Document:

EXHIBIT
4.2

 

OVERSTOCK.COM, INC.

 

TO

 

[TRUSTEE]

 

AS TRUSTEE

 

INDENTURE

 

DATED AS OF        

 

SUBORDINATED DEBT SECURITIES

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  1

  	
  DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

  	
  1

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 1.1

  	
   

  	
  Definitions

  	
  1

  
	
  Section 1.2

  	
   

  	
  Compliance Certificates and Opinions

  	
  7

  
	
  Section 1.3

  	
   

  	
  Form of Documents Delivered to Trustee

  	
  8

  
	
  Section 1.4

  	
   

  	
  Acts of Holders; Record Dates

  	
  8

  
	
  Section 1.5

  	
   

  	
  Notices, etc., to Trustee and Company

  	
  10

  
	
  Section 1.6

  	
   

  	
  Notice to Holders; Waiver

  	
  10

  
	
  Section 1.7

  	
   

  	
  Conflict with Trust Indenture Act

  	
  10

  
	
  Section 1.8

  	
   

  	
  Effect of Headings and Table of Contents

  	
  10

  
	
  Section 1.9

  	
   

  	
  Successors and Assigns

  	
  10

  
	
  Section 1.10

  	
   

  	
  Separability Clause

  	
  10

  
	
  Section 1.11

  	
   

  	
  Benefits of Indenture

  	
  11

  
	
  Section 1.12

  	
   

  	
  Governing Law

  	
  11

  
	
  Section 1.13

  	
   

  	
  Legal Holidays

  	
  11

  
	
  Section 1.14

  	
   

  	
  Indenture and Securities Solely Corporate Obligations

  	
  11

  
	
  Section 1.15

  	
   

  	
  Indenture May be Executed in Counterparts

  	
  11

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  2

  	
  SECURITY FORMS

  	
  11

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 2.1

  	
   

  	
  Forms Generally

  	
  11

  
	
  Section 2.2

  	
   

  	
  Form of Face of Security

  	
  12

  
	
  Section 2.3

  	
   

  	
  Form of Reverse of Security

  	
  13

  
	
  Section 2.4

  	
   

  	
  Form of Legend for Global Securities

  	
  16

  
	
  Section 2.5

  	
   

  	
  Form of Trustee’s Certificate of Authentication

  	
  16

  
	
  Section 2.6

  	
   

  	
  Form of Conversion Notice

  	
  16

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  3

  	
  THE SECURITIES

  	
  17

  
	
   

  	
   

  	
   

  
	
  Section 3.1

  	
   

  	
  Amount Unlimited; Issuable in Series

  	
  17

  
	
  Section 3.2

  	
   

  	
  Denominations

  	
  19

  
	
  Section 3.3

  	
   

  	
  Execution, Authentication, Delivery and Dating

  	
  19

  
	
  Section 3.4

  	
   

  	
  Temporary Securities

  	
  21

  
	
  Section 3.5

  	
   

  	
  Registration; Registration of Transfer and Exchange

  	
  21

  
	
  Section 3.6

  	
   

  	
  Mutilated, Destroyed, Lost and Stolen Securities

  	
  22

  
	
  Section 3.7

  	
   

  	
  Payment of Interest; Interest Rights Preserved

  	
  23

  
	
  Section 3.8

  	
   

  	
  Persons Deemed Owners

  	
  23

  
	
  Section 3.9

  	
   

  	
  Cancellation

  	
  24

  
	
  Section 3.10

  	
   

  	
  Computation of Interest

  	
  24

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  4

  	
  SATISFACTION AND DISCHARGE

  	
  24

  
	
   

  	
   

  	
   

  
	
  Section 4.1

  	
   

  	
  Satisfaction and Discharge of Indenture

  	
  24

  
	
  Section 4.2

  	
   

  	
  Application of Trust Money

  	
  25

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  5

  	
  REMEDIES

  	
  25

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 5.1

  	
   

  	
  Events of Default

  	
  25

  
	
  Section 5.2

  	
   

  	
  Acceleration of Maturity; Rescission and Annulment

  	
  26

  
	
  Section 5.3

  	
   

  	
  Collection of Indebtedness and Suits for Enforcement by Trustee

  	
  27

  
	
  Section 5.4

  	
   

  	
  Trustee May File Proofs of Claim

  	
  27

  
	
  Section 5.5

  	
   

  	
  Trustee May Enforce Claims Without Possession of Securities

  	
  27

  
	
  Section 5.6

  	
   

  	
  Application of Money Collected

  	
  28

  
	
  Section 5.7

  	
   

  	
  Limitation on Suits

  	
  28

  
	
  Section 5.8

  	
   

  	
  Unconditional Right of Holders to Receive Principal, Premium and
  Interest and to Convert

  	
  28

  
	
  Section 5.9

  	
   

  	
  Restoration of Rights and Remedies

  	
  29

  
	
  Section 5.10

  	
   

  	
  Rights and Remedies Cumulative

  	
  29

  
					

 

i

 

TABLE OF CONTENTS

(continued)

 

	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 5.11

  	
   

  	
  Delay or Omission Not Waiver

  	
  29

  
	
  Section 5.12

  	
   

  	
  Control by Holders

  	
  29

  
	
  Section 5.13

  	
   

  	
  Waiver of Past Defaults

  	
  29

  
	
  Section 5.14

  	
   

  	
  Undertaking for Costs

  	
  30

  
	
  Section 5.15

  	
   

  	
  Waiver of Usury, Stay or Extension Laws

  	
  30

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 6

  	
  THE TRUSTEE

  	
  30

  
	
   

  	
   

  	
   

  
	
  Section 6.1

  	
   

  	
  Certain Duties and Responsibilities

  	
  30

  
	
  Section 6.2

  	
   

  	
  Notice of Defaults

  	
  30

  
	
  Section 6.3

  	
   

  	
  Certain Rights of Trustee

  	
  31

  
	
  Section 6.4

  	
   

  	
  Not Responsible for Recitals or Issuance of Securities

  	
  31

  
	
  Section 6.5

  	
   

  	
  May Hold Securities and Act as Trustee under Other Indentures

  	
  32

  
	
  Section 6.6

  	
   

  	
  Money Held in Trust

  	
  32

  
	
  Section 6.7

  	
   

  	
  Compensation and Reimbursement

  	
  32

  
	
  Section 6.8

  	
   

  	
  Conflicting Interests

  	
  32

  
	
  Section 6.9

  	
   

  	
  Corporate Trustee Required; Eligibility

  	
  33

  
	
  Section 6.10

  	
   

  	
  Resignation and Removal; Appointment of Successor

  	
  33

  
	
  Section 6.11

  	
   

  	
  Acceptance of Appointment by Successor

  	
  34

  
	
  Section 6.12

  	
   

  	
  Merger, Conversion, Consolidation or Succession to Business

  	
  34

  
	
  Section 6.13

  	
   

  	
  Preferential Collection of Claims Against Company

  	
  35

  
	
  Section 6.14

  	
   

  	
  Appointment of Authenticating Agent

  	
  35

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 7

  	
  HOLDERS’ LISTS AND REPORTS BY TRUSTEE AND COMPANY

  	
  36

  
	
   

  	
   

  	
   

  
	
  Section 7.1

  	
   

  	
  Company to Furnish Trustee Names and Addresses of Holders

  	
  36

  
	
  Section 7.2

  	
   

  	
  Preservation of Information; Communications to Holders

  	
  36

  
	
  Section 7.3

  	
   

  	
  Reports by Trustee

  	
  37

  
	
  Section 7.4

  	
   

  	
  Reports by Company

  	
  37

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 8

  	
  CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

  	
  37

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 8.1

  	
   

  	
  Company May Consolidate, etc., Only on Certain Terms

  	
  37

  
	
  Section 8.2

  	
   

  	
  Successor Substituted

  	
  38

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 9

  	
  SUPPLEMENTAL INDENTURES

  	
  38

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 9.1

  	
   

  	
  Supplemental Indentures Without Consent of Holders

  	
  38

  
	
  Section 9.2

  	
   

  	
  Supplemental Indentures with Consent of Holders

  	
  39

  
	
  Section 9.3

  	
   

  	
  Execution of Supplemental Indentures

  	
  40

  
	
  Section 9.4

  	
   

  	
  Effect of Supplemental Indentures

  	
  40

  
	
  Section 9.5

  	
   

  	
  Conformity with Trust Indenture Act

  	
  40

  
	
  Section 9.6

  	
   

  	
  Reference in Securities to Supplemental Indentures

  	
  40

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 10

  	
  COVENANTS

  	
  40

  
	
   

  	
   

  	
   

  
	
  Section 10.1

  	
   

  	
  Payment of Principal, Premium and Interest

  	
  40

  
	
  Section 10.2

  	
   

  	
  Maintenance of Office or Agency

  	
  40

  
	
  Section 10.3

  	
   

  	
  Money for Securities Payments to be Held in Trust

  	
  41

  
	
  Section 10.4

  	
   

  	
  Statement by Officers as to Default

  	
  41

  
	
  Section 10.5

  	
   

  	
  Existence

  	
  42

  
	
  Section 10.6

  	
   

  	
  Waiver of Certain Covenants

  	
  42

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 11

  	
  REDEMPTION OF SECURITIES

  	
  42

  
	
   

  	
   

  	
   

  
	
  Section 11.1

  	
   

  	
  Applicability of Article

  	
  42

  
	
  Section 11.2

  	
   

  	
  Election to Redeem; Notice to Trustee

  	
  42

  
	
  Section 11.3

  	
   

  	
  Selection by Trustee of Securities to Be Redeemed

  	
  42

  

 

ii

 

TABLE OF CONTENTS

(continued)

 

	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 11.4

  	
   

  	
  Notice of Redemption

  	
  43

  
	
  Section 11.5

  	
   

  	
  Deposit of Redemption Price

  	
  44

  
	
  Section 11.6

  	
   

  	
  Securities Payable on Redemption Date

  	
  44

  
	
  Section 11.7

  	
   

  	
  Securities Redeemed in Part

  	
  44

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 12

  	
  SINKING FUNDS

  	
  44

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 12.1

  	
   

  	
  Applicability of Article

  	
  44

  
	
  Section 12.2

  	
   

  	
  Satisfaction of Sinking Fund Payments with Securities

  	
  45

  
	
  Section 12.3

  	
   

  	
  Redemption of Securities for Sinking Fund

  	
  45

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 13

  	
  DEFEASANCE AND COVENANT DEFEASANCE

  	
  45

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 13.1

  	
   

  	
  Company’s Option to Effect Defeasance or Covenant Defeasance

  	
  45

  
	
  Section 13.2

  	
   

  	
  Defeasance and Discharge

  	
  45

  
	
  Section 13.3

  	
   

  	
  Covenant Defeasance

  	
  46

  
	
  Section 13.4

  	
   

  	
  Conditions to Defeasance or Covenant Defeasance

  	
  46

  
	
  Section 13.5

  	
   

  	
  Deposited Money, U.S. Government Obligations and Foreign Government
  Obligations to be Held in Trust; Miscellaneous Provisions

  	
  48

  
	
  Section 13.6

  	
   

  	
  Reinstatement

  	
  49

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 14

  	
  CONVERSION OF SECURITIES

  	
  49

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 14.1

  	
   

  	
  Applicability of Article

  	
  49

  
	
  Section 14.2

  	
   

  	
  Exercise of Conversion Privilege

  	
  49

  
	
  Section 14.3

  	
   

  	
  No Fractional Shares

  	
  50

  
	
  Section 14.4

  	
   

  	
  Adjustment of Conversion Price

  	
  50

  
	
  Section 14.5

  	
   

  	
  Notice of Certain Corporate Actions

  	
  50

  
	
  Section 14.6

  	
   

  	
  Reservation of Shares of Common Stock

  	
  51

  
	
  Section 14.7

  	
   

  	
  Payment of Certain Taxes upon Conversion

  	
  51

  
	
  Section 14.8

  	
   

  	
  Nonassessability

  	
  51

  
	
  Section 14.9

  	
   

  	
  Provision in Case of Consolidation, Merger or Sale of Assets

  	
  51

  
	
  Section 14.10

  	
   

  	
  Duties of Trustee Regarding Conversion

  	
  52

  
	
  Section 14.11

  	
   

  	
  Repayment of Certain Funds upon Conversion

  	
  52

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 15

  	
  SUBORDINATION OF SECURITIES

  	
  53

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 15.1

  	
   

  	
  Agreement of Subordination

  	
  53

  
	
  Section 15.2

  	
   

  	
  Payments to Holders

  	
  53

  
	
  Section 15.3

  	
   

  	
  Subrogation of Securities

  	
  55

  
	
  Section 15.4

  	
   

  	
  Authorization to Effect Subordination

  	
  55

  
	
  Section 15.5

  	
   

  	
  Notice to Trustee

  	
  56

  
	
  Section 15.6

  	
   

  	
  Trustee’s Relation to Senior Debt

  	
  56

  
	
  Section 15.7

  	
   

  	
  No Impairment of Subordination

  	
  56

  
	
  Section 15.8

  	
   

  	
  Certain Conversions/Exchanges Deemed Payment

  	
  57

  
	
  Section 15.9

  	
   

  	
  Article Applicable to Paying Agents

  	
  57

  
	
  Section 15.10

  	
   

  	
  Senior Debt Entitled to Rely

  	
  57

  
	
  Section 15.11

  	
   

  	
  Reliance on Judicial Order or Certificate of Liquidating Agent

  	
  57

  
	
  Section 15.12

  	
   

  	
  Trust Monies Not Subordinated

  	
  57

  

 

iii

 

Overstock.com, Inc.

 

Certain
Sections of this Indenture relating to Sections 310 through 318, inclusive, of
the Trust Indenture Act of 1939:

 

	
  Section 310

  	
   

  	
  (a)(1)

  	
   

  	
  6.9

  	
   

  
	
   

  	
   

  	
  (a)(2)

  	
   

  	
  6.9

  	
   

  
	
   

  	
   

  	
  (a)(3)

  	
   

  	
  Not Applicable

  	
   

  
	
   

  	
   

  	
  (a)(4)

  	
   

  	
  Not Applicable

  	
   

  
	
   

  	
   

  	
  (b)

  	
   

  	
  6.8, 6.10

  	
   

  
	
  Section 311

  	
   

  	
  (a)

  	
   

  	
  6.13

  	
   

  
	
   

  	
   

  	
  (b)

  	
   

  	
  6.13

  	
   

  
	
  Section 312

  	
   

  	
  (a)

  	
   

  	
  7.1, 7.2

  	
   

  
	
   

  	
   

  	
  (b)

  	
   

  	
  7.2

  	
   

  
	
   

  	
   

  	
  (c)

  	
   

  	
  7.2

  	
   

  
	
  Section 313

  	
   

  	
  (a)

  	
   

  	
  7.3

  	
   

  
	
   

  	
   

  	
  (b)

  	
   

  	
  7.3

  	
   

  
	
   

  	
   

  	
  (c)

  	
   

  	
  7.3

  	
   

  
	
   

  	
   

  	
  (d)

  	
   

  	
  7.3

  	
   

  
	
  Section 314

  	
   

  	
  (a)

  	
   

  	
  7.4

  	
   

  
	
   

  	
   

  	
  (a)(4)

  	
   

  	
  1.1, 10.4

  	
   

  
	
   

  	
   

  	
  (b)

  	
   

  	
  Not Applicable

  	
   

  
	
   

  	
   

  	
  (c)(1)

  	
   

  	
  1.2

  	
   

  
	
   

  	
   

  	
  (c)(2)

  	
   

  	
  1.2

  	
   

  
	
   

  	
   

  	
  (c)(3)

  	
   

  	
  Not Applicable

  	
   

  
	
   

  	
   

  	
  (d)

  	
   

  	
  Not Applicable

  	
   

  
	
   

  	
   

  	
  (e)

  	
   

  	
  1.2

  	
   

  
	
  Section 315

  	
   

  	
  (a)

  	
   

  	
  6.1

  	
   

  
	
   

  	
   

  	
  (b)

  	
   

  	
  6.2

  	
   

  
	
   

  	
   

  	
  (c)

  	
   

  	
  6.1

  	
   

  
	
   

  	
   

  	
  (d)

  	
   

  	
  6.1

  	
   

  
	
   

  	
   

  	
  (e)

  	
   

  	
  5.14

  	
   

  
	
  Section 316

  	
   

  	
  (a)

  	
   

  	
  1.1

  	
   

  
	
   

  	
   

  	
  (a)(1)(A)

  	
   

  	
  5.2, 5.12

  	
   

  
	
   

  	
   

  	
  (a)(1)(B)

  	
   

  	
  5.13

  	
   

  
	
   

  	
   

  	
  (a)(2)

  	
   

  	
  Not Applicable

  	
   

  
	
   

  	
   

  	
  (b)

  	
   

  	
  5.8

  	
   

  
	
   

  	
   

  	
  (c)

  	
   

  	
  1.4

  	
   

  
	
  Section 317

  	
   

  	
  (a)(1)

  	
   

  	
  5.3

  	
   

  
	
   

  	
   

  	
  (a)(2)

  	
   

  	
  5.4

  	
   

  
	
   

  	
   

  	
  (b)

  	
   

  	
  10.3

  	
   

  
	
  Section 318

  	
   

  	
  (a)

  	
   

  	
  1.7

  	
   

  

 

NOTE: This
reconciliation and tie shall not, for any purpose, be deemed to be a part of
the Indenture.

