Exhibit 4.1


 




 


 





SEPRACOR INC.


 


 


as Issuer


 


 


AND


 


 


JPMORGAN CHASE BANK


 


 


as Trustee


 


 


INDENTURE


 


 


Dated as of December 12, 2003


 


 


0% Series A Convertible Senior Subordinated
Notes due 2008

0% Series
B Convertible Senior Subordinated Notes due 2010




 





 

















 


TABLE
OF CONTENTS


 


	
   

  	
  Page

  
	
  ARTICLE I
  DEFINITIONS

  	
  2

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 1.1

  	
  Definitions

  	
  2

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE II ISSUE, DESCRIPTION,
  EXECUTION, REGISTRATION  AND EXCHANGE
  OF NOTES

  	
  9

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 2.1

  	
  Designation,
  Amount and Issue of Notes

  	
  9

  
	
   

  	
  Section 2.2

  	
  Form
  of Notes

  	
  10

  
	
   

  	
  Section 2.3

  	
  Date
  and Denomination of Notes: Payments of Liquidated Damages

  	
  11

  
	
   

  	
  Section 2.4

  	
  Execution
  of Notes

  	
  11

  
	
   

  	
  Section 2.5

  	
  Exchange
  and Registration of Transfer of Notes; Restrictions on Transfer; Depositary.

  	
  11

  
	
   

  	
  Section 2.6

  	
  Mutilated,
  Destroyed, Lost or Stolen Notes

  	
  17

  
	
   

  	
  Section 2.7

  	
  Temporary
  Notes

  	
  18

  
	
   

  	
  Section 2.8

  	
  Cancellation
  of Notes Paid, Etc

  	
  19

  
	
   

  	
  Section 2.9

  	
  CUSIP
  Numbers

  	
  19

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE III REDEMPTION OF NOTES

  	
  20

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 3.1

  	
  No
  Redemption

  	
  20

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IV SUBORDINATION OF NOTES

  	
  20

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 4.1

  	
  Agreement
  of Subordination

  	
  20

  
	
   

  	
  Section 4.2

  	
  Payments
  to Noteholders

  	
  20

  
	
   

  	
  Section 4.3

  	
  Subrogation
  of Notes

  	
  23

  
	
   

  	
  Section 4.4

  	
  Authorization
  to Effect Subordination

  	
  24

  
	
   

  	
  Section 4.5

  	
  Notice
  to Trustee

  	
  24

  
	
   

  	
  Section 4.6

  	
  Trustee’s
  Relation to Senior Obligations

  	
  25

  
	
   

  	
  Section 4.7

  	
  No
  Impairment of Subordination

  	
  25

  
	
   

  	
  Section 4.8

  	
  Certain
  Conversions Not Deemed Payment

  	
  25

  
	
   

  	
  Section 4.9

  	
  Article Applicable
  to Paying Agents

  	
  26

  
	
   

  	
  Section 4.10

  	
  Senior
  Obligations Entitled to Rely

  	
  26

  
	
   

  	
  Section 4.11

  	
  Reliance
  on Judicial Order or Certificate of Liquidating Agent

  	
  26

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE V PARTICULAR COVENANTS OF THE COMPANY

  	
  26

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 5.1

  	
  Payment
  of Principal and Premium and Liquidated Damages

  	
  26

  
	
   

  	
  Section 5.2

  	
  Maintenance
  of Office or Agency

  	
  27

  
	
   

  	
  Section 5.3

  	
  Appointments
  to Fill Vacancies in Trustee’s Office

  	
  27

  
	
   

  	
  Section 5.4

  	
  Provisions
  as to Paying Agent

  	
  27

  



 


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  Section 5.5

  	
  Existence

  	
  28

  
	
   

  	
  Section 5.6

  	
  Rule
  144A Information Requirement

  	
  28

  
	
   

  	
  Section 5.7

  	
  Stay,
  Extension and Usury Laws

  	
  29

  
	
   

  	
  Section 5.8

  	
  Compliance
  Certificate

  	
  29

  
	
   

  	
  Section 5.9

  	
  Liquidated
  Damages

  	
  29

  
	
   

  	
  Section 5.10

  	
  Further
  Instruments and Acts

  	
  30

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VI NOTEHOLDERS’ LISTS AND
  REPORTS BY THE COMPANY AND THE TRUSTEE

  	
  30

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 6.1

  	
  Noteholders’
  Lists

  	
  30

  
	
   

  	
  Section 6.2

  	
  Preservation
  and Disclosure of Lists

  	
  30

  
	
   

  	
  Section 6.3

  	
  Reports
  by Trustee

  	
  30

  
	
   

  	
  Section 6.4

  	
  Reports
  by Company

  	
  30

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VII
  DEFAULTS AND REMEDIES

  	
  30

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 7.1

  	
  Events
  of Default

  	
  30

  
	
   

  	
  Section 7.2

  	
  Payments
  of Notes on Default; Suit Therefor

  	
  33

  
	
   

  	
  Section 7.3

  	
  Application
  of Monies Collected by Trustee

  	
  35

  
	
   

  	
  Section 7.4

  	
  Proceedings
  by Noteholder

  	
  36

  
	
   

  	
  Section 7.5

  	
  Proceedings
  by Trustee

  	
  36

  
	
   

  	
  Section 7.6

  	
  Remedies
  Cumulative and Continuing

  	
  37

  
	
   

  	
  Section 7.7

  	
  Direction
  of Proceedings and Waiver of Defaults by Majority of Noteholders

  	
  37

  
	
   

  	
  Section 7.8

  	
  Notice
  of Defaults

  	
  37

  
	
   

  	
  Section 7.9

  	
  Undertaking
  to Pay Costs

  	
  38

  
	
   

  	
  Section 7.10

  	
  Delay
  or Omission Not Waiver

  	
  38

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VIII
  CONCERNING THE TRUSTEE

  	
  38

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 8.1

  	
  Duties
  and Responsibilities of Trustee

  	
  38

  
	
   

  	
  Section 8.2

  	
  Reliance
  on Documents, Opinions, Etc

  	
  40

  
	
   

  	
  Section 8.3

  	
  No
  Responsibility for Recitals, Etc

  	
  41

  
	
   

  	
  Section 8.4

  	
  Trustee,
  Paying Agents, Conversion Agents or Registrar May Own Notes

  	
  41

  
	
   

  	
  Section 8.5

  	
  Monies
  to Be Held in Trust

  	
  41

  
	
   

  	
  Section 8.6

  	
  Compensation
  and Expenses of Trustee

  	
  42

  
	
   

  	
  Section 8.7

  	
  Officers’
  Certificate as Evidence

  	
  42

  
	
   

  	
  Section 8.8

  	
  Conflicting
  Interests of Trustee

  	
  43

  
	
   

  	
  Section 8.9

  	
  Eligibility
  of Trustee

  	
  43

  
	
   

  	
  Section 8.10

  	
  Resignation
  or Removal of Trustee

  	
  43

  



 


ii

















 


	
   

  	
  Section 8.11

  	
  Acceptance
  by Successor Trustee

  	
  44

  
	
   

  	
  Section 8.12

  	
  Succession
  by Merger, Etc

  	
  45

  
	
   

  	
  Section 8.13

  	
  Limitation
  on Rights of Trustee as Creditor

  	
  45

  
	
   

  	
  Section 8.14

  	
  Trustee’s
  Application for Instructions from the Company

  	
  45

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IX
  CONCERNING THE NOTEHOLDERS

  	
  46

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 9.1

  	
  Action
  by Noteholders

  	
  46

  
	
   

  	
  Section 9.2

  	
  Proof
  of Execution by Noteholders

  	
  46

  
	
   

  	
  Section 9.3

  	
  Who
  Are Deemed Absolute Owners

  	
  46

  
	
   

  	
  Section 9.4

  	
  Company-Owned
  Notes Disregarded

  	
  47

  
	
   

  	
  Section 9.5

  	
  Revocation
  of Consents; Future Holders Bound

  	
  47

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE X
  NOTEHOLDERS’ MEETINGS

  	
  48

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 10.1

  	
  Purpose
  of Meetings

  	
  48

  
	
   

  	
  Section 10.2

  	
  Call
  of Meetings by Trustee

  	
  48

  
	
   

  	
  Section 10.3

  	
  Call
  of Meetings by Company or Noteholders

  	
  49

  
	
   

  	
  Section 10.4

  	
  Qualifications
  for Voting

  	
  49

  
	
   

  	
  Section 10.5

  	
  Regulations

  	
  49

  
	
   

  	
  Section 10.6

  	
  Voting

  	
  50

  
	
   

  	
  Section 10.7

  	
  No
  Delay of Rights by Meeting

  	
  50

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XI
  SUPPLEMENTAL INDENTURES

  	
  50

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 11.1

  	
  Supplemental
  Indentures Without Consent of Noteholders

  	
  50

  
	
   

  	
  Section 11.2

  	
  Supplemental
  Indentures With Consent of Noteholders

  	
  51

  
	
   

  	
  Section 11.3

  	
  Effect
  of Supplemental Indentures

  	
  52

  
	
   

  	
  Section 11.4

  	
  Notation
  on Notes

  	
  53

  
	
   

  	
  Section 11.5

  	
  Evidence
  of Compliance of Supplemental Indenture to Be Furnished Trustee

  	
  53

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XII CONSOLIDATION, MERGER,
  SALE, CONVEYANCE AND LEASE

  	
  53

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 12.1

  	
  Company
  May Consolidate, Etc on Certain Terms

  	
  53

  
	
   

  	
  Section 12.2

  	
  Successor
  Corporation to Be Substituted

  	
  54

  
	
   

  	
  Section 12.3

  	
  Opinion
  of Counsel to Be Given Trustee

  	
  54

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XIII
  SATISFACTION AND DISCHARGE OF INDENTURE

  	
  54

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 13.1

  	
  Discharge
  of Indenture

  	
  54

  
	
   

  	
  Section 13.2

  	
  Deposited
  Monies to Be Held in Trust by Trustee

  	
  55

  
	
   

  	
  Section 13.3

  	
  Paying
  Agent to Repay Monies Held

  	
  55

  
	
   

  	
  Section 13.4

  	
  Return
  of Unclaimed Monies

  	
  55

  



 


iii

















 


	
   

  	
  Section 13.5

  	
  Reinstatement

  	
  56

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XIV IMMUNITY OF INCORPORATORS,
  STOCKHOLDERS, OFFICERS AND DIRECTORS

  	
  56

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 14.1

  	
  Indenture
  and Notes Solely Corporate Obligations

  	
  56

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XV
  CONVERSION OF NOTES

  	
  56

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 15.1

  	
  Right
  to Convert

  	
  56

  
	
   

  	
  Section 15.2

  	
  Exercise
  of Conversion Privilege; Issuance of Common Stock on Conversion; No
  Adjustment for Dividends

  	
  57

  
	
   

  	
  Section 15.3

  	
  Cash
  Payments in Lieu of Fractional Shares

  	
  58

  
	
   

  	
  Section 15.4

  	
  Conversion
  Rate

  	
  58

  
	
   

  	
  Section 15.5

  	
  Adjustment
  of Conversion Rate

  	
  58

  
	
   

  	
  Section 15.6

  	
  Effect
  of Reclassification, Consolidation, Merger or Sale

  	
  68

  
	
   

  	
  Section 15.7

  	
  Taxes
  on Shares Issued

  	
  68

  
	
   

  	
  Section 15.8

  	
  Reservation
  of Shares; Shares to Be Fully Paid; Listing of Common Stock

  	
  68

  
	
   

  	
  Section 15.9

  	
  Responsibility
  of Trustee

  	
  70

  
	
   

  	
  Section 15.10

  	
  Notice to Holders Prior to Certain Actions

  	
  70

  
	
   

  	
  Section 15.11

  	
  Shareholder Rights Plans

  	
  71

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XVI
  REPURCHASE UPON A DESIGNATED EVENT

  	
  72

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 16.1

  	
  Repurchase
  at Option of Holders Upon a Designated Event

  	
  72

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XVII
  MISCELLANEOUS PROVISIONS

  	
  74

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 17.1

  	
  Provisions
  Binding on Company’s Successors

  	
  74

  
	
   

  	
  Section 17.2

  	
  Official
  Acts by Successor Corporation

  	
  74

  
	
   

  	
  Section 17.3

  	
  Addresses
  for Notices, Etc

  	
  75

  
	
   

  	
  Section 17.4

  	
  GOVERNING
  LAW

  	
  75

  
	
   

  	
  Section 17.5

  	
  Evidence
  of Compliance with Conditions Precedent; Certificates to Trustee

  	
  75

  
	
   

  	
  Section 17.6

  	
  Legal
  Holidays

  	
  76

  
	
   

  	
  Section 17.7

  	
  No
  Security Interest Created

  	
  76

  
	
   

  	
  Section 17.8

  	
  Trust
  Indenture Act

  	
  76

  
	
   

  	
  Section 17.9

  	
  Benefits
  of Indenture

  	
  76

  
	
   

  	
  Section 17.10

  	
  Table of Contents, Headings, Etc

  	
  76

  
	
   

  	
  Section 17.11

  	
  Authenticating Agent

  	
  76

  
	
   

  	
  Section 17.12

  	
  Execution in Counterparts

  	
  77

  



 


iv

















 


INDENTURE dated as of December 12, 2003 between Sepracor Inc., a
Delaware corporation, as issuer (hereinafter sometimes called the “Company”, as
more fully set forth in Section 1.1), and JPMorgan Chase Bank, a banking
corporation organized under the laws of the State of New York, as trustee (hereinafter
sometimes called the “Trustee”, as more fully set forth in Section 1.1).


 


W I T N E S S E T H:


 


WHEREAS, for its lawful corporate purposes, the Company has duly
authorized the issue of its 0% Series A Convertible Senior Subordinated Notes
due 2008 (hereinafter sometimes called the “Series A Notes”), initially in an
aggregate principal amount not to exceed $200,000,000 ($250,000,000 if the
option to purchase additional Series A Notes granted to the Initial Purchasers
(as defined herein) pursuant to the Purchase Agreement (as defined herein) is
exercised in full) and its 0% Series B Senior Subordinated Notes due 2010
(hereinafter sometimes called the “Series B Notes”), initially in an aggregate
principal amount not to exceed $400,000,000 ($500,000,000 if the option to
purchase additional Series B Notes granted to the Initial Purchasers pursuant
to the Purchase Agreement is exercised in full) (the Series A Notes and the
Series B notes collectively hereinafter sometimes called the “Notes”), and in
order to provide the terms and conditions upon which the Notes are to be
authenticated, issued and delivered, the Company has duly authorized the
execution and delivery of this Indenture; and


 


WHEREAS, the Notes, the certificate of authentication to be borne by
the Notes, a form of assignment, a form of option to elect repayment upon a
Designated Event (as defined herein), a form of conversion notice and a
certificate of transfer to be borne by the Notes are to be substantially in the
forms hereinafter provided for; and


 


WHEREAS, all acts and things necessary to make the Notes, when executed
by the Company and authenticated and delivered by the Trustee or a duly
authorized authenticating agent, as in this Indenture provided, the valid,
binding and legal obligations of the Company, and to constitute these presents
a valid agreement according to its terms, have been done and performed, and the
execution of this Indenture and the issue hereunder of the Notes have in all
respects been duly authorized.


 


NOW, THEREFORE, THIS INDENTURE WITNESSETH:


 


That in order to declare the terms and conditions upon which the Notes
are, and are to be, authenticated, issued and delivered, and in consideration
of the premises and of the purchase and acceptance of the Notes by the holders
thereof, the Company covenants and agrees with the Trustee for the equal and
proportionate benefit of the respective holders from time to time of each
series of the Notes (except as otherwise provided below), as follows:


 

















 


ARTICLE I

DEFINITIONS


 


Section 1.1                                      Definitions. 
The terms defined in this Section 1.1 (except as herein otherwise
expressly provided or unless the context otherwise requires) for all purposes
of this Indenture and of any indenture supplemental hereto shall have the
respective meanings specified in this Section 1.1.  All other terms used in this Indenture,
which are defined in the Trust Indenture Act or which are by reference therein
defined in the Securities Act (except as herein otherwise expressly provided or
unless the context otherwise requires) shall have the meanings assigned to such
terms in said Trust Indenture Act and in said Securities Act as in force at the
date of the execution of this Indenture. 
The words “herein,” “hereof,” “hereunder,” and words of similar import
refer to this Indenture as a whole and not to any particular Article,
Section or other Subdivision.  The
terms defined in this Article include the plural as well as the singular.


 


Accepted Purchase Shares:  Accepted Purchase Shares shall have the
meaning specified in Section 15.5(a).


 


Affiliate:  The term “Affiliate” of any specified person
shall mean 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.


 


Board of Directors:  The term “Board of Directors” shall mean the
Board of Directors of the Company or a committee of such Board duly authorized
to act for it hereunder.


 


Board Resolution:  The term “Board Resolution” means a copy of
a resolution certified by the Secretary or an Assistant Secretary of the
Company to have been duly adopted by the Board of Directors, or duly authorized
committee thereof (to the extent permitted by applicable law), and to be in
full force and effect on the date of such certification, and delivered to the
Trustee.


 


Business Day:  The term “Business Day” means each Monday,
Tuesday, Wednesday, Thursday and Friday which is not a day on which the banking
institutions in The City of New York or the city in which the Corporate Trust
Office is located are authorized or obligated by law or executive order to
close or be closed.


 


close of business:  The term “close of business” means 5 p.m. (New
York City time).


 


Closing Sale Price:  The term “Closing Sale Price” means the
closing sale price per share of the Common Stock (or, if no closing sale price
is reported, the average of the closing bid and ask prices or, if more than one
in either case, the average of the average closing bid and the average closing
ask prices) on such date as reported in composite transactions for the
principal United States


 


2

















 


securities exchange on which shares of Common Stock are traded or, if
the shares of Common Stock are not listed on a United States national or
regional securities exchange, as reported by the Nasdaq or by the National
Quotation Bureau Incorporated.  In the
absence of such quotations, the Company shall be entitled to determine the
Closing Sale Price in such manner as furnished by any New York Stock Exchange
member firm selected from time to time by the Board of Directors for that
purpose, or a price determined in good faith by the Board of Directors, whose
determination shall be conclusive and described in a Board Resolution.  The Closing Sale Price shall be determined
without reference to extended or after hours trading.


 


Commission:  The term “Commission” shall mean the
Securities and Exchange Commission.


 


Common Stock:  The term “Common Stock” shall mean any stock
of any class of the Company which has no preference in respect of dividends or
of amounts payable in the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Company and which is not subject to redemption
by the Company.  Subject to the
provisions of Section 15.6, however, shares issuable on conversion of
Notes shall include only shares of the class designated as common stock of the
Company, par value $0.10 per share, at the date of this Indenture or shares of
any class or classes resulting from any reclassification or reclassifications
thereof and that have no preference in respect of dividends or of amounts
payable in the event of any voluntary or involuntary liquidation, dissolution
or winding up of the Company and that are not subject to redemption by the
Company; provided that if at any time there shall be more than one such
resulting class, the shares of each such class then so issuable shall be
substantially in the proportion which the total number of shares of such class
resulting from all such reclassifications bears to the total number of shares
of all such classes resulting from all such reclassifications.


 


Company:  The term “Company” shall mean Sepracor Inc.,
a Delaware corporation, and subject to the provisions of Article XII,
shall include its successors and assigns.


 


Company Notice:  The term “Company Notice” shall have the
meaning specified in Section 16.2.


 


Conversion Date:  The term “Conversion Date” shall have the
meaning specified in Section 15.4.


 


Conversion Rate:  The term “Conversion Rate” shall have the
meaning specified in Section 15.4.


 


Corporate Trust Office:  The term “Corporate Trust Office,” or other
similar term, shall mean the principal corporate trust office of the Trustee at
which at any particular time its corporate trust business shall be principally
administered, which office is, at the date as of which this Indenture is dated,
located at JPMorgan Chase Bank, 4 New York Plaza, New York, New York 10004,
Attention:  Institutional Trust Services
(Sepracor Inc. 0% Series A Convertible Senior Subordinated Notes due 2008 and
0% Series B Senior Subordinated Notes due 2010).


 


3

















 


Custodian:  The term “Custodian” means JPMorgan Chase
Bank with respect to the Notes in global form, or any successor entity thereto.


 


Default:  The term “Default” shall mean any event that
is, or after notice or passage of time, or both, would be, an Event of Default.


 


Depositary:  The term “Depositary” means, with respect to
the Notes issuable or issued in whole or in part in global form, the person
specified in Section 2.5(d) as the Depositary with respect to such Notes,
until a successor shall have been appointed and become such pursuant to the
applicable provisions of this Indenture, and thereafter, “Depositary” shall
mean or include such successor.


 


Designated Event:
The term “Designated Event” means (a) the occurrence of a Fundamental Change or
(b) a Termination of Trading.


 


Designated Senior Obligations:
The term “Designated Senior Obligations” shall mean Senior Obligations in which
the instrument creating or evidencing the same or the assumption or guarantee
thereof (or related agreements or documents to which the Company is a party)
expressly provides that such Senior Obligations shall be “Designated Senior
Obligations” for purposes of this Indenture (provided that such instrument,
agreement or other document may place limitations and conditions on the right
of such Senior Obligations to exercise the rights of Designated Senior
Obligations). If any payment made to any holder of any Designated Senior
Obligations or its Representative with respect to such Designated Senior
Obligations is rescinded or must otherwise be returned by such holder or
Representative upon the insolvency, bankruptcy or reorganization of the Company
or otherwise, the reinstated Indebtedness of the Company arising as a result of
such rescission or return shall constitute Designated Senior Obligations
effective as of the date of such rescission or return.


 


Event of Default:  The term “Event of Default” shall mean with
respect to any series of Notes any event specified in Section 7.1,
continued for the period of time, if any, and after the giving of notice, if
any, therein designated.


 


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


 


Expiration Time:  The term “Expiration Time” shall have the meaning
specified in Section 15.5(f) or 15.5(g).


 


Fundamental Change:  The term “Fundamental Change” shall mean the
occurrence of any transaction or event in connection with which all or
substantially all the Common Stock shall be exchanged for, be converted into,
be acquired for, or constitute solely the right to receive, consideration that
is not all or substantially all common stock that is (or, upon consummation of
or immediately following such transaction or event, will be) listed on a United
States national securities exchange or approved for quotation on the Nasdaq
National Market or any similar United States


 


4

















 


system of automated dissemination of quotations of securities prices
(whether by means of an exchange offer, liquidation, tender offer,
consolidation, merger, combination, reclassification, recapitalization or
otherwise).


 


Global Note:  The term “Global Note”  shall have the meaning specified in
Section 2.5(b).


 


Indebtedness:  The term “Indebtedness” shall mean, with
respect to any Person, and without duplication, (a) all indebtedness,
obligations and other liabilities (contingent or otherwise) of such Person for
borrowed money (including obligations of the Company in respect of overdrafts,
foreign exchange contracts, currency exchange agreements, interest rate
protection agreements, and any loans or advances from banks, whether or not
evidenced by notes or similar instruments, and all commitment, stand by and
other fees due and payable to financial institutions with respect to credit
facilities available to such Person) or evidenced by bonds, debentures, notes
or similar instruments (whether or not the recourse of the lender is to the
whole of the assets of such Person or to only a portion thereof) (other than
any account payable or other accrued current liability or obligation incurred
in the ordinary course of business in connection with the obtaining of
materials or services); (b) all reimbursement obligations and other liabilities
(contingent or otherwise) of such Person with respect to letters of credit,
bank guarantees or bankers’ acceptances; (c) all obligations and liabilities
(contingent or otherwise) in respect of leases of real or personal property or
other assets of such Person required, in conformity with generally accepted
accounting principles, to be accounted for as capitalized lease obligations on
the balance sheet of such Person; (d) all obligations of such Person
(contingent or otherwise) with respect to an interest rate or other swap, cap
or collar agreement or other similar instrument or agreement or foreign
currency hedge, exchange, purchase or similar instrument or agreement; (e) all
direct or indirect guaranties or similar agreements by such Person in respect
of, and obligations or liabilities (contingent or otherwise) of such Person to
assure a creditor against loss in respect of indebtedness of another Person of
the kind described in clauses (a) through (d); (f) any indebtedness described
in clauses (a) through (e) secured by any mortgage, pledge, lien or other
encumbrance existing on property that is owned or held by such Person,
regardless of whether the indebtedness or other obligation secured thereby
shall have been assumed by such Person; and (g) any and all deferrals, renewals,
extensions and refundings of, or amendments, modifications or supplements to,
any indebtedness, obligation or liability of the kind described in clauses (a)
through (f).


 


Indenture:  The term “Indenture” shall mean this
instrument as originally executed or, if amended or supplemented as herein
provided, as so amended or supplemented.


 


Initial Purchasers:  The term “Initial Purchasers” means Morgan
Stanley & Co. Incorporated, U.S. Bancorp Piper Jaffray, Inc. and Credit
Suisse First Boston LLC.


 


Liquidated Damages:  The term “Liquidated Damages” means all
Liquidated Damages Amounts as defined in the Registration Rights Agreement.


 


5

















 


Note or Notes:  The terms “Note” or “Notes” shall mean any
Note or Notes, as the case may be, authenticated and delivered under this
Indenture.


 


Noteholder
or holder:  The terms
“Noteholder” or “holder” as applied to any Note, or other similar terms (but
excluding the term “beneficial holder”), shall mean any person in whose name at
the time a particular Note is registered on the Note register.


 


Note registrar:  The term “Note registrar” shall have the
meaning specified in Section 2.5(a).


 


Note register:  The term “Note register” shall have the
meaning specified in Section 2.5.


 


Officers’
Certificate:  The term
“Officers’ Certificate”, when used with respect to the Company, shall mean a
certificate signed by (a) one of the President, the Chief Executive Officer,
any Executive or Senior Vice President or any Vice President (whether or not
designated by a number or numbers or word added before or after the title “Vice
President”) and (b) by one of the Treasurer or any Assistant Treasurer,
Secretary or any Assistant Secretary or Controller of the Company, which is
delivered to the Trustee.  Each such
certificate shall include the statements provided for in Section 17.5 if
and to the extent required by the provisions of such Section.


 


Opinion of Counsel:  The term “Opinion of Counsel” shall mean an
opinion in writing signed by legal counsel, who may be an employee of or
counsel to the Company, or other counsel acceptable to the Trustee, which is
delivered to the Trustee.  Each such
opinion shall include the statements provided for in Section 17.5 if and
to the extent required by the provisions of such Section.


 


outstanding:  The term “outstanding,” when used with
reference to Notes, shall, subject to the provisions of Section 9.4, mean,
as of any particular time, all Notes authenticated and delivered by the Trustee
under this Indenture, except:


 


(a)          Notes theretofore
canceled by the Trustee or delivered to the Trustee for cancellation;


 


(b)         Notes, or portions
thereof, for the payment repurchase of which monies in the necessary amount
shall have been deposited in trust with the Trustee or with any paying agent
(other than the Company) or shall have been set aside and segregated in trust
by the Company (if the Company shall act as its own paying agent);


 


(c)          Notes in lieu of which,
or in substitution for which, other Notes shall have been authenticated and
delivered pursuant to the terms of Section 2.6 unless proof satisfactory
to the Trustee is presented that any such Notes are held by bona fide holders
in due course; and


 


(d)         Notes converted into
Common Stock pursuant to Article XV.


 


6

















 


Payment Blockage Notice:  The term “Payment Blockage Notice” shall
have the meaning specified in Section 4.2.


 


Person or person:  The term “person” shall mean an individual,
a corporation, a limited liability company, an association, a partnership, a
joint venture, a joint stock company, a trust, an unincorporated organization
or a government or an agency or a political subdivision thereof.


 


Portal Market:  The term “Portal Market” shall mean The
Portal Market operated by the National Association of Securities Dealers, Inc.
or any successor thereto.


 


Predecessor Note:  The term “Predecessor Note” of any
particular Note shall mean every previous Note evidencing all or a portion of
the same debt as that evidenced by such particular Note; and, for the purposes
of this definition, any Note authenticated and delivered under Section 2.6
in lieu of a lost, destroyed or stolen Note shall be deemed to evidence the
same debt as the lost, destroyed or stolen Note that it replaces.


 


Purchase Agreement:  The term “Purchase Agreement” means that
certain Purchase Agreement, dated as of December 8, 2003, by and among the
Company and the Initial Purchasers.


 


Purchased Shares:  The term “Purchased Shares” shall have the
meaning specified in Section 15.5(f).


 


QIB:  The term “QIB” shall mean a “qualified
institutional buyer” as defined in Rule 144A.


 


record date:  The term “record date” shall have the
meaning specified in Section 2.3.


 


Registration
Rights Agreement:  The
term “Registration Rights Agreement” means that certain Registration Rights
Agreement, dated as of December 12, 2003, between the Company and the
Initial Purchasers.


 


Representative:  The term “Representative” shall mean the (a)
indenture trustee or other trustee, agent or representative for any Senior
Obligations or (b) with respect to any Senior Obligations that do not have any
such trustee, agent or other representative, (i) in the case of such Senior
Obligations issued pursuant to an agreement providing for voting arrangements
as among the holders or owners of such Senior Obligations, any holder or owner
of such Senior Obligations acting with the consent of the required persons
necessary to bind such holders or owners of such Senior Obligations and (ii) in
the case of all other such Senior Obligations, the holder or owner of such
Senior Obligations.


 


Repurchase Price:  The term “Repurchase Price” has the meaning
specified in Section 16.1.


 


Responsible Officer:  The term “Responsible Officer”, when used
with respect to the Trustee, shall mean an officer of the Trustee in the
Corporate Trust Office, including any managing director,


 


7

















 


vice president, assistant vice president, assistant treasurer,
assistant secretary or any other officer of the Trustee customarily performing
functions similar to those performed by any of the above designated officers
and having direct responsibility for the administration of this Indenture, and
also, with respect to a particular matter, any other officer to whom such
matter is referred because of such officer’s knowledge of and familiarity with
the particular subject.


 


Restricted Securities:  The term “Restricted Securities” has the
meaning specified in Section 2.5(d).


 


Rule 144A:  The term “Rule 144A” shall mean Rule 144A as
promulgated under the Securities Act.


