement entered into among the
Company, the Trustee and any holder of a Senior Priority Lien (or its representative).


 


3

















 


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


 


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


 


“Junior Priority Lien” means, to the extent
securing the Securities, a Lien granted by a Junior Priority Security Document
as security for the Securities, which is junior in priority to the Senior
Priority Liens.


 


“Junior Priority Security Documents” means,
collectively, the Security Agreement, the Intellectual Property Agreement and
all other security agreements, pledges, collateral assignments, mortgages or
other instruments evidencing or creating any Security Interests in favor of the
Trustee, for the benefit of the Trustee and the Securityholders, in all or any
portion of the Collateral, in each case, as amended, amended and restated,
supplemented, replaced or otherwise modified from time to time, in accordance
with the terms thereof.


 


“Lien” means any interest in an asset
securing an obligation owed to, or a claim by, any Person other than the owner
of the asset, whether such interest shall be based on the common law, statute,
or contract, whether such interest shall be recorded or perfected, and whether
such interest shall be contingent upon the occurrence of some future event or
events or the existence of some future circumstance or circumstances, including
the lien or security interest arising from a mortgage, deed of trust,
encumbrance, pledge, hypothecation, assignment, deposit arrangement, security
agreement, conditional sale or trust receipt, or from a lease, consignment, or
bailment for security purposes and also including reservations, exceptions,
encroachments, easements, rights-of-way, covenants, conditions, restrictions,
leases, and other title exceptions and encumbrances affecting real property.


 


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


 


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


 


“New Convertible Notes” means the Company’s
6.50% Senior Secured Convertible Notes Due 2009.


 


“Noteholder Documents” means this Indenture,
the Securities, the Intercreditor Agreement and the Junior Priority Security
Documents.


 


4

















 


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


 


“Officers’ Certificate” means a written
certificate containing the information specified in Sections 12.04 and 12.05,
signed in the name of the Company by its Chairman of the Board, a Vice
Chairman, its President, a Senior Vice President or a Vice President, and by
its Treasurer, an Assistant Treasurer, its Secretary or an Assistant Secretary,
and delivered to the Trustee.


 


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


 


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


 


“Opinion of Counsel” means a written opinion
signed by legal counsel who may be an employee of or counsel to the Company and
who shall be satisfactory to the Trustee. 
Each such opinion shall comply with Section 314 of the Trust Indenture
Act and include the information specified in Sections 12.04 and 12.05.


 


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


 


“Permitted Purchase Money Indebtedness”
means indebtedness incurred at the time of, or within 20 days after, the
acquisition of any fixed assets for the purpose of financing all or any part of
the acquisition cost thereof.


 


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


 


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


 


5

















 


“Prospectus” means the prospectus dated
November 21, 2003, as amended or supplemented from time to time included
in the registration statement (File No. 333-110683) on Form S-3 filed
by the Company under the Securities Act with the SEC pursuant to which the
Company offered to exchange the Securities and the New Notes for its Old Notes.


 


“Redemption Date” shall mean a date
specified for redemption of the Securities (other than redemption upon a
Fundamental Change at the option of the Securityholder) in accordance with the
terms of the Securities and Section 3.01 of this Indenture.


 


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


 


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


 


“SEC” means the Securities and Exchange
Commission.


 


“Secured Credit Facility” means that certain
Amended and Restated Loan and Security Agreement among the Company, Silicon
Graphics Federal, Inc. and Wells Fargo Foothill, Inc., as Administrative Agent
for itself and other lenders, and the Bank of America, N.A. dated as of
September 20, 2002, as the same shall be renewed, replaced, restructured
or refinanced (whether with the original administrative agent and lenders or
others, and whether provided under the original Secured Credit Facility or any
other agreement or indenture).


 


“Security” or “Securities” means any of the
Company’s 11.75% Senior Secured Notes Due 2009, as amended or supplemented from
time to time, issued under this Indenture.


 


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


 


“Security Agreement” means the security
agreement dated as of the date hereof between the Trustee and the Company.


 


“Security Interests” means the Liens on the
Collateral created by the Junior Priority Security Documents in favor of the
Trustee on a junior priority basis, for the benefit of the Trustee and the
Securityholders.


 


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


 


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


 


6

















 


“Senior Priority Lien” means any lien on the
Collateral created by the Company that this senior to the lien granted to
Securityholders under the Security Agreement and that secures debt permitted
under Section 4.06(e) of this Indenture, including, but not limited to the
liens created under the Secured Credit Facility.


 


“Senior Priority Lien Obligations” means all
indebtedness incurred by the Company and permitted under this Indenture that is
secured by a Senior Priority Lien.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


7

















 


Section 1.02.  Other Definitions.


 


 


	
  Term

  	
   

  	
  Defined in

  Section

  	
   

  
	
  Bankruptcy Law

  	
   

  	
  6.01

  	
   

  
	
  Company Notice

  	
   

  	
  3.07

  	
   

  
	
  Event of Default

  	
   

  	
  6.01

  	
   

  
	
  Fundamental Change Repurchase Date

  	
   

  	
  3.07

  	
   

  
	
  Fundamental Change Redemption Price

  	
   

  	
  3.07

  	
   

  
	
  Incur

  	
   

  	
  4.06

  	
   

  
	
  Legal Holiday

  	
   

  	
  12.08

  	
   

  
	
  Notice of Default

  	
   

  	
  6.01

  	
   

  
	
  Paying Agent

  	
   

  	
  2.03

  	
   

  
	
  Registrar

  	
   

  	
  2.03

  	
   

  



 


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


 


“Commission” means the SEC.


 


“Indenture Securities” means the Securities.


 


“Indenture Security Holder” means a
Securityholder.


 


“Indenture to be Qualified” means this
Indenture.


 


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


 


“Obligor” on the indenture securities means
the Company.


 


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


 


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


 


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


 


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


 


8

















 


(c)           “or” is not exclusive;


 


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


 


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


 


 


ARTICLE 2

THE SECURITIES


 


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


 


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


 


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


 


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


 


The Trustee shall authenticate and deliver
Securities for original issue in an aggregate principal amount of up to
$230,591,000 upon a Company Order without any further action by the Company.


 


9

















 


Section 2.03.  Registrar, Paying Agent and Conversion
Agent.  The Company shall
maintain an office or agency where Securities may be presented for registration
of transfer or for exchange (“Registrar”), and an office or agency where
Securities may be presented for purchase or payment (“Paying Agent”).  The Registrar shall keep a register (the “Security
Register”) of the Securities and of their transfer and
exchange.  The Company may have one or
more co-registrars, one or more additional paying agents and one or more
additional conversion agents.  The term
Paying Agent includes any additional paying agent.


 


The Company shall enter into an appropriate
agency agreement with any Registrar, Paying Agent or co-registrar (if not the
Trustee).  The agreement shall implement
the provisions of this Indenture that relate to such agent. The Company shall
notify the Trustee of the name and address of any such agent.  If the Company fails to maintain a Registrar
or Paying Agent, the Trustee shall act as such and shall be entitled to
appropriate compensation therefor pursuant to Section 7.07. The Company or any
Subsidiary or an Affiliate of either of them may act as Paying Agent, Registrar
or co-registrar.


 


The Company initially appoints the Trustee as
Registrar and Paying Agent in connection with the Securities.


