Exhibit 4.9


 


EXECUTION COPY


 


QUANEX CORPORATION,


 


as Issuer


 












 


UNION BANK OF CALIFORNIA, N.A.,


 


 


as Trustee


 












 


UP TO $125,000,000 AGGREGATE PRINCIPAL AMOUNT
OF


 


2.50% CONVERTIBLE SENIOR DEBENTURES DUE MAY
15, 2034


 












 


INDENTURE


 


 


DATED AS OF MAY 5, 2004


 

















 


TABLE OF CONTENTS


 


	
  ARTICLE 1. DEFINITIONS AND INCORPORATION BY REFERENCE

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 1.1.

  	
  Definitions

  	
   

  
	
  Section 1.2.

  	
  Other Definitions

  	
   

  
	
  Section 1.3.

  	
  Trust Indenture Act Provisions

  	
   

  
	
  Section 1.4.

  	
  Rules of Construction

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 2. THE SECURITIES

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 2.1.

  	
  Form and Dating

  	
   

  
	
  Section 2.2.

  	
  Execution and Authentication

  	
   

  
	
  Section 2.3.

  	
  Registrar, Paying Agent, Conversion Agent
  and Bid Solicitation Agent

  	
   

  
	
  Section 2.4.

  	
  Paying Agent to Hold Money and Securities
  in Trust

  	
   

  
	
  Section 2.5.

  	
  Securityholder Lists

  	
   

  
	
  Section 2.6.

  	
  Transfer and Exchange

  	
   

  
	
  Section 2.7.

  	
  Replacement Securities

  	
   

  
	
  Section 2.8.

  	
  Outstanding Securities

  	
   

  
	
  Section 2.9.

  	
  Treasury Securities

  	
   

  
	
  Section 2.10.

  	
  Temporary Securities

  	
   

  
	
  Section 2.11.

  	
  Cancellation

  	
   

  
	
  Section 2.12.

  	
  Legend; Additional Transfer and Exchange
  Requirements

  	
   

  
	
  Section 2.13.

  	
  CUSIP Numbers

  	
   

  
	
  Section 2.14.

  	
  Ranking

  	
   

  
	
  Section 2.15.

  	
  Persons Deemed Owners

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 3. REDEMPTION

  	
   

  
	
   

  	
   

  
	
  Section 3.1.

  	
  The Company’s Right to Redeem; Notice to
  Trustee

  	
   

  
	
  Section 3.2.

  	
  Selection of Securities to be Redeemed

  	
   

  
	
  Section 3.3.

  	
  Notice of Redemption

  	
   

  
	
  Section 3.4.

  	
  Effect of Notice of Redemption

  	
   

  
	
  Section 3.5.

  	
  Deposit of Redemption Price

  	
   

  
	
  Section 3.6.

  	
  Securities Redeemed in Part

  	
   

  
	
  Section 3.7.

  	
  Repayment to the Company

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 4. OPTIONAL PUT

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 4.1.

  	
  Optional Put

  	
   

  
	
  Section 4.2.

  	
  Effect of Purchase Notice.

  	
   

  
	
  Section 4.3.

  	
  Deposit of Purchase Price.

  	
   

  
	
  Section 4.4.

  	
  Securities Purchased in Part.

  	
   

  
	
  Section 4.5.

  	
  Repayment to the Company.

  	
   

  
	
  Section 4.6.

  	
  Compliance with Securities Laws Upon
  Purchase of Securities

  	
   

  



 


i

















 


	
  ARTICLE 5. PUT OPTION UPON FUNDAMENTAL
  CHANGE

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 5.1.

  	
  Purchase of Securities at Option of the
  Holder Upon a Fundamental Change

  	
   

  
	
  Section 5.2.

  	
  Effect of Fundamental Change Purchase
  Notice

  	
   

  
	
  Section 5.3.

  	
  Deposit of Fundamental Change Purchase
  Price

  	
   

  
	
  Section 5.4.

  	
  Securities Purchased in Part

  	
   

  
	
  Section 5.5.

  	
  Repayment to the Company

  	
   

  
	
  Section 5.6.

  	
  Compliance with Securities Laws Upon
  Purchase of Securities

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 6. CONVERSION

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 6.1.

  	
  Conversion Privilege

  	
   

  
	
  Section 6.2.

  	
  Conversion Procedures

  	
   

  
	
  Section 6.3.

  	
  Taxes on Conversion

  	
   

  
	
  Section 6.4.

  	
  Company to Provide Stock

  	
   

  
	
  Section 6.5.

  	
  Adjustment of Conversion Rate

  	
   

  
	
  Section 6.6.

  	
  No Adjustment

  	
   

  
	
  Section 6.7.

  	
  Notice of Adjustment

  	
   

  
	
  Section 6.8.

  	
  Notice of Certain Transactions

  	
   

  
	
  Section 6.9.

  	
  Effect of Reclassification, Consolidation,
  Merger or Sale on Conversion Privilege

  	
   

  
	
  Section 6.10.

  	
  Trustee’s Disclaimer

  	
   

  
	
  Section 6.11.

  	
  Voluntary Increase

  	
   

  
	
  Section 6.12.

  	
  Conversion After Record Date

  	
   

  
	
  Section 6.13.

  	
  Option to Satisfy Conversion Obligation
  with Cash, Common Stock or Combination Thereof

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 7. CONTINGENT INTEREST

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 7.1.

  	
  Contingent Interest

  	
   

  
	
  Section 7.2.

  	
  Payment of Contingent Interest; Contingent
  Interest Rights Preserved

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 8. COVENANTS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 8.1.

  	
  Payment of Securities

  	
   

  
	
  Section 8.2.

  	
  SEC Reports

  	
   

  
	
  Section 8.3.

  	
  Compliance Certificates

  	
   

  
	
  Section 8.4.

  	
  Further Instruments and Acts

  	
   

  
	
  Section 8.5.

  	
  Maintenance of Corporate Existence

  	
   

  
	
  Section 8.6.

  	
  Rule 144A Information Requirement

  	
   

  
	
  Section 8.7.

  	
  Stay, Extension and Usury Laws

  	
   

  
	
  Section 8.8.

  	
  Maintenance of Office or Agency of the Trustee,
  Regstrar, Paying Agent and Conversion Agent

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 9. CONSOLIDATION, MERGER,
  CONVEYANCE, TRANSFER OR LEASE

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 9.1.

  	
  Company May Consolidate, Etc, Only on
  Certain Terms

  	
   

  



 


ii

















 


	
  Section 9.2.

  	
  Successor Substituted

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 10. DEFAULT AND REMEDIES

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 10.1.

  	
  Events of Default

  	
   

  
	
  Section 10.2.

  	
  Acceleration

  	
   

  
	
  Section 10.3.

  	
  Other Remedies

  	
   

  
	
  Section 10.4.

  	
  Waiver of Defaults and Events of Default

  	
   

  
	
  Section 10.5.

  	
  Control by Majority

  	
   

  
	
  Section 10.6.

  	
  Limitations on Suits

  	
   

  
	
  Section 10.7.

  	
  Rights of Holders to Receive Payment and to
  Convert

  	
   

  
	
  Section 10.8.

  	
  Collection Suit by Trustee

  	
   

  
	
  Section 10.9.

  	
  Trustee May File Proofs of Claim

  	
   

  
	
  Section 10.10.

  	
  Priorities

  	
   

  
	
  Section 10.11.

  	
  Undertaking for Costs

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 11. TRUSTEE

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 11.1.

  	
  Duties of Trustee

  	
   

  
	
  Section 11.2.

  	
  Rights of Trustee

  	
   

  
	
  Section 11.3.

  	
  Individual Rights of Trustee

  	
   

  
	
  Section 11.4.

  	
  Trustee’s Disclaimer

  	
   

  
	
  Section 11.5.

  	
  Notice of Default or Events of Default

  	
   

  
	
  Section 11.6.

  	
  Reports by Trustee to Holders

  	
   

  
	
  Section 11.7.

  	
  Compensation and Indemnity

  	
   

  
	
  Section 11.8.

  	
  Replacement of Trustee

  	
   

  
	
  Section 11.9.

  	
  Successor Trustee by Merger, Etc.

  	
   

  
	
  Section 11.10.

  	
  Eligibility; Disqualification

  	
   

  
	
  Section 11.11.

  	
  Preferential Collection of Claims Against
  Company

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 12. AMENDMENTS, SUPPLEMENTS
  AND WAIVERS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 12.1.

  	
  Without Consent of Holders

  	
   

  
	
  Section 12.2.

  	
  With Consent of Holders

  	
   

  
	
  Section 12.3.

  	
  Compliance with Trust Indenture Act

  	
   

  
	
  Section 12.4.

  	
  Revocation and Effect of Consents

  	
   

  
	
  Section 12.5.

  	
  Notation on or Exchange of Securities

  	
   

  
	
  Section 12.6.

  	
  Trustee to Sign Amendments, Etc.

  	
   

  
	
  Section 12.7.

  	
  Effect of Supplemental Indentures

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 13. TAX TREATMENT

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 14. SATISFACTION AND DISCHARGE

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 14.1.

  	
  Satisfaction and Discharge of the Indenture

  	
   

  
	
  Section 14.2.

  	
  Repayment to the Company

  	
   

  



 


iii

















 


	
  ARTICLE 15. MISCELLANEOUS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 15.1.

  	
  Trust Indenture Act Controls

  	
   

  
	
  Section 15.2.

  	
  Notices

  	
   

  
	
  Section 15.3.

  	
  Communications by Holders with Other
  Holders

  	
   

  
	
  Section 15.4.

  	
  Certificate and Opinion as to Conditions
  Precedent

  	
   

  
	
  Section 15.5.

  	
  Record Date for Vote or Consent of
  Securityholders

  	
   

  
	
  Section 15.6.

  	
  Rules by Trustee, Paying Agent, Registrar
  and Conversion Agent

  	
   

  
	
  Section 15.7.

  	
  Legal Holidays

  	
   

  
	
  Section 15.8.

  	
  Governing Law

  	
   

  
	
  Section 15.9.

  	
  No Adverse Interpretation of Other
  Agreements

  	
   

  
	
  Section 15.10.

  	
  No Recourse Against Others

  	
   

  
	
  Section 15.11.

  	
  Successors

  	
   

  
	
  Section 15.12.

  	
  Multiple Counterparts

  	
   

  
	
  Section 15.13.

  	
  Separability

  	
   

  
	
  Section 15.14.

  	
  Table of Contents, Headings, Etc.

  	
   

  



 


	
  EXHIBIT A

  	
   

  	
  FORM OF SECURITY

  
	
  EXHIBIT B

  	
   

  	
  CERTIFICATE TO BE DELIVERED UPON EXCHANGE
  OR REGISTRATION OF TRANSFER OF RESTRICTED SECURITIES

  



 


iv

















 


CROSS-REFERENCE TABLE*


 


	
  TIA INDENTURE SECTION

  	
   

  	
  SECTION

  
	
  Section 310(a)(1)

  	
   

  	
  11.10

  
	
  (a)(2)

  	
   

  	
  11.10

  
	
  (a)(3)

  	
   

  	
  N.A.**

  
	
  (a)(4)

  	
   

  	
  N.A.

  
	
  (a)(5)

  	
   

  	
  11.10

  
	
  (b)

  	
   

  	
  11.8; 11.10

  
	
  (c)

  	
   

  	
  N.A.

  
	
  Section 311(a)

  	
   

  	
  11.11

  
	
  (b)

  	
   

  	
  11.11

  
	
  (c)

  	
   

  	
  N.A.

  
	
  Section 312(a)

  	
   

  	
  2.5

  
	
  (b)

  	
   

  	
  15.3

  
	
  (c)

  	
   

  	
  15.3

  
	
  Section 313(a)

  	
   

  	
  11

  
	
  (b)(1)

  	
   

  	
  N.A.

  
	
  (b)(2)

  	
   

  	
  11

  
	
  (c)

  	
   

  	
  11.1, 15.2

  
	
  (d)

  	
   

  	
  11.6

  
	
  Section 314(a)

  	
   

  	
  8.2; 8.3;
  2.2

  
	
  (b)

  	
   

  	
  N.A.

  
	
  (c)(1)

  	
   

  	
  15.4(a)

  
	
  (c)(2)

  	
   

  	
  15.4(a)

  
	
  (c)(3)

  	
   

  	
  N.A.

  
	
  (d)

  	
   

  	
  N.A.

  
	
  (e)

  	
   

  	
  15.4(b)

  
	
  (f)

  	
   

  	
  N.A.

  
	
  Section 315(a)

  	
   

  	
  11.1(b)

  
	
  (b)

  	
   

  	
  11.5; 12.2

  
	
  (c)

  	
   

  	
  11.1(a)

  
	
  (d)

  	
   

  	
  11.1(c)

  
	
  (e)

  	
   

  	
  10.11

  
	
  Section 316(a)(last
  sentence)

  	
   

  	
  2.10

  
	
  (a)(1)(A)

  	
   

  	
  10.5

  
	
  (a)(1)(B)

  	
   

  	
  10.4

  
	
  (a)(2)

  	
   

  	
  N.A.

  
	
  (b)

  	
   

  	
  10.7

  
	
  (c)

  	
   

  	
  15.5

  
	
  Section 317(a)(1)

  	
   

  	
  10.8

  
	
  (a)(2)

  	
   

  	
  10.9

  
	
  (b)

  	
   

  	
  2.4

  



 












* Cross-Reference Table shall not, for any purpose, be deemed a part of
this Indenture.


** N.A. means Not Applicable.


 

















 


THIS INDENTURE dated as of May 5, 2004 is between QUANEX CORPORATION, a
Delaware corporation (the “Company”),
and UNION BANK OF CALIFORNIA, N.A., a national banking association, as trustee
(the “Trustee”).


 


In consideration of the premises and the purchase of the Securities by
the Holders thereof, the parties hereto agree as follows for the benefit of the
others and for the equal and ratable benefit of the registered Holders of the
Securities.


 


ARTICLE 1.

DEFINITIONS AND INCORPORATION BY
REFERENCE


 


Section 1.1.                                   Definitions.


 


“Additional Interest” has
the meaning set forth in the Registration Rights Agreement.  All references herein or in the Securities
to interest accrued or payable as of any date shall include, without
duplication, any Additional Interest accrued or payable as of such date as
provided in the Registration Rights Agreement.


 


“Affiliate” of any
specified Person means any other Person directly or indirectly controlling or
controlled by or under direct or indirect common control with such specified
Person. For purposes of this definition, “control” (including, with correlative
meanings, the terms “controlling,” “controlled by” and “under common control with”),
as used with respect to any Person, shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such Person, whether through the ownership of voting securities, by
agreement or otherwise.


 


“Agent” means any
Registrar, Paying Agent, Bid Solicitation Agent or Conversion Agent.


 


“Applicable Procedures”
means, with respect to any transfer or exchange of beneficial ownership
interests in a Global Security, the rules and procedures of the Depositary, in
each case to the extent applicable to such transfer or exchange.


 


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


 


“Business Day” means each
day that is not a Legal Holiday.


 


“Capital Stock” of any
Person means any and all shares, interests, rights to purchase, warrants,
options, participations or other equivalents of or interests in (however
designated) equity of such Person.


 


“cash” means such coin or
currency of the United States as at any time of payment is legal tender for the
payment of public and private debts.


 

















 


“Certificated Security”
means a Security that is in substantially the form attached hereto as Exhibit
A and that does not include the information or the schedule called for
by footnotes 1 and 3 thereof.


 


“Closing Sale Price” of
the Common Stock on any Trading Day means the closing per share sale price (or
if no closing sale price is reported, the average of the bid and ask prices or,
if there is more than one bid or ask price, the average of the average bid and
the average ask prices) on such Trading Day as reported in composite
transactions for the principal U.S. securities exchange on which the Common
Stock is traded or, if the Common Stock is not listed on a U.S. national or
regional securities exchange, as reported by the National Association of
Securities Dealers Automated Quotation system (“Nasdaq”) or, if the Common
Stock is not quoted on Nasdaq, on the principal other market on which such
Common Stock is then traded.


 


“Common Stock” means the
common stock, $.50 par value per share, of the Company as that stock exists on
the date of this Indenture or any other shares of Capital Stock of the Company
into which such Common Stock shall be reclassified or changed.


 


“Company” means the party
named as such in the first paragraph of this Indenture until a successor
replaces it pursuant to the applicable provisions of this Indenture, and
thereafter “Company” shall mean such successor Company.


 


“Contingent Interest”
means all amounts to be paid pursuant to Article 7.  All references herein or in the Securities
to interest accrued or payable as of any date shall include any Contingent
Interest, if any, accrued or payable as of such date.


 


“Conversion
Price”  means, at any time, $1,000 divided by the Conversion Rate in
effect at such time rounded to two decimal places (rounded up if the third
decimal place thereof is 5 or more and otherwise rounded down).


 


“Conversion Rate” means
initially 17.3919 shares of Common Stock per $1,000 principal amount of
Securities, subject to adjustment as set forth herein.


 


“Corporate Trust Office”
means the office of the Trustee at which at any time the trust created by this
Indenture shall be administered, which office at the date of the execution of
this Indenture is located at 475 Sansome Street, 12th Floor, San
Francisco, California 94111, Attention: 
Corporate Trust Department, or at any other time at such other address
as the Trustee may designate from time to time by notice to the Company.


 


“Default” or “default” means, when used with respect to
the Securities, any event which is or, after notice or passage of time or both,
would be an Event of Default.


 


“Excess
Amount” means, with respect to each $1,000 principal amount of a
Security, as of any Conversion Date, a dollar amount equal to the excess, if
any, of (a) the product of (i) the Conversion Rate at such time multiplied by
(ii) the Closing Sale Price on the last Trading Day prior to such Conversion
Date over (b) $1,000.


 


“Exchange Act” means the
United States Securities and Exchange Act of 1934, as amended, and the rules
and regulations promulgated thereunder, as in effect from time to time.


 


2

















 


“Ex-Dividend Date” means,
with respect to any issuance or distribution on shares of Common Stock, the
first Trading Day on which the shares of Common Stock trade “regular way” on
the principal securities market on which the shares of Common Stock are then
traded without the right to receive such issuance or distribution.


 


“Extraordinary Cash Dividend”
means any dividend or other cash distribution payable in respect of the Common
Stock that is not a Regular Cash Dividend.


 


“Final Maturity Date”
means May 15, 2034.


 


“GAAP” means generally
accepted accounting principles set forth in the opinions and pronouncements of
the Accounting Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting
Standards Board or in such other statements by such other entity as have been
approved by a significant segment of the accounting profession, which are in
effect from time to time and consistently applied.


 


“Global Security” means a
permanent Global Security that is in substantially the form attached hereto as Exhibit
A and that includes the information and schedule called for by
footnotes 1 and 3 thereof and which is deposited with the Depositary or its
custodian and registered in the name of the Depositary or its nominee.


 


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


 


“Indebtedness” means, with
respect to any person,


 


(a)                                  all
obligations, contingent or otherwise, of such person (i) for borrowed money
(whether or not the recourse of the lender is to the whole of the assets of
such person or only to a portion thereof), (ii) evidenced by a note, debenture,
bond or written instrument (including a purchase money obligation), (iii) in
respect of leases of such person required, in conformity with GAAP, to be
accounted for as capitalized lease obligations on the balance sheet of such
person; or (iv) in respect of letters of credit (including reimbursement obligations
with respect thereto), local guarantees or bankers’ acceptances;


 


(b)                                 all
obligations secured by a mortgage, pledge, lien, encumbrance, charge or adverse
claim affecting title or resulting in an encumbrance to which the property or
assets of such person are subject and as are reflected as debt on the balance
sheet of such person, whether or not the obligations secured thereby shall have
been assumed by or shall otherwise be such person’s legal liability;


 


(c)                                  all
obligations of such person under interest rate and currency swap agreements,
cap, floor and collar agreements, spot and forward contracts and similar
agreements and arrangements; and


 


(d)                                 all
obligations of others of the type described in clause (a), (b) or (c) above
assumed by or guaranteed in any manner by such person or in effect guaranteed
by such person


 


3

















 


through an
agreement to purchase, contingent or otherwise (and the obligations of such
person under any such assumptions, guarantees or other such arrangements).


 


“Indenture” means this
Indenture as amended or supplemented from time to time pursuant to the terms of
this Indenture, including the provisions of the TIA that are explicitly
incorporated in this Indenture by reference to the TIA.


 


“Initial Purchasers” means
Credit Suisse First Boston LLC, Bear, Stearns & Co. Inc. and the other
initial purchasers named in Schedule A to the Purchase Agreement.


 


“Interest
Payment Date”  has the meaning set forth in the
Securities.


 


“Interest Payment Record Date”
has the meaning set forth in the Securities.


 


“Officer” means, with
respect to any Person, the Chairman of the Board, the Chief Executive Officer,
the President, the Chief Operating Officer, the Chief Financial Officer, the
Treasurer, any Assistant Treasurer, the Controller, the Secretary, Assistant
Secretary or any Vice President of such Person.


 


“Officers’ Certificate”
means a certificate signed by two Officers; provided, however,
that for purposes of Sections 6.11 and 8.3, “Officers’ Certificate” means a
certificate signed by the principal executive officer, principal financial
officer or principal accounting officer of the Company and by one other
Officer.


 


“Opinion of Counsel” means
a written opinion from legal counsel. 
The counsel may be an employee of or counsel to the Company or the
Trustee.


 


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


 


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


 


“Registration Rights Agreement”
means the Registration Rights Agreement, dated as of May 5, 2004, among the
Company and the Initial Purchasers.


 


“Regular Cash Dividend”
means the regular quarterly cash dividend in respect of the Common Stock as
declared by the Board of Directors as part of the dividend payment practice or
stated cash dividend policy of the Company then in effect, whether publicly
announced or not; provided that Regular Cash Dividends shall not include
any other dividends or distributions, such as any dividends designated by the
Board of Directors as extraordinary, special or otherwise nonrecurring.


 


“Restricted
Certificated Security”  means a Certificated Security that is a
Restricted Security.


 


4

















 


“Restricted Global Security”
means a Global Security that is a Restricted Security.


 


“Restricted Security”
means a Security required to bear the Restricted Legend set forth in the form
of Security set forth in Exhibit A of this Indenture.


 


“Rule 144” means Rule 144
under the Securities Act or any successor to such Rule, as it may be amended
from time to time.


 


“Rule 144A” means Rule
144A under the Securities Act or any successor to such Rule, as it may be
amended from time to time.


 


“SEC” means the United
States Securities and Exchange Commission.


 


“Security” or “Securities” means the Company’s 2.50%
Convertible Senior Debentures due May 15, 2034, as amended or supplemented from
time to time, that are issued under this Indenture.


 


“Securities Act” means the
United States Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder, as in effect from time to time.


 


“Securities Custodian”
means the Trustee, as custodian with respect to the Securities in global form,
or any successor thereto.


 


“Significant Subsidiary”
means, in respect of 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 under the Securities Act or the Exchange Act.


 


“Subsidiary” means, in
respect of any Person, any corporation, association, partnership or other
business entity of which more than 50% of the total voting power of shares of
Capital Stock or other interests (including partnership interests) entitled
(without regard to the occurrence of any contingency) to vote in the election
of directors, managers, general partners or trustees thereof is at the time
owned or controlled, directly or indirectly, by (i) such Person; (ii) such
Person and one or more Subsidiaries of such Person; or (iii) one or more
Subsidiaries of such Person.


 


“TIA” means the United
States Trust Indenture Act of 1939, as amended, and the rules and regulations
thereunder as in effect on the date of this Indenture and except to the extent
any amendment to the Trust Indenture Act expressly provides for application of
the Trust Indenture Act as in effect on another date.


 


“Trading Day” means a day
during which trading in securities generally occurs on the New York Stock
Exchange or, if the Common Stock is not listed on the New York Stock Exchange,
on the principal other national or regional securities exchange on which the
Common Stock is then listed or, if the Common Stock is not listed on a national
or regional securities exchange, on the National Association of Securities
Dealers Automated Quotation system (“Nasdaq”) or, if the Common Stock is not
quoted on Nasdaq, on the principal other market on which such Common Stock is
then traded.


 


5

















 


“Trading Price” means, for
any Security on the date of determination, the average of the secondary market
bid quotations per $1,000 Security obtained by the Bid Solicitation Agent for
$10,000,000 principal amount of the Securities at approximately 4:00 p.m., New
York City time, on such determination date from three unaffiliated securities
dealers selected by the Company; provided that if at least three such
bids are not obtained by the Bid Solicitation Agent, or  if, in the reasonable
judgment of the Company, the bid quotations are not indicative of the secondary
market value of the Securities, then the Trading Price shall equal the then
applicable Conversion Rate multiplied by the average Closing Sale Price of the
Common Stock on the five Trading Days ending on such determination date.


 


“Trustee” means the party
named as such in the first paragraph of this Indenture until a successor
replaces it in accordance with the provisions of this Indenture, and thereafter
means the successor.


 


“Trust Officer” means,
with respect to the Trustee, any officer assigned to the Corporate Trust
Office, 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.


 


“Undisrupted Trading Day”
means a Trading Day on which the Common Stock does not experience any of the
following at any time during the one-hour period ending at the conclusion of
the regular Trading Day:


 


(a)                                  any suspension of or
limitation imposed on trading of the Common Stock on any national or regional
securities exchange or association or over-the-counter market;


 


(b)                                 any event (other than
an event listed in clause (c) below) that disrupts or impairs the ability of
market participants in general to (i) effect transactions in or obtain market
values for the Common Stock on any relevant national or regional securities
exchange or association or over-the-counter market or (ii) effect transactions
in or obtain market values for, futures or options contracts relating to the
Common Stock on any relevant national or regional securities exchange or
association or over-the-counter market; or


 


(c)                                  any relevant national
or regional securities exchange or association or over-the-counter market on
which the Common Stock trades closes on any exchange Trading Day prior to its
scheduled closing time unless such earlier closing time is announced by the
exchange at least one hour prior to the earlier of (i) the actual closing time
for the regular trading session on such exchange and (ii) the submission
deadline for orders to be entered into the exchange for execution on such
Trading Day,


 


if, in the case of clauses (a) and (b) (but not clause (c)) above, the
Company determines the effect of such suspension, limitation, disruption or
impairment is material.