 


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


 


Senior Obligations:  The term “Senior Obligations” shall mean the
principal of, premium, if any, interest (including all interest accruing
subsequent to the commencement of any bankruptcy or similar proceeding, whether
or not a claim for post-petition interest is allowable as a claim in any such
proceeding) and rent payable on or in connection with, and all fees, costs,
expenses and other amounts accrued or due on or in connection with,
Indebtedness of the Company, whether outstanding on the date of this Indenture
or thereafter created, incurred, assumed, guaranteed or in effect guaranteed by
the Company (including all deferrals, renewals, extensions or refundings of, or
amendments, modifications or supplements to, the foregoing), unless in the case
of any particular Indebtedness the instrument creating or evidencing the same
or the assumption or guarantee thereof expressly provides that such
Indebtedness shall not be senior in right of payment to the Notes or expressly
provides that such Indebtedness is “pari passu” or “junior” to the Notes.  Notwithstanding the foregoing, the term
Senior Obligations shall not include (a) the 5.75% Convertible Subordinated
Notes due 2006, (b) the 5% Convertible Subordinated Notes due 2007, (c) any
Indebtedness of the Company to any Subsidiary of the Company, or (d) the Notes.
If any payment made to any holder of any Senior Obligations or its
Representative with respect to such Senior Obligations is rescinded or must
otherwise be returned by such holder or Representative upon the insolvency,
bankruptcy or reorganization of the Company or otherwise, the reinstated
Indebtedness of the Company arising as a result of such rescission or return
shall constitute Senior Obligations effective as of the date of such rescission
or return.


 


Significant Subsidiary:  The term “Significant Subsidiary” means,
with respect to any person, a Subsidiary of such person that would constitute a
“significant subsidiary” as such term is defined under Rule 1-02 of Regulation
S-X of the Securities and Exchange Commission.


 


Subsidiary:  The term “Subsidiary” means a corporation
more than 50% of the outstanding voting stock of which is owned, directly or
indirectly, by the Company or by one or more other Subsidiaries, or by the
Company and one or more other Subsidiaries. 
For the purposes of this definition, “voting stock” means stock which
ordinarily has voting power for the election of


 


8

















 


directors, whether at all times or only so long as no senior class of
stock has such voting power by reason of any contingency.


 


Termination of Trading:  A “Termination of Trading” means any time
that the Common Stock (or other common stock into which the Notes are then
convertible) is neither listed for trading on a United States national or
regional securities exchange nor approved for trading on the Nasdaq National
Market, Nasdaq SmallCap Market or any similar United States system of automated
dissemination of quotations of securities prices.


 


Trading Day:  The term “Trading Day” has the meaning
specified in Section 15.5(h)(iv).


 


transfer:  The term “transfer” shall have the meaning
specified in Section 2.5(d).


 


Trigger Event:  The term “Trigger Event” shall have the
meaning specified in Section 15.5(d).


 


Trust Indenture
Act:  The term “Trust
Indenture Act” shall mean the Trust Indenture Act of 1939, as amended, as it
was in force at the date of execution of this Indenture, except as provided in
Sections 11.3 and 15.6; provided, however, that in the event the Trust
Indenture Act of 1939 is amended after the date hereof, the term “Trust
Indenture Act” shall mean, to the extent required by such amendment, the Trust
Indenture Act of 1939 as so amended.


 


Trustee:  The term “Trustee” shall mean JPMorgan Chase
Bank, and its successors and any corporation resulting from or surviving any
consolidation or merger to which it or its successors may be a party and any
successor trustee at the time serving as successor trustee hereunder.


 


The definitions of certain other terms are as specified in
Article XV and Article XVI.


 


ARTICLE II


 


ISSUE, DESCRIPTION, EXECUTION, REGISTRATION 

AND EXCHANGE OF NOTES


 


Section 2.1                                      Designation,
Amount and Issue of Notes. The Series A Notes shall be designated as a
“0% Series A Convertible Senior Subordinated Notes due 2008”. The Series B
Notes shall be designated as “0% Series B Convertible Senior Subordinated Notes
due 2010”.  Series A Notes not to exceed
the aggregate principal amount of $200,000,000 (or $250,000,000 if the option
set forth in Section 2(a) of the Purchase Agreement is exercised in full),
and Series B Notes not to exceed an aggregate principal amount of $400,000,000
($500,000,000 if the option set forth in Section 2 of the Purchase
Agreement is exercised in full), in each case upon the execution of this
Indenture, or (except pursuant to Sections 2.5, 2.6, 15.2 and 16.2) from time
to time thereafter may be executed by the Company and delivered to the Trustee
for authentication, and the Trustee shall


 


9

















 


thereupon authenticate and deliver said Notes upon the written order of
the Company, signed by the Company’s (a) Chief Executive Officer, President,
Executive or Senior Vice President or any Vice President (whether or not
designated by a number or numbers or word or words added before or after the
title “Vice President”) and (b) Treasurer or Assistant Treasurer or its
Secretary or any Assistant Secretary, without any further action by the Company
hereunder, provided, however, that said Notes may not be executed,
delivered or authenticated unless and until the Trustee shall have received an
Officers’ Certificate stating that the Notes are substantially in the form set
forth in Exhibit A of the Indenture in the case of Series A Notes, or Exhibit B
of the Indenture, in the case of Series B Notes, and an Opinion of Counsel
substantially to the effect that the Indenture, to the extent applicable, and
Notes have been duly authorized and, if executed and authenticated in
accordance with the provisions of the Indenture and delivered to and duly paid
for by the purchasers thereof on the date of such opinion, would be entitled to
the benefits of the Indenture and would be valid and binding obligations of the
Company, enforceable against the Company in accordance with their respective
terms, subject to bankruptcy, insolvency, reorganization, receivership,
moratorium and other similar laws affecting creditors’ rights generally,
general principles of equity, and such other matters as shall be specified
therein; further  provided that additional Notes may be issued in
an unlimited aggregate principal amount so long as such Notes are executed,
delivered or authenticated at a price that would not cause such Notes to have
“original issue discount” within the meaning of Section 1273 of the United
States Internal Revenue Code of 1986, as amended.  The Trustee shall be fully protected in relying upon such
Officers’ Certificate and Opinion of Counsel.


 


Section 2.2                                      Form
of Notes.  The Notes and the Trustee’s certificate of authentication
to be borne by such Notes shall be substantially in the form set forth in
Exhibit A, in the case of the Series A Notes, and in Exhibit B, in the case of
the Series B Notes, both of which are incorporated in and made a part of this
Indenture.


 


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


 


The Global Note shall represent such of the outstanding Notes as shall
be specified therein and shall provide that it shall represent the aggregate
amount of outstanding Notes from time to time endorsed thereon and that the
aggregate amount of outstanding Notes represented thereby may from time to time
be increased or reduced to reflect transfers or exchanges permitted
hereby.  Any endorsement of the Global
Note to reflect the amount of any increase or decrease in the amount of outstanding
Notes represented thereby shall be made by the Trustee or the Custodian, at the
direction of the Trustee, in such manner and upon written instructions given by
the holder of such Notes in accordance with this Indenture.  Payment of principal, Liquidated Damages, if
any, and premium, if any (including any Repurchase Price), on the Global Note
shall be made to the holder of such Note


 


10

















 


on the date of payment, unless a record date or other means of determining
holders eligible to receive payment is provided for herein.


 


The terms and provisions contained in the form of Note attached as
Exhibit A hereto, in the case of the Series A Notes, and as Exhibit B hereto,
in the case of the Series B Notes, shall constitute, and are hereby expressly
made, a part of this Indenture and to the extent applicable, the Company and
the Trustee, by their execution and delivery of this Indenture, expressly agree
to such terms and provisions and to be bound thereby.


 


Section 2.3                                      Date
and Denomination of Notes: Payments of Liquidated Damages.  The Notes
shall be issuable in registered form without coupons in denominations of $1,000
principal amount and integral multiples thereof.  Every Note shall be dated the date of its authentication and
shall pay Liquidated Damages in the manner and to the persons set forth in the
Registration Rights Agreement.


 


Section 2.4                                      Execution
of Notes.  The Notes shall be signed in the name and on behalf of the
Company by the facsimile signature of its Chief Executive Officer, President,
any of its Executive or Senior Vice Presidents, or any of its Vice Presidents
(whether or not designated by a number or numbers or word or words added before
or after the title “Vice President”) and attested by the facsimile signature of
its Secretary or any of its Assistant Secretaries (or Treasurer or any of its
Assistant Treasurers) (which may be printed, engraved or otherwise reproduced
thereon, by facsimile or otherwise).  Only
such Notes as shall bear thereon a certificate of authentication substantially
in the form set forth on the form of Note attached as Exhibit A hereto, in the
case of the Series A Notes, or Exhibit B hereto, in the case of the Series B
Notes, manually executed by the Trustee (or an authenticating agent appointed
by the Trustee as provided by Section 17.11), shall be entitled to the
benefits of this Indenture or be valid or obligatory for any purpose.  Such certificate by the Trustee (or such an
authenticating agent) upon any Note executed by the Company shall be conclusive
evidence that the Note so authenticated has been duly authenticated and
delivered hereunder and that the holder is entitled to the benefits of this
Indenture.


 


In case any officer of the Company who shall have signed any of the
Notes shall cease to be such officer before the Notes so signed shall have been
authenticated and delivered by the Trustee, or disposed of by the Company, such
Notes nevertheless may be authenticated and delivered or disposed of as though
the person who signed such Notes had not ceased to be such officer of the
Company; and any Note may be signed on behalf of the Company by such persons
as, at the actual date of the execution of such Note, shall be the proper
officers of the Company, although at the date of the execution of this
Indenture any such person was not such an officer.


 


Section 2.5                                      Exchange
and Registration of Transfer of Notes; Restrictions on Transfer; Depositary.


 


(a)          The Company shall cause
to be kept at the Corporate Trust Office a register (the register maintained in
such office and in any other office or agency of the Company designated


 


11

















 


pursuant to Section 5.2 being herein sometimes collectively
referred to as the “Note register”) in which, subject to such reasonable
regulations as it may prescribe, the Company shall provide for the registration
of Notes and of transfers of Notes. 
Such register shall be in written form or in any form capable of being
converted into written form within a reasonable period of time.  The Trustee is hereby appointed “Note
registrar” for the purpose of registering Notes and transfers of Notes as
herein provided.  The Company may appoint
one or more co-registrars in accordance with Section 5.2.


 


Upon surrender for registration of transfer of any Note to the Note
registrar or any co-registrar, and satisfaction of the requirements for such
transfer set forth in this Section 2.5, the Company shall execute, and the
Trustee shall authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Notes of the same series of any
authorized denominations and of a like aggregate principal amount and bearing
such restrictive legends as may be required by this Indenture.


 


Notes may be exchanged for other Notes of the same series of any
authorized denominations and of a like aggregate principal amount, upon
surrender of the Notes to be exchanged at any such office or agency maintained
by the Company pursuant to Section 5.2. 
Whenever any Notes are so surrendered for exchange, the Company shall
execute, and the Trustee shall authenticate and deliver, the Notes which the
Noteholder making the exchange is entitled to receive, bearing registration
numbers not contemporaneously outstanding.


 


All Notes presented or surrendered for registration of transfer or for
exchange, repurchase or conversion shall (if so required by the Company, the
Trustee, the Note registrar or any co-registrar) be duly endorsed, or be
accompanied by a written instrument or instruments of transfer in form
satisfactory to the Company and duly executed, by the Noteholder thereof or his
attorney-in-fact duly authorized in writing.


 


No service charge shall be charged to the Noteholder for any exchange
or registration of transfer of Notes, 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 Note registrar or any
co-registrar shall be required to exchange or register a transfer of (a) any
Notes surrendered for conversion or, if a portion of any Note is surrendered
for conversion, such portion thereof surrendered for conversion or (b) any
Notes, or a portion of any Note, surrendered for repurchase (and not withdrawn)
in connection with a Designated Event.


 


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


 


12

















 


(b)         So long as a series of
the Notes is eligible for book-entry settlement with the Depositary, unless
otherwise required by law, all Notes of such series shall be represented by a
Note in global form (a “Global Note”) registered in the name of the Depositary
or the nominee of the Depositary.  The
transfer and exchange of beneficial interests in a Global Note, which does not
involve the issuance of a definitive Note, shall be effected through the
Depositary (but not the Trustee or the Custodian) in accordance with this
Indenture (including the restrictions on transfer set forth herein) and the
procedures of the Depositary therefor.


 


(c)          Any Global Note may be
endorsed with or have incorporated in the text thereof such legends or recitals
or changes not inconsistent with the provisions of this Indenture as may be
required by the Custodian, the Depositary or by the National Association of
Securities Dealers, Inc. in order for the Notes to be tradable on The Portal
Market or as may be required for the Notes to be tradable on any other market
developed for trading of securities pursuant to Rule 144A or required to comply
with any applicable law or any regulation thereunder or with the rules and
regulations of any securities exchange or automated quotation system upon which
the Notes may be listed or traded or designated for issuance or to conform with
any usage with respect thereto, or to indicate any special limitations or
restrictions to which any particular Notes are subject.


 


(d)         Every Note that bears or
is required under this Section 2.5(d) to bear either of the legends set
forth in this Section 2.5(d) (together with any Common Stock issued upon
conversion of the Notes and required to bear either of the legends set forth in
Section 2.5(e), collectively, the “Restricted Securities”) shall be
subject to the restrictions on transfer set forth in this Section 2.5(d)
(including one of the legends set forth below), unless such restrictions on
transfer shall be waived by written consent of the Company, and the holder of
each such Restricted Security, by such holder’s acceptance thereof, agrees to
be bound by all such restrictions on transfer. 
As used in Sections 2.5(d) and 2.5(e), the term “transfer” encompasses
any sale, pledge, transfer or other disposition whatsoever of any Restricted
Security.


 


Until the date (the “Resale Restriction Termination Date”) that is two (2)
years after the later of the original issuance date of any Note and the last
date on which the Company or any affiliate of the Company was the owner of such
Note, any certificate evidencing such Note (and all securities issued in
exchange therefor or substitution thereof, other than Common Stock, if any,
issued upon conversion thereof which shall bear the legend set forth in
Section 2.5(e), if applicable) shall bear a legend in substantially the
following form (unless such Notes have been transferred pursuant to a
registration statement that has been declared effective under the Securities
Acts and which continues to be effective at the time of such transfer, pursuant
to the exemption from registration provided by Rule 144 under the Securities
Act, or unless otherwise agreed by the Company in writing, with notice thereof
to the Trustee):


 


THIS SECURITY AND THE SHARES OF SEPRACOR INC. (THE “COMPANY”) COMMON
STOCK (“COMMON STOCK”) ISSUABLE UPON CONVERSION OF THIS SECURITY HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS


 


13

















 


AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS.   NEITHER THIS SECURITY, THE SHARES OF COMMON
STOCK ISSUABLE UPON CONVERSION OF THIS SECURITY NOR ANY INTEREST OR
PARTICIPATION HEREIN OR THEREIN MAY BE REOFFERED, SOLD, ASSIGNED,
TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF
SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO,
REGISTRATION.


 


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


 


Any Note (or security issued in exchange or substitution therefor) as
to which such restrictions on transfer shall have expired in accordance with
their terms may, upon surrender of such Note for exchange to the Note registrar
in accordance with the provisions of this Section 2.5, be exchanged for a
new Note or Notes, of the same series and of like tenor and aggregate principal
amount, which shall not bear the restrictive legend required by this
Section 2.5(d).


 


Notwithstanding any other provisions of this Indenture (other than the
provisions set forth in this Section 2.5(d)), a Global Note may not be
transferred as a whole or in part except by the


 


14

















 


Depositary to a nominee of the Depositary or by a nominee of the
Depositary to the Depositary or another nominee of the Depositary or by the
Depositary or any such nominee to a successor Depositary or a nominee of such
successor Depositary, provided that a Global Note may be exchanged in
whole or in part for a definitive Note registered in the name of any Person
other than the Depositary if any holder of a beneficial interest in such Global
Note through the Depositary requests to exchange such beneficial interest for a
Note in registered form, in accordance with customary procedures.


 


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 Global
Note.  Initially, the Global Note 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 a Global Note notifies the Company
that it is unwilling or unable to continue as Depositary for such Note, the
Company may appoint a successor Depositary with respect to such Note.  If a successor Depositary for such Global
Note is not appointed by the Company within ninety (90) days after the Company
receives such notice, the Company will execute, and the Trustee, upon receipt
of an Officers’ Certificate for the authentication and delivery of Notes, will
authenticate and deliver Notes in definitive form in the same series and in an
aggregate principal amount equal to the principal amount of such Global Note,
in exchange for  such Global Note, and
upon delivery of the Global Note to the Trustee such Global Note shall be
canceled.


 


Definitive Notes issued in exchange for all or a part of the Global
Note pursuant to this Section 2.5(d) shall be registered in such names and
in such authorized denominations as the Depositary, pursuant to instructions
from its direct or indirect participants or otherwise, shall instruct the
Trustee.  Upon execution and
authentication, the Trustee shall deliver such definitive Notes to the persons
in whose names such definitive Notes are so registered.


 


At such time as all interests in a Global Note have been converted,
canceled, repurchased or transferred, such Global Note shall be, upon receipt
thereof, canceled by the Trustee in accordance with standing procedures and
instructions existing between the Depositary and the Custodian.  At any time prior to such cancellation, if
any interest in a Global Note is exchanged for definitive Notes, converted,
canceled, repurchased or transferred to a transferee who receives definitive
Notes therefor or any definitive Note is exchanged or transferred for part of
such Global Note, the principal amount of such Global Note shall, in accordance
with the standing procedures and instructions existing between the Depositary
and the Custodian, be appropriately reduced or increased, as the case may be,
and an endorsement shall be made on such Global Note, by the Trustee or the
Custodian, at the direction of the Trustee, to reflect such reduction or
increase.


 


(e)          Until the Resale
Restriction Termination Date, any stock certificate representing Common Stock
issued upon conversion of such Note shall bear a legend in substantially the


 


15

















 


following form (unless the Note or such Common Stock has been sold  pursuant to the exemption from registration
provided by Rule 144 under the Securities Act or pursuant to a registration
statement that has been declared effective under the Securities Act, and which
continues to be effective at the time of such transfer, or such Common Stock
has been issued upon conversion of Notes that have been transferred pursuant to
a registration statement that has been declared effective under the Securities
Act or pursuant to the exemption from registration provided by Rule 144 under
the Securities Act, or unless otherwise agreed by the Company with written
notice thereof to the Trustee and any transfer agent for the Common Stock):


 


THE COMMON STOCK EVIDENCED HEREBY (THE “SECURITY”) HAS NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”),
OR ANY STATE SECURITIES LAWS, AND MAY NOT BE REOFFERED, SOLD, ASSIGNED,
TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF
SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO,
REGISTRATION.


 


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


 


16

















 


Any such Common Stock as to which such restrictions on transfer shall
have expired in accordance with their terms may, upon surrender of the
certificates representing such shares of Common Stock for exchange in
accordance with the procedures of the transfer agent for the Common Stock, be
exchanged for a new certificate or certificates for a like aggregate number of
shares of Common Stock, which shall not bear the restrictive legend required by
this Section 2.5(e).


 


(f)            Any Note or Common
Stock issued upon the conversion or exchange of a Note that, prior to the
expiration of the holding period applicable to sales thereof under Rule 144(k)
under the Securities Act (or any successor provision), is purchased or owned by
the Company or any Affiliate thereof may not be resold by the Company or such
Affiliate unless registered under the Securities Act or resold pursuant to an
exemption from the registration requirements of the Securities Act in a
transaction that results in such Notes or Common Stock, as the case may be, no
longer being “restricted securities” (as defined under Rule 144).


 


(g)         Notwithstanding any
provision of Section 2.5 to the contrary, in the event Rule 144(k) as
promulgated under the Securities Act (or any successor rule) is amended to
change the two-year period under Rule 144(k) (or the corresponding period under
any successor rule), from and after receipt by the Trustee of the Officers’
Certificate and Opinion of Counsel provided for in this Section 2.5(g),
(i) each reference in Section 2.5(d) to “two (2) years” and in the
restrictive legend set forth in such paragraph to “TWO YEARS” shall be deemed
for all purposes hereof to be references to such changed period, (ii) each
reference in Section 2.5(e) to “two (2) years” and in the restrictive legend
set forth in such paragraph to “TWO YEARS” shall be deemed for all purposes
hereof to be references to such changed period and (iii) all corresponding
references in the Notes (including the definition of Resale Restriction
Termination Date) and the restrictive legends thereon shall be deemed for all
purposes hereof to be references to such changed period, provided that
such changes shall not become effective if they are otherwise prohibited by, or
would otherwise cause a violation of, the then-applicable federal securities
laws.  As soon as practicable after the
Company has knowledge of the effectiveness of any such amendment to change the
two-year period under Rule 144(k) (or the corresponding period under any successor
rule), unless such changes would otherwise be prohibited by, or would otherwise
cause a violation of, the then-applicable securities law, the Company shall
provide to the Trustee an Officers’ Certificate and Opinion of Counsel
informing the Trustee of the effectiveness of such amendment and the
effectiveness of the foregoing changes to Sections 2.5(d) and 2.5(e) and the
Notes.  The provisions of this
Section 2.5(g) will not be effective until such time as the Opinion of
Counsel and Officers’ Certificate have been received by the Trustee hereunder.  This Section 2.5(g) shall apply to
successive amendments to Rule 144(k) (or any successor rule) changing the
holding period thereunder.


 


Section 2.6                                      Mutilated,
Destroyed, Lost or Stolen Notes 
  In case any Note of any series shall become mutilated or be
destroyed, lost or stolen, the Company in its discretion may execute, and upon
its written request the Trustee or an authenticating agent appointed by the
Trustee shall authenticate and deliver, a new Note of such series, bearing a
number not contemporaneously outstanding, in exchange and substitution for the
mutilated Note, or in lieu of and in substitution for


 


17

















 


the Note so destroyed, lost or stolen. 
In every case the applicant for a substituted Note shall furnish to the
Company, to the Trustee and, if applicable, to such authenticating agent such
security or indemnity as may be required by them to save each of them harmless
from any loss, liability, cost or expense caused by or connected with such
substitution, and, in every case of destruction, loss or theft, the applicant
shall also furnish to the Company, to the Trustee and, if applicable, to such
authenticating agent evidence to their satisfaction of the destruction, loss or
theft of such Note and of the ownership thereof.


 


The Trustee or such authenticating agent may authenticate any such
substituted Note and deliver the same upon the receipt of such security or
indemnity as the Trustee, the Company and, if applicable, such authenticating agent
may require.  Upon the issuance of any
substituted Note, 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 connected therewith.  In case any Note which has matured or is about to mature or is
about to be converted into Common Stock shall become mutilated or be destroyed,
lost or stolen, the Company may, instead of issuing a substitute Note, pay or
authorize the payment of or convert or authorize the conversion of the same
(without surrender thereof except in the case of a mutilated Note), as the case
may be, if the applicant for such payment or conversion shall furnish to the
Company, to the Trustee and, if applicable, to such authenticating agent such
security or indemnity as may be required by them to save each of them harmless
for any loss, liability, cost or expense caused by or connected with such
substitution, and, in case of destruction, loss or theft, evidence satisfactory
to the Company, the Trustee and, if applicable, any paying agent or conversion
agent of the destruction, loss or theft of such Note and of the ownership
thereof.


 


Every substitute Note issued pursuant to the provisions of this
Section 2.6 by virtue of the fact that any Note is destroyed, lost or
stolen shall constitute an additional contractual obligation of the Company,
whether or not the destroyed, lost or stolen Note shall be found at any time,
and shall be entitled to all the benefits of (but shall be subject to all the
limitations set forth in) this Indenture equally and proportionately with any
and all other Notes duly issued hereunder. 
To the extent permitted by law, all Notes shall be held and owned upon
the express condition that the foregoing provisions are exclusive with respect
to the replacement or payment or conversion of mutilated, destroyed, lost or
stolen Notes and shall preclude any and all other rights or remedies
notwithstanding any law or statute existing or hereafter enacted to the
contrary with respect to the replacement or payment or conversion of negotiable
instruments or other securities without their surrender.


 


Section 2.7                                      Temporary
Notes.  Pending the preparation of Notes in certificated form, the
Company may execute and the Trustee or an authenticating agent appointed by the
Trustee shall, upon written request of the Company, authenticate and deliver
temporary Notes (printed or lithographed). 
Temporary Notes shall be issuable in any authorized denomination, and
substantially in the form of the Notes in certificated form but with such
omissions, insertions and variations as may be appropriate for temporary Notes,
all as may be determined by the Company. 
Every such


 


18

















 


temporary Note shall be executed by the Company and authenticated by
the Trustee or such authenticating agent upon the same conditions and in
substantially the same manner, and with the same effect, as the Notes in
certificated form.  Without unreasonable
delay the Company will execute and deliver to the Trustee or such
authenticating agent Notes in certificated form (other than in the case of
Notes in global form) and thereupon any or all temporary Notes (other than any
Global Note) may be surrendered in exchange therefor, at each office or agency
maintained by the Company pursuant to Section 5.2 and the Trustee or such
authenticating agent shall authenticate and deliver in exchange for such
temporary Notes an equal aggregate principal amount of Notes of the same series
in certificated form.  Such exchange
shall be made by the Company at its own expense and without any charge
therefor.  Until so exchanged, the
temporary Notes shall in all respects be entitled to the same benefits and
subject to the same limitations under this Indenture as Notes in certificated
form authenticated and delivered hereunder.


 


Section 2.8                                      Cancellation
of Notes Paid, Etc.  All Notes surrendered for the purpose of payment,
repurchase, conversion, exchange or registration of transfer, shall, if
surrendered to the Company or any paying agent or any Note registrar or any
conversion agent, be surrendered to the Trustee and promptly canceled by it,
or, if surrendered to the Trustee, shall be promptly canceled by it, and no
Notes shall be issued in lieu thereof except as expressly permitted by any of
the provisions of this Indenture.  Upon
written instructions of the Company, the Trustee shall destroy canceled Notes
and, after such destruction, shall deliver a certificate of such destruction to
the Company.  If the Company shall
acquire any of the Notes, such acquisition shall not operate as satisfaction of
the indebtedness represented by such Notes unless and until the same are
delivered to the Trustee for cancellation.


 


Section 2.9                                      CUSIP
Numbers.  The Company in issuing the Notes may use “CUSIP” numbers (if
then generally in use), and, if so, the trustee shall use “CUSIP” numbers in
Company Notices as a convenience to holders of the Notes; provided, that any
such notice may state that no representation is made as to the correctness of
such numbers either as printed on the Notes or Company Notice and that reliance
may be placed only on the other identification numbers printed on the
Notes.  The Company will promptly notify
the Trustee in writing of any change in the “CUSIP” numbers.


 


ARTICLE III

REDEMPTION OF NOTES


 


Section 3.1                                      No
Redemption.  The Notes of any series shall not be redeemable by the
Company prior to maturity of such series.


 


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ARTICLE IV

SUBORDINATION OF NOTES


 


Section 4.1                                      Agreement
of Subordination.  The Company covenants and agrees, and each holder
of Notes issued hereunder by its acceptance thereof likewise covenants and
agrees, that all Notes shall be issued subject to the provisions of this Article IV;
and each person holding any Note, whether upon original issue or upon transfer,
assignment or exchange thereof, accepts and agrees to be bound by such
provisions.


 


The payment of
the principal of, premium, if any, and Liquidated Damages, if any, on all Notes
(including, but not limited to, the Repurchase Price with respect to the Notes
submitted for repurchase in accordance with Article XVI as provided in the
Indenture) issued hereunder shall, to the extent and in the manner hereinafter
set forth, be subordinated and subject in right of payment to the prior payment
in full of all Senior Obligations, whether outstanding at the date of this
Indenture or thereafter incurred. 
Notwithstanding anything to the contrary in the Indenture or any Notes,
the Notes issued pursuant to this Indenture shall be senior in right of payment
to the Company’s 5.75% Convertible Subordinated Notes due 2006 and its 5%
Convertible Subordinated Debentures due 2007. 
Notwithstanding anything contained in this Indenture to the contrary,
nothing in this Indenture shall prohibit the Company from redeeming the
Company’s 5.75% Convertible Subordinated Notes due 2006 prior to their
maturity, provided that at the time such Notes are called for redemption
no Default or Event of Default has occurred and is continuing.


 


No provision of this Article IV shall prevent the occurrence of
any default or Event of Default hereunder.


 


Section 4.2                                      Payments
to Noteholders.  No payment shall be made with respect to the
principal of, premium, if any, or Liquidated Damages, if any, on the Notes
(including, but not limited to, the Repurchase Price with respect to Notes
submitted for repurchase in accordance with Article XVI as provided in
this Indenture), except payments and distributions made by the Trustee as
permitted by the first or second paragraph of Section 4.5, if:


 


(a)          a default in the payment
of principal, premium, if any, interest, rent or other obligations in respect
of Senior Obligations occurs and is continuing (a “Payment Default”), unless
and until such Payment Default shall have been cured or waived or shall have
ceased to exist; or


 


(b)         a default, other than a
Payment Default, on any Designated Senior Obligations occurs and is continuing
that then permits holders of such Designated Senior Obligations to accelerate
its maturity and the Trustee receives written notice of the default (a “Payment
Blockage Notice”) from a holder of Designated Senior Obligations, a
Representative of Designated Senior Obligations or the Company (a “Non-Payment
Default”).


 


If the Trustee receives any Payment Blockage Notice pursuant to clause
(b) above, no subsequent Payment Blockage Notice shall be effective for
purposes of this Section 4.2 unless and


 


20

















 


until at least 365 days shall have elapsed since the initial
effectiveness of the immediately prior Payment Blockage Notice. No Non-Payment
Default that existed or was continuing on the date of delivery of any Payment
Blockage Notice to the Trustee shall be, or be made, the basis for a subsequent
Payment Blockage Notice.


 


The Company may and shall resume payments on and distributions in
respect of the Notes, including any past scheduled payments of the principal
of, premium, if any, and Liquidated Damages, if any on such Notes (including,
but not limited to, the Repurchase Price with respect to Notes submitted for
repurchase in accordance with Article XVI as provided in this Indenture),
to which the holders of the Notes would have been entitled but for the provisions
of this Article IV:


 


(1)                                  in
the case of a Payment Default, on the date upon which such Payment Default is
cured or waived or ceases to exist, and


 


(2)                                  in
the case of a Non-Payment Default, the earlier of (a) the date upon which such
default is cured or waived or ceases to exist or (b) 179 days after the Payment
Blockage Notice is received by the Trustee if the maturity of such Designated
Senior Obligations has not been accelerated and no Payment Default with respect
to any Senior Obligations has occurred which has not been cured or waived or
ceased to exist (in such event clause (1) above shall instead be applicable),


 


unless this
Article IV otherwise prohibits the payment or distribution at the time of
such payment or distribution.