 


Section 2.04.  Paying Agent to Hold Money and Securities in
Trust.  Except as otherwise
provided herein, prior to or on each due date of payments in respect of any
Security, the Company shall deposit with the Paying Agent a sum of money or
securities sufficient to make such payments when so becoming due.  The Company shall require each Paying Agent
(other than the Trustee) to agree in writing that the Paying Agent shall hold
in trust for the benefit of Securityholders or the Trustee all money and
securities held by the Paying Agent for the making of payments in respect of
the Securities and shall notify the Trustee of any default by the Company in
making any such payment.  At any time
during the continuance of any such default, the Paying Agent shall, upon the
written request of the Trustee, forthwith pay to the Trustee all money and
securities so held in trust.  If the
Company, a Subsidiary or an Affiliate of either of them acts as Paying Agent,
it shall segregate the money and securities held by it as Paying Agent and hold
it as a separate trust fund.  The
Company at any time may require a Paying Agent to pay all money and securities
held by it to the Trustee and to account for any funds and securities disbursed
by it.  Upon doing so, the Paying Agent
shall have no further liability for the money or securities.


 


Section 2.05.  Securityholder Lists.  The Trustee shall preserve in as
current a form as is reasonably practicable the most recent list available to
it of the names and addresses of Securityholders.  If the Trustee is not the Registrar, the Company shall cause to
be furnished to the Trustee at least semiannually on November 15 and
May 15 a listing of Holders dated within 15 days of the date on which the
list is furnished and at such other times as the Trustee may request in


 


10

















 


writing a list in such form and as of such date as the Trustee may
reasonably require of the names and addresses of Securityholders.


 


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


 


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


 


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


 


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


 


None of the Company, the Trustee, the
Registrar or any co-registrar shall be required to exchange or register a
transfer of (a) any Securities for a period of 15 days next preceding any
selection of Securities to be redeemed or (b) any Securities or portions
thereof selected or called for redemption or (c) any Securities or portion
thereof surrendered for redemption (and not withdrawn) pursuant to Section
3.07.


 


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


 


11

















 


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


 


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


 


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


 


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


 


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


 


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


 


12

















 


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


 


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


 


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


 


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


 


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


 


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


 


13

















 


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


 


Section 2.08.  Outstanding Securities; Determinations of
Holders’ Action.  Securities
outstanding at any time are all the Securities authenticated by the Trustee
except for those canceled by it, those delivered to it for cancellation and
those described in this Section 2.08 as not outstanding.  A Security does not cease to be outstanding
because the Company or an Affiliate thereof holds the Security; provided,
however, that in determining whether the Holders of the requisite principal
amount of Securities have given or concurred in any request, demand,
authorization, direction, notice, consent or waiver hereunder, Securities owned
by the Company or any other obligor upon the Securities or any Affiliate of the
Company or such other obligor shall be disregarded and deemed not to be
outstanding, except that, in determining whether the Trustee shall be protected
in relying upon any such request, demand, authorization, direction, notice,
consent or waiver, only Securities which the Trustee knows to be so owned shall
be so disregarded.  Subject to the
foregoing, only Securities outstanding at the time of such determination shall
be considered in any such determination (including, without limitation,
determinations pursuant to Articles 6 and 9).


 


If a Security is replaced pursuant to Section
2.07, it ceases to be outstanding unless the Trustee receives proof
satisfactory to it that the replaced Security is held by a bona fide purchaser.


 


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


 


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


 


If temporary Securities are issued, the
Company will cause definitive Securities to be prepared without unreasonable
delay.  After the preparation of


 


14

















 


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


 


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


 


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


 


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


 


Any interest on any Security which is
payable, but is not punctually paid or duly provided for, on any Interest
Payment Date (herein called “Defaulted Interest”) shall forthwith cease
to be payable to the Holder on the relevant Regular Record Date by virtue of
having been such Holder, and such Defaulted


 


15

















 


Interest may
be paid by the Company, at its election in each case, as provided in (a) or (b)
below:


 


(a)           The Company may elect to make payment
of any Defaulted Interest to the Persons in whose names the Securities (or
their respective Predecessor Securities) are registered at the close of
business on a Special Record Date for the payment of such Defaulted Interest,
which shall be fixed in the following manner. The Company shall notify the
Trustee in writing of the amount of Defaulted Interest proposed to be paid on
each Security and the date of the proposed payment, and at the same time the
Company shall deposit with the Trustee an amount of money equal to the
aggregate amount proposed to be paid in respect of such Defaulted Interest or
shall make arrangements satisfactory to the Trustee for such deposit on or
prior to the date of the proposed payment, such money when deposited to be held
in trust for the benefit of the Persons entitled to such Defaulted Interest as
in this Clause provided. Thereupon the Trustee shall fix a Special Record Date
for the payment of such Defaulted Interest which shall be not more than 15 days
and not less than 10 days prior to the date of the proposed payment and not
less than 10 days after the receipt by the Trustee of the notice of the
proposed payment.  The Trustee shall
promptly notify the Company of such Special Record Date and, in the name and at
the expense of the Company, shall cause notice of proposed payment of such
Defaulted Interest and the Special Record Date therefor to be mailed,
first-class postage prepaid, to each Holder at his address as it appears in the
Security Register, not less than 10 days prior to such Special Record
Date.  Notice of the proposed payment of
such Defaulted Interest and the Special Record Date therefor having been so
mailed, such Defaulted Interest shall be paid to the Persons in whose names the
Securities (or their respective Predecessor Securities) are registered at the
close of business on such Special Record Date and shall no longer be payable
pursuant to the following clause 2.12(b).


 


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


 


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


 


16

















 


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


 


Section 2.14.  Preservation of Information; Communications
to Holders.


 


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


 


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


 


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


 


 


ARTICLE 3

REDEMPTION


 


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


 


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


 


Section 3.02.  Selection of Securities to be Redeemed.  If less than all the Securities
are to be redeemed, the Trustee shall select the Securities to be redeemed pro
rata or by lot or by a method the Trustee considers fair and appropriate (as
long as such method is not prohibited by the rules of any stock


 


17

















 


exchange or automated quotation system on which the Securities are then
listed).  The Trustee shall make the
selection at least 10 days, but not more than 60 days, before the Redemption
Date from outstanding Securities not previously called for redemption.  The Trustee may select for redemption
portions of the principal amount of Securities that have denominations larger
than $1,000.  Securities and portions of
Securities selected by the Trustee shall be in principal amounts of $1,000 or a
multiple of $1,000.  Provisions of this
Indenture that apply to Securities called for redemption also apply to portions
of Securities called for redemption. 
The Trustee shall notify the Company promptly of the Securities or
portions of Securities to be redeemed.


 


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


 


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


 


(a)           the Redemption Date;


 


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


 


(c)           the name and address of the Paying
Agent;


 


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


 


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


 


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


 


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


 


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


 


Upon the later of the Redemption Date or the
date such Securities are surrendered to the Paying Agent, such Securities shall
be paid at the Redemption


 


18

















 


Price,
together with accrued interest to, but excluding, the Redemption Date, stated
in the notice.