 

iv

 

INDENTURE,
dated as of
              ,
between Overstock.com, Inc., a corporation duly organized and existing
under the laws of the State of Delaware (herein called the “Company”), having
its principal executive office at 6350 South 3000 East, Salt Lake City, Utah
84121, and [Trustee], a
            , as
Trustee (herein called the “Trustee”).

 

RECITALS OF THE COMPANY

 

The Company
has duly authorized the execution and delivery of this Indenture to provide for
the issuance from time to time of its unsecured subordinated debentures, notes
or other evidences of indebtedness (herein called the “Securities”), to be
issued in one or more series as provided in this Indenture.

 

All things
necessary to make this Indenture a valid agreement of the Company, in
accordance with its terms, have been done.

 

NOW, THEREFORE, THIS INDENTURE WITNESSETH:

 

For and in
consideration of the premises and the purchase of the Securities by the Holders
thereof, it is mutually covenanted and agreed, for the equal and proportionate
benefit of all Holders of the Securities or of series thereof appertaining, as
follows:

 

ARTICLE 1

 

DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

 

Section 1.1            Definitions.

 

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

 

(1)   the terms
defined in this Article have the meanings assigned to them in this Article and
include the plural as well as the singular;

 

(2)   all other
terms used herein which are defined in the Trust Indenture Act, either directly
or by reference therein, have the meanings assigned to them therein;

 

(3)   all
accounting terms not otherwise defined herein have the meanings assigned to
them in accordance with generally accepted accounting principles in the United
States of America, and, except as otherwise herein expressly provided,
the term “generally accepted accounting principles” with respect to any
computation required or permitted hereunder shall mean such accounting principles
in the United States of America as are generally accepted at the date of such
computation;

 

(4)   all
references to “$” refer to lawful currency of the United States of America;

 

(5)   unless the
context otherwise requires, any reference to an “Article” or a “Section” refers
to an Article or a Section, as the case may be, of this Indenture; and

 

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

 

“Act,” when
used with respect to any Holder, has the meaning specified in Section 1.4.

 

“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.

 

1

 

“Authenticating
Agent” means any Person authorized by the Trustee pursuant to Section 6.14
to act on behalf of the Trustee to authenticate Securities of one or more
series.

 

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

 

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

 

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

 

“Commission”
means the Securities and Exchange Commission, from time to time constituted,
created under the Exchange Act, or, if at any time after the execution of this
instrument such Commission is not existing and performing the duties now
assigned to it under the Trust Indenture Act, then the body performing such
duties at such time.

 

“Common Stock”
includes any stock of any class of the Company which has no preference in
respect of dividends or of amounts payable in the event of any voluntary or
involuntary liquidation, dissolution or winding-up of the Company and which is
not subject to redemption by the Company; provided, however,
subject to the provisions of Section 14.9, shares issuable upon conversion
of Securities shall include only shares of the class designated as Common Stock
of the Company at the date of this Indenture or shares of any class or classes
resulting from any reclassification or reclassifications thereof and which have
no preference in respect of dividends or of amounts payable in the event of any
voluntary or involuntary liquidation, dissolution or winding-up of the Company
and which are not subject to redemption by the Company; provided, further,
that if at any time there shall be more than one such resulting class, the
shares of each such class then so issuable shall be substantially in the
proportion which the total number of shares of such class resulting from all
such reclassifications bears to the total number of shares of all such classes
resulting from all such reclassifications.

 

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

 

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

 

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

 

“Corporate
Trust Office” means the corporate trust office of the Trustee at
                                                      ,
or such other office, designated by the Trustee by written notice to the
Company, at which at any particular time its corporate trust business shall be
administered.

 

“corporation”
means a corporation, association, company, joint-stock company or business
trust.

 

“Covenant
Defeasance” has the meaning specified in Section 13.3.

 

“Defaulted
Interest” has the meaning specified in Section 3.7.

 

“Defeasance”
has the meaning specified in Section 13.2.

 

2

 

“Depositary”
means, with respect to Securities of any series issuable in whole or in part in
the form of one or more Global Securities, a clearing agency registered under
the Exchange Act that is designated to act as Depositary for such Securities as
contemplated by Section 3.1.

 

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

 

“euro” or
“euros” means the currency adopted by those nations participating in the third
stage of the economic and monetary union provisions of the Treaty on European
Union, signed at Maastricht on February 7, 1992.

 

“European
Economic Area” means the member nations of the European Economic Area pursuant
to the Oporto Agreement on the European Economic Area dated May 2, 1992,
as amended.

 

“European
Union” means the member nations of the European Union established by the Treaty
of European Union, signed at Maastricht on February 2, 1992, which amended
the Treaty of Rome establishing the European Community.

 

“Event of
Default” has the meaning specified in Section 5.1.

 

“Exchange Act”
means the Securities Exchange Act of 1934 and any statute successor thereto, in
each case as amended from time to time.

 

“Expiration
Date” has the meaning specified in Section 1.4.

 

“Foreign
Government Obligation” means with respect to Securities of any series which are
not denominated in the currency of the United States of America (x) any
security which is (i) a direct obligation of the government which issued
or caused to be issued the currency in which such security is denominated and
for the payment of which obligations its full faith and credit is pledged or,
with respect to Securities of any series which are denominated in euros, a
direct obligation of any member nation of the European Union for the payment of
which obligation the full faith and credit of the respective nation is pledged
so long as such nation has a credit rating at least equal to that of the
highest rated member nation of the European Economic Area, or (ii) an
obligation of a Person controlled or supervised by and acting as an agency or
instrumentality of a government specified in clause (i) above the payment
of which is unconditionally guaranteed as a full faith and credit obligation by
the such government, which, in either case (i) or (ii), is not callable or
redeemable at the option of the issuer thereof, and (y) any depositary
receipt issued by a bank (as defined in Section 3(a)(2) of the
Securities Act) as custodian with respect to any Foreign Government Obligation
which is specified in clause (x) above and held by such bank for the
account of the holder of such depositary receipt, or with respect to any
specific payment of principal of or interest on any Foreign Government
Obligation which is so specified and held, provided that (except as required by
law) such custodian is not authorized to make any deduction from the amount
payable to the holder of such depositary receipt from any amount received by
the custodian in respect of the Foreign Government Obligation or the specific
payment of principal or interest evidenced by such depositary receipt.

 

“Global
Security” means a Security that evidences all or part of the Securities of any
series and bears the legend set forth in Section 2.4 (or such legend as
may be specified as contemplated by Section 3.1 for such Securities).

 

3

 

“Holder” means
a Person in whose name a Security is registered in the Security Register.

 

“Indebtedness”
means, with respect to any Person, all obligations, whether absolute or
contingent, whether secured or unsecured, due or to become due, outstanding on
the date of this Indenture or thereafter created, incurred or assumed, of such
Person (i) (a) for borrowed money (including, but not limited to, any
indebtedness secured by a security interest, mortgage or other lien on the
assets of that Person that is (1) given to secure all or part of the
purchase price of property subject thereto, whether given to the vendor of such
property or to another, or (2) existing on property at the time of
acquisition thereof), (b) evidenced by a note or similar instrument given
in connection with the acquisition of any business, properties or assets of any
kind (c) evidenced by a credit or loan agreement, note, debenture, bond or
other written obligation, (d) under a lease required to be capitalized on
the balance sheet of the lessee under United States generally accepted
accounting principles or under other leases for facilities, capital equipment
or related assets, whether or not capitalized, entered into or leased for
financing purposes, (e) in respect of letters of credit, bank guarantees,
bankers’ acceptances and similar facilities (including reimbursement
obligations with respect to any of the foregoing), (f) issued or assumed
as the deferred purchase price of any property or services, but excluding trade
accounts payable and accrued liabilities arising in the ordinary course of
business, (g) under interest rate or currency swap agreements, cap, floor,
collar agreements, hedge agreements, forward contracts and similar agreements
and arrangements; (ii) with respect to any obligation of others of the
type described in the preceding clause (i)  the payment of which is
assumed by or guaranteed in any manner by such Person or for which such Person
is responsible or liable, directly or indirectly, jointly or severally, as
obligor, guarantor or otherwise, or which are secured by a lien on such
Person’s property; and (iii) any and all renewals, extensions,
modifications, replacements, restatements and refundings of, or any
Indebtedness or obligation issued in exchange for, any such Indebtedness or
obligation described in the preceding clauses (i) or (ii).

 

“Indenture”
means this instrument as originally executed and as it may from time to time be
supplemented or amended by one or more indentures supplemental hereto entered
into pursuant to the applicable provisions hereof, including, for all purposes
of this instrument and any such supplemental indenture, the provisions of the
Trust Indenture Act that are deemed to be a part of and govern this instrument
and any such supplemental indenture, respectively. The term “Indenture” shall
also include the terms of particular series of Securities established as
contemplated by Section 3.1; provided, however, that if at
any time more than one Person is acting as Trustee under this Indenture due to
the appointment of one or more separate Trustees for any one or more separate
series of Securities, “Indenture” shall mean, with respect to such series of
Securities for which any such Person is Trustee, this instrument as originally
executed or as it may from time to time be supplemented or amended by one or
more indentures supplemental hereto entered into pursuant to the applicable
provisions hereof and shall include the terms of particular series of
Securities for which such Person is Trustee established as contemplated by Section 3.1,
exclusive, however, of any provisions or terms which relate solely to other
series of Securities for which such Person is not Trustee, regardless of when
such terms or provisions were adopted, and exclusive of any provisions or terms
adopted by means of one or more indentures supplemental hereto executed and
delivered after such Person had become such Trustee, but to which such person,
as such Trustee, was not a party; provided, further that in the
event that this Indenture is supplemented or amended by one or more indentures
supplemental hereto which are only applicable to certain series of Securities,
the term “Indenture” for a particular series of Securities shall only include
the supplemental indentures applicable thereto.

 

“interest,”
when used with respect to an Original Issue Discount Security, which by its
terms bears interest only after Maturity, means interest payable after
Maturity.

 

“Interest
Payment Date,” when used with respect to any Security, means the Stated Maturity
of an installment of interest on such Security.

 

“Investment
Company Act” means the Investment Company Act of 1940 and any statute successor
thereto, in each case as amended from time to time.

 

“Maturity,”
when used with respect to any Security, means the date on which the principal
of such Security or an installment of principal becomes due and payable as
therein or herein provided, whether at the Stated Maturity or by declaration of
acceleration, repurchase at the option of the Holder, upon redemption or
otherwise.

 

“Notice of
Default” means a written notice of the kind specified in Section 5.1(4).

 

4

 

“Officers’
Certificate” means a certificate signed by the Chairman of the Board, a Vice
Chairman of the Board, the Chief Executive Officer, the President or a Vice
President, and by the principal financial officer, the Treasurer, an Assistant
Treasurer, the Secretary or an Assistant Secretary, of the Company, and
delivered to the Trustee. One of the officers signing an Officers’ Certificate
given pursuant to Section 10.4 shall be the principal executive, financial
or accounting officer of the Company.

 

“Opinion of
Counsel” means a written opinion of counsel, who may be counsel for, or an
employee of, the Company, and who shall be reasonably acceptable to the
Trustee.

 

“Original
Issue Discount Security” means any Security that provides for an amount less
than the principal amount thereof to be due and payable upon a declaration of
acceleration of the Maturity thereof pursuant to Section 5.2.

 

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

 

(1)   Securities
theretofore canceled by the Trustee or delivered to the Trustee for
cancellation;

 

(2)   Securities
for whose payment or redemption money in the necessary amount has been
theretofore deposited with the Trustee or any Paying Agent (other than the
Company) in trust or set aside and segregated in trust by the Company (if the
Company shall act as its own Paying Agent) for the Holders of such Securities;
provided that, if such Securities are to be redeemed, notice of such redemption
has been duly given pursuant to this Indenture or provision therefor
satisfactory to the Trustee has been made;

 

(3)   Securities
as to which Defeasance has been effected pursuant to Section 13.2; and

 

(4)   Securities
which have been paid pursuant to Section 3.6 or in exchange for or in lieu
of which other Securities have been authenticated and delivered pursuant to
this Indenture, other than any such Securities in respect of which there shall
have been presented to the Trustee proof satisfactory to it that such
Securities are held by a bona fide purchaser in whose hands such Securities are
valid obligations of the Company;

 

provided,
however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given, made or taken any
request, demand, authorization, direction, notice, consent, waiver or other
action hereunder as of any date, (A) the principal amount of an Original
Issue Discount Security which shall be deemed to be Outstanding shall be the
amount of the principal thereof which would be due and payable as of such date
upon acceleration of the Maturity thereof to such date pursuant to Section 5.2,
(B) if, as of such date, the principal amount payable at the Stated
Maturity of a Security is not determinable, the principal amount of such
Security which shall be deemed to be Outstanding shall be the amount as
specified or determined as contemplated by Section 3.1, (C) the
principal amount of a Security denominated in one or more non-U.S. dollar
currencies or currency units which shall be deemed to be Outstanding shall be
the U.S. dollar equivalent, determined as of such date in the manner provided
as contemplated by Section 3.1, of the principal amount of such Security
(or, in the case of a Security described in clause (A) or (B) above,
of the amount determined as provided in such clause), and (D) Securities
owned by the Company or any other obligor upon the Securities or any Affiliate
of the Company or of such other obligor shall be disregarded and deemed not to
be Outstanding, except that, in determining whether the Trustee shall be
protected in relying upon any such request, demand, authorization, direction,
notice, consent, waiver or other action, only Securities which the Trustee
knows to be so owned shall be so disregarded. Securities so owned which have
been pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Trustee the pledgee’s right so to act
with respect to such Securities and that the pledgee is not the Company or any
other obligor upon the Securities or any Affiliate of the Company or of such
other obligor.

 

“Paying Agent”
means any Person authorized by the Company to pay the principal of or any
premium or interest on any Securities on behalf of the Company.

 

“Payment
Blockage Notice” has the meaning specified in Section 15.2.

 

5

 

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

 

“Place of
Payment,” when used with respect to the Securities of any series, means the
place or places where the principal of and any premium and interest on the
Securities of that series are payable as specified as contemplated by Section 3.1.

 

“Predecessor
Security” of any particular Security means every previous Security evidencing
all or a portion of the same debt as that evidenced by such particular
Security; and, for the purposes of this definition, any Security authenticated
and delivered under Section 3.6 in exchange for or in lieu of a mutilated,
destroyed, lost or stolen Security shall be deemed to evidence the same debt as
the mutilated, destroyed, lost or stolen Security.

 

“Record Date”
means any Regular Record Date or Special Record Date.

 

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

 

“Redemption
Price,” when used with respect to any Security to be redeemed, means the price
at which it is to be redeemed pursuant to this Indenture.

 

“Regular
Record Date” for the interest payable on any Interest Payment Date on the
Securities of any series means the date specified for that purpose as
contemplated by Section 3.1.