 


“Unrestricted Certificated Security”
means a Certificated Security that is not a Restricted Security.


 


6

















 


“Unrestricted Global Security”
means a Global Security that is not a Restricted Security.


 


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


 


Section 1.2.                                   Other Definitions.


 


	
  Defined in Section Term

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  “Agent
  Members”

  	
   

  	
  2.1(b)

  
	
  “Bankruptcy
  Law”

  	
   

  	
  10.1

  
	
  “Bid
  Solicitation Agent”

  	
   

  	
  2.3

  
	
  “Cash
  Amount”

  	
   

  	
  6.13(b)

  
	
  “Cash
  Settlement Averaging Period”

  	
   

  	
  6.13(b)

  
	
  “Company
  Order”

  	
   

  	
  2.2

  
	
  “Contingent
  Debt Regulations”

  	
   

  	
  13

  
	
  “Contingent
  Interest Period”

  	
   

  	
  7.1

  
	
  “Conversion
  Agent”

  	
   

  	
  2.3

  
	
  “Conversion
  Date”

  	
   

  	
  6.2(c)

  
	
  “Conversion
  Notice”

  	
   

  	
  6.2(b)

  
	
  “Conversion
  Obligation”

  	
   

  	
  6.13(b)

  
	
  “Current
  Market Price”

  	
   

  	
  6.5(g)

  
	
  “Custodian”

  	
   

  	
  10.1

  
	
  “DTC”

  	
   

  	
  2.1(a)

  
	
  “Depositary”

  	
   

  	
  2.1(a)

  
	
  “Event of
  Default”

  	
   

  	
  10.1

  
	
  “Excess
  Conversion Obligations”

  	
   

  	
  6.13(b)

  
	
  “Expiration
  Date”

  	
   

  	
  6.5(f)

  
	
  “Expiration
  Time”

  	
   

  	
  6.5(f)

  
	
  “Final
  Notice Date”

  	
   

  	
  6.13(b)

  
	
  “Fundamental
  Change”

  	
   

  	
  5.1(a)

  
	
  “Fundamental
  Change Company Notice”.

  	
   

  	
  5.1(b)

  
	
  “Fundamental
  Change Purchase Date”

  	
   

  	
  5.1(a)

  
	
  “Fundamental
  Change Purchase Notice”

  	
   

  	
  5.1(c)

  
	
  “Fundamental
  Change Purchase Price”

  	
   

  	
  5.1(a)

  
	
  “Legal
  Holiday”

  	
   

  	
  15.7

  
	
  “Notice of
  Default”

  	
   

  	
  10.1

  
	
  “Paying
  Agent”

  	
   

  	
  2.3

  
	
  “Principal
  Conversion Settlement Election”

  	
   

  	
  6.13(a)

  
	
  “Purchase
  Agreement”

  	
   

  	
  2.1

  
	
  “Purchased
  Shares”

  	
   

  	
  6.5(f)

  
	
  “Purchase
  Date”

  	
   

  	
  4.1(a)

  
	
  “Purchase
  Notice”

  	
   

  	
  4.1(c)

  
	
  “Purchase
  Price”

  	
   

  	
  4.1(a)

  
	
  “QIB” or
  “QIBs”

  	
   

  	
  2.1(a)

  



 


7

















 


	
  Defined in Section Term

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  “Redemption
  Price”

  	
   

  	
  3.1

  
	
  “Register”

  	
   

  	
  2.3

  
	
  “Registrar”

  	
   

  	
  2.3

  
	
  “Restricted
  Legend”

  	
   

  	
  2.12(f)

  
	
  “Rights
  Plan”

  	
   

  	
  6.5(d)

  
	
  “Settlement
  Notice Period”

  	
   

  	
  6.13(b)

  
	
  “Triggering
  Distribution”

  	
   

  	
  6.5(e)

  
	
  “Trigger
  Event”

  	
   

  	
  6.5(d)

  



 


Section 1.3.                                   Trust Indenture Act Provisions.


 


Whenever this Indenture refers to a provision of the TIA, that
provision is incorporated by reference in and made a part of this Indenture. The
Indenture shall also include those provisions of the TIA required to be
included herein by the provisions of the Trust Indenture Reform Act of 1990.
The following TIA terms used in this Indenture have the following meanings:


 


“Commission”  means
the SEC.


 


“indenture securities”
means the Securities;


 


“indenture security holder”
means a Securityholder;


 


“indenture to be qualified”
means this Indenture;


 


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


 


“obligor” on the indenture
securities means the Company and any successor obligor on the Securities.


 


All other terms used in this Indenture that are defined in the TIA,
defined by TIA reference to another statute or defined by any SEC rule and not
otherwise defined herein have the meanings assigned to them therein.


 


Section 1.4.                                   Rules of Construction.


 


Unless the context otherwise requires:


 


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


 


(b)                                 an
accounting term not otherwise defined has the meaning assigned to it in
accordance with GAAP;


 


(c)                                  words
in the singular include the plural, and words in the plural include the
singular;


 


8

















 


(d)                                 provisions
apply to successive events and transactions;


 


(e)                                  the
term “merger” includes a statutory share exchange and the term “merged” has a
correlative meaning;


 


(f)                                    the
masculine gender includes the feminine and the neuter;


 


(g)                                 references
to agreements and other instruments include subsequent amendments thereto; and


 


(h)                                 “herein,”
“hereof” and other words of similar import refer to this Indenture as a whole
and not to any particular Article, Section or other subdivision.


 


ARTICLE 2.

THE SECURITIES


 


Section 2.1.                                   Form and Dating.


 


The Securities and the corresponding Trustee’s certificate of
authentication shall be substantially in the respective forms set forth in Exhibit
A, which Exhibit is incorporated in and made part of this Indenture.  The Securities may have notations, legends
or endorsements required by law, stock exchange rule or usage.  The Company shall provide any such
notations, legends or endorsements to the Trustee in writing.  Each Security shall be dated the date of its
authentication.  The Securities are
being offered and sold by the Company pursuant to a Purchase Agreement, dated
April 29, 2004 (the “Purchase Agreement”),
among the Company and the Initial Purchasers, in transactions exempt from, or
not subject to, the registration requirements of the Securities Act.


 


The terms and provisions contained in the Securities shall constitute,
and are hereby expressly made, a part of this Indenture and 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.  However, to the extent permitted by applicable law, if any
provision of any Security conflicts with the express provisions of this
Indenture, the provisions of this Indenture shall govern and be controlling.


 


(a)                                  Restricted
Global Securities.  All of the
Securities are initially being offered and sold to qualified institutional
buyers as defined in Rule 144A (collectively, “QIBs”
or individually, each a “QIB”) in
reliance on Rule 144A and shall be issued initially in the form of one or more
Restricted Global Securities, which shall be deposited on behalf of the
purchasers of the Securities represented thereby with the Trustee, at its
Corporate Trust Office, as custodian for the depositary, The Depository Trust
Company (“DTC”) (such depositary, or any
successor thereto, being hereinafter referred to as the “Depositary”),
and registered in the name of its nominee, Cede & Co., duly executed by the
Company and authenticated by the Trustee as hereinafter provided.  The aggregate principal amount of the
Restricted Global Securities may from time to time be increased or decreased by
adjustments made on the records of the Securities


 


9

















 


Custodian and
the Depositary as hereinafter provided, subject in each case to compliance with
the Applicable Procedures and the provisions of this Indenture.


 


(b)                                 Global
Securities In General.  Each Global
Security shall represent such of the outstanding Securities as shall be
specified therein and each shall provide that it shall represent the aggregate
amount of outstanding Securities from time to time endorsed thereon and that
the aggregate amount of outstanding Securities represented thereby may from
time to time be reduced or increased, as appropriate, to reflect exchanges,
redemptions, purchases or conversions of such Securities.  Any adjustment of the aggregate principal
amount of a Global Security to reflect the amount of any increase or decrease
in the amount of outstanding Securities represented thereby shall be made by
the Trustee in accordance with instructions given by the Holder thereof as
required by Section 2.12 hereof and shall be made on the records of the
Trustee and the Depositary.


 


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


 


(c)                                  Book
Entry Provisions.  The Company shall
execute and the Trustee shall, in accordance with this Section 2.1(c),
authenticate and deliver initially one or more Global Securities that (i) shall
be registered in the name of Cede & Co. or as otherwise instructed by the
Depositary, (ii) shall be delivered by the Trustee to the Depositary or
pursuant to the Depositary’s instructions and (iii) shall bear legends
substantially to the following effect:


 


“UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY 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 THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. THIS SECURITY
IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED
TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS SECURITY
IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN
THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED


 


10

















 


CIRCUMSTANCES DESCRIBED IN THE INDENTURE AND, UNLESS AND UNTIL IT IS
EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN DEFINITIVE FORM, THIS SECURITY
MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE 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.”


 


(d)                                 Certificated
Securities.  Certificated Securities
will be issued only under the limited circumstances provided in
Section 2.12(a)(i).


 


Section 2.2.                                   Execution and Authentication.


 


An Officer shall sign the Securities for the Company by manual or
facsimile signature.  Typographic and
other minor errors or defects in any such facsimile signature shall not affect
the validity or enforceability of any Security that has been authenticated and
delivered by the Trustee.


 


If an Officer whose signature is on a Security no longer holds that
office at the time the Trustee authenticates the Security, the Security shall
be valid nevertheless.


 


A Security shall not be valid until an authorized signatory of the
Trustee manually signs the certificate of authentication on the Security.  The signature shall be conclusive evidence
that the Security has been authenticated under this Indenture.


 


(a)                                  The
Trustee shall authenticate and make available for delivery Securities for
original issue in the aggregate principal amount of up to $125,000,000
($25,000,000 of which includes Securities issued upon exercise in full of the
Initial Purchasers’ option to purchase additional debentures provided for in
the Purchase Agreement) upon receipt of a written order or orders of the
Company signed by an Officer of the Company (a “Company
Order”).  Each Company Order
shall specify the amount of Securities to be authenticated, shall provide that
all such Securities shall be represented by a Restricted Global Security and
the date on which each original issue of Securities is to be authenticated. The
aggregate principal amount of Securities outstanding at any time may not exceed
$125,000,000 except as provided in Section 2.7.


 


The Trustee shall act as the initial authenticating agent.  Thereafter, the Trustee may appoint an
authenticating agent acceptable to the Company to authenticate Securities. An
authenticating agent may authenticate Securities whenever the Trustee may do
so.  Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent.  An authenticating agent shall have the same
rights as an Agent to deal with the Company or an Affiliate of the Company.


 


The Securities shall be issuable only in registered form without
coupons and only in denominations of $1,000 principal amount and any integral
multiple thereof.


 


11

















 


Section 2.3.                                   Registrar, Paying Agent,
Conversion Agent and Bid Solicitation Agent.


 


The Company shall maintain an office or agency where Securities may be
presented for registration of transfer or for exchange (“Registrar”), an office or agency where
Securities may be presented for redemption, purchase or payment (“Paying Agent”), an office or agency where
Securities may be presented for conversion (“Conversion
Agent”) and an office or agency where notices and demands to or upon
the Company in respect of the Securities and this Indenture may be served.  The Company shall also appoint a bid
solicitation agent (“Bid Solicitation Agent”)
to act as set forth in paragraph 3 of the Securities.  Pursuant to Section 8.8, the Company shall at all times
maintain a Paying Agent, Conversion Agent, Bid Solicitation Agent and Registrar
and an office or agency where notices and demands to or upon the Company in
respect of the Securities and this Indenture may be served.  The Registrar shall keep a register of the
Securities (“Register”) and of their
transfer and exchange.


 


The Company may have one or more co-registrars, one or more additional
paying agents, one or more additional conversion agents and one or more
additional bid solicitation agents.  The
term Paying Agent includes any additional paying agent, including any named
pursuant to Section 8.8.  The term
Conversion Agent includes any additional conversion agent, including any named
pursuant to Section 8.8.


 


The Company shall enter into an appropriate agency agreement with any
Agent not a party to this Indenture. 
The agreement shall implement the provisions of this Indenture that
relate to such Agent.  The Company shall
notify the Trustee of the name and address of any Agent not a party to this
Indenture.  If the Company fails to
maintain a Registrar, Paying Agent, Conversion Agent or Bid Solicitation Agent
or agent for service of notices and demands in any place required by this
Indenture, or fails to give the foregoing notice, the Trustee shall act as
such.  The Company or any Affiliate of
the Company may act as Paying Agent. 
None of the Company or any Affiliate may act as Bid Solicitation Agent.


 


The Company hereby initially appoints the Trustee as Registrar, Paying
Agent, Conversion Agent and Bid Solicitation Agent in connection with the Securities.


 


Section 2.4.                                   Paying Agent to Hold Money and
Securities in Trust.


 


Prior to 10:00 a.m., New York City time, on each due date of payments
in respect of, or delivery of Common Stock upon conversion of, any Security,
the Company shall deposit with the Paying Agent cash (in immediately available
funds if deposited on the due date) or with the Conversion Agent such number of
shares of Common Stock sufficient to make such payments or deliveries when so
becoming due.  The Company shall require
each Paying Agent or Conversion Agent, as applicable (other than the Trustee),
to agree in writing that such Agent shall hold in trust for the benefit of
Securityholders or the Trustee all cash or Common Stock, as applicable, held by
such Agent for the making of payments or deliveries in respect of the
Securities and shall notify the Trustee of any default by the Company in making
any such payment or delivery.  If the
Company or an Affiliate of the Company acts as Paying Agent or Conversion
Agent, as applicable, it shall segregate the cash and Common Stock, as
applicable,


 


12

















 


held by it as Paying Agent or Conversion Agent, as applicable, and hold
it as a separate trust fund.


 


The Company at any time may require a Paying Agent or Conversion Agent,
as applicable, to pay all cash or Common Stock held by it to the Trustee, and
the Trustee may at any time during the continuance of any default, upon written
request to the Paying Agent or the Conversion Agent, as applicable, require
such Paying Agent or Conversion Agent, as applicable, to pay forthwith to the
Trustee all cash or Common Stock, as applicable, so held in trust by such
Paying Agent or Conversion Agent.  Upon
doing so, the Paying Agent or the Conversion Agent, as applicable, shall have
no further liability for the cash or Common Stock, as applicable.


 


Section 2.5.                                   Securityholder Lists.


 


The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
the Securityholders.  If the Trustee is
not the Registrar, the Company shall furnish to the Trustee on or before each
semi-annual Interest Payment Date, and at such other times as the Trustee may
request in writing, a list in such form and as of such date as the Trustee may
reasonably require of the names and addresses of the Securityholders.


 


Section 2.6.                                   Transfer and Exchange.


 


(a)                                  Subject
to compliance with any applicable additional requirements contained in
Section 2.12, when a Security is presented to a Registrar with a request
to register a transfer thereof or to exchange such Security for an equal
principal amount of Securities of other authorized denominations, the Registrar
shall register the transfer or make the exchange as requested; provided,
however, that every Security presented or surrendered for registration
of transfer or exchange shall be duly endorsed or accompanied by an assignment
form, in the form included in Exhibit A attached hereto and, if
applicable, a transfer certificate, in the form included in Exhibit B
attached hereto, and in form satisfactory to the Registrar duly executed by the
Holder thereof or its attorney duly authorized in writing.  To permit registration of transfers and
exchanges, upon surrender of any Security for registration of transfer or
exchange at an office or agency maintained pursuant to Section 2.3, the
Company shall execute and the Trustee shall authenticate Securities of a like
aggregate principal amount at the Registrar’s request.  Any exchange or transfer shall be without
charge, except that the Company or the Registrar may require payment of a sum
sufficient to cover any tax, assessment or other governmental charge that may
be imposed in relation thereto.


 


Neither the Company, any Registrar nor the Trustee shall be required to
exchange or register a transfer of (i) any Securities for a period of 15 days
next preceding any mailing of a notice of Securities to be redeemed, (ii) any
Securities or portions thereof selected or called for redemption (except, in
the case of redemption of a Security in part, the portion thereof not to be
redeemed) or (iii) any Securities or portions thereof in respect of which a
Fundamental Change Purchase Notice or Purchase Notice has been delivered and
not withdrawn by the Holder thereof (except, in the case of the purchase of a
Security in part, the portion thereof not to be purchased).


 


13

















 


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


 


(b)                                 Any
Registrar appointed pursuant to Section 2.3 hereof shall provide to the Trustee
such information as the Trustee may reasonably require in connection with the
delivery by such Registrar of Securities upon transfer or exchange of
Securities.


 


(c)                                  Each
Holder of a Security agrees to indemnify the Company, the Registrar and the Trustee
against any liability that may result from the transfer, exchange or assignment
of such Holder’s Security in violation of any provision of this Indenture
and/or applicable United States federal or state securities law.


 


The Trustee shall have no obligation or duty to monitor, determine or
inquire as to compliance with any restrictions on transfer imposed under this
Indenture or under applicable law with respect to any transfer of any interest
in any Security (including any transfers between or among Agent Members or
other beneficial owners of interests in any Global Security) other than to
require delivery of such certificates and other documentation or evidence as
are expressly required by, and to do so if and when expressly required by the
terms of, this Indenture, and to examine the same to determine substantial
compliance as to form with the express requirements hereof.


 


Section 2.7.                                   Replacement Securities.


 


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


 


In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, or is about to be redeemed
pursuant to Article 3 or purchased by the Company pursuant to Articles 4
or 5, the Company in its discretion may, instead of issuing a new Security,
pay, redeem or purchase such Security, as the case may be.


 


Upon the issuance of any new Securities under this Section 2.7,
the Company may require the payment of a sum sufficient to cover any tax,
assessment or other governmental charge that may be imposed in relation thereto
and any other reasonable expenses (including the reasonable fees and expenses
of the Trustee or the Registrar) in connection therewith.


 


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


 


14

















 


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


 


The provisions of this Section 2.7 are (to the extent lawful)
exclusive and shall preclude (to the extent lawful) all other rights and
remedies with respect to the replacement or payment of mutilated, destroyed,
lost or stolen Securities.


 


Section 2.8.                                   Outstanding Securities.


 


Securities outstanding at any time are all Securities authenticated by
the Trustee, except for those canceled by it, those paid, redeemed or
repurchased pursuant to Section 2.7, those delivered to it for
cancellation and those described in this Section 2.8 as not outstanding.


 


If a Security is replaced pursuant to Section 2.7, it ceases to be
outstanding unless the Trustee receives, subsequent to the new Security’s
authentication, proof satisfactory to the Company that the replaced Security is
held by a bona fide or protected purchaser.


 


If the Paying Agent holds, in accordance with the terms of this
Indenture, prior to 10:00 a.m., New York City time, on the Final Maturity Date
or a Redemption Date or on the Business Day immediately following a Purchase
Date or a Fundamental Change Purchase Date, as the case may be, cash or
securities, if permitted hereunder, sufficient to pay Securities payable, then
immediately after such Final Maturity Date, Redemption Date, Purchase Date or
Fundamental Change Purchase Date, as the case may be, such Securities shall
cease to be outstanding and interest (including Contingent Interest and
Additional Interest, if any) on such Securities shall cease to accrue.


 


If a Security is converted in accordance with Article 6, then from
and after 5:00 p.m., New York City time, on the Conversion Date, such Security
shall cease to be outstanding and interest (including Contingent Interest and
Additional Interest, if any) on such Security shall cease to accrue.


 


Subject to the restrictions contained in Section 2.9, a Security
does not cease to be outstanding because the Company or an Affiliate of the
Company holds the Security.


 


Section 2.9.                                   Treasury Securities.


 


In determining whether the Holders of the required principal amount of
Securities have given or concurred in any notice, request, demand,
authorization, direction, waiver or consent, Securities owned by the Company or
any other obligor on the Securities or by any Affiliate of the Company or of
such other obligor shall be disregarded and deemed not to be outstanding,
except that, for purposes of determining whether the Trustee shall be protected
in relying on any such notice, direction, waiver or consent, only Securities
which a Trust Officer of the Trustee actually knows are so owned shall be so
disregarded. Securities so owned which have been pledged in good faith shall
not be disregarded if the pledgee establishes to the satisfaction of the
Trustee the pledgee’s right so to act with respect to the Securities and that
the pledgee is not the Company or any other obligor on the Securities or any
Affiliate of the Company or of such other obligor.


 


15

















 


Section 2.10.                             Temporary Securities.


 


Until definitive Securities are ready for delivery, the Company may
prepare and execute, and, upon receipt of a Company Order, the Trustee shall
authenticate and deliver, temporary Securities. Temporary Securities shall be
substantially in the form of definitive Securities but may have variations that
the Company with the consent of the Trustee considers appropriate for temporary
Securities. Without unreasonable delay, the Company shall prepare and the
Trustee shall authenticate and deliver definitive Securities in exchange for
temporary Securities.  After the
preparation of definitive Securities, the temporary Securities shall be
exchangeable for definitive Securities upon surrender of the temporary
Securities at the office or agency of the Company designated for such purpose
pursuant to Section 2.3, without charge to the Holder.  Upon surrender for cancellation of any one
or more temporary Securities the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor a like principal amount of
definitive Securities of authorized denominations.  Until so exchanged the temporary Securities shall in all respects
be entitled to the same benefits under this Indenture as definitive Securities.


 


Section 2.11.                             Cancellation.


 


The Company at any time may deliver Securities to the Trustee for
cancellation.  The Registrar, the Paying
Agent and the Conversion Agent shall forward to the Trustee or its agent any
Securities surrendered to them for transfer, exchange, redemption, payment or
conversion.  The Trustee and no one else
shall cancel, in accordance with its standard procedures, all Securities surrendered
for transfer, exchange, redemption, payment, conversion or cancellation and
shall deliver the canceled Securities to the Company.


 


All Securities that are redeemed, purchased pursuant to Article IV
or Article V or otherwise acquired by the Company or any of its
Subsidiaries prior to the Final Maturity Date shall be delivered to the Trustee
for cancellation, and the Company may not hold or resell such Securities or
issue any new Securities to replace any such Securities or any Securities that
any Holder has converted pursuant to Article 6.


 


Section 2.12.                             Legend; Additional Transfer and
Exchange Requirements


 


(a)                                  Transfer
and Exchange of Global Securities.


 


(i)                                     Certificated
Securities shall be issued in exchange for interests in the Global Securities
only if (x) the Depositary notifies the Company that it is unwilling or unable
to continue as Depositary for the Global Securities or if it at any time ceases
to be a “clearing agency” registered under the Exchange Act, if so required by
applicable law or regulation, and a successor Depositary is not appointed by
the Company within 90 days or (y) an Event of Default has occurred and is
continuing.  In any such case, the
Company shall execute, and the Trustee shall, upon receipt of a Company Order
(which the Company agrees to deliver promptly), authenticate and deliver
Certificated Securities in an aggregate principal amount equal to the principal
amount of such Global Securities in exchange therefor.  Only Restricted Certificated Securities
shall be issued in exchange for beneficial interests in Restricted Global
Securities, and only Unrestricted Certificated Securities shall be issued in
exchange for beneficial interests in Unrestricted Global


 


16

















 


Securities.  Certificated
Securities issued in exchange for beneficial interests in Global Securities
shall be registered in such names and shall be in such authorized denominations
as the Depositary, pursuant to instructions from its direct or indirect
participants or otherwise, shall instruct the Trustee.  The Trustee shall deliver or cause to be
delivered such Certificated Securities to the Persons in whose name such
Securities are so registered.  Such
exchange shall be effected in accordance with the Applicable Procedures.


 


(ii)                                  Notwithstanding
any other provisions of this Indenture other than the provisions set forth in
Section 2.12(a)(i), a Global Security may not be transferred except as a
whole by the 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.


 


(b)                                 Transfer
and Exchange of Certificated Securities. 
In the event that Certificated Securities are issued in exchange for
beneficial interests in Global Securities in accordance with
Section 2.12(a)(i), and, on or after such event, Certificated Securities
are presented by a Holder to the Registrar with a request:


 


(x)                                   to
register the transfer of the Certificated Securities to a person who will take
delivery thereof in the form of Certificated Securities only; or


 


(y)                                 to exchange such
Certificated Securities for an equal principal amount of Certificated
Securities of other authorized denominations,


 


such Registrar shall
register the transfer or make the exchange as requested; provided that the Certificated Securities presented or surrendered for
register of transfer or exchange:


 


(i)                                     shall
be duly endorsed or accompanied by a written instrument of transfer in
accordance with the proviso to the first paragraph of Section 2.6; and


 


(ii)                                  in
the case of a Restricted Certificated Security, such request shall be
accompanied by the following additional information and documents, as applicable:


 


(A)                              if
such Restricted Certificated Security is being delivered to the Registrar by a
Holder for registration in the name of such Holder, without transfer, or such
Restricted Certificated Security is being transferred to the Company or a
Subsidiary of the Company, a certification to that effect from such Holder (in
substantially the form set forth in Exhibit B);


 


(B)                                if
such Restricted Certificated Security is being transferred to a person the
Holder reasonably believes is a QIB in accordance with Rule 144A, or pursuant
to an effective registration statement under the Securities Act or in
compliance with Rule 904 under the Securities Act, a


 


17

















 


certification to that effect from such Holder (in substantially the
form set forth in Exhibit B);


 


(C)                                if
such Restricted Certificated Security is being transferred pursuant to an
exemption from the registration requirements of the Securities Act in
accordance with Rule 144 pursuant to and in compliance with an exemption from
the registration requirements under the Securities Act, a certification to that
effect from the Holder (in substantially the form set forth in Exhibit B)
and if the Company or the Registrar so requests, a customary opinion of
counsel, certificates and other information reasonably acceptable to the
Company and the Registrar to the effect that such transfer does not require
registration under the Securities Act.