 


Section 3.05.  Deposit of Redemption Price.  Prior to or on the Redemption
Date, the Company shall deposit with the Paying Agent (or if the Company or a
Subsidiary or an Affiliate of either of them is the Paying Agent, shall
segregate and hold in trust) money sufficient to pay the Redemption Price and
accrued interest to, but excluding, the Redemption Date of all Securities to be
redeemed on that date other than Securities or portions of Securities called
for redemption which prior thereto have been delivered by the Company to the
Trustee for cancellation; provided that if such payment is made on the
Redemption Date it must be received by the Trustee or Paying Agent, as the case
may be, by 10:00 a.m.  New York City
time, on such Redemption Date.  If such
money is then held by the Company in trust and is not required for such purpose
it shall be discharged from such trust.


 


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


 


Section 3.07.  Redemption at Option of the Holder upon a
Fundamental Change.


 


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


 


(b)        On or before the tenth
day after the occurrence of a Fundamental Change, the Company, or, at its
written request (which must be received by the Trustee at least five Business
Days prior to the date the Trustee is requested to give notice as described
below), the Trustee in the name of and at the expense of the Company, shall
mail or cause to be mailed to all Holders of record on the date


 


19

















 


of the
Fundamental Change a notice (the “Company Notice”) of the occurrence of such
Fundamental Change and of the redemption right at the option of the Holders
arising as a result thereof.  Such
notice shall be mailed in the manner and with the effect set forth in Section
3.03.  The Company shall also deliver a
copy of the Company Notice to the Trustee at such time as it is mailed to the
Holders.


 


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


 


No failure of the Company to give the
foregoing notices and no defect therein shall limit the Holders’ redemption
rights or affect the validity of the proceedings for the repurchase of the
Securities pursuant to this Section 3.07.


 


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


 


(d)        Upon receipt by the
Company of the Fundamental Change Redemption Notice specified in Section
3.07(c), the Holder of the Security in respect of which such Fundamental Change
Redemption Notice was given shall (unless such Fundamental Change Redemption
Notice is withdrawn as specified in the following two paragraphs) thereafter be
entitled to receive solely the Fundamental Change Redemption Price, together with
accrued interest to, but excluding, the Fundamental Change Repurchase Date,
with respect to such Security.  Such
Fundamental Change Redemption Price together with accrued interest to, but
excluding, the Fundamental Change Repurchase Date, shall be paid to such Holder
promptly following the Fundamental Change Repurchase Date.


 


20

















 


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


 


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


 


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


 


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


 


There shall be no redemption pursuant to
Section 3.07 if there has occurred prior to, on or after, as the case may be,
the giving, by the Holders of such Securities, of the required Fundamental
Change Redemption Notice and is continuing an Event of Default (other than a
default in the payment of the Fundamental Change Redemption Price, together
with accrued interest to, but excluding, the Fundamental Change Repurchase
Date, with respect to such Securities).


 


(e)        On or before the
Fundamental Change Repurchase Date the Company shall deposit with the Trustee
or with the Paying Agent (or, if the Company or a Subsidiary or an Affiliate of
either of them is acting as the Paying Agent, shall segregate and hold in trust
as provided in Section 2.04) an amount of money and/or securities, if permitted
hereunder, sufficient to pay the aggregate Fundamental Change Redemption Price,
together with accrued interest to, but excluding, the Fundamental Change
Repurchase Date, of all the Securities or portions thereof which are to be
redeemed as of such Fundamental Change Repurchase Date; provided that if such
payment is made on the Fundamental Change Repurchase Date it must be received
by the Trustee or Paying Agent, as the case may be, by 10:00 a.m.  New York City time, on such Fundamental
Change Repurchase Date.


 


(f)         Any Security that is
to be redeemed upon a Fundamental Change only in part shall be surrendered at
the office of the Paying Agent (with, if the Company or the Trustee so
requires, due endorsement by, or a written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed by, the Holder
thereof or such Holder’s attorney duly authorized in writing) and the Company
shall execute and, upon the Company’s written direction to the Trustee, the
Trustee shall authenticate and deliver to the Holder of such Security, without
service charge, a new Security or Securities, of any authorized denomination as
requested by such Holder in aggregate principal amount equal to, and in
exchange


 


21

















 


for, the portion of the principal amount of the Security so surrendered
which is not redeemed.


 


(g)        In connection with any
offer to redeem Securities under Section 3.07 hereof the Company shall comply
with all Federal and state securities laws so as to permit the rights and
obligations under Section 3.07 to be exercised in the time and in the manner
specified in Section 3.07.


 


(h)        The Trustee and the
Paying Agent shall return to the Company any cash that remains unclaimed as
provided in paragraph 9 of the Securities, together with interest or dividends,
if any (subject to the provisions of Section 7.01(f)), thereon, held by them
for the payment of a Fundamental Change Redemption Price, together with accrued
interest to, but excluding, the Fundamental Change Repurchase Date; provided,
however that to the extent that the aggregate amount of cash
deposited by the Company pursuant to Section 3.07 exceeds the aggregate Fundamental
Change Redemption Price, together with accrued interest to, but excluding, the
Fundamental Change Repurchase Date, of the Securities or portions thereof which
the Company is obligated to purchase as of the Fundamental Change Repurchase
Date then promptly after the Business Day following the Fundamental Change
Repurchase Date the Trustee and the Paying Agent shall return any such excess
to the Company together with interest or dividends, if any, thereon.


 


 


ARTICLE 4

COVENANTS


 


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


 


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


 


Section 4.02.  SEC Reports.  The Company shall file with the Trustee, within 15
days after it files such annual and quarterly reports, information, documents
and other reports with the SEC, copies of its annual report and of the


 


22

















 


information, documents and other reports (or copies of such portions of
any of the foregoing as the SEC may by rules and regulations prescribe) which
the Company is required to file with the SEC pursuant to Section 13 or 15(d) of
the Exchange Act.


 


Section 4.03.  Compliance Certificate.  The Company shall deliver to the Trustee
within 120 days after the end of each fiscal year of the Company (beginning
with the fiscal year ending in June 2004) an Officers’ Certificate stating
whether or not the signers know of any Default that occurred during such
period.  If they do, such Officers’
Certificate shall describe the Default and its status.


 


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


 


Section 4.05.  Maintenance of Office or Agency.  The Company will maintain in the
Borough of Manhattan, The City of New York, an office or agency where
Securities may be presented or surrendered for payment, where Securities may be
surrendered for registration of transfer, exchange, or redemption and where
notices and demands to or upon the Company in respect of the Securities and
this Indenture may be served.  The
office of U.S. Bank Trust National Association, an Affiliate of the Trustee, at
100 Wall Street, Suite 1600, New York, NY 10005, shall be such office or agency
for all of the aforesaid purposes unless the Company shall maintain some other
office or agency for such purposes and shall give prompt written notice to the
Trustee of the location, and any change in the location, of such other office
or agency.  If at any time the Company
shall fail to maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the address of the Trustee set
forth in Section 12.02.