 

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

 

“Responsible
Officer” means, when used with respect to the Trustee, an officer of the
Trustee in the Corporate Trust Office assigned and duly authorized by the
Trustee to administer its corporate trust matters.

 

“Securities”
has the meaning stated in the first recital of this Indenture and more
particularly means any Securities authenticated and delivered under this
Indenture.

 

“Securities
Act” means the Securities Act of 1933 and any statute successor thereto, in
each case as amended from time to time.

 

“Security
Register” and “Security Registrar” have the respective meanings specified in Section 3.5.

 

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

 

6

 

“Special Record Date” for
the payment of any Defaulted Interest means a date fixed by the Trustee
pursuant to Section 3.7.

 

“Stated Maturity,” when used
with respect to any Security or any installment of principal thereof or
interest thereon, means the date specified in such Security as the fixed date
on which the principal of such Security or such installment of principal or
interest is due and payable.

 

“Subsidiary” means a Person
of which more than 50% of the outstanding voting stock having the power to
elect a majority of the board of directors of such Person (in the case of a
corporation) is, or of which more than 50% of the equity interests (in the case
of a Person which is not a corporation) are, at the time owned, directly or
indirectly, by the Company or by one or more other Subsidiaries, or by the
Company and one or more other Subsidiaries. For the purposes of this
definition, “voting stock” means stock or other similar interests which
ordinarily has voting power for the election of directors or persons performing
similar functions, whether at all times or only so long as no senior class of
stock or other interests has such voting power by reason of any contingency.

 

“Trust Indenture Act” means
the Trust Indenture Act of 1939 as in force at the date as of which this
instrument was executed; provided, however, that in the event the
Trust Indenture Act of 1939 is amended after such date, “Trust Indenture Act”
means, to the extent required by any such amendment, the Trust Indenture Act of
1939 as so amended.

 

“Trustee” means the Person
named as the “Trustee” in the first paragraph of this instrument until a
successor Trustee shall have become such pursuant to the applicable provisions
of this Indenture, and thereafter “Trustee” shall mean or include each Person
who is then a Trustee hereunder, and if at any time there is more than one such
Person, “Trustee” as used with respect to the Securities of any series shall
mean the Trustee with respect to Securities of that series.

 

“U.S. Government Obligation”
means (x) any security which is (i) a direct obligation of the United
States of America for the payment of which the full faith and credit of the
United States of America is pledged or (ii) an obligation of a Person
controlled or supervised by and acting as an agency or instrumentality of the
United States of America the payment of which is unconditionally guaranteed as
a full faith and credit obligation by the United States of America, which, in
either case (i) or (ii), is not callable or redeemable at the option of
the issuer thereof, and (y) any depositary receipt issued by a bank (as
defined in Section 3(a)(2) of the Securities Act) as custodian with
respect to any U.S. Government Obligation which is specified in clause (x) above
and held by such bank for the account of the holder of such depositary receipt,
or with respect to any specific payment of principal of or interest on any U.S.
Government Obligation which is so specified and held, provided that (except as
required by law) such custodian is not authorized to make any deduction from
the amount payable to the holder of such depositary receipt from any amount
received by the custodian in respect of the U.S. Government Obligation or the
specific payment of principal or interest evidenced by such depositary receipt.

 

“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            Compliance Certificates and
Opinions.

 

Upon any application or
request by the Company to the Trustee to take any action under any provision of
this Indenture, the Company shall furnish to the Trustee such certificates and
opinions as may be required under the Trust Indenture Act. Each such
certificate or opinion shall be given in the form of an Officers’ Certificate,
if to be given by an officer of the Company, or an Opinion of Counsel, if to be
given by counsel, and shall comply with the requirements of the Trust Indenture
Act and any other requirements set forth in this Indenture.

 

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

 

(1)   a statement
that each individual signing such certificate or opinion has read such covenant
or condition and the definitions herein relating thereto;

 

7

 

(2)   a brief
statement as to the nature and scope of the examination or investigation upon
which the statements or opinions contained in such certificate or opinion are
based;

 

(3)   a statement
that, in the opinion of each such individual, he 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

 

(4)   a statement
as to whether, in the opinion of each such individual, such condition or
covenant has been complied with.

 

Section 1.3            Form of Documents Delivered to
Trustee.

 

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

 

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

 

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

 

Section 1.4            Acts of Holders; Record Dates.

 

Any request, demand,
authorization, direction, notice, consent, waiver or other action provided or
permitted by this Indenture to be given, made or taken by Holders may be
embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Holders in person or by agent duly appointed in writing;
and, except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments are delivered to the Trustee and,
where it is hereby expressly required, to the Company. The Trustee shall
promptly deliver to the Company copies of all such instrument or instruments
delivered to the Trustee. Such instrument or instruments (and the action
embodied therein and evidenced thereby) are herein sometimes referred to as the
“Act” of the Holders signing such instrument or instruments. Proof of execution
of any such instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Indenture and (subject to Section 6.1)
conclusive in favor of the Trustee and the Company, if made in the manner
provided in this Section.

 

The fact and date of the execution
by any Person of any such instrument or writing may be proved by the affidavit
of a witness of such execution or by a certificate of a notary public or other
officer authorized by law to take acknowledgments of deeds, certifying that the
individual signing such instrument or writing acknowledged to him or her the
execution thereof. Where such execution is by a signer acting in a capacity
other than his or her individual capacity, such certificate or affidavit shall
also constitute sufficient proof of his or her authority. The fact and date of
the execution of any such instrument or writing, or the authority of the Person
executing the same, may also be proved in any other manner that the Trustee
deems sufficient.

 

The ownership of Securities
shall be proved by the Security Register.

 

8

 

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

 

The Company may set any day
as a record date for the purpose of determining the Holders of Outstanding
Securities of any series entitled to give, make or take any request, demand,
authorization, direction, vote, notice, consent, waiver or other action
provided or permitted by this Indenture to be given, made or taken by Holders
of Securities of such series, provided that the Company may not set a
record date for, and the provisions of this paragraph shall not apply with
respect to, the giving or making of any notice, declaration, request or
direction referred to in the next paragraph. If any record date is set pursuant
to this paragraph, the Holders of Outstanding Securities of the relevant series
on such record date, and no other Holders, shall be entitled to take the
relevant action, whether or not such Holders remain Holders after such record
date; provided that no such action shall be effective hereunder unless
taken on or prior to the applicable Expiration Date by Holders of the requisite
principal amount of Outstanding Securities of such series on such record date.
Nothing in this paragraph shall be construed to prevent the Company from
setting a new record date for any action for which a record date has previously
been set pursuant to this paragraph (whereupon the record date previously set
shall automatically and with no action by any Person be canceled and of no
effect), and nothing in this paragraph shall be construed to render ineffective
any action taken by Holders of the requisite principal amount of Outstanding
Securities of the relevant series on the date such action is taken. Promptly
after any record date is set pursuant to this paragraph, the Company, at its
own expense, shall cause notice of such record date, the proposed action by
Holders and the applicable Expiration Date to be given to the Trustee in
writing and to each Holder of Securities of the relevant series in the manner
set forth in Section 1.6.

 

The Trustee may set any day
as a record date for the purpose of determining the Holders of Outstanding
Securities of any series entitled to join in the giving or making of (i) any
Notice of Default, (ii) any declaration of acceleration referred to in Section 5.2,
(iii) any request to institute proceedings referred to in Section 5.7(2) or
(iv) any direction referred to in Section 5.12, in each case with
respect to Securities of such series. If any record date is set pursuant to
this paragraph, the Holders of Outstanding Securities of such series on such
record date, and no other Holders, shall be entitled to join in such notice,
declaration, request or direction, whether or not such Holders remain Holders
after such record date; provided that no such action shall be effective
hereunder unless taken on or prior to the applicable Expiration Date by Holders
of the requisite principal amount of Outstanding Securities of such series on
such record date. Nothing in this paragraph shall be construed to prevent the
Trustee from setting a new record date for any action for which a record date
has previously been set pursuant to this paragraph (whereupon the record date
previously set shall automatically and with no action by any Person be canceled
and of no effect), and nothing in this paragraph shall be construed to render
ineffective any action taken by Holders of the requisite principal amount of
Outstanding Securities of the relevant series on the date such action is taken.
Promptly after any record date is set pursuant to this paragraph, the Trustee,
at the Company’s expense, shall cause notice of such record date, the proposed
action by Holders and the applicable Expiration Date to be given to the Company
in writing and to each Holder of Securities of the relevant series in the
manner set forth in Section 1.6.

 

With respect to any record
date set pursuant to this Section, the party hereto which sets such record
dates may designate any day as the “Expiration Date” and from time to time may
change the Expiration Date to any earlier or later day; provided that no
such change shall be effective unless notice of the proposed new Expiration
Date is given to the other party hereto in writing, and to each Holder of
Securities of the relevant series in the manner set forth in Section 1.6,
on or prior to the existing Expiration Date. If an Expiration Date is not
designated with respect to any record date set pursuant to this Section, the
party hereto which set such record date shall be deemed to have initially
designated the 180th day after such record date as the Expiration Date with
respect thereto, subject to its right to change the Expiration Date as provided
in this paragraph. Notwithstanding the foregoing, no Expiration Date shall be
later than the 180th day after the applicable record date.

 

Without limiting the foregoing,
a Holder entitled hereunder to take any action hereunder with regard to any
particular Security may do so with regard to all or any part of the principal
amount of such Security or by one or more duly appointed agents each of which
may do so pursuant to such appointment with regard to all or any part of such
principal amount.

 

9

 

Section 1.5            Notices, etc., to Trustee and
Company.

 

Any request, demand,
authorization, direction, notice, consent, waiver or Act of Holders or other
document provided or permitted by this Indenture to be made upon, given or
furnished to, or filed with,

 

(1)   the Trustee
by any Holder or by the Company shall be sufficient for every purpose hereunder
if made, given, furnished or filed in writing (or by facsimile transmissions,
provided that oral confirmation of receipt shall have been received) to or with
the Trustee at its Corporate Trust Office, Attention: Corporate Trust
Department, or

 

(2)   the Company
by the Trustee or by any Holder shall be sufficient for every purpose hereunder
(unless otherwise herein expressly provided) if in writing and mailed,
first-class postage prepaid, personally delivered or sent via overnight courier
to the Company addressed to it at the address of its principal office specified
in the first paragraph of this instrument or at any other address previously
furnished in writing to the Trustee by the Company, Attention: Chief Financial
Officer.

 

Section 1.6            Notice to Holders; Waiver.

 

Where this Indenture provides
for notice to Holders of any event, such notice shall be sufficiently given
(unless otherwise herein expressly provided) if in writing and mailed,
first-class postage prepaid or delivered by hand or overnight courier, to each
Holder affected by such event, at its address as it appears in the Security
Register, not later than the latest date (if any), and not earlier than the
earliest date (if any), prescribed for the giving of such notice. Neither the
failure to mail or deliver by hand or overnight courier any notice, nor any
defect in any notice so mailed or delivered by hand or overnight courier, to
any particular Holder shall affect the sufficiency of such notice with respect
to other Holders. Where this Indenture provides for notice in any manner, such
notice may be waived in writing by the Person entitled to receive such notice,
either before or after the event, and such waiver shall be the equivalent of
such notice. Waivers of notice by Holders shall be filed with the Trustee, but
such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such waiver.

 

In case by reason of the
suspension of regular mail service or by reason of any other cause it shall be
impracticable to give such notice by mail, then such notification as shall be
made with the approval of the Trustee shall constitute a sufficient
notification for every purpose hereunder.

 

Section 1.7            Conflict with Trust Indenture Act.

 

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

 

Section 1.8            Effect of Headings and Table of
Contents.

 

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

 

Section 1.9            Successors and Assigns.

 

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

 

Section 1.10         Separability Clause.

 

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

 

10

 

Section 1.11         Benefits of Indenture.

 

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

 

Section 1.12         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 1.13         Legal Holidays.

 

In any case where any
Interest Payment Date, Redemption Date or Stated Maturity of any Security or
the last date on which a Holder has the right to convert a Security at a
particular conversion price or rate shall not be a Business Day at any Place of
Payment, then (notwithstanding any other provision of this Indenture or of the
Securities (other than a provision of any Security which specifically states
that such provision shall apply in lieu of this Section)) payment of interest
or principal (and premium, if any) or, if applicable to a particular series of
Securities, conversion need not be made at such Place of Payment on such date,
but may be made on the next succeeding Business Day at such Place of Payment
with the same force and effect as if made on the Interest Payment Date or
Redemption Date, at the Stated Maturity or on such last day for conversion, as
the case may be.

 

Section 1.14         Indenture and Securities Solely
Corporate Obligations.

 

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

 

Section 1.15         Indenture May be Executed in
Counterparts.

 

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

 

ARTICLE 2

 

SECURITY FORMS

 

Section 2.1            Forms Generally.

 

The Securities of each
series shall be in substantially the form set forth in this Article, or in such
other form as shall be established by or pursuant to a Board Resolution or in
one or more indentures supplemental hereto, in each case with such appropriate
insertions, omissions, substitutions and other variations as are required or
permitted by this Indenture, and may have such letters, numbers or other marks
of identification and such legends or endorsements placed thereon as may be
required to comply with the rules of any securities exchange or Depositary
therefor or as may, consistently herewith, be determined by the officers
executing such Securities, as evidenced by their execution thereof. If the form
of Securities of any series is established by action taken pursuant to a Board
Resolution, a copy of an appropriate record of such action shall be certified
by the Secretary or an Assistant Secretary of the Company and delivered to the
Trustee at or prior to the delivery of the Company Order contemplated by Section 3.3
for the authentication and delivery of such Securities. Any such Board
Resolution or 

 

11

 

record
of such action shall have attached thereto a true and correct copy of the form
of Security referred to therein approved by or pursuant to such Board
Resolution.

 

The definitive Securities
shall be printed, lithographed or engraved on steel engraved borders or may be
produced in any other manner, all as determined by the officers executing such
Securities, as evidenced by their execution of such Securities.

 

Section 2.2            Form of Face of Security.

 

[INSERT
ANY LEGEND REQUIRED BY THE INTERNAL REVENUE CODE AND THE REGULATIONS
THEREUNDER.]

 

OVERSTOCK.COM, INC.

 

	
  NO.

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  CUSIP:

  	
   

  

 

Overstock.com, Inc., a
corporation duly organized and existing under the laws of Delaware (herein
called the “Company,” which term includes any successor Person under the
Indenture hereinafter referred to), for value received, hereby promises to pay
to             , or
registered assigns, the principal sum of
            
dollars on
             [if the Security is to bear interest prior to Maturity,
insert — , and to pay interest thereon from
             or
from the most recent Interest Payment Date to which interest has been paid or
duly provided for, semi-annually on
             and
             in
each year, commencing             ,
at the rate of
            % per
annum, until the principal hereof is paid or made available for payment [if applicable, insert — , provided that any
principal and premium, and any such installment of interest, which is overdue
shall bear interest at the rate of
            % per
annum (to the extent that the payment of such interest shall be legally
enforceable), from the dates such amounts are due until they are paid or made
available for payment, and such interest shall be payable on demand]. The
interest so payable, and punctually paid or duly provided for, on any Interest
Payment Date will, as provided in such Indenture, be paid to the Person in
whose name this Security (or one or more Predecessor Securities) is registered
at the close of business on the Regular Record Date for such interest, which
shall be the
             or
             
(whether or not a Business Day), as the case may be, next preceding such
Interest Payment Date. Any such interest not so punctually paid or duly
provided for will forthwith cease to be payable to the Holder on such Regular
Record Date and may either be paid to the Person in whose name this Security
(or one or more Predecessor Securities) is registered at the close of business
on a Special Record Date for the payment of such Defaulted Interest to be fixed
by the Trustee, notice whereof shall be given to Holders of Securities of this
series not less than 10 days prior to such Special Record Date, or be paid at
any time in any other lawful manner not inconsistent with the requirements of
any securities exchange on which the Securities of this series may be listed,
and upon such notice as may be required by such exchange, all as more fully
provided in said Indenture].