 


(c)                                  Transfer
of a Beneficial Interest in a Restricted Global Security for a Beneficial
Interest in an Unrestricted Global Security.  Any person having a beneficial interest in a Restricted Global
Security may upon request, subject to the Applicable Procedures, transfer such
beneficial interest to a person who is required or permitted to take delivery
thereof in the form of an Unrestricted Global Security.  Upon receipt by the Trustee of written
instructions, or such other form of instructions as is customary for the
Depositary, from the Depositary or its nominee on behalf of any person having a
beneficial interest in a Restricted Global Security and the following
additional information and documents in such form as is customary for the
Depositary from the Depositary or its nominee on behalf of the person having
such beneficial interest in the Restricted Global Security (all of which may be
submitted by facsimile or electronically):


 


(i)                                     if
such beneficial interest is being transferred pursuant to an effective
registration statement under the Securities Act, a certification to that effect
from the Holder (in substantially the form set forth in Exhibit B); or


 


(ii)                                  if
such beneficial interest is being transferred pursuant to an exemption from the
registration requirements of the Securities Act in accordance with Rule 144, a
certification to that effect from the Holder (in substantially the form set
forth in Exhibit B) and, if the Company or the Trustee so requests, a
customary opinion of counsel, certificates and other information reasonably
acceptable to the Company and the Register to the effect that such transfer
does not require registration under the Securities Act,


 


the Registrar shall
reduce or cause to be reduced the aggregate principal amount of the Restricted
Global Security by the appropriate principal amount and shall increase or cause
to be increased the aggregate principal amount of the Unrestricted Global
Security by a like principal amount. 
Such transfer shall otherwise be effected in accordance with the
Applicable Procedures.  If no
Unrestricted Global Security is then outstanding, the Company shall execute and
the Trustee shall, upon receipt of a Company Order (which the Company agrees to
deliver promptly), authenticate and deliver an Unrestricted Global Security.


 


(d)                                 Transfer
of a Beneficial Interest in an Unrestricted Global Security for a Beneficial
Interest in a Restricted Global Security. 
Any person having a beneficial interest in an Unrestricted Global
Security may upon request, subject to the Applicable Procedures, transfer


 


18

















 


such
beneficial interest to a person who is required or permitted to take delivery
thereof in the form of a Restricted Global Security.  Upon receipt by the Trustee of written instructions, or such
other form of instructions as is customary for the Depositary, from the
Depository or its nominee on behalf of any person having a beneficial interest
in an Unrestricted Global Security and the following additional information and
documents in such form as is customary for the Depositary, from the Depositary
or its nominee on behalf of the person having such beneficial interest in the
Unrestricted Global Security (all of which may be submitted by facsimile or
electronically):


 


(i)                                     a
certification from the Holder (in substantially the form set forth in Exhibit
B) to the effect that such beneficial interest is being transferred to a
person that the transferor reasonably believes is a QIB in accordance with Rule
144A; or


 


(ii)                                  a
certification from the Holder (in substantially the form set forth in Exhibit
B) to the effect that such beneficial interest is being transferred in
compliance with Rule 904 under the Act.


 


The Registrar shall reduce or cause to be reduced the aggregate
principal amount of the Unrestricted Global Security by the appropriate
principal amount and shall increase or cause to be increased the aggregate
principal amount of the Restricted Global Security by a like principal
amount.  Such transfer shall otherwise
be effected in accordance with the Applicable Procedures.  If no Restricted Global Security is then
outstanding, the Company shall execute and the Trustee shall, upon receipt of a
Company Order (which the Company agrees to deliver promptly), authenticate and
deliver a Restricted Global Security.


 


(e)                                  Transfers
of Certificated Securities for Beneficial Interest in Global Securities.  In the event that Certificated Securities
are issued in exchange for beneficial interests in Global Securities and,
thereafter, the events or conditions specified in Section 2.12(a)(i) which
required such exchange shall cease to exist, the Company shall mail notice to
the Trustee and to the Holders stating that Holders may exchange Certificated
Securities or interests in Global Securities by complying with the procedures
set forth in this Indenture and briefly describing such procedures and the
events or circumstances requiring that such notice be given. Thereafter, if
Certificated Securities are presented by a Holder to a Registrar with a
request:


 


(x)                                   to register the
transfer of such Certificated Securities to a person who will take delivery
thereof in the form of a beneficial interest in a Global Security, which
request shall specify whether such Global Security will be a Restricted Global
Security or an Unrestricted Global Security, or


 


(y)                                 to exchange such Certificated
Securities for an equal principal amount of beneficial interests in a Global
Security, which beneficial interests will be owned by the Holder transferring
such Certificated Securities (provided that in the case of such an exchange,
Restricted Certificated Securities may be exchanged only for Restricted Global
Securities and Unrestricted Certificated Securities may be exchanged only for
Unrestricted Global Securities), the Registrar shall register the transfer or
make the exchange as requested by canceling such Certificated Security and
causing the aggregate principal amount of the applicable Global Security to be
increased accordingly and, if no such Global Security is then outstanding, the
Company shall issue and the Trustee shall,


 


19

















 


upon receipt of a Company Order (which the Company agrees to deliver
promptly) authenticate and deliver a new Global Security;


 


provided that the Certificated Securities
presented or surrendered for registration of transfer or exchange:


 


(i)                                     shall
be duly endorsed or accompanied by a written instrument of transfer in
accordance with the proviso to Section 2.6(a);


 


(ii)                                  in
the case of a Restricted Certificated Security to be transferred for a
beneficial interest in an Unrestricted Global Security, such request shall be
accompanied by the following additional information and documents, as
applicable:


 


(A)                              if
such Restricted Certificated Security is being transferred pursuant to an
effective registration statement under the Securities Act, a certification to
that effect from such Holder (in substantially the form set forth in Exhibit
B); or


 


(B)                                if
such Restricted Certificated Security is being transferred pursuant to an
exemption from the registration requirements of the Securities Act in
accordance with Rule 144, a certification to that effect from such Holder (in
substantially the form set forth in Exhibit B) and, if the Company or
the Registrar so requests, a customary opinion of counsel, certificates and
other information reasonably acceptable to the Company and the Trustee to the
effect that such transfer does not require registration under of the Securities
Act;


 


(iii)                               in
the case of a Restricted Certificated Security to be transferred or exchanged
for a beneficial interest in a Restricted Global Security, such request shall
be accompanied by the following information and documents, as applicable:


 


(A)                              if
such Restricted Certificated Security is being transferred to a person the
Holder reasonably believes is a QIB (which, in the case of an exchange, shall
be such Holder) in accordance with Rule 144A, a certification to that effect
from such Holder (in substantially the form set forth in Exhibit B); or


 


(B)                                if
such Restricted Certificated Security is being transferred in compliance with
Rule 904 under the Act, certification to that effect from such Holder (in
substantially the form set forth in Exhibit B);


 


(iv)                              in
the case of an Unrestricted Certificated Security to be transferred or
exchanged for a beneficial interest in an Unrestricted Global Security, such
request need not be accompanied by any additional information or documents; and


 


(v)                                 in
the case of an Unrestricted Certificated Security to be transferred or
exchanged for a beneficial interest in a Restricted Global Security, such
request shall be accompanied by the following additional information and
documents, as applicable:


 


20

















 


(A)                              if
such Unrestricted Certificated Security is being transferred to a person the Holder
reasonably believes is a QIB (which, in the case of an exchange, shall be such
Holder) in accordance with Rule 144A, a certification to that effect from such
Holder (in substantially the form set forth in Exhibit B); or


 


(B)                                if
such Unrestricted Certificated Security is being transferred in compliance with
Rule 904 under the Act, certification to that effect from such Holder (in
substantially the form set forth in Exhibit B).


 


(f)                                    Legends.


 


(i)                                     Except
as permitted by the following paragraphs (ii), (iii) and (iv), each Global
Security and Certificated Security (and all Securities issued in exchange
therefor or upon registration of transfer or replacement thereof) shall bear a
legend in substantially the form called for by footnote 2 to Exhibit A
attached hereto (the “Restricted Legend”),  for so long as it is required by this
Indenture to bear such legend.


 


(ii)                                  Upon
any sale or transfer of a Restricted Security (x) after the expiration of the
holding period applicable to sales of the Securities under Rule 144(k) of the
Securities Act, (y) pursuant to Rule 144 or (z) pursuant to an effective
registration statement under the Securities Act:


 


(A)                              in
the case of any Restricted Certificated Security, any Registrar shall permit
the Holder thereof to exchange such Restricted Certificated Security for an
Unrestricted Certificated Security, or (under the circumstances described in
Section 2.12(e)) to transfer such Restricted Certificated Security to a
transferee who shall take such Security in the form of a beneficial interest in
an Unrestricted Global Security, and in each case shall rescind any restriction
on the transfer of such Security; provided that the Holder of such Restricted
Certificated Security shall, in connection with such exchange or transfer,
comply with the other applicable provisions of this Section 2.12; and


 


(B)                                in
the case of any beneficial interest in a Restricted Global Security, the
Trustee shall permit the beneficial owner thereof to transfer such beneficial
interest to a transferee who shall take such interest in the form of a
beneficial interest in an Unrestricted Global Security and shall rescind any
restriction on transfer of such beneficial interest; provided that
such Unrestricted Global Security shall continue to be subject to the provisions
of Section 2.12(a)(ii); and provided  further that the owner of such
beneficial interest shall, in connection with such transfer, comply with the
other applicable provisions of this Section 2.12.


 


(iii)                               Upon
the exchange, registration of transfer or replacement of Securities not bearing
the Restricted Legend, the Company shall execute, and the Trustee shall
authenticate and deliver, Securities that do not bear such Restricted Legend.


 


21

















 


(iv)                              After
the expiration of the holding period pursuant to Rule 144(k) of the Securities
Act, the Company may with the consent of the Holder of a Restricted Global
Security or a Restricted Certificated Security, remove any restriction of
transfer on such Security, and the Company shall execute, and the Trustee shall
authenticate and deliver, Securities that do not bear the Restricted Legend.


 


(v)                                 Until
the expiration of the holding period applicable to sales of the Securities
under Rule 144(k) of the Securities Act or a transfer pursuant to Rule 144 or
pursuant to an effective registration statement under the Securities Act, the
shares of Common Stock issued upon conversion of the Securities shall bear the
Restricted Legend.


 


(g)                                 Transfers
to the Company.  Nothing contained
in this Indenture or in the Securities shall prohibit the sale or other
transfer of any Securities (including beneficial interests in Global
Securities) to the Company or any of its Subsidiaries.


 


Section 2.13.                             CUSIP
Numbers.


 


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


 


Section 2.14.                             Ranking.


 


The indebtedness of the Company arising under or in connection with
this Indenture and every outstanding Security issued under this Indenture from
time to time constitutes and shall constitute a senior unsecured general
obligation of the Company, ranking equally with existing and future senior
unsecured Indebtedness of the Company and ranking senior in right of payment to
any future Indebtedness of the Company that is expressly made subordinate to
the Securities by the terms of such Indebtedness.


 


Section 2.15.                             Persons Deemed Owners


 


Prior to due presentment of a Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the person in whose name such Security is registered as the owner of such
Security for the purpose of receiving payment of principal of, Redemption
Price, Purchase Price or Fundamental Change Purchase Price, and interest
(including Contingent Interest and Additional Interest, if any) on the
Security, for the purpose of receiving cash or Common Stock upon conversion and
for all other purposes whatsoever, whether or not such Security is overdue, and
neither the Company, the Trustee nor any agent of the Company or the Trustee
shall be affected by notice to the contrary.


 


22

















 


ARTICLE 3.

REDEMPTION


 


Section 3.1.                                   The Company’s Right to Redeem;
Notice to Trustee.


 


Prior to May 15, 2011, the Securities shall not be redeemable at the
Company’s option.  On or after May 15,
2011, the Company, at its option, may redeem the Securities in accordance with
this Article 3 at any time as a whole or from time to time in part, at the
redemption price in cash equal to 100% of the principal amount of the
Securities to be redeemed plus any accrued and unpaid interest (including
Contingent Interest and Additional Interest, if any, to, but not including, the
Redemption Date (the “Redemption Price”).


 


In the event that the Company elects to redeem the Securities on a date
that is after any Interest Payment Record Date but on or before the
corresponding Interest Payment Date, the Company shall be required to pay any
accrued and unpaid interest (including Contingent Interest and Additional
Interest, if any) to the same Holder to whom the Company pays the principal of
such Security regardless of whether such Holder was the registered Holder on
the Interest Payment Record Date immediately preceding such Redemption Date
and, if the Holder to whom the Company pays the principal, interest (including
Contingent Interest and Additional Interest, if any) was not the registered
Holder on the Interest Payment Record Date, such payment shall be in lieu of
payment to the registered Holder on such Interest Payment Record Date.


 


If the Company elects to redeem Securities pursuant to this
Section 3.1 and paragraph 5 of the Securities, it shall notify the Trustee
of the Redemption Date and the principal amount of Securities to be redeemed at
least 15 days prior to the date notice of the Redemption Date is given to the
Holders pursuant to Section 3.3 (unless a shorter notice shall be satisfactory
to the Trustee).


 


Section 3.2.                                   Selection of Securities to be
Redeemed.


 


If less than all of the Securities are to be redeemed, unless the
procedures of the Depositary provide otherwise, the Trustee shall select the
Securities to be redeemed. The Trustee shall make the selection from the
Securities outstanding and not previously called for redemption by lot, on a
pro rata basis or by any other method the Trustee considers fair and
appropriate.  The Trustee shall make the
selection within five Business Days after it receives the notice provided for
in Section 3.1 from outstanding Securities not previously called for
redemption.  Securities in denominations
of $1,000 may only be redeemed in whole. 
The Trustee may select for redemption portions (equal to $1,000 or any
integral multiple thereof) of the principal of Securities that have
denominations larger than $1,000. 
Provisions of this Indenture that apply to Securities called for
redemption also apply to portions of Securities called for redemption.  The Trustee shall notify the Company
promptly of the Securities or portions of the Securities to be redeemed.


 


Securities and portions of Securities that are to be redeemed are
convertible by the Holder until 5:00 p.m., New York City time, on the
Business Day immediately preceding the


 


23

















 


Redemption Date.  If any
Security selected for partial redemption is converted in part before
termination of the conversion right with respect to the portion of the Security
so selected, the converted portion of such Security shall be deemed to be the
portion selected for redemption. Securities that have been converted subsequent
to the Trustee commencing selection of Securities to be redeemed but prior to
redemption of such Securities shall be treated by the Trustee as outstanding
for the purpose of such selection.


 


Section 3.3.                                   Notice of Redemption.


 


At least 30 days but not more than 60 days before a Redemption Date,
the Company shall mail or cause to be mailed a notice of redemption to each
Holder of Securities to be redeemed in accordance with Section 15.2.


 


The notice shall identify the Securities (including CUSIP numbers) to
be redeemed and shall state:


 


(1)                                  the
Redemption Date;


 


(2)                                  the
Redemption Price;


 


(3)                                  the
then current Conversion Rate;


 


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


 


(5)                                  that
Securities called for redemption must be presented and surrendered to the
Paying Agent at any time prior to 5:00 p.m., New York City time, on the
Business Day preceding the Redemption Date, to collect the Redemption Price;


 


(6)                                  that
Holders who wish to convert Securities must surrender such Securities for
conversion prior to 5:00 p.m., New York City time, on the Business Day
immediately preceding the Redemption Date and must satisfy the other
requirements set forth in paragraph 7 of the Securities and Article 6
hereof;


 


(7)                                  that,
unless the Company defaults in making the payment of the Redemption Price,
interest (including Contingent Interest and Additional Interest, if any) on
Securities called for redemption shall cease accruing on and after the
Redemption Date; and


 


(8)                                  if
any Security is being redeemed in part, the portion of the principal amount of
such Security to be redeemed and that, after the Redemption Date, upon
presentation and surrender of such Security, a new Security or Securities in
aggregate principal amount equal to the unredeemed portion thereof shall be
issued.


 


If any of the Securities to be redeemed is in the form of a Global
Security, then the Company shall modify such notice to the extent necessary to
accord with the procedures of the Depositary applicable to redemptions.


 


24

















 


At the Company’s written request, the Trustee shall give the notice of
redemption to each Holder in the Company’s name and at the Company’s expense; provided
that the Company makes such request at least three Business Days (unless a
shorter period shall be satisfactory to the Trustee) prior to the date by which
such notice of redemption must be given to Holders in accordance with this
Section 3.3; provided, further, that the text of the notice
of redemption shall be prepared by the Company.


 


Section 3.4.                                   Effect of Notice of Redemption.


 


Once notice of redemption is mailed, Securities called for redemption
become due and payable on the Redemption Date and at the Redemption Price
stated in the notice, except for Securities that are converted in accordance
with the provisions of this Indenture. 
Upon surrender to the Paying Agent, such Securities shall be paid at the
Redemption Price.


 


Section 3.5.                                   Deposit of Redemption Price.


 


Prior to 10:00 a.m. New York City time, on the applicable Redemption
Date, the Company shall deposit with the Paying Agent (or, if the Company or an
Affiliate acts as Paying Agent, shall segregate and hold in trust as provided
in Section 2.4) an amount of cash (in immediately available funds if
deposited on such Redemption Date) sufficient to pay the aggregate Redemption
Price of all Securities or portions thereof that are to be redeemed on that
date, other than Securities or portions thereof called for redemption on that
date that have been delivered by the Company to the Trustee for cancellation or
have been converted.


 


If the Paying Agent holds, in accordance with the terms hereof, at
10:00 a.m., New York City time on the applicable Redemption Date, cash
sufficient to pay the Redemption Price of any Securities for which notice of
redemption is given, then, immediately after such Redemption Date, such Securities
shall cease to be outstanding and interest (including Contingent Interest and
Additional Interest, if any) on such Securities shall cease to accrue, whether
or not such Securities are delivered to the Paying Agent, and the rights of the
Holders in respect thereof shall terminate (other than the right to receive the
Redemption Price upon delivery of such Securities).


 


Section 3.6.                                   Securities Redeemed in Part.


 


Any Certificated Security that is to be redeemed only in part shall be
surrendered at the office of the Paying Agent and promptly after the Redemption
Date, the Company shall execute and the Trustee shall authenticate and deliver
to the Holder of such Security without service charge a new Security or
Securities, of such authorized denomination or denominations as may be
requested by such Holder, in aggregate principal amount equal to, and in
exchange for, the portion of the principal amount of the Security so
surrendered that is not redeemed.


 


Section 3.7.                                   Repayment to the Company.


 


To
the extent that the aggregate amount of cash deposited by the Company pursuant
to Section 3.5 exceeds the aggregate Redemption Price of the Securities or
portions thereof that the Company is obligated to redeem on the Redemption Date
(because of the


 


25

















 


conversion
of Securities pursuant to Article 6 or otherwise, then, promptly after the
Redemption Date, the Paying Agent shall return any such excess cash to the
Company.


 


ARTICLE 4. OPTIONAL PUT


 


Section 4.1.                                   Optional Put.


 


(a)                                  Securities
shall be purchased by the Company, at the option of any Holder thereof, in
accordance with the provisions of paragraph 6 of the Securities on May 15 of
2011, 2014, 2019, 2024 and 2029 (each, a “Purchase Date”)
at a purchase price in cash equal to 100% of the principal amount of those
Securities plus accrued and unpaid interest (including Contingent Interest and
Additional Interest, if any) to, but excluding, the Purchase Date (the “Purchase Price”), subject to satisfaction by or on behalf of
the Holder of the requirements set forth in Section 4.1(c).


 


(b)                                 Notice
of Purchase Date.  No later than 20
Business Days prior to each Purchase Date, the Company shall mail a written
notice of the purchase right to each Holder (and to beneficial owners as
required by applicable law) in accordance with Section 15.2.  The notice shall include a form of Purchase
Notice to be completed by the Holder and shall state, as applicable:


 


(1)                                  the
date by which the Purchase Notice must be delivered to the Paying Agent in
order for a Holder to exercise the purchase right;


 


(2)                                  the
Purchase Date;


 


(3)                                  the
Purchase Price;


 


(4)                                  the
procedures the Holder must follow to exercise its put right under this
Section 4.1;


 


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


 


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


 


(7)                                  that
the Purchase Price for any Security as to which a Purchase Notice has been duly
given and not withdrawn shall be paid promptly following the later of the
Purchase Date and the time of surrender of such Security;


 


(8)                                  the
conversion rights, if any, of the Securities;


 


(9)                                  the
current Conversion Rate;


 


26

















 


(10)                            that
the Securities as to which a Purchase Notice has been given may be converted if
they are otherwise convertible pursuant to Article 6 of this Indenture
only if the Purchase Notice has been withdrawn in accordance with the terms of
this Indenture;


 


(11)                            the
procedures for withdrawing a Purchase Notice;


 


(12)                            that,
unless the Company defaults in making payment of such Purchase Price, interest
(including Contingent Interest and Additional Interest, if any) on Securities
surrendered for purchase by the Company shall cease to accrue on and after the
Purchase Date; and


 


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


 


If any of the Securities is in the form of a Global Security, the
Company shall modify such notice to the extent necessary to accord with the
procedures of the Depositary applicable to repurchases.


 


At the Company’s request, the Trustee shall give the notice of purchase
right in the Company’s name and at the Company’s expense; provided that
the Company makes such request at least three Business Days (unless a shorter
period shall be satisfactory to the Trustee) prior to the date by which such
notice of purchase right must be given to the Holder in accordance with this
Section 4.1(b); provided  further that the text of such
notice of purchase right shall be prepared by the Company.


 


(c)                                  Purchase
Notice.  A Holder may exercise its
right specified in Section 4.1(a) upon delivery of a written notice (which
shall be in substantially the form included in Exhibit A hereto and
which may be delivered by letter, overnight courier, hand delivery, facsimile
transmission or in any other written form and, in the case of Global
Securities, may be delivered electronically or by other means in accordance
with the Depositary’s customary procedures) of the exercise of such rights (a “Purchase Notice”), to a Paying Agent at any
time during the period beginning at 9:00 a.m., New York City time, on the date
that is 20 Business Days immediately preceding the relevant Purchase Date until
5:00 p.m., New York City time, on the Business Day immediately preceding such Purchase
Date.  The Purchase Notice must state:


 


(1)                                  if
Certificated Securities are to be delivered, the certificate number of the
Security that the Holder shall deliver to be purchased;


 


(2)                                  the
portion of the principal amount of the Security that the Holder shall deliver
to be purchased, which portion must be in principal amounts of $1,000 or an
integral multiple thereof; and


 


(3)                                  that
such Security shall be purchased by the Company as of the Purchase Date
pursuant to the terms and conditions specified in paragraph 6 of the Securities
and in this Indenture.


 


The delivery of such Security to any Paying Agent (together with all
necessary endorsements) at the office of such Paying Agent shall be a condition
to the receipt by the Holder of the Purchase Price; provided that such
Purchase Price shall be paid pursuant to this


 


27

















 


Section 4.1 only if the Security so delivered to the Paying Agent
shall conform in all respects to the description thereof in the related Purchase
Notice.


 


The Company shall purchase from the Holder thereof, pursuant to this
Section 4.1, a portion of a Security if the principal amount of such
portion is $1,000 or an integral multiple of $1,000.  Provisions of this Article 4 that apply to the purchase of
all of a Security also apply to the purchase of such portion of such Security.


 


Notwithstanding anything herein to the contrary, any Holder delivering
to the Paying Agent the Purchase Notice contemplated by this
Section 4.1(c) shall have the right to withdraw such Purchase Notice at
any time prior to 5:00 p.m., New York City time, on the Business Day
immediately preceding to the Purchase Date by delivery of a written notice of
withdrawal to the Paying Agent in accordance with Section 4.2.


 


A Paying Agent shall promptly notify the Company of the receipt by it
of any Purchase Notice or written notice of withdrawal thereof.


 


Anything herein to the contrary notwithstanding, in the case of Global
Securities, any Purchase Notice may be delivered or withdrawn and such
Securities may be surrendered or delivered for purchase in accordance with the
Applicable Procedures as in effect from time to time.


 


Section 4.2.                                   Effect of Purchase Notice.


 


Upon receipt by the Paying Agent of the Purchase Notice specified in
Section 4.1(c), the Holder of the Security in respect of which such
Purchase Notice was given shall (unless such Purchase Notice is withdrawn as
specified below) thereafter be entitled to receive solely the Purchase Price
with respect to such Security.  Such
Purchase Price shall be paid to such Holder promptly following the later of (x)
the Purchase Date with respect to such Security (provided the conditions in
Section 4.1 have been satisfied) and (y) the time of delivery of such
Security to the Paying Agent by the Holder thereof in the manner required by
Section 4.1.  Securities in respect
of which a Purchase Notice has been given by the Holder thereof may not be
converted pursuant to Article 6 hereof on or after the date of the
delivery of such Purchase Notice, unless such Purchase Notice has first been
validly withdrawn.


 


A Purchase Notice may be withdrawn upon delivery of a written notice of
withdrawal (which may be delivered by mail, overnight courier, hand delivery,
facsimile transmission or in any other written form and, in the case of Global
Securities, may be delivered electronically or by other means in accordance
with the Depositary’s customary procedures) to a Paying Agent at any time prior
5:00 p.m., New York City time, on the Business Day immediately preceding the
Purchase Date, specifying:


 


(1)                                  if
Certificated Securities are to be withdrawn, the certificate number of the
Security in respect of which such notice of withdrawal is being submitted;


 


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


 


28

















 


(3)                                  the
principal amount, if any, of such Security that remains subject to the original
Purchase Notice and that has been or shall be delivered for purchase by the
Company.


 


Section 4.3.                                   Deposit of Purchase Price.