 


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


 


Section 4.06.  Restriction on Additional Indebtedness.  The Company shall not, nor shall
it permit any Subsidiary to, directly or indirectly, create, incur, assume, guaranty
or otherwise become directly or indirectly liable for (“Incur”) any additional
indebtedness for borrowed money or issue any Disqualified Stock,


 


23

















 


except that the Company may, and may permit any Subsidiary to Incur
additional indebtedness:


 


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


 


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


 


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


 


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


 


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


 


(f)         indebtedness
represented by purchase money liens or the interests of lessors under Capital
Leases to the extent that such liens or interests secure Permitted Purchase
Money Indebtedness and so long as such lien attaches only to the asset
purchased or acquired and the proceeds thereof, including indebtedness incurred
to refund, refinance or replace any indebtedness incurred pursuant to this
clause (f); or


 


(g)        that is (i) in an
aggregate principal amount no greater than $35,000,000, (ii) is subordinate in
right of payment to all amounts payable under


 


24

















 


the Securities and the New Notes, (iii) does not have a final Stated
Maturity prior to the Stated Maturity of the Securities and the New Notes, and
(iv) has an Average Life at least equal to the remaining Average Life of the
Securities and the New Notes.


 


Section 4.07.  Restricted Payments. 
The Company shall not


 


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


 


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


 


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


 


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


 


 


ARTICLE 5

SUCCESSOR CORPORATION


 


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


 


(a)        the Person (if other than the Company)
formed by such consolidation or into which the Company is merged or the Person
which


 


25

















 


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


 


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


 


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


 


The successor Person formed by such
consolidation or into which the Company is merged or the successor Person to
which such conveyance, transfer or lease is made shall succeed to, and be
substituted for, and may exercise every right and power of, the Company under
this Indenture with the same effect as if such successor had been named as the
Company herein; and thereafter, except in the case of (i) a lease of its
properties and assets substantially as an entirety, the Company shall be
discharged from all obligations and covenants under this Indenture and the
Securities.


 


 


ARTICLE 6

DEFAULTS AND REMEDIES


 


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


 


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


 


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


 


26

















 


(c)        the Company fails to
comply with any of its agreements in the Securities, this Indenture or the
Junior Priority Security Documents and such failure continues for 60 days after
receipt by the Company of a Notice of Default;


 


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


 


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


 


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


 


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


 


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


 


Section 6.02.  Acceleration.  If an Event of Default (other than an Event of Default
specified in Section 6.01(d) or (e)) occurs and is continuing, the Trustee by
notice to the Company, or the Holders of at least 25% in aggregate principal
amount of the Securities at the time outstanding by notice to the Company and
the Trustee, may declare the principal amount and premium, if any, on all the


 


27

















 


Securities and the interest accrued thereon to be immediately due and payable.  Upon such a declaration, such principal
amount, premium, if any, and interest accrued thereon shall be due and payable
immediately.  If an Event of Default
specified in Section 6.01(d) or (e) occurs and is continuing, the principal
amount and premium, if any, on all the Securities and the interest accrued
thereon shall become and be immediately due and payable without any declaration
or other act on the part of the Trustee or any Securityholders.  The Holders of a majority in aggregate
principal amount of the Securities at the time outstanding, by notice to the
Trustee (and without notice to any other Securityholder) may rescind an
acceleration and its consequences if the rescission would not conflict with any
judgment or decree and if all existing Events of Default have been cured or
waived except nonpayment of the principal amount, premium, if any, and interest
accrued thereon that has become due solely as a result of acceleration and if
all amounts due to the Trustee under Section 7.07 have been paid.  No such rescission shall affect any
subsequent Default or impair any right consequent thereto.


 


Section 6.03. 
Other Remedies. 
If an Event of Default occurs and is continuing, the Trustee
may pursue any available remedy to collect the payment of the principal amount
and premium, if any, on the Securities and interest accrued thereon or to
enforce the performance of any provision of the Securities or this Indenture.


 


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


 


Section 6.04. 
Waiver of Past Defaults.  The Holders of a majority in aggregate principal
amount of the Securities at the time outstanding, by notice to the Trustee (and
without notice to any other Securityholder), may waive an existing Default and
its consequences except (1) an Event of Default described in Section 6.01(a) or
6.01(b), or (2) a Default in respect of a provision that under Section 9.02
cannot be amended without the consent of each Securityholder affected.  When a Default is waived, it is deemed
cured, but no such waiver shall extend to any subsequent or other Default or
impair any consequent right.


 


Section 6.05. 
Control by Majority. 
The Holders of a majority in aggregate principal amount of
the Securities at the time outstanding may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or of
exercising any trust or power conferred on the Trustee.  However, the Trustee may refuse to follow
any direction that conflicts


 


28

















 


with law or this Indenture or that the Trustee determines in good faith
is unduly prejudicial to the rights of other Securityholders or would involve
the Trustee in personal liability unless the Trustee is offered indemnity
satisfactory to it.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


Section 6.07. 
Rights of Holders to Receive Payment.  Notwithstanding any other
provision of this Indenture, the right of any Holder to receive payment of the
principal amount, premium, if any, accrued interest, Redemption Price or
Fundamental Change Redemption Price in respect of the Securities held by such Holder,
on or after the respective due dates expressed in the Securities or any
Redemption Date or Fundamental Change Repurchase Date, as the case may be, or
to bring suit for the enforcement of any such payment on or after such
respective dates, shall not be impaired or affected adversely without the
consent of each such Holder.


 


Section 6.08. 
Collection Suit by Trustee.  If an Event of Default described in Section 6.01(a) or
6.01(b) occurs and is continuing, the Trustee may recover judgment in its own
name and as trustee of an express trust against the Company for the whole
amount owing with respect to the Securities and the amounts provided for in
Section 7.07.


 


29

















 


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


 


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


 


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


 


and any custodian, receiver, assignee, trustee, liquidator,
sequestrator or similar official in any such judicial proceeding is hereby
authorized by each Holder to make such payments to the Trustee and, in the
event that the Trustee shall consent to the making of such payments directly to
the Holders, to pay the Trustee any amount due it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section 7.07.


 


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


 


Section 6.10. 
Priorities.  If
the Trustee collects any money pursuant to this Article 6 (including upon
realization of any Lien on the Collateral), it shall pay out the money in the
following order:


 


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


 


Second:  to Securityholders for amounts due and
unpaid on the Securities for the principal amount, premium, if any, accrued
interest, Redemption Price or


 


30

















 


Fundamental
Change Redemption Price, as the case may be, ratably, without preference or
priority of any kind, according to such amounts due and payable on the
Securities; and


 


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


 


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


 


Section 6.11. 
Undertaking for Costs.  In any suit for the enforcement of any right or
remedy, under this Indenture or in any suit against the Trustee for any action
taken or omitted by it as Trustee, a court in its discretion may require the
filing by any party litigant (other than the Trustee) in the suit of an
undertaking to pay the costs of the suit, and the court in its discretion may
assess reasonable costs, including reasonable attorneys’ fees, against any
party litigant in the suit, having due regard to the merits and good faith of
the claims or defenses made by the party litigant.  This Section 6.11 does not apply to a suit by the Trustee, a suit
by a Holder pursuant to Section 6.07 or a suit by Holders of more than 10% in
aggregate principal amount of the Securities at the time outstanding.


 


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


 


 


ARTICLE 7

TRUSTEE


 


Section 7.01. 
Duties of Trustee. 
(a)  If an Event of
Default has occurred and is continuing, the Trustee shall exercise the rights
and powers vested in it by this Indenture and use the same degree of care and
skill in its exercise as a prudent man would exercise or use under the
circumstances in the conduct of his own affairs.