 

[If the Security is not to bear interest prior to Maturity, insert —
The principal of this Security shall not bear interest except in the case of a
default in payment of principal upon acceleration, upon redemption or at Stated
Maturity and in such case the overdue principal and any overdue premium shall
bear interest at the rate of
            % per
annum (to the extent that the payment of such interest shall be legally
enforceable), from the dates such amounts are due until they are paid or made
available for payment. Interest on any overdue principal or premium shall be
payable on demand. Any such interest on overdue principal or premium which is
not paid on demand shall bear interest at the rate of             %
per annum (to the extent that the payment of such interest on interest shall be
legally enforceable), from the date of such demand until the amount so demanded
is paid or made available for payment. Interest on any overdue interest shall
be payable on demand.] Payment of the principal of (and premium, if any) and [if applicable, insert — any such] interest
on this Security will be made at the office or agency of the Company maintained
for that purpose in
            , 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 [if applicable, insert —; 

 

12

 

provided, however,
that at the option of the Company payment of interest may be made by check
mailed to the address of the Person entitled thereto as such address shall
appear in the Security Register].

 

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

 

Unless the certificate of
authentication hereon has been executed by the Trustee referred to on the
reverse hereof by manual signature, this Security shall not be entitled to any
benefit under the Indenture or be valid or obligatory for any purpose.

 

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

 

 

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  OVERSTOCK.COM, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
  ATTEST:

  	
   

  
	
   

  	
   

  	
   

  

 

Section 2.3            Form of Reverse of Security.

 

This Security is one of a
duly authorized issue of securities of the Company (herein called the
“Securities”), issued and to be issued in one or more series under an
Indenture, dated as of
            , 200_
(herein called the “Indenture,” which term shall have the meaning assigned to
it in such instrument), between the Company and [Trustee], as Trustee (herein
called the “Trustee,” which term includes any successor trustee under the
Indenture), and reference is hereby made to the Indenture and all indentures
supplemental thereto for a statement of the respective rights, limitations of
rights, duties and immunities thereunder of the Company, the Trustee, the
holders of Senior Debt and the Holders of the Securities and of the terms upon
which the Securities are, and are to be, authenticated and delivered. This
Security is one of the series designated on the face hereof [if applicable, insert —, limited in
aggregate principal amount to
$            ].

 

[If applicable, insert —The Securities of this series are
subject to redemption upon not less than [if
applicable, insert — 30] days’ notice by mail, [IF APPLICABLE,
INSERT — (1) on
             in any
year commencing with the year
             and
ending with the year
            
through operation of the sinking fund for this series at a Redemption Price
equal to 100% of the principal amount, and (2)] at any time [if applicable, insert — on or after
            ,
20            ], as
a whole or in part, at the election of the Company, at the following Redemption
Prices (expressed as percentages of the principal amount): If redeemed [if applicable, insert — on or before
            ,
            %, and
if redeemed] during the 12-month period beginning
             of the
years indicated,

 

	
  Year

  	
   

  	
  Redemption Price

  	
   

  	
  Year

  	
   

  	
  Redemption Price

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

and thereafter at a
Redemption Price equal to
            % of
the principal amount, together in the case of any such redemption [if applicable, insert — (whether through
operation of the sinking fund or otherwise)] with accrued interest to the
Redemption Date, but interest installments whose Stated Maturity is on or prior
to such Redemption 

 

13

 

Date will be payable to the
Holders of such Securities, or one or more Predecessor Securities, of record at
the close of business on the relevant Record Dates referred to on the face
hereof, all as provided in the Indenture.]

 

[If applicable, insert —The Securities of this series are
subject to redemption upon not less than [if
applicable, insert — 30] days’ notice by mail, (1) on
             in any
year commencing with the year
             and
ending with the year             
through operation of the sinking fund for this series at the Redemption Prices
for redemption through operation of the sinking fund (expressed as percentages
of the principal amount) set forth in the table below, and (2) at any time
[if applicable, insert — on or
after
            ], as a
whole or in part, at the election of the Company, at the Redemption Prices for
redemption otherwise than through operation of the sinking fund (expressed as
percentages of the principal amount) set forth in the table below: If redeemed
during the 12-month period beginning             
of the years indicated,

 

	
  Year

  	
   

  	
  Redemption Price For Redemption

  Through Operation of the Sinking Fund

  	
   

  	
  Redemption Price For Redemption

  Otherwise Than Through Operation of

  the Sinking Fund

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

and thereafter at a
Redemption Price equal to             %
of the principal amount, together in the case of any such redemption (whether
through operation of the sinking fund or otherwise) with accrued interest to
the Redemption Date, but interest installments whose Stated Maturity is on or
prior to such Redemption Date will be payable to the Holders of such
Securities, or one or more Predecessor Securities, of record at the close of
business on the relevant Record Dates referred to on the face hereof, all as
provided in the Indenture.]

 

[If applicable, insert — Notwithstanding the foregoing, the
Company may not, prior to
            ,
redeem any Securities of this series as contemplated by [if applicable, insert — clause (2) of]
the preceding paragraph as a part of, or in anticipation of, any refunding
operation by the application, directly or indirectly, of moneys borrowed having
an interest cost to the Company (calculated in accordance with generally
accepted financial practice) of less than
            % per
annum.]

 

[If applicable, insert — The sinking fund for this series
provides for the redemption on
            , in
each year beginning with the year
             and
ending with the year
             of [if applicable, insert — not less than
$            
(“mandatory sinking fund”) and not more than] $            
aggregate principal amount of Securities of this series. Securities of this
series acquired or redeemed by the Company otherwise than through [if applicable, insert — mandatory] sinking
fund payments may be credited against subsequent [if applicable, insert — mandatory] sinking fund payments
otherwise required to be made if applicable,
insert —, in the inverse order in which they become due].]

 

[If the Security is subject to redemption of any kind, insert —
In the event of redemption of this Security in part only, a new Security or
Securities of this series and of like tenor for the unredeemed portion hereof
will be issued in the name of the Holder hereof upon the cancellation hereof.]

 

[If applicable, insert — The Indenture contains provisions for
defeasance at any time of [the entire indebtedness of this Security] [or]
[certain restrictive covenants and Events of Default with respect to this
Security] [, in each case] upon compliance with certain conditions set forth in
the Indenture.]

 

[If the
Security is convertible into other securities of the Company, specify the
conversion features.]

 

The indebtedness evidenced
by this Security is, to the extent and in the manner provided in the Indenture,
subordinate and subject in right of payment to the prior payment in full of all
Senior Debt of the Company, and this Security is issued subject to such
provisions of the Indenture with respect thereto. Each Holder of this Security,
by accepting the same, (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Trustee on his behalf to take
such action as may be necessary or appropriate to effectuate the subordination
so provided and (c) appoints the Trustee his attorney-in-fact for any and
all such purposes.

 

14

 

[If the Security is not an Original Issue Discount Security, insert —
If an Event of Default with respect to Securities of this series shall occur
and be continuing, the principal of the Securities of this series may be declared
due and payable in the manner and with the effect provided in the Indenture.]

 

[If the Security is an Original Issue Discount Security, insert — If
an Event of Default with respect to Securities of this series shall occur and
be continuing, an amount of principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture. Such amount shall be equal to — insert
formula for determining the amount. Upon payment (i) of the
amount of principal so declared due and payable and (ii) of interest on
any overdue principal, premium and interest (in each case to the extent that
the payment of such interest shall be legally enforceable), all of the
Company’s obligations in respect of the payment of the principal of and premium
and interest, if any, on the Securities of this series shall terminate.]

 

The Indenture permits, with
certain exceptions as therein provided, the amendment thereof and the
modification of the rights and obligations of the Company and the rights of the
Holders of the Securities of each series to be affected under the Indenture at
any time by the Company and the Trustee with the consent of the Holders of more
than 50% in principal amount of the Securities at the time Outstanding of each
series to be affected. The Indenture also contains provisions permitting the
Holders of specified percentages in principal amount of the Securities of each
series at the time Outstanding, on behalf of the Holders of all Securities of
such series, to waive compliance by the Company with certain provisions of the
Indenture and certain past defaults under the Indenture and their consequences.
Any such consent or waiver by the Holder of this Security shall be conclusive
and binding upon such Holder and upon all future Holders of this Security and
of any Security issued upon the registration of transfer hereof or in exchange
herefor or in lieu hereof, whether or not notation of such consent or waiver is
made upon this Security.

 

As provided in and subject
to the provisions of the Indenture, the Holder of this Security shall not have
the right to institute any proceeding with respect to the Indenture or for the
appointment of a receiver or trustee or for any other remedy thereunder, unless
such Holder shall have previously given the Trustee written notice of a
continuing Event of Default with respect to the Securities of this series, the
Holders of not less than a majority in principal amount of the Securities of
this series at the time Outstanding shall have made written request to the
Trustee to institute proceedings in respect of such Event of Default as Trustee
and offered the Trustee reasonable indemnity, and the Trustee shall not have
received from the Holders of a majority in principal amount of Securities of
this series at the time Outstanding a direction inconsistent with such request,
and shall have failed to institute any such proceeding, for 60 days after
receipt of such notice, request and offer of indemnity. The foregoing shall not
apply to any suit instituted by the Holder of this Security for the enforcement
of any payment of principal hereof or any premium or interest hereon on or
after the respective due dates expressed herein.

 

No reference herein to the
Indenture and no provision of this Security or of the Indenture shall alter or
impair the obligation of the Company, which is absolute and unconditional, to
pay the principal of and any premium and interest on this Security at the
times, place and rate, and in the coin or currency, herein prescribed.

 

As provided in the Indenture
and subject to certain limitations therein set forth, the transfer of this
Security is registrable in the Security Register, upon surrender of this
Security for registration of transfer at the office or agency of the Company in
any place where the principal of and any premium and interest on this Security
are payable, duly endorsed by, or accompanied by a written instrument of
transfer in form satisfactory to the Company and the Security Registrar duly
executed by, the Holder hereof or its attorney duly authorized in writing, and
thereupon one or more new Securities of this series and of like tenor, of
authorized denominations and for the same aggregate principal amount, will be
issued to the designated transferee or transferees.

 

The Securities of this
series are issuable only in registered form without coupons in denominations of
$             and
any integral multiple thereof. As provided in the Indenture and subject to
certain limitations therein set forth, Securities of this series are
exchangeable for a like aggregate principal amount of Securities of this series
and of like tenor of a different authorized denomination, as requested by the
Holder surrendering the same.

 

No service charge shall be
made for any such registration of transfer or exchange, but the Company may
require payment of a sum sufficient to cover any tax or other governmental
charge payable in connection therewith.

 

15

 

Prior to due presentment of
this 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 this
Security is registered as the owner hereof for all purposes, whether or not
this Security be overdue, and neither the Company, the Trustee nor any such
agent shall be affected by notice to the contrary.

 

All terms used in this
Security that are defined in the Indenture shall have the meanings assigned to
them in the Indenture.

 

Section 2.4            Form of Legend for Global Securities.

 

Unless otherwise specified
as contemplated by Section 3.1 for the Securities evidenced thereby, every
Global Security authenticated and delivered hereunder shall bear a legend in
substantially the following form:

 

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

 

Section 2.5            Form of Trustee’s Certificate
of Authentication.

 

The Trustee’s certificates
of authentication shall be in substantially the following form:

 

This is one of the
Securities of the series designated herein referred to in the within-mentioned
Indenture.

 

 

	
   

  	
   

  	
  [Trustee],

  
	
   

  	
   

  	
  as Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Authorized Officer

  

 

Section 2.6            Form of Conversion Notice.

 

Unless otherwise provided as
contemplated by Section 3.1 or in a supplemental indenture for the
Securities evidenced hereby, conversion notices shall be in substantially the
following form:

 

To Overstock.com, Inc.:

 

The undersigned owner of
this Security hereby irrevocably exercises the option to convert this Security,
or portion hereof (which is $1,000 or an integral multiple thereof) below
designated, into shares of Common Stock of the Company in accordance with the
terms of the Indenture referred to in this Security, and directs that the
shares issuable and deliverable upon the conversion, together with any check in
payment for fractional shares and any Securities representing any unconverted
principal amount hereof, be issued and delivered to the registered holder
hereof unless a different name has been indicated below. If shares are to be
issued in the name of a person other than the undersigned, the undersigned will
pay all transfer taxes payable with respect hereto. Any amount required to be
paid by the undersigned on account of interest accompanies this Security.

 

 

	
  Principal Amount
  to be Converted

  (in an integral multiple of $1,000, if less than all):

  	
   

  
	
  U.S. $.

  	
                                      .

  	
   

  	
   

  
				

 

16

 

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Signature(s) must
  be guaranteed by an eligible guarantor institution (banks, stockbrokers,
  savings and loan associations and credit unions with membership in an
  approved signature guarantee medallion program) pursuant to Securities and
  Exchange Commission Rule 17Ad-15.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Signature Guaranty

  

 

Fill in for registration of
shares of Common Stock and Security if to be issued otherwise than to the
registered Holder.

 

 

	
   

  	
   

  	
   

  
	
  (Name)

  	
   

  	
  Social Security or
  Other Taxpayer

  Identification
  Number

  
	
   

  	
   

  	
   

  
	
  Please print Name and
  Address

  (including zip
  code)

  	
   

  	
   

  

 

[The above conversion notice
is to be modified, as appropriate, for conversion into other securities or
property of the Company.]

 

ARTICLE 3

 

THE SECURITIES

 

Section 3.1            Amount Unlimited; Issuable in
Series.

 

The aggregate principal
amount of Securities that may be authenticated and delivered under this
Indenture is unlimited. The Securities may be issued in one or more series.
There shall be established in or pursuant to a Board Resolution and, subject to
Section 3.3, set forth, or determined in the manner provided, in an
Officers’ Certificate, or established in one or more indentures supplemental
hereto, prior to the issuance of Securities of any series,

 

(1)   the title
of the Securities of the series (which shall distinguish the Securities of the
series from Securities of any other series);

 

(2)   any limit
upon the aggregate principal amount of the Securities of the series which may
be authenticated and delivered under this Indenture (except for Securities
authenticated and delivered upon registration of transfer of, or in exchange
for, or in lieu of, other Securities of the series pursuant to Section 3.4,
3.5, 3.6, 9.6 or 11.7 and except for any Securities which, pursuant to Section 3.3,
are deemed never to have been authenticated and delivered hereunder);

 

(3)   the Person
to whom any interest on a Security of the series shall be payable, if other
than the Person in whose name that Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest;

 

(4)   the date or
dates on which the principal of any Securities of the series is payable;

 

(5)   the rate or
rates (which may be fixed or variable) at which any Securities of the series
shall bear interest, if any, the date or dates from which any such interest
shall accrue, the Interest Payment Dates on which any such interest shall be
payable and the Regular Record Date for any such interest payable on any
Interest Payment Date (or the method for determining the dates and rates);

 

17

 

(6)   the place
or places where the principal of and any premium and interest on any Securities
of the series shall be payable;

 

(7)   the period
or periods within which, the price or prices at which and the terms and
conditions upon which any Securities of the series may be redeemed, in whole or
in part, at the option of the Company and, if other than by a Board Resolution,
the manner in which any election by the Company to redeem the Securities shall
be evidenced;

 

(8)   the
obligation, if any, of the Company to redeem or purchase any Securities of the
series pursuant to any sinking fund or analogous provisions or at the option of
the Holder thereof and the period or periods within which, the price or prices
at which and the terms and conditions upon which any Securities of the series
shall be redeemed or purchased, in whole or in part, pursuant to such
obligation;

 

(9)   if other
than denominations of $1,000 and any integral multiple thereof, the
denominations in which any Securities of the series shall be issuable;

 

(10) if the
amount of principal of or any premium or interest on any Securities of the
series may be determined with reference to an index or pursuant to a formula,
the manner in which such amounts shall be determined;

 

(11) if other
than the currency of the United States of America, the currency, currencies or
currency units in which the principal of or any premium or interest on any
Securities of the series shall be payable and the manner of determining the
equivalent thereof in the currency of the United States of America for any
purpose, including for purposes of the definition of “Outstanding” in Section 1.1;

 

(12) if the
principal of or any premium or interest on any Securities of the series is to
be payable, at the election of the Company or the Holder thereof, in one or
more currencies or currency units other than that or those in which such
Securities are stated to be payable, the currency, currencies or currency units
in which the principal of or any premium or interest on such Securities as to
which such election is made shall be payable, the periods within which and the
terms and conditions upon which such election is to be made and the amount so
payable (or the manner in which such amount shall be determined);