 


Prior to 10:00 a.m., New York City time, on the applicable Purchase
Date, the Company shall deposit with the Paying Agent (or, if the Company or an
Affiliate is acting as the Paying Agent, shall segregate and hold in trust as
provided in Section 2.4) an amount in cash (in immediately available funds
if deposited on such Purchase Date) sufficient to pay the aggregate Purchase
Price of all the Securities or portions thereof that are to be purchased as of
such Purchase Date.


 


If a Paying Agent holds, in accordance with the terms hereof, at 10:00
a.m., New York City time on the applicable Purchase Date, cash sufficient to
pay the Purchase Price of any Security for which a Purchase Notice has been
tendered and not withdrawn prior to the applicable Purchase Date then,
immediately after such Purchase Date, such Securities shall cease to be
outstanding and interest (including Contingent Interest and Additional
Interest, if any) on such Securities shall cease to accrue, whether or not such
Securities are delivered to the Paying Agent, and the rights of the Holder in
respect thereof shall terminate (other than the right to receive the Purchase
Price upon delivery of such Securities).


 


Section 4.4.                                   Securities Purchased in
Part.


 


Any
Certificated Security that is to be purchased only in part shall be surrendered
at the office of a Paying Agent (with, if the Company or the Trustee so
requires, due endorsement by, or a written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed by, the Holder
thereof or such Holder’s attorney duly authorized in writing), and promptly
after the Fundamental Change Purchase Date or the Purchase Date, as the case
may be, the Company shall execute and the Trustee shall authenticate and
deliver to the Holder of such Security, without service charge, a new Security
or Securities, of such authorized denomination or denominations as may be
requested by such Holder, in aggregate principal amount equal to, and in
exchange for, the portion of the principal amount of the Security so
surrendered that is not purchased.


 


Section 4.5.                                   Repayment
to the Company.


 


To
the extent that the aggregate amount of cash deposited by the Company pursuant
to Section 4.3 exceeds the aggregate Purchase Price of the Securities or
portions thereof that the Company is obligated to purchase on the Purchase
Date, then, promptly after the Purchase Date, the Paying Agent shall return any
such excess cash to the Company.


 


Section 4.6.                                   Compliance with Securities Laws
Upon Purchase of Securities


 


When complying with the provisions of Section 4.1 hereof (provided
that such offer or purchase constitutes an “issuer tender offer” for purposes
of Rule 13e-4 (which term, as used herein, includes any successor provision
thereto) under the Exchange Act at the time of


 


29

















 


such offer or purchase), and subject to any exemptions available under
applicable law, the Company shall:


 


(a)                                  comply
with Rule 13e-4 and Rule 14e-1 and any other tender offer rules under the
Exchange Act that may then be applicable;


 


(b)                                 file
the required related Schedule TO (or any successor schedule, form or
report) under the Exchange Act; and


 


(c)                                  otherwise
comply with all federal and state securities laws so as to permit the rights
and obligations in connection with any purchase pursuant to Section 4.1 to
be exercised in the time and in the manner specified therein.


 


ARTICLE 5. PUT OPTION UPON FUNDAMENTAL CHANGE


 


Section 5.1.                                   Purchase of Securities at Option of
the Holder Upon a Fundamental Change.


 


(a)                                  If
at any time that Securities remain outstanding there shall occur a Fundamental
Change, Securities shall be purchased by the Company at the option of any
Holder thereof, in accordance with the provisions of paragraph 6 of the
Securities on the date that is 30 Business Days after the occurrence of the
Fundamental Change (the “Fundamental Change
Purchase Date”) at a purchase price in cash equal to 100% of the
principal amount of the Securities plus accrued and unpaid interest (including
Contingent Interest and Additional Interest, if any) to, but excluding, the
Fundamental Change Purchase Date (the “Fundamental Change
Purchase Price”), subject to satisfaction by or on behalf of any
Holder of the requirements set forth in Section 5.1(c).


 


A “Fundamental Change”
shall be deemed to have occurred if any of the following occurs after the date
hereof:


 


(1)                                  any
“person” or “group” is or becomes the “beneficial owner”, directly or
indirectly, of shares of the Company’s voting stock representing 50% or more of
the total voting power of all outstanding classes of the Company’s voting stock
or has the power, directly or indirectly, to elect a majority of the members of
the Company’s board of directors;


 


(2)                                  the
Company consolidates with, or merges with or into, another person or the
Company sells, assigns, conveys, transfers, leases or otherwise disposes of all
or substantially all of the Company’s assets, or any person consolidates with,
or merges with or into, the Company, in any such event other than pursuant to a
transaction in which the persons that “beneficially owned” directly or
indirectly, the shares of the Company’s voting stock immediately prior to such
transaction beneficially own, directly or indirectly, shares of voting stock
representing a majority of the total voting power of all outstanding classes of
voting stock of the surviving or transferee person;


 


30

















 


(3)                                  a
majority of the members of the Company’s board of directors are not continuing
directors (as defined below);


 


(4)                                  the
holders of the Company’s capital stock approve any plan or proposal for the
Company’s liquidation or dissolution (whether or not otherwise in compliance
with this Indenture); or


 


(5)                                  the
Company’s Common Stock ceases to be listed on a national securities exchange or
quoted on The Nasdaq National Market or another established automated
over-the-counter trading market in the United States.


 


Notwithstanding anything to the contrary set forth in this
Section 5.1, a Fundamental Change shall not be deemed to have occurred if
either:


 


(1)                                  the
Closing Sale Price of the Common Stock for any five Trading Days during the ten
Trading Days immediately preceding the Fundamental Change is equal to or
exceeds 105% of the Conversion Price in effect on such Trading Day; or


 


(2)                                  in
the case of a merger or consolidation, all of the consideration (excluding cash
payments for fractional shares and cash payments pursuant to dissenters’
appraisal rights) in the merger or consolidation constituting the Fundamental
Change consists of common stock traded on a national securities exchange or
quoted on The Nasdaq National Market (or which shall be so traded or quoted
when issued or exchanged in connection with such Fundamental Change) and as a
result of such transaction or transactions the debentures become convertible
solely into such common stock.


 


For purposes of this
section:


 


(1)                                  “person” or “group” shall
have the meanings given to them for purposes of Sections 13(d) and 14(d)
of the Exchange Act or any successor provisions, and the term “group” includes
any group acting for the purpose of acquiring, holding or disposing of
securities within the meaning of Rule 13d-5(b)(l) under the Exchange Act, or
any successor provision;


 


(2)                                  a
“beneficial owner” shall be determined in accordance with Rule 13d-3 under the
Exchange Act, as in effect on the date of this Indenture;


 


(3)                                  “beneficially
own” and “beneficially owned” have meanings correlative to that of beneficial
owner;


 


(4)                                  “board
of directors” means the Board of Directors or other governing body charged with
the ultimate management of any person;


 


(5)                                  “capital
stock” means: (i) in the case of a corporation, corporate stock; (ii) in the
case of an association or business entity, any and all shares, interests,
participations, rights or other equivalents (however designated) of corporate
stock; (iii) in the case of a partnership or limited liability company,
partnership interests (whether


 


31

















 


general
or limited) or membership interests; or (iv) any other interest or
participation that confers on a person the right to receive a share of the
profits and losses of, or distributions of assets of, the issuing person;


 


(6)                                  “continuing
director” means, as of any date of determination, any member of the Company’s
board of directors who was a member of such board of directors on the date of
this Indenture; or was nominated for election or elected to such board of
directors with the approval of: (A) a majority of the continuing directors who
were members of such board at the time of such nomination or election or (B) a
nominating committee, a majority of which committee were continuing directors at
the time of such nomination or election.


 


(7)                                  “voting
stock” means any class or classes of capital stock or other interests then
outstanding and normally entitled (without regard to the occurrence of any
contingency) to vote in the election of the board of directors, managers or
trustees.


 


(b)                                 Notice
of Fundamental Change.  Within 10
Business Days after the occurrence of a Fundamental Change, the Company shall
notify the Trustee of the Fundamental Change Purchase Date and shall mail a
written notice of the Fundamental Change (the “Fundamental
Change Company Notice”) to each Holder (and to beneficial owners as
required by applicable law) in accordance with Section 15.2.  The notice shall include the form of a
Fundamental Change Purchase Notice to be completed by the Holder and shall
state, as applicable:


 


(1)                                  the
events causing a Fundamental Change and the date of such Fundamental Change;


 


(2)                                  that
the Holder has a right to require the Company to purchase the Holder’s
Securities;


 


(3)                                  the
date by which the Fundamental Change Purchase Notice must be delivered to the
Paying Agent in order for a Holder to exercise the Fundamental Change purchase
right;


 


(4)                                  the
Fundamental Change Purchase Date;


 


(5)                                  the
Fundamental Change Purchase Price;


 


(6)                                  the
procedures that the Holder must follow to exercise its Fundamental Change
purchase rights under this Section 5.1;


 


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


 


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


 


(9)                                  that
the Fundamental Change Purchase Price for any Security as to which a
Fundamental Change Purchase Notice has been duly given and not withdrawn shall
be


 


32

















 


paid promptly following the later of the Fundamental Change Purchase
Date and the time of surrender of such Security;


 


(10)                            the
conversion rights, if any, of the Securities arising as a result of such
Fundamental Change;


 


(11)                            the
current Conversion Rate and any adjustments to the Conversion Rate that may
result from the Fundamental Change;


 


(12)                            that
the Securities as to which a Fundamental Change Purchase Notice has been given
may be converted pursuant to Article 6 of this Indenture only if the
Fundamental Change Purchase Notice has been withdrawn in accordance with the
terms of this Indenture;


 


(13)                            the
procedures for withdrawing a Fundamental Change Purchase Notice;


 


(14)                            that,
unless the Company defaults in making payment of such Fundamental Change
Purchase Price, interest (including Contingent Interest and Additional
Interest, if any) on Securities surrendered for purchase by the Company shall
cease to accrue on and after the Fundamental Change Purchase Price; and


 


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


 


If any of the Securities is in the form of a Global Security, then the
Company shall modify such notice to the extent necessary to accord with the
procedures of the Depositary applicable to repurchases.


 


At the Company’s request, the Trustee shall give notice of such
Fundamental Change on behalf of the Company and at the Company’s expense; provided
that the Company makes such request at least three Business Days (unless a
shorter period shall be satisfactory to the Trustee) prior to the date by which
such Fundamental Change Company Notice must be given to the Holders in
accordance with this Section 5.1(b); provided  further that
the text of such notice shall be prepared by the Company.


 


(c)                                  Fundamental
Change Purchase Notice.  A Holder
may exercise its right specified in Section 5.1(a) upon delivery of a
written notice (which shall be in substantially the form included in Exhibit
A hereto and which may be delivered by letter, overnight courier, hand
delivery, facsimile transmission or in any other written form and, in the case
of Global Securities, may be delivered electronically or by other means in
accordance with the Depositary’s customary procedures) of the exercise of such
rights (a “Fundamental Change Purchase Notice”)
to a Paying Agent at any time prior to 5:00 p.m., New York City time, on the
Business Day immediately preceding the Fundamental Change Purchase Date.  The Fundamental Change Purchase Notice must
state:


 


(1)                                  if
Certificated Securities are to be delivered, the certificate number of the
Security that the Holder shall deliver to be purchased;


 


33

















 


(2)                                  the
portion of the principal amount of the Security that the Holder shall deliver
to be purchased, which portion must be in principal amounts of $1,000 or an
integral multiple thereof; and


 


(3)                                  that
such Security shall be purchased by the Company on the Fundamental Change
Purchase Date pursuant to the terms and conditions specified in paragraph 6 of
the Securities and in this Indenture.


 


The delivery of such Security to any Paying Agent (together with all
necessary endorsements) at the office of such Paying Agent shall be a condition
to the receipt by the Holder of the Fundamental Change Purchase Price; provided that such Fundamental Change Purchase Price shall be paid
pursuant to this Section 5.1 only if the Security so delivered to the
Paying Agent shall conform in all respects to the description thereof in the
related Fundamental Change Purchase Notice.


 


The Company shall purchase from the Holder thereof, pursuant to this
Section 5.1, a portion of a Security if the principal amount of such
portion is $1,000 or an integral multiple of $1,000.  Provisions of this Article 5 that apply to the purchase of
all of a Security also apply to the purchase of such portion of such Security.


 


Notwithstanding anything herein to the contrary, any Holder delivering
to the Paying Agent the Fundamental Change Purchase Notice contemplated by this
Section 5.1(c) shall have the right to withdraw such Fundamental Change
Purchase Notice at any time prior to 5:00 p.m., New York City time, on the
Business Day immediately preceding the Fundamental Change Purchase Date by
delivery of a written notice of withdrawal to the Paying Agent in accordance
with Section 5.2.


 


A Paying Agent shall promptly notify the Company of the receipt by it
of any Fundamental Change Purchase Notice or written notice of withdrawal
thereof.


 


Anything herein to the contrary notwithstanding, in the case of Global
Securities, any Fundamental Change Purchase Notice may be delivered or
withdrawn and such Securities may be surrendered or delivered for purchase in
accordance with the Applicable Procedures as in effect from time to time.


 


Section 5.2.                                   Effect of Fundamental Change
Purchase Notice.


 


Upon receipt by any Paying Agent of the Fundamental Change Purchase
Notice specified in Section 5.1(c), the Holder of the Security in respect
of which such Fundamental Change Purchase Notice was given shall (unless such
Fundamental Change Purchase Notice is withdrawn as specified below) thereafter
be entitled to receive the Fundamental Change Purchase Price with respect to
such Security.  Such Fundamental Change
Purchase Price shall be paid to such Holder promptly following the later of (a)
the Fundamental Change Purchase Date with respect to such Security (provided
the conditions in Section 5.1(c) have been satisfied) and (b) the time of
delivery of such Security to a Paying Agent by the Holder thereof in the manner
required by Section 5.1(c). 
Securities in respect of which a Fundamental Change Purchase Notice has
been given by the Holder thereof may not be converted into shares of Common
Stock


 


34

















 


pursuant to Article 6 on or after the date of the delivery of such
Fundamental Change Purchase Notice unless such Fundamental Change Purchase
Notice has first been validly withdrawn.


 


A Fundamental Change Purchase Notice may be withdrawn upon delivery of
a written notice of withdrawal (which may be delivered by mail, overnight
courier, hand delivery, facsimile transmission or in any other written form
and, in the case of Global Securities, may be delivered electronically or by
other means in accordance with the Depositary’s customary procedures) to a
Paying Agent at any time prior to 5:00 p.m., New York City time, on the
Business Day immediately preceding the Fundamental Change Purchase Date,
specifying:


 


(1)                                  if
Certificated Securities are to be withdrawn, the certificate number of the
Security in respect of which such notice of withdrawal is being submitted;


 


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


 


(3)                                  the
principal amount, if any, of such Security that remains subject to the original
Fundamental Change Purchase Notice and that has been or shall be delivered for
purchase by the Company.


 


Section 5.3.                                   Deposit of Fundamental Change
Purchase Price.


 


Prior to 10:00 a.m., New York City time, on the Fundamental Change
Purchase Date, the Company shall deposit with the Paying Agent (or if the
Company or an Affiliate is acting as the Paying Agent, shall segregate and hold
in trust as provided in Section 2.4) an amount in cash (in immediately
available funds if deposited on such Fundamental Change Purchase Date)
sufficient to pay the aggregate Fundamental Change Purchase Price of all the
Securities or portions thereof that are to be purchased as of such Fundamental
Change Purchase Date.


 


If a Paying Agent holds, in accordance with the terms hereof, at 10:00
a.m., New York City time, on the applicable Fundamental Change Purchase Date,
cash sufficient to pay the Fundamental Change Purchase Price of any Security
for which a Fundamental Change Purchase Notice has been tendered and not
withdrawn in accordance with this Indenture then, immediately after the Fundamental
Change Purchase Date, such Securities shall cease to be outstanding and
interest (including Contingent Interest and Additional Interest, if any) on
such Securities shall cease to accrue, whether or not such Securities are
delivered to the Paying Agent, and the rights of the Holders in respect thereof
shall terminate (other than the right to receive the Fundamental Change
Purchase Price upon delivery of such Securities).


 


Section 5.4.                                   Securities
Purchased in Part.


 


Any Certificated Security
that is to be purchased only in part shall be surrendered at the office of a
Paying Agent (with, if the Company or the Trustee so requires, due endorsement
by, or a written instrument of transfer in form satisfactory to the Company and
the Trustee duly executed by, the Holder thereof or such Holder’s attorney duly
authorized in writing), and promptly after the Fundamental Change Purchase
Date, the Company shall execute and the Trustee shall authenticate and deliver
to the Holder of such Security, without service


 


35

















 


charge, a new Security or
Securities, of such authorized denomination or denominations as may be
requested by such Holder, in aggregate principal amount equal to, and in
exchange for, the portion of the principal amount of the Security so
surrendered that is not purchased.


 


Section 5.5.                                   Repayment to the Company.


 


To the extent that the
aggregate amount of cash deposited by the Company pursuant to Section 5.3
exceeds the aggregate Fundamental Change Purchase Price of the Securities or
portions thereof that the Company is obligated to purchase on the Fundamental
Change Purchase Date, then, promptly after the Fundamental Change Purchase
Date, the Paying Agent shall return any such excess cash to the Company.


 


Section 5.6.                                   Compliance with Securities Laws
Upon Purchase of Securities.


 


When complying with the provisions of Section 5.1 hereof (provided
that such offer or purchase constitutes an “issuer tender offer” for purposes
of Rule 13e-4 (which term, as used herein, includes any successor provision
thereto) under the Exchange Act at the time of such offer or purchase), and
subject to any exemptions available under applicable law, the Company shall:


 


(a)                                  comply
with Rule 13e-4 and Rule 14e-1 and any other tender offer rules under the
Exchange Act that may then be applicable;


 


(b)                                 file
the required related Schedule TO (or any successor schedule, form or
report) under the Exchange Act; and


 


(c)                                  otherwise
comply with all federal and state securities laws so as to permit the rights
and obligations in connection with any purchase pursuant to a Fundamental
Change to be exercised in the time and in the manner specified therein.


 


ARTICLE 6.

CONVERSION


 


Section 6.1.                                   Conversion Privilege.


 


(a)                                  Subject
to the further provisions of this Article 6 and paragraph 7 of the
Securities, a Holder of a Security may convert the principal amount of such
Security (or any portion thereof equal to $1,000 or any integral multiple of
$1,000 in excess thereof) into Common Stock at the Conversion Rate in effect on
the Conversion Date only as follows:


 


(i)                                     during
the fiscal quarter after any fiscal quarter ending on or after April 30,
2004, if the Closing Sale Price of the Common Stock for at least 20 Trading
Days in the 30 Trading Days ending on the last Trading Day of the previous
fiscal quarter is more than 120% of the Conversion Price per share of Common
Stock on such last Trading Day;


 


36

















 


(ii)                                  at
any time prior to 5:00 p.m., New York City time, on the Business Day
immediately preceding the Redemption Date, if such Security has been called for
redemption pursuant to Article 3 hereof;


 


(iii)                               in
the event that the Company declares


 


(A)                              a
dividend or distribution of any rights or warrants (other than pursuant to a
Rights Plan) to all holders of Common Stock entitling them to subscribe for or
purchase shares of Common Stock at less than the Closing Sale Price of the
Common Stock on the record date of such issuance, or


 


(B)                                a
dividend or distribution of cash, debt securities (or other evidences of
indebtedness), or other assets (excluding dividends or distributions for which
the Conversion Rate adjustment is required to be made under Section 6.5(a)
or 6.5(b) of this Indenture), which distribution has a per share value
exceeding 5% of the Closing Sale Price of the Common Stock on the Trading Day
preceding the declaration date for such distribution,


 


then the Securities may be surrendered for conversion beginning on the
date the Company gives notice to the Holders of such right, which shall not be
less than 20 days prior to the Ex-Dividend Date for such dividend or
distribution and Securities may be surrendered for conversion at any time
thereafter until the close of business on the Business Day prior to the Ex-Dividend
Date or until the Company announces that such distribution shall not take
place; or


 


(iv)                              in
the event that the Company is a party to a consolidation, merger, combination
or binding share exchange involving the Company or transfer or lease of all or
substantially all of its assets pursuant to which the Common Stock would be
converted into cash, securities or other assets, the Securities may be
surrendered for conversion at any time from or after the date that is 15 days
prior to the anticipated effective time of the transaction as announced by the
Company, which announcement must occur no later than 15 days prior to such
anticipated effective time, until 15 days after the actual date of such
transaction.


 


(b)                                 The
Company shall determine on the first day of each of its fiscal quarters whether
the Securities shall be convertible as a result of the occurrence of an event
specified in clause (a)(i) of this Section 6.1 and, if the Securities
shall be so convertible, the Company shall promptly deliver to the Trustee
written notice thereof.


 


Whenever the Securities shall become convertible pursuant to this
Section 6.1, the Company or, at the Company’s request, the Trustee in the
name and at the expense of the Company, shall notify the Holders in writing of
the event triggering such convertibility in the manner provided in
Section 15.2, and the Company shall also publicly announce such
information by press release and publish it on the Company’s website.  Any notice so given shall be conclusively
presumed to have been given, whether or not the Holders receives such notice.


 


37

















 


Section 6.2.                                   Conversion Procedures.


 


(a)                                  Subject
to Section 6.13, each Security shall be convertible at the office of the
Conversion Agent into fully paid and nonassessable shares of Common Stock
(calculated to the nearest 1/100th of a share).


 


The Conversion Agent shall notify the Company
when it receives a Conversion Notice. 
Settlement of the conversion obligation relating to any Security subject
to a Conversion Notice shall be in accordance with the procedures set forth in
Section 6.13.  If the Company
elects to settle in Common Stock only, a certificate for the number of full
shares of Common Stock into which the Securities are converted (and cash in
lieu of fractional shares) shall be delivered to such Holder, assuming all of
the other requirements have been satisfied by such Holder, as soon as
practicable after the Company issues its notification of its chosen method of
settlement in accordance with Section 6.13.  If the Company elects to settle in cash or a combination of cash
and Common Stock, the cash and, if applicable, a certificate for the number of
full shares of Common Stock into which the Securities are converted (and cash in
lieu of fractional shares) shall be delivered to such Holder, assuming all of
the other requirements have been satisfied by such Holder, in accordance with
Section 6.13.  Notwithstanding the
foregoing, the Company shall not be required to deliver certificates for Common
Stock while the stock transfer books for such stock or the security register
are duly closed for any purpose, but certificates for Common Stock shall be
issued and delivered as soon as practicable after the opening of such books or
security register.


 


No separate cash payment of accrued and
unpaid interest (including Contingent Interest and Additional Interest, if any)
shall be paid by the Company on a converted Security, and except as described
in Section 6.12 hereof.  Accrued
and unpaid interest (including Contingent Interest and Additional Interest, if
any) shall be deemed to be paid in full with the shares of Common Stock issued
or cash paid upon conversion, rather than deemed cancelled, extinguished or
forfeited.


 


The Company shall not issue any fraction of a
share of Common Stock in connection with any conversion of Securities, but
instead shall, subject to Section 6.11 hereof, make a cash payment
(calculated to the nearest cent) equal to such fraction multiplied by the
Closing Sale Price of the Common Stock on the last Trading Day prior to the
date of conversion.


 


If more than one Security shall be
surrendered for conversion at one time by the same Holder, the number of full
shares of Common Stock that shall be deliverable upon conversion shall be
computed on the basis of the aggregate principal amount of the Securities (or
specified portions thereof to the extent permitted thereby) so surrendered.


 


Notwithstanding the foregoing, a Security in
respect of which a Holder has delivered a Purchase Notice or Fundamental Change
Purchase Notice exercising such Holder’s option to require the Company to
purchase such Security may be converted only if such notice of exercise is
withdrawn in accordance with Sections 4.2 or 5.2 hereof, as the case may be,
prior to the close of business on the Business Day immediately preceding the
applicable Purchase Date or Fundamental Change Purchase Date, as the case may
be.


 


38

















 


A Holder of Securities is not entitled to any
rights of a holder of Common Stock until such Holder has converted its
Securities to Common Stock, and only to the extent such Securities are deemed
to have been converted into Common Stock pursuant to this Section 6.2(c).


 


(b)                                 Before
any Holder of a Security shall be entitled to convert the same into Common
Stock, such Holder shall, in the case of Global Securities, comply with the
Applicable Procedures of the Depositary in effect at that time, and in the case
of Certificated Securities, surrender such Securities, duly endorsed to the
Company or in blank, at the office of the Conversion Agent, and shall give
written notice to the Company at said office or place in the form of the
Conversion Notice attached to the Securities (the “Conversion
Notice”) that such Holder elects to convert (in whole or in part so
long as the principal amount to be converted is in multiples of $1,000
principal amount) the same and shall state in writing therein the principal
amount of Security to be converted and the name or names (with addresses) in
which such Holder wishes the certificate or certificates for Common Stock to be
issued.


 


Before any such conversion, a Holder also
shall pay all funds required, if any, relating to interest (including
Contingent Interest and Additional Interest, if any), on the Securities, as
provided in Section 6.12 and all taxes or duties, if any, as provided in
Section 6.3.


 


If shares of Common Stock to be issued upon
conversion of a Restricted Security are to be issued in the name of a Person
other than the Holder of such Restricted Security, such Holder shall deliver to
the Conversion Agent a certification in substantially the form set forth in Exhibit
B dated the date of surrender of such Restricted Security and signed by
such Holder, as to compliance with the restrictions on transfer applicable to
such Restricted Security.  The Company
shall not be required to issue Common Stock upon conversion of any such
Restricted Security to a Person other than the Holder if such Restricted
Security is not so accompanied by a properly completed certification, and the
Registrar shall not be required to register Common Stock upon conversion of any
such Restricted Security in the name of a Person other than the Holder if such
Restricted Security is not so accompanied by a properly completed
certification.


 


(c)                                  A
Security shall be deemed to have been converted immediately prior to 5:00 p.m.,
New York City time on the date of the surrender of such Security for conversion
and all of the items required for conversion shall have been delivered and all
requirements for conversion as provided above shall have been met (such date,
the “Conversion Date” for such
Security), and the person or persons entitled to receive the Common Stock
issuable upon such conversion shall be treated for all purposes as the record
Holder or Holders of such Common Stock as of immediately prior to 5:00 p.m.,
New York City time on such date.