 


Upon any payment by the Company, or distribution of assets of the
Company of any kind or character, whether in cash, property or securities, to
creditors upon any dissolution or winding up or liquidation or reorganization
of the Company, whether voluntary or involuntary or in bankruptcy, insolvency,
receivership or other proceedings, all amounts due or to become due upon all
Senior Obligations shall first be paid in full in cash or other payment
satisfactory to the holders of such Senior Obligations, or payment thereof in
accordance with its terms provided for in cash or other payment satisfactory to
the holders of such Senior Obligations before any payment is made on account of
the principal of, premium, if any, or Liquidated Damages, if any, on the Notes
(except payments made pursuant to Article XIII from monies deposited with
the Trustee pursuant thereto prior to commencement of proceedings for such
dissolution, winding up, liquidation or reorganization); and upon any such
dissolution or winding up or liquidation or reorganization of the Company or
bankruptcy, insolvency, receivership or other proceeding, any payment by the
Company, or distribution of assets of the Company of any kind or character,
whether in cash, property or securities, to which the holders of the Notes or
the Trustee would be entitled, except for the provision of this
Article IV, shall (except as aforesaid) be paid by the Company or by any
receiver, trustee in bankruptcy, liquidating trustee, agent or other Person
making such payment or distribution, or by the holders of the Notes or by the
Trustee under this Indenture if received by them or it, directly to the holders
of Senior Obligations (pro rata to such holders on the basis of the


 


21

















 


respective amounts of Senior Obligations held by such holders, or as
otherwise required by law or a court order) or their Representative or
Representatives, or to the trustee or trustees under any indenture pursuant to
which any instruments evidencing any Senior Obligations may have been issued,
as their respective interests may appear, to the extent necessary to pay all
Senior Obligations in full, in cash or other payment satisfactory to the
holders of such Senior Obligations, after giving effect to any concurrent
payment or distribution to or for the holders of Senior Obligations, before any
payment or distribution is made to the holders of the Notes or to the Trustee.


 


For purposes of this Article IV, the words, “cash, property or
securities” shall not be deemed to include shares of stock of the Company as
reorganized or readjusted, or securities of the Company or any other
corporation provided for by a plan of reorganization or readjustment, the
payment of which is subordinated at least to the extent provided in this
Article IV with respect to the Notes to the payment of all Senior
Obligations that may at the time be outstanding; provided that (i) the Senior
Obligations are assumed by the new corporation, if any, resulting from any
reorganization or readjustment, and (ii) the rights of the holders of Senior
Obligations are not, without the consent of such holders, altered by such
reorganization or readjustment. The consolidation of the Company with, or the
merger of the Company into, another corporation or the liquidation or dissolution
of the Company following the conveyance or transfer of its property as an
entirety, or substantially as an entirety, to another corporation upon the
terms and conditions provided for in Article XII shall not be deemed a
dissolution, winding-up, liquidation or reorganization for the purposes of this
Section 4.2 if such other corporation shall, as a part of such
consolidation, merger, conveyance or transfer, comply with the conditions
stated in Article XII.


 


In the event of the acceleration of any series of the Notes because of
an Event of Default, no payment or distribution shall be made to the Trustee or
any holder of Notes in respect of the principal of, premium, if any, or
Liquidated Damages, if any on the Notes (including, but not limited to, the Repurchase
Price with respect to Notes submitted for repurchase in accordance with
Article XVI as provided in the Indenture), except payments and
distributions made by the Trustee as permitted by the first or second paragraph
of Section 4.5, until all Senior Obligations have been paid in full in
cash or other payment satisfactory to the holders of Senior Obligations or such
acceleration is rescinded in accordance with the terms of this Indenture. If
payment of the Notes is accelerated because of an Event of Default, the Company
shall promptly notify holders of Senior Obligations of the acceleration.


 


In the event that, notwithstanding the foregoing provisions, any
payment or distribution of assets of the Company of any kind or character,
whether in cash, property or securities (including, without limitation, by way
of setoff or otherwise), prohibited by the foregoing provisions in this
Section 4.2, shall be received by the Trustee or the holders of the Notes
before all Senior Obligations are paid in full in cash or other payment
satisfactory to the holders of such Senior Obligations, or provision is made
for such payment thereof in accordance with its terms in cash or other payment
satisfactory to the holders of such Senior Obligations, such payment or
distribution shall be held in trust for the benefit of and shall be paid over
or delivered to the holders of Senior Obligations or


 


22

















 


their Representative or Representatives, or to the trustee or trustees
under any indenture pursuant to which any instruments evidencing any Senior
Obligations may have been issued, as their respective interests may appear, as
calculated by the Company, for application to the payment of any Senior
Obligations remaining unpaid to the extent necessary to pay all Senior
Obligations in full in cash or other payment satisfactory to the holders of
such Senior Obligations, after giving effect to any concurrent payment or
distribution to or for the holders of such Senior Obligations.


 


Nothing in this Section 4.2 shall apply to claims of, or payments
to, the Trustee under or pursuant to Section 8.6. This Section 4.2
shall be subject to the further provisions of Section 4.5


 


Section 4.3                                      Subrogation
of Notes.  Subject to the payment in full of all Senior Obligations,
the rights of the holders of the Notes shall be subrogated to the extent of the
payments or distributions made to the holders of such Senior Obligations
pursuant to the provisions of this Article IV (equally and ratably with
the holders of all indebtedness of the Company which by its express terms is
subordinated to other indebtedness of the Company to substantially the same
extent as the Notes are subordinated and is entitled to like rights of
subrogation; provided that the Notes are senior in right of payment to
the Company’s 5.75% Convertible Subordinated Notes due 2006 and its 5%
Convertible Subordinated Debentures due 2007) to the rights of the holders of
Senior Obligations to receive payments or distributions of cash, property or securities
of the Company applicable to the Senior Obligations until the principal,
premium, if any, and Liquidated Damages, if any, on the Notes shall be paid in
full; and, for the purposes of such subrogation, no payments or distributions
to the holders of the Senior Obligations of any cash, property or securities to
which the holders of the Notes or the Trustee would be entitled except for the
provisions of this Article IV, and no payment over pursuant to the
provisions of this Article IV, to or for the benefit of the holders of
Senior Obligations by holders of the Notes or the Trustee, shall, as between
the Company, its creditors other than holders of Senior Obligations, and the
holders of the Notes, be deemed to be a payment by the Company to or on account
of the Senior Obligations; and no payments or distributions of cash, property
or securities to or for the benefit of the holders of the Notes pursuant to the
subrogation provisions of this Article IV, that would otherwise have been
paid to the holders of Senior Obligations shall be deemed to be a payment by
the Company to or for the account of the Notes. It is understood that the
provisions of this Article IV are and are intended solely for the purposes
of defining the relative rights of the holders of the Notes, on the one hand,
and the holders of the Senior Obligations, on the other hand.


 


Nothing contained in this Article IV or elsewhere in this
Indenture or in the Notes is intended to or shall impair, as among the Company,
its creditors other than the holders of Senior Obligations, and the holders of
the Notes, the obligation of the Company, which is absolute and unconditional,
to pay to the holders of the Notes the principal of, premium, if any, and
Liquidated Damages, if any, on the Notes as and when the same shall become due
and payable in accordance with their terms, or is intended to or shall affect
the relative rights of the holders of the Notes and creditors of the Company
other than the holders of the Senior Obligations, nor shall anything herein or
therein prevent the Trustee or the holder of any Note from exercising all
remedies otherwise permitted by applicable


 


23

















 


law upon default under this Indenture, subject to the rights, if any,
under this Article IV of the holders of Senior Obligations in respect of
cash, property or securities of the Company received upon the exercise of any
such remedy.


 


Section 4.4                                      Authorization
to Effect Subordination.  Each holder of a Note by the holder’s
acceptance thereof authorizes and directs the Trustee on the holder’s behalf to
take such action as may be necessary or appropriate to effectuate the
subordination as provided in this Article IV and appoints the Trustee to
act as the holder’s attorney-in-fact for any and all such purposes. If the
Trustee does not file a proper proof of claim or proof of debt in the form
required in any proceeding referred to in the second paragraph of
Section 7.2 hereof at least thirty (30) days before the expiration of the
time to file such claim, the holders of any Senior Obligations or their
representatives are hereby authorized to file an appropriate claim for and on
behalf of the holders of the Notes.


 


Section 4.5                                      Notice
to Trustee.  The Company shall give prompt written notice in the form
of an Officers’ Certificate to a Responsible Officer of the Trustee and to any
paying agent of any fact known to the Company which would prohibit the making
of any payment of monies to or by the Trustee or any paying agent in respect of
the Notes pursuant to the provisions of this Article IV. Notwithstanding
the provisions of this Article IV or any other provision of this
Indenture, the Trustee shall not be charged with knowledge of the existence of
any facts which would prohibit the making of any payment of monies to or by the
Trustee in respect of the Notes pursuant to the provisions of this
Article IV, unless and until a Responsible Officer of the Trustee shall
have received written notice thereof at the Corporate Trust Office from the
Company (in the form of an Officers’ Certificate) or a Representative or a
holder or holders of Senior Obligations or from any trustee thereof; and before
the receipt of any such written notice, the Trustee shall be entitled in all
respects to assume that no such facts exist; provided that if on a date not
less than two (2) Business Days prior to the date upon which by the terms
hereof any such monies may become payable for any purpose (including, without
limitation, the payment of the principal of, or premium, if any, or Liquidated
Damages on any Note) the Trustee shall not have received, with respect to such
monies, the notice provided for in this Section 4.5, then, anything herein
contained to the contrary notwithstanding, the Trustee shall have full power and
authority to apply monies received to the purpose for which they were received,
and shall not be affected by any notice to the contrary which may be received
by it on or after such prior date.


 


Notwithstanding
anything in this Article IV to the contrary, nothing shall prevent any
payment by the Trustee to the Noteholders of monies deposited with it pursuant
to Section 13.1, provided such deposit was not in violation of this
Article IV, and any such payment shall not be subject to the provisions of
Section 4.1 or 4.2


 


The Trustee shall be entitled to conclusively rely on the delivery to
it of a written notice by a Representative to a person representing himself to
be a holder of Senior Obligations (or a trustee on behalf of such holder) to
establish that such notice has been given by a Representative or a holder of


 


24

















 


Senior Obligations or a trustee on behalf of any such holder or
holders.  The Trustee shall not be
required to make any payment or distribution to or on behalf of a holder of
Senior Obligations pursuant to this Article IV unless it has received
reasonably satisfactory evidence as to the amount of Senior Obligations held by
such person, the extent to which such person is entitled to participate in such
payment or distribution and any other facts pertinent to the rights of such
person under this Article IV.


 


Section 4.6                                      Trustee’s
Relation to Senior Obligations.  The Trustee in its individual
capacity shall be entitled to all the rights set forth in this Article IV
in respect of any Senior Obligations at any time held by it, to the same extent
as any other holder of Senior Obligations, and nothing in Section 8.13 or
elsewhere in this Indenture shall deprive the Trustee of any of its rights as
such holder.


 


With respect to the holders of Senior Obligations, the Trustee
undertakes to perform or to observe only such of its covenants and obligations
as are specifically set forth in this Article IV, and no implied covenants
or obligations with respect to the holders of Senior Obligations shall be read
into this Indenture against the Trustee. The Trustee shall not be deemed to owe
any fiduciary duty to the holders of Senior Obligations.


 


Section 4.7                                      No
Impairment of Subordination.  No right of any present or future holder
of any Senior Obligations to enforce subordination as herein provided shall at
any time in any way be prejudiced or impaired by any act or failure to act on
the part of the Company or by any act or failure to act, in good faith, by any
such holder, or by any noncompliance by the Company with the terms, provisions
and covenants of this Indenture, regardless of any knowledge thereof which any
such holder may have or otherwise be charged with.


 


Section 4.8                                      Certain
Conversions Not Deemed Payment.  For the purposes of this
Article IV only, (1) the issuance and delivery of junior securities upon
conversion of Notes in accordance with Article XV shall not be deemed to
constitute a payment or distribution on account of the principal of, premium, if
any, or Liquidated Damages, if any, on Notes or on account of the purchase or
other acquisition of Notes, and (2) the payment, issuance or delivery of cash
(except in satisfaction of fractional shares pursuant to Section 15.3),
property or securities (other than junior securities) upon conversion of a Note
shall be deemed to constitute payment on account of the principal of, premium,
if any, or Liquidated Damages, if any, on such Note. For the purposes of this
Section 4.8, the term “junior securities” means (a) shares of any stock of
any class of the Company or (b) securities of the Company that are subordinated
in right of payment to all Senior Obligations that may be outstanding at the
time of issuance or delivery of such securities to substantially the same extent
as, or to a greater extent than, the Notes are so subordinated as provided in
this Article. Nothing contained in this Article IV or elsewhere in this
Indenture or in the Notes is intended to or shall impair, as among the Company,
its creditors (other than holders of Senior Obligations) and the Noteholders,
the right, which is absolute and unconditional, of the Holder of any Note to
convert such Note in accordance with Article XV.


 


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Section 4.9                                      Article Applicable
to Paying Agents.  If at any time any paying agent other than the
Trustee shall have been appointed by the Company and be then acting hereunder,
the term “Trustee” as used in this Article shall (unless the context
otherwise requires) be construed as extending to and including such paying
agent within its meaning as fully for all intents and purposes as if such
paying agent were named in this Article in addition to or in place of the
Trustee; provided, however, that the first paragraph of Section 4.5 shall
not apply to the Company or any Affiliate of the Company if it or such
Affiliate acts as paying agent.  The
Trustee shall not be responsible for the actions or inactions of any other
paying agents (including the Company if acting as its own paying agent) and
have no control of any funds held by such other paying agents, unless and to
the extent that the Trustee has been appointed as paying agent under this
Indenture.


 


Section 4.10                                Senior
Obligations Entitled to Rely.  The holders of Senior Obligations
(including, without limitation, Designated Senior Obligations) shall have the
right to rely upon this Article IV, and no amendment or modification of
the provisions contained herein shall diminish the rights of such holders
unless such holders shall have agreed in writing thereto.


 


Section 4.11                                Reliance
on Judicial Order or Certificate of Liquidating Agent.  Upon any
payment or distribution of assets of the Company referred to in this Article,
the Trustee and the Noteholders shall be entitled to conclusively rely upon any
order or decree entered by any court of competent jurisdiction in which such
insolvency, bankruptcy, receivership, liquidation, reorganization, dissolution,
winding up or similar case or proceeding is pending, or a certificate of the trustee
in bankruptcy, liquidating trustee, custodian, receiver, assignee for the
benefit of creditors, agent or other person making such payment or
distribution, delivered to the Trustee or to the Noteholders, for the purpose
of ascertaining the persons entitled to participate in such payment or
distribution, the holders of Senior Obligations and other indebtedness of the
Company, the amount thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this Article.


 


ARTICLE V

PARTICULAR COVENANTS OF THE COMPANY


 


Section 5.1                                      Payment
of Principal and Premium and Liquidated Damages.  The Company
covenants and agrees that it will duly and punctually pay or cause to be paid
the principal of and premium, if any, and Liquidated Damages, if any, on each
of the Notes at the places, at the respective times and in the manner provided
herein and in the Notes.  Each
installment of Liquidated Damages on the Notes due on any Damages Payment Date
(as defined in the Registration Rights Agreement) may be paid by mailing checks
for the amount payable to or upon the written order of the holders of Notes
entitled thereto as they shall appear on the registry books of the Company,
provided that, with respect to any holder of Notes with an aggregate principal
amount equal to or in excess of $2,000,000, at the request of such holder in
writing to the Company, Liquidated Damages on such holder’s Notes shall be paid
by wire transfer in immediately available funds in accordance


 


26

















 


with the wire transfer instructions supplied by such holder from time
to time to the Trustee and paying agent (if different from Trustee) at least
two days prior to the applicable record date; provided further that
payment of Liquidated Damages made to the Depositary shall be paid by wire
transfer in immediately available funds in accordance with such wire transfer
instructions and other procedures provided by the Depositary from time to time.


 


Section 5.2                                      Maintenance
of Office or Agency.  The Company will maintain in the Borough of
Manhattan, The City of New York, an office or agency where the Notes may be
surrendered for registration of transfer or exchange or for presentation for
payment or for conversion or repurchase and where notices and demands to or
upon the Company in respect of the Notes and this Indenture may be served.  The Company will give prompt written notice
to the Trustee of the location, and any change in the location, of such office
or agency not designated or appointed by the Trustee.  If at any time the Company shall fail to maintain any such
required office or agency or shall fail to furnish the Trustee with the address
thereof, such presentations, surrenders, notices and demands may be made or
served at the Corporate Trust Office or the office or agency of the Trustee in
the Borough of Manhattan, The City of New York.


 


The Company may also from time to time designate one or more other
offices or agencies where the Notes may be presented or surrendered for any or
all such purposes and may from time to time rescind such designations; provided
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. 
The Company will give prompt written notice to the Trustee of any such
designation or rescission and of any change in the location of any such other
office or agency.


 


The Company hereby initially designates the Trustee as paying agent,
Note registrar, Custodian and conversion agent and the Corporate Trust Office
as one such office or agency of the Company for each of the aforesaid purposes.


 


So long as the Trustee is the Note registrar, the Trustee agrees to
mail, or cause to be mailed, the notices set forth in Section 8.10(a) and
the third paragraph of Section 8.11.


 


Section 5.3                                      Appointments
to Fill Vacancies in Trustee’s Office.  The Company, whenever
necessary to avoid or fill a vacancy in the office of Trustee, will appoint, in
the manner provided in Section 8.10, a Trustee, so that there shall at all
times be a Trustee hereunder.


 


Section 5.4                                      Provisions
as to Paying Agent.


 


(a)          If the Company shall
appoint a paying agent other than the Trustee or if the Trustee shall appoint
such a paying agent, it will cause such paying agent to execute and deliver to
the Trustee an instrument in which such agent shall agree with the Trustee,
subject to the provisions of this Section 5.4:


 


27

















 


(1)                                  that
it will hold all sums held by it as such agent for the payment of the principal
of and premium, if any, or Liquidated Damages on the Notes (whether such sums
have been paid to it by the Company or by any other obligor on the Notes) in
trust for the benefit of the holders of the Notes;


 


(2)                                  that
it will give the Trustee notice of any failure by the Company (or by any other
obligor on the Notes) to make any payment of the principal of and premium, if
any, or Liquidated Damages on the Notes when the same shall be due and payable;
and


 


(3)                                  that
at any time during the continuance of an Event of Default, upon request of the
Trustee, it will forthwith pay to the Trustee all sums so held in trust.


 


The Company shall, on or before each due date of the principal of, or
premium, if any, or Liquidated Damages on the Notes, deposit with the paying
agent a sum sufficient to pay such principal, premium, if any, or Liquidated
Damages, and (unless such paying agent is the Trustee) the Company will
promptly notify the Trustee of any failure to take such action, provided
that if such deposit is made on the due date, such deposit must be received by
the paying agent by 10:00 a.m., New York City time, on such date.


 


(b)         If the Company shall act
as its own paying agent, it will, on or before each due date of the principal
of, premium, if any, or Liquidated Damages on the Notes, set aside, segregate
and hold in trust for the benefit of the holders of the Notes a sum sufficient
to pay such principal, premium, if any, or Liquidated Damages so becoming due
and will notify the Trustee in writing of any failure to take such action and
of any failure by the Company (or any other obligor under the Notes) to make
any payment of the principal of, premium, if any, or Liquidated Damages on the
Notes when the same shall become due and payable.


 


(c)          Anything in this
Section 5.4 to the contrary notwithstanding, the Company may, at any time,
for the purpose of obtaining a satisfaction and discharge of this Indenture, or
for any other reason, pay or cause to be paid to the Trustee all sums held in
trust by the Company or any paying agent hereunder as required by this
Section 5.4, such sums to be held by the Trustee upon the trusts herein
contained and upon such payment by the Company or any paying agent to the
Trustee, the Company or such paying agent shall be released from all further
liability with respect to such sums.


 


(d)         Anything in this
Section 5.4 to the contrary notwithstanding, the agreement to hold sums in
trust as provided in this Section 5.4 is subject to Sections 13.3 and
13.4.


 


Section 5.5                                      Existence. 
Subject to Article XII, the Company will do or cause to be done all things
necessary to preserve and keep in full force and effect its corporate
existence.


 


Section 5.6                                      Rule
144A Information Requirement.  Within the period prior to the
expiration of the holding period applicable to sales of Notes or any Common
Stock issuable on


 


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conversion thereof under Rule 144(k) under the Securities Act (or any
successor provision), the Company covenants and agrees that it shall, during
any period in which it is not subject to Section 13 or 15(d) under the
Exchange Act, make available to any holder or beneficial holder of Notes or any
such Common Stock, in each case which continue to be Restricted Securities, in
connection with any sale thereof and any prospective purchaser of Notes or such
Common Stock from such holder or beneficial holder, the information required
pursuant to Rule 144A(d)(4) under the Securities Act upon the request of any
holder or beneficial holder of the Notes or such Common Stock and it will take
such further action as any holder or beneficial holder of such Notes or such
Common Stock may reasonably request, all to the extent required from time to
time to enable such holder or beneficial holder to sell its Notes or Common
Stock without registration under the Securities Act within the limitation of
the exemption provided by Rule 144A, as such rule may be amended from time to
time.  Upon the request of any holder or
any beneficial holder of the Notes or such Common Stock, the Company will
deliver to such holder a written statement as to whether it has complied with
such requirements.


 


Section 5.7                                      Stay,
Extension and Usury Laws.  The Company covenants (to the extent that
it may lawfully do so) that it shall not at any time insist upon, plead, or in
any manner whatsoever claim or take the benefit or advantage of, any stay,
extension or usury law or other law which would prohibit or forgive the Company
from paying all or any portion of the principal of or interest on the Notes as
contemplated herein, wherever enacted, now or at any time hereafter in force,
or which may affect the covenants or the performance of this Indenture; and the
Company (to the extent it may lawfully do so) hereby expressly waives all
benefit or advantage of any such law, and covenants that it will not, by resort
to any such law, 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 has been enacted.


 


Section 5.8                                      Compliance
Certificate.  The Company shall deliver to the Trustee within 120 days
after the end of each fiscal year of the Company (beginning with the fiscal
year ending on December 31, 2002) an Officers’ Certificate stating whether
or not to the best of their knowledge the signers know of any default or Event
of Default that occurred during such period. 
If they do, such Officers’ Certificate shall describe the default or
Event of Default and its status.


 


Section 5.9                                      Liquidated
Damages.  If Liquidated Damages are payable by the Company pursuant to
the Registration Rights Agreement, the Company shall deliver to the Trustee a
certificate to that effect stating (i) the amount of such Liquidated Damages
that are payable and (ii) the date on which such damages are payable.  Unless and until a Responsible Officer of
the Trustee receives at the Corporate Trust Office such a certificate, the
Trustee may assume without inquiry that no such Liquidated Damages are
payable.  If the Company has paid
Liquidated Damages directly to the persons entitled to them, the Company shall
deliver to the Trustee a certificate setting forth the particulars of such
payment


 


29

















 


Section 5.10                                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.


 


ARTICLE VI

NOTEHOLDERS’ LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE


 


Section 6.1                                      Noteholders’
Lists.  The Company covenants and agrees that it will furnish or cause
to be furnished to the Trustee, semi-annually, not more than fifteen (15) days
after each May 1 and November 1 in each year beginning with
May 1, 2004, and at such other times as the Trustee may request in
writing, within thirty (30) days after receipt by the Company of any such
request (or such lesser time as the Trustee may reasonably request in order to
enable it to timely provide any notice to be provided by it hereunder), a list
in such form as the Trustee may reasonably require of the names and addresses of
the holders of Notes as of a date not more than fifteen (15) days (or such
other date as the Trustee may reasonably request in order to so provide any
such notices) prior to the time such information is furnished, except that no
such list need be furnished so long as the Trustee is acting as Note registrar.


 


Section 6.2                                      Preservation
and Disclosure of Lists.


 


(a)          The Trustee shall
preserve, in as current a form as is reasonably practicable, all information as
to the names and addresses of the holders of Notes contained in the most recent
list furnished to it as provided in Section 6.1 or maintained by the
Trustee in its capacity as Note registrar, if so acting.  The Trustee may destroy any list furnished
to it as provided in Section 6.1 upon receipt of a new list so furnished.


 


(b)         The rights of Noteholders
to communicate with other holders of Notes with respect to their rights under
this Indenture or under the Notes and the corresponding rights and duties of
the Trustee, shall be as provided by the Trust Indenture Act.


 


(c)          Every Noteholder, 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 any disclosure of information as to names and
addresses of holders of Notes made pursuant to the Trust Indenture Act.


 


Section 6.3                                      Reports
by Trustee.


 


(a)          Within sixty (60) days
after August 15 of each year commencing with the year 2004, the Trustee
shall transmit to holders of Notes such reports dated as of August 15 of
each year in which such reports are made concerning the Trustee and its actions
under this Indenture as may be required pursuant to the Trust Indenture Act at
the times and in the manner provided pursuant thereto.


 


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(b)         A copy of such report
shall, at the time of such transmission to holders of Notes, be filed by the
Trustee with each stock exchange and automated quotation system upon which the
Notes are listed and with the Company. 
The Company will notify the Trustee in writing within a reasonable time
when the Notes are listed on any stock exchange or automated quotation system
and when any such listing is discontinued.


 


Section 6.4                                      Reports
by Company.


 


(a)          After this Indenture has
been qualified under the Trust Indenture Act, the Company shall file with the
Trustee and the Commission, and transmit to holders of Notes, such information,
documents and other reports and such summaries thereof, as may be required
pursuant to the Trust Indenture Act at the times and in the manner provided
pursuant to such Act; provided that any such information, documents or reports
required to be filed with the Commission pursuant to Section 13 or 15(d)
of the Exchange Act shall be filed with the Trustee within 15 days after the
same is so required to be filed with the Commission.


 


(b)         Delivery of such reports,
information and documents to the Trustee is for informational purposes only,
and the Trustee’s receipt of such shall not constitute constructive notice of
any information contained therein or determinable from information contained
therein, including the Company’s compliance with any of its covenants hereunder
(as to which the Trustee is entitled to conclusively rely exclusively on an Officer’s
Certificate).


 


ARTICLE VII

DEFAULTS AND REMEDIES


 


Section 7.1                                      Events
of Default.  The following events shall be Events of Default with
respect to any series of Notes:


 


(a)          default in the payment
of the principal of and premium, if any, on the Notes as and when the same
shall become due and payable either at maturity or in connection with any
repurchase or otherwise, whether or not such payment is prohibited by the
provisions of Article IV; or


 


(b)         default for thirty (30)
days in the payment of any installment of Liquidated Damages, if any, upon any
of the Notes as and when the same shall become due and payable, whether or not
such payment is prohibited by the provisions of Article IV; or


 


(c)          failure on the part of
the Company duly to observe or perform any other of the covenants on the part
of the Company in the Notes or in this Indenture (other than a covenant default
in whose performance or whose breach is elsewhere in this
Section specifically dealt with) and the continuance of such failure for a
period of sixty (60) days after the date on which written notice of such
failure, requiring the Company to remedy the same, shall have been given to the
Company by


 


31

















 


the Trustee, or to the Company and a Responsible Officer of the Trustee
by the holders of at least 25% in aggregate principal amount of a series of
outstanding Notes at the time outstanding determined in accordance with
Section 9.4; or


 


(d)         a default in the payment
of the Repurchase Price in respect of any Note on the repurchase date therefor
in accordance with the provisions of Article XVI, whether or not such
payment in cash of the Repurchase Price is prohibited by the provisions of
Article IV; or


 


(e)          failure on the part of
the Company to provide a written notice of a Designated Event in accordance
with Section 16.2; or


 


(f)            the Company or any
Significant Subsidiary shall commence a voluntary case or other proceeding
seeking liquidation, reorganization or other relief with respect to itself or
its debts under any bankruptcy, insolvency or other similar law now or
hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any substantial part
of its property, or shall consent to any such relief or to the appointment of
or taking possession by any such official in an involuntary case or other
proceeding commenced against it, or shall make a general assignment for the
benefit of creditors, or shall fail generally to pay its debts as they become
due, provided that a liquidation or winding up of a Significant Subsidiary
pursuant to applicable corporate law shall not be deemed an Event of Default
hereunder; or


 


(g)         an involuntary case or
other proceeding shall be commenced against the Company or any Significant
Subsidiary seeking liquidation, reorganization or other relief with respect to
it or its debts under any bankruptcy, insolvency or other similar law now or
hereafter in effect or seeking the appointment of a trustee, receiver, liquidator,
custodian or other similar official of it or any substantial part of its
property, and such involuntary case or other proceeding shall remain
undismissed and unstayed for a period of ninety (90) consecutive days; or


 


(h)         following the exercise by
a Noteholder of the right to convert any Note in accordance with
Article XV hereof, the Company fails to deliver the Common Stock or other
property required to be delivered within five calendar days following the
applicable date of delivery set forth in Article XV; or


 


(i)             acceleration of
Indebtedness of the Company that, in the aggregate, exceeds $25,000,000.