 

(13) if other
than the entire principal amount thereof, the portion of the principal amount
of any Securities of the series which shall be payable upon declaration of
acceleration of the Maturity thereof pursuant to Section 5.2;

 

(14) if the
principal amount payable at the Stated Maturity of any Securities of the series
will not be determinable as of any one or more dates prior to the Stated
Maturity, the amount which shall be deemed to be the principal amount of such
Securities as of any such date for any purpose thereunder or hereunder,
including the principal amount thereof which shall be due and payable upon any
Maturity other than the Stated Maturity or which shall be deemed to be
Outstanding as of any date prior to the Stated Maturity (or, in any such case,
the manner in which such amount deemed to be the principal amount shall be
determined);

 

(15) if
applicable, that the Securities of the series, in whole or any specified part,
shall be defeasible pursuant to Section 13.2 or Section 13.3 or both
such Sections, or any other defeasance provisions applicable to any Securities
of the series, and, if other than by a Board Resolution, the manner in which
any election by the Company to defease such Securities shall be evidenced;

 

(16) if
applicable, the terms of any right to convert or exchange Securities of the
series into shares of Common Stock of the Company or other securities or
property;

 

(17) if
applicable, that any Securities of the series shall be issuable in whole or in
part in the form of one or more Global Securities and, in such case, the
respective Depositaries for such Global Securities, the form of any legend or
legends which shall be borne by any such Global Security in addition to or in
lieu of that set forth in Section 2.4 and any circumstances in addition to
or in lieu of those set forth in clause (2) of the last paragraph of 

 

18

 

Section 3.5 in which
any such Global Security may be exchanged in whole or in part for Securities
registered, and any transfer of such Global Security in whole or in part may be
registered, in the name or names of Persons other than the Depositary for such
Global Security or a nominee thereof;

 

(18) any deletion
of, addition to or change in the Events of Default which applies to any
Securities of the series and any change in the right of the Trustee or the
requisite Holders of such Securities to declare the principal amount thereof
due and payable pursuant to Section 5.2;

 

(19) any deletion
of, addition to or change in the covenants set forth in Article 10 which
applies to Securities of the series;

 

(20) any
Authenticating Agents, Paying Agents, Security Registrars or such other agents
necessary in connection with the issuance of the Securities of such series,
including, without limitation, exchange rate agents and calculation agents;

 

(21) if
applicable, the terms of any security that will be provided for a series of
Securities, including provisions regarding the circumstances under which
collateral may be released or substituted;

 

(22) if applicable,
the terms of any guaranties for the Securities and any circumstances under
which there may be additional obligors on the Securities;

 

(23) any addition
to or change in or modification to the subordination provisions of this
Indenture relating to the Securities of that series (including the provisions
of Article 15), or different subordination provisions, including a
different definition of “Senior Debt” or “Designated Senior Debt,” that will
apply to Securities of the series; and

 

(24) any other
terms of the series (which terms shall not be inconsistent with the provisions
of this Indenture, except as permitted by Section 9.1(5)).

 

All Securities
of any one series shall be substantially identical except as to denomination
and except as may otherwise be provided in or pursuant to the Board Resolution
referred to above and (subject to Section 3.3) set forth, or determined in
the manner provided, in the Officers’ Certificate referred to above or in any
such indenture supplemental hereto.

 

If any of the
terms of the series are established by action taken pursuant to a Board
Resolution, a copy of an appropriate record of such action shall be certified
by the Secretary or an Assistant Secretary of the Company and delivered to the
Trustee at or prior to the delivery of the Officers’ Certificate setting forth
the terms of the series.

 

The Securities
shall be subordinated in right of payment to Senior Debt as provided in Article 15.

 

Section 3.2            Denominations.

 

The Securities
of each series shall be issuable only in registered form without coupons and
only in such denominations as shall be specified as contemplated by Section 3.1.
In the absence of any such specified denomination with respect to the
Securities of any series, the Securities of such series shall be issuable in
denominations of $1,000 and any integral multiple thereof.

 

Section 3.3            Execution, Authentication, Delivery
and Dating.

 

The Securities
shall be executed on behalf of the Company by its Chairman of the Board, its
Vice Chairman of the Board, its Chief Executive Officer, its principal
financial officer, its President or one of its Vice Presidents, attested by its
Treasurer, its Secretary or one of its Assistant Treasurers or Assistant
Secretaries. The signature of any of these officers on the Securities may be
manual or facsimile.

 

19

 

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

 

At any time
and from time to time after the execution and delivery of this Indenture, the
Company may deliver Securities of any series executed by the Company to the
Trustee for authentication, together with a Company Order for the
authentication and delivery of such Securities, and the Trustee in accordance
with the Company Order shall authenticate and deliver such Securities. If the
form or terms of the Securities of the series have been established by or
pursuant to one or more Board Resolutions as permitted by Sections 2.1 and 3.1,
in authenticating such Securities, and accepting the additional
responsibilities under this Indenture in relation to such Securities, the
Trustee shall be entitled to receive, and (subject to Section 6.1) shall
be fully protected in relying upon, a copy of such Board Resolution, the
Officers’ Certificate setting forth the terms of the series and an Opinion of
Counsel, with such Opinion of Counsel stating,

 

(1)   if the form
of such Securities has been established by or pursuant to Board Resolution as
permitted by Section 2.1, that such form has been established in
conformity with the provisions of this Indenture;

 

(2)   if the
terms of such Securities have been established by or pursuant to Board
Resolution as permitted by Section 3.1, that such terms have been
established in conformity with the provisions of this Indenture; and

 

(3)   that such
Securities, when authenticated and delivered by the Trustee and issued by the
Company in the manner and subject to any conditions specified in such Opinion
of Counsel, will constitute valid and legally binding obligations of the
Company enforceable in accordance with their terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors’ rights and to general
equity principles.

 

If such form
or terms have been so established, the Trustee shall not be required to
authenticate such Securities if the issue of such Securities pursuant to this
Indenture will affect the Trustee’s own rights, duties or immunities under the
Securities and this Indenture or otherwise in a manner that is not reasonably
acceptable to the Trustee.

 

Notwithstanding
the provisions of Section 3.1 and of the preceding paragraph, if all
Securities of a series are not to be originally issued at one time, it shall
not be necessary to deliver the Officers’ Certificate otherwise required
pursuant to Section 3.1 or the Company Order and Opinion of Counsel
otherwise required pursuant to such preceding paragraph at or prior to the
authentication of each Security of such series if such documents are delivered
at or prior to the authentication upon original issuance of the first Security
of such series to be issued.

 

Each Security
shall be dated the date of its authentication.

 

No Security
shall be entitled to any benefit under this Indenture or be valid or obligatory
for any purpose unless there appears on such Security a certificate of
authentication substantially in the form provided for herein executed by the
Trustee by manual signature, and such certificate upon any Security shall be
conclusive evidence, and the only evidence, that such Security has been duly
authenticated and delivered hereunder. Notwithstanding the foregoing, if any
Security shall have been authenticated and delivered hereunder but never issued
and sold by the Company, and the Company shall deliver such Security to the
Trustee for cancellation as provided in Section 3.9, for all purposes of
this Indenture such Security shall be deemed never to have been authenticated
and delivered hereunder and shall never be entitled to the benefits of this
Indenture.

 

Neither the
Company nor the Trustee shall have any responsibility for any defect in the
CUSIP number that appears on any Security, check, advice of payment or
redemption notice, and any such document may contain a statement to the effect
that CUSIP numbers have been assigned by an independent service for convenience
of reference and that neither the Company nor the Trustee shall be liable for
any inaccuracy in such numbers.

 

20

 

Section 3.4            Temporary Securities.

 

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

 

If temporary
Securities of any series are issued, the Company will cause definitive
Securities of that series to be prepared without unreasonable delay. After the
preparation of definitive Securities of such series, the temporary Securities
of such series shall be exchangeable for definitive Securities of such series
upon surrender of the temporary Securities of such series at the office or
agency of the Company in a Place of Payment for that series, without charge to
the Holder. Upon surrender for cancellation of any one or more temporary
Securities of any series, the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor one or more definitive Securities
of the same series, of any authorized denominations and of like tenor and
aggregate principal amount. Until so exchanged, the temporary Securities of any
series shall in all respects be entitled to the same benefits under this
Indenture as definitive Securities of such series and tenor.

 

Section 3.5            Registration; Registration of
Transfer and Exchange.

 

The Company
shall cause to be kept at the Corporate Trust Office of the Trustee a register
(the register maintained in such office and in any other office or agency of
the Company in a Place of Payment being herein sometimes collectively referred
to as the “Security Register”) in which, subject to such reasonable regulations
as it may prescribe, the Company shall provide for the registration of
Securities and of transfers of Securities. The Trustee is hereby appointed
“Security Registrar” for the purpose of registering Securities and transfers of
Securities as herein provided.

 

Upon surrender
for registration of transfer of any Security of a series at the office or
agency of the Company in a Place of Payment for that series, the Company shall
execute, and the Trustee shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Securities of the same
series, of any authorized denominations and of like tenor and aggregate
principal amount.

 

At the option
of the Holder, Securities of any series may be exchanged for other Securities
of the same series, of any authorized denominations and of like tenor and
aggregate principal amount, upon surrender of the Securities to be exchanged at
such office or agency. Whenever any Securities are so surrendered for exchange,
the Company shall execute, and the Trustee shall authenticate and deliver, the
Securities that the Holder making the exchange is entitled to receive. All
Securities issued upon any registration of transfer or exchange of Securities
shall be the valid obligations of the Company, evidencing the same debt, and
entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.

 

Every Security
presented or surrendered for registration of transfer or for exchange shall (if
so required by the Company or the Trustee) be duly endorsed, or be accompanied
by a written instrument of transfer in form satisfactory to the Company and the
Security Registrar duly executed, by the Holder thereof or its attorney duly
authorized in writing.

 

No service
charge shall be made for any registration of transfer or exchange of
Securities, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in connection with any
registration of transfer or exchange of Securities, other than exchanges
pursuant to Section 3.4, 9.6 or 11.7 not involving any transfer.

 

If the
Securities of any series (or of any series and specified tenor) are to be
redeemed in part, the Company shall not be required (A) to issue, register
the transfer of or exchange any Securities of that series (or of that series
and specified tenor, as the case may be) during a period beginning at the
opening of business 15 days before the day of the mailing of a notice of
redemption of any such Securities selected for redemption under Section 11.3
and 

 

21

 

ending at the close of business on the day of such mailing, or (B) to
register the transfer of or exchange any Security so selected for redemption in
whole or in part, except the unredeemed portion of any Security being redeemed
in part.

 

The provisions
of clauses (1), (2), (3) and (4) below shall apply only to Global
Securities:

 

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

 

(2)   Notwithstanding
any other provision in this Indenture, no Global Security may be exchanged in
whole or in part for Securities registered, and no transfer of a Global
Security in whole or in part may be registered, in the name of any Person other
than the Depositary for such Global Security or a nominee thereof unless (A) such
Depositary (i) has notified the Company that it is unwilling or unable to
continue as Depositary for such Global Security or (ii) has ceased to be a
clearing agency registered under the Exchange Act, (B) there shall have
occurred and be continuing an Event of Default with respect to such Global
Security or (C) there shall exist such circumstances, if any, in addition
to or in lieu of the foregoing as have been specified for this purpose as
contemplated by Section 3.1.

 

(3)   Subject to
clause (2) above, any exchange of a Global Security for other Securities
may be made in whole or in part, and all Securities issued in exchange for a
Global Security or any portion thereof shall be registered in such names as the
Depositary for such Global Security shall direct.

 

(4)   Every
Security authenticated and delivered upon registration of transfer of, or in
exchange for or in lieu of, a Global Security or any portion thereof, whether pursuant
to this Section, Section 3.4, 3.6, 9.6 or 11.7 or otherwise, shall be
authenticated and delivered in the form of, and shall be, a Global Security,
unless such Security is registered in the name of a Person other than the
Depositary for such Global Security or a nominee thereof.

 

Section 3.6            Mutilated, Destroyed, Lost and
Stolen Securities.

 

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

 

If there shall
be delivered to the Company and the Trustee (i) evidence to their
satisfaction of the destruction, loss or theft of any Security and (ii) such
security or indemnity as may be required by them to save each of them and any
agent of either of them harmless, then, in the absence of notice to the Company
or the Trustee that such Security has been acquired by a bona fide purchaser,
the Company shall execute and the Trustee shall authenticate and deliver, in
lieu of any such destroyed, lost or stolen Security, a new Security of the same
series and of like tenor and principal amount and 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, the Company in its discretion may, instead of issuing a
new Security, pay such Security.

 

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

 

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

 

22

 

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

 

Section 3.7            Payment of Interest; Interest Rights
Preserved.

 

Except as
otherwise provided as contemplated by Section 3.1 with respect to any
series of Securities or in a supplemental indenture with respect to any series
of Securities, interest on any Security which is payable, and is punctually
paid or duly provided for, on any Interest Payment Date shall be paid to the
Person in whose name that Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such
interest.

 

Any interest
on any Security of any series which is payable, but is not punctually paid or
duly provided for, on any Interest Payment Date (herein called “Defaulted
Interest”) shall forthwith cease to be payable to the Holder on the relevant
Regular Record Date by virtue of having been such Holder, and such Defaulted
Interest may be paid by the Company, at its election in each case, as provided
in clause (1) or (2) below:

 

(1)   The Company
may elect to make payment of any Defaulted Interest to the Persons in whose
names the Securities of such series (or their respective Predecessor
Securities) are registered at the close of business on a Special Record Date
for the payment of such Defaulted Interest, which shall be fixed in the
following manner. The Company shall notify the Trustee in writing of the amount
of Defaulted Interest proposed to be paid on each Security of such series and
the date of the proposed payment, and at the same time the Company shall
deposit with the Trustee an amount of money equal to the aggregate amount
proposed to be paid in respect of such Defaulted Interest or shall make
arrangements satisfactory to the Trustee for such deposit prior to the date of
the proposed payment, such money when deposited to be held in trust for the
benefit of the Persons entitled to such Defaulted Interest as in this clause
provided. Thereupon the Trustee shall fix a Special Record Date for the payment
of such Defaulted Interest, which shall be not more than 15 days and not less
than 10 days prior to the date of the proposed payment and not less than 10
days after the receipt by the Trustee of the notice of the proposed payment.
The Trustee shall promptly notify the Company of such Special Record Date and,
in the name and at the expense of the Company, shall cause notice of the
proposed payment of such Defaulted Interest and the Special Record Date
therefor to be given to each Holder of Securities of such series in the manner
set forth in Section 1.6, not less than 10 days prior to such Special
Record Date. Notice of the proposed payment of such Defaulted Interest and the
Special Record Date therefor having been so mailed, such Defaulted Interest
shall be paid to the Persons in whose names the Securities of such series (or
their respective Predecessor Securities) are registered at the close of business
on such Special Record Date and shall no longer be payable pursuant to the
following clause (2).

 

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

 

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

 

Section 3.8            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 and any premium and (subject to Section 3.7)
any interest on such Security and for all other purposes whatsoever, whether or
not such Security be overdue, and neither the Company, the Trustee nor any
agent of the Company or the Trustee shall be affected by notice to the
contrary.

 

23

 

Section 3.9            Cancellation.

 

All Securities
surrendered for payment, redemption, registration of transfer or exchange or
for credit against any sinking fund payment shall, if surrendered to any Person
other than the Trustee, be delivered to the Trustee and shall be promptly
canceled by it. The Company may at any time deliver to the Trustee for
cancellation any Securities previously authenticated and delivered hereunder
which the Company may have acquired in any manner whatsoever, and may deliver
to the Trustee (or to any other Person for delivery to the Trustee) for
cancellation any Securities previously authenticated hereunder which the
Company has not issued and sold, and all Securities so delivered shall be
promptly canceled by the Trustee. No Securities shall be authenticated in lieu
of or in exchange for any Securities canceled as provided in this Section,
except as expressly permitted by this Indenture. All canceled Securities held
by the Trustee shall be disposed of in accordance with its customary
procedures.