 


(d)                                 In
case any Certificated Security shall be surrendered for partial conversion, the
Company shall execute and the Trustee shall authenticate and deliver to or upon
the written order of the Holder of the Security so surrendered, without charge
to such Holder (subject to the provisions of Section 6.3 hereof), a new
Security or Securities in authorized denominations in an aggregate principal
amount equal to the unconverted portion of the surrendered Certificated
Securities.


 


39

















 


Section 6.3.                                   Taxes on Conversion.


 


The issue of stock certificates on conversion of Securities shall be
made without charge to the converting Holder for any documentary, stamp or
similar issue or transfer taxes in respect of the issue thereof, and the
Company shall pay any and all documentary, stamp or similar issue or transfer
taxes that may be payable in respect of the issue or delivery of shares of
Common Stock on conversion of Securities pursuant hereto.  The Company shall not, however, be required
to pay any such tax which may be payable in respect of any transfer involved in
the issue or delivery of shares of Common Stock or the portion, if any, of the
Securities which are not so converted in a name other than that in which the
Securities so converted were registered, and no such issue or delivery shall be
made unless and until the Person requesting such issue has paid to the Company
the amount of such tax or has established to the satisfaction of the Company
that such tax has been paid.  Nothing
herein shall preclude any tax withholding required by law or regulation.


 


Section 6.4.                                   Company to Provide Stock.


 


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


 


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


 


The Company shall endeavor promptly to comply with all federal and
state securities laws regulating the offer and delivery of shares of Common
Stock upon conversion of Securities, if any, and shall list or cause to have
quoted such shares of Common Stock on each national securities exchange or on
The Nasdaq National Market or other over-the-counter market or such other
market on which the Common Stock is then listed or quoted; provided, however,
that if rules of such exchange or automated quotation system permit the Company
to defer the listing of such Common Stock until the first conversion of the
Securities into Common Stock in accordance with the provisions of this
Indenture, the Company covenants to list such Common Stock issuable upon
conversion of the Securities in accordance with the requirements of such
exchange or automated quotation system at such time.  Any Common Stock issued upon conversion of a Security hereunder
which at the time of conversion was a Restricted Security shall also be a
Restricted Security.


 


Section 6.5.                                   Adjustment of Conversion Rate.


 


The Conversion Rate shall be adjusted from time to time by the Company
as follows:


 


(a)                                  In
case the Company shall, at any time or from time to time while any of the
Securities are outstanding, pay a dividend or make a distribution in shares of
Common Stock to all holders of its outstanding shares of Common Stock, then the
Conversion Rate in effect at the opening of business on the date next following
the record date fixed for the determination of


 


40

















 


stockholders
entitled to receive such dividend or other distribution shall be increased by
multiplying such Conversion Rate 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 such record date fixed for such
determination and the total number of shares 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 such record date fixed for such determination.


 


If any dividend or distribution of the type
described in this Section 6.5(a) is declared but not so paid or made, the
Conversion Rate shall again be adjusted to the Conversion Rate which would then
be in effect if such dividend or distribution had not been declared.


 


(b)                                 In
case the Company shall issue rights or warrants (other than pursuant to a
Rights Plan) to all holders of its Common Stock entitling them (for a period
commencing no earlier than the record date described below and expiring not
more than 60 days after such record date) to subscribe for or purchase shares
of Common Stock (or securities convertible into Common Stock) at a price per
share (or having a conversion price per share) less than the Current Market
Price per share of Common Stock on the Trading Day immediately prior to the
date of announcement of such issuance, the Conversion Rate in effect shall be
adjusted so that the same shall equal the rate determined by multiplying the
Conversion Rate in effect immediately prior to such announcement by a fraction
of which the numerator shall be the number of shares of Common Stock outstanding
at the close of business on the date of announcement plus the number of
additional shares of Common Stock offered (or into which the convertible
securities so offered are convertible), and the denominator of which shall be
the number of shares of Common Stock outstanding at the close of business on
the date of announcement plus the number of shares which the aggregate offering
price of the total number of shares of Common Stock so offered (or the
aggregate conversion price of the convertible securities so offered, which
shall be determined by multiplying the number of shares of Common Stock
issuable upon conversion of such convertible securities by the conversion price
per share of Common Stock pursuant to the terms of such convertible securities)
would purchase at the Current Market Price per share of Common Stock on the
Trading Day immediately preceding the date of announcement of such
issuance.  Such adjustment shall be made
successively whenever any such rights or warrants are issued, and shall become
effective on the day following the date of announcement of such issuance.  If at the end of the period during which
such rights or warrants are exercisable not all rights or warrants shall have
been exercised, the adjusted Conversion Rate shall be immediately readjusted to
what it would have been based upon the number of additional shares of Common
Stock actually issued (or the number of shares of Common Stock issuable upon
conversion of convertible securities actually issued).


 


(c)                                  In
case the Company shall, at any time or from time to time while any of the
Securities are outstanding, subdivide its outstanding shares of Common Stock
into a greater number of shares of Common Stock or combine its outstanding
shares of Common Stock into a smaller number of shares of Common Stock, then
the Conversion Rate in effect at the opening of business on the day following
the day upon which such subdivision or combination becomes


 


41

















 


effective
shall be adjusted by multiplying such Conversion Rate by a fraction, the
numerator of which shall be the number of shares of Common Stock outstanding
immediately after giving effect to such subdivision or combination and the
denominator of which shall be the number of shares of Common Stock outstanding
immediately prior to such subdivision or combination.


 


(d)                                 In
case the Company shall distribute to all holders of its Common Stock any shares
of capital stock of the Company, Extraordinary Cash Dividends, evidences of
indebtedness or other assets (including securities of any person other than the
Company but excluding dividends or distributions referred to in
subsection (a) of this Section 6.5 and dividends referred to in
subsection (e) of this Section 6.5), or shall distribute to all
holders of its Common Stock rights or warrants to subscribe for or purchase any
of its securities (excluding those rights and warrants referred to in
subsection (b) of this Section 6.5), then in each such case the
Conversion Rate shall be adjusted so that the same shall equal the rate
determined by multiplying the current Conversion Rate by a fraction of which
the numerator shall be the Current Market Price per share of the Common Stock
on the record date mentioned below and the denominator shall be the Current
Market Price per share of the Common Stock on such record date less the sum of
any such Extraordinary Cash Dividends per share of Common Stock and the fair
market value on such record date (as determined by the Board of Directors,
whose determination shall be conclusive evidence of such fair market value and
which shall be evidenced by an Officers’ Certificate delivered to the Trustee)
of the portion of the capital stock, evidences of indebtedness or other assets
so distributed or of such rights or warrants applicable to one share of Common
Stock (in each case, determined on the basis of the number of shares of Common
Stock outstanding on the record date). 
Such adjustment shall be made successively whenever any such
distribution is made and shall become effective immediately after the record
date for the determination of shareholders entitled to receive such
distribution.


 


In the event the sum of any such Extraordinary Cash Dividends per share
of Common Stock and the then fair market value (as so determined) of the
portion of the Capital Stock, evidences of indebtedness or other assets so
distributed or of such rights or warrants applicable to one share of Common
Stock is equal to or greater than the Current Market Price per share of Common
Stock on such record date, in lieu of the foregoing adjustment, adequate
provision shall be made so that each holder of a Security shall have the right
to receive upon conversion the amount of Capital Stock, Extraordinary Cash
Dividends, evidences of indebtedness or other assets so distributed or of such
rights or warrants such holder would have received had such holder converted
each Security on such record date.  In
the event that 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 6.5 by
reference to the actual or when issued trading market for any securities, it
must in doing so consider the prices in such market over the same period used
in computing the Current Market Price of the Common Stock.


 


In the event that the Company has in effect a rights plan described in
the next paragraph (“Rights Plan”),
upon conversion of the Securities into Common Stock, to the extent that the
Rights Plan is still in effect upon such conversion, the holders of Securities
shall receive, in addition to the Common Stock, the rights described therein
(whether or not the rights have


 


42

















 


separated from the Common Stock at the time of conversion), subject to
the limitations set forth in the Rights Plan.


 


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 6.5
(and no adjustment to the Conversion Rate under this Section 6.5 shall 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 6.5.  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 6.5 was made, (1) in the case of any such rights or warrants which
shall all have been redeemed or purchased without exercise by any holders
thereof, the Conversion Rate shall be readjusted upon such final redemption or
purchase 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
purchase 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 purchase, and (2) in the case of such rights or warrants which
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.


 


(e)                                  In
case the Company shall pay or distribute a Regular Cash Dividend to all holders
of its Common Stock in excess of $0.17 in the aggregate in any fiscal quarter
(a “Triggering Distribution”), the
Conversion Rate shall be increased so that the same shall equal the rate
determined by multiplying such Conversion Rate in effect on the Business Day
immediately preceding the record date for such Triggering Distribution by a
fraction of which the numerator shall be the Current Market Price per share of
the Common Stock on the record date mentioned below, and the denominator shall
be the Current Market Price per share of the Common Stock on the such record
date less the aggregate amount by which the cash so distributed applicable to
one share of Common Stock (determined on the basis of the number of shares of
Common Stock outstanding on such record date) exceeds $0.17 in the aggregate in
any fiscal quarter.  It is expressly understood
that a stock buyback, repurchase or similar transaction or program shall in no
event be considered a Triggering Distribution for purposes of this
Section 6.5(e).  Such adjustment
shall be made successively whenever any such dividend or distribution is made
and shall become effective immediately after the record date for the
determination of


 


43

















 


shareholders
entitled to receive such dividend or distribution.  In the event that such dividend or distribution is not so paid or
made, the Conversion Rate shall again be adjusted to be the Conversion Rate
that would be in effect if such dividend or distribution had not been declared.


 


Notwithstanding the
foregoing, adjustments to the Conversion Rate resulting from Regular Cash
Dividends may not cause the Conversion Rate to exceed 24.35 (the quotient
obtained by dividing $1,000 by the last reported closing sale price per share
of the Common Stock on April 29, 2004) as adjusted for any other
adjustment pursuant to this Section 6.5.


 


(f)                                    In
case the Company or any of its Subsidiaries shall purchase any shares of the
Company’s Common Stock by means of a tender offer, then, effective immediately
prior to the opening of business on the day after the last date (the “Expiration Date”) tenders could have been made pursuant to
such tender offer (as it may be amended) (the last time at which such tenders
could have been made on the Expiration Date is hereinafter sometimes called 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 close of business on the
Expiration Date by a fraction of which the numerator shall be the sum of (x)
the aggregate consideration (determined as set forth below) payable to
stockholders of the Company based on the acceptance (up to any maximum
specified in the terms of the tender offer) of all shares validly tendered 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 and excluding any shares held in the
treasury of the Company) immediately after the Expiration Time and the Current
Market Price per share of Common Stock (as determined in accordance with
subsection (g) of this Section 6.5), and the denominator shall be the
product of the number of shares of Common Stock outstanding (including
Purchased Shares but excluding any shares held in the treasury of the Company)
immediately prior to the Expiration Time multiplied by the Current Market Price
per share of the Common Stock (as determined in accordance with
subsection (g) of this Section 6.5). 
For purposes of this Section 6.5(f), the aggregate consideration in
any such tender offer shall equal the sum of the aggregate amount of cash
consideration and the aggregate fair market value (as determined by the Board
of Directors, whose determination shall be conclusive evidence thereof and
which shall be evidenced by an Officers’ Certificate delivered to the Trustee)
of any other consideration payable in such tender offer.  In the event that the Company is obligated
to purchase shares pursuant to any such tender offer, but the Company is
permanently prevented by applicable law from effecting any or all such
purchases or any or all such purchases are rescinded, the Conversion Rate shall
again be adjusted to be the Conversion Rate which would have been in effect
based upon the number of shares actually purchased.  If the application of this Section 6.5(f) to any tender
offer would result in a decrease in the Conversion Rate, no adjustment shall be
made for such tender offer under this Section 6.5(f).  For purposes of this Section 6.5(f),
the term “tender offer” shall mean and include both tender offers and exchange
offers, all references to “purchases” of shares in tender offers (and all
similar references) shall mean and include both the purchase of shares in
tender offers and the acquisition of shares pursuant to exchange offers, and
all references to “tendered shares” (and all similar references) shall mean and
include shares tendered in both tender offers and exchange offers.


 


44

















 


(g)                                 For
the purpose of any computation under subsections (b), (d) and (e) of this
Section 6.5, the current market price (the “Current
Market Price”) per share of Common Stock on any date shall be deemed
to be the average of the daily Closing Prices for the five consecutive Trading
Days commencing six Trading Days before the record date with respect to
distributions, issuances or other events requiring such computation under
subsection (b), (d) or (e) of this Section 6.5.  For purposes of any computation under
subsection (f) of this Section 6.5, the Current Market Price per
share of Common Stock shall be deemed to be the average of the daily Closing
Prices for the five consecutive Trading Days commencing on the Trading Day next
succeeding the Expiration Date.


 


(h)                                 In
any case in which this Section 6.5 shall require that an adjustment be
made following a record date, an announcement date or an Expiration Date, as
the case may be, established for purposes of this Section 6.5, the Company
may elect to defer (but only until five Business Days following the filing by
the Company with the Trustee of the certificate described in Section 6.8)
issuing to the Holder of any Security converted after such record date or
announcement date or Expiration Date the shares of Common Stock and other
capital stock of the Company issuable upon such conversion over and above the
shares of Common Stock and other capital stock of the Company issuable upon
such conversion only on the basis of the Conversion Rate prior to adjustment;
and, in lieu of the shares the issuance of which is so deferred, the Company
shall issue or cause its transfer agents to issue due bills or other
appropriate evidence prepared by the Company of the right to receive such shares.  If any distribution in respect of which an
adjustment to the Conversion Rate is required to be made as of the record date
or announcement date or Expiration Date therefor is not thereafter made or paid
by the Company for any reason, the Conversion Rate shall be readjusted to the
Conversion Rate which would then be in effect if such record date had not been
fixed or such announcement date or effective date or Expiration Date had not
occurred.


 


(i)                                     All
calculations under this Section 6.5 shall be made to the nearest cent or
one-hundredth of a share, with one-half cent and 0.005 of a share,
respectively, being rounded upward. 
Notwithstanding any other provision of this Section 6.5, the
Company shall not be required to make any adjustment of the Conversion Rate
unless such adjustment would require an increase or decrease of at least 1% of
such rate.  Any lesser adjustment shall
be carried forward and shall be made at the time of and together with the next
subsequent adjustment which, together with any adjustment or adjustments so
carried forward, shall amount to an increase or decrease of at least 1% in such
rate.  Any adjustments under this
Section 6.5 shall be made successively whenever an event requiring such an
adjustment occurs.


 


Section 6.6.                                   No Adjustment.


 


No adjustment in the Conversion Price shall be required if Holders may
participate in the transactions described in Section 6.5 without
converting.


 


No adjustment need be made for issuances of Common Stock pursuant to a
Company plan for reinvestment of dividends or for a change in the par value or
a change to no par value of the Common Stock.


 


45



















Section 6.7.                                   Notice of Adjustment.


 


Whenever an adjustment in the Conversion Rate with respect to the
Securities is required:


 


(a)                                  the
Company shall forthwith place on file with the Trustee and any Conversion Agent
for such securities a certificate of the Treasurer of the Company, stating the
adjusted Conversion Rate determined as provided herein and setting forth in
reasonable detail such facts as shall be necessary to show the reason for and
the manner of computing such adjustment; and


 


(b)                                 a
notice stating that the Conversion Rate has been adjusted and setting forth the
adjusted Conversion Rate shall forthwith be given by the Company or, at the
Company’s request, by the Trustee in the name and at the expense of the
Company, to each Holder in the manner provided in Section 15.2
hereof.  Any notice so given shall be
conclusively presumed to have been duly given, whether or not the Holder
receives such notice.


 


Section 6.8.                                   Notice of Certain Transactions.


 


In the event that:


 


(1)                                  the
Company takes any action which would require an adjustment in the Conversion
Rate;


 


(2)                                  the
Company consolidates or merges with, or transfers all or substantially all of
its property and assets to, another corporation and shareholders of the Company
must approve the transaction; or


 


(3)                                  there
is a dissolution or liquidation of the Company,


 


the Company shall mail to Holders and file with the Trustee a notice
stating the proposed record or effective date, as the case may be. The Company
shall mail the notice at least ten days before such date.  Failure to mail such notice or any defect
therein shall not affect the validity of any transaction referred to in clause
(1), (2) or (3) of this Section 6.8.


 


Section 6.9.                                   Effect of Reclassification,
Consolidation, Merger or Sale on Conversion Privilege.


 


If any of the following shall occur:


 


(a) any reclassification or change of shares of Common Stock issuable
upon conversion of the Securities (other than a change in par value, or from
par value to no par value, or from no par value to par value, or as a result of
a subdivision or combination, or any other change for which an adjustment is
provided in Section 6.5);


 


(b) any consolidation, merger, combination or binding share exchange to
which the Company is a party other than a merger in which the Company is the
continuing corporation and which does not result in any reclassification of, or
change (other than in par value, or from


 


46

















 


par value to no par value, or from no par value to par value, or as a
result of a subdivision or combination) in, outstanding shares of Common Stock;
or


 


(c) any transfer or lease of all or substantially all of the assets of
the Company, directly or indirectly, to any person,


 


then the Company, or such
successor, purchasing or transferee Person, as the case may be, shall, as a
condition precedent to such reclassification, change, consolidation, merger,
combination, binding share exchange, transfer or lease, execute and deliver to
the Trustee a supplemental indenture providing that the Holder of each Security
then outstanding shall have the right to convert such Security into the kind
and amount of shares of stock and other securities and property (including
cash) receivable upon such reclassification, change, consolidation, merger,
combination, binding share exchange, transfer or lease by a holder of the
number of shares of Common Stock issuable upon conversion of such Security
immediately prior to such reclassification, change, consolidation, merger,
combination, binding share exchange, transfer or lease.  Such supplemental indenture shall provide
for adjustments of the Conversion Rate that shall be as nearly equivalent as
may be practicable to the adjustments of the Conversion Rate provided for in
this Article 6.  If, in the case of
any such consolidation, merger, combination, binding share exchange, transfer
or lease, the stock or other securities and property (including cash)
receivable thereupon by a holder of Common Stock include shares of stock or
other securities and property of a person other than the successor, purchasing
or transferee Person, as the case may be, in such consolidation, merger,
combination, binding share exchange, transfer or lease of all, then such
supplemental indenture shall also be executed by such other person and shall
contain such additional provisions to protect the interests of the Holders of
the Securities as the Board of Directors shall reasonably consider necessary by
reason of the foregoing.  The provisions
of this Section 6.9 shall similarly apply to successive reclassifications,
changes, consolidations, mergers, combinations, binding share exchanges,
transfers or leases.


 


In the event the Company shall execute a supplemental indenture
pursuant to this Section 6.9, the Company shall promptly file with the
Trustee (x) an Officers’ Certificate briefly stating the reasons therefor, the
kind or amount of shares of stock or other securities or property (including
cash) receivable by Holders of the Securities upon the conversion of their Securities
after any such reclassification, change, consolidation, merger, combination,
binding share exchange, transfer or lease, any adjustment to be made with
respect thereto and that all conditions precedent have been complied with and
(y) an Opinion of Counsel that all conditions precedent have been complied
with, and the Company or the Trustee on behalf of the Company shall promptly
mail notice thereof to all Holders.


 


Section 6.10.                             Trustee’s Disclaimer.


 


The Trustee has no duty to determine when an
adjustment under this Article 6 should be made, how it should be made or
what it should be.  The Trustee makes no
representation as to the validity or value of any securities or assets issued
upon conversion of Securities.  The
Trustee shall not be responsible for any failure of the Company to comply with
this Article 6.  Each Conversion
Agent other than the Company shall have the same protection under this
Section 6.10 as the Trustee.


 


47

















 


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


 


Section 6.11.                             Voluntary Increase.


 


The Company from time to time may increase the Conversion Rate by any
amount for any period of time if the period is at least 20 days and if the
increase is irrevocable during the period if the Board of Directors determines
that such increase would be in the best interest of the Company or to avoid or
diminish income tax to holders of shares of Common Stock in connection with a
dividend or distribution of stock or similar event, and the Company provides 15
days prior notice of any increase in the Conversion Rate; provided that
in no event may the Company increase the Conversion Rate such that a share of
Common Stock would be issuable upon conversion of the Securities at less than
the par value of a share of Common Stock.


 


Section 6.12.                             Conversion After Record Date.


 


Except as provided in this Section 6.12,
a converting Holder of Securities shall not be entitled to receive any separate
cash payments with respect to accrued and unpaid interest (including Contingent
Interest and Additional Interest, if any) on any such Securities being
converted.  By delivery to the Holder of
the number of shares of Common Stock or other consideration issuable or cash
payable upon conversion in accordance with this Article 6, any accrued and
unpaid interest (including Contingent Interest and Additional Interest, if any)
on such Securities shall be deemed to have been paid in full.  If any Securities are surrendered for
conversion subsequent to the record date preceding an Interest Payment Date but
prior to such Interest Payment Date, the Holder of such Securities at the close
of business on such record date shall receive the interest (including
Contingent Interest and Additional Interest, if any) payable on such Security
on such Interest Payment Date notwithstanding the conversion thereof.  Securities surrendered for conversion during
the period from the close of business on any record date preceding any Interest
Payment Date to the opening of business on such Interest Payment Date shall be
accompanied by payment from converting Holders, for the account of the Company,
in New York Clearing House funds, or other funds of an amount equal to the
interest (including Contingent Interest and Additional Interest, if any)
payable on such Interest Payment Date on the Securities being surrendered for
conversion;provided that
no such payment is required if (a) the Company has specified a Redemption Date
during the period from the close of business on any record date preceding any
Interest Payment Date through and including such Interest Payment Date or (b)
any overdue interest (including any overdue Contingent Interest and Additional
Interest, if any) exists at the time of the conversion with respect to the
Securities converted, but only to the extent of the amount of such overdue
interest.


 


Except as provided in Section 6.2(a) and this Section 6.12,
no payment or adjustments in respect of payments of interest (including
Contingent Interest and Additional Interest, if any) on Securities surrendered
for conversion or any dividends or distributions on the Common Stock issued
upon conversion shall be made upon the conversion of any Securities.


 


48

















 


Section 6.13.                             Option to Satisfy Conversion
Obligation with Cash, Common Stock or Combination Thereof


 


(a)                                  On
the first date the Securities become convertible under the circumstances
described in Section 6.1, the Company shall make an election at its sole
and absolute discretion (the “Principal
Conversion Settlement Election”) and shall publicly announce such
information by press release no later than the end of the first Business Day
thereafter and notify the Holders in writing through the Trustee whether a
Holder who converts a Security shall be entitled to receive, in respect of the
principal amount of such Security upon surrender thereof, all Common Stock
(other than with respect to fractional shares), all cash or a combination of
cash and Common Stock.  If the Company
elects to settle the Conversion Obligation relating to the principal amount of
such Security in a combination of cash and Common Stock, the Company shall
specify the percentage of the principal amount to be satisfied in cash.  This notification is irrevocable and legally
binding with regard to any conversion of the Securities under the circumstances
described in Section 6.1.


 


(b)                                 If
the Company receives any Holder’s Conversion Notice on or prior to the day that
is 31 Trading Days prior to the Final Maturity Date (the “Final Notice Date”), then (i) as to the
principal amount of the Security, the method for settlement shall be in
accordance with the Principal Conversion Settlement Election and (ii) as to the
Excess Amount, the Company shall notify the Holder in writing through the
Trustee, at any time on or before the date that is three Trading Days following
receipt of the Conversion Notice required pursuant to Section 6.2 (such
period, the “Settlement Notice Period”)
of the method the Company elects to settle its obligation upon conversion of
the Excess Amount (the “Excess Conversion
Obligation”, which together with the obligation upon conversion in
respect of principal constitutes the “Conversion
Obligation”) by specifying whether the Holder is entitled to
receive, in respect of the Excess Conversion Obligation, all cash, all Common
Stock (other than with respect to fractional shares), or a combination of cash
and Common Stock.  If the Company elects
to settle the Excess Conversion Obligation in a combination of cash and Common
Stock, the Company shall specify the percentage of the obligation to be settled
in cash.  The Company shall treat all
Holders converting on the same Trading Day in the same manner and the Company
shall not have any obligation to settle Excess Conversion Obligations arising
on different Trading Days in the same manner.


 


Settlement of the
Company’s entire Conversion Obligation in Common Stock only shall occur in
accordance with Section 6.2(a). 
Settlement in cash or in a combination of cash and Common Stock shall,
subject to Section 6.13(d), occur on the third Trading Day following the
final Trading Day of the 20 Trading Day period (the “Cash Settlement Averaging Period”)
beginning on the final Trading Day of the Settlement Notice Period.