 


In case one or more Events of Default shall have occurred and be
continuing (whatever the reason for such Event of Default and whether it shall
be voluntary or involuntary or be effected by operation of law or pursuant to
any judgment, decree or order of any court or any order, rule or regulation of
any administrative or governmental body), then, and in each and every such case
(other than an Event of Default specified in Section 7.1(f) or 7.1(g) with
respect to the Company), unless the principal of all of the Notes shall have
already become due and payable, either the Trustee or the holders of not less
than 25% in aggregate principal amount of the Notes of such series then


 


32

















 


outstanding determined in accordance with Section 9.4, by notice
in writing to the Company (and to the Trustee if given by Noteholders), may
declare the principal of and premium, if any, on all the Notes of such series
and Liquidated Damages accrued thereon to be due and payable immediately, and
upon any such declaration the same shall become and shall be immediately due
and payable, anything in this Indenture or in the Notes contained to the
contrary notwithstanding.  If an Event
of Default specified in Section 7.1(f) or 7.1(g) occurs and is continuing
with respect to the Company, the principal of all the Notes of each series and
Liquidated Damages accrued thereon shall be immediately due and payable.  This provision, however, is subject to the
conditions that if, at any time after the principal of the Notes of any series
shall have been so declared due and payable, and before any judgment or decree
for the payment of the monies due shall have been obtained or entered as
hereinafter provided, the Company shall pay or shall deposit with the Trustee a
sum sufficient to pay installments of Liquidated Damages upon all Notes of such
series and the principal of and premium, if any, on any and all Notes of such
series that shall have become due otherwise than by acceleration (with interest
on overdue installments of Liquidated Damages (to the extent that payment of
such interest is enforceable under applicable law) and on such principal and
premium, if any, at the rate of 1% per year and amounts due to the Trustee
pursuant to Section 8.6, and if any and all defaults under this Indenture,
other than the nonpayment of principal of and premium, if any, and accrued
Liquidated Damages on Notes that shall have become due by acceleration, shall
have been cured or waived pursuant to Section 7.7, then and in every such
case the holders of a majority in aggregate principal amount of the Notes of
such series then outstanding, by written notice to the Company and to the
Trustee, may waive all defaults or Events of Default with respect to such
series of Notes and rescind and annul such declaration and its consequences;
but no such waiver or rescission and annulment shall extend to or shall affect
any subsequent default or Event of Default, or shall impair any right
consequent thereon.  The Company shall
notify the Responsible Officer of the Trustee, promptly upon becoming aware
thereof, of any Event of Default by delivering to the Trustee a statement specifying
such Event of Default and the action the Company has taken, is taking or
proposes to take with respect thereto.


 


In case the Trustee shall have proceeded to enforce any right under
this Indenture for any series of Notes and such proceedings shall have been
discontinued or abandoned because of such waiver or rescission and annulment or
for any other reason or shall have been determined adversely to the Trustee,
then and in every such case the Company, the holders of Notes of such series,
and the Trustee shall be restored respectively to their several positions and
rights hereunder, and all rights, remedies and powers of the Company, the
holders of Notes of such series, and the Trustee shall continue as though no
such proceeding had been instituted.


 


Section 7.2                                      Payments
of Notes on Default; Suit Therefor.  In the event that the Trustee or
the holders of not less than twenty-five percent (25%) in aggregate principal
amount of the Notes of any series then outstanding hereunder have declared the
principal of and premium, if any, on all Notes of such series (including
Liquidated Damages, if any,) to be due and payable immediately in accordance
with Section 7.1, and the Company shall have failed forthwith to pay such
amounts, the Trustee, in its own name and as trustee of an express trust, shall
be entitled and empowered to


 


33

















 


institute any actions or proceedings at law or in equity for the
collection of the sums so due and unpaid (including such further amounts as
shall be sufficient to cover the costs and expenses of collection, including
compensation to the Trustee, its agents, attorneys, custodians, nominees and
counsel, and any expenses or liabilities incurred by the Trustee hereunder
other than through its negligence or bad faith), and may prosecute any such
action or proceeding to judgment or final degree, and may enforce any such
judgment or final decree against the Company or any other obligor on the Notes
of such series and collect in the manner provided by law out of the property of
the Company or any other obligor on the Notes of such series wherever situated
the monies adjudged or decreed to be payable.


 


In the case there shall be pending proceedings for the bankruptcy or
for the reorganization of the Company or any other obligor on the Notes under
Title 11 of the United States Code, or any other applicable law, or in case a
receiver, assignee or trustee in bankruptcy or reorganization, liquidator,
sequestrator or similar official shall have been appointed for or taken
possession of the Company or such other obligor, the property of the Company or
such other obligor, or in the case of any other judicial proceedings relative
to the Company or such other obligor upon the Notes, or to the creditors or property
of the Company or such other obligor, the Trustee, irrespective of whether the
principal of the Notes shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Trustee shall have
made any demand pursuant to the provisions of this Section 7.2, shall be
entitled and empowered, by intervention in such proceedings or otherwise, to
file and prove a claim or claims for the whole amount of principal premium, if
any, and Liquidated Damages in respect of the Notes, and, in case of any
judicial proceedings, to file such proofs of claim and other papers or
documents and to take such other actions as it may deem 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 Noteholders allowed in such judicial proceedings
relative to the Company or any other obligor on the Notes, its or their
creditors, or its or their property, and to collect and receive any monies or
other property payable or deliverable on any such claims, and to distribute the
same after the deduction of any amounts due the Trustee under Section 8.6;
and any receiver, assignee or trustee in bankruptcy or reorganization,
liquidator, custodian or similar official is hereby authorized by each of the
Noteholders to make such payments to the Trustee, as administrative expenses,
and, in the event that the Trustee shall consent to the making of such payments
directly to the Noteholders, to pay to the Trustee any amount due it for
reasonable compensation, expenses, advances and disbursements, including agents
and counsel fees, and including any other amounts due to the Trustee under
Section 8.6 hereof, incurred by it up to the date of such
distribution.  To the extent that such
payment of reasonable compensation, expenses, advances and disbursements out of
the estate in any such proceedings shall be denied for any reason, payment of
the same shall be secured by a lien on, and shall be paid out of, any and all
distributions, dividends, monies, securities and other property which the
holders of the Notes may be entitled to receive in such proceedings, whether in
liquidation or under any plan of reorganization or arrangement or otherwise.


 


34

















 


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


 


All rights of action and of asserting claims under this Indenture, or
under any of the Notes, may be enforced by the Trustee without the possession
of any of the Notes, or the production thereof at any trial or other proceeding
relative thereto, and any such suit or proceeding instituted by the Trustee
shall be brought in its own name as trustee of an express trust, and any
recovery of judgment shall, after provision for the payment of the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents,
custodians, nominees and counsel, be for the ratable benefit of the holders of
the Notes.


 


In any proceedings brought by the Trustee (and in any proceedings
involving the interpretation of any provision of this Indenture to which the
Trustee shall be a party) the Trustee shall be held to represent all the
holders of the Notes, and it shall not be necessary to make any holders of the
Notes parties to any such proceedings.


 


Section 7.3                                      Application
of Monies Collected by Trustee.  Any monies collected by the Trustee
pursuant to this Article VII with respect to any series of Notes shall be
applied in the order following, at the date or dates fixed by the Trustee for
the distribution of such monies, upon presentation of the several Notes of such
series, and stamping thereon the payment, if only partially paid, and upon
surrender thereof, if fully paid:


 


First:  To the payment of all
amounts due the Trustee under Section 8.6;


 


Second:  Subject to the
provisions of Article IV, in case the principal of the outstanding Notes
of such series shall not have become due and be unpaid, to the payment of
Liquidated Damages with interest (to the extent that such interest has been
collected by the Trustee) upon the overdue installments of Liquidated Damages
at the rate of 1% per year, such payments to be made ratably to the persons
entitled thereto;


 


Third:  Subject to the
provisions of Article IV, in case the principal of the outstanding Notes
of such series shall have become due, by declaration or otherwise, and be
unpaid, to the payment of the whole amount then owing and unpaid upon the Notes
of such series for principal and premium, if any, and Liquidated Damages, if
any, and (to the extent that such Liquidated Damages have been collected by the
Trustee) upon overdue installments of Liquidated Damages at the rate of 1% per
year; and in case such monies shall be insufficient to pay in full the whole
amounts so due and unpaid upon the Notes of such series, then to the payment of
such principal and premium, if any, and Liquidated Damages without preference
or priority of principal and premium, if any, over Liquidated Damages, or of
Liquidated Damages over principal and premium, if any, or of any Note of such
series over any other Note of such series, ratably to the aggregate of such
principal and premium, if any, and unpaid Liquidated Damages.


 


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Section 7.4                                      Proceedings
by Noteholder.  No holder of any Note of any series shall have any
right by virtue of or by availing of any provision of this Indenture to institute
any suit, action or proceeding in equity or at law upon or under or with
respect to this Indenture, or for the appointment of a receiver, trustee,
liquidator, custodian or other similar official, or for any other remedy
hereunder, unless such holder previously shall have given to the Trustee
written notice of an Event of Default and of the continuance thereof, as
hereinbefore provided, and unless also the holders of not less than 25% in
aggregate principal amount of the Notes of such series then outstanding shall
have made written request upon the Trustee to institute such action, suit or
proceeding in its own name as Trustee hereunder and shall have offered to the
Trustee such indemnity it may require against the costs, expenses and
liabilities to be incurred therein or thereby, and the Trustee for sixty (60)
days after its receipt of such notice, request and offer of indemnity, shall
have neglected or refused to institute any such action, suit or proceeding and
no direction inconsistent with such written request shall have been given to
the Trustee by the holders of Notes of such series pursuant to
Section 7.7; it being understood and intended, and being expressly
covenanted by the taker and holder of every Note of such series with every
other taker and holder and the Trustee, that no one or more holders of Notes of
such series shall have any right in any manner whatever by virtue of or by
availing of any provision of this Indenture to affect, disturb or prejudice the
rights of any other holder of Notes of such series, or to obtain or seek to
obtain priority over or preference to any other such holder, or to enforce any
right under this Indenture, except in the manner herein provided and for the
equal, ratable and common benefit of all holders of Notes of such series
(except as otherwise provided herein). 
For the protection and enforcement of this Section 7.4, each and
every Noteholder and the Trustee shall be entitled to such relief as can be
given either at law or in equity.


 


Notwithstanding any other provision of this Indenture and any provision
of any Note, the right of any holder of any Note to receive payment of the
principal of and premium, if any, and Liquidated Damages on such Note, on or
after the respective due dates expressed in such Note, or to institute suit for
the enforcement of any such payment on or after such respective dates against
the Company shall not be impaired or affected without the consent of such
holder.


 


Anything in this Indenture or the Notes to the contrary
notwithstanding, the holder of any Note, without the consent of either the
Trustee or the holder of any other Note, in his own behalf and for his own
benefit, may enforce, and may institute and maintain any proceeding suitable to
enforce, his rights of conversion as provided herein.


 


Section 7.5                                      Proceedings
by Trustee.  In case of an Event of Default the Trustee may in its
discretion proceed to protect and enforce the rights vested in it by this
Indenture by such appropriate judicial proceedings as the Trustee shall deem
most effectual to protect and enforce any of such rights, either by suit in
equity or by action at law or by proceeding in bankruptcy or otherwise, whether
for the specific enforcement of any covenant or agreement contained in this
Indenture or in aid of the exercise of any power granted in this Indenture, or
to enforce any other legal or equitable right vested in the Trustee by this
Indenture or by law.


 


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Section 7.6                                      Remedies
Cumulative and Continuing.  Except as provided in the last paragraph
of Section 2.6, all powers and remedies given by this Article VII to
the Trustee or to the Noteholders shall, to the extent permitted by law, be
deemed cumulative and not exclusive of any thereof or of any other powers and
remedies available to the Trustee or the holders of the Notes, by judicial
proceedings or otherwise, to enforce the performance or observance of the
covenants and agreements contained in this Indenture, and no delay or omission
of the Trustee or of any holder of any of the Notes to exercise any right or
power accruing upon any default or Event of Default occurring and continuing as
aforesaid shall impair any such right or power, or shall be construed to be a
waiver of any such default or any acquiescence therein; and, subject to the
provisions of Section 7.4, every power and remedy given by this
Article VII or by law to the Trustee or to the Noteholders may be
exercised from time to time, and as often as shall be deemed expedient, by the
Trustee or by the Noteholders.


 


Section 7.7                                      Direction
of Proceedings and Waiver of Defaults by Majority of Noteholders.  The
holders of a majority in aggregate principal amount of the Notes of any series
at the time outstanding determined in accordance with Section 9.4 shall
have the right to direct the time, method, and place of conducting any
proceeding for any remedy available to the Trustee or exercising any trust or
power conferred on the Trustee with respect to Notes of such series; provided,
however, that (a) such direction shall not be in conflict with any rule of
law or with this Indenture, and (b) the Trustee may take any other action
deemed proper by the Trustee that is not inconsistent with such direction.  The holders of a majority in aggregate
principal amount of the Notes of any series at the time outstanding determined
in accordance with Section 9.4 may on behalf of the holders of all of the
Notes of such series waive any past default or Event of Default hereunder and
its consequences except (i) a default in the payment of Liquidated Damages or
premium, if any, on, or the principal of, the Notes of such series when due
which has not been cured pursuant to the provisions of Section 7.1, (ii) a
failure by the Company to convert any Notes of such series into Common Stock or
(iii) a default in respect of a covenant or provisions hereof which under
Article XI cannot be modified or amended without the consent of the
holders of all Notes of such series then outstanding.  Upon any such waiver the Company, the Trustee and the holders of
the Notes of such series shall be restored to their former positions and rights
hereunder; but no such waiver shall extend to any subsequent or other default
or Event of Default or impair any right consequent thereon.  Whenever any default or Event of Default
hereunder shall have been waived as permitted by this Section 7.7, said
default or Event of Default shall for all purposes of the Notes of such series
and this Indenture be deemed to have been cured and to be not continuing; but no
such waiver shall extend to any subsequent or other default or Event of Default
or impair any right consequent thereon.


 


Section 7.8                                      Notice
of Defaults.  The Trustee shall, within ninety (90) days after the
occurrence of a default of which a Responsible Officer has actual knowledge,
mail to all Noteholders as the names and addresses of such holders appear upon
the Note register, notice of all defaults known to a Responsible Officer,
unless such defaults shall have been cured or waived before the giving of such notice;
and provided that, except in the case of default in the payment of the
principal


 


37

















 


of, or premium, if any or Liquidated Damages, on any of the Notes,
including without limiting the generality of the foregoing any default in the
payment of any Repurchase Price, then in any such event the Trustee shall be
protected in withholding such notice if and so long as a trust committee of
directors and/or Responsible Officers of the Trustee in good faith determine
that the withholding of such notice is in the best interests of the Noteholders
of such series.


 


Section 7.9                                      Undertaking
to Pay Costs.  All parties to this Indenture agree, and each holder of
any Note by his acceptance thereof shall be deemed to have agreed, that any
court may, in its discretion, require, in any suit for the enforcement of any
right or remedy under this Indenture, or in any suit against the Trustee for
any action taken or omitted by it as Trustee, the filing by any party litigant
in such suit of an undertaking to pay the costs of such suit and that such
court may in its discretion assess reasonable costs, including reasonable
attorneys’ fees, against any party litigant in such suit, having due regard to
the merits and good faith of the claims or defenses made by such party
litigant; provided that the provisions of this Section 7.9 (to the extent
permitted by law) shall not apply to any suit instituted by the Trustee, to any
suit instituted by any Noteholder of any series of Notes, or group of
Noteholders, holding in the aggregate more than 10% in principal amount of the
Notes of such series at the time outstanding determined in accordance with
Section 9.4, or to any suit instituted by any Noteholder for the
enforcement of the payment of the principal of or premium, if any, or
Liquidated Damages on any Note (including, but not limited to, the Repurchase
Price with respect to the Notes being repurchased as provided in this
Indenture) on or after the due date expressed in such Note or to any suit for
the enforcement of the right to convert any Note in accordance with the
provisions of Article XV.


 


Section 7.10                                Delay
or Omission Not Waiver.  No delay or omission of the Trustee or of any
holder of any Note to exercise any right or remedy accruing upon any Event of
Default shall impair any such right or remedy or constitute a waiver of any
such Event of Default or any acquiescence therein.  Every right and remedy given by this Article or by law to
the Trustee or to the holders of Notes may be exercised from time to time, and
as often as may be deemed expedient, by the Trustee or by the holders of Notes,
as the case may be.


 


ARTICLE VIII

CONCERNING THE TRUSTEE


 


Section 8.1                                      Duties
and Responsibilities of Trustee.  The Trustee, prior to the occurrence
of an Event of Default and after the curing or waiver of all Events of Default
which may have occurred, undertakes to perform such duties and only such duties
as are specifically set forth in this Indenture.  In case an Event of Default has occurred (which has not been
cured or waived) the Trustee shall exercise such of the rights and powers
vested in it by this Indenture, and use the same degree of care and skill in
their exercise, as a prudent person would exercise or use under the
circumstances in the conduct of such person’s own affairs.


 


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


 


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


 


(1)                                  the
duties and obligations of the Trustee shall be determined solely by the express
provisions of this Indenture and, after it has been qualified thereunder, the
Trust Indenture Act, and the Trustee shall not be liable except for the
performance of such duties and obligations as are specifically set forth in
this Indenture and no implied covenants or obligations shall be read into this
Indenture and the Trust Indenture Act against the Trustee; and


 


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


 


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


 


(c)          the Trustee shall not be
liable with respect to any action taken or omitted to be taken by it in good
faith in accordance with the direction of the holders of not less than a
majority in principal amount of the Notes at the time outstanding determined as
provided in Section 9.4 relating to the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee, under this Indenture;
and


 


(d)         whether or not therein
provided, every provision of this Indenture relating to the conduct or
affecting the liability of, or affording protection to, the Trustee shall be
subject to the provisions of this Section.


 


(e)          the Trustee shall not be
liable in respect of any payment (as to the correctness of amount, entitlement
to receive or any other matters relating to payment) or notice effected by the
Company or any paying agent or any records maintained by any co-registrar with
respect to the Notes.


 


(f)            If any party fails to
deliver a notice relating to an event the fact of which, pursuant to this
Indenture, requires notice to be sent to the Trustee, the Trustee may
conclusively rely on its failure to receive such notice as reason to act as if
no such event occurred, unless such Responsible Officer of the Trustee had
actual knowledge of such event.


 


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(g)         In the absence of written
investment direction from the Company, all cash received by the Trustee shall
be placed in a non-interest bearing trust account.  In no event shall the Trustee be liable for the selection of
investments or for investment losses incurred thereon or for losses incurred as
a result of the liquidation of any such investments prior to its stated
maturity or the failure of the party directing such investments prior to its
stated maturity or the failure of the party directing such investment to
provide timely written investment direction, and the Trustee shall have no
obligation to invest or reinvest any amounts held hereunder in the absence of
such written investment direction from the Company; and


 


(h)         In the event that the
Trustee is also acting as Custodian, Note Registrar, paying agent, conversion
agent or transfer agent hereunder, the rights and protections afforded to the
Trustee pursuant to this Article VIII shall also be afforded to such
Custodian, Note Registrar, paying agent, conversion agent or transfer agent.


 


None of the provisions contained in this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties or in the exercise of any of
its rights or powers, if there is reasonable ground for believing that the
repayment of such funds or adequate indemnity against such risk or liability is
not assured to it.


 


Section 8.2                                      Reliance
on Documents, Opinions, Etc.  Except as otherwise provided in
Section 8.1:


 


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


 


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


 


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


 


(d)         the Trustee shall be
under no obligation to exercise any of the rights or powers vested in it by
this Indenture at the request, order or direction of any of the Noteholders
pursuant to the provisions of this Indenture, unless such Noteholders shall
have offered to the Trustee security or indemnity satisfactory to it against
the costs, expenses and liabilities which may be incurred therein or thereby;


 


40

















 


(e)          the Trustee shall not be
bound to make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture or other paper or document,
but the Trustee, in its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit, and, if the Trustee
shall determine to make such further inquiry or investigation, it shall be
entitled to examine the books, records and premises of the Company, personally
or by agent or attorney; provided, however, that if the payment within a
reasonable time to the Trustee of the costs, expenses or liabilities likely to
be incurred by it in the making of such investigation is, in the opinion of the
Trustee, not reasonably assured to the Trustee by the security afforded to it
by the terms of this Indenture, the Trustee may require indemnity satisfactory
to the Trustee from the Noteholders against such expenses or liability as a
condition to so proceeding; the reasonable expenses of every such examination
shall be paid by the Company or, if paid by the Trustee or any predecessor
Trustee, shall be repaid by the Company upon demand; and


 


(f)            the Trustee may
execute any of the trusts or powers hereunder or perform any duties hereunder
either directly or by or through agents, custodians, nominees or attorneys and
the Trustee shall not be responsible for any misconduct or negligence on the
part of any agent, custodian, nominee or attorney appointed by it with due care
hereunder.


 


In no event shall the Trustee be liable for any consequential loss or
damage of any kind whatsoever (including but not limited to lost profits), even
if the Trustee has been advised of the likelihood of such loss or damage and
regardless of the form of action other than through the Trustee’s willful
misconduct or gross negligence.


 


Section 8.3                                      No
Responsibility for Recitals, Etc.  The recitals contained herein and
in the Notes (except in the Trustee’s certificate of authentication) shall be
taken as the statements of the Company, and the Trustee assumes no
responsibility for the correctness of the same.  The Trustee makes no representations as to the validity or
sufficiency of this Indenture or of the Notes. 
The Trustee shall not be accountable for the use or application by the
Company of any Notes or the proceeds of any Notes authenticated and delivered
by the Trustee in conformity with the provisions of this Indenture.


 


Section 8.4                                      Trustee,
Paying Agents, Conversion Agents or Registrar May Own Notes.  The
Trustee, any paying agent, any conversion agent or Note registrar, in its
individual or any other capacity, may become the owner or pledgee of Notes with
the same rights it would have if it were not Trustee, paying agent, conversion
agent or Note registrar.


 


Section 8.5                                      Monies
to Be Held in Trust.  Subject to the provisions of Sections 4.2
and 13.4, all monies received by the Trustee shall, until used or applied as
herein provided, be held in trust for the purposes for which they were
received.  Money held by the Trustee in
trust hereunder need not be segregated from other funds except to the extent
required by law.  The Trustee shall be 


 


41

















 


under no liability for interest on any money received by it hereunder
except as may be agreed from time to time by the Company and the Trustee.


 


Section 8.6                                      Compensation
and Expenses of Trustee.  The Company covenants and agrees to pay to
the Trustee from time to time, and the Trustee shall be entitled to, reasonable
compensation for all services rendered by it hereunder in any capacity (which
shall not be limited by any provision of law in regard to the compensation of a
trustee of an express trust) as mutually agreed to in writing between the
Trustee and the Company, and the Company will pay or reimburse the Trustee upon
its request for all reasonable expenses, disbursements and advances reasonably
incurred or made by the Trustee in accordance with any of the provisions of
this Indenture (including the reasonable compensation and the expenses and
disbursements of its agents and counsel and of all persons not regularly in its
employ) except any such expense, disbursement or advance as may arise from its
negligence, willful misconduct or bad faith. 
The Company also covenants to indemnify the Trustee in any capacity
under this Indenture and any other document or transaction entered into in
connection herewith and its agents and any authenticating agent for, and to
hold them harmless against, any loss, liability or expense incurred without
negligence, willful misconduct or bad faith on the part of the Trustee, its
officers, directors, agents or employees, or such agent or authenticating
agent, as the case may be, and arising out of or in connection with the
acceptance or administration of this trust or in any other capacity hereunder,
including the costs and expenses of defending themselves against any claim of
liability in the premises.  The
obligations of the Company under this Section 8.6 to compensate or
indemnify the Trustee and to pay or reimburse the Trustee for expenses,
disbursements and advances shall be secured by a lien prior to that of the
Notes upon all property and funds held or collected by the Trustee as such,
except, subject to the effect of Sections 4.3 and 7.6, funds held in trust
herewith for the benefit of the holders of particular Notes prior to the date
of the accrual of such unpaid compensation or indemnifiable claim.  The Trustee’s right to receive payment of
any amounts due under this Section 8.6 shall not be subordinate to any
other liability or indebtedness of the Company (even though the Notes may be so
subordinated).  The obligation of the
Company under this Section shall survive the satisfaction and discharge of
this Indenture and the earlier resignation or removal or the Trustee.  The indemnification provided in this
Section 8.6 shall extend to the officers, directors, agents and employees
of the Trustee.


 


When the Trustee and its agents and any authenticating agent incur
expenses or render services after an Event of Default specified in
Section 7.1(f) or (g) occurs, the expenses and the compensation for the
services are intended to constitute expenses of administration under any
bankruptcy, insolvency or similar laws.


 


Section 8.7                                      Officers’
Certificate as Evidence.  Except as otherwise provided in
Section 8.1, whenever in the administration of the provisions of this
Indenture the Trustee shall deem it necessary or desirable that a matter be
proved or established prior to taking or omitting any action hereunder, such
matter (unless other evidence in respect thereof be herein specifically
prescribed) may, in the absence of negligence, willful misconduct, recklessness
and bad faith on the part of the Trustee, be deemed to be conclusively proved
and established by an Officers’ Certificate


 


42

















 


delivered to the Trustee, and such Officers’ Certificate, in the absence
of negligence, willful misconduct, recklessness and bad faith on the part of
the Trustee, shall be full warrant to the Trustee for any action taken or
omitted by it under the provisions of this Indenture upon the faith thereof.


 


Section 8.8                                      Conflicting
Interests of Trustee.  After qualification under the Trust Indenture
Act, if the Trustee has or shall acquire a conflicting interest within the
meaning of the Trust Indenture Act, the Trustee shall either eliminate such
interest or resign, to the extent and in the manner provided by, and subject to
the provisions of, the Trust Indenture Act and this Indenture.


 


Section 8.9                                      Eligibility
of Trustee.  There shall at all times be a Trustee hereunder which
shall be a person that is eligible pursuant to the Trust Indenture Act to act
as such and has a combined capital and surplus of at least $50,000,000.  If such person publishes reports of
condition at least annually, pursuant to law or to the requirements of any
supervising or examining authority, then for the purposes of this Section, the
combined capital and surplus of such person shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published.  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 8.10                                Resignation
or Removal of Trustee.


 


(a)          The Trustee may at any
time resign by giving written notice of such resignation to the Company and by
mailing notice thereof to the holders of Notes at their addresses as they shall
appear on the Note register.  Upon
receiving such notice of resignation, the Company shall promptly appoint a
successor trustee by written instrument, in duplicate, executed by order of the
Board of Directors, one copy of which instrument shall be delivered to the
resigning Trustee and one copy to the successor trustee.  If no successor trustee shall have been so
appointed and have accepted appointment sixty (60) days after the mailing of
such notice of resignation to the Noteholders, the resigning Trustee may
petition any court of competent jurisdiction for the appointment of a successor
trustee, or any Noteholder who has been a bona fide holder of a Note or Notes
for at least six months may, subject to the provisions of Section 7.9, on
behalf of himself and all others similarly situated, petition any such court
for the appointment of a successor trustee. 
Such court may thereupon, after such notice, if any, as it may deem
proper and prescribe, appoint a successor trustee.


 


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


 


(1)                                  the
Trustee shall fail to comply with Section 8.8 within a reasonable time
after written request therefor by the Company or by any Noteholder who has been
a bona fide holder of a Note or Notes for at least six months, or


 


(2)                                  the
Trustee shall cease to be eligible in accordance with the provisions of
Section 8.9 and shall fail to resign after written request therefor by the
Company or by any such Noteholder, or


 


43

















 


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


 


then, in any such case, the Company may by a Board Resolution remove
the Trustee and appoint a successor trustee by written instrument, in
duplicate, executed by order of the Board of Directors, one copy of which
instrument shall be delivered to the Trustee so removed and one copy to the
successor trustee, or, subject to the provisions of Section 7.9, any
Noteholder who has been a bona fide holder of a Note or Notes for at least six
months may, on behalf of himself and all others similarly situated, petition
any court of competent jurisdiction for the removal of the Trustee and the
appointment of a successor trustee. 
Such court may thereupon, after such notice, if any, as it may deem
proper and prescribe, remove the Trustee and appoint a successor trustee.





 


(c)          The holders of a
majority in aggregate principal amount of the Notes of any series at the time
outstanding may at any time remove the Trustee and nominate a successor trustee
which shall be deemed appointed as successor trustee unless within ten (10)
days after notice to the Company of such nomination the Company objects
thereto, in which case the Trustee so removed or any Noteholder, upon the terms
and conditions and otherwise as in Section 8.10(a) provided, may petition
any court of competent jurisdiction for an appointment of a successor trustee.


 


(d)         Any resignation or
removal of the Trustee and appointment of a successor trustee pursuant to any
of the provisions of this Section 8.10 shall become effective upon
acceptance of appointment by the successor trustee as provided in
Section 8.11.


 


Section 8.11                                Acceptance
by Successor Trustee.  Any successor trustee appointed as provided in
Section 8.10 shall execute, acknowledge and deliver to the Company and to
its predecessor trustee an instrument accepting such appointment hereunder, and
thereupon the resignation or removal of the predecessor trustee shall become
effective and such successor trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, duties and
obligations of its predecessor hereunder, with like effect as if originally
named as trustee herein; but, nevertheless, on the written request of the
Company or of the successor trustee, the trustee ceasing to act shall, upon
payment of any amounts then due it pursuant to the provisions of
Section 8.6, execute and deliver an instrument transferring to such
successor trustee all the rights and powers of the trustee so ceasing to
act.  Upon request of any such successor
trustee, the Company shall execute any and all instruments in writing for more
fully and certainly vesting in and confirming to such successor trustee all
such rights and powers.  Any trustee
ceasing to act shall, nevertheless, retain a lien upon all property and funds
held or collected by such trustee as such, except for funds held in trust for
the benefit of holders of particular Notes, to secure any amounts then due it
pursuant to the provisions of Section 8.6.


 


44

















 


No successor trustee shall accept appointment as provided in this
Section 8.11 unless at the time of such acceptance such successor trustee
shall be qualified under the provisions of Section 8.8 and be eligible
under the provisions of Section 8.9.


 


Upon acceptance of appointment by a successor trustee as provided in
this Section 8.11, each of the Company and the former trustee, at the
written direction and at the expense of the Company shall mail or cause to be
mailed notice of the succession of such trustee hereunder to the holders of
Notes at their addresses as they shall appear on the Note register.  If the Company fails to mail such notice
within ten (10) days after acceptance of appointment by the successor trustee,
the successor trustee shall cause such notice to be mailed at the expense of
the Company.


 


Section 8.12                                Succession
by Merger, Etc.  Any corporation or other entity into which the
Trustee may be merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or consolidation to which the
Trustee shall be a party, or any corporation or other entity succeeding to all
or substantially all of the corporate trust business of the Trustee (including
the administration of this Indenture), shall be the successor to the Trustee
hereunder without the execution or filing of any paper or any further act on
the part of any of the parties hereto, provided that in the case of any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee such corporation shall be qualified under the
provisions of Section 8.8 and eligible under the provisions of
Section 8.9.