 


31

















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


32

















 


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


 


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


 


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


 


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


 


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


 


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


 


Section 7.07.  Compensation and Indemnity.  The Company agrees:


 


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


 


(b)           to reimburse the Trustee upon its
request for all reasonable expenses, disbursements and advances incurred or
made by the Trustee in


 


33

















 


accordance
with any provision of the Noteholder Documents to which it is a party
(including the reasonable compensation and the expense, advances and
disbursements of its agents and counsel), except any such expense, disbursement
or advance as may be attributable to its negligence or bad faith; and


 


(c)           to indemnify the Trustee for, and to
hold it harmless against, any loss, liability or expense incurred without
negligence or bad faith on its part, arising out of or in connection with the
acceptance or administration of this trust, including the costs and expenses of
defending itself against any claim or liability in connection with the exercise
or performance of any of its powers or duties under the Noteholder Documents to
which it is a party.


 


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


 


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


 


Section 7.08. 
Replacement of Trustee.  The Trustee may resign by so notifying the Company; provided
that if the Trustee resigns its position hereunder it shall be deemed to have
also resigned as trustee under the Junior Priority Security Documents.  Any such resignation shall not be effective
until a successor Trustee hereunder and under the Junior Priority Security Documents
has accepted its appointment pursuant to this Section 7.08.  The Holders of a majority in aggregate
principal amount of the Securities at the time outstanding may remove the
Trustee by so notifying the Trustee and may appoint a successor Trustee hereunder
and under the Junior Priority Security Documents.  The Company shall remove the Trustee if:


 


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


 


(b)           the Trustee is adjudged bankrupt or
insolvent;


 


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


 


(d)           the Trustee otherwise becomes
incapable of acting.


 


34

















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


Section 7.12. 
Reports by Trustee.


 


35

















 


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


 


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


 


 


ARTICLE 8

DISCHARGE OF INDENTURE


 


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


 


Section 8.02. 
Repayment to the Company.  The Trustee and the Paying Agent shall return to the
Company upon written request any money or securities held by them for the
payment of any amount with respect to the Securities that remains unclaimed for
two years, provided, however, that the Trustee or such Paying Agent, before
being required to make any such return, shall at the expense of the Company
cause to be published once in a newspaper of general circulation in The City of
New York or mail to each such Holder notice that such money or securities
remains unclaimed and that, after a date specified therein, which shall not be
less than 30 days from the date of such publication or mailing, any unclaimed
money or securities then remaining will be returned to the Company.  After return to the Company, Holders
entitled to the money or securities must look to the Company for payment as
general creditors unless an applicable abandoned property law designates
another person.


 


36

















 


ARTICLE 9

AMENDMENTS


 


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


 


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


 


(b)           to comply with Article 5;


 


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


 


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


 


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


 


(f)            to add any additional assets as
Collateral;


 


(g)           to reflect the grant of Liens on the
Collateral for the benefit of another secured party to the extent such
indebtedness is permitted by the terms of Section 4.06(e) of this Indenture;


 


(h)           to release Collateral from the Lien
of this Indenture and the Junior Priority Security Documents when permitted or
required by the Noteholder Documents; or


 


(i)            to conform the text of this
Indenture or the other Noteholder Documents to any provision contained in the
Prospectus under the section “Description of the 2009 Secured Notes.”


 


Section 9.02. 
With Consent of Holders.  With the written consent of the Holders of at least a
majority in aggregate principal amount of the Securities at the time
outstanding, the Company and the Trustee may amend this Indenture or the
Securities.  However, without the
consent of each Securityholder affected, an amendment or supplement to this
Indenture or the Securities may not:


 


(a)           make any change to the manner or rate
of accrual in connection with interest, reduce the rate of interest referred to
in paragraph


 


37

















 


1 of the
Securities or extend the time for payment of interest on any Security;


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


Section 9.03. 
Compliance with TIA. 
Every supplemental indenture executed pursuant to this
Article shall comply with the TIA as then in effect.


 


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


 


38

















 


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


 


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


 


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


 


Notwithstanding anything to the contrary
contained in this Article 9, the Company may amend (i) the Secured Credit
Facility and (ii) to the extent contemplated by the Intercreditor Agreement and
Section 11.04 hereof, any agreement or instrument evidencing a Security
Interest without the consent of Trustee or any Securityholder.


 


 


ARTICLE 10

RANKING OF NOTE LIENS


 


Section 10.01.  Agreement
for the Benefit of Holders of Senior Priority Liens.  The Trustee and each Securityholder by accepting a
Security agrees, that:


 


(a)        the Junior Priority Liens securing the
Securities upon any and all Collateral are, to the extent and in the manner
provided in the Intercreditor Agreement, junior in ranking to all present and
future Senior Priority Liens:


 


(i)        are enforceable by the holders of Senior
Priority Liens, for the benefit of the holders of Senior Priority Lien
Obligations secured thereby;


 


39

















 


(ii)       will remain enforceable by the holders of
Senior Priority Liens until the payment in full in cash of all Senior Priority
Lien Obligations.


 


(b)        without the necessity of any consent of
or prior notice to the Trustee or any Securityholder, the Company may
(1) amend, modify, supplement or terminate the Senior Credit Facility and
(2) enter into such agreements, including an Intercreditor Agreement, as
may be necessary or desirable to reflect its grant of Senior Priority Liens on
the Collateral for the benefit of additional secured parties, as permitted
under Section 4.06(e) of this Indenture.


 


(c)        as among the Trustee and the Securityholders
and the holders of Senior Priority Liens, the holders of the Senior Priority
Liens and the Administrative Agent will have the sole ability to control and
obtain remedies with respect to all Collateral without the necessity of any
consent of or notice to the Trustee or any Securityholder, as set forth in more
detail in the Intercreditor Agreement;


 


(d)        any or all Liens as set forth in, and
granted under the Junior Priority Security Documents for the benefit of the
Securityholders will be released by the Trustee as provided by Sections 3 or
5(b) of the Intercreditor Agreement, without the necessity of any consent of
the Securityholders, upon the request of the Administrative Agent;


 


(e)        the Indenture and Securities are subject
to the Intercreditor Agreement.  In case
of any conflict or inconsistency between the terms of the Intercreditor
Agreement and the Junior Priority Security Documents, the terms of the
Intercreditor Agreement shall control.


 


Section 10.02.  Securities
not Subordinated.  The provisions
of this Article 10 are intended solely to set forth the relative ranking, as
Liens, of the Junior Priority Liens as against the Senior Priority Liens.  The Securities are senior non-subordinated
obligations of the Company.  Neither the
Securities nor the exercise or enforcement of any right or remedy for the
payment or collection thereof (other than the exercise of rights and remedies
of a secured party, which are subject to the Intercreditor Agreement) are
intended to be, or will ever be by reason of the provisions of this Article 10,
in any respect subordinated, deferred, postponed, restricted or prejudiced.