 


Settlement amounts shall
be computed as follows:


 


(i)                                     if the Company elects to satisfy its entire Conversion
Obligation, including the principal amount and Excess Amount, in shares of
Common Stock (other than with respect to fractional shares), the Company shall
deliver to a Holder, for each $1,000 principal amount of a Security, a number
of shares of Common Stock equal to the applicable Conversion Rate;


 


49

















 


(ii)                                  if
the Company elects to satisfy its entire Conversion Obligation in cash,
including principal amount and Excess Amount, the Company shall deliver to a
Holder, for each $1,000 principal amount of Securities, cash in an amount equal
to the product of (i)) the applicable Conversion Rate multiplied by (ii) the volume
weighted average price of the Common Stock during the Cash Settlement Averaging
Period;


 


(iii)                               if
the Company elects to satisfy its Conversion Obligation, including principal
amount and Excess Amount, in a combination of cash and Common Stock, the Company
shall deliver to a Holder, for each $1,000 principal amount of Securities:


 


(1)                                  a
cash amount (the “Cash Amount”)
(excluding any cash in lieu of fraction shares) equal to the sum of:


 


(A)                              the
product of (x) $1,000 multiplied by (y) the percentage of such principal amount
of a Security to be satisfied in cash; plus


 


(B)                                if
greater than zero, the product of (x) the amount of cash that would be paid
pursuant to clause (ii) immediately above minus $1,000, multiplied by (y) the
percentage of the Excess Amount to be satisfied in cash;


 


and


 


(2)                                  a
number of shares of Common Stock equal to the difference between:


 


(A)                              the
number of shares of Common Stock that would be issued pursuant to clause (i)
immediately above, minus


 


(B)                                the
number of shares equal to the quotient of (x) the Cash Amount divided by (y)
the volume weighted average price of the Common Stock during the Cash
Settlement Averaging Period.


 


The “volume weighted
average price” per share of the Common Stock on any Trading Day shall be the
volume weighted average price on the New York Stock Exchange, or if the Common
Stock is not listed on the New York Stock Exchange, on the principal exchange
or over-the-counter market on which the Common Stock is then listed or traded,
from 9:30 a.m. to 4:00 p.m. (New York City time) on that Trading Day as
displayed by Bloomberg (Bloomberg key-strokes: 
NX Equity VAP) (or if such volume weighted average price is not
available, the market value of one share on such Trading Day as we determine in
good faith using a volume weighted method).


 


(c)                                  The
Company shall settle all of its Conversion Obligations arising after the Final
Notice Date in the same manner. 
Settlement of the Conversion Obligation relating to the principal amount
of the Securities shall be according to the Principal Conversion Settlement
Election.  On or prior to the Final
Notice Date, the Company shall notify the Holders through the Trustee of the
method it chooses to settle any Excess Conversion Obligations arising after the
Final Notice Date.


 


50

















 


Settlement of Conversion Obligations arising after the Final Notice
Date in Common Stock only shall occur in accordance with
Section 6.2(a).  Subject to
Section 6.13(d), settlement of Conversion Obligations arising after the
Final Notice Date in cash or in a combination of cash and Common Stock shall
occur on the third Trading Day following the final Trading Day of the Cash
Settlement Averaging Period described in the following sentence.  The settlement amount of cash or combination
of cash and Common Stock in satisfaction of Conversion Obligations arising
after the Final Notice Date shall be computed in the same manner as set forth
in Section 6.13(b), except that the Cash Settlement Averaging Period shall
be the 20 Trading Day period beginning on the date that is the 23rd Trading Day
prior to the Final Maturity Date.


 


(d)                                 If
any Trading Day during a Cash Settlement Averaging Period is not an Undisrupted
Trading Day, then determination of the price for that day shall be delayed
until the next Undisrupted Trading Day and such day shall not count as one of
the 20 Trading Days that constitute the Cash Settlement Averaging Period.  If this results in the Cash Settlement
Averaging Period extending beyond the eighth Trading Day after the last of the
original 20 Trading Days in the Cash Settlement Averaging Period, then the
Company shall determine all prices for all delayed and undetermined prices on
that eighth Trading Day based on its good faith estimate of the value of the
Common Stock on that date.  In the event
that any Trading Day during the Cash Settlement Averaging Period beginning on
the date that is the 23rd Trading Day prior to the Final Maturity
Date is not an Undisrupted Trading Day, settlement will occur after the Final
Maturity Date.


 


ARTICLE 7.

CONTINGENT INTEREST


 


Section 7.1.                                   Contingent Interest.


 


The Company shall make Contingent Interest payments to the Holders of
Securities, as set forth in Section 7.2 below, during any six-month period
from May 15 to November 14 and from November 15 to May 14, commencing
with the six-month period beginning May 15, 2011 (each a “Contingent Interest Period”), if the
average Trading Price of a Security for the five Trading Days ending on the
third Trading Day immediately preceding the first day of the relevant
Contingent Interest Period equals 120% or more of the principal amount of such
Security.  During any Contingent
Interest Period when Contingent Interest is payable pursuant to this
Section 7.1, each Contingent Interest payment due and payable on each
$1,000 principal amount shall equal 0.25% per annum of such average Trading
Price of such Security.  Contingent
Interest, if any, shall accrue and be payable to Holders in the same manner as
regular cash interest. Regular cash interest shall continue to accrue at the
rate specified in the Securities whether or not Contingent Interest is paid.


 


51

















 


Section 7.2.                                   Payment of Contingent Interest;
Contingent Interest Rights Preserved.


 


(a)                                  The
Company shall pay Contingent Interest owed pursuant to Section 7.1 for any
Contingent Interest Period on the Interest Payment Date immediately succeeding
the applicable Contingent Interest Period to Holders of Securities as of the
record date relating to such Interest Payment Date.


 


(b)                                 Upon
a determination by the Company that Holders of Securities shall be entitled to
receive Contingent Interest during a Contingent Interest Period, on or prior to
the first day of such Contingent Interest Period, the Company shall notify the
Holders in writing of such determination in the manner provided in
Section 15.2, and the Company shall also publicly announce such
information by press release and publish it on the Company’s website.


 


ARTICLE 8.

COVENANTS


 


Section 8.1.                                   Payment of Securities.


 


The Company shall promptly make all payments in respect of the
Securities on the dates and in the manner provided in the Securities and this
Indenture.  Principal amount, Redemption
Price, Purchase Price and Fundamental Change Purchase Price and accrued and
unpaid interest (including Contingent Interest and Additional Interest, if any)
shall be considered paid on the date it is due if the Paying Agent holds by
10:00 a.m., New York City time, on such date the Paying Agent holds, in
accordance with this Indenture, cash or securities, if permitted hereunder,
sufficient to pay all such amounts then due. The Company shall, to the fullest
extent permitted by law, pay interest on overdue principal and overdue
installments of interest (including Contingent Interest and Additional
Interest, if any) at the rate borne by the Securities per annum.  Except as otherwise specified, all
references in this Indenture or the Securities to interest shall be deemed to
include, without duplication, Additional Interest, if any, payable pursuant to
the Registration Rights Agreement.


 


Payment of the principal of, interest (including Contingent Interest
and Additional Interest, if any) on the Securities shall be made at the
Corporate Trust Office of the Trustee in such coin or currency of the United
States of America as at the time of payment is legal tender for payment of
public and private debts.  Payment of
interest (including Contingent Interest and Additional Interest, if any) on
Certificated Securities shall be made by (i) check mailed to the address of the
Person entitled thereto as such address appears in the Register if such
Securities have an aggregate principal amount of $5 million or less or (ii)
wire transfer of immediately available funds to an account within the United
States designated by such Person if such Securities have an aggregate principal
amount in excess of $5 million. 
Notwithstanding the foregoing, so long as the Securities are registered
in the name of a Depositary or its nominee, all payments with respect to the
Securities shall be made by wire transfer of immediately available funds to the
account of the Depositary or its nominee.


 


52

















 


The Company shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue amounts from time to time on
demand at the rate then in effect; it shall pay interest (including
post-petition interest in any proceeding under any Bankruptcy Law) on overdue
installments of interest (including Contingent Interest and Additional
Interest, if any)  (without regard to
any applicable grace periods) from time to time on demand at the same rate to
the extent lawful.  Interest shall be
computed on the basis of a 360-day year of twelve 30-day months.


 


Section 8.2.                                   SEC Reports.


 


The Company shall file all reports and other information and documents
that it is required to file with the SEC pursuant to Section 13 or 15(d)
of the Exchange Act, and within 15 days after it files them with the SEC, the
Company shall deliver copies of all such reports, information and other
documents to the Trustee.  In the event
the Company is at any time no longer subject to the reporting requirements of Section 13
or 15(d) of the Exchange Act, it shall continue to provide the Trustee with
annual and quarterly reports containing substantially the same information as
would have been required to be filed with the SEC had the Company continued to
have been subject to such reporting requirements.  In such event, such reports shall be provided at the times the
Company would have been required to provide reports had it continued to have
been subject to such reporting requirements. 
The Company also shall comply with the other provisions of TIA
Section 314(a).


 


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 rely exclusively on Officers’ Certificates).


 


Section 8.3.                                   Compliance Certificates.


 


(a)                                  The
Company shall deliver to the Trustee, within 90 days after the end of each
fiscal year (beginning with fiscal year ending October 31, 2004), an
Officers’ Certificate stating that a review of the activities of the Company
during the preceding fiscal year has been made under the supervision of the
signing Officers with a view to determining whether the Company has kept,
observed, performed and fulfilled its obligations under this Indenture, and
further stating, as to each such Officer signing such certificate, that to the
best of his or her knowledge the Company has kept, observed, performed and
fulfilled each and every covenant contained in this Indenture and is not in
default in the performance or observance of any of the terms, provisions and
conditions of this Indenture (or, if a Default or Event of Default shall have
occurred, describing all such Defaults or Events of Default of which he or she
may have knowledge and what action the Company is taking or proposes to take
with respect thereto) and that to the best of his or her knowledge no event has
occurred and remains in existence by reason of which payments on account of the
principal of or interest, if any, on the Securities is prohibited or if such
event has occurred, a description of the event and what action the Company is
taking or proposes to take with respect thereto.


 


53

















 


(b)                                 The
Company shall, so long as any of the Securities are outstanding, deliver to the
Trustee, as soon as practicable and in any event within five Business Days upon
any Officer becoming aware of any Default or Event of Default, an Officers’
Certificate specifying such Default or Event of Default and what action the
Company is taking or proposes to take with respect thereto.


 


Section 8.4.                                   Further Instruments and Acts.


 


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


 


Section 8.5.                                   Maintenance of Corporate Existence.


 


Subject to Article 9, the Company shall do or cause to be done all
things necessary to preserve and keep in full force and effect its corporate
existence.


 


Section 8.6.                                   Rule 144A Information Requirement.


 


Within the period prior to the expiration of the holding period
applicable to sales 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, upon the request of any Holder or beneficial holder of the
Securities make available to such Holder or beneficial holder of Securities or
any Common Stock issued upon conversion thereof which continue to be Restricted
Securities in connection with any sale thereof and any prospective purchaser of
Securities or such Common Stock designated by such Holder or beneficial holder,
the information required pursuant to Rule 144A(d)(4) under the Securities Act
and it shall take such further action as any Holder or beneficial holder of
such Securities 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 Securities 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 Securities or such Common
Stock, the Company shall deliver to such Holder a written statement as to
whether it has complied with such requirements.


 


Section 8.7.                                   Stay, Extension and Usury Laws.


 


The Company covenants, to the extent 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 amount, Redemption Price, Purchase Price or Fundamental Change Purchase
Price in respect of Securities, or any interest (including Contingent Interest
and Additional Interest, if any) on the Securities 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 shall not, by resort to any such law,
hinder, delay or impede the execution of any power herein granted to the


 


54

















 


Trustee or any Agent, but shall suffer and permit the execution of
every such power as though no such law had been enacted.


 


Section 8.8.                                   Maintenance of Office or Agency of
the Trustee, Regstrar, Paying Agent and Conversion Agent


 


The Company shall maintain an office or
agency of the Trustee, Registrar, Paying Agent and Conversion Agent where
Securities may be presented or surrendered for payment, where Securities may be
surrendered for registration of transfer, exchange, redemption, purchase or
conversion and where notices and demands to or upon the Company in respect of
the Securities and this Indenture may be served.  An office of the Trustee shall initially be such office or agency
for all of the aforesaid purposes.  The
Company shall give prompt written notice to the Trustee of the location, and of
any change in the location, of any such office or agency (other than a change
in the location of the office of 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 address of the Trustee set forth in Section 15.2.


 


ARTICLE 9.

CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE


 


Section 9.1.                                   Company May Consolidate, Etc, Only
on Certain Terms.


 


The Company shall not consolidate with or merge into any other Person
(in a transaction in which the Company is not the surviving corporation) or
convey, transfer or lease all or substantially of its properties and assets to
any successor Person, unless:


 


(1)                                  the
resulting, surviving or transferee Person is organized and validly existing
under the laws of the United States of America, any State thereof or the
District of Columbia and shall expressly assume, by an indenture supplemental
hereto, executed and delivered to the Trustee, in form satisfactory to the
Trustee, all of the obligations of the Company under the Securities and this
Indenture;


 


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


 


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


 


Section 9.2.                                   Successor Substituted.


 


Upon any consolidation of the Company with, or merger of the Company
into, any other Person or any conveyance, transfer or lease of all or substantially
all of the properties


 


55

















 


and assets of the Company in accordance with Section 9.1, the
successor Person formed by such consolidation or into which the Company is
merged or to which such conveyance, transfer or lease is made shall succeed to,
and be substituted for, and may exercise every right and power of, the Company
under this Indenture with the same effect as if such successor Person had been
named as the Company herein, and thereafter, except in the case of a lease, the
predecessor Person shall be relieved of all obligations and covenants under
this Indenture and the Securities.


 


ARTICLE 10.

DEFAULT AND REMEDIES


 


Section 10.1.                             Events
of Default.


 


An “Event of Default” shall occur if:


 


(1)                                  the
Company defaults in the payment of any principal of any of the Securities when
the same becomes due and payable (whether at maturity, upon redemption, on a
Purchase Date or Fundamental Change Purchase Date or otherwise);


 


(2)                                  the
Company defaults in the payment of any accrued and unpaid interest (including
Contingent Interest and Additional Interest, if any), in each case, when due
and payable, and such default continues for a period of 30 days;


 


(3)                                  following
the exercise by the Holder of the right to convert a Security pursuant to and
in accordance with Article 6, the Company (i) fails to deliver the cash,
if any, when required to be delivered following the Company’s election to so
deliver cash upon conversion pursuant to Section 6.13 or (ii) fails to deliver
the Common Stock, if any, when required to be delivered following the Company’s
election to so deliver Common Stock upon conversion pursuant to
Section 6.13;


 


(4)                                  the
Company fails to provide the Fundamental Change Company Notice as required by
this Indenture;


 


(5)                                  the
Company fails to comply with any other covenant or warranty contained in the
Securities or in this Indenture (other than those referred to in clauses 1
through 4 above) and such failure continues for 60 days after receipt by the
Company of a Notice of Default (defined below);


 


(6)                                  the
Company defaults under any Indebtedness for money borrowed by the Company or
any Significant Subsidiary in an aggregate outstanding principal amount in
excess of $10,000,000, and such Default continues for 30 days after receipt by
the Company of a Notice of Default, which default:


 


(A)                              is
caused by a failure to pay principal or interest when due on such Indebtedness
by the end of the applicable grace period, if any, unless such Indebtedness is
discharged, or


 


56

















 


(B)                                results
in the acceleration of such Indebtedness, unless such acceleration is waived,
cured, rescinded or annulled;


 


(7)                                  the
Company or any of its Significant Subsidiaries, pursuant to or within the
meaning of any Bankruptcy Law:


 


(A)                              commences
a voluntary case or proceeding;


 


(B)                                consents
to the entry of an order for relief against it in an involuntary case or
proceeding or the commencement of any case against it;


 


(C)                                consents
to the appointment of a Custodian of it or for any substantial part of its
property; or


 


(D)                               makes
a general assignment for the benefit of its creditors; or


 


(8)                                  a
court of competent jurisdiction enters an order or decree under any Bankruptcy
Law that:


 


(A)                              is
for relief against the Company or any Significant Subsidiary of the Company in
an involuntary case or proceeding;


 


(B)                                appoints
a Custodian of the Company or any Significant Subsidiary of the Company, or for
any substantial part of the property of the Company or any Significant
Subsidiary of the Company; or


 


(C)                                orders
the winding up or liquidation of the Company or any Significant Subsidiary of
the Company;


 


and in each case of this subclause (8) the order or decree remains
unstayed and in effect for 60 consecutive days.


 


The term “Bankruptcy Law”
means Title 11 of the United States Code (or any successor thereto) or any
similar federal or state law for the relief of debtors. The term “Custodian” means any receiver, trustee,
assignee, liquidator, sequestrator or similar official under any Bankruptcy
Law.


 


A default under clause (5) or (6) above is not an Event of Default
until the Trustee notifies the Company, or the Holders of at least 25% in
aggregate principal amount of the Securities then outstanding notify the Company
and the Trustee, in writing of the Default, and the Company does not cure the
Default (and such Default is not waived) within the time period specified in
clauses (5) or (6) above after actual receipt of such notice.  The notice given pursuant to this Section 10.1
must specify the Default, demand that it be remedied and state that the notice
is a “Notice of Default.” When any
Default under this Section 10.1 is cured, it ceases.


 


57

















 


The Trustee shall not be charged with knowledge of any Event of Default
unless written notice thereof shall have been given to a Trust Officer at the
Corporate Trust Office of the Trustee by the Company, a Paying Agent, any
Holder or any agent of any Holder.


 


Section 10.2.                             Acceleration.


 


If an Event of Default (other than an Event of Default specified in
clause (7) or (8) of Section 10.1) occurs and is continuing, the Trustee
may, by notice to the Company, or the Holders of at least 25% in aggregate
principal amount of the Securities then outstanding may, by notice to the
Company and the Trustee, declare all unpaid principal of plus accrued and
unpaid interest (including Contingent Interest and Additional Interest, if any)
on all the Securities then outstanding to be due and payable upon any such
declaration, and the same shall become and be immediately due and payable.


 


If an Event of Default specified in clause (7) or (8) of
Section 10.1 occurs, all unpaid principal of plus accrued and unpaid
interest (including Contingent Interest and Additional Interest, if any) on all
the Securities then outstanding shall ipso facto become and be immediately due
and payable without any declaration or other act on the part of the Trustee or
any Holder.


 


The Holders of a majority in aggregate principal amount of the
Securities then outstanding by notice to the Trustee may rescind an
acceleration of Securities and its consequences before a judgment or decree for
the payment of money has been obtained by the Trustee if (a) all existing
Events of Default, other than the nonpayment of the principal of plus accrued
and unpaid interest (including Contingent Interest and Additional Interest, if
any) on the Securities that has become due solely by such declaration of
acceleration, have been cured or waived and (b) all payments due to the Trustee
and any predecessor Trustee under Section 11.7 have been made.  No such rescission shall affect any
subsequent Default or impair any right consequent thereto.


 


Section 10.3.                             Other
Remedies.


 


If an Event of Default occurs and is continuing, the Trustee may, but
shall not be obligated to, pursue any available remedy by proceeding at law or
in equity to collect the payment of the principal of or accrued and unpaid
interest (including Contingent Interest and Additional Interest, if any) on the
Securities or to enforce the performance of any provision of the Securities or
this Indenture.


 


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


 


58

















 


Section 10.4.                             Waiver of Defaults and Events of
Default.


 


Subject to Sections 10.7 and 12.2, the Holders of a majority in
aggregate principal amount of the Securities then outstanding by notice to the
Trustee may waive an existing Default or Event of Default and its consequence,
except a Default or Event of Default in the payment of the principal of, or any
interest (including Contingent Interest and Additional Interest, if any) on any
Security, or the payment of any applicable Purchase Price, Fundamental Change
Purchase Price or Redemption Price, or a failure by the Company to convert any
Securities into Common Stock and/or cash or any Default or Event of Default in
respect of any provision of this Indenture or the Securities that, under
Section 12.2, cannot be modified or amended without the consent of the
Holder of each Security affected.  When
a Default or Event of Default is waived, it is deemed cured, but no such waiver
shall extend to any subsequent or other Default or impair any consequent
right.  This Section 10.4 shall be
in lieu of Section 316(a)1(B) of the TIA and such Section 316(a)1(B)
is hereby expressly excluded from this Indenture, as permitted by the TIA.


 


Section 10.5.                             Control by Majority.


 


The Holders of a majority in aggregate principal amount of the
Securities then outstanding may 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 it.  However, the
Trustee may refuse to follow any direction that conflicts with law or this
Indenture, that the Trustee determines may be unduly prejudicial to the rights
of another Holder or the Trustee, or that may involve the Trustee in personal
liability unless the Trustee is offered indemnity satisfactory to it; provided
that the Trustee may take any other action deemed proper by the Trustee which
is not inconsistent with such direction. 
This Section 10.5 shall be in lieu of Section 316(a)1(A) of
the TIA and such Section 316(a)1(A) is hereby expressly excluded from this
Indenture, as permitted by the TIA.


 


Section 10.6.                             Limitations on Suits.


 


A Holder of a Security may not pursue any remedy with respect to this
Indenture or the Securities unless:


 


(1)                                  the
Holder gives to the Trustee written notice of a continuing Event of Default;


 


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


 


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


 


(4)                                  the
Trustee does not comply with the request within 60 days after receipt of the
request and the offer of indemnity; and


 


(5)                                  no
direction inconsistent with such written request has been given to the Trustee
during such 60-day period by the Holders of a majority in aggregate principal
amount of the Securities then outstanding.


 


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


 


Section 10.7.                             Rights of Holders to Receive
Payment and to Convert.


 


Notwithstanding any other provision of this Indenture, the right of any
Holder of a Security to receive payment of the principal amount, Redemption
Price, Purchase Price, Fundamental Change Purchase Price or interest (including
Contingent Interest and Additional Interest, if any) on any Security, on or
after the respective due dates expressed in the Security and this Indenture, to
convert such Security in accordance with Article 6 and to bring suit for
the enforcement of any such payment on or after such respective dates or the
right to convert, is absolute and unconditional and shall not be impaired or
affected without the consent of the Holder.


 


Section 10.8.                             Collection Suit by Trustee.


 


If an Event of Default in the payment of principal or interest
specified in clause (1) or (2) of Section 10.1 occurs and is continuing,
the Trustee may recover judgment in its own name and as trustee of an express
trust against the Company or another obligor on the Securities for the whole
amount owing with respect to the Securities and the amounts provided for in
Section 11.7.


 


Section 10.9.                             Trustee May File Proofs of Claim.


 


The Trustee may file such proofs of claim and other papers or documents
as may be necessary or advisable in order to have the claims of the Trustee
(including any claim for the reasonable compensation, expenses, disbursements
and advances of the Trustee, its agents and counsel) and the Holders allowed in
any judicial proceedings relative to the Company (or any other obligor on the
Securities), its creditors or its property and shall be entitled and empowered
to collect and receive any money or other property payable or deliverable on
any such claims and to distribute the same, and any Custodian in any such judicial
proceeding is hereby authorized by each Holder to make such payments to the
Trustee and, in the event that the Trustee shall consent to the making of such
payments directly to the Holders, to pay to the Trustee any amount due to it
for the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 11.7, and to the extent that such payment of the reasonable
compensation, expenses, disbursements and advances 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, money,
securities and other property which the Holders may be entitled to receive in such
proceedings, whether in liquidation or under any plan of reorganization or
arrangement or otherwise.  Nothing
herein contained shall be deemed to authorize the Trustee to authorize or
consent to, or, on behalf of any Holder, to authorize, accept or adopt any plan
of reorganization, arrangement, adjustment or composition affecting the
Securities or the rights of any Holder thereof, or to authorize the Trustee to
vote in respect of the claim of any Holder in any such proceeding.


 


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Section 10.10.                       Priorities.


 


If the Trustee collects any money pursuant to this Article 10, it
shall pay out the money in the following order:


 


First, to the Trustee for amounts due under
Section 11.7;


 


Second, to Securityholders for amounts due and
unpaid on the Securities for the principal amount, Redemption Price, Purchase
Price, Fundamental Change Purchase Price or interest (including Contingent
Interest and Additional Interest, if any), as the case may be, ratably, without
preference or priority of any kind, according to such amounts due and payable
on the Securities; and


 


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


 


The Trustee may fix a record date and payment date for any payment to
Holders pursuant to this Section 10.10. 
At least 15 days before such record date, the Trustee shall mail to each
Securityholder and the Company a notice that states the record date, the
payment date and the amount to be paid.


 


Section 10.11.                       Undertaking
for Costs.


 


In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys’ fees and expenses, against any party litigant in the suit, having
due regard to the merits and good faith of the claims or defenses made by the
party litigant.  This Section 10.11
does not apply to a suit made by the Trustee, a suit by a Holder pursuant to
Section 10.7, or a suit by Holders of more than 10% in aggregate principal
amount of the Securities then outstanding. 
This Section 10.11 shall be in lieu of Section 315(e) of the
TIA and such Section 315(e) is hereby expressly excluded from this
Indenture, as permitted by the TIA.


 


ARTICLE 11.

TRUSTEE


 


Section 11.1.                             Duties of Trustee.


 


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


 


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


 


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


 


(2)                                  in
the absence of bad faith on its part, the Trustee may conclusively rely, as to
the truth of the statements and the correctness of the opinions expressed
therein, upon certificates or opinions furnished to the Trustee and conforming
to the requirements of this Indenture.  The Trustee, however, shall examine any certificates and opinions
which by any provision hereof are specifically required to be delivered to the
Trustee to determine whether or not they conform to the requirements of this
Indenture.


 


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


 


(1)                                  this
paragraph does not limit the effect of subsection (b) of this
Section 11.1;


 


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


 


(3)                                  the
Trustee shall not be liable with respect to any action it takes or omits to
take in good faith in accordance with a direction received by it pursuant to
Section 10.5.


 


(d)                                 No
provision of this Indenture shall require the Trustee to expend or risk its own
funds or otherwise incur any financial liability in the performance of any of
its duties hereunder or in the exercise of any of its rights or powers unless
the Trustee shall have received adequate indemnity in its opinion against
potential costs and liabilities incurred by it relating thereto.


 


Subparagraphs (c)(i),
(ii) and (iii) shall be in lieu of
Sections 315(d)(1), 315(d)(2) and 315(d)(3)  of the TIA, respectively,
and such Sections 315(d)(1), 315(d)(2) and 315(d)(3) are hereby expressly
excluded from this Indenture, as permitted by the TIA.


 


(e)                                  Every
provision of this Indenture that in any way relates to the Trustee is subject
to subsections (a), (b), (c) and (d) of this Section 11.1.