 


In case at the
time such successor to the Trustee shall succeed to the trusts created by this
Indenture, any of the Notes shall have been authenticated but not delivered,
any such successor to the Trustee may adopt the certificate of authentication
of any predecessor trustee or authenticating agent appointed by such
predecessor trustee, and deliver such Notes so authenticated; and in case at
that time any of the Notes shall not have been authenticated, any successor to
the Trustee or an authenticating agent appointed by such successor trustee may
authenticate such Notes either in the name of any predecessor trustee hereunder
or in the name of the successor trustee; and in all such cases such
certificates shall have the full force which it is anywhere in the Notes or in
this Indenture provided that the certificate of the Trustee shall have; provided,
however, that the right to adopt the certificate of authentication of any
predecessor Trustee or to authenticate Notes in the name of any predecessor
Trustee shall apply only to its successor or successors by merger, conversion
or consolidation.


 


Section 8.13                                Limitation
on Rights of Trustee as Creditor.  If and when the Trustee shall be or
become a creditor of the Company (or any other obligor upon the Notes), after
qualification under the Trust Indenture Act, the Trustee shall be subject to
the provisions of the Trust Indenture Act regarding the collection of the
claims against the Company (or any such other obligor).


 


Section 8.14                                Trustee’s
Application for Instructions from the Company.   Any application by the Trustee for written
instructions from the Company (other than with regard to any action proposed to
be taken or omitted to be taken by the Trustee that affects the rights of the
holders of the


 


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Notes or Senior Indebtedness under this Indenture, including, without
limitation, under Article IV hereof) may, at the option of the Trustee,
set forth in writing any action proposed to be taken or omitted by the Trustee
under this Indenture and the date on and/or after which such action shall be
taken or such omission shall be effective. 
The Trustee shall not be liable for any action taken by, or omission of,
the Trustee in accordance with a proposal included in such application on or
after the date specified in such application (which date shall not be less than
three (3) Business Days after the date any officer of the Company actually
receives such application, unless any such officer shall have consented in
writing to any earlier date), unless, prior to taking any such action (or the
effective date in the case of any omission), the Trustee shall have received
written instructions in response to such application specifying the action to
be taken or omitted.


 


ARTICLE IX

CONCERNING THE NOTEHOLDERS


 


Section 9.1                                      Action
by Noteholders.  Whenever in this Indenture it is provided that the
holders of a specified percentage in aggregate principal amount of the Notes of
any series may take any action (including the making of any demand or request,
the giving of any notice, consent or waiver or the taking of any other action),
the fact that at the time of taking any such action, the holders of such
specified percentage have joined therein may be evidenced (a) by any instrument
or any number of instruments of similar tenor executed by Noteholders of such
series in person or by agent or proxy appointed in writing, or (b) by the
record of the holders of Notes of such series voting in favor thereof at any
meeting of Noteholders of such series duly called and held in accordance with
the provisions of Article X, or (c) by a combination of such instrument or
instruments and any such record of such a meeting of Noteholders of such
series.  Whenever the Company or the
Trustee solicits the taking of any action by the holders of the Notes of any
series, the Company or the Trustee may fix in advance of such solicitation, a
date as the record date for determining holders of such series entitled to take
such action.  The record date shall be
not more than fifteen (15) days prior to the date of commencement of
solicitation of such action.


 


Section 9.2                                      Proof
of Execution by Noteholders.  Subject to the provisions of Sections
8.1, 8.2 and 10.5, proof of the execution of any instrument by a Noteholder or
his agent or proxy shall be sufficient if made in accordance with such
reasonable rules and regulations as may be prescribed by the Trustee or in such
manner as shall be satisfactory to the Trustee.  The holding of Notes shall be proved by the Note register or by a
certificate of the Note registrar.  The
record of any Noteholders’ meeting shall be proved in the manner provided in
Section 10.6.


 


Section 9.3                                      Who
Are Deemed Absolute Owners.  The Company, the Trustee, any
authenticating agent, any paying agent, any conversion agent and any Note
registrar may deem the person in whose name such Note shall be registered upon
the Note register to be, and may treat him as, the absolute owner of such Note
(whether or not such Note shall be overdue and notwithstanding any notation of
ownership or other writing thereon) for the purpose of receiving payment of or
on


 


46

















 


account of the principal of, premium, if any, and Liquidated Damages on
such Note, for conversion of such Note and for all other purposes; and neither
the Company nor the Trustee nor any paying agent nor any conversion agent nor
any Note registrar shall be affected by any notice to the contrary.  All such payments so made to any holder for
the time being, or upon his order, shall be valid, and, to the extent of the
sum or sums so paid, effectual to satisfy and discharge the liability for
monies payable upon any such Note.  Notwithstanding
anything to the contrary in this Indenture or the Notes, any holder of a
beneficial interest in a Global Note may directly enforce against the Company,
without the consent, solicitation, proxy, authorization or any other action of
the Depositary or any other person, such holder’s right to exchange such
beneficial interest for a Note in certificated form in accordance with the
provisions of this Indenture.


 


Section 9.4                                      Company-Owned
Notes Disregarded.  In determining whether the holders of the
requisite aggregate principal amount of Notes of any series have concurred in
any direction, consent, waiver or other action under this Indenture, Notes of
such series that are owned by the Company or any other obligor on the Notes of
such series or by any person directly or indirectly controlling or controlled
by or under direct or indirect common control with the Company or any other
obligor on such Notes shall be disregarded and deemed not to be outstanding for
the purpose of any such determination; provided that for the purposes of
determining whether the Trustee shall be protected in relying on any such
direction, consent, waiver or other action only Notes of such series that a
Responsible Officer knows are so owned shall be so disregarded.  Notes of such series so owned that have been
pledged in good faith may be regarded as outstanding for the purposes of this
Section 9.4 if the pledgee shall establish to the satisfaction of the
Trustee the pledgee’s right to vote such Notes and that the pledgee is not the
Company, any other obligor on the Notes or a person directly or indirectly
controlling or controlled by or under direct or indirect common control with
the Company or any such other obligor. 
In the case of a dispute as to such right, any decision by the Trustee
taken upon the advice of counsel shall be full protection to the Trustee.  Upon request of the Trustee, the Company
shall furnish to the Trustee promptly an Officers’ Certificate listing and
identifying all Notes of any series, if any, known by the Company to be owned
or held by or for the account of any of the above described persons; and,
subject to Section 8.1, the Trustee shall be entitled to accept such
Officers’ Certificate as conclusive evidence of the facts therein set forth and
of the fact that all Notes not listed therein are outstanding for the purpose
of any such determination.


 


Section 9.5                                      Revocation
of Consents; Future Holders Bound.  At any time prior to (but not
after) the evidencing to the Trustee, as provided in Section 9.1, of the
taking of any action by the holders of the percentage in aggregate principal
amount of the Notes of any series specified in this Indenture in connection
with such action, any holder of a Note of such series that is shown by the
evidence to be included in the Notes the holders of which have consented to
such action may, by filing written notice with the Trustee at its Corporate
Trust Office and upon proof of holding as provided in Section 9.2, revoke
such action so far as concerns such Note. 
Except as aforesaid, any such action taken by the holder of any Note
shall be conclusive and binding upon such holder and upon all future holders
and owners of such Note and of any Notes issued in exchange or substitution


 


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therefor, irrespective of whether any notation in regard thereto is
made upon such Note or any Note issued in exchange or substitution therefor.


 


ARTICLE X

NOTEHOLDERS’ MEETINGS


 


Section 10.1                                Purpose
of Meetings.  A meeting of Noteholders of any series may be called at
any time and from time to time pursuant to the provisions of this
Article X for any of the following purposes:


 


(1)                                  to
give any notice to the Company or to the Trustee or to give any directions to
the Trustee permitted under this Indenture, or to consent to the waiving of any
default or Event of Default hereunder with respect to such series and its
consequences, or to take any other action authorized to be taken by Noteholders
pursuant to any of the provisions of Article VII;


 


(2)                                  to
remove the Trustee and nominate a successor trustee pursuant to the provisions
of Article VIII;


 


(3)                                  to
consent to the execution of an indenture or indentures supplemental hereto
pursuant to the provisions of Section 11.2; or


 


(4)                                  to
take any other action authorized to be taken by or on behalf of the holders of
any specified aggregate principal amount of the Notes of such series under any
other provision of this Indenture or under applicable law.


 


Section 10.2                                Call
of Meetings by Trustee.  The Trustee may, at the expense of the
Company, at any time call a meeting of Noteholders of any series to take any
action specified in Section 10.1, to be held at such time and at such
place as the Trustee shall determine. 
Notice of every meeting of the Noteholders of such series, setting forth
the time and the place of such meeting and in general terms the action proposed
to be taken at such meeting and the establishment of any record date pursuant
to Section 9.1, shall be mailed to holders of such Notes at their
addresses as they shall appear on the Note register.  Such notice shall also be mailed to the Company.  Such notices shall be mailed not less than
twenty (20) nor more than ninety (90) days prior to the date fixed for the meeting.


 


Any meeting of
Noteholders of such series shall be valid without notice if the holders of all
Notes of such series then outstanding are present in person or by proxy or if
notice is waived before or after the meeting by the holders of all Notes of
such series outstanding, and if the Company and the Trustee are either present
by duly authorized representatives or have, before or after the meeting, waived
notice.


 


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Section 10.3                                Call
of Meetings by Company or Noteholders.  In case at any time the
Company, pursuant to a resolution of its Board of Directors, or the holders of
at least 10% in aggregate principal amount of the Notes of any series then
outstanding, shall have requested the Trustee to call a meeting of Noteholders,
by written request setting forth in reasonable detail the action proposed to be
taken at the meeting, and the Trustee shall not have mailed the notice of such
meeting within twenty (20) days after receipt of such request, then the Company
or such Noteholders of such series may determine the time and the place for
such meeting and may call such meeting to take any action authorized in
Section 10.1, by mailing notice thereof as provided in Section 10.2.


 


Section 10.4                                Qualifications
for Voting.  To be entitled to vote at any meeting of Noteholders of
any series a person shall (a) be a holder of one or more Notes of such series
on the record date pertaining to such meeting or (b) be a person appointed by
an instrument in writing as proxy by a holder of one or more Notes of such
series.  The only persons who shall be
entitled to be present or to speak at any meeting of Noteholders shall be the
persons entitled to vote at such meeting and their counsel and any
representatives of the Trustee and its counsel and any representatives of the
Company and its counsel.


 


Section 10.5                                Regulations. 
Notwithstanding any other provisions of this Indenture, the Trustee may make
such reasonable regulations as it may deem advisable for any meeting of
Noteholders of any series, in regard to proof of the holding of Notes of such
series and of the appointment of proxies, and in regard to the appointment and
duties of inspectors of votes, the submission and examination of proxies,
certificates and other evidence of the right to vote, and such other matters
concerning the conduct of the meeting as it shall think fit.


 


The Trustee shall,
by an instrument in writing, appoint a temporary chairman of the meeting,
unless the meeting shall have been called by the Company or by Noteholders as
provided in Section 10.3, in which case the Company or the Noteholders
calling the meeting, as the case may be, shall in like manner appoint a
temporary chairman.  A permanent
chairman and a permanent secretary of the meeting shall be elected by vote of
the holders of a majority in principal amount of the Notes represented at the
meeting and entitled to vote at the meeting.


 


Subject to the provisions of Section 9.4, at any meeting of
Noteholders of any series each Noteholder of such series or proxyholder shall
be entitled to one vote for each $1,000 principal amount of Notes of such
series held or represented by him; provided, however, that no vote shall
be cast or counted at any meeting in respect of any Note of such series
challenged as not outstanding and ruled by the chairman of the meeting to be
not outstanding.  The chairman of the
meeting shall have no right to vote other than by virtue of Notes of such
series held by him or instruments in writing as aforesaid duly designating him
as the proxy to vote on behalf of other Noteholders of such series.  Any meeting of Noteholders of any series
duly called pursuant to the provisions of Section 10.2 or 10.3 may be
adjourned from time to time by the holders of a majority of the aggregate
principal amount of Notes of such series represented at the meeting, whether or
not constituting a quorum, and the meeting may be held as so adjourned without
further notice.


 


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Section 10.6                                Voting. 
The vote upon any resolution submitted to any meeting of Noteholders of any
series shall be by written ballot on which shall be subscribed the signatures
of the holders of Notes of such series or of their representatives by proxy and
the principal amount of the Notes of such series held or represented by them.  The permanent chairman of the meeting shall
appoint two inspectors of votes who shall count all votes cast at the meeting
for or against any resolution and who shall make and file with the secretary of
the meeting their verified written reports in duplicate of all votes cast at
the meeting.  A record in duplicate of
the proceedings of each meeting of Noteholders shall be prepared by the
secretary of the meeting and there shall be attached to said record the
original reports of the inspectors of votes on any vote by ballot taken thereat
and affidavits by one or more persons having knowledge of the facts setting
forth a copy of the notice of the meeting and showing that said notice was
mailed as provided in Section 10.2. 
The record shall show the principal amount of the Notes of such series
voting in favor of or against any resolution. 
The record shall be signed and verified by the affidavits of the
permanent chairman and secretary of the meeting and one of the duplicates shall
be delivered to the Company and the other to the Trustee to be preserved by the
Trustee, the latter to have attached thereto the ballots voted at the meeting.


 


Any record so signed and verified shall be conclusive evidence of the
matters therein stated.


 


Section 10.7                                No
Delay of Rights by Meeting.  Nothing
in this Article X contained shall be deemed or construed to authorize or
permit, by reason of any call of a meeting of Noteholders or any rights
expressly or impliedly conferred hereunder to make such call, any hindrance or
delay in the exercise of any right or rights conferred upon or reserved to the
Trustee or to the Noteholders under any of the provisions of this Indenture or
of the Notes.


 


ARTICLE XI

SUPPLEMENTAL INDENTURES


 


Section 11.1                                Supplemental
Indentures Without Consent of Noteholders. 
The Company, when authorized by the resolutions of the Board of
Directors, and the Trustee, at the Company’s expense, may from time to time and
at any time enter into an indenture or indentures supplemental hereto for one
or more of the following purposes:


 


(a)          to make provision with
respect to the conversion rights of the holders of Notes pursuant to the
requirements of Section 15.6;


 


(b)         subject to
Article IV, to convey, transfer, assign, mortgage or pledge to the Trustee
as security for the Notes, any property or assets;


 


(c)          to evidence the
succession of another corporation to the Company, or successive successions,
and the assumption by the successor corporation of the covenants, agreements
and obligations of the Company pursuant to Article XII;


 


50

















 


(d)         to add to the covenants
of the Company such further covenants, restrictions or conditions for the
benefit of the holders of Notes, and to make the occurrence, or the occurrence
and continuance, of a default in any such additional covenants, restrictions or
conditions a default or an Event of Default permitting the enforcement of all
or any of the several remedies provided in this Indenture as herein set forth; provided,
however, that in respect of any such additional covenant, restriction or
condition such supplemental indenture may provide for a particular period of
grace after default (which period may be shorter or longer than that allowed in
the case of other defaults) or may provide for an immediate enforcement upon such
default or may limit the remedies available to the Trustee upon such default;


 


(e)          to cure any ambiguity or
to correct or supplement any provision contained herein or in any supplemental
indenture which may be defective or inconsistent with any other provision
contained herein or in any supplemental indenture, or to make such other
provisions in regard to matters or questions arising under this Indenture which
shall not materially adversely affect the interests of the holders of the
Notes;


 


(f)            to evidence and
provide for the acceptance of appointment hereunder by a successor Trustee with
respect to the Notes; or


 


(g)         to modify, eliminate or
add to the provisions of this Indenture to such extent as shall be necessary to
effect the qualifications of this Indenture under the Trust Indenture Act, or
under any similar federal statute hereafter enacted.


 


Upon the written request of the Company, accompanied by a Board
Resolution authorizing the execution of such supplemental indenture, the
Trustee is hereby authorized to join with the Company in the execution of any
such supplemental indenture, to make any further appropriate agreements and
stipulations which may be therein contained and to accept the conveyance,
transfer and assignment of any property thereunder, but the Trustee shall not
be obligated to, but may in its discretion, enter into any supplemental
indenture which affects the Trustee’s own rights, duties or immunities under
this Indenture or otherwise.


 


Any supplemental indenture authorized by the provisions of this
Section 11.1 may be executed by the Company and the Trustee without the
consent of the holders of any of the Notes at the time outstanding,
notwithstanding any of the provisions of Section 11.2.


 


Notwithstanding any other provision of the Indenture or the Notes, the
Registration Rights Agreement and the obligation to pay Liquidated Damages
thereunder may be amended, modified or waived solely in accordance with the
provisions of the Registration Rights Agreement.


 


Section 11.2                                Supplemental
Indentures With Consent of Noteholders. 
With the consent (evidenced as provided in Article IX) of the
holders of not less than a majority in aggregate principal amount of the Notes
of any series at the time outstanding (determined in accordance with
Article IX), the Company, when authorized by the resolutions of the Board
of Directors, and the Trustee


 


51

















 


may, at the Company’s expense, from time to time and at any time enter
into an indenture or indentures supplemental hereto for the purpose of adding
any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or any supplemental indenture or of modifying in
any manner the rights of the holders of the Notes of such series; provided,
however, that no such supplemental indenture shall (i) extend the fixed
maturity of any Note of such series, or reduce the rate or extend the time of
payment of Liquidated Damages thereon, or reduce the principal amount thereof
or premium, if any, thereon, or reduce any amount payable on repurchase
thereof, impair, or change in any respect adverse to the holder of Notes of
such series, the obligation of the Company to repurchase any Note at the option
of the holder upon the happening of a Designated Event, or impair or adversely
affect the right of any Noteholder of such series to institute suit for the
payment thereof, or change the currency in which the Notes of such series are
payable, or impair or change in any respect adverse to the Noteholders of such
series the right to convert the Notes into Common Stock subject to the terms
set forth herein, including Section 15.6, or modify the provisions of this
Indenture with respect to the subordination of the Notes in a manner adverse to
the Noteholders of such series, reduce the quorum or voting requirement for
such series of Notes as set forth in this Indenture, modify the provisions of
this Section 11.2, except to increase the percentage in principal amount
of Notes with such series whose holders must consent to an amendment or to
provide that certain other provisions of this Indenture cannot be modified or
waived without the consent of Noteholders of each series of outstanding Notes
affected by such modification or waiver without the consent of the holder of
each such Note so affected, or (ii) reduce the aforesaid percentage of Notes of
such series, the holders of which are required to consent to any such
supplemental indenture, without the consent of the holders of all Notes of such
series then outstanding.


 


Upon the written request of the Company, accompanied by a copy of the
Board Resolutions authorizing the execution of any such supplemental indenture,
and upon the filing with the Trustee of evidence of the consent of Noteholders
of such series as aforesaid, the Trustee shall join with the Company in the
execution of such supplemental indenture unless such supplemental indenture
affects the Trustee’s own rights, duties or immunities under this Indenture or
otherwise, in which case the Trustee may in its discretion, but shall not be
obligated to, enter into such supplemental indenture.


 


It shall not be necessary for the consent of the Noteholders under this
Section 11.2 to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such consent shall approve the
substance thereof.


 


Section 11.3                                Effect
of Supplemental Indentures.  Any
supplemental indenture executed pursuant to the provisions of this
Article XI shall comply with the Trust Indenture Act, as then in effect.  Upon the execution of any supplemental
indenture pursuant to the provisions of this Article XI, this Indenture
shall be and be deemed to be modified and amended in accordance therewith and
the respective rights, limitation of rights, obligations, duties and immunities
under this Indenture of the Trustee, the Company and the holders of Notes shall
thereafter be determined, exercised and 


 


52

















 


enforced hereunder subject in all respects to such modifications and
amendments and all the terms and conditions of any such supplemental indenture
shall be and be deemed to be part of the terms and conditions of this Indenture
for any and all purposes.


 


Section 11.4                                Notation
on Notes.  Notes authenticated and
delivered after the execution of any supplemental indenture pursuant to the
provisions of this Article XI may bear a notation in form approved by the
Trustee as to any matter provided for in such supplemental indenture.  If the Company or the Trustee shall so
determine, new Notes so modified as to conform, in the opinion of the Trustee
and the Board of Directors, to any modification of this Indenture contained in
any such supplemental indenture may, at the Company’s expense, be prepared and
executed by the Company, authenticated by the Trustee (or an authenticating
agent duly appointed by the Trustee pursuant to Section 17.11) and
delivered in exchange for the Notes then outstanding, upon surrender of such
Notes then outstanding.


 


Section 11.5                                Evidence
of Compliance of Supplemental Indenture to Be Furnished Trustee.  The Trustee may receive an Officers’
Certificate and an Opinion of Counsel as conclusive evidence that any
supplemental indenture executed pursuant hereto complies with the requirements
of this Article XI.


 


ARTICLE XII

CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE


 


Section 12.1                                Company
May Consolidate, Etc on Certain Terms.  Subject to the provisions of Section 12.2 and
notwithstanding anything to the contrary in this Indenture, the Company shall
not consolidate or merge with or into any other Person (whether or not
affiliated with the Company), or sell, convey or lease all or substantially all
of its assets or properties to any Person unless the person formed by such
consolidation or into which the Company is merged or the Person which acquires
by conveyance or transfer, or which leases, all or substantially all of the
assets or properties of the Company shall be a corporation organized under the
laws of the United States of America, any state thereof or the District of
Columbia; and unless, after giving effect to any such consolidation, merger,
sale, conveyance or lease, there shall be no Event of Default under this
Indenture, and no event which, after notice or passage of time or both, would
become an Event of Default.  Further,
upon any such consolidation, merger, sale, conveyance or lease, the due and
punctual payment of the principal of and premium, if any, and Liquidated
Damages, if any, on all of the Notes, according to their terms, and the due and
punctual performance and observance of all of the covenants and conditions of
this Indenture to be performed by the Company, shall be expressly assumed by
supplemental indenture satisfactory in form to the Trustee, executed and
delivered to the Trustee by the corporation (if other than the Company) formed
by such consolidation, or into which the Company shall have been merged, or
which shall have acquired or leased all or substantially all of the Company’s
assets or properties, and such supplemental indenture shall provide for the
applicable conversion rights set forth in Section 15.6.


 


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Section 12.2                                Successor
Corporation to Be Substituted.  In
case of any such consolidation, merger, sale, conveyance or lease and upon the
assumption by the successor corporation, by supplemental indenture, executed
and delivered to the Trustee and satisfactory in form to the Trustee, of the
due and punctual payment of the principal of and premium, if any, and Liquidated
Damages on all of the Notes and the due and punctual performance of all of the
covenants and conditions of this Indenture to be performed by the Company, such
successor corporation shall succeed to and be substituted for the Company, with
the same effect as if it had been named herein as the party of the first
part.  Such successor corporation
thereupon may cause to be signed, and may issue either in its own name or in
the name of Sepracor Inc. any or all of the Notes issuable hereunder which
theretofore shall not have been signed by the Company and delivered to the
Trustee; and, upon the order of such successor corporation instead of the
Company and subject to all the terms, conditions and limitations in this
Indenture prescribed, the Trustee shall authenticate and shall deliver, or
cause to be authenticated and delivered, any Notes which previously shall have
been signed and delivered by the officers of the Company to the Trustee for
authentication, and any Notes which such successor corporation thereafter shall
cause to be signed and delivered to the Trustee for that purpose.  All the Notes so issued shall in all
respects have the same legal rank and benefit under this Indenture as the Notes
theretofore or thereafter issued in accordance with the terms of this Indenture
as though all of such Notes had been issued at the date of the execution
hereof.  In the event of any such
consolidation, merger, sale, conveyance or lease, the person named as the
“Company” in the first paragraph of this Indenture or any successor which shall
thereafter have become such in the manner prescribed in this Article XII
may be dissolved, wound up and liquidated at any time thereafter and such
person shall be released from its liabilities as obligor and maker of the Notes
and from its obligations under this Indenture.


 


In case of any such consolidation, merger, sale, conveyance or lease,
such changes in phraseology and form (but not in substance) may be made in the
Notes thereafter to be issued as may be appropriate.


 


Section 12.3                                Opinion
of Counsel to Be Given Trustee.  The
Trustee shall receive an Officers’ Certificate and an Opinion of Counsel as
conclusive evidence that any such consolidation, merger, sale, conveyance or
lease and any such assumption complies with the provisions of this
Article XII.


 


ARTICLE XIII

SATISFACTION AND DISCHARGE OF INDENTURE


 


Section 13.1                                Discharge
of Indenture.  When (a) the Company
shall deliver to the Trustee for cancellation all Notes of any series
theretofore authenticated (other than any Notes of such series that have been
destroyed, lost or stolen and in lieu of or in substitution for which other
Notes of such series shall have been authenticated and delivered) and not
theretofore canceled, or (b) all the Notes of any series not theretofore canceled
or delivered to the Trustee for cancellation shall have become


 


54

















 


due and payable, and the Company shall deposit with the Trustee, in
trust, funds sufficient to pay at maturity all of the Notes of such series
(other than any Notes of such series that shall have been mutilated, destroyed,
lost or stolen and in lieu of or in substitution for which other Notes of such
series shall have been authenticated and delivered) not theretofore canceled or
delivered to the Trustee for cancellation, including principal and premium, if
any, and Liquidated Damages due or to become due to such date of maturity
accompanied by a verification report, as to the sufficiency of the deposited
amount, from an independent certified public accountant or other financial
professional, and if in either case the Company shall also pay or cause to be
paid all other sums payable hereunder by the Company, then this Indenture shall
cease to be of further effect with respect to such series of Notes except as to
(i) the right to receive payments of principal of and premium, if any, and
Liquidated Damages on, the Notes of such series and the other rights, duties
and obligations of Noteholders of such series, as beneficiaries hereof with
respect to the amounts, if any, so deposited with the Trustee, (ii) the rights,
obligations and immunities of the Trustee hereunder and (iii) the obligations
of the Company under Section 8.6, and the Trustee, on written demand of
the Company accompanied by an Officers’ Certificate and an Opinion of Counsel
as required by Section 17.5 and at the cost and expense of the Company,
shall execute proper instruments acknowledging satisfaction of and discharging
this Indenture with respect to such series of Notes; the Company, however,
hereby agreeing to reimburse the Trustee for any costs or expenses thereafter
reasonably and properly incurred by the Trustee and to compensate the Trustee
for any services thereafter reasonably and properly rendered by the Trustee in
connection with this Indenture or the Notes of such series.


 


Section 13.2                                Deposited
Monies to Be Held in Trust by Trustee. 
Subject to Section 13.4, all monies deposited with the Trustee
pursuant to Section 13.1 shall be held in trust and applied by it to the payment,
notwithstanding the provisions of Article IV, either directly or through
any paying agent (including the Company if acting as its own paying agent), to
the holders of the particular Notes for the payment of which such monies have
been deposited with the Trustee, of all sums due and to become due thereon for
principal and Liquidated Damages and premium, if any.


 


Section 13.3                                Paying
Agent to Repay Monies Held.  Upon
the satisfaction and discharge of this Indenture, all monies then held by any
paying agent of the Notes (other than the Trustee) shall, upon written demand
of the Company, be repaid to it or paid to the Trustee, and thereupon such
paying agent shall be released from all further liability with respect to such
monies.


 


Section 13.4                                Return
of Unclaimed Monies.  Subject to the
requirements of applicable law, any monies deposited with or paid to the
Trustee for payment of the principal of, premium, if any, or Liquidated Damages
on Notes and not applied but remaining unclaimed by the holders of Notes for
two years after the date upon which the principal of, premium, if any, or
Liquidated Damages on such Notes, as the case may be, shall have become due and
payable, shall be repaid to the Company by the Trustee on written demand and
all liability of the Trustee shall thereupon cease with respect to such monies;
and the holder of any of the Notes shall thereafter look only to the Company
for any


 


55

















 


payment which such holder may be entitled to collect unless an
applicable abandoned property law designates another person.


 


Section 13.5                                Reinstatement.  If (i) the Trustee or the paying agent is
unable to apply any money in accordance with Section 13.2 by reason of any
order or judgment of any court or governmental authority enjoining, restraining
or otherwise prohibiting such application and (ii) the holders of at least a
majority in principal amount of the then outstanding relevant series of Notes
so request by written notice to the Trustee, the Company’s obligations under
this Indenture such Notes shall be revived and reinstated as though no deposit
had occurred pursuant to Section 13.1 until such time as the Trustee or
the paying agent is permitted to apply all such money in accordance with
Section 13.2; provided, however, that if the Company makes any
payment of Liquidated Damages on or principal of any Note of such series
following the reinstatement of its obligations, the Company shall be subrogated
to the rights of the holders of such Notes to receive such payment from the
money held by the Trustee or paying agent.


 


ARTICLE XIV


 


IMMUNITY OF INCORPORATORS, STOCKHOLDERS,

OFFICERS AND DIRECTORS


 


Section 14.1                                Indenture
and Notes Solely Corporate Obligations. 
No recourse for the payment of the principal of or premium, if any, or
Liquidated Damages on any Note, or for any claim based thereon or otherwise in
respect thereof, and no recourse under or upon any obligation, covenant or
agreement of the Company in this Indenture or in any supplemental indenture or
in any Note, or because of the creation of any indebtedness represented
thereby, shall be had against any incorporator, stockholder, employee, agent,
officer or director or Subsidiary, as such, past, present or future, of the
Company or of any successor corporation, either directly or through the Company
or any successor corporation, whether by virtue of any constitution, statute or
rule of law, or by the enforcement of any assessment or penalty or otherwise;
it being expressly understood that all such liability is hereby expressly
waived and released as a condition of, and as a consideration for, the
execution of this Indenture and the issue of the Notes.


 


ARTICLE XV

CONVERSION OF NOTES


 


Section 15.1                                Right
to Convert.  Subject to and upon
compliance with the provisions of this Indenture, the holder of any Note shall
have the right, at its option, at any time following the date of original
issuance of the Notes and prior to the close of business on December 15,
2008, in the case of the Series A Notes, and December 15, 2010, in the
case of the Series B Notes, to convert the principal amount of any such Note,
or any portion of such principal amount which is $1,000 or an integral multiple
thereof, into fully paid and non-assessable shares of Common Stock (as such shares


 


56

















 


shall then be constituted) at the Conversion Rate in effect at such
time for each $1,000 principal amount of Notes so converted, by surrender of
the Note so to be converted in whole or in part in the manner provided in
Section 15.2.  A holder of Notes is
not entitled to any rights of a holder of Common Stock until such holder has
converted his Notes to Common Stock, and only to the extent such Notes are
deemed to have been converted to Common Stock under this Article XV.  A Note with respect to which a holder has
delivered a notice in accordance with Section 16.2 regarding such holder’s
election to require the Company to repurchase such holder’s Notes following the
occurrence of a Designated Event may be converted in accordance with this
Article XV only if such holder withdraws such notice by delivering a
written notice of withdrawal to the Company prior to the close of business on
last Business Day prior to the day fixed for repurchase.