 

Section 3.10         Computation of Interest.

 

Except as
otherwise specified as contemplated by Section 3.1 for Securities of any
series, interest on the Securities of each series shall be computed on the
basis of a 360-day year of twelve 30-day months.

 

ARTICLE 4

SATISFACTION AND DISCHARGE

 

Section 4.1            Satisfaction and Discharge of
Indenture.

 

This Indenture
shall upon Company Request 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, at the expense of the Company, shall
execute proper instruments acknowledging satisfaction and discharge of this
Indenture, when

 

(1)   either

 

(A)                          all
Securities theretofore authenticated and delivered (other than (i) Securities
which have been destroyed, lost or stolen and which have been replaced or paid
as provided in Section 3.6 and (ii) Securities for whose payment
money has theretofore been deposited in trust or segregated and held in trust
by the Trustee or the Company and thereafter repaid to the Company or
discharged from such trust, as provided in Section 10.3) have been
delivered to the Trustee for cancellation; or

 

(B)                           all such Securities
not theretofore delivered to the Trustee for cancellation

 

(i)    have
become due and payable, or

 

(ii)   will
become due and payable at their Stated Maturity within one year, or

 

(iii)  are to be
called for redemption within one year under arrangements satisfactory to the
Trustee for the giving of notice of redemption by the Trustee in the name, and
at the expense, of the Company,

 

and the Company, in the case of
(i), (ii) or (iii) above, has deposited or caused to be deposited
with the Trustee as trust funds in trust for the purpose money in an amount
sufficient to pay and discharge the entire indebtedness on such Securities not
theretofore delivered to the Trustee for cancellation, for principal and any
premium and interest to the date of such deposit (in the case of Securities
which have become due and payable) or to the Stated Maturity or Redemption Date,
as the case may be;

 

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

 

24

 

(3)   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
to the Trustee under Section 6.7, the obligations of the Trustee to any
Authenticating Agent under Section 6.14 and, if money shall have been
deposited with the Trustee pursuant to subclause (B) of clause (1) of
this Section, the obligations of the Trustee under Section 4.2 and the
last paragraph of Section 10.3 shall survive.

 

Section 4.2            Application of Trust Money.

 

Subject to the
provisions of the last paragraph of Section 10.3, all money deposited with
the Trustee pursuant to Section 4.1 shall be held in trust and applied by
it, in accordance with the provisions of the Securities and this Indenture, to
the payment, either directly or through any Paying Agent (including the Company
acting as its own Paying Agent) as the Trustee may determine, to the Persons
entitled thereto, of the principal and any premium and interest for whose
payment such money has been deposited with the Trustee.

 

ARTICLE 5

REMEDIES

 

Section 5.1            Events of Default.

 

“Event of
Default,” wherever used herein with respect to Securities of any series, means
any one of the following events (whatever the reason for such Event of Default
and whether it shall be occasioned by the provisions of Article 15 or be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment, decree or order of any court or any order, rule or regulation of
any administrative or governmental body), unless in the Board Resolution,
supplemental indenture or Officers’ Certificate establishing such series, it is
provided that such series shall not have the benefit of said Event of Default:

 

(1)   default in
the payment of any interest upon any Security of that series when it becomes
due and payable, and continuance of such default for a period of 30 days; or

 

(2)   default in
the payment of the principal of or any premium on any Security of that series
at its Maturity; or

 

(3)   default in
the deposit of any sinking fund payment, when and as due by the terms of a
Security of that series; or

 

(4)   default in
the performance, or breach, of any covenant or warranty of the Company in this
Indenture (other than a covenant or warranty a default in whose performance or
whose breach is elsewhere in this Section specifically dealt with or which
has expressly been included in this Indenture solely for the benefit of series
of Securities other than that series), and continuance of such default or
breach for a period of 90 days after there has been given, by registered or
certified mail, to the Company by the Trustee or to the Company and the Trustee
by the Holders of at least 25% in principal amount of the Outstanding
Securities of that series a written notice specifying such default or breach
and requiring it to be remedied and stating that such notice is a “Notice of
Default” hereunder; or

 

(5)   the entry
by a court having jurisdiction in the premises of (A) a decree or order
for relief in respect of the Company in an involuntary case or proceeding under
any applicable Federal or State bankruptcy, insolvency, reorganization or other
similar law or (B) a decree or order adjudging the Company a bankrupt or
insolvent, or approving as properly filed a petition seeking reorganization,
arrangement, adjustment or composition of or in respect of the Company under
any applicable Federal or State law, or appointing a custodian, receiver,
liquidator, assignee, trustee, sequestrator or other similar official of the
Company or of any substantial part of its property, or ordering the winding up
or liquidation of its affairs, and the continuance of 

 

25

 

any such decree or order
for relief or any such other decree or order unstayed and in effect for a
period of 90 consecutive days; or

 

(6)   the
commencement by the Company of a voluntary case or proceeding under any
applicable Federal or State bankruptcy, insolvency, reorganization or other
similar law or of any other case or proceeding to be adjudicated a bankrupt or
insolvent, or the consent by it to the entry of a decree or order for relief in
respect of the Company in an involuntary case or proceeding under any
applicable Federal or State bankruptcy, insolvency, reorganization or other
similar law or to the commencement of any bankruptcy or insolvency case or
proceeding against it, or the filing by it of a petition or answer or consent
seeking reorganization or relief under any applicable Federal or State law, or
the consent by it to the filing of such petition or to the appointment of or
taking possession by a custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of the Company or of any substantial
part of its property, or the making by it of an assignment for the benefit of
creditors, or the admission by it in writing of its inability to pay its debts
generally as they become due, or the taking of corporate action by the Company
in furtherance of any such action; or

 

(7)   any other
Event of Default provided with respect to Securities of that series in the
Board Resolution, supplemental indenture or Officers’ Certificate establishing
that series.

 

Section 5.2            Acceleration of Maturity; Rescission
and Annulment.

 

Unless the
Board Resolution, supplemental indenture or Officers’ Certificate establishing
such series provides otherwise, if an Event of Default (other than an Event of
Default specified in Section 5.1(5) or 5.1(6)) with respect to
Securities of any series at the time Outstanding occurs and is continuing, then
in every such case the Trustee or the Holders of not less than 25% in principal
amount of the Outstanding Securities of that series may declare the principal
amount of all the Securities of that series (or, if any Securities of that
series are Original Issue Discount Securities, such portion of the principal
amount of such Securities as may be specified by the terms thereof) and premium,
if any, together with accrued and unpaid interest, if any, thereon, to be due
and payable immediately, by a notice in writing to the Company (and to the
Trustee if given by the Holders), and upon any such declaration such principal
amount (or specified amount) and premium, if any, together with accrued and
unpaid interest, if any, thereon, shall become immediately due and payable. If
an Event of Default specified in Section 5.1(5) or 5.1(6) with
respect to Securities of any series at the time Outstanding occurs, the
principal amount of all the Securities of that series (or, if any Securities of
that series are Original Issue Discount Securities, such portion of the
principal amount of such Securities as may be specified by the terms thereof)
and premium, if any, together with accrued and unpaid interest, if any,
thereon, shall automatically, and without any declaration or other action on
the part of the Trustee or any Holder, become immediately due and payable. Any
payments by the Company on the Securities following any such acceleration will
be subject to the subordination provisions of Article 15 to the extent
provided therein.

 

At any time
after such a declaration of acceleration with respect to Securities of any
series has been made and before a judgment or decree for payment of the money
due has been obtained by the Trustee as hereinafter in this Article provided,
the Holders of a majority in principal amount of the Outstanding Securities of
that series, by written notice to the Company and the Trustee, may rescind and
annul such declaration and its consequences if

 

(1)   the Company has paid or deposited with the
Trustee a sum sufficient to pay

 

(A)                                                                              all
overdue interest on all Securities of that series,

 

(B)                                                                                the
principal of (and premium, if any, on) any Securities of that series which have
become due otherwise than by such declaration of acceleration and any interest
thereon at the rate or rates prescribed therefor in such Securities,

 

(C)                                                                                to
the extent that payment of such interest is lawful, interest upon overdue
interest at the rate or rates prescribed therefor in such Securities, and

 

26

 

(D)                          all
sums paid or advanced by the Trustee hereunder and the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel;
and

 

(2)   all Events
of Default with respect to Securities of that series, other than the
non-payment of the principal of Securities of that series that have become due
solely by such declaration of acceleration, have been cured or waived as
provided in Section 5.13. No such rescission shall affect any subsequent
default or impair any right consequent thereon.

 

Section 5.3            Collection of Indebtedness and Suits
for Enforcement by Trustee.

 

The Company covenants that if

 

(1)   default is
made in the payment of any interest on any Security when such interest becomes
due and payable and such default continues for a period of 30 days, or

 

(2)   default is
made in the payment of the principal of (or premium, if any, on) any Security
at the Maturity thereof, the Company will, upon demand of the Trustee, pay to
it, for the benefit of the Holders of such Securities, the whole amount then
due and payable on such Securities for principal and any premium and interest
and, to the extent that payment of such interest shall be legally enforceable,
interest on any overdue principal and premium and on any overdue interest, at
the rate or rates prescribed therefor in such Securities, and, in addition
thereto, such further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.

 

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

 

Section 5.4            Trustee May File Proofs of
Claim.

 

In case of any
judicial proceeding relative to the Company (or any other obligor upon the
Securities), its property or its creditors, the Trustee shall be entitled and
empowered, by intervention in such proceeding or otherwise, to take any and all
actions authorized under the Trust Indenture Act in order to have claims of the
Holders and the Trustee allowed in any such proceeding. In particular, the
Trustee shall be authorized to collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute the same; and any
custodian, receiver, assignee, trustee, liquidator, sequestrator or other
similar official in any such judicial proceeding is hereby authorized by each
Holder to make such payments to the Trustee and, in the event that the Trustee
shall consent to the making of such payments directly to the Holders, to pay to
the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any
other amounts due the Trustee under Section 6.7. No provision of this
Indenture shall be deemed to authorize the Trustee to authorize or consent to
or accept or adopt on behalf of any Holder any plan of reorganization,
arrangement, adjustment or composition affecting the Securities or the rights
of any Holder thereof or to authorize the Trustee to vote in respect of the
claim of any Holder in any such proceeding; provided, however,
that the Trustee may, on behalf of the Holders, vote for the election of a
trustee in bankruptcy or similar official and be a member of a creditors’ or
other similar committee.

 

Section 5.5            Trustee May Enforce Claims
Without Possession of Securities.

 

All rights of
action and claims under this Indenture or the Securities may be prosecuted and
enforced by the Trustee without the possession of any of the Securities or the
production thereof in any proceeding relating thereto, and any such proceeding
instituted by the Trustee shall be brought in its own name as trustee of an
express trust, and any recovery of judgment shall, after provision for the
payment of the reasonable compensation, expenses, 

 

27

 

disbursements and advances of the Trustee, its agents and counsel, be
for the ratable benefit of the Holders of the Securities in respect of which
such judgment has been recovered.

 

Section 5.6            Application of Money Collected.

 

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

 

FIRST:  To the payment of all amounts due the Trustee
under Section 6.7;

 

SECOND:  Subject to Article 15, to the payment of
the amounts then due and unpaid for principal of and any premium, if any, and
interest on the Securities in respect of which or for the benefit of which such
money has been collected, ratably, without preference or priority of any kind,
according to the amounts due and payable on such Securities for principal and
any premium, if any, and interest, respectively; and

 

THIRD:  The balance, if any, to the Company or any
other Person or Persons entitled thereto.

 

Section 5.7            Limitation on Suits.

 

No Holder of
any Security of any series shall have any right to institute any proceeding,
judicial or otherwise, with respect to this Indenture, or for the appointment
of a receiver or trustee, or for any other remedy hereunder, unless

 

(1)   such Holder
has previously given written notice to the Trustee of a continuing Event of
Default with respect to the Securities of that series;

 

(2)   the Holders
of more than 50% in aggregate principal amount of the Outstanding Securities of
that series shall have made written request to the Trustee to institute
proceedings in respect of such Event of Default in its own name as Trustee
hereunder;

 

(3)   such Holder
or Holders have offered to the Trustee reasonable indemnity against the costs,
expenses and liabilities to be incurred in compliance with such request;

 

(4)   the Trustee
for 60 days after its receipt of such notice, request and offer of indemnity
has failed to institute any such proceeding; 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 principal amount of
the Outstanding Securities of that series; it being understood and intended
that no one or more of such Holders shall have any right in any manner whatever
by virtue of, or by availing of, any provision of this Indenture to affect,
disturb or prejudice the rights of any other of such Holders, or to obtain or
to seek to obtain priority or preference over any other of such Holders or to
enforce any right under this Indenture, except in the manner herein provided
and for the equal and ratable benefit of all of such Holders.

 

Section 5.8            Unconditional Right of Holders to Receive
Principal, Premium and Interest and to Convert.

 

Notwithstanding
any other provision in this Indenture, the Holder of any Security shall have
the right, which is absolute and unconditional, to receive payment of the
principal of and any premium and (subject to Section 3.7) interest on such
Security on the respective Stated Maturities expressed in such Security (or, in
the case of redemption, on the Redemption Date), to convert such Securities in
accordance with Article 14 to the extent that such right to convert is
applicable to such Security, and to institute suit for the enforcement of any
such payment, and such rights shall not be impaired without the consent of such
Holder.

 

28

 

Section 5.9            Restoration of Rights and Remedies.

 

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

 

Section 5.10         Rights and Remedies Cumulative.

 

Except as
otherwise provided with respect to the replacement or payment of mutilated, destroyed,
lost or stolen Securities in the last paragraph of Section 3.6, no right
or remedy herein conferred upon or reserved to the Trustee or to the Holders is
intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at
law or in equity or otherwise. The assertion or employment of any right or
remedy hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.

 

Section 5.11         Delay or Omission Not Waiver.

 

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

 

Section 5.12         Control by Holders.

 

The Holders of
a majority in principal amount of the Outstanding Securities of any series
shall have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust or
power conferred on the Trustee, with respect to the Securities of such series, provided
that

 

(1)   such
direction shall not be in conflict with any rule of law or with this
Indenture and the Trustee shall not have determined that the action so directed
would be unjustly prejudicial to Holders of Securities of that series, or any
other series, not taking part in such direction; and

 

(2)   the Trustee
may take any other action deemed proper by the Trustee that is not inconsistent
with such direction or this Indenture.

 

Section 5.13         Waiver of Past Defaults.

 

The Holders of
not less than a majority in principal amount of the Outstanding Securities of
any series may on behalf of the Holders of all the Securities of such series
waive any past default hereunder with respect to such series and its
consequences, except

 

(1)   a default
in the payment of the principal of or any premium or interest on any Security
of such series as and when the same shall become due and payable by the terms
thereof, otherwise than by acceleration (unless such default has been cured and
a sum sufficient to pay all matured installments of interest, principal and
premium, if any, has been deposited with the Trustee), or

 

(2)   to the
extent such right is applicable to such Security, a failure by the Company on
request to convert any Security into Common Stock; or

 

29

 

(3)   in respect
of a covenant or provision hereof which under Article 9 cannot be modified
or amended without the consent of the Holder of each Outstanding Security of
such series affected.

 

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

 

Section 5.14         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, suffered or omitted by it as Trustee,
a court may require any party litigant in such suit to file an undertaking to
pay the costs of such suit, and may assess costs against any such party
litigant, in the manner and to the extent provided in the Trust Indenture Act;
provided that neither this Section nor the Trust Indenture Act shall be
deemed to authorize any court to require such an undertaking or to make such an
assessment in any suit instituted by the Company or in any suit for the
enforcement of the right to convert any Security in accordance with Article 14.

 

Section 5.15         Waiver of Usury, Stay or Extension
Laws.

 

The Company
covenants (to the extent that it may lawfully do so) that it will not at any
time insist upon, or plead, or in any manner whatsoever claim or take the
benefit or advantage of, any usury, stay or extension law wherever enacted, now
or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution
of every such power as though no such law had been enacted.

 

ARTICLE 6

THE TRUSTEE

 

Section 6.1            Certain Duties and Responsibilities.