 


Section 10.03.  Relative
Rights.  The Intercreditor
Agreement defines the relative rights, as lienholders, of holders of Junior
Priority Liens and holders of Senior Priority Liens.  Nothing in this Indenture or the Intercreditor Agreement will:


 


40

















 


(a)        impair, as between the Company and the
Securityholders, the obligation of the Company, which is absolute and
unconditional, to pay principal of, premium and interest on such Securities in
accordance with their terms or to perform any other obligation of the Company
under this Indenture or the Securities;


 


(b)        restrict the right of any Securityholder
to sue for payments that are then due and owing;


 


(c)        prevent the Trustee or any
Securityholder from exercising against the Company or any other obligor any of
its other available remedies upon a Default or Event of Default (other than its
rights as a secured party, which are subject to the Intercreditor Agreement);
or


 


(d)        restrict the right of the Trustee or any
Securityholder:


 


(i)        to file and prosecute a petition seeking
an order for relief in an involuntary bankruptcy case as to the Company or otherwise
to commence, or seek relief commencing, any insolvency or liquidation
proceeding involuntarily against the Company;


 


(ii)       to make, support or oppose any request
for an order for dismissal, abstention or conversion in any insolvency or
liquidation proceeding;


 


(iii)      to make, support or oppose, in any
insolvency or liquidation proceeding, any request for an order extending or
terminating any period during which the debtor (or any other Person) has the
exclusive right to propose a plan of reorganization or other dispositive
restructuring or liquidation plan therein;


 


(iv)     to seek the creation of, or appointment to,
any official committee representing creditors (or certain of the creditors) in
any insolvency or liquidation proceedings and, if appointed, to serve and act
as a member of such committee without being in any respect restricted or bound
by, or liable for, any of the obligations under this Article 10;


 


(v)      to seek or object to the appointment of
any professional person to serve in any capacity in any insolvency or
liquidation proceeding or to support or object to any request for compensation
made by any professional person or others therein;


 


(vi)     to make, support or oppose any request for
order appointing a trustee or examiner in any insolvency or liquidation
proceedings; or


 


41

















 


(vii)    otherwise to make, support or oppose any
request for relief in any insolvency or liquidation proceeding that it is
permitted by law to make, support or oppose;


 


(x)            if
it were a holder of unsecured claims; or


 


(y)           as
to any matter relating to any plan of reorganization or other restructuring or
liquidation plan or as to any matter relating to the administration of the
estate or the disposition of the case or proceeding


 


(except as set forth in the Intercreditor Agreement).


 


 


ARTICLE 11

COLLATERAL AND SECURITY


 


Section 11.01.  Junior
Priority Security Documents.


 


(a)        The payment of the principal of and
interest and premium, if any, on the Securities when due, whether on an
interest payment date, at maturity, by acceleration, repurchase, redemption or
otherwise by the Company and the performance of all other obligations of the
Company under this Indenture and the Securities are secured as provided in the
Junior Priority Security Documents which the Company and Trustee have entered
into simultaneously with the execution of this Indenture and will be secured by
Junior Priority Security Documents hereafter delivered as required or permitted
by this Indenture.


 


(b)        Pursuant to the terms of the Junior
Priority Security Agreements, the Company has agreed to take such actions as
may be necessary to perfect the Security Interests.  To the extent that perfection of the Collateral secured pursuant
to the Intellectual Property Security Agreement may be attained by filing of
financing statements under the Code, such actions will be taken on or prior to
the date hereof.  To the extent that
perfection of such Security Interests requires recordation with the Copyright
Office and Patent and Trademark Office, the Company shall file the
documentation required to effect such recordation on or before the date hereof
and shall notify the Trustee of such recordation upon its effectiveness.


 


Section 11.02.  Trustee’s
Rights and Obligations with Respect to the Collateral.


 


(a)        Subject to Section 7.01, neither the
Trustee nor any of its respective officers, directors, employees, attorneys or
agents will be responsible or liable for the existence, genuineness, value or
protection of any Collateral, for the legality,


 


42

















 


enforceability, effectiveness or sufficiency of the Junior Priority
Security Documents, for the creation, perfection, priority, sufficiency or
protection of any Junior Priority Lien, or for any defect or deficiency as to
any such matters, or for any failure to demand, collect, foreclose or realize
upon or otherwise enforce any of the Junior Priority Liens or Junior Priority
Security Documents or any delay in doing so.


 


(b)        Except as required or permitted by this
Indenture, the Trustee will not be obligated:


 


(i)        to act upon directions purported to be
delivered to it by any other Person;


 


(ii)       to foreclose upon or otherwise enforce
any Junior Priority Lien; or


 


(iii)      to take any other action whatsoever with
regard to any or all of the Junior Priority Liens, Junior Priority Security
Documents or Collateral.


 


(c)        The Trustee will be accountable only for
amounts that it actually receives as a result of the enforcement of the Junior
Priority Liens or Junior Priority Security Documents.


 


Section 11.03.  Authorization
of Actions to be Taken.


 


(a)        Each Securityholder, by its acceptance
thereof, consents and agrees to the terms of the Noteholder Documents, as
originally in effect and as amended, supplemented or replaced from time to time
in accordance with its terms, authorizes and directs the Trustee to enter into
and deliver the Noteholder Documents to which it is a party, and authorizes and
empowers the Trustee to bind the Securityholders as set forth in the Noteholder
Documents to which it is a party and to perform its obligations and exercise
its rights and powers thereunder.


 


(b)        The Trustee is authorized and empowered
to receive for the benefit of the Securityholders any funds collected or
distributed under the Noteholder Documents to which the Trustee is a party and
to make further distributions of such funds to the Securityholders according to
the provisions of this Indenture.


 


(c)        Subject to the provisions of Section
7.01, Section 7.02, Article 10, and the Intercreditor Agreement, the Trustee
may, in its sole discretion and without the consent of the Securityholders take
all actions it deems necessary or appropriate in order to:


 


(i)        foreclose upon or otherwise enforce any
or all of the Junior Priority Liens;


 


43

















 


(ii)       enforce any of the terms of the
Noteholder Documents to which the Trustee is a party; or


 


(iii)      collect and receive payment of any and all
Securities.


 


Subject to the Intercreditor Agreement, the Trustee is authorized and
empowered to institute and maintain such suits and proceedings as it may deem
expedient to protect or enforce the Junior Priority Liens or the Junior
Priority Security Documents to which the Trustee is a party or to prevent any
impairment of Collateral by any acts that may be unlawful or in violation of
the Junior Priority Security Documents to which Trustee is a party or this
Indenture, and such suits and proceedings as the Trustee may deem expedient to
preserve or protect its interests and the interests of the Securityholders in
the Collateral, including power to institute and maintain suits or proceedings
to restrain the enforcement of or compliance with any legislative or other
governmental enactment, rule or order that may be unconstitutional or otherwise
invalid if the enforcement of, or compliance with, such enactment, rule or
order would impair the Security Interests under the Junior Priority Security
Documents or be prejudicial to the interests of Securityholders or the Trustee.


 


Section 11.04.  Release of
Junior Priority Liens.


 


(a)        The Junior Priority Liens will be
released, with respect to the Securities:


 


(i)        in accordance with Sections 3 and 5(b)
of the Intercreditor Agreement;


 


(ii)       in whole, upon payment in full of the
principal of, accrued and unpaid interest and premium, if any, on the
Securities;


 


(iii)      in whole, upon satisfaction and discharge
of this Indenture pursuant to Section 8.01;


 


(iv)     in part, as to any property constituting
Collateral that is sold or otherwise disposed of by the Company to any Person
other than the Company in a transaction permitted by the Noteholder Documents,
at the time of such sale or disposition, to the extent of the interest sold or
disposed of.