 


Section 15.2                                Exercise
of Conversion Privilege; Issuance of Common Stock on Conversion; No Adjustment
for Dividends.  In order to exercise
the conversion privilege with respect to any Note in definitive form, the
holder of any such Note to be converted in whole or in part shall surrender
such Note, duly endorsed, at an office or agency maintained by the Company
pursuant to Section 5.2 and shall give written notice of conversion in the
form provided on the Notes (or such other notice which is acceptable to the Company)
to the office or agency that the holder elects to convert such Note or such
portion thereof specified in said notice. 
Such notice shall also state the name or names (with address) in which
the certificate or certificates for shares of Common Stock that shall be
issuable on such conversion shall be issued, and shall be accompanied by
transfer taxes, if required pursuant to Section 15.7.  Each such Note surrendered for conversion
shall, unless the shares issuable on conversion are to be issued in the same name
as the registration of such Note, be duly endorsed by, or be accompanied by
instruments of transfer in form satisfactory to the Company duly executed by,
the holder or his duly authorized attorney. 
The date on which a Noteholder satisfies all of the foregoing
requirements, or the requirements for conversion on an interest in a Global
Note as set forth in the next paragraph, as applicable, is the “Conversion Date.”


 


In order to exercise the conversion privilege with respect to any
interest in the Global Note, the beneficial holder must complete the
appropriate instruction form for conversion pursuant to the Depositary’s
book-entry conversion program, deliver by book-entry delivery an interest in
the Global Note, furnish appropriate endorsements and transfer documents if
required by the Company or the Trustee or conversion agent and pay any transfer
taxes, if required pursuant to Section 15.7.


 


As promptly as practicable after satisfaction of the requirements for
conversion set forth above, but no later than five Business Days after the
Conversion Date, subject to compliance with any restrictions on transfer if
shares issuable on conversion are to be issued in a name other than that of the
Noteholder (as if such transfer were a transfer of the Note or Notes (or
portion thereof) so converted), the Company shall issue and shall deliver to
such holder at the office or agency maintained by the Company for such purpose
pursuant to Section 5.2, a certificate or certificates for the number of
full shares of Common Stock issuable upon the conversion of such Note or
portion thereof in accordance with the provisions of this Article and a
check or cash in respect of any fractional interest in respect of a share of
Common Stock arising upon such conversion, as provided


 


57

















 


in Section 15.3.  In case
any Note of a denomination greater than $1,000 shall be surrendered for partial
conversion, the Company shall execute and the Trustee shall authenticate and
deliver to the holder of the Note so surrendered, without charge to him, a new
Note or Notes in authorized denominations in an aggregate principal amount
equal to the unconverted portion of the surrendered Note.


 


Each conversion shall be deemed to have been effected as to any such
Note (or portion thereof) on the Conversion Date as to such Note (or portion
thereof), and the person in whose name any certificate or certificates for
shares of Common Stock shall be issuable upon such conversion shall be deemed
to have become on said date the holder of record of the shares represented
thereby; provided, however, that any such surrender on any date when the
stock transfer books of the Company shall be closed shall constitute the person
in whose name the certificates are to be issued as the record holder thereof
for all purposes on the next succeeding day on which such stock transfer books
are open, but such conversion shall be at the Conversion Rate in effect on the
date upon which such Note shall be surrendered.


 


Except as provided above in this Section 15.2, no adjustment shall
be made for dividends on any shares issued upon the conversion of any Note as
provided in this Article.


 


Upon the conversion of an interest in a Global Note, the Trustee, or
the Custodian at the direction of the Trustee, shall make a notation on such
Global Note as to the reduction in the principal amount represented
thereby.  The Company shall notify the
Trustee in writing of any conversion of Notes effected through any conversion
agent other than the Trustee.


 


Section 15.3                                Cash
Payments in Lieu of Fractional Shares. 
No fractional shares of Common Stock or scrip representing fractional
shares shall be issued upon conversion of Notes.  If more than one Note shall be surrendered for conversion at one
time by the same holder, the number of full shares which shall be issuable upon
conversion shall be computed on the basis of the aggregate principal amount of
the Notes (or specified portions thereof to the extent permitted hereby) so
surrendered for conversion.  If any
fractional share of stock otherwise would be issuable upon the conversion of
any Note or Notes, the Company shall make an adjustment therefor in cash at the
current market value thereof to the holder of Notes.  The current market value of a share of Common Stock shall be the
Closing Sale Price on the first Trading Day immediately preceding the
Conversion Date for such Notes (or specified portions thereof).


 


Section 15.4                                Conversion
Rate.  Each $1,000 principal amount
of the Notes shall be convertible into the number of shares of Common Stock
specified in the form of Note (herein called the “Conversion Rate”) attached as
Exhibit A hereto, in the case of the Series A Notes, and attached as Exhibit B
hereto, in the case of the Series B Notes, subject to adjustment as provided in
this Article XV.


 


Section 15.5                                Adjustment
of Conversion Rate.  The Conversion
Rate shall be adjusted from time to time by the Company as follows:


 


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


 


(i)                                     the
numerator of which shall be the sum of the number of shares of Common Stock outstanding
at the close of business on the date fixed for the determination of
stockholders entitled to receive such dividend or other distribution plus the
total number of shares of Common Stock constituting such dividend or other
distribution; and


 


(ii)                                  the
denominator of which shall be the number of shares of Common Stock outstanding
at the close of business on the date fixed for such determination,


 


such increase to become effective immediately after
the opening of business on the day following the date fixed for such
determination.  If any dividend or
distribution of the type described in this Section 15.5(a) is declared but
not so paid or made, the Conversion Rate shall again be adjusted to the
Conversion Rate that would then be in effect if such dividend or distribution
had not been declared.


 


(b)         In case the Company shall
issue rights or warrants to all holders of its outstanding shares of Common
Stock entitling them (for a period expiring within forty-five (45) days after
the date fixed for determination of stockholders entitled to receive such
rights or warrants) to subscribe for or purchase shares of Common Stock at a
price per share less than the average of the Closing Sale Prices of the Common
Stock for the 10 Trading Days immediately preceding the date fixed for
determination of stockholders entitled to receive such rights or warrants, the
Conversion Rate shall be increased so that the same shall equal the rate
determined by multiplying the Conversion Rate in effect immediately prior to
the date fixed for determination of stockholders entitled to receive such
rights or warrants by a fraction,


 


(i)                                     the
numerator of which shall be the number of shares of Common Stock outstanding on
the date fixed for determination of stockholders entitled to receive such
rights or warrants plus the total number of additional shares of Common Stock
offered for subscription or purchase, and


 


(ii)                                  the
denominator of which shall be the sum of the number of shares of Common Stock
outstanding at the close of business on the date fixed for determination of
stockholders entitled to receive such rights or warrants plus the number of
shares that the aggregate offering price of the total number of shares so
offered would purchase at a price equal to the average of the Closing Sale Prices
of the Common Stock for the 10 Trading Days immediately preceding the date
fixed for determination of stockholders entitled to receive such rights or
warrants.


 


59

















 


Such adjustment shall be successively made whenever any such rights or
warrants are issued, and shall become effective immediately after the opening
of business on the day following the date fixed for determination of
stockholders entitled to receive such rights or warrants.  To the extent that shares of Common Stock
are not delivered after the expiration of such rights or warrants, the
Conversion Rate shall be readjusted to the Conversion Rate that would then be
in effect had the adjustments made upon the issuance of such rights or warrants
been made on the basis of delivery of only the number of shares of Common Stock
actually delivered.  If such rights or
warrants are not so issued, the Conversion Rate shall again be adjusted to be
the Conversion Rate that would then be in effect if such date fixed for the
determination of stockholders entitled to receive such rights or warrants had
not been fixed.  In determining whether
any rights or warrants entitle the holders to subscribe for or purchase shares of
Common Stock at a price less than the average of the Closing Sale Prices of the
Common Stock for the 10 Trading Days immediately preceding the date fixed for
determination of stockholders entitled to receive such rights or warrants, and
in determining the aggregate offering price of such shares of Common Stock,
there shall be taken into account any consideration received by the Company for
such rights or warrants and any amount payable on exercise or conversion
thereof, the value of such consideration, if other than cash, to be determined
by the Board of Directors.


 


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


 


(d)         In case the Company
shall, by dividend or otherwise, distribute to all holders of its Common Stock
shares of any class of capital stock of the Company or evidences of its
indebtedness, cash or other assets (including securities, but excluding (1) any
rights or warrants referred to in Section 15.5(b), (2) dividends and
distributions (A) in connection with the liquidation, dissolution or winding up
of the Company or (B) paid exclusively in cash and (3) any capital stock, evidences
of indebtedness, cash or assets distributed upon a merger or consolidation to
which Section 15.6 applies) (any of such shares of capital stock,
indebtedness, cash or other property hereinafter in this Section 15.5(d))
called the “Distributed Property”)), then, in each such case (unless the
Company distributes such Distributed Property for distribution to the
Noteholders on such dividend or distribution date (as if each Noteholder had
converted such Note into Common Stock immediately prior to the Record Date (as
defined in Section 15.5(h) for such distribution or dividend of
Distributed Property)) the Conversion Rate shall be increased so that the same
shall be equal to the rate determined by multiplying the Conversion Rate in
effect on the Record Date with respect to such distribution by a fraction,


 


60

















 


(i)                                     the
numerator of which shall be the Current Market Price on such Record Date; and


 


(ii)                                  the
denominator of which shall be the Current Market Price on such Record Date less
the fair market value (as determined by the Board of Directors, whose
determination shall be conclusive, and described in a resolution of the Board
of Directors) on the Record Date of the portion of the Distributed Property so
distributed applicable to one share of Common Stock,


 


such adjustment to become effective immediately prior to the opening of
business on the day following such Record Date; provided that if the
then fair market value (as so determined) of the portion of the Distributed
Property so distributed applicable to one share of Common Stock is equal to or
greater than the Current Market Price on the Record Date, in lieu of the
foregoing adjustment, adequate provision shall be made so that each
Securityholder shall have the right to receive upon conversion the amount of
Distributed Property such holder would have received had such holder converted
each Note on the Record Date.  If such
dividend or distribution is not so paid or made, the Conversion Rate shall
again be adjusted to be the Conversion Rate that would then be in effect if
such dividend or distribution had not been declared.  If the Board of Directors determines the fair market value of any
distribution for purposes of this Section 15.5(d) by reference to the actual
or when issued trading market for any securities, it must in doing so consider
the prices in such market over the same period used in computing the Current
Market Price on the applicable Record Date.


 


Notwithstanding the foregoing, if the Distributed Property distributed
by the Company to all holders of its Common Stock consist of capital stock of,
or similar equity interests in, a Subsidiary or other business unit, the
Conversion Rate shall be increased so that the same shall be equal to the rate determined
by multiplying the Conversion Rate in effect on the Record Date with respect to
such distribution by a fraction,


 


(i)                                     the
numerator of which shall be the sum of (A) the average of the Closing Sale
Prices of the Common Stock for the ten (10) Trading Days commencing on and
including the fifth Trading Day after the date on which “ex-dividend trading”
commences for such dividend or distribution on the Nasdaq National Market or
such other national or regional exchange or market on which such securities are
then listed or quoted (the “Ex-Dividend Date”) plus (B) the fair market value
of the securities distributed in respect of each share of Common Stock for
which this Section 16.5(d) applies, which shall equal the number of
securities distributed in respect of each share of Common Stock multiplied by
the average of the Closing Sale Prices of those securities distributed for the
ten (10) Trading Days commencing on and including the fifth Trading Day after
the Ex-Dividend Date; and


 


(ii)                                  the
denominator of which shall be the average of the Closing Sale Prices of the
Common Stock for the ten (10) Trading Days commencing on and including the
fifth Trading Day after the Ex-Dividend Date,


 


61

















 


such adjustment to become effective immediately prior to the opening of
business on the day following such Record Date; provided that the Company
may in lieu of the foregoing adjustment make adequate provision so that each
Securityholder shall have the right to receive upon conversion the amount of
Distributed Property such holder would have received had such holder converted
its Notes on the Record Date with respect to such distribution.


 


In the event that the Company implements a stockholder rights plan,
such rights plan shall provide that upon conversion of the Notes the holders
will receive, in addition to the Common Stock issuable upon such conversion,
the rights issued under such rights plan (notwithstanding the occurrence of an
event causing such rights to separate from the Common Stock at or prior to the
time of conversion).


 


Rights or warrants distributed by the Company to all holders of Common
Stock entitling the holders thereof to subscribe for or purchase shares of the
Company’s capital stock (either initially or under certain circumstances),
which rights or warrants, until the occurrence of a specified event or events
(“Trigger Event”): (i) are deemed to be transferred with such shares of Common
Stock; (ii) are not exercisable; and (iii) are also issued in respect of future
issuances of Common Stock, shall be deemed not to have been distributed for
purposes of this Section 15.5 (and no adjustment to the Conversion Rate
under this Section 15.5 will be required) until the occurrence of the
earliest Trigger Event, whereupon such rights and warrants shall be deemed to
have been distributed and an appropriate adjustment (if any is required) to the
Conversion Rate shall be made under this Section 15.5(d).  If any such right or warrant, including any
such existing rights or warrants distributed prior to the date of this
Indenture, are subject to events, upon the occurrence of which such rights or
warrants become exercisable to purchase different securities, evidences of
indebtedness or other assets, then the date of the occurrence of any and each
such event shall be deemed to be the date of distribution and record date with
respect to new rights or warrants with such rights (and a termination or
expiration of the existing rights or warrants without exercise by any of the
holders thereof).  In addition, in the
event of any distribution (or deemed distribution) of rights or warrants, or
any Trigger Event or other event (of the type described in the preceding
sentence) with respect thereto that was counted for purposes of calculating a
distribution amount for which an adjustment to the Conversion Rate under this
Section 15.5 was made, (1) in the case of any such rights or warrants that
shall all have been redeemed or repurchased without exercise by any holders
thereof, the Conversion Rate shall be readjusted upon such final redemption or
repurchase to give effect to such distribution or Trigger Event, as the case
may be, as though it were a cash distribution, equal to the per share
redemption or repurchase price received by a holder or holders of Common Stock
with respect to such rights or warrants (assuming such holder had retained such
rights or warrants), made to all holders of Common Stock as of the date of such
redemption or repurchase, and (2) in the case of such rights or warrants that
shall have expired or been terminated without exercise by any holders thereof,
the Conversion Rate shall be readjusted as if such rights and warrants had not
been issued.


 


No adjustment of the Conversion Rate shall be made pursuant to this
Section 15.5(d) in respect of rights or warrants distributed or deemed
distributed on any Trigger Event to the extent that


 


62

















 


such rights or warrants are actually distributed, or reserved by the
Company for distribution to holders of Notes upon conversion by such holders of
Notes into Common Stock.


 


For purposes of this Section 15.5(d) and Sections 15.5(a) and (b),
any dividend or distribution to which this Section 15.5(d) is applicable
that also includes shares of Common Stock, or rights or warrants to subscribe
for or purchase shares of Common Stock to which Section 15.5(b) applies
(or both), shall be deemed instead to be (1) a dividend or distribution of the
evidences of indebtedness, assets or shares of capital stock other than such
shares of Common Stock or rights or warrants to which Section 15.5(b)
applies (and any Conversion Rate adjustment required by this
Section 15.5(d) with respect to such dividend or distribution shall then
be made) immediately followed by (2) a dividend or distribution of such shares
of Common Stock or such rights or warrants (and any further Conversion Rate
adjustment required by Sections 15.5(a) and 15.5(b) with respect to such
dividend or distribution shall then be made), except (A) the Record Date of
such dividend or distribution shall be substituted as “the date fixed for the
determination of stockholders entitled to receive such dividend or other
distribution”, “the date fixed for the determination of stockholders entitled
to receive such rights or warrants” and “the date fixed for such determination”
within the meaning of Section 15.5(a) and 15.5(b) and (B) any shares of
Common Stock included in such dividend or distribution shall not be deemed
“outstanding at the close of business on the date fixed for such determination”
within the meaning of Section 15.5(a).


 


(e)          In case the Company
shall, by dividend or otherwise, distribute to all holders of its Common Stock
cash (excluding any dividend or distribution in connection with the liquidation,
dissolution or winding up of the Company, whether voluntary or involuntary),
then the Conversion Rate shall be increased so that the same shall equal the
rate determined by multiplying the Conversion Rate in effect immediately prior
to the close of business on such record date by a fraction,


 


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


 


(ii)                                  the
denominator of which shall be the Current Market Price on such record date less
the amount of cash so distributed applicable to one share of Common Stock,


 


such adjustment to be effective immediately prior to the opening of
business on the day following the record date; provided that if the portion
of the cash so distributed applicable to one share of Common Stock is equal to
or greater than the Current Market Price on the record date, in lieu of the
foregoing adjustment, adequate provision shall be made so that each Noteholder
shall have the right to receive upon conversion of a Note (or any portion
thereof) the amount of cash such holder would have received had such holder
converted such Note (or portion thereof) on the record date.  If such dividend or distribution is not so
paid or made, the Conversion Rate shall again be adjusted to be the Conversion
Rate that would then be in effect if such dividend or distribution had not been
declared.


 


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(f)            In case a tender or
exchange offer made by the Company or any Subsidiary for all or any portion of
the Common Stock shall expire and such tender or exchange offer (as amended
upon the expiration thereof) shall require the payment to stockholders of
consideration per share of Common Stock having a Fair Market Value (as
determined by the Board of Directors, whose determination shall be conclusive
and described in a resolution of the Board of Directors) that as of the last
time (the “Expiration Time”) tenders or exchanges may be made pursuant to such
tender or exchange offer (as it may be amended) exceeds the Closing Sale Price
of a share of Common Stock on the Trading Day next succeeding the Expiration
Time, the Conversion Rate shall be increased so that the same shall equal the
rate determined by multiplying the Conversion Rate in effect immediately prior
to the Expiration Time by a fraction,


 


(i)                                     the
numerator of which shall be the sum of (x) the Fair Market Value (determined as
aforesaid) of the aggregate consideration payable to stockholders based on the
acceptance (up to any maximum specified in the terms of the tender or exchange
offer) of all shares validly tendered or exchanged and not withdrawn as of the
Expiration Time (the shares deemed so accepted up to any such maximum, being
referred to as the “Purchased Shares”) and (y) the product of the number of
shares of Common Stock outstanding (less any Purchased Shares) at the
Expiration Time and the Closing Sale Price of a share of Common Stock on the
Trading Day next succeeding the Expiration Time, and


 


(ii)                                  the
denominator of which shall be the number of shares of Common Stock outstanding
(including any Purchased Shares) at the Expiration Time multiplied by the
Closing Sale Price of a share of Common Stock on the Trading Day next
succeeding the Expiration Time,


 


such adjustment to become effective immediately prior to the opening of
business on the day following the Expiration Time.  If the Company is obligated to purchase shares pursuant to any
such tender or exchange offer, but the Company is permanently prevented by
applicable law from effecting any such purchases or all such purchases are
rescinded, the Conversion Rate shall again be adjusted to be the Conversion
Rate that would then be in effect if such tender or exchange offer had not been
made.


 


(g)         In case of a tender or
exchange offer made by a Person other than the Company or any Subsidiary for an
amount that increases the offeror’s ownership of Common Stock to more than 25%
of the Common Stock outstanding and shall involve the payment by such Person of
consideration per share of Common Stock having a Fair Market Value (as
determined by the Board of Directors, whose determination shall be conclusive,
and described in a resolution of the Board of Directors) that as of the last
time (the “Offer Expiration Time”) tenders or exchanges may be made pursuant to
such tender or exchange offer (as it shall have been amended) that exceeds the
Closing Price of a share of Common Stock on the Trading Day next succeeding the
Offer Expiration Time, and in which, as of the Offer Expiration Time the Board
of Directors is not recommending rejection of the offer, the Conversion Rate
shall be increased so that the same shall equal the rate determined


 


64

















 


by multiplying the Conversion Rate in effect immediately prior to the
Offer Expiration Time by a fraction


 


(i)                                     the
numerator of which shall be the sum of (x) the Fair Market Value (determined as
aforesaid) of the aggregate consideration payable to stockholders based on the
acceptance (up to any maximum specified in the terms of the tender or exchange
offer) of all shares validly tendered or exchanged and not withdrawn as of the
Offer Expiration Time (the shares deemed so accepted, up to any such maximum,
being referred to as the “Accepted Purchased Shares”) and (y) the product of
the number of shares of Common Stock outstanding (less any Accepted Purchased
Shares) at the Offer Expiration Time and the Closing Sale Price of a share of
Common Stock on the Trading Day next succeeding the Offer Expiration Time, and


 


(ii)                                  the
denominator of which shall be the number of shares of Common Stock outstanding
(including any Accepted Purchased Shares) at the Offer Expiration Time
multiplied by the Closing Sale Price of a share of Common Stock on the Trading
Day next succeeding the Offer Expiration Time,


 


such adjustment to become effective immediately prior to the opening of
business on the day following the Offer Expiration Time.  If such Person is obligated to purchase
shares pursuant to any such tender or exchange offer, but such Person is
permanently prevented by applicable law from effecting any such purchases or
all such purchases are rescinded, the Conversion Rate shall again be adjusted
to be the Conversion Rate that would then be in effect if such tender or
exchange offer had not been made. 
Notwithstanding the foregoing, the adjustment described in this
Section 15.5(g) shall not be made if, as of the Offer Expiration Time, the
offering documents with respect to such offer disclose a plan or intention to
cause the Company to engage in any transaction described in Article XII.


 


(h)         For purposes of this
Section 15.05, the following terms shall have the meaning indicated:


 


(i)                                     “Current
Market Price” shall mean the average of the daily Closing Sale Prices per share
of Common Stock for the ten consecutive Trading Days ending not later than the
earlier of the day in question and the day before the “ex” date with respect to
the issuance, distribution, subdivision or combination requiring such
computation immediately prior to the date in question.  For purpose of this paragraph, the term “ex”
date, (1) when used with respect to any issuance or distribution, means the
first date on which the Common Stock trades, regular way, on the relevant
exchange or in the relevant market from which the Closing Sale Price was obtained
without the right to receive such issuance or distribution, and (2) when used
with respect to any subdivision or combination of shares of Common Stock, means
the first date on which the Common Stock trades, regular way, on such exchange
or in such market after the time at which such subdivision or combination
becomes effective.


 


65

















 


If another issuance, distribution, subdivision or combination to which
Section 15.5 applies occurs during the period applicable for calculating
“Current Market Price” pursuant to the definition in the preceding paragraph,
“Current Market Price” shall be calculated for such period in a manner
determined by the Board of Directors to reflect the impact of such issuance,
distribution, subdivision or combination on the Closing Sale Price of the
Common Stock during such period.


 


(ii)                                  “Fair
Market Value” shall mean the amount which a willing buyer would pay a willing
seller in an arm’s-length transaction.


 


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


 


(iv)                              “Trading
Day” shall mean (x) if the applicable security is quoted on the Nasdaq National
Market, Nasdaq SmallCap Market or any similar United States system of automated
dissemination of quotations of securities prices, a day on which trades may be
made thereon or (y) if the applicable security is listed or admitted for
trading on the American Stock Exchange, New York Stock Exchange or another
national or regional securities exchange, a day on which the American Stock
Exchange, New York Stock Exchange or another national or regional securities
exchange is open for business or (z) if the applicable security is not so
listed, admitted for trading or quoted, any day other than a Saturday or Sunday
or a day on which banking institutions in the State of New York are authorized
or obligated by law or executive order to close.


 


(i)             The Company may make
such increases in the Conversion Rate, in addition to those required by
Section 15.5(a), (b), (c), (d), (e), (f) or (g) as the Board of Directors
considers to be advisable to avoid or diminish any income tax to holders of
Common Stock or rights to purchase Common Stock resulting from any dividend or
distribution of stock (or rights to acquire stock) or from any event treated as
such for income tax purposes.


 


To the extent permitted by applicable law, the Company from time to
time may increase the Conversion Rate by any amount if the Board of Directors
shall have made a determination that such increase would be in the best
interests of the Company, which determination shall be conclusive.  Whenever the Conversion Rate is increased
pursuant to the preceding sentence, the Company shall mail to the holder of
each Note at his last address appearing on the Note register provided for in
Section 2.5 a notice of the increase at least one full Business Day prior
to the date the increased Conversion Rate takes effect, and such notice shall
state the increased Conversion Rate and the period during which it will be in
effect.


 


(j)             All calculations
under this Article XV shall be made by the Company and shall be made to
the nearest cent or to the nearest one-ten thousandth (1/10,000) of a share, as
the case may


 


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be.  No adjustment shall be made
for the Company’s issuance of rights to purchase Common Stock pursuant to a
Company plan for reinvestment of dividends or interest or for any issuance of
Common Stock or convertible or exchangeable securities or rights to purchase
Common Stock or convertible or exchangeable securities, other than as provided
in Section 15.5.  To the extent the
Notes become convertible into cash, assets, property or securities (other than
Distributed Property), no adjustment need be made thereafter as to the cash,
assets, property or such securities. 
Interest will not accrue on any cash into which the Notes are
convertible.


 


(k)          Whenever the Conversion
Rate is adjusted as herein provided, the Company shall promptly file with the
Trustee and any conversion agent other than the Trustee an Officers’
Certificate setting forth the Conversion Rate after such adjustment and setting
forth a brief statement of the facts requiring such adjustment.  Unless and until a Responsible Officer of
the Trustee shall have received such Officers’ Certificate, the Trustee shall
not be deemed to have knowledge of any adjustment of the Conversion Rate and
may assume without inquiry that the last Conversion Rate of which it has
knowledge is still in effect.  Promptly
after delivery of such certificate, the Company shall prepare a notice of such
adjustment of the Conversion Rate setting forth the adjusted Conversion Rate
and the date on which each adjustment becomes effective and shall mail such
notice of such adjustment of the Conversion Rate to the holder of each Note at
his last address appearing on the Note Register provided for in
Section 2.5 of this Indenture, within twenty (20) days of the effective
date of such adjustment.  Failure to
deliver such notice shall not affect the legality or validity of any such adjustment.


 


(l)             In any case in which
this Section 15.5 provides that an adjustment shall become effective
immediately after (1) a record date or Record Date for an event, (2) the date
fixed for the determination of stockholders entitled to receive a dividend or
distribution pursuant to Section 15.5(a), (3) a date fixed for the
determination of stockholders entitled to receive rights or warrants pursuant
to Section 15.5(b), or (4) the Expiration Time or Offer Expiration Time,
as the case may be, for any tender or exchange offer pursuant to
Section 15.5(f) or Section 15.5(g), (each a “Determination Date”),
the Company may elect to defer until the occurrence of the applicable
Adjustment Event (as hereinafter defined) (x) issuing to the holder of any Note
converted after such Determination Date and before the occurrence of such
Adjustment Event, the additional shares of Common Stock or other securities
issuable upon such conversion by reason of the adjustment required by such
Adjustment Event over and above the Common Stock issuable upon such conversion
before giving effect to such adjustment and (y) paying to such holder any
amount in cash in lieu of any fraction pursuant to Section 15.3.  For purposes of this Section 15.5(l),
the term “Adjustment Event” shall mean:


 


(i)                                     in
any case referred to in clause (1) hereof, the occurrence of such event,


 


(ii)                                  in
any case referred to in clause (2) hereof, the date any such dividend or
distribution is paid or made,


 


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(iii)                               in
any case referred to in clause (3) hereof, the date of expiration of such
rights or warrants, and


 


(iv)                              in
any case referred to in clause (4) hereof, the date a sale or exchange of
Common Stock pursuant to such tender or exchange offer is consummated and
becomes irrevocable.


 


(m)       For purposes of this
Section 15.5, the number of shares of Common Stock at any time outstanding
shall not include shares held in the treasury of the Company but shall include
shares issuable in respect of scrip certificates issued in lieu of fractions of
shares of Common Stock.  The Company
will not pay any dividend or make any distribution on shares of Common Stock
held in the treasury of the Company.


 


Section 15.6                                Effect
of Reclassification, Consolidation, Merger or Sale.  If any of the following events occur, namely
(i) any reclassification or change of the outstanding shares of Common Stock
(other than a change in par value, or from par value to no par value, or from
no par value to par value, or as a result of a split, subdivision or
combination), (ii) any consolidation, merger or combination of the Company with
another corporation as a result of which holders of Common Stock shall be
entitled to receive stock, securities or other property or assets (including
cash) with respect to or in exchange for such Common Stock, or (iii) any sale
or conveyance of the properties and assets of the Company as, or substantially
as, an entirety to any other corporation as a result of which holders of Common
Stock shall be entitled to receive stock, securities or other property or
assets (including cash) with respect to or in exchange for such Common Stock,
then the Company or the successor or purchasing corporation, as the case may
be, shall execute with the Trustee a supplemental indenture (which shall comply
with the Trust Indenture Act as in force at the date of execution of such
supplemental indenture if such supplemental indenture is then required to so
comply) providing that such Note shall be convertible into the kind and amount
of shares of stock and other securities or property or assets (including cash)
receivable upon such reclassification, change, consolidation, merger,
combination, sale or conveyance by a holder of a number of shares of Common
Stock issuable upon conversion of such Notes (assuming, for such purposes, a
sufficient number of authorized shares of Common Stock available to convert all
such Notes) immediately prior to such reclassification, change, consolidation,
merger, combination, sale or conveyance assuming such holder of Common Stock
did not exercise his rights of election, if any, as to the kind or amount of
securities, cash or other property receivable 
upon such consolidation, merger, statutory exchange, sale or conveyance
(provided that, if the kind or amount of securities, cash or other property
receivable upon such consolidation, merger, statutory exchange, sale or
conveyance is not the same for each share of Common Stock in respect of which
such rights of election shall not have been exercised (“non-electing share”),
then for the purposes of this Section 15.6 the kind and amount of
securities, cash or other property receivable upon such consolidation, merger,
statutory exchange, sale or conveyance for each non-electing share shall be
deemed to be the kind and amount so receivable per share by a plurality of the
non-electing shares).  Such supplemental
indenture shall provide for adjustments which shall be as nearly equivalent as
may be practicable to the adjustments


 


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provided for in this Article. 
If, in the case of any such reclassification, change, consolidation,
merger, combination, sale or conveyance, the stock or other securities and
assets receivable thereupon by a holder of shares of Common Stock include shares
of stock or other securities and assets of a corporation other than the
successor or purchasing corporation, as the case may be, in such
reclassification, change, consolidation, merger, combination, sale or
conveyance, then such supplemental indenture shall also be executed by such
other corporation and shall contain such additional provisions to protect the
interests of the holders of the Notes as the Board of Directors shall
reasonably consider necessary by reason of the foregoing, including to the extent
required by the Board of Directors and practicable the provisions providing for
the repurchase rights set forth in Article XVI herein.