 

The duties and
responsibilities of the Trustee shall be as provided by the Trust Indenture
Act. Notwithstanding the foregoing, 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 if it shall have reasonable grounds
for believing that repayment of such funds or adequate indemnity against such
risk or liability is not reasonably assured to it. Whether or not therein
expressly so provided, every provision of this Indenture relating to the
conduct or affecting the liability of or affording protection to the Trustee
shall be subject to the provisions of this Section.

 

Section 6.2            Notice of Defaults.

 

If a default
occurs hereunder with respect to Securities of any series, the Trustee shall
give the Holders of Securities of such series notice of such default as and to
the extent provided by the Trust Indenture Act; provided, however,
that except in the case of a default in the payment of principal of (or
premium, if any) or interest on any Securities of such series or in the payment
of any sinking fund installment or any conversion right applicable to
Securities of such series, the Trustee shall be protected in withholding such
notice if and so long as a trust committee of directors and/or Responsible
Officers of the Trustee in good faith determine that the withholding of such
notice is in the interests of the holders of Securities of such series; provided,
further, however, that in the case of any default of the
character specified in Section 5.1(4) with respect to Securities of
such series, no such notice to Holders shall be given until at least 60 days
after the occurrence thereof. For the purpose of this Section, the term
“default” means any event that is, or after notice or lapse of time or both
would become, an Event of Default with respect to Securities of such series.

 

30

 

Except with
respect to Section 10.1, the Trustee shall have no duty to inquire as to
the performance of the Company with respect to the covenants contained in Article 10.
In addition, the Trustee shall not be deemed to have knowledge of an Event of
Default except (i) any Default or Event of Default occurring pursuant to
Sections 5.1(1), 5.1(2) and 5.1(3) (defaults in payments on the
Securities) or (ii) any Default or Event of Default of which the Trustee
shall have received written notification or obtained actual knowledge.

 

Delivery of
reports, information and documents to the Trustee under Section 7.4 is for
informational purposes only and the Trustee’s receipt of the foregoing shall
not constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company’s
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely conclusively on Officers’ Certificates).

 

Section 6.3            Certain Rights of Trustee.

 

Subject to the
provisions of Section 6.1:

 

(1)   in the
absence of bad faith on the part of the Trustee, the Trustee may rely and shall
be protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document believed by it to be genuine and to
have been signed or presented by the proper party or parties;

 

(2)   any request
or direction of the Company mentioned herein shall be sufficiently evidenced by
a Company Request or Company Order, and any resolution of the Board of
Directors shall be sufficiently evidenced by a Board Resolution;

 

(3)   whenever in
the administration of this Indenture the Trustee shall deem it desirable that a
matter be proved or established prior to taking, suffering or omitting any
action hereunder, the Trustee (unless other evidence be herein specifically
prescribed) is entitled to and may, in the absence of bad faith on its part,
rely upon an Officers’ Certificate;

 

(4)   the Trustee
may consult with counsel and the written advice of such counsel or any Opinion
of Counsel shall be full and complete authorization and protection in respect
of any action taken, suffered or omitted by it hereunder in good faith and in
reliance thereon;

 

(5)   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
reasonable security or indemnity against the costs, expenses and liabilities
which might be incurred by it in compliance with such request or direction;

 

(6)   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; and

 

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

 

Section 6.4            Not Responsible for Recitals or
Issuance of Securities.

 

The recitals
contained herein and in the Securities, except the Trustee’s certificates of
authentication, shall be taken as the statements of the Company, and neither
the Trustee nor any Authenticating Agent assumes any responsibility for their
correctness. The Trustee makes no representations as to the validity, sufficiency
or priority of 

 

31

 

this Indenture or of the Securities. Neither the Trustee nor any
Authenticating Agent shall be accountable for the use or application by the
Company of Securities or the proceeds thereof.

 

Section 6.5            May Hold Securities and Act as
Trustee under Other Indentures.

 

The Trustee,
any Authenticating Agent, any Paying Agent, any Security Registrar or any other
agent of the Company, in its individual or any other capacity, may become the owner
or pledgee of Securities and, subject to Sections 6.8 and 6.13, may otherwise
deal with the Company with the same rights it would have if it were not
Trustee, Authenticating Agent, Paying Agent, Security Registrar or such other
agent.

 

Subject to the
limitations imposed by the Trust Indenture Act, nothing in this Indenture shall
prohibit the Trustee from becoming and acting as trustee under other indentures
under which other securities, or certificates of interest of participation in
other securities, of the Company are outstanding in the same manner as if it
were not Trustee hereunder.

 

Section 6.6            Money Held in Trust.

 

Money held by
the Trustee in trust hereunder need not be segregated from other funds except
to the extent required by law. The Trustee shall be under no liability for
interest on any money received by it hereunder except as otherwise agreed with
the Company.

 

Section 6.7            Compensation and Reimbursement.

 

The Company
agrees:

 

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

 

(2)   except as
otherwise expressly provided herein, to reimburse the Trustee upon its request
for all reasonable expenses, disbursements and advances incurred or made by the
Trustee in accordance with any provision of this Indenture (including the
reasonable compensation and the expenses and disbursements of its agents and
counsel), except any such expense, disbursement or advance as may be
attributable to its negligence or bad faith and

 

(3)   to
indemnify the Trustee for, and to hold it harmless against, any loss, liability
or expense incurred without negligence or bad faith on its part, arising out of
or in connection with the acceptance or administration of the trust or trusts
hereunder, including the costs and expenses of defending itself against any
claim or liability in connection with the exercise or performance of any of its
powers or duties hereunder.

 

When the Trustee incurs
expenses or renders services after an Event of Default specified in Section 5.1(5) or
Section 5.1(6) hereof occurs, the expenses and the compensation for
the services (including the fees and expenses of its agents and counsel) are
intended to constitute expenses of administration under any applicable
bankruptcy, insolvency, reorganization or similar law.

 

Section 6.8            Conflicting Interests.

 

If the Trustee
has or shall acquire a conflicting interest within the meaning of the Trust
Indenture Act and there is an Event of Default under the relevant series of
Securities, the Trustee shall either eliminate such interest or resign, to the
extent and in the manner provided by, and subject to the provisions of, the Trust
Indenture Act and this Indenture. To the extent permitted by the Trust
Indenture Act, the Trustee shall not be deemed to have a conflicting interest
by virtue of being a trustee under this Indenture with respect to Securities of
more than one series.

 

32

 

Section 6.9            Corporate Trustee Required;
Eligibility.

 

There shall at
all times be one (and only one) Trustee hereunder with respect to the
Securities of each series, which may be Trustee hereunder for Securities of one
or more other series. Each Trustee shall be a Person that is eligible pursuant
to the Trust Indenture Act to act as such and has (or if the Trustee is a
member of a bank holding company system, its bank holding company has) a
combined capital and surplus of at least $50,000,000. If any such Person or
bank holding company publishes reports of condition at least annually, pursuant
to law or to the requirements of its supervising or examining authority, then
for the purposes of this Section and to the extent permitted by the Trust
Indenture Act, the combined capital and surplus of such Person or bank holding
company shall be deemed to be its combined capital and surplus as set forth in
its most recent report of condition so published. If at any time the Trustee
with respect to the Securities of any series shall cease to be eligible in
accordance with the provisions of this Section, it shall resign immediately in
the manner and with the effect hereinafter specified in this Article.

 

Section 6.10         Resignation and Removal; Appointment of
Successor.

 

No resignation
or removal of the Trustee and no appointment of a successor Trustee pursuant to
this Article shall become effective until the acceptance of appointment by
the successor Trustee in accordance with the applicable requirements of Section 6.11.
The Trustee may resign at any time with respect to the Securities of one or
more series by giving written notice thereof to the Company. If the instrument
of acceptance by a successor Trustee required by Section 6.11 shall not
have been delivered to the Trustee within 30 days after the giving of such
notice of resignation, the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor Trustee with respect
to the Securities of such series.

 

The Trustee
may be removed at any time with respect to the Securities of any series by Act
of the Holders of a majority in principal amount of the Outstanding Securities
of such series, delivered to the Trustee and to the Company.

 

If at any time:

 

(1)   the Trustee
shall fail to comply with Section 6.8 after written request therefor by
the Company or by any Holder who has been a bona fide Holder of a Security for
at least six months, or

 

(2)   the Trustee
shall cease to be eligible under Section 6.9 and shall fail to resign
after written request therefor by the Company or by any such Holder, or

 

(3)   the Trustee
shall become incapable of acting or shall be adjudged a bankrupt or insolvent
or a receiver of the Trustee or of its property shall be appointed or any
public officer shall take charge or control of the Trustee or of its property
or affairs for the purpose of rehabilitation, conservation or liquidation,
then, in any such case, (A) the Company by a Board Resolution may remove
the Trustee with respect to all Securities, or (B) subject to Section 5.14,
any Holder who has been a bona fide Holder of a Security for at least six
months may, on behalf of himself and all others similarly situated, petition
any court of competent jurisdiction for the removal of the Trustee with respect
to all Securities and the appointment of a successor Trustee or Trustees.

 

If the Trustee
shall resign, be removed or become incapable of acting, or if a vacancy shall
occur in the office of Trustee for any cause, with respect to the Securities of
one or more series, the Company, by a Board Resolution, shall promptly appoint
a successor Trustee or Trustees with respect to the Securities of that or those
series (it being understood that any such successor Trustee may be appointed
with respect to the Securities of one or more or all of such series and that at
any time there shall be only one Trustee with respect to the Securities of any
particular series) and shall comply with the applicable requirements of Section 6.11.
If, within one year after such resignation, removal or incapability, or the
occurrence of such vacancy, a successor Trustee with respect to the Securities
of any series shall be appointed by Act of the Holders of a majority in
principal amount of the Outstanding Securities of such series delivered to the
Company and the retiring Trustee, the successor Trustee so appointed shall,
forthwith upon its acceptance of such appointment in accordance with the
applicable requirements of Section 6.11, become the successor Trustee with
respect to the Securities of such series and to that extent 

 

33

 

supersede the successor Trustee appointed by the Company. If no
successor Trustee with respect to the Securities of any series shall have been
so appointed by the Company or the Holders and accepted appointment in the
manner required by Section 6.11, the retiring Trustee may petition, or any
Holder who has been a bona fide Holder of a Security of such series for at
least six months may petition, on behalf of himself and all others similarly
situated, any court of competent jurisdiction for the appointment of a
successor Trustee with respect to the Securities of such series.

 

The Company
shall give notice of each resignation and each removal of the Trustee with
respect to the Securities of any series and each appointment of a successor
Trustee with respect to the Securities of any series to all Holders of
Securities of such series in the manner provided in Section 1.6. Each notice
shall include the name of the successor Trustee with respect to the Securities
of such series and the address of its Corporate Trust Office.

 

Section 6.11         Acceptance of Appointment by Successor.

 

In case of the
appointment hereunder of a successor Trustee with respect to all Securities,
every such successor Trustee so appointed shall execute, acknowledge and
deliver to the Company and to the retiring Trustee an instrument accepting such
appointment, and thereupon the resignation or removal of the retiring Trustee
shall become effective and such successor Trustee, without any further act,
deed or conveyance, shall become vested with all the rights, powers, trusts and
duties of the retiring Trustee; but, on the request of the Company or the
successor Trustee, such retiring Trustee shall, upon payment of its charges,
execute and deliver an instrument transferring to such successor Trustee all
the rights, powers and trusts of the retiring Trustee and shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder.

 

In case of the
appointment hereunder of a successor Trustee with respect to the Securities of
one or more (but not all) series, the Company, the retiring Trustee and each
successor Trustee with respect to the Securities of one or more series shall
execute and deliver an indenture supplemental hereto wherein each successor
Trustee shall accept such appointment and which (1) shall contain such
provisions as shall be necessary or desirable to transfer and confirm to, and
to vest in, each successor Trustee all the rights, powers, trusts and duties of
the retiring Trustee with respect to the Securities of that or those series to
which the appointment of such successor Trustee relates, (2) if the
retiring Trustee is not retiring with respect to all Securities, shall contain
such provisions as shall be deemed necessary or desirable to confirm that all
the rights, powers, trusts and duties of the retiring Trustee with respect to
the Securities of that or those series as to which the retiring Trustee is not
retiring shall continue to be vested in the retiring Trustee, and (3) shall
add to or change any of the provisions of this Indenture as shall be necessary
to provide for or facilitate the administration of the trusts hereunder by more
than one Trustee, it being understood that nothing herein or in such
supplemental indenture shall constitute such Trustees co-trustees of the same
trust and that each such Trustee shall be trustee of a trust or trusts
hereunder separate and apart from any trust or trusts hereunder administered by
any other such Trustee; and upon the execution and delivery of such
supplemental indenture the resignation or removal of the retiring Trustee shall
become effective to the extent provided therein and each such successor
Trustee, without any further act, deed or conveyance, shall become vested with
all the rights, powers, trusts and duties of the retiring Trustee with respect
to the Securities of that or those series to which the appointment of such
successor Trustee relates; but, on request of the Company or any successor
Trustee, such retiring Trustee shall duly assign, transfer and deliver to such
successor Trustee all property and money held by such retiring Trustee hereunder
with respect to the Securities of that or those series to which the appointment
of such successor Trustee relates.

 

Upon request
of any such successor Trustee, the Company shall execute any and all
instruments for more fully and certainly vesting in and confirming to such
successor Trustee all such rights, powers and trusts referred to in the first
or second preceding paragraph, as the case may be.

 

No successor
Trustee shall accept its appointment unless at the time of such acceptance such
successor Trustee shall be qualified and eligible under this Article.

 

Section 6.12         Merger, Conversion, Consolidation or
Succession to Business.

 

Any
corporation into which the Trustee may be merged or converted or with which it
may be consolidated, or any corporation resulting from any merger, conversion
or consolidation to which the Trustee shall be a party, or 

 

34

 

any corporation succeeding to all or substantially all the corporate
trust business of the Trustee (including the administration of the trust
created by this Indenture), shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto. In case any Securities shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Securities so authenticated with the same
effect as if such successor Trustee had itself authenticated such Securities.
In the event that any Securities shall not have been authenticated by such
predecessor Trustee, any such successor Trustee may authenticate and deliver
such Securities in either its own name or that of a predecessor Trustee, with
the full force and effect which this Indenture provides for the certificate of
authentication of the Trustee.

 

Section 6.13         Preferential Collection of Claims
Against Company.

 

If and when
the Trustee shall be or become a creditor of the Company (or any other obligor
upon the Securities), the Trustee shall be subject to the provisions of the
Trust Indenture Act regarding the collection of claims against the Company (or
any such other obligor).

 

Section 6.14         Appointment of Authenticating Agent.

 

The Trustee
may appoint an Authenticating Agent or Agents with respect to one or more
series of Securities which shall be authorized to act on behalf of the Trustee
to authenticate Securities of such series issued upon original issue and upon
exchange, registration of transfer or partial redemption thereof or pursuant to
Section 3.6, and Securities so authenticated shall be entitled to the
benefits of this Indenture and shall be valid and obligatory for all purposes
as if authenticated by the Trustee hereunder. Wherever reference is made in
this Indenture to the authentication and delivery of Securities by the Trustee
or the Trustee’s certificate of authentication, such reference shall be deemed
to include authentication and delivery on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed on behalf of
the Trustee by an Authenticating Agent. Each Authenticating Agent shall be
acceptable to the Company and shall at all times be a corporation organized and
doing business under the laws of the United States of America, any State
thereof or the District of Columbia, authorized under such laws to act as
Authenticating Agent, having (or if the Authenticating Agent is a member of a
bank holding company system, its bank holding company has) a combined capital
and surplus of not less than $50,000,000 and subject to supervision or
examination by Federal or State authority. If such Authenticating Agent
publishes reports of condition at least annually, pursuant to law or to the
requirements of said supervising or examining authority, then for the purposes
of this Section, the combined capital and surplus of such Authenticating Agent
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. If at any time an Authenticating Agent
shall cease to be eligible in accordance with the provisions of this Section,
such Authenticating Agent shall resign immediately in the manner and with the
effect specified in this Section.