 


(b)        Upon delivery to the Trustee of an
Officers’ Certificate requesting execution of an instrument confirming the
release of the Junior Priority Liens pursuant to Section 11.04(a), accompanied
by:


 


(i)        an Opinion of Counsel confirming that
such release is permitted by Section 11.04(a); and


 


44

















 


(ii)       all instruments requested by the Company
to effectuate or confirm such release.


 


The Trustee will promptly execute and deliver such instruments.


 


(c)        All instruments effectuating or confirming
any release of any Junior Priority Liens will have the effect solely of
releasing such Junior Priority Liens as to the Collateral described therein, on
customary terms and without any recourse, representation, warranty or liability
whatsoever.


 


(d)        The Company will bear and pay all costs
and expenses associated with any release of Junior Priority Liens pursuant to
this Section 11.04, including all reasonable fees and disbursements of any
attorneys or representatives acting for the Trustee.


 


Section 11.05.  Filing,
Recording and Opinions.


 


(a)        The Company will comply with the
provisions of TIA §314(b) and 314(d), except to the extent not required as set
forth in any Commission regulation or interpretation (including any no-action
letter issued by the Staff of the Commission, whether issued to the Company or
any other Person).  To the extent the
Company is required to furnish to the Trustee an Opinion of Counsel pursuant to
TIA §314(b)(2), the Company will furnish such opinion not more than 60 but not
less than 30 days prior to each December [23].


 


(b)        Any release of Collateral permitted by
Section 11.04 hereof will be deemed not to impair the Liens under the Indenture
and the Junior Priority Security Documents in contravention thereof and any
person that is required to deliver an Officer’s Certificate or Opinion of
Counsel pursuant to Section 314(d) of the TIA, shall be entitled to rely upon
the foregoing as a basis for delivery of such certificate or opinion.  The Trustee may, to the extent permitted by
Section 7.01 and Section 7.02 hereof, accept as conclusive evidence of
compliance with the foregoing provisions the appropriate statements contained
in such documents and Opinion of Counsel.


 


 


ARTICLE 12

MISCELLANEOUS


 


Section 12.01.  Conflict
with TIA.  If any provision
hereof limits, qualifies or conflicts with a provision of the TIA that is
required under the TIA to be a part of and govern this Indenture, the latter
provision shall control.  If any
provision of this Indenture modifies or excludes any provision of the TIA that
may be so modified or excluded, the latter provision shall be deemed to apply
to this Indenture as so modified or excluded, as the case may be.


 


45

















 


Section 12.02.  Notices.  Any request, demand,
authorization, notice, waiver, consent or communication shall be in writing and
delivered in person or mailed by first class mail, postage prepaid, addressed
as follows or transmitted by facsimile transmission (confirmed by overnight
courier) to the following facsimile numbers:


 


if to the Company:


 


Silicon Graphics, Inc.

1600 Amphitheatre Parkway

Mountain View, California 94043

Attn:       General Counsel

Telephone Number:             (415)
960-1980

Facsimile Number:                (415)
969-6289


 


if to the Trustee:


 


U.S. Bank National Association

633 West Fifth Street, 24th Floor

Los Angeles, California 90071

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

Telephone Number:  (213) 615-6043

Telefax Number:  (213) 615-6197

Paula.Oswald@usbank.com


 


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


 


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


 


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


 


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


 


Section 12.03.  Communication
by Holders with Other Holders.  Securityholders
may communicate pursuant to TIA Section 312(b) with other Securityholders with
respect to their rights under this Indenture or the Securities.


46

















 


The Company, the Trustee, the Registrar, the Paying Agent, the
Conversion Agent and anyone else shall have the protection of TIA Section
312(c).


 


Section 12.04.  Certificate
and Opinion as to Conditions Precedent. 
Upon any request or application by the Company to the Trustee
to take any action under this Indenture, the Company shall furnish to the
Trustee:


 


(a)           an Officers’ Certificate stating
that, in the opinion of the signers, all conditions precedent, if any, provided
for in this Indenture relating to the proposed action have been complied with;
and


 


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


 


Section 12.05.  Statements
Required in Certificate or Opinion.  Each
Officers’ Certificate or Opinion of Counsel with respect to compliance with a
covenant or condition provided for in this Indenture shall include:


 


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


 


(b)           a brief statement as to the nature
and scope of the examination or investigation upon which the statements or
opinions contained in such Officers’ Certificate or Opinion of Counsel are
based;


 


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


 


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


 


Section 12.06.  Separability
Clause.  In case any
provision in this Indenture or in the Securities shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.


 


Section 12.07.  Rules By
Trustee, Paying Agent, Conversion Agent and Registrar.  The Trustee may make reasonable
rules for action by or a meeting of Securityholders.  The Registrar, Conversion Agent and the Paying Agent may make
reasonable rules for their functions.


 


Section 12.08.  Legal
Holidays.  A “Legal
Holiday” is any day other than a Business Day.  If any specified date (including a date for
giving notice) is a Legal Holiday, the action shall be taken on the next
succeeding day that is not a


 


47

















 


Legal Holiday, and, to the extent applicable, no interest, if any,
shall accrue for the intervening period.


 


Section 12.09.  Governing
Law.  THE LAWS OF THE STATE
OF NEW YORK SHALL GOVERN THIS INDENTURE AND THE SECURITIES.


 


Section 12.10.  No Recourse
Against Others.  A director,
officer, employee or stockholder, as such, of the Company shall not have any
liability for any obligations of the Company under the Securities or this
Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation.  By
accepting a Security, each Securityholder shall waive and release all such
liability.  The waiver and release shall
be part of the consideration for the issue of the Securities.


 


Section 12.11.  Successors.  All agreements of the Company in
this Indenture and the Securities shall bind its successor.  All agreements of the Trustee in this
Indenture shall bind its successor.


 


Section 12.12.  Multiple
Originals.  The parties may
sign any number of copies of this Indenture. 
Each signed copy shall be an original, but all of them together
represent the same agreement.  One
signed copy is enough to prove this Indenture.


 


48

















 


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


 


	
   

  	
  SILICON GRAPHICS, INC.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Jeffrey Zellmer

  
	
   

  	
   

  	
  Title:

  	
  Chief Financial Officer

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Attest:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ________________________

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  [SEAL]

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  U.S. BANK NATIONAL ASSOCIATION

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Paula M. Oswald

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  
						



 


49

















 


EXHIBIT A


 


[FORM OF FACE OF SECURITY]


 


[FORM OF LEGEND FOR GLOBAL SECURITY:


 


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


 


SILICON GRAPHICS, INC.