 


The Company shall cause notice of the execution of such supplemental
indenture to be mailed to each holder of Notes, at his address appearing on the
Note register provided for in Section 2.5 of this Indenture, within twenty
(20) days after execution thereof. 
Failure to deliver such notice shall not affect the legality or validity
of such supplemental indenture.


 


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


 


If this Section 15.6 applies to any event or occurrence,
Section 15.5 shall not apply.


 


Section 15.7                                Taxes
on Shares Issued.  The issue of
stock certificates on conversions of Notes shall be made without charge to the
converting Noteholder for any tax in respect of the issue thereof.  The Company shall not, however, be required
to pay any tax which may be payable in respect of any transfer involved in the
issue and delivery of stock in any name other than that of the holder of any
Note converted, and the Company shall not be required to issue or deliver any
such stock certificate unless and until the person or persons requesting the
issue thereof shall have paid to the Company the amount of such tax or shall
have established to the satisfaction of the Company that such tax has been
paid.


 


Section 15.8                                Reservation
of Shares; Shares to Be Fully Paid; Listing of Common Stock.  The Company shall provide, free from
preemptive rights, out of its authorized but unissued shares or shares held in
treasury, sufficient shares to provide for the conversion of the Notes from
time to time as such Notes are presented for conversion.


 


Before taking any action which would cause an adjustment reducing the
Conversion Rate below the then par value, if any, of the shares of Common Stock
issuable upon conversion of the Notes, the Company will take all corporate
action which may, in the opinion of its counsel, be necessary in order that the
Company may validly and legally issue shares of such Common Stock at such
adjusted Conversion Rate.


 


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The Company
covenants that all shares of Common Stock issued upon conversion of Notes will
be fully paid and non-assessable by the Company and free from all taxes, liens
and charges with respect to the issue thereof.


 


The Company covenants that, if any shares of Common Stock to be
provided for the purpose of conversion of Notes hereunder require registration
with or approval of any governmental authority under any federal or state law
before such shares may be validly issued upon conversion, the Company will in
good faith and as expeditiously as possible, to the extent then permitted by
the rules and interpretations of the Commission (or any successor thereto),
endeavor to secure such registration or approval, as the case may be.


 


The Company further covenants that if at any time the Common Stock
shall be listed on any other national securities exchange or automated
quotation system the Company will, if permitted and required by the rules of
such exchange or automated quotation system, list and keep listed, so long as
the Common Stock shall be so listed on such exchange or automated quotation
system, all Common Stock issuable upon conversion of the Notes.


 


Section 15.9                                Responsibility
of Trustee.  The Trustee and any
other conversion agent shall not at any time be under any duty or responsibility
to any holder of Notes to determine the Conversion Rate or whether any facts
exist which may require any adjustment of the Conversion Rate, or with respect
to the nature or extent or calculation of any such adjustment when made, or
with respect to the method employed, or herein or in any supplemental indenture
provided to be employed, in making the same. 
The Trustee and any other conversion agent shall not be accountable with
respect to the validity or value (or the kind or amount) of any shares of Common
Stock, or of any securities or property, which may at any time be issued or
delivered upon the conversion of any Note; and the Trustee and any other
conversion agent make no representations with respect thereto.  Neither the Trustee nor any conversion agent
shall be responsible for any failure of the Company to issue, transfer or
deliver any shares of Common Stock or stock certificates or other securities or
property or cash upon the surrender of any note for the purpose of conversion
or to comply with any of the duties, responsibilities or covenants of the
Company contained in this Article. 
Without limiting the generality of the foregoing, neither the Trustee
nor any conversion agent shall be under any responsibility to determine the
correctness of any provisions contained in any supplemental indenture entered
into pursuant to Section 15.6 relating either to the kind or amount of
shares of stock or securities or property (including cash) receivable by
Noteholders upon the conversion of their Notes after any event referred to in
such Section 15.6 or to any adjustment to be made with respect thereto,
but, subject to the provisions of Section 8.1, may accept as conclusive
evidence of the correctness of any such provisions, and shall be protected in
relying upon, the Officers’ Certificate (which the Company shall be obligated
to file with the Trustee prior to the execution of any such supplemental
indenture) with respect thereto.


 


Section 15.10                          Notice
to Holders Prior to Certain Actions. 
In case:


 


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(a)          the Company shall
declare a dividend (or any other distribution) on its Common Stock (that would
require an adjustment in the Conversion Rate pursuant to Section 15.5); or


 


(b)         the Company shall
authorize the granting to all of the holders of its Common Stock of rights or
warrants to subscribe for or purchase any share of any class or any other
rights or warrants; or


 


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


 


(d)         of the voluntary or
involuntary dissolution, liquidation or winding-up of the Company;


 


the Company shall cause to be filed with the Trustee and to be mailed
to each holder of Notes at his address appearing on the Note register, provided
for in Section 2.5 of this Indenture, as promptly as possible but in any
event at least fifteen days prior to the applicable date hereinafter specified,
a notice stating (x) the date on which a record is to be taken for the purpose
of such dividend, distribution or rights or warrants, or, if a record is not to
be taken, the date as of which the holders of Common Stock of record to be
entitled to such dividend, distribution or rights are to be determined, or (y)
the date on which such reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding-up is expected to become effective or
occur, and the date as of which it is expected that holders of Common Stock of
record shall be entitled to exchange their Common Stock for securities or other
property deliverable upon such reclassification, consolidation, merger, sale,
transfer, dissolution, liquidation or winding-up.  Failure to give such notice, or any defect therein, shall not
affect the legality or validity of such dividend, distribution,
reclassification, consolidation, merger, sale, transfer, dissolution,
liquidation or winding-up.


 


Section 15.11                          Shareholder
Rights Plans. Each share of Common Stock issued upon conversion of
Securities pursuant to this Article XVI shall be entitled to receive the
appropriate number of rights, if any, and the certificates representing the
Common Stock issued upon such conversion shall bear such legends, if any, in
each case as may be provided by the terms of any shareholder rights plan
adopted by the Company, as the same may be amended from time to time. If at the
time of conversion, however, the rights have separated from the shares of
Common Stock in accordance with the provisions of the applicable shareholder
rights agreement so that the holders of the Securities would not be entitled to
receive any rights in respect of Common Stock issuable upon conversion of the
Securities, the Conversion Rate will be adjusted as provided in
Section 15.5(d).


 


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ARTICLE XVI

REPURCHASE UPON A DESIGNATED EVENT


 


Section 16.1                                Repurchase
at Option of Holders Upon a Designated Event.


 


(a)          If there shall occur a
Designated Event at any time prior to maturity of any series of Notes, then
each Noteholder of such series shall have the right, at such holder’s option,
to require the Company to repurchase all of such holder’s Notes, or any portion
thereof that is a multiple of $1,000 principal amount, on the date (the
“Designated Event Repurchase Date”) specified by the Company that is not less
than twenty (20) Business Days and not more than thirty (30) Business Days
after the date of the Designated Event Notice (as defined in Section 16.1(b))
of such Designated Event at a repurchase price equal to 100% of the principal
amount thereof, together with accrued and unpaid Liquidated Damages to, but
excluding, the Designated Event Repurchase Date (the “Repurchase Price”).  Repurchases of Notes under this
Section 16.1 shall be made, at the option of the holder thereof, upon:


 


(i)                                     delivery
to the Trustee (or other paying agent appointed by the Company) by a holder of
a duly completed notice (the “Designated Event Repurchase Notice”) in the form
set forth on the reverse of the Note prior to the close of business on the
Designated Event Repurchase Date; and


 


(ii)                                  delivery
or book-entry transfer of the Notes to the Trustee (or other paying agent
appointed by the Company) at any time after delivery of the Designated Event
Repurchase Notice (together with all necessary endorsements) at the Corporate
Trust Office of the Trustee (or other paying agent appointed by the Company) in
the Borough of Manhattan, such delivery being a condition to receipt by the
holder of the Repurchase Price therefor; provided that such Repurchase
Price shall be so paid pursuant to this Section 16.1 only if the Note so
delivered to the Trustee (or other paying agent appointed by the Company) shall
conform in all respects to the description thereof in the related Designated
Event Repurchase Notice.


 


Any purchase by the Company contemplated pursuant to the provisions of
this Section 16.1 shall be consummated by the delivery of the
consideration to be received by the holder promptly following the later of the
Designated Event Repurchase Date and the time of the book-entry transfer or
delivery of the Note.


 


Notwithstanding anything herein to the contrary, any holder delivering
to the Trustee (or other paying agent appointed by the Company) the Designated
Event Repurchase Notice contemplated by this Section 16.1 shall have the
right to withdraw such Designated Event Repurchase Notice at any time prior to
the close of business on the Designated Event Repurchase Date by delivery of a
written notice of withdrawal to the Trustee (or other paying agent appointed by
the Company) in accordance with Section 16.1(c) below.


 


The Trustee (or other paying agent appointed by the Company) shall
promptly notify the Company of the receipt by it of any Designated Event
Repurchase Notice or written notice of withdrawal thereof.


 


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(b)         On or before the tenth
day after the occurrence of a Designated Event, the Company or, at the written
request of the Company, the Trustee, shall mail or cause to be mailed to all
holders of record of the Notes a notice (the “Designated Event Notice”) of the
occurrence of such Designated Event and of the repurchase right at the option
of the holders arising as a result thereof. 
Such mailing shall be by first class mail.  The Company shall also deliver a copy of the Designated Event
Notice to the Trustee and cause a copy of such Designated Event Notice, or a
summary of the information contained therein, to be published once in a
newspaper of general circulation in The City of New York.  Concurrently with the mailing of any
Designated Event Notice, the Company shall issue a press release announcing
such Designated Event referred to in the Designated Event Notice, the form and
content of which press release shall be determined by the Company in its sole
discretion.  The failure to issue any
such press release or any defect therein shall not affect the validity of the
Designated Event Notice or any proceedings for the repurchase of any Note that
any Noteholder may elect to have the Company repurchase as provided in this
Section 16.1.


 


Each Designated Event Notice shall specify the circumstances
constituting the Designated Event, the Designated Event Repurchase Date, the
Repurchase Price, that the holder must exercise the repurchase right on or
prior to the close of business on the Designated Event Repurchase Date (the
“Designated Event Expiration Time”), that the holder shall have the right to
withdraw any Notes surrendered prior to the Designated Event Expiration Time, a
description of the procedure which a Noteholder must follow to exercise such
repurchase right and to withdraw any surrendered Notes, the place or places
where the holder is to surrender such holder’s Notes and the CUSIP number or
numbers of the Notes (if then generally in use) and include a form of
Designated Event Repurchase Notice.


 


No failure of the Company to give the foregoing notices and no defect
therein shall limit the Noteholders’ repurchase rights or affect the validity
of the proceedings for the repurchase of the Notes pursuant to this
Section 16.1.


 


(c)          A Designated Event
Repurchase Notice may be withdrawn by means of a written notice of withdrawal
delivered to the Corporate Trust Office of the Trustee (or other paying agent
appointed by the Company) in accordance with the Designated Event Repurchase
Notice at any time prior to the close of business on the Designated Event
Repurchase Date, specifying:


 


(i)                                     the
certificate number, if any, of the Note in respect of which such notice of
withdrawal is being submitted, or the appropriate Depositary information if the
Note in respect of which such notice of withdrawal is being submitted is
represented by a Global Security,


 


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


 


(iii)                               the
principal amount, if any, of such Note that remains subject to the original
Designated Event Repurchase Notice and that has been or will be delivered for
purchase by the Company.


 


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A written notice of withdrawal of a Designated Event Repurchase Notice
may be in the form set forth in the preceding paragraph or may be in the form
of a conditional withdrawal contained in a Designated Event Repurchase Notice
pursuant to the terms of Section 16.1(a).


 


(d)         On or prior to the
Designated Event Repurchase Date, the Company will deposit with the Trustee (or
other paying agent appointed by the Company or if the Company is acting as its
own paying agent, set aside, segregate and hold in trust as provided in
Section 5.4) an amount of money sufficient to repurchase on the Designated
Event Repurchase Date all of the Notes to be repurchased on such date at the
appropriate Repurchase Price; provided that if such payment is made on the
Designated Event 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 date.
Subject to receipt of funds and/or Notes by the Trustee (or other paying agent
appointed by the Company), payment for Notes surrendered for repurchase (and
not withdrawn) prior to the Designated Event Expiration Time will be made
promptly (but in no event more than two Business Days) following the later of
(x) the Designated Event Repurchase Date with respect to such Note (provided
the holder has satisfied the conditions in Section 16.1) and (y) the time
of delivery of such Note to the Trustee (or other paying agent appointed by the
Company) by the holder thereof in the manner required by Section 16.1) by
mailing checks for the amount payable to the holders of such Notes entitled
thereto as they shall appear in the Security Register, provided, however,
that payments to the Depositary shall be made by wire transfer of immediately
available funds to the account of the Depositary or its nominee.


 


If the Trustee (or other paying agent appointed by the Company) holds
money sufficient to repurchase on the Designated Event Repurchase Date all the
Notes or portions thereof that are to be purchased as of the Designated Event
Repurchase Date, then on or after the Designated Event Repurchase Date (i) such
Notes will cease to be outstanding, (ii) Liquidated Damages, if any, will cease
to accrue on such Notes, and (iii) all other rights of the holders of such
Notes will terminate, whether or not book-entry transfer of the Notes has been
made or the Notes have been delivered to the Trustee or paying agent, other
than the right to receive the repurchase price upon delivery of the Notes.


 


ARTICLE XVII

MISCELLANEOUS PROVISIONS


 


Section 17.1                                Provisions
Binding on Company’s Successors. 
All the covenants, stipulations, promises and agreements of the Company
contained in this Indenture shall bind its successors and assigns whether so
expressed or not.


 


Section 17.2                                Official
Acts by Successor Corporation.  Any
act or proceeding by any provision of this Indenture authorized or required to
be done or performed by any board, committee or officer of the Company shall
and may be done and performed with like force and effect by the like board,
committee or officer of any corporation that shall at the time be the lawful
sole successor of the Company.


 


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Section 17.3                                Addresses
for Notices, Etc.  Any notice or
demand which by any provision of this Indenture is required or permitted to be
given or served by the Trustee or by the holders of Notes on the Company shall
be deemed to have been sufficiently given or made, for all purposes if given or
served by being deposited postage prepaid by registered or certified mail in a
post office letter box addressed (until another address is filed by the Company
with the Trustee) to Sepracor Inc., 84 Waterford Drive, Marlborough, MA  01752, Attention: Chief Financial Officer.  Any notice, direction, request or demand
hereunder to or upon the Trustee shall be deemed to have been sufficiently
given or made, for all purposes, if given or served by being deposited postage
prepaid by registered or certified mail in a post office letter box addressed
to the Corporate Trust Office.


 


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


 


Any notice or communication mailed to a Noteholder shall be mailed to him
by first class mail, postage prepaid, at his address as it appears on the Note
register and shall be sufficiently given to him if so mailed within the time
prescribed.


 


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


 


Section 17.4                                GOVERNING
LAW.  THIS INDENTURE AND EACH NOTE
SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE LAWS OF NEW YORK, AND FOR ALL
PURPOSES SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF NEW YORK.


 


Section 17.5                                Evidence
of Compliance with Conditions Precedent; Certificates to Trustee.  Upon any application or demand by the
Company to the Trustee to take any action under any of the provisions of this
Indenture, the Company shall furnish to the Trustee an Officers’ Certificate
stating that all conditions precedent, if any, provided for in this Indenture
relating to the proposed action have been complied with, and an Opinion of
Counsel stating that, in the opinion of such counsel, all such conditions
precedent have been complied with.


 


Each certificate
or opinion provided for by or on behalf of the Company in this Indenture and
delivered to the Trustee with respect to compliance with a condition or
covenant provided for in this Indenture shall include (1) a statement that the
person making such certificate or opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statement or opinion contained in such certificate
or opinion is based; (3) a statement that, in the opinion of such person, he
has made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or condition has
been complied with; and (4) a statement as to whether or not, in the opinion of
such person, such condition or covenant has been complied with.


 


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Section 17.6                                Legal
Holidays.  In any case where the
date of maturity of interest on or principal of the Notes or the date fixed for
repurchase of any Note will not be a Business Day, then payment of such
interest on or principal of the Notes need not be made on such date, but may be
made on the next succeeding Business Day with the same force and effect as if
made on the date of maturity or the date fixed for repurchase, and no interest
shall accrue for the period from and after such date.


 


Section 17.7                                No
Security Interest Created.  Nothing
in this Indenture or in the Notes, expressed or implied, shall be construed to
constitute a security interest under the Uniform Commercial Code or similar
legislation, as now or hereafter enacted and in effect, in any jurisdiction.


 


Section 17.8                                Trust
Indenture Act.  This Indenture is
hereby made subject to, and shall be governed by, the provisions of the Trust
Indenture Act required to be part of and to govern indentures qualified under
the Trust Indenture Act; provided, however, that, unless otherwise
required by law, notwithstanding the foregoing, this Indenture and the Notes
issued hereunder shall not be subject to the provisions of subsections (a)(1),
(a)(2), and (a)(3) of Section 314 of the Trust Indenture Act as now in
effect as hereafter amended or modified; provided further that this
Section 17.8 shall not require that this Indenture or the Trustee be
qualified under the Trust Indenture Act prior to the time such qualification is
in fact required under the terms of the Trust Indenture Act, nor shall it
constitute any admission or acknowledgment by any party hereto that any such
qualification is required prior to the time such qualification is in fact required
under the terms of the Trust Indenture Act. 
If any provision hereof limits, qualifies or conflicts with another
provision hereof which is required to be included in an indenture qualified
under the Trust Indenture Act, such required provision shall control.


 


Section 17.9                                Benefits
of Indenture.  Nothing in this
Indenture or in the Notes, expressed or implied, shall give to any person,
other than the parties hereto, any paying agent, any authenticating agent, any
Note registrar and their successors hereunder, the holders of Notes and the
holders of Senior Obligations, any benefit or any legal or equitable right,
remedy or claim under this Indenture.


 


Section 17.10                          Table
of Contents, Headings, Etc.  The
table of contents and the titles and headings of the articles and sections of
this Indenture have been inserted for convenience of reference only, are not to
be considered a part hereof, and shall in no way modify or restrict any of the
terms or provisions hereof.


 


Section 17.11                          Authenticating
Agent.  The Trustee may appoint an
authenticating agent which shall be authorized to act on its behalf and subject
to its direction in the authentication and delivery of Notes in connection with
the original issuance thereof and transfers and exchanges of Notes hereunder,
including under Sections 2.4, 2.5, 2.6, 2.7 and 3.3, as fully to all intents
and purposes as though the authenticating agent had been expressly authorized
by this Indenture and those Sections to authenticate and deliver Notes.  For all purposes of this Indenture, the


 


76

















 


authentication and delivery of Notes by the authenticating agent shall
be deemed to be authentication and delivery of such Notes “by the Trustee” and
a certificate of authentication executed on behalf of the Trustee by an
authenticating agent shall be deemed to satisfy any requirement hereunder or in
the Notes for the Trustee’s certificate of authentication.  Such authenticating agent shall at all times
be a person eligible to serve as trustee hereunder pursuant to
Section 8.9.


 


Any corporation into which any authenticating agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, consolidation or conversion to which any authenticating agent
shall be a party, or any corporation succeeding to the corporate trust business
of any authenticating agent, shall be the successor of the authenticating agent
hereunder, if such successor corporation is otherwise eligible under this
Section, without the execution or filing of any paper or any further act on the
part of the parties hereto or the authenticating agent or such successor
corporation.


 


Any authenticating agent may at any time resign by giving written
notice of resignation to the Trustee and to the Company.  The Trustee may at any time terminate the
agency of any authenticating agent by giving written notice of termination to
such authenticating agent and to the Company. 
Upon receiving such a notice of resignation or upon such a termination,
or in case at any time any authenticating agent shall cease to be eligible
under this Section, the Trustee shall promptly appoint a successor
authenticating agent (which may be the Trustee), shall give written notice of
such appointment to the Company and shall mail notice of such appointment to
all holders of Notes as the names and addresses of such holders appear on the
Note register.


 


The Trustee agrees to pay to the authenticating agent from time to time
reasonable compensation for its services (to the extent pre-approved by the
Company in writing), and the Trustee shall be entitled to be reimbursed for
such pre-approved payments, subject to Section 8.6.


 


The provisions of Sections 8.2, 8.3, 8.4, 9.3 and this
Section 17.11 shall be applicable to any authenticating agent.


 


Section 17.12                          Execution
in Counterparts.  This Indenture may
be executed in any number of counterparts, each of which shall be an original,
but such counterparts shall together constitute but one and the same
instrument.


 


JPMorgan Chase Bank hereby accepts the trusts in this Indenture
declared and provided, upon the terms and conditions hereinabove set forth.


 


77

















 


IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly signed, and their respective corporate seals to be hereunto affixed and
attested, all as of the date first written above.


 


	
   

  	
  SEPRACOR INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Timothy J. Barberich

  
	
   

  	
  Name:

  	
    Timothy J. Barberich

  
	
   

  	
  Title:

  	
    Chief Executive Officer

  
	
   

  	
   

  
	
  Attest:

  	
   

  
	
   

  	
   

  
	
   /s/ David P. Southwell

  	
   

  	
   

  
	
  Name:

  	
   David P. Southwell

  	
   

  	
   

  
	
  Title:

  	
   Secretary

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  [seal]

  	
   

  
	
   

  	
   

  
	
   

  	
  JPMORGAN CHASE BANK

  
	
   

  	
  as Trustee

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Kathleen Perry

  
	
   

  	
  Name:

  	
   Kathleen Perry

  
	
   

  	
  Title:

  	
   Vice President

  
								



 

















 


EXHIBIT A


[FORM OF FACE OF SERIES A
NOTE]


 


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.


 


THIS SECURITY AND THE SHARES OF SEPRACOR INC. (THE ‘‘COMPANY’’) COMMON
STOCK (‘‘COMMON STOCK’’) ISSUABLE UPON CONVERSION OF THIS SECURITY HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE ‘‘SECURITIES
ACT’’), OR ANY STATE SECURITIES LAWS. NEITHER THIS SECURITY, THE SHARES OF
COMMON STOCK ISSUABLE UPON CONVERSION OF THIS SECURITY NOR ANY INTEREST OR
PARTICIPATION HEREIN OR THEREIN MAY BE REOFFERED, SOLD, ASSIGNED,
TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF
SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO,
REGISTRATION.


 


THE HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF, AGREES TO OFFER,
SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE ‘‘RESALE
RESTRICTION TERMINATION DATE’’) THAT IS TWO YEARS AFTER THE LATER OF THE
ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY
AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF
SUCH SECURITY) ONLY (A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, (B) FOR SO
LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A
PERSON IT REASONABLY BELIEVES IS A ‘‘QUALIFIED INSTITUTIONAL BUYER’’ AS DEFINED
IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR
THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHICH NOTICE IS GIVEN THAT
THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (C) PURSUANT TO A
REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES
ACT, OR (D) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE RIGHTS OF THE COMPANY AND
THE TRUSTEE PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (D) TO
REQUIRE THE DELIVERY OF AN OPINION


 


A-1

















 


OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH
OF THEM, AND IN EACH OF THE FOREGOING CASES WHERE REGISTRATION OR TRANSFER OF
THIS SECURITY IS REQUIRED, A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON
THE OTHER SIDE OF THIS SECURITY COMPLETED AND DELIVERED BY THE TRANSFEROR TO
THE TRUSTEE. THIS LEGEND WILL BE REMOVED AFTER THE RESALE RESTRICTION
TERMINATION DATE UPON THE REQUEST OF THE HOLDER AND THE DELIVERY OF AN OPINION
OF COUNSEL, CERTIFICATES AND/OR OTHER INFORMATION SATISFACTORY TO THE COMPANY.


 


A-2

















 


SEPRACOR INC.


 


0% Series A Convertible Senior Subordinated
Notes due 2008


 


	
  No. 1

  	
  $200,000,000

  



 


CUSIP No. 817315AR5


 


Sepracor Inc., a
corporation duly organized and validly existing under the laws of the State of
Delaware (herein called the “Company”, which term includes any successor
corporation under the Indenture referred to on the reverse hereof), for value
received hereby promises to pay to CEDE & CO., or registered assigns, the
principal sum of Two Hundred Million Dollars (which amount may from time to
time be increased or decreased to such other principal amounts (which, taken
together with the principal amounts of all other outstanding Notes, shall not
exceed $200,000,000 in aggregate at any time (or $250,000,000 if the option set
forth in the Purchase Agreement is exercised in full by the Initial
Purchasers)) by adjustments made on the records of the Trustee, as Custodian of
the Depositary, in accordance with the rules and procedures of the Depositary)
on December 15, 2008, and Liquidated Damages in the manner, at the rates
and to the persons set forth in the Registration Rights Agreement.


 


Payment of the
principal of and Liquidated Damages accrued on this Note shall be made at the
office or agency of the Company maintained for that purpose in the Borough of
Manhattan, The City of New York, or, at the option of the holder of this Note,
at the Corporate Trust Office, in such lawful money of the United States of
America as at the time of payment shall be legal tender for the payment of public
and private debts; provided, however, Liquidated Damages may be paid by
check mailed to your address as it appears in the Note register; provided
further, however, that, with respect to any holder of Notes with an
aggregate principal amount equal to or in excess of $2,000,000, at the request
of such holder in writing to the Company, Liquidated Damages on such holder’s
Notes shall be paid by wire transfer in immediately available funds in
accordance with the written wire transfer instruction supplied by such holder
from time to time to the Trustee and paying agent (if different from the
Trustee) at least two days prior to the applicable record date; provided that
any payment to the Depositary or its nominee shall be paid by wire transfer in
immediately available funds in accordance with the wire transfer instruction
supplied by the Depositary or its nominee from time to time to the Trustee and
paying agent (if different from Trustee) at least two days prior to the
applicable record date.


 


Reference is made to the further provisions of this Note set forth on
the reverse hereof, including, without limitation, provisions subordinating the
payment of principal of and premium, if any, and Liquidated Damages on this
Note to the prior payment in full of all Senior Obligations as defined in the
Indenture and provisions giving the holder of this Note the right to convert
this Note into Common Stock of the Company on the terms and subject to the
limitations referred to on the


 


A-3

















 


reverse hereof and as more fully specified in the Indenture.  Such further provisions shall for all
purposes have the same effect as though fully set forth at this place.


 


This Note shall be deemed to be a contract made under the laws of the
State of New York, and for all purposes shall be construed in accordance with
and governed by the laws of said State (without regard to the conflicts of laws
provisions thereof).


 


This Note shall not be valid or become obligatory for any purpose until
the certificate of authentication hereon shall have been manually signed by the
Trustee or a duly authorized authenticating agent under the Indenture.


 


[Remainder of page intentionally left blank]


 


A-4

















 


IN WITNESS WHEREOF, the Company has caused this Note to be duly
executed.


 


	
   

  	
  SEPRACOR INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
  Attest:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:

  	
   

  
	
  Title:

  	
   

  
	
   

  	
   

  
	
  Dated:  December 12, 2003

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  TRUSTEE’S CERTIFICATE OF AUTHENTICATION

  	
   

  
	
   

  	
   

  
	
  JPMORGAN CHASE BANK,

  as Trustee, certifies that this is one of the Notes described

  in the within-named Indenture.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
  Authorized Signatory

  	
   

  
							



 


A-5

















 


[FORM OF REVERSE OF SERIES A NOTE]


 


SEPRACOR INC.


 


0% Series A Convertible Senior Subordinated
Notes due 2008


 


This Note is one of a duly authorized issue of Notes of the Company,
designated as its 0% Series A Convertible Senior Subordinated Notes due 2008
(herein called the “Notes”), limited to the aggregate principal amount of
$200,000,000 (or $250,000,000 if the option set forth in the Purchase Agreement
is exercised in full by the Initial Purchasers) all issued or to be issued
under and pursuant to an Indenture dated as of 
December 12, 2003  (herein
called the “Indenture”), between the Company and JPMorgan Chase Bank, (herein
called the “Trustee”), to which Indenture and all indentures supplemental
thereto reference is hereby made for a description of the rights, limitations
of rights, obligations, duties and immunities thereunder of the Trustee, the
Company and the holders of the Notes. 
Additional Notes may be issued in an unlimited aggregate principal
amount, subject to certain conditions specified in the Indenture.


 


In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of, premium, if any, and accrued
Liquidated Damages, if any, on all Notes may be declared, and upon said
declaration shall become, due and payable, in the manner, with the effect and
subject to the conditions provided in the Indenture.


 


The Indenture
contains provisions permitting the Company and the Trustee in certain
circumstances, without the consent of the holders of the Notes, and in other
circumstances, with the consent of the holders of not less than a majority in
aggregate principal amount of the Notes at the time outstanding, evidenced as
in the Indenture provided, to execute supplemental indentures adding any
provisions to or changing in any manner or eliminating any of the provisions of
the Indenture or of any supplemental indenture or modifying in any manner the
rights of the holders of the Notes; provided, however, that no such
supplemental indenture shall (i) extend the fixed maturity of any Note, or
reduce the rate or extend the time of payment of Liquidated Damages thereon, or
reduce the principal amount thereof or premium, if any, thereon, or reduce any
amount payable on repurchase thereof, impair, or change in any respect adverse
to the holder of Notes, the obligation of the Company to repurchase any Note at
the option of the holder upon the happening of a Designated Event, or impair or
adversely affect the right of any Noteholder to institute suit for the payment
thereof, or change the currency in which the Notes are payable, or impair or
change in any respect adverse to the Noteholders the right to convert the Notes
into Common Stock or any other property receivable upon conversion subject to
the terms set forth in the Indenture, or modify the provisions of the Indenture
with respect to the subordination of the Notes in a manner adverse to the
Noteholders, reduce the quorum or voting requirements under the Indenture with
respect to the Notes, subject to certain exceptions, modify certain provisions
of the Indenture relating to these modification provisions, in each case
without the consent of the holder of each Note so affected, or


 


A-6

















 


(ii) reduce the aforesaid percentage of Notes, the holders of which are
required to consent to any such supplemental indenture, without the consent of
the holders of all Notes then outstanding. 
It is also provided in the Indenture that, prior to any declaration
accelerating the maturity of the Notes, the holders of a majority in aggregate
principal amount of the Notes at the time outstanding may on behalf of the
holders of all of the Notes waive any past default or Event of Default under
the Indenture and its consequences except (i) a default in the payment of
Liquidated Damages or premium, if any, on, or the principal of, the Notes when
due which default has not been cured, (ii) a failure by the Company to convert
any Notes into Common Stock or (iii) a default in respect of a covenant or
provisions of the Indenture which under Article XI of the Indenture cannot
be modified or amended without the consent of the holders of all Notes then
outstanding.  Any such consent or waiver
by the holder of this Note (unless revoked as provided in the Indenture) shall
be conclusive and binding upon such holder and upon all future holders and
owners of this Note and any Notes which may be issued in exchange or
substitution hereof, irrespective of whether or not any notation thereof is
made upon this Note or such other Notes.