 


(f)                                    The
Trustee shall not be liable for interest or any other investment income on any
money received by it except as the Trustee may agree in writing with the
Company.  Money held in trust by the
Trustee need not be segregated from other funds except to the extent required
by law.


 


Section 11.2.                             Rights of Trustee.


 


Subject to
Section 11.1:


 


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


 


(b)                                 Before
the Trustee acts or refrains from acting, it may require an Officers’
Certificate or an Opinion of Counsel, which shall conform to
Section 15.4(b).  The Trustee shall
not be liable for any action it takes or omits to take in good faith in
reliance on such Officers’ Certificate or Opinion.


 


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


 


(d)                                 The
Trustee shall not be liable for any action it takes or omits to take in good
faith which it believes to be authorized or within its rights or powers.


 


(e)                                  The
Trustee may consult with counsel of its selection, and the advice or opinion of
such counsel as to matters of law shall be full and complete authorization and
protection in respect of any such action taken, omitted or suffered by it
hereunder in good faith and in accordance with the advice or opinion of such
counsel.


 


(f)                                    The
Trustee shall be under no obligation to exercise any of the rights or powers
vested in it by this Indenture at the request or direction of any of the
Holders pursuant to this Indenture, unless such Holders shall have offered to
the Trustee security or indemnity satisfactory to the Trustee against the
costs, expenses and liabilities which might be incurred by it in compliance
with such request or direction.


 


(g)                                 The
Trustee shall not be bound to make any investigation into the facts or matters
stated in any resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture, note, other
evidence of indebtedness 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 at the
sole cost of the Company and shall incur no liability or additional liability
of any kind by reason of such inquiry or investigation.


 


(h)                                 The
Trustee shall not be deemed to have notice of any Default or Event of Default
unless a Trust Officer of the Trustee has actual knowledge thereof or unless
written notice by the Company or any Holder of any event which is in fact such
a default is received by the Trustee at the Corporate Trust Office, and such
notice references the Securities and this Indenture.


 


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


 


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Section 11.3.                             Individual Rights of Trustee.


 


The Trustee in its individual or any other capacity may become the
owner or pledgee of Securities and may otherwise deal with the Company or an
Affiliate of the Company with the same rights it would have if it were not Trustee.  Any Agent may do the same with like
rights.  However, the Trustee is subject
to Sections 11.10 and 11.11.


 


Section 11.4.                             Trustee’s
Disclaimer.


 


The Trustee makes no representation as to the validity or adequacy of
this Indenture or the Securities, it shall not be accountable for the Company’s
use of the proceeds from the Securities, and it shall not be responsible for
any statement in the Securities other than its certificate of authentication.


 


Section 11.5.                             Notice of Default or Events of
Default.


 


If a Default or an Event of Default occurs and is continuing and if it
is known to the Trustee, the Trustee shall give to each Securityholder notice
of the Default within 90 days after it occurs or, if later, within 15 days
after it is known to the Trustee, unless such Default or Event of Default shall
have been cured or waived before the giving of such notice.  Notwithstanding the preceding sentence,
except in the case of a Default or Event of Default described in
Section 10.1(a) or (b), the Trustee may withhold the notice if and so long
as a committee of its Trust Officers in good faith determines that withholding
the notice is in the interest of the Securityholders.  The preceding sentence shall be in lieu of the proviso to
Section 315(b) of the TIA and such proviso is hereby expressly excluded
from this Indenture, as permitted by the TIA.


 


Section 11.6.                             Reports by Trustee to Holders.


 


If such report is required by TIA Section 313, within 60 days
after each March 15, beginning with the March 15 following the date
of this Indenture, the Trustee shall mail to each Securityholder a brief report
dated as of such March 15 that complies with TIA Section 313(a).  The Trustee also shall comply with TIA
Section 313(b)(2) and (c).


 


A copy of each report at the time of its mailing to Securityholders
shall be mailed to the Company and filed with the SEC and each stock exchange,
if any, on which the Securities are listed. 
The Company shall notify the Trustee whenever the Securities become
listed on any stock exchange or listed or admitted to trading on any quotation
system and any changes in the stock exchanges or quotation systems on which the
Securities are listed or admitted to trading and of any delisting thereof.


 


Section 11.7.                             Compensation and Indemnity.


 


The Company shall pay to the Trustee from time to time such
compensation (as agreed to from time to time by the Company and the Trustee in
writing) for its services (which compensation shall not be limited by any
provision of law in regard to the compensation of a trustee of an express
trust).  The Company shall reimburse the
Trustee upon request for all reasonable disbursements, expenses and advances
incurred or made by it.  Such expenses
may


 


64

















 


include the reasonable compensation, disbursements and expenses of the
Trustee’s agents and counsel.


 


The Company shall indemnify the Trustee or any predecessor Trustee
(which for purposes of this Section 11.7 shall include its officers,
directors, employees and agents) for, and hold it harmless against, any and all
loss, liability or expense (including reasonable legal fees and expenses)
including taxes (other than taxes based upon, measured by or determined by the
income of the Trustee), incurred by it in connection with the acceptance or
administration of its duties under this Indenture or any action or failure to
act as authorized or within the discretion or rights or powers conferred upon
the Trustee hereunder including the reasonable costs and expenses of the
Trustee and its counsel in defending itself against any claim or liability in
connection with the exercise or performance of any of its powers or duties
hereunder.  The Trustee shall notify the
Company promptly of any claim asserted against the Trustee for which it may
seek indemnity.  The Company need not
pay for any settlement without its written consent, which shall not be
unreasonably withheld.


 


The Company need not reimburse the Trustee for any expense or indemnify
it against any loss or liability incurred by it resulting from its negligence
or bad faith.


 


To secure the Company’s payment obligations in this Section 11.7,
the Trustee shall have a senior claim to which the Securities are hereby made
subordinate on all money or property held or collected by the Trustee, except
such money or property held in trust to pay the principal of, Redemption Price,
Purchase Price, Fundamental Change Purchase Price or interest (including
Contingent Interest and Additional Interest, if any), as the case may be, on
the Securities.  The obligations of the
Company under this Section 11.7 shall survive the satisfaction and
discharge of this Indenture and the Securities or the resignation or removal of
the Trustee.


 


When the Trustee incurs expenses or renders services after an Event of
Default specified in clause (7) or (8) of Section 10.1 occurs, the
expenses and the compensation for the services are intended to constitute
expenses of administration under any Bankruptcy Law.  The provisions of this Section shall survive the termination
of this Indenture and the Securities.


 


Section 11.8.                             Replacement of Trustee.


 


The Trustee may resign by so notifying the Company.  The Holders of a majority in aggregate
principal amount of the Securities then outstanding may remove the Trustee by
so notifying the Trustee and may, with the Company’s written consent, appoint a
successor Trustee. The Company may remove the Trustee if:


 


(1)                                  the
Trustee fails to comply with Section 11.10;


 


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


 


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


 


(4)                                  the
Trustee becomes incapable of acting.


 


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If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a
successor Trustee.  The resignation or
removal of a Trustee shall not be effective until a successor Trustee shall
have delivered the written acceptance of its appointment as described below.


 


If a successor Trustee does not take office within 30 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or
the Holders of 10% in principal amount of the Securities then outstanding may
petition any court of competent jurisdiction for the appointment of a successor
Trustee at the expense of the Company.


 


If the Trustee fails to comply with Section 11.10, any Holder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.


 


A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company.  Immediately after that, the retiring Trustee
shall transfer all property held by it as Trustee to the successor Trustee and
be released from its obligations (exclusive of any liabilities that the
retiring Trustee may have incurred while acting as Trustee) hereunder, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. A successor Trustee shall mail notice of its succession
to each Holder.


 


A retiring Trustee shall not be liable for the acts or omissions of any
successor Trustee after its succession and shall be protected in its actions
taken in accordance with this Indenture prior to such resignation.


 


Notwithstanding replacement of the Trustee pursuant to this Section 11.8,
the Company’s obligations under Section 11.7 shall continue for the
benefit of the retiring Trustee.


 


Section 11.9.                             Successor Trustee by Merger, Etc.


 


If the Trustee consolidates with, merges or converts into, or transfers
all or substantially all of its corporate trust assets (including the
administration of this Indenture) to, another corporation, the resulting,
surviving or transferee corporation, without any further act, shall be the
successor Trustee, provided such transferee corporation shall qualify and be
eligible under Section 11.10.  Such
successor Trustee shall promptly mail notice of its succession to the Company
and each Holder.


 


Section 11.10.                       Eligibility; Disqualification.


 


The Trustee shall always satisfy the requirements of paragraphs (1),
(2) and (5) of TIA Section 310(a). 
The Trustee (or its parent holding company) shall have a combined
capital and surplus of at least $50,000,000. 
If at any time the Trustee shall cease to satisfy any such requirements,
it shall resign immediately in the manner and with the effect specified in this
Article 11.  The Trustee shall be
subject to the provisions of TIA Section 310(b).  Nothing herein shall prevent the Trustee from filing with the SEC
the application referred to in the penultimate paragraph of TIA
Section 310(b).


 


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Section 11.11.                       Preferential Collection of
Claims Against Company.


 


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


 


ARTICLE 12.

AMENDMENTS, SUPPLEMENTS AND WAIVERS


 


Section 12.1.                             Without Consent of Holders.


 


The Company and the Trustee may amend or supplement the Indenture or
the Securities without notice to or consent of any Securityholder:


 


(a)                                  to
comply with Sections 6.9 and 9.1;


 


(b)                                 to
cure any ambiguity, omission, defect or inconsistency;


 


(c)                                  to
make any other change that does not adversely affect the rights of any
Securityholder;


 


(d)                                 to
comply with the provisions of the TIA;


 


(e)                                  to
add to the covenants of the Company for the equal and ratable benefit of the
Securityholders or to surrender any right, power or option conferred upon the
Company; or


 


(f)                                    to
appoint a successor Trustee.


 


Section 12.2.                             With Consent of Holders.


 


The Company and the Trustee may amend or supplement the Securities or
this Indenture with the written consent of the Holders of at least a majority
in aggregate principal amount of the Securities then outstanding.  The Holders of at least a majority in
aggregate principal amount of the Securities then outstanding may waive
compliance in a particular instance by the Company with any provision of the
Securities or this Indenture without notice to any Securityholder.  However, notwithstanding the foregoing but
subject to Section 12.4, without the written consent of each
Securityholder affected, an amendment, supplement or waiver, including a waiver
pursuant to Section 10.4, may not:


 


(a)                                  change
the stated maturity of the principal of, or the payment date of any installment
of interest (including Contingent Interest and Additional Interest, if any) on,
or with respect to any Security;


 


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(b)                                 reduce
the principal amount of, the Redemption Price, Purchase Price or Fundamental
Change Purchase Price of, or rate of interest (including Contingent Interest
and Additional Interest, if any) on, any Security;


 


(c)                                  reduce
the amount of principal payable upon acceleration of the maturity of any
Security;


 


(d)                                 change
the currency of payment of principal of, the Redemption Price, Purchase Price
or Fundamental Change Purchase Price of, or rate of interest (including
Contingent Interest and Additional Interest, if any) on, any Security;


 


(e)                                  impair
the right to institute suit for the enforcement of any payment on, or with
respect to, any Security;


 


(f)                                    modify
the provisions with respect to the purchase rights of Holders as provided in
Articles 4 and 5 in a manner adverse to Holders;


 


(g)                                 adversely
affect the right of Holders to convert Securities other than as provided in or
under Article 6 of this Indenture;


 


(h)                                 reduce
the percentage of the aggregate principal amount of the outstanding Securities the
written consent or affirmative vote of whose Holders is required to take
specific actions under this Indenture;


 


(i)                                     reduce
the percentage of the aggregate principal amount of the outstanding Securities
necessary for the waiver of compliance with certain provisions of this
Indenture or the waiver of certain Defaults under this Indenture; or


 


(j)                                     alter
the manner of calculation or rate of accrual of interest, Contingent Interest,
Additional Interest, Redemption Price or Purchase Price on any Security or extend
the time or payment of any such amount.


 


It shall not be necessary for the consent of the Holders under this
Section 12.2 to approve the particular form of any proposed amendment,
supplement or waiver, but it shall be sufficient if such consent approves the
substance thereof.


 


After an amendment, supplement or waiver under this Section 12.2
becomes effective, the Company shall mail to the Holders affected thereby a
notice briefly describing the amendment, supplement or waiver.  Any failure of the Company to mail such
notice, or any defect therein, shall not, however, in any way impair or affect
the validity of any such amendment, supplement or waiver.


 


Section 12.3.                             Compliance with Trust Indenture Act.


 


Every amendment to or supplement of this Indenture or the Securities
shall comply with the TIA as in effect at the date of such amendment or
supplement.


 


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Section 12.4.                             Revocation and Effect of Consents.


 


Until an amendment, supplement or waiver becomes effective, a consent
to it by a Holder is a continuing consent by the Holder and every subsequent
Holder of a Security or portion of a Security that evidences the same debt as
the consenting Holder’s Security, even if notation of the consent is not made on
any Security.  However, any such Holder
or subsequent Holder may revoke the consent as to its Security or portion of a
Security if the Trustee receives the notice of revocation before the date the
amendment, supplement or waiver becomes effective.


 


After an amendment, supplement or waiver becomes effective, it shall
bind every applicable Securityholder.


 


Section 12.5.                             Notation on or Exchange of
Securities.


 


If an amendment, supplement or waiver changes the terms of a Security,
the Trustee may require the Holder of the Security to deliver it to the
Trustee.  The Trustee may place an
appropriate notation on the Security about the changed terms and return it to
the Holder.  Alternatively, if the
Company or the Trustee so determines, the Company in exchange for the Security
shall issue and the Trustee shall authenticate a new Security that reflects the
changed terms.


 


Section 12.6.                             Trustee to Sign Amendments, Etc.


 


The Trustee shall sign any amendment or supplemental indenture
authorized pursuant to this Article 12 if the amendment or supplemental
indenture does not adversely affect the rights, duties, liabilities or
immunities of the Trustee.  If it does,
the Trustee may, in its sole discretion, but need not sign it.  In signing or refusing to sign such amendment
or supplemental indenture, the Trustee shall be entitled to receive and,
subject to Section 11.1, shall be fully protected in relying upon, an
Officers’ Certificate and an Opinion of Counsel stating that such amendment or
supplemental indenture is authorized or permitted by this Indenture.


 


Section 12.7.                             Effect of Supplemental Indentures.


 


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


 


ARTICLE 13.

TAX TREATMENT


 


The Company agrees, and by acceptance of a
beneficial ownership interest in the Securities each Holder and each beneficial
owner of the Securities shall be deemed to have agreed, for United States
federal income tax purposes (1) to treat the Securities as indebtedness that is
subject to Treasury regulations section 1.1275-4 (the “Contingent Debt Regulations”) and, for
purposes of the Contingent Debt Regulations, to treat the fair market value of
any stock


 


69

















 


beneficially received upon any conversion of
the Securities as a contingent payment, (2) to accrue interest with respect to
the Securities as original issue discount on a constant yield basis using the
comparable yield of 5.86% per annum compounded semi-annually and (3) to
be bound by the Company’s determination of the “comparable yield” and
“projected payment schedule,” within the meaning of the Contingent Payment
Regulations, with respect to the Securities. 
A Holder of Securities may obtain the issue price, amount of original
issue discount, issue date, yield to maturity, comparable yield and projected
payment schedule for the Securities by submitting a written request for
such information to the Company at the following address:  Quanex Corporation, 1900 West Loop South,
Suite 1500, Houston, Texas 77027, Attention: 
Chief Financial Officer and Treasurer.


 


ARTICLE 14.

SATISFACTION AND DISCHARGE


 


Section 14.1.                             Satisfaction and Discharge of
the Indenture.


 


This Indenture shall cease to be of further effect (except as to any
surviving rights of registration of transfer or exchange of Securities herein
expressly provided for), and the Trustee, on demand of and at the expense of
the Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when


 


(a)                                  either


 


(i)                                     all
Securities theretofore authenticated and delivered (other than Securities that
have been destroyed, lost or stolen and which have been replaced or paid as
provided in Section 2.7) have been delivered to the Trustee for
cancellation; or


 


(ii)                                  all
such Securities not theretofore delivered to the Trustee for cancellation have
become due and payable or shall become due and payable (whether at the Final
Maturity Date or upon acceleration, or on any Redemption Date, or with respect
to any Purchase Date or Fundamental Change Purchase Date), and the Company
deposits with the Paying Agent cash or Common Stock, as applicable, sufficient
to pay all amounts due and owing on all outstanding Securities (other than
Securities replaced pursuant to Section 2.7);


 


(b)                                 the
Company has paid or caused to be paid all other sums payable hereunder by the
Company; and


 


(c)                                  the
Company has delivered to the Trustee an Officers’ Certificate and an Opinion of
Counsel, each stating that all conditions precedent herein provided for
relating to the satisfaction and discharge of this Indenture have been complied
with.


 


Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company as to conversion of the Securities under
Article 6 of this Indenture and to the Trustee under Section 11.7
and, if money shall have been deposited with the Trustee pursuant to
Section 14.1(a)(ii), the obligations of the Trustee under
Section 14.2 shall survive.


 


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Section 14.2.                             Repayment to the Company.


 


The Trustee and the Paying Agent shall return to the Company upon
written request any cash or securities held by them for the payment of any
amount with respect to the Securities that remains unclaimed for two years,
subject to applicable unclaimed property law. 
After return to the Company, Holders entitled to the cash or securities
must look to the Company for payment as general creditors unless an applicable
abandoned property law designates another person and the Trustee and the Paying
Agent shall have no further liability to the Securityholders with respect to
such cash or securities for that period commencing after the return thereof.


 


ARTICLE 15.

MISCELLANEOUS


 


Section 15.1.                             Trust Indenture Act Controls.


 


If any provision of this Indenture limits, qualifies or conflicts with
the duties imposed by any of Sections 310 to 317, inclusive, of the TIA through
operation of Section 318(c) thereof, such imposed duties shall control.


 


Section 15.2.                             Notices.


 


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


 


If to the Company, to:


 


Quanex Corporation

1900 West Loop South

Suite 1500

Houston, TX  77027

Attention:  Kevin P. Delaney, Esq.


General Counsel


Fax No.:  (713) 626-7549


 


if to the Trustee, to:


 


Union Bank of California, N.A.


475 Sansome Street, 12th Floor


San Francisco, CA  94111

Attention:  Corporate Trust Office

Facsimile No.:  (415) 296-6957


 


71

















 


Such notices or communications shall be effective when received.


 


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


 


Any notice or communication mailed to a Securityholder shall be mailed
by first-class mail, postage prepaid, or delivered by an overnight delivery
service to it at its address shown on the register kept by the Registrar.


 


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


 


Section 15.3.                             Communications by Holders with
Other Holders.


 


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


 


Section 15.4.                             Certificate and Opinion as to
Conditions Precedent.


 


(a)                                  Upon
any request or application by the Company to the Trustee to take any action
under this Indenture, the Company shall furnish to the Trustee at the request
of the Trustee:


 


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


 


(2)                                  an
Opinion of Counsel stating that, in the opinion of such counsel, all such
conditions precedent (including any covenants, compliance with which
constitutes a condition precedent) have been complied with.


 


(b)                                 Each
Officers’ Certificate and Opinion of Counsel 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 statements or opinions contained in such certificate or opinion
are based;


 


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


 


72

















 


(4)                                  a
statement as to whether or not, in the opinion of such person, such condition
or covenant has been complied with;


 


provided that with respect to matters of fact
an Opinion of Counsel may rely on an Officers’ Certificate or certificates of
public officials.


 


Section 15.5.                             Record Date for Vote or Consent of
Securityholders.


 


The Company may set a record date for purposes of determining the
identity of Holders entitled to vote or consent to any action by vote or
consent authorized or permitted under this Indenture, which record date shall
not be more than 30 days prior to the date of the commencement of solicitation
of such action. Notwithstanding the provisions of Section 12.4, if a
record date is fixed, those persons who were Holders of Securities at the close
of business on such record date (or their duly designated proxies), and only
those persons, shall be entitled to take such action by vote or consent or to
revoke any vote or consent previously given, whether or not such persons
continue to be Holders after such record date.


 


Section 15.6.                             Rules by Trustee, Paying Agent,
Registrar and Conversion Agent.


 


The Trustee may make reasonable rules (not inconsistent with the terms
of this Indenture) for action by or at a meeting of Holders. Any Registrar,
Paying Agent or Conversion Agent may make reasonable rules for its functions.


 


Section 15.7.                             Legal
Holidays.


 


A “Legal Holiday” is a
Saturday, Sunday or a day on which state or federally chartered banking
institutions in New York, New York and the state in which the Corporate Trust
Office is located are not required to be open. If a payment date is a Legal
Holiday, payment shall be made on the next succeeding day that is not a Legal
Holiday, and no interest shall accrue for the intervening period.  If an Interest Payment Record Date is a
Legal Holiday, the record date shall not be affected.


 


Section 15.8.                             Governing
Law.


 


This Indenture and the Securities shall be governed by, and construed
in accordance with, the laws of the State of New York.


 


Section 15.9.                             No Adverse Interpretation of
Other Agreements.


 


This Indenture may not be used to interpret another indenture, loan or
debt agreement of the Company or a Subsidiary of the Company. Any such
indenture, loan or debt agreement may not be used to interpret this Indenture.


 


Section 15.10.                       No Recourse Against Others.


 


All liability described in paragraph 14 of the Securities of any
director, officer, employee or shareholder, as such, of the Company is waived
and released.


 


73

















 


Section 15.11.                       Successors.


 


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


 


Section 15.12.                       Multiple
Counterparts.


 


The parties may sign multiple counterparts of this Indenture. Each
signed counterpart shall be deemed an original, but all of them together
represent the same agreement.


 


Section 15.13.                       Separability.


 


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


 


Section 15.14.                       Table of Contents, Headings, Etc.


 


The table of contents, cross-reference sheet 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.


 


[SIGNATURE PAGE FOLLOWS]


 


74

















 


IN WITNESS WHEREOF, the parties hereto have hereunto set their hands as
of the date and year first above written.


 


	
   

  	
  QUANEX CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  UNION BANK OF CALIFORNIA, N.A., as

  Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  



 


75

















 


EXHIBIT
A


 


[FORM OF FACE OF SECURITY]


 


[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY 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 THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. THIS SECURITY
IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED
TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS
SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON
OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES
DESCRIBED IN THE INDENTURE AND, UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN
PART FOR SECURITIES IN DEFINITIVE FORM, THIS SECURITY MAY NOT BE TRANSFERRED
EXCEPT AS A WHOLE BY THE 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.](1)


 


[THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF
1933 (THE “SECURITIES ACT”), AND THIS SECURITY AND COMMON STOCK ISSUABLE UPON
CONVERSION THEREOF MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THIS SECURITY IS HEREBY NOTIFIED THAT THE SELLER OF THIS SECURITY
MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.](2)


 


[THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE COMPANY THAT
(A) THIS SECURITY AND COMMON STOCK ISSUABLE UPON CONVERSION THEREOF MAY BE
OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (I) IN THE UNITED
STATES TO A PERSON WHOM THE


 












(1) This legend should be included only if the Security is a Global
Security.


 


(2) This legend to be included only if the Security is a Restricted
Security.


 

















 


SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (II) OUTSIDE THE UNITED STATES IN AN OFFSHORE
TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE SECURITIES ACT, (III)
PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY
RULE 144 THEREUNDER (IF AVAILABLE) OR (IV) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (I) THROUGH
(IV) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED
TO, NOTIFY ANY PURCHASER OF THIS SECURITY FROM IT OF THE RESALE RESTRICTIONS
REFERRED TO IN (A) ABOVE.  IN ANY CASE,
THE HOLDER HEREOF WILL NOT, DIRECTLY OR INDIRECTLY, ENGAGE IN ANY HEDGING
TRANSACTIONS WITH REGARD TO THIS SECURITY EXCEPT AS PERMITTED UNDER THE
SECURITIES ACT.](2)


 


[THE HOLDER OF THIS SECURITY IS ENTITLED TO THE BENEFITS OF A
REGISTRATION RIGHTS AGREEMENT (AS SUCH TERM IS DEFINED IN THE INDENTURE
REFERRED TO ON THE REVERSE HEREOF) AND, BY ITS ACCEPTANCE HEREOF, AGREES TO BE
BOUND BY AND TO COMPLY WITH THE PROVISIONS OF SUCH REGISTRATION RIGHTS
AGREEMENT.](2)


 


THE COMPANY AGREES, AND BY ACCEPTANCE OF A BENEFICIAL OWNERSHIP
INTEREST IN THE SECURITIES EACH HOLDER AND EACH BENEFICIAL OWNER OF THE
SECURITIES WILL BE DEEMED TO HAVE AGREED, FOR UNITED STATES FEDERAL INCOME TAX
PURPOSES (1) TO TREAT THE SECURITIES AS INDEBTEDNESS THAT IS SUBJECT TO
TREASURY REGULATIONS SECTION 1.1275-4 (THE “CONTINGENT DEBT REGULATIONS”)
AND, FOR PURPOSES OF THE CONTINGENT DEBT REGULATIONS, TO TREAT THE FAIR MARKET
VALUE OF ANY STOCK BENEFICIALLY RECEIVED UPON ANY CONVERSION OF THE SECURITIES
AS A CONTINGENT PAYMENT, (2) TO ACCRUE INTEREST WITH RESPECT TO THE SECURITIES
AS ORIGINAL ISSUE DISCOUNT ON A CONSTANT YIELD BASIS USING THE COMPARABLE YIELD
OF 5.86% PER ANNUM COMPOUNDED SEMI-ANNUALLY AND (3) TO BE BOUND BY THE
COMPANY’S DETERMINATION OF THE “COMPARABLE YIELD” AND “PROJECTED PAYMENT
SCHEDULE,” WITHIN THE MEANING OF THE CONTINGENT PAYMENT REGULATIONS, WITH
RESPECT TO THE SECURITIES.  A HOLDER OF
SECURITIES MAY OBTAIN THE ISSUE PRICE, AMOUNT OF ORIGINAL ISSUE DISCOUNT, ISSUE
DATE, YIELD TO MATURITY, COMPARABLE YIELD AND PROJECTED PAYMENT
SCHEDULE FOR THE SECURITIES BY SUBMITTING A WRITTEN REQUEST FOR SUCH
INFORMATION TO THE COMPANY AT THE FOLLOWING ADDRESS:  QUANEX CORPORATION, 1900 WEST LOOP SOUTH,
SUITE 1500, HOUSTON, TEXAS 77027, ATTENTION: 
CHIEF FINANCIAL OFFICER AND TREASURER.