 


$              
11.75% SENIOR SECURED NOTE DUE 2009


 


	
  REGISTERED

  	
   

  	
  CUSIP No. 827056 AE 2

  



No. 1


 


Silicon Graphics, Inc., a Delaware
corporation, promises to pay to or registered assigns, the principal amount
of                     
Dollars ($) on June 1, 2009 and to pay interest thereon from
December     , 2003 or from the most recent Interest
Payment Date to which interest has been paid or duly provided for,
semi-annually on December 1 and June 1 in each year, commencing
June 1, 2004, at the rate of 11.75% 
per annum until the principal hereof is paid or made available for
payment.  The interest so payable, and
punctually paid or duly provided for, on any Interest Payment Date, as provided
in such Indenture, will be paid to the Person in whose name this Security (or
one or more Predecessor Securities) is registered at the close of business on
the Regular Record Date for such interest, which shall be November 15 or
May 15 (whether or not a Business Day), as the case may be, next preceding
such Interest Payment Date.  Any such
interest not so punctually paid or duly provided for will forthwith cease to be
payable to the Holder on such Regular Record Date and may either be paid to the
Person in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on a Special Record Date for the payment of
such Defaulted Interest to be fixed by the Trustee, notice whereof shall be
given to Holders of Securities not less than 10 days prior to such Special
Record Date, or be paid at any time in any other lawful manner not inconsistent
with the


 


A-1

















 


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


 


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


 


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


 


	
   

  	
  SILICON GRAPHICS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
  [SEAL]

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Attest:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  TRUSTEE’S CERTIFICATE OF AUTHENTICATION

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  This is one of the Securities referred to in the within mentioned
  Indenture.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  U.S. BANK NATIONAL ASSOCIATION, as Trustee,

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Authorized Signatory

  	
   

  	
   

  
									



 


A-3

















 


[FORM OF REVERSE SIDE OF SECURITY]


 


SILICON GRAPHICS, INC.


 


11.75% SENIOR SECURED NOTE DUE 2009


 


1.             Interest


 


This Security shall bear interest at 11.75%
per annum in the manner set forth in the Indenture and the face of this
Security.  In the event that principal
hereof or any portion of such principal is not paid when due (whether upon
acceleration pursuant to Section 6.02 of the Indenture, upon the date set for
payment of the Redemption Price pursuant to paragraph 5 hereof, upon the date
set for payment of a Fundamental Change Redemption Price pursuant to paragraph
6 hereof or upon the Stated Maturity of this Security), then in each such case
the overdue amount shall bear interest at the rate of 11.75% per annum,
compounded semiannually (to the extent that the payment of such interest shall
be legally enforceable), which interest shall accrue from the date such overdue
amount was due to the date payment of such amount, including interest thereon,
has been made or duly provided for.  All
such interest shall be payable on demand.


 


2.             Method of Payment


 


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


 


3.             Paying Agent and
Registrar


 


Initially, U.S. Bank National Association, a
national banking association (the “Trustee”), will act as Paying Agent and
Registrar.  The Company may appoint and
change any Paying Agent, Registrar or co-registrar without notice, other than
notice to the Trustee.  The Company or
any of its Subsidiaries or any of their Affiliates may act as Paying Agent,
Conversion Agent, Registrar or co-registrar.


 


 


A-4

















 


4.             Indenture


 


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


 


The Securities are general unsecured
obligations of the Company limited to $230,591,000 aggregate principal amount
(subject to Sections 2.02 and 2.07 of the Indenture).


 


5.             Redemption at the
Option of the Company


 


Prior to June 1, 2004, the Securities
will not be redeemable at the option of the Company.  Beginning on June 1, 2004, the Company may redeem the
Securities for cash as a whole at any time, or from time to time in part, upon
not less than 10 days’ nor more than 60 days’ notice at the following prices
(the “Redemption
Price”) (expressed as percentages of the principal amount), together
with accrued and unpaid interest to, but excluding, the Redemption Date.  Beginning on June 1, 2004, the
Redemption Price shall be 104% of the principal amount plus accrued and unpaid
interest thereon.  Beginning on
June 1, 2005, the Redemption Price shall be 103% plus accrued and unpaid
interest thereon.  Beginning on
June 1, 2006, the Redemption Price shall be 102% plus accrued and unpaid
interest thereon.  Beginning on June 1,
2007, the Redemption Price shall be 101% plus accrued and unpaid interest
thereon.  Beginning on June 1,
2008, the Redemption Price shall be 100% plus accrued and unpaid interest
thereon.


 


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


 


No sinking fund is provided for the
Securities.


 


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


 


 


A-5

















 


principal
amount may be redeemed in part but only in multiples of $1,000 of principal
amount.


 


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


 


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


 


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


 


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


 


7.             Denominations;
Transfer; Exchange


 


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


 


 


A-6

















 


Fundamental
Change Redemption Notice has been given and not withdrawn (except, in the case
of a Security to be purchased in part, the portion of the Security not to be
purchased) or any Securities for a period of 15 days before a selection of
Securities to be redeemed.


 


8.             Persons Deemed
Owners


 


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


 


9.             Unclaimed Money or
Securities


 


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


 


10.          Amendment; Waiver


 


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


 


 


A-7

















 


11.          Defaults and Remedies


 


Under the Indenture, Events of Default
include (i) default in payment of the principal amount, Redemption Price or
Fundamental Change Redemption Price, as the case may be, in respect of the
Securities when the same becomes due and payable; (ii) default for 30 days in
the payment of any installment of interest on the Securities; (iii) failure by
the Company to comply with other agreements in the Indenture or the Securities,
subject to notice and lapse of time; (iv) an event of default under the Old
Notes Indenture, the New Convertible Indenture or the Junior Priority Security
Documents shall have occurred that results in the principal amount of and
accrued interest on that debt becoming immediately due and payable, and (v)
certain events of bankruptcy or insolvency. 
If an Event of Default occurs and is continuing, the Trustee, or the
Holders of at least 25% in aggregate principal amount of the Securities at the
time outstanding, may declare all the Securities to be due and payable
immediately.  Certain events of
bankruptcy or insolvency are Events of Default which will result in the
Securities being declared due and payable immediately upon the occurrence of
such Events of Default.


 


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


 


12.          Lien Subordination
and Sharing.  This Security is secured by Junior Priority
Liens upon the Collateral pursuant to certain Junior Priority Security
Documents.  The Junior Priority Liens
upon any and all Collateral are, to the extent and in the manner provided in
the Intercreditor Agreement, subordinate in ranking to all present and future
Senior Priority Liens as set forth in the Indenture and the Intercreditor
Agreement.


 


13.          Trustee Dealings with
the Company


 


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


 


14.          No Recourse Against
Others


 


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


 


A-8

















 


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


 


15.          Authentication


 


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


 


16.          Abbreviations


 


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


 


17.          Governing Law


 


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


 












 


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


 


Silicon Graphics, Inc.


1600 Amphitheatre Parkway


Mountain View, California 94043


Attn:  General Counsel


 


A-9

















 


[FORM OF OPTION TO ELECT REDEMPTION

UPON A FUNDAMENTAL CHANGE]


 


To:          Silicon Graphics,
Inc.


 


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


 


	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Signature(s)

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  principal amount to be redeemed

  
	
   

  	
  (if less than all):

  	
   

  
	
   

  	
   

  
	
   

  	
  $

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Social Security or other

  	
   

  
	
   

  	
  Taxpayer Identification Number

  	
   

  



 


A-10

















 


[FORM OF ASSIGNMENT]


 


For value received
                     
hereby sell(s), assign(s) and transfer(s) unto 


 


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


the within Security and hereby irrevocably constitutes and appoints
                                
attorney to transfer the said Security on the books of the Company, with full
power of substitution in the premises.


 


	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Signature(s)

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

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

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Signature Guarantee

  	
   

  



 


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


 


 


A-11