 


The indebtedness evidenced by the Notes is, to the extent and in the
manner provided in the Indenture, expressly subordinate and subject in right of
payment to the prior payment in full in cash or other payment satisfactory to
the holders of Senior Obligations of all Senior Obligations of the Company, as defined
in the Indenture, whether outstanding at the date of the Indenture or
thereafter incurred, and this Note is issued subject to the provisions of the
Indenture with respect to such subordination. 
Each holder of this Note, by accepting the same, agrees to and shall be
bound by such provisions and authorizes the Trustee on his behalf to take such
action as may be necessary or appropriate to effectuate the subordination so
provided and appoints the Trustee his attorney in fact for such purpose.


 


No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of, premium, if any, and
Liquidated Damages on this Note at the place, at the respective times, at the
rate and in the lawful money herein prescribed.


 


The Notes are issuable in registered form without coupons in
denominations of $1,000 principal amount and integral multiples thereof.  At the office or agency of the Company
referred to on the face hereof, and in the manner and subject to the
limitations provided in the Indenture, without payment of any service charge
but with payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any registration or exchange of
Notes, Notes may be exchanged for a like aggregate principal amount of Notes of
other authorized denominations.


 


The Notes will not be redeemable by the Company.


 


The Notes are not subject to redemption through the operation of any
sinking fund.


 


A-7

















 


Upon the occurrence of a “Designated Event,” the Noteholder has the
right, at such holder’s option, to require the Company to repurchase all of
such holder’s Notes or any portion thereof (in principal amounts of $1,000 or
integral multiples thereof) on the Designated Event Purchase Date at a price
equal to 100% of the principal amount of the Notes such holder elects to
require the Company to repurchase, together with accrued and unpaid Liquidated
Damages, if any, to but excluding the date fixed for repurchase.  The Company or, at the written request of
the Company, the Trustee shall mail to all holders of record of the Notes a
notice of the occurrence of a Designated Event and of the repurchase right
arising as a result thereof on or before the tenth calendar day after the
occurrence of such Designated Event.


 


Subject to the provisions of the Indenture, the holder hereof has the
right, at its option, at any time following the date of original issuance of
the Notes and prior to the close of business on December 15, 2008, to
convert the principal hereof or any portion of such principal which is $1,000
or an integral multiple thereof, into that number of fully paid and non-assessable
shares of Company’s Common Stock, as said shares shall be constituted at the
date of conversion, at the Conversion Rate, as adjusted from time to time as
provided in the Indenture, for each $1,000 principal amount of Notes so
converted, upon surrender of this Note, together with a conversion notice as
provided in the Indenture and this Note, to the Company at the office or agency
of the Company maintained for that purpose in the Borough of Manhattan, The
City of New York, or at the option of such holder, the Corporate Trust Office,
and, unless the shares issuable on conversion are to be issued in the same name
as this Note, duly endorsed by, or accompanied by instruments of transfer in
form satisfactory to the Company duly executed by, the holder or by his duly
authorized attorney.  The initial
Conversion Rate shall be 31.3550 shares for each $1,000 principal amount of
Notes.  No fractional shares of Common
Stock will be issued upon any conversion, but an adjustment in cash will be
paid to the holder, as provided in the Indenture, in respect of any fraction of
a share which would otherwise be issuable upon the surrender of any Note or
Notes for conversion.  No adjustment
shall be made for dividends or any shares issued upon conversion of such Note
except as provided in Section 15.5 of the Indenture.


 


Upon due presentment for registration of transfer of this Note at the
office or agency of the Company in the Borough of Manhattan, The City of New
York, a new Note or Notes of authorized denominations for an equal aggregate
principal amount will be issued to the transferee in exchange thereof, subject
to the limitations provided in the Indenture, without charge except for any
tax, assessments or other governmental charge imposed in connection therewith.


 


The Company, the Trustee, any authenticating agent, any paying agent,
any conversion agent and any Note registrar may deem and treat the registered
holder hereof as the absolute owner of this Note (whether or not this Note
shall be overdue and notwithstanding any notation of ownership or other writing
hereon), for the purpose of receiving payment hereof, or on account hereof, for
the conversion hereof and for all other purposes, and neither the Company nor
the Trustee nor any other authenticating agent nor any paying agent nor any
other conversion agent nor any Note registrar shall be affected by any notice
to the contrary.  Notwithstanding the
foregoing, the Indenture


 


A-8

















 


provides that owners of beneficial interests in a Global Note may
directly enforce against the Company such owners’ right to exchange such
beneficial interest for Notes in certificated form. All payments made to or
upon the order of such registered holder shall, to the extent of the sum or
sums paid, satisfy and discharge liability for monies payable on this Note.


 


No recourse for the payment of the principal of or any premium or
Liquidated Damages on this Note, or for any claim based hereon or otherwise in
respect hereof, and no recourse under or upon any obligation, covenant or
agreement of the Company in the Indenture or any indenture supplemental thereto
or in any Note, or because of the creation of any indebtedness represented
thereby, shall be had against any incorporator, stockholder, employee, agent,
officer, director or subsidiary, as such, past, present or future, of the
Company or of any successor corporation, either directly or through the Company
or any successor corporation, whether by virtue of any constitution, statute or
rule of law or by the enforcement of any assessment or penalty or otherwise,
all such liability being, by the acceptance hereof and as part of the
consideration for the issue hereof, expressly waived and released.


 


Terms used in this Note and defined in the Indenture are used herein as
therein defined.


 


A-9

















 


ABBREVIATIONS


 


The
following abbreviations, when used in the inscription of the face of this Note,
shall be construed as though they were written out in full according to
applicable laws or regulations:


 


	
  TEN COM - as tenants in common

  	
  UNIF GIFT MIN ACT –

  
	
   

  	
   

  
	
   

  	
   

  	
  Custodian

  
	
   

  	
  (Cust)

  
	
   

  	
   

  
	
  TEN ENT - as tenants by the entireties

  	
   

  	
   

  
	
   

  	
  (Minor)

  
	
   

  	
   

  
	
  JT TEN  - as joint tenants
  with right of

  	
   

  
	
  survivorship and not as tenants in common

  	
  Uniform Gifts to Minors Act

  	
   

  
	
   

  	
  (State)

  
				



 


Additional abbreviations may also be used
though not in the above list.


 


A-10

















 


[FORM OF CONVERSION NOTICE]


 


To:  Sepracor Inc.


 


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


 


	
  Dated: 

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Signature(s)

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Signature Guarantee

  	
   

  



 


Signature(s) must be guaranteed by an eligible Guarantor Institution
(banks, stock brokers, savings and loan associations and credit unions) with
membership in an approved signature guarantee medallion program pursuant to
Securities and Exchange Commission Rule 17Ad-15 if shares of Common Stock are
to be issued, or Notes to be delivered, other than to and in the name of the
registered holder.


 


A-11

















 


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


 


	
   

  	
   

  	
   

  
	
  (Name)

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (Street Address)

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (City, State and Zip
  Code)

  	
   

  
	
   

  	
   

  
	
  Please print name and
  address

  	
   

  
	
   

  	
   

  
	
   

  	
  Principal amount to be
  converted (if less than all): 
  $           ,000

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Social Security or
  Other Taxpayer Identification Number

  
				



 


A-12

















 


[FORM OF OPTION TO ELECT REPAYMENT


 


UPON A DESIGNATED EVENT]


 


To: Sepracor Inc.


 


The undersigned registered owner of this Note hereby acknowledges
receipt of a notice from Sepracor Inc. (the “Company”) as to the occurrence of
a Designated Event with respect to the Company and requests and instructs the
Company to repay the entire principal amount of this Note, or the portion
thereof (which is $1,000 principal amount or an integral multiple thereof)
below designated, in accordance with the terms of the Indenture referred to in
this Note, together with accrued Liquidated Damages to, but excluding, such
date, to the registered holder hereof.


 


	
  Dated: 

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Signature(s)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Social Security or Other Taxpayer

  
	
   

  	
  Identification Number

  
	
   

  	
   

  
	
   

  	
  Principal amount to be repaid (if less than all): 
  $         ,000

  
	
   

  	
   

  
	
   

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

  



 


A-13

















 


[FORM OF ASSIGNMENT AND TRANSFER]


 


For value received
                                                    
hereby sell(s), assign(s) and transfer(s) unto
                             
(Please insert social security or Taxpayer Identification Number of assignee)
the within Note, and hereby irrevocably constitutes and appoints
                                                    
attorney to transfer the said Note on the books of the Company, with full power
of substitution in the premises.


 


In connection with any transfer of the within Note occurring prior to
the Resale Restriction Termination Date, as defined in the Indenture governing
such Note (unless such Note is being transferred pursuant to a registration
statement that has been declared effective under the Securities Act), the
undersigned confirms that such Note is being transferred:


 


o                                    *To
Sepracor Inc. or a subsidiary thereof; or


 


o                                    *Pursuant
to and in compliance with Rule 144A under the Securities Act of 1933, as
amended; or


 


o                                    *Pursuant
to and in compliance with Rule 144 under the Securities Act of 1933, as
amended;


 


and unless the box below is checked, the undersigned confirms that such
Note is not being transferred to an “affiliate” of the Company as defined in
Rule 144 under the Securities Act of 1933, as amended (an “Affiliate”):


 


o                                    *The
transferee is an Affiliate of the Company.


 


A-14

















 


	
  Dated: 

  	
   

  	
   

  
	
   

  
	
   

  	
   

  
	
   

  
	
   

  	
   

  
	
  Signature(s)

  
	
   

  
	
   

  	
   

  
	
  Signature Guarantee

  
				



 


Signature(s) must be guaranteed by an eligible Guarantor Institution
(banks, stock brokers, savings and loan associations and credit unions) with
membership in an approved signature guarantee medallion program pursuant to
Securities and Exchange Commission Rule 17Ad-15 if shares of Common Stock are
to be issued, or Notes to be delivered, other than to and in the name of the
registered holder.


 


NOTICE:  The signature on the
conversion notice, the option to elect repurchase upon a Designated Event or
the assignment must correspond with the name as written upon the face of the
Note in every particular without alteration or enlargement or any change
whatever.


 


A-15

















 


EXHIBIT B


[FORM OF FACE OF SERIES B
NOTE]


 


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.


 


THIS SECURITY AND THE SHARES OF SEPRACOR INC. (THE ‘‘COMPANY’’) COMMON
STOCK (‘‘COMMON STOCK’’) ISSUABLE UPON CONVERSION OF THIS SECURITY HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE ‘‘SECURITIES
ACT’’), OR ANY STATE SECURITIES LAWS. NEITHER THIS SECURITY, THE SHARES OF
COMMON STOCK ISSUABLE UPON CONVERSION OF THIS SECURITY NOR ANY INTEREST OR
PARTICIPATION HEREIN OR THEREIN MAY BE REOFFERED, SOLD, ASSIGNED,
TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF
SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO,
REGISTRATION.


 


THE HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF, AGREES TO OFFER,
SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE ‘‘RESALE
RESTRICTION TERMINATION DATE’’) THAT IS TWO YEARS AFTER THE LATER OF THE
ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY
AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF
SUCH SECURITY) ONLY (A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, (B) FOR SO LONG
AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON IT
REASONABLY BELIEVES IS A ‘‘QUALIFIED INSTITUTIONAL BUYER’’ AS DEFINED IN RULE
144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHICH NOTICE IS GIVEN THAT THE
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (C) PURSUANT TO A REGISTRATION
STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, OR (D)
PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS


 


1

















 


OF THE SECURITIES ACT, SUBJECT TO THE RIGHTS OF THE COMPANY AND THE
TRUSTEE PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (D) TO
REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER
INFORMATION SATISFACTORY TO EACH OF THEM, AND IN EACH OF THE FOREGOING CASES
WHERE REGISTRATION OR TRANSFER OF THIS SECURITY IS REQUIRED, A CERTIFICATE OF
TRANSFER IN THE FORM APPEARING ON THE OTHER SIDE OF THIS SECURITY COMPLETED AND
DELIVERED BY THE TRANSFEROR TO THE TRUSTEE. THIS LEGEND WILL BE REMOVED AFTER
THE RESALE RESTRICTION TERMINATION DATE UPON THE REQUEST OF THE HOLDER AND THE
DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATES AND/OR OTHER INFORMATION
SATISFACTORY TO THE COMPANY.


 


2

















 


SEPRACOR INC.


 


0% Series B Convertible Senior Subordinated
Notes due 2010


 


	
  No. 1

  	
  $400,000,000

  



 


CUSIP No. 817315AS3


 


Sepracor Inc., a
corporation duly organized and validly existing under the laws of the State of
Delaware (herein called the “Company”, which term includes any successor
corporation under the Indenture referred to on the reverse hereof), for value
received hereby promises to pay to CEDE & CO., or registered assigns, the
principal sum of Four Hundred Million Dollars (which amount may from time to
time be increased or decreased to such other principal amounts (which, taken
together with the principal amounts of all other outstanding Notes, shall not
exceed $400,000,000 in aggregate at any time (or $500,000,000 if the option set
forth in the Purchase Agreement is exercised in full by the Initial
Purchasers)) by adjustments made on the records of the Trustee, as Custodian of
the Depositary, in accordance with the rules and procedures of the Depositary)
on December 15, 2010, and Liquidated Damages in the manner, at the rates
and to the persons set forth in the Registration Rights Agreement.


 


Payment of the
principal of and Liquidated Damages accrued on this Note shall be made at the
office or agency of the Company maintained for that purpose in the Borough of
Manhattan, The City of New York, or, at the option of the holder of this Note,
at the Corporate Trust Office, in such lawful money of the United States of
America as at the time of payment shall be legal tender for the payment of
public and private debts; provided, however, Liquidated Damages may be
paid by check mailed to your address as it appears in the Note register; provided
further, however, that, with respect to any holder of Notes with an
aggregate principal amount equal to or in excess of $2,000,000, at the request
of such holder in writing to the Company, Liquidated Damages on such holder’s
Notes shall be paid by wire transfer in immediately available funds in
accordance with the written wire transfer instruction supplied by such holder
from time to time to the Trustee and paying agent (if different from the
Trustee) at least two days prior to the applicable record date; provided that
any payment to the Depositary or its nominee shall be paid by wire transfer in
immediately available funds in accordance with the wire transfer instruction
supplied by the Depositary or its nominee from time to time to the Trustee and
paying agent (if different from Trustee) at least two days prior to the
applicable record date.


 


Reference is made to the further provisions of this Note set forth on
the reverse hereof, including, without limitation, provisions subordinating the
payment of principal of and premium, if any, and Liquidated Damages on this
Note to the prior payment in full of all Senior


 


3

















 


Obligations as defined in the Indenture and provisions giving the
holder of this Note the right to convert this Note into Common Stock of the
Company on the terms and subject to the limitations referred to on the reverse
hereof and as more fully specified in the Indenture.  Such further provisions shall for all purposes have the same
effect as though fully set forth at this place.


 


This Note shall be deemed to be a contract made under the laws of the
State of New York, and for all purposes shall be construed in accordance with
and governed by the laws of said State (without regard to the conflicts of laws
provisions thereof).


 


This Note shall not be valid or become obligatory for any purpose until
the certificate of authentication hereon shall have been manually signed by the
Trustee or a duly authorized authenticating agent under the Indenture.


 


[Remainder of page
intentionally left blank]


 


4

















 


IN WITNESS WHEREOF, the Company has caused this Note to be duly
executed.


 


	
   

  	
  SEPRACOR INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
  Attest:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:

  	
   

  
	
  Title:

  	
   

  
	
   

  	
   

  
	
  Dated: December 12, 2003

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  TRUSTEE’S CERTIFICATE OF AUTHENTICATION

  	
   

  
	
   

  	
   

  
	
  JPMORGAN CHASE BANK,

  as Trustee, certifies that this is one of the Notes described

  in the within-named Indenture.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
  Authorized Signatory

  	
   

  
						



 


B-1

















 


[FORM OF REVERSE OF
SERIES B NOTE]


 


SEPRACOR INC.


 


0% Series B Convertible Senior Subordinated
Notes due 2010


 


This Note is one of a duly authorized issue of Notes of the Company,
designated as its 0% Series B Convertible Senior Subordinated Notes due 2010
(herein called the “Notes”), limited to the aggregate principal amount of
$400,000,000 (or $500,000,000 if the option set forth in the Purchase Agreement
is exercised in full by the Initial Purchasers) all issued or to be issued
under and pursuant to an Indenture dated as of 
December 12, 2003  (herein
called the “Indenture”), between the Company and JPMorgan Chase Bank, (herein
called the “Trustee”), to which Indenture and all indentures supplemental
thereto reference is hereby made for a description of the rights, limitations
of rights, obligations, duties and immunities thereunder of the Trustee, the
Company and the holders of the Notes. 
Additional Notes may be issued in an unlimited aggregate principal
amount, subject to certain conditions specified in the Indenture.


 


In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of, premium, if any, and accrued
Liquidated Damages, if any, on all Notes may be declared, and upon said
declaration shall become, due and payable, in the manner, with the effect and
subject to the conditions provided in the Indenture.


 


The Indenture
contains provisions permitting the Company and the Trustee in certain
circumstances, without the consent of the holders of the Notes, and in other
circumstances, with the consent of the holders of not less than a majority in
aggregate principal amount of the Notes at the time outstanding, evidenced as
in the Indenture provided, to execute supplemental indentures adding any
provisions to or changing in any manner or eliminating any of the provisions of
the Indenture or of any supplemental indenture or modifying in any manner the
rights of the holders of the Notes; provided, however, that no such
supplemental indenture shall (i) extend the fixed maturity of any Note, or
reduce the rate or extend the time of payment of Liquidated Damages thereon, or
reduce the principal amount thereof or premium, if any, thereon, or reduce any
amount payable on repurchase thereof, impair, or change in any respect adverse
to the holder of Notes, the obligation of the Company to repurchase any Note at
the option of the holder upon the happening of a Designated Event, or impair or
adversely affect the right of any Noteholder to institute suit for the payment
thereof, or change the currency in which the Notes are payable, or impair or
change in any respect adverse to the Noteholders the right to convert the Notes
into Common Stock or any other property receivable upon conversion subject to
the terms set forth in the Indenture, or modify the provisions of the Indenture
with respect to the subordination of the Notes in a manner adverse to the
Noteholders, reduce the quorum or voting requirements under the Indenture with
respect to the Notes, subject to certain exceptions, modify certain provisions
of the Indenture relating to these modification provisions, in each case
without the consent of the holder of each Note so affected, or


 


B-2

















 


(ii) reduce the aforesaid percentage of Notes, the holders of which are
required to consent to any such supplemental indenture, without the consent of
the holders of all Notes then outstanding. 
It is also provided in the Indenture that, prior to any declaration
accelerating the maturity of the Notes, the holders of a majority in aggregate
principal amount of the Notes at the time outstanding may on behalf of the
holders of all of the Notes waive any past default or Event of Default under
the Indenture and its consequences except (i) a default in the payment of
Liquidated Damages or premium, if any, on, or the principal of, the Notes when
due which default has not been cured, (ii) a failure by the Company to convert
any Notes into Common Stock or (iii) a default in respect of a covenant or provisions
of the Indenture which under Article XI of the Indenture cannot be
modified or amended without the consent of the holders of all Notes then
outstanding.  Any such consent or waiver
by the holder of this Note (unless revoked as provided in the Indenture) shall
be conclusive and binding upon such holder and upon all future holders and
owners of this Note and any Notes which may be issued in exchange or
substitution hereof, irrespective of whether or not any notation thereof is
made upon this Note or such other Notes.


 


The indebtedness evidenced by the Notes is, to the extent and in the
manner provided in the Indenture, expressly subordinate and subject in right of
payment to the prior payment in full in cash or other payment satisfactory to
the holders of Senior Obligations of all Senior Obligations of the Company, as
defined in the Indenture, whether outstanding at the date of the Indenture or
thereafter incurred, and this Note is issued subject to the provisions of the
Indenture with respect to such subordination. 
Each holder of this Note, by accepting the same, agrees to and shall be
bound by such provisions and authorizes the Trustee on his behalf to take such
action as may be necessary or appropriate to effectuate the subordination so
provided and appoints the Trustee his attorney in fact for such purpose.


 


No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of, premium, if any, and
Liquidated Damages on this Note at the place, at the respective times, at the
rate and in the lawful money herein prescribed.


 


The Notes are issuable in registered form without coupons in
denominations of $1,000 principal amount and integral multiples thereof.  At the office or agency of the Company
referred to on the face hereof, and in the manner and subject to the
limitations provided in the Indenture, without payment of any service charge
but with payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any registration or exchange of
Notes, Notes may be exchanged for a like aggregate principal amount of Notes of
other authorized denominations.


 


The Notes will not be redeemable by the Company.


 


The Notes are not subject to redemption through the operation of any
sinking fund.


 


B-3

















 


Upon the occurrence of a “Designated Event,” the Noteholder has the
right, at such holder’s option, to require the Company to repurchase all of
such holder’s Notes or any portion thereof (in principal amounts of $1,000 or
integral multiples thereof) on the Designated Event Purchase Date at a price
equal to 100% of the principal amount of the Notes such holder elects to
require the Company to repurchase, together with accrued and unpaid Liquidated
Damages, if any, to but excluding the date fixed for repurchase.  The Company or, at the written request of
the Company, the Trustee shall mail to all holders of record of the Notes a
notice of the occurrence of a Designated Event and of the repurchase right
arising as a result thereof on or before the tenth calendar day after the
occurrence of such Designated Event.


 


Subject to the provisions of the Indenture, the holder hereof has the
right, at its option, at any time following the date of original issuance of
the Notes and prior to the close of business on December 15, 2010, to
convert the principal hereof or any portion of such principal which is $1,000
or an integral multiple thereof, into that number of fully paid and
non-assessable shares of Company’s Common Stock, as said shares shall be
constituted at the date of conversion, at the Conversion Rate, as adjusted from
time to time as provided in the Indenture, for each $1,000 principal amount of
Notes so converted, upon surrender of this Note, together with a conversion
notice as provided in the Indenture and this Note, to the Company at the office
or agency of the Company maintained for that purpose in the Borough of
Manhattan, The City of New York, or at the option of such holder, the Corporate
Trust Office, and, unless the shares issuable on conversion are to be issued in
the same name as this Note, duly endorsed by, or accompanied by instruments of
transfer in form satisfactory to the Company duly executed by, the holder or by
his duly authorized attorney.  The
initial Conversion Rate shall be 33.5175 shares for each $1,000 principal
amount of Notes. No fractional shares of Common Stock will be issued upon any
conversion, but an adjustment in cash will be paid to the holder, as provided
in the Indenture, in respect of any fraction of a share which would otherwise
be issuable upon the surrender of any Note or Notes for conversion.  No adjustment shall be made for dividends or
any shares issued upon conversion of such Note except as provided in
Section 15.5 of the Indenture.


 


Upon due presentment for registration of transfer of this Note at the
office or agency of the Company in the Borough of Manhattan, The City of New
York, a new Note or Notes of authorized denominations for an equal aggregate
principal amount will be issued to the transferee in exchange thereof, subject
to the limitations provided in the Indenture, without charge except for any
tax, assessments or other governmental charge imposed in connection therewith.


 


The Company, the Trustee, any authenticating agent, any paying agent,
any conversion agent and any Note registrar may deem and treat the registered
holder hereof as the absolute owner of this Note (whether or not this Note
shall be overdue and notwithstanding any notation of ownership or other writing
hereon), for the purpose of receiving payment hereof, or on account hereof, for
the conversion hereof and for all other purposes, and neither the Company nor
the Trustee nor any other authenticating agent nor any paying agent nor any
other conversion agent nor any Note registrar shall be affected by any notice
to the contrary.  Notwithstanding the
foregoing, the Indenture


 


B-4

















 


provides that owners of beneficial interests in a Global Note may
directly enforce against the Company such owners’ right to exchange such
beneficial interest for Notes in certificated form. All payments made to or
upon the order of such registered holder shall, to the extent of the sum or
sums paid, satisfy and discharge liability for monies payable on this Note.


 


No recourse for the payment of the principal of or any premium or
Liquidated Damages on this Note, or for any claim based hereon or otherwise in
respect hereof, and no recourse under or upon any obligation, covenant or
agreement of the Company in the Indenture or any indenture supplemental thereto
or in any Note, or because of the creation of any indebtedness represented
thereby, shall be had against any incorporator, stockholder, employee, agent,
officer, director or subsidiary, as such, past, present or future, of the
Company or of any successor corporation, either directly or through the Company
or any successor corporation, whether by virtue of any constitution, statute or
rule of law or by the enforcement of any assessment or penalty or otherwise,
all such liability being, by the acceptance hereof and as part of the
consideration for the issue hereof, expressly waived and released.


 


Terms used in this Note and defined in the Indenture are used herein as
therein defined.


 


B-5

















 


ABBREVIATIONS


 


The
following abbreviations, when used in the inscription of the face of this Note,
shall be construed as though they were written out in full according to
applicable laws or regulations:


 


	
  TEN COM - as tenants in common

  	
  UNIF GIFT MIN ACT –

  
	
   

  	
   

  
	
   

  	
   

  	
  Custodian

  
	
   

  	
  (Cust)

  
	
   

  	
   

  
	
  TEN ENT - as tenants by the entireties

  	
   

  	
   

  
	
   

  	
  (Minor)

  
	
   

  	
   

  
	
  JT TEN  - as joint tenants
  with right of

  	
   

  
	
  survivorship and not as tenants in common

  	
  Uniform Gifts to Minors Act

  	
   

  
	
   

  	
  (State)

  
				



 


Additional abbreviations may also be used
though not in the above list.


 


B-6

















 


[FORM OF CONVERSION NOTICE]


 


To:  Sepracor Inc.


 


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


 


	
  Dated: 

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Signature(s)

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Signature Guarantee

  	
   

  
							



 


Signature(s) must be guaranteed
by an eligible Guarantor Institution (banks, stock brokers, savings and loan
associations and credit unions) with membership in an approved signature
guarantee medallion program pursuant to Securities and Exchange Commission
Rule 17Ad-15 if shares of Common Stock are to be issued, or Notes to be
delivered, other than to and in the name of the registered holder.


 


B-7

















 


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


 


	
   

  	
   

  	
   

  
	
  (Name)

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (Street Address)

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (City, State and Zip
  Code)

  	
   

  
	
   

  	
   

  
	
  Please print name and
  address

  	
   

  
	
   

  	
   

  
	
   

  	
  Principal amount to be
  converted (if less than all): 
  $           ,000

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Social Security or
  Other Taxpayer Identification Number

  
				



 


B-8

















 


[FORM OF OPTION TO ELECT REPAYMENT


 


UPON A DESIGNATED EVENT]


 


To: Sepracor Inc.


 


The undersigned registered owner of this Note hereby acknowledges
receipt of a notice from Sepracor Inc. (the “Company”) as to the occurrence of
a Designated Event with respect to the Company and requests and instructs the
Company to repay the entire principal amount of this Note, or the portion thereof
(which is $1,000 principal amount or an integral multiple thereof) below
designated, in accordance with the terms of the Indenture referred to in this
Note, together with accrued Liquidated Damages to, but excluding, such date, to
the registered holder hereof.


 


	
  Dated: 

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Signature(s)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Social Security or Other Taxpayer Identification
  Number

  
	
   

  	
   

  
	
   

  	
  Principal amount to be repaid (if less than all): 
  $         ,000

  
	
   

  	
   

  
	
   

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

  



 


B-9

















 


[FORM OF ASSIGNMENT AND TRANSFER]


 


For value received
                                              
hereby sell(s), assign(s) and transfer(s) unto
                            
(Please insert social security or Taxpayer Identification Number of assignee)
the within Note, and hereby irrevocably constitutes and appoints
                                        
attorney to transfer the said Note on the books of the Company, with full power
of substitution in the premises.


 


In connection with any transfer of the within Note occurring within two
years (or such other holding period required under Rule 144(k) of the
Securities Act) of the original issuance of such Note (unless such Note is
being transferred pursuant to a registration statement that has been declared
effective under the Securities Act), the undersigned confirms that such Note is
being transferred:


 


o                                    *To
Sepracor Inc. or a subsidiary thereof; or


 


o                                    *Pursuant
to and in compliance with Rule 144A under the Securities Act of 1933, as
amended; or


 


o                                    *Pursuant
to and in compliance with Rule 144 under the Securities Act of 1933, as
amended;


 


and unless the box below is checked, the undersigned confirms that such
Note is not being transferred to an “affiliate” of the Company as defined in
Rule 144 under the Securities Act of 1933, as amended (an “Affiliate”):


 


o                                    *The
transferee is an Affiliate of the Company.


 


B-10

















 


	
  Dated: 

  	
   

  	
   

  
	
   

  
	
   

  	
   

  
	
   

  
	
   

  	
   

  
	
  Signature(s)

  
	
   

  
	
   

  	
   

  
	
  Signature Guarantee

  
				



 


Signature(s) must be guaranteed by an eligible Guarantor Institution
(banks, stock brokers, savings and loan associations and credit unions) with
membership in an approved signature guarantee medallion program pursuant to
Securities and Exchange Commission Rule 17Ad-15 if shares of Common Stock are
to be issued, or Notes to be delivered, other than to and in the name of the
registered holder.


 


NOTICE:  The signature on the
conversion notice, the option to elect repurchase upon a Designated Event or
the assignment must correspond with the name as written upon the face of the
Note in every particular without alteration or enlargement or any change
whatever.


 


B-11