 


A-2

















 


QUANEX CORPORATION


 


2.50% Convertible Senior Debentures due May 15, 2034


 




	
  No.       

  	
   

  	
  CUSIP:  747620AD4

  






 


QUANEX CORPORATION, a
Delaware corporation (the “Company”, which term shall include any
successor corporation under the Indenture referred to on the reverse hereof),
promises to pay to
                                   ,
or registered assigns, up to the principal amount of
                                     
($                         )
[, or such greater or lesser amount as is indicated on the Schedule of
Exchanges of Securities on the other side of this Security](3) on May 15, 2034,
and to pay interest thereon, in arrears, from May 5, 2004 or from the most recent Interest Payment Date to which
interest has been paid or duly provided for, on May 15 and November 15 in
each year (each, an “Interest Payment Date”), commencing on
November 15, 2004, at the rate of 2.50% per annum until the principal
hereof is paid or made available for payment at May 15, 2034, or upon acceleration,
or until such date on which the Securities are converted, redeemed or purchased
as provided herein.  The interest so
payable and punctually paid or duly provided for on any Interest Payment Date
shall, as provided in the Indenture (as hereinafter defined), be paid to the
Person in whose name this Security is registered at the close of business on
the regular record date for such interest, which shall be the May 1 or
November 1 (whether or not a Business Day), as the case may be, next preceding
the corresponding Interest Payment Date (an “Interest Payment Record Date”).


 


The Company shall make Contingent Interest
payments to the Holders of Securities during any six-month period from May 15
to November 14 and from November 15 to May 14, commencing with the
six-month period beginning May 15, 2011, if the average Trading Price of a
Security for the five Trading Days ending on the third Trading Day immediately
preceding the first day of the relevant Contingent Interest Period equals 120%
or more of the principal amount of such Security.  Contingent Interest shall be paid to the Person in whose name a
Security is registered on the next preceding Interest Payment Record Date on
which Contingent Interest is payable. 
The amount of Contingent Interest payable per $1,000 principal amount of
Securities in respect of any Contingent Interest Period shall equal 0.25% per
annum of such average Trading Price of such Security.


 


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


 


[Signature page follows]


 












(3) This should be included only if the
Security is a Global Security.


 


A-3

















 


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


 


	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  QUANEX CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Attested by:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  



 


Trustee’s Certificate of Authentication:  This is one of the Securities referred to in the within-mentioned
Indenture.


 


	
   

  	
  UNION BANK OF CALIFORNIA, N.A.

  
	
   

  	
    as Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Authorized
  Signatory

  



 


A-4

















 


[FORM OF REVERSE SIDE OF SECURITY]


 


QUANEX CORPORATION


 


2.50% Convertible Senior Debentures due May
15, 2034


 


This Security is one of a duly
authorized issue of 2.50% Convertible Senior
Debentures due May 15, 2034 (the “Securities”) of QUANEX CORPORATION, a
Delaware corporation (including any successor corporation under the Indenture
hereinafter referred to, the “Company”), issued under an Indenture, dated
as of May 5, 2004 (the “Indenture”),
between the Company and Union Bank of California, N.A., as trustee (the “Trustee”).  The terms of the Security include those
stated in the Indenture, those made part of the Indenture by reference to the
Trust Indenture Act of 1939, as amended (“TIA”), and those set forth in this
Security.  This Security is subject to
all such terms, and Holders are referred to the Indenture and the TIA for a
statement of all such terms.  To the
extent permitted by applicable law, in the event of any inconsistency between
the terms of this Security and the terms of the Indenture, the terms of the
Indenture shall control.  Capitalized
terms used but not defined herein have the meanings assigned to them in the
Indenture referred to below unless otherwise indicated.


 


1.                                       Interest.


 


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


 


If this Security is redeemed pursuant to
paragraph 5 of this Security, or the Holder elects to require the Company to
purchase this Security pursuant to paragraph 6 of this Security, on a date that
is after the Interest Payment Record Date and on or before the corresponding
Interest Payment Date, interest, Contingent Interest and Additional Interest,
if any, accrued and unpaid hereon to, but excluding, the applicable Redemption
Date, Purchase Date or Fundamental Change Purchase Date shall be paid to the
same Holder to whom the Company pays the principal of this Security.  Interest, Contingent Interest and Additional
Interest, if any, accrued and unpaid hereon at the Final Maturity Date also
shall be paid to the same Holder to whom the Company pays the principal of this
Security.


 


Interest, Contingent Interest and Additional
Interest, if any, on Securities converted after the close of business on a
Interest Payment Record Date but prior to the opening of business on the
corresponding Interest Payment Date shall be paid to the Holder of the
Securities on the Interest Payment Record Date but, upon conversion, the Holder
must pay the Company an amount equal to the interest, Contingent Interest and
Additional Interest, if any, which has accrued and shall be paid on such
Interest Payment Date.  No such payment
need be made with respect to Securities converted after an Interest Payment
Record Date and prior to the corresponding Interest Payment Date after being
called for redemption if the Company has specified a Redemption Date during the
period from the close of business on any record date preceding any Interest
Payment Date through and including such Interest Payment Date.


 


Except as otherwise stated herein, any reference herein to interest
accrued or payable as of any date shall include Contingent Interest, if any,
and Additional Interest, if any accrued or payable on such date as provided in
the Registration Rights Agreement.


 


A-5

















 


2.                                       Method
of Payment.


 


Payment of the principal of, interest (including Contingent Interest
and Additional Interest, if any) on the Securities shall be made at the
Corporate Trust Office of the Trustee in such coin or currency of the United
States of America as at the time of payment is legal tender for payment of
public and private debts.  The Holder
must surrender this Security to a Paying Agent to collect payment of
principal.  Payment of interest (including
Contingent Interest and Additional Interest, if any) on Certificated Securities
will be made by (i) check mailed to the address of the Person entitled thereto
as such address appears in the Register if such Securities have an aggregate
principal amount of $5 million or less or (ii) wire transfer of immediately
available funds to an account designated by such Person if such Securities have
an aggregate principal amount in excess of $5 million.  Notwithstanding the foregoing, so long as
the Securities are registered in the name of a Depositary or its nominee, all
payments with respect to the Securities shall be made by wire transfer of
immediately available funds to the account of the Depositary or its nominee.


 


3.                                       Paying
Agent, Registrar, Conversion Agent and Bid Solicitation Agent.


 


Initially, the Trustee will act as Paying Agent, Registrar, Bid
Solicitation Agent and Conversion Agent. 
The Company or any Affiliate of the Company may act as Paying Agent,
Registrar, Conversion Agent or co-registrar. 
None of the
Company or any Affiliate of any of them may act as Bid Solicitation Agent.


 


4.                                       Indenture.


 


The Securities are general unsecured senior obligations of the Company
limited to up to $125,000,000 aggregate principal amount ($25,000,000 of which
includes Securities issued upon exercise in full of the Initial Purchasers’
option to purchase additional Securities provided for in the Purchase
Agreement).  The Indenture does not
limit other debt of the Company, secured or unsecured.


 


5.                                       Redemption
at the Option of the Company.


 


The Company may, at its option, redeem the
Securities at any time as a whole, or from time to time in part, on or after
May 15, 2011, at a redemption price in cash equal to 100% of the principal
amount of Securities to be redeemed plus any accrued and unpaid interest
(including Contingent Interest and Additional Interest, if any) on those
Securities to, but not including, the Redemption Date.


 


Notice of redemption pursuant to this
Section of this Security shall be mailed at least 30 days but not more
than 60 days before the Redemption Date to each Holder of Securities to be
redeemed at the Holder’s registered address. 
If cash sufficient to pay the Redemption Price of all Securities or
portions thereof to be redeemed on the Redemption Date is deposited with the
Paying Agent prior to 10:00 a.m., New York City time, on the Redemption Date,
then immediately after such Redemption Date, such Securities or portions
thereof shall cease to be outstanding and interest (including Contingent
Interest and Additional Interest, if any) shall cease to accrue on such
Securities or portions thereof and the Holder thereof shall have no other
rights as such other than the right to receive the Redemption Price upon
surrender of such


 


A-6

















 


Security. 
Securities in denominations larger than $1,000 of principal amount may
be redeemed in part but only in multiples of $1,000 of principal amount.


 


6.                                       Purchase
by the Company at the Option of the Holder or Upon a Fundamental Change.


 


Subject to the terms and conditions of the
Indenture, the Company shall become obligated to purchase, at the option of the
Holder, all or any portion of the Securities held by such Holder on May 15 of
2011, 2014, 2019, 2024 and 2029 in multiples of $1,000 at a purchase price in
cash equal to 100% of the principal amount of those Securities plus accrued and
unpaid interest (including Contingent Interest and Additional Interest, if any)
to, but not including, such Purchase Date. 
To exercise such right, a Holder shall deliver to the Paying Agent a
Purchase Notice containing the information set forth in the Indenture, at any
time from 9:00 a.m., New York City time, on the date that is 20 Business Days
immediately preceding such Purchase Date until 5:00 p.m., New York City time,
on the Business Day immediately preceding such Purchase Date, and shall deliver
the Securities to the Paying Agent as set forth in the Indenture.


 


Subject to the terms and conditions of the
Indenture, the Company shall become obligated to purchase, at the option of the
Holder, all or any portion of the Securities held by such Holder upon a
Fundamental Change in multiples of $1,000 at the Fundamental Change Purchase
Price.  To exercise such right, a Holder
shall deliver to the Paying Agent a Fundamental Change Purchase Notice
containing the information set forth in the Indenture, at any time prior to
5:00 p.m., New York City time, on the Business Day immediately preceding the
Fundamental Change Purchase Date, and shall deliver the Securities to the
Paying Agent as set forth in the Indenture.


 


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


 


If cash sufficient to pay the Purchase Price
or Fundamental Change Purchase Price, as the case may be, of all Securities or
portions thereof to be purchased with respect to a Purchase Date or Fundamental
Change Purchase Date, as the case may be, is deposited with the Paying Agent,
at 10:00 a.m., New York City time, on the Purchase Date or Fundamental Change
Purchase Date, as the case may be, then, immediately after the Purchase Date or
Fundamental Change Purchase Date, as applicable, such Securities shall cease to
be outstanding and interest (including Contingent Interest and Additional
Interest, if any) on such Securities shall cease to accrue on such Securities
or portion thereof and the Holder thereof shall have no other rights as such
other than the right to receive the Purchase Price or Fundamental Change
Purchase Price upon surrender of such Security.


 


7.                                       Conversion.


 


Subject to and in compliance with the
provisions of the Indenture (including, without limitation, the conditions to
conversion of this Security set forth in Section 6.1 thereof and the right
of the Company to elect to deliver cash or a combination of cash and Common
Stock set forth in Section 6.13 thereof), a Holder is entitled, at such
Holder’s option, to convert the Holder’s Security (or any portion of the
principal amount thereof that is $1,000 or a multiple


 


A-7

















 


of $1,000), into fully paid and nonassessable
shares of Common Stock at the Conversion Rate in effect on the date of
conversion.


 


Upon conversion, the Company shall have the
right to deliver, in lieu of shares of Common Stock, cash or a combination of
cash and shares of Common Stock.


 


On the first date the Securities become
convertible, the Company shall notify Holders in writing of its Principal
Conversion Settlement Election.  This
notification is irrevocable and legally binding with regard to any subsequent
conversion of the Securities.


 


Until the Securities are surrendered for
conversion, the Company shall not be required to notify Holders of its method
for settling the Excess Amount of its conversion obligation of the $1,000
principal amount of the Securities.


 


The Company shall notify Holders of any event
triggering the right to convert the Securities in accordance with the
Indenture.


 


A Security in respect of which a Holder has delivered
a Purchase Notice or Fundamental Change Purchase Notice, as the case may be,
exercising the right of such Holder to require the Company to purchase such
Security may be converted only if such Purchase Notice or Fundamental Change
Purchase Notice is withdrawn in accordance with the terms of the Indenture.


 


The initial Conversion Rate is 17.3919 shares
of Common Stock per $1,000 principal amount of Securities, subject to
adjustment in certain events described in the Indenture.


 


To surrender a Security for conversion, a
Holder must, in the case of Global Securities, comply with the Applicable
Procedures of the Depositary in effect at that time, and in the case of
Certificated Securities, (1) surrender the Security to the Conversion Agent,
(2) complete and manually sign the conversion notice below (or complete and
manually sign a facsimile of such notice) and deliver such notice to the
Conversion Agent, (3) if required by the Conversion Agent, furnish appropriate
endorsements and transfer documents and (4) pay all funds required, if any,
relating to interest (including Contingent Interest and Additional Interest, if
any), and any transfer or similar tax or duty, if required.


 


No fractional share of Common Stock shall be
issued upon conversion of any Security. Instead, the Company shall pay a cash
adjustment as provided in the Indenture.


 


Except as provided in Section 6.2(a) and
Section 6.12 of the Indenture, no separate cash payment or adjustment
shall be made for accrued and unpaid interest (including Contingent Interest
and Additional Interest, if any) or dividends on the shares of Common Stock,
except as provided in the Indenture.


 


8.                                       Denominations;
Transfer; Exchange.


 


The Securities are in registered form, without coupons, in
denominations of $1,000 and integral multiples of $1,000.  A Holder may register the transfer of or
exchange Securities in accordance with the Indenture.  The Registrar may require a Holder, among other


 


A-8

















 


things, to furnish appropriate endorsements and transfer documents and
to pay any taxes or other governmental charges that may be imposed in relation
thereto by law or permitted by the Indenture.


 


9.                                       Persons
Deemed Owners.


 


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


 


10.                                 Unclaimed
Money or Securities.


 


The Trustee and the Paying Agent shall return to the Company upon
written request any Cash or securities held by them for the payment of any
amount with respect to the Securities that remains unclaimed for two years,
subject to applicable unclaimed property law. After return to the Company,
Holders entitled to the money or securities must look to the Company for
payment as general creditors unless an applicable abandoned property law
designates another person.


 


11.                                 Amendment,
Supplement and Waiver.


 


Subject to certain exceptions, the Securities or the Indenture with
respect to the Securities may be amended or supplemented with the consent of
the Holders of at least a majority in aggregate principal amount of the
Securities then outstanding, and an existing Default or Event of Default with
respect to the Securities and its consequence or compliance with any provision
of the Securities or the Indenture with respect to the Securities may be waived
in a particular instance with the consent of the Holders of a majority in
aggregate principal amount of the Securities then outstanding.  Without the consent of or notice to any
Holder, the Company and the Trustee may amend or supplement the Indenture or
the Securities to, among other things, cure any ambiguity, defect or
inconsistency or make any other change that does not adversely affect the
rights of any Holder.


 


12.                                 Defaults
and Remedies


 


If any Event of Default other than as a result of certain events of
bankruptcy, insolvency or reorganization of the Company or its Significant
Subsidiaries occurs and is continuing, the principal of all the Securities plus
accrued and unpaid interest (including Contingent Interest and Additional
Interest, if any) may be declared due and payable in the manner and with the
effect provided in the Indenture.  If an
Event of Default occurs as a result of certain events of bankruptcy, insolvency
or reorganization of the Company or its Significant Subsidiaries, the principal
plus accrued and unpaid interest (including Contingent Interest and Additional
Interest, if any) on all the Securities to be immediately due and payable of
all the Securities shall become due and payable immediately without any
declaration or other act on the part of the Trustee or any Holder, all as and
to the extent provided in the Indenture.


 


13.                                 Trustee
Dealings with the Company.


 


Subject to certain limitations imposed by the TIA, the Trustee under
the Indenture, in its individual or any other capacity, may become the owner or
pledgee of Securities


 


A-9

















 


and may otherwise deal with and collect obligations owed to it by the
Company or its Affiliates and may otherwise deal with the Company or its
Affiliates with the same rights it would have if it were not Trustee.


 


14.                                 No
Recourse Against Others.


 


No recourse under or upon any obligation, covenant or agreement
contained in the Indenture, or in this Security, or because of any indebtedness
evidenced thereby, shall be had against any incorporator, as such, or against
any past, present or future stockholder, officer or director, as such, of the
Company or of any successor, either directly or through the Company or any
successor, under any rule of law, statute or constitutional provision or by the
enforcement of any assessment or by any legal or equitable proceeding or
otherwise, all such liability being expressly waived and released by the
acceptance of the Securities by the Holders and as part of the consideration
for the issue of the Securities.


 


15.                                 Authentication.


 


This Security shall not be valid until the Trustee or an authenticating
agent manually signs the certificate of authentication on the other side of
this Security.


 


16.                                 Abbreviations.


 


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


 


17.                                 Indenture
to Control; Governing Law.


 


To the extent permitted by applicable law, in the case of any conflict
between the provisions of this Security and the Indenture, the provisions of
the Indenture shall control.  This
Security shall be governed by, and construed in accordance with, the laws of
the State of New York.


 


18.                                 Copies
of Indenture.


 


The Company will furnish to any Holder, upon written request and
without charge, a copy of the Indenture. 
Requests may be made to: Quanex Corporation, 1900 West Loop South, Suite
1500, Houston, Texas 77027, Fax no.: 
(713) 626-7549, Attention: General Counsel.


 


[19.                             Registration
Rights.


 


The Holders of the Securities are entitled to the benefits of a
Registration Rights Agreement, dated as of May 5, 2004, between the Company and
the Initial Purchasers named


 


A-10

















 


therein, including, in certain circumstances, the receipt of Additional
Interest upon a registration default (as defined in such agreement).](4)


 












(4) This Section to be included only if the Security is a
Restricted Security.


 


A-11

















 


SCHEDULE OF EXCHANGES OF SECURITIES(5)


 


The following exchanges, redemptions, purchases or conversions of a
part of this Global Security have been made:


 


	
  Principal Amount

  of this Global

  Security Following

  Such Decrease

  Date of Exchange

  (or Increase)

  	
   

  	
  Authorized

  Signatory of

  Securities

  Custodian

  	
   

  	
  Amount of

  Principal

  	
   

  	
  Decrease in

  Principal Amount

  of this Global

  Security

  	
   

  	
  Amount of

  Increase in

  Principal Amount

  of this Global

  Security

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 












(5) This schedule should be included
only if the Security is a Global Security.


 

















 


ASSIGNMENT FORM(6)


 


To assign this Security,
fill in the form below:


 


I or we assign and
transfer this Security to


	
   

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

  
	
   

  
	
   

  
	
   

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

  



 


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


 


	
   

  	
   

  	
   

  	
   Your Signature:

  
	
   

  	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
   

  
	
   

  	
  (Sign exactly as your name appears on the

  other side of this Security)

  
	
   

  	
   

  
	
  Signature Guaranteed

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Participant in a Recognized Signature

  Guarantee Medallion Program

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Authorized Signatory

  	
   

  
							



 












(6) This Form and the following Forms should be included only if the
Security is a Certificated Security.


 


A-13

















 


FORM OF CONVERSION NOTICE


 


To convert this Security
into shares of Common Stock (or cash or a combination of shares of Common Stock
and cash, if the Company so elects) of the Company, check the box o


 


To convert only part of
this Security, state the principal amount to be converted (which must be $1,000
or a multiple of $1,000):


 


If you want the stock
certificate made out in another person’s name fill in the form below:


 


	
   

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

  
	
   

  
	
   

  
	
   

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

  



 


	
   

  	
   

  	
   

  	
  Your Signature:

  
	
   

  	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
   

  
	
   

  	
  (Sign exactly as your name appears on the 

  other side of this Security)

  
	
   

  	
   

  
	
  Signature Guaranteed

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Participant in a Recognized Signature

  Guarantee Medallion Program

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Authorized Signatory

  	
   

  
							



 

















 


FORM
OF PURCHASE NOTICE


 


                      ,        


 


Union Bank of California, N.A.

475 Sansome Street, 12th Floor

San Francisco, CA  94111

Attention:  Corporate Trust Office


 


	
  Re:

  	
   

  	
  Quanex Corporation (the “Company”)

  
	
   

  	
   

  	
  2.50% Convertible Senior Debentures due May
  15, 2034

  



 


This is a Purchase Notice as defined in
Section 4.1(c) of the Indenture dated as of May 5, 2004 (the “Indenture”) between the Company and Union
Bank of California, N.A., as Trustee. 
Terms used but not defined herein shall have the meanings ascribed to
them in the Indenture.


 


Certificate No(s). of
Securities:                                        


 


I intend to deliver the following aggregate
principal amount of Securities for purchase by the Company pursuant to
Article 4 of the Indenture (in multiples of $1,000):


 


$                                                


 


I hereby agree that the Securities will be
purchased on the Purchase Date pursuant to the terms and conditions specified
in the Securities and the Indenture.


 


 


	
   

  	
   

  	
  Signed:

  	
   

  	
   

  



 


A-15

















 


FORM
OF FUNDAMENTAL CHANGE PURCHASE NOTICE


 


                    ,          


 


Union Bank of California, N.A.

475 Sansome Street, 12th Floor

San Francisco, CA  94111

Attention:  Corporate Trust Office


 


	
  Re:

  	
   

  	
  Quanex Corporation (the “Company”)

  
	
   

  	
   

  	
  2.50% Convertible Senior Debentures due May
  15, 2034

  



 


This is a Fundamental Change Purchase Notice
as defined in Section 5.1(c) of the Indenture dated as of May 5, 2004 (the
“Indenture”) between the Company
and Union Bank of California, N.A., as Trustee.  Terms used but not defined herein shall have the meanings
ascribed to them in the Indenture.


 


Certificate No(s). of
Securities:                                                   


 


I intend to deliver the following aggregate
principal amount of Securities for purchase by the Company pursuant to
Article 5 of the Indenture (in multiples of $1,000):


 


$                             


 


I hereby agree that the Securities will be
purchased on the Fundamental Change Purchase Date pursuant to the terms and
conditions specified in the Securities and the Indenture.


 


 


	
   

  	
   

  	
  Signed:

  	
   

  	
   

  



 


A-16

















 


EXHIBIT
B


 


CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR

REGISTRATION OF TRANSFER OF RESTRICTED SECURITIES(1)


 


Re:                               2.50%
Convertible Senior Debentures due May 15, 2034 (the “Securities”) of Quanex Corporation


 


This certificate relates to
$                        principal
amount of Securities owned in (check applicable box):


 


	
  o

  	
  book-entry
  or

  	
  o

  	
  definitive
  form
  by                         (the
  “Transferor”).

  	
   

  



 


The Transferor has requested a Registrar or the Trustee to exchange or
register the transfer of such Securities. 
In connection with such request and in respect of each such Security,
the Transferor does hereby certify that the Transferor is familiar with
transfer restrictions relating to the Securities as provided in
Section 2.12 of the Indenture dated as of May 5, 2004, between Quanex
Corporation and Union Bank of California, N.A., as trustee (the “Indenture”), and the transfer of such
Security is being made pursuant to an effective registration statement under
the Securities Act of 1933, as amended (the “Securities
Act”) (check applicable box) or the transfer or exchange, as the
case may be, of such Security does not require registration under the
Securities Act because (check applicable box):


 


o                                    Such
Security is being transferred pursuant to an effective registration statement
under the Securities Act.


 


o                                    Such
Security is being acquired for the Transferor’s own account, without transfer.


 


o                                    Such
Security is being transferred to the Company or a Subsidiary (as defined in the
Indenture) of the Company.


 


o                                    Such
Security is being transferred to a person the Transferor reasonably believes is
a “qualified institutional buyer” (as defined in Rule 144A or any successor
provision thereto (“Rule 144A”)
under the Securities Act) that is purchasing for its own account or for the
account of a “qualified institutional buyer”, in each case to whom notice has
been given that the transfer is being made in reliance on such Rule 144A, and
in each case in reliance on Rule 144A.


 


o                                    Such
Security is being transferred pursuant to and in compliance with an exemption
from the registration requirements under the Securities Act in accordance with
Rule 144 (or any successor thereto) (“Rule
144”) under the Securities Act.


 












(1) This certificate should only be included
if the Security is a Restricted Security.


 

















 


o                                    Such
Security is being transferred to a non-U.S. Person in an offshore transaction
in compliance with Rule 904 of Regulation S under the Securities Act (or any
successor thereto).


 


o                                    Such
Security is being transferred pursuant to and in compliance with an exemption
from the registration requirements of the Securities Act (other than an
exemption referred to above) and as a result of which such Security will, upon
such transfer, cease to be a “restricted security” within the meaning of Rule
144 under the Securities Act.


 


The Transferor acknowledges and agrees that, if the transferee will
hold any such Securities in the form of beneficial interests in a Global
Security that is a “restricted security” within the meaning of Rule 144 under
the Securities Act, then such transfer can be made only (x) pursuant to Rule
144A under the Securities Act to a transferee that the transferor reasonably
believes is a “qualified institutional buyer,” as defined in Rule 144A, or (y)
pursuant to Regulation S under the Securities Act.


 


 


	
  Date:

  	
   

  
	
   

  	
  Signature(s) of Transferor

  



 


 


(If the registered owner is a corporation, partnership or fiduciary,
the title of the person signing on behalf of such registered owner must be
stated.)


 


	
  Signature Guaranteed

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Participant in a Recognized Signature

  Guarantee Medallion Program

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
  Authorized Signatory

  	
   

  
				



 


B-2