 

Any
corporation into which an Authenticating Agent may be merged or converted or
with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which such Authenticating Agent shall be
a party, or any corporation succeeding to the corporate agency or corporate
trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section, without the execution or filing of any paper or any further
act on the part of the Trustee or the Authenticating Agent.

 

An
Authenticating Agent may resign at any time by giving written notice thereof to
the Trustee and to the Company. The Trustee may at any time terminate the
agency of an Authenticating Agent by giving written notice thereof to such
Authenticating Agent and to the Company. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall give notice of such
appointment in the manner provided in Section 1.6 to all Holders of
Securities of the series with respect to which such Authenticating Agent will
serve. Any successor Authenticating Agent upon acceptance of its appointment
hereunder shall become vested with all the rights, powers and duties of its
predecessor hereunder, with like effect as if originally named as an
Authenticating Agent. No successor Authenticating Agent shall be appointed
unless eligible under the provisions of this Section.

 

35

 

The Trustee
agrees to pay to each Authenticating Agent from time to time reasonable
compensation for its services under this Section, and the Trustee shall be
entitled to be reimbursed for such payments, subject to the provisions of Section 6.7.

 

If an
appointment with respect to one or more series is made pursuant to this Section 6.12,
the Securities of such series may have endorsed thereon, in lieu of the
Trustee’s certificate of authentication, an alternative certificate of
authentication in the following form:

 

This is one of the Securities of the series
designated therein referred to in the within-mentioned Indenture.

 

	
   

  	
  [TRUSTEE]

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  As
  Authenticating Agent

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Authorized
  Officer

  
				

 

ARTICLE 7

HOLDERS’ LISTS AND REPORTS BY TRUSTEE AND COMPANY

 

Section 7.1            Company to Furnish Trustee Names and
Addresses of Holders.

 

The Company will furnish or cause to be
furnished to the Trustee

 

(1)   semi-annually,
not later than 15 days after the Regular Record Date for each respective series
of Securities, a list, in such form as the Trustee may reasonably require, of
the names and addresses of the Holders of Securities of each series as of such
Regular Record Date, as the case may be, or if there is no Regular Record Date
for such series of Securities, semi-annually, and

 

(2)   at such
other times as the Trustee may request in writing, within 30 days after the
receipt by the Company of any such request, a list of similar form and content
as of a date not more than 15 days prior to the time such list is furnished;

 

provided that
no such list need be furnished by the Company to the Trustee so long as the
Trustee is acting as Security Registrar.

 

Section 7.2            Preservation of Information;
Communications to Holders.

 

The Trustee
shall preserve, in as current a form as is reasonably practicable, the names
and addresses of Holders contained in the most recent list furnished to the
Trustee as provided in Section 7.1 and the names and addresses of Holders
received by the Trustee in its capacity as Security Registrar. The Trustee may
destroy any list furnished to it as provided in Section 7.1 upon receipt
of a new list so furnished.

 

The rights of
Holders to communicate with other Holders with respect to their rights under
this Indenture or under the Securities, and the corresponding rights and
privileges of the Trustee, shall be as provided by the Trust Indenture Act.
Every Holder of Securities, by receiving and holding the same, agrees with the
Company and the Trustee that neither the Company nor the Trustee nor any agent
of either of them shall be held accountable by reason of any disclosure of
information as to names and addresses of Holders made pursuant to the Trust
Indenture Act.

 

36

 

Section 7.3            Reports by Trustee.

 

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

 

Reports so
required to be transmitted at stated intervals of not more than 12 months shall
be transmitted no later than July 15 in each calendar year, commencing
with the first July 15 after the first issuance of Securities pursuant to
this Indenture.

 

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

 

Section 7.4            Reports by Company.

 

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

 

ARTICLE 8

CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

 

Section 8.1            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 its properties and assets substantially as an entirety to any Person,
unless:

 

(1)   in case the
Company shall consolidate with or merge into another Person (in a transaction
in which the Company is not the surviving corporation) or convey, transfer or
lease its properties and assets substantially as an entirety to any Person, the
Person formed by such consolidation or into which the Company is merged or the
Person which acquires by conveyance or transfer, or which leases, the
properties and assets of the Company substantially as an entirety shall be a
corporation, limited liability company, partnership, trust or other business
entity, shall be 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, the due and punctual
payment of the principal of and any premium and interest on all the Securities
and the performance or observance of every covenant of this Indenture on the
part of the Company to be performed or observed and the conversion rights shall
be provided for in accordance with Article 14, if applicable, or as
otherwise specified pursuant to Section 3.1, by supplemental indenture
satisfactory in form to the Trustee, executed and delivered to the Trustee, by
the Person (if other than the Company) formed by such consolidation or into
which the Company shall have been merged or by the Person which shall have
acquired the Company’s assets;

 

(2)   immediately
after giving effect to such transaction and treating any indebtedness which
becomes an obligation of the Company or any Subsidiary as a result of such
transaction as having been incurred by the Company or such Subsidiary at the
time of such transaction, no Event of Default, and no event which, after notice
or lapse of time or both, would become an 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 

 

37

 

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 8.2            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 the properties and assets of the
Company substantially as an entirety in accordance with Section 8.1, 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 9

SUPPLEMENTAL INDENTURES

 

Section 9.1            Supplemental Indentures Without
Consent of Holders.

 

Without the
consent of any Holders, the Company, when authorized by a Board Resolution, and
the Trustee, at any time and from time to time, may enter into one or more
indentures supplemental hereto, in form satisfactory to the Trustee, for any of
the following purposes:

 

(1)   to evidence
the succession of another Person to the Company, or successive successions, and
the assumption by any such successor of the covenants of the Company herein and
in the Securities in compliance with Article 8; or

 

(2)   to add to
the covenants of the Company for the benefit of the Holders of all or any
series of Securities (and if such covenants are to be for the benefit of less
than all series of Securities, stating that such covenants are expressly being
included solely for the benefit of such series) or to surrender any right or
power herein conferred upon the Company; or

 

(3)   to add any
additional Events of Default for the benefit of the Holders of all or any
series of Securities (and if such additional Events of Default are to be for
the benefit of less than all series of Securities, stating that such additional
Events of Default are expressly being included solely for the benefit of such
series); or

 

(4)   to add to
or change any of the provisions of this Indenture to such extent as shall be
necessary to permit or facilitate the issuance of Securities in bearer form,
registrable or not registrable as to principal, and with or without interest
coupons, or to permit or facilitate the issuance of Securities in
uncertificated form; or

 

(5)   to add to,
change or eliminate any of the provisions of this Indenture in respect of one
or more series of Securities, provided that any such addition, change or
elimination (A) shall neither (i) apply to any Security of any series
created prior to the execution of such supplemental indenture and entitled to
the benefit of such provision nor (ii) modify the rights of the Holder of
any such Security with respect to such provision or (B) shall become
effective only when there is no such Security Outstanding; or

 

(6)   to secure
the Securities, including provisions regarding the circumstances under which
collateral may be released or substituted; or

 

(7)   to add or
provide for a guaranty of the Securities or additional obligors on the
Securities; or

 

(8)   to
establish the form or terms of Securities of any series as permitted by
Sections 2.1 and 3.1; or

 

(9)   to evidence
and provide for the acceptance of appointment hereunder by a successor Trustee
with respect to the Securities of one or more series and to add to or change
any of the provisions of this Indenture as 

 

38

 

shall be necessary to
provide for or facilitate the administration of the trusts hereunder by more
than one Trustee, pursuant to the requirements of Section 6.11; or

 

(10) to cure any
ambiguity, to correct or supplement any provision herein which may be defective
or inconsistent with any other provision herein, or to make any other
provisions with respect to matters or questions arising under this Indenture,
provided that such action pursuant to this clause (10) shall not adversely
affect the interests of the Holders of Securities of any series in any material
respect; or

 

(11) to
supplement any of the provisions of the Indenture to such extent as shall be
necessary to permit or facilitate the defeasance and discharge of any series of
Securities pursuant to Articles 4 and 13, provided that any such action shall
not adversely affect the interests of the Holders of Securities of such series
or any other series of Securities in any material respect.

 

Section 9.2            Supplemental Indentures with Consent
of Holders.

 

With the
consent of the Holders of a majority in principal amount of the Outstanding
Securities of each series affected by such supplemental indenture, by Act of
said Holders delivered to the Company and the Trustee, the Company, when
authorized by a Board Resolution, and the Trustee may enter into an indenture
or indentures supplemental hereto for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions of this
Indenture or of modifying in any manner the rights of the Holders of Securities
of such series under this Indenture; provided, however, that no
such supplemental indenture shall, without the consent of the Holder of each
Outstanding Security affected thereby,

 

(1)   change the
Stated Maturity of the principal of, or any installment of principal of or
interest on, any Security, or reduce the principal or premium amount thereof or
the rate of interest thereon or any amount payable upon the redemption thereof,
or reduce the amount of the principal of an Original Issue Discount Security or
any other Security which would be due and payable upon a declaration of
acceleration of the Maturity thereof pursuant to Section 5.2 or reduce the
amount of any sinking fund payment, or change the coin or currency in which,
any Security or any premium or interest thereon is payable, or impair the right
to institute suit for the enforcement of any such payment on or after the
Stated Maturity thereof (or, in the case of redemption, on or after the
Redemption Date), or modify the provisions of this Indenture with respect to
the subordination of such series of Securities in a manner materially adverse
to the Holders of Securities of such series, or, in the case of Securities of
any series that are convertible into Securities or other securities of the
Company, adversely affect the right of Holders to convert any of the Securities
of such series other than as provided in or pursuant to this Indenture, or

 

(2)   reduce the
percentage in principal amount of the Outstanding Securities of any series, the
consent of whose Holders is required for any such supplemental indenture, or
the consent of whose Holders is required for any waiver (of compliance with
certain provisions of this Indenture or certain defaults hereunder and their
consequences) provided for in this Indenture, or

 

(3)   modify any
of the provisions of this Section, Section 5.13 or Section 10.8,
except to increase any such percentage or to provide that certain other
provisions of this Indenture cannot be modified or waived without the consent
of the Holder of each Outstanding Security affected thereby; provided, however,
that this clause shall not be deemed to require the consent of any Holder with
respect to changes in the references to “the Trustee” and concomitant changes
in this Section and Section 10.8, or the deletion of this proviso, in
accordance with the requirements of Sections 6.11 and 9.1(8).

 

A supplemental
indenture which changes or eliminates any covenant or other provision of this
Indenture which has expressly been included solely for the benefit of one or
more particular series of Securities, or which modifies the rights of the
Holders of Securities of such series with respect to such covenant or other
provision, shall be deemed not to affect the rights under this Indenture of the
Holders of Securities of any other series.

 

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

 

39

 

Section 9.3            Execution of Supplemental
Indentures.

 

In executing,
or accepting the additional trusts created by, any supplemental indenture
permitted by this Article or the modifications thereby of the trusts
created by this Indenture, the Trustee shall be entitled to receive, and
(subject to Sections 6.1 and 6.3) shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Trustee may, but shall not be
obligated to, enter into any such supplemental indenture which affects the
Trustee’s own rights, duties or immunities under this Indenture or otherwise.

 

Section 9.4            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.

 

Section 9.5            Conformity with Trust Indenture Act.

 

Every
supplemental indenture executed pursuant to this Article shall conform to
the requirements of the Trust Indenture Act.

 

Section 9.6            Reference in Securities to
Supplemental Indentures.

 

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

 

ARTICLE 10

COVENANTS

 

Section 10.1         Payment of Principal, Premium and
Interest.

 

The Company
covenants and agrees for the benefit of each series of Securities that it will
duly and punctually pay the principal of and any premium and interest on the
Securities of that series in accordance with the terms of the Securities and
this Indenture.

 

Section 10.2         Maintenance of Office or Agency.

 

The Company
will maintain in each Place of Payment for any series of Securities an office
or agency where Securities of that series may be presented or surrendered for
payment, where Securities of that series may be surrendered for registration of
transfer or exchange, where Securities of that series may be surrendered for
conversion and where notices and demands to or upon the Company in respect of
the Securities of that series and this Indenture may be served. The Company
will give prompt written notice to the Trustee of the location, and any change
in the location, of such office or agency. If at any time the Company shall
fail to maintain any such required office or agency or shall fail to furnish
the Trustee with the address thereof, such presentations, surrenders, notices
and demands may be made or served at the Corporate Trust Office of the Trustee,
and the Company hereby appoints the Trustee as its agent to receive all such
presentations, surrenders, notices and demands. Unless otherwise provided in a
supplemental indenture or pursuant to Section 3.1 hereof, the Place of
Payment for any series of Securities shall be the Corporate Trust Office of the
Trustee.

 

The Company
may also from time to time designate one or more other offices or agencies
where the Securities of one or more series may be presented or surrendered for
any or all such purposes and may from time to 

 

40

 

time rescind such designations; provided, however, that
no such designation or rescission shall in any manner relieve the Company of
its obligation to maintain an office or agency in each Place of Payment for
Securities of any series for such purposes. The Company will give prompt
written notice to the Trustee of any such designation or rescission and of any
change in the location of any such other office or agency.

 

Section 10.3         Money for Securities Payments to be
Held in Trust.

 

If the Company
shall at any time act as its own Paying Agent with respect to any series of
Securities, it will, on or before each due date of the principal of or any
premium or interest on any of the Securities of that series, segregate and hold
in trust for the benefit of the Persons entitled thereto a sum sufficient to
pay the principal and any premium and interest so becoming due until such sums
shall be paid to such Persons or otherwise disposed of as herein provided and
will promptly notify the Trustee of its action or failure so to act.

 

Whenever the
Company shall have one or more Paying Agents for any series of Securities, it
will, on or prior to each due date of the principal of or any premium or
interest on any Securities of that series, deposit with a Paying Agent a sum
sufficient to pay such amount, such sum to be held as provided by the Trust
Indenture Act, and (unless such Paying Agent is the Trustee) the Company will
promptly notify the Trustee of its action or failure so to act.

 

The Company
will cause each Paying Agent for any series of Securities other than the
Trustee to execute and deliver to the Trustee an instrument in which such
Paying Agent shall agree with the Trustee, subject to the provisions of this
Section, that such Paying Agent will (1) comply with the provisions of the
Trust Indenture Act applicable to it as a Paying Agent and (2) during the
continuance of any default by the Company (or any other obligor upon the
Securities of that series) in the making of any payment in respect of the
Securities of that series, upon the written request of the Trustee, forthwith
pay to the Trustee all sums held in trust by such Paying Agent for payment in
respect of the Securities of that series.

 

The Company
may at any time, for the purpose of obtaining the satisfaction and discharge of
this Indenture or for any other purpose, pay, or by Company Order direct any
Paying Agent to pay, to the Trustee all sums held in trust by the Company or
such Paying Agent, such sums to be held by the Trustee upon the same trusts as
those upon which such sums were held by the Company or such Paying Agent; and,
upon such payment by any Paying Agent to the Trustee, such Paying Agent shall
be released from all further liability with respect to such money.

 

Any money
deposited with the Trustee or any Paying Agent, or then held by the Company, in
trust for the payment of the principal of or any premium or interest on any
Security of any series and remaining unclaimed for a period ending on the
earlier of the date that is ten Business Days prior to the date such money
would escheat to the State or two years after such principal, premium or interest
has become due and payable shall be paid to the Company on Company Request, or
(if then held by the Company) shall be discharged from such trust; and the
Holder of such Security shall thereafter, as an unsecured general creditor,
look only to the Company for payment thereof, and all liability of the Trustee
or such Paying Agent with respect to such trust money, and all liability of the
Company as trustee thereof, shall thereupon cease; provided, however,
that the Trustee or such Paying Agent, before being required to make any such
repayment, may at the expense of the Company cause to be published once, in a
newspaper published in the English language, customarily published on each
Business Day and of general circulation in each Place of Payment, notice that
such money remains unclaimed and that, after a date specified therein, which
shall not be less than 30 days from the date of such publication, any unclaimed
balance of such money then remaining will be repaid to the Company.

 

Section 10.4         Statement by Officers as to Default.

 

The Company
will deliver to the Trustee, within 120 days after the end of each fiscal year
of the Company ending after the date hereof, an Officers’ Certificate, stating
whether or not to the best knowledge of the signers thereof the Company is in
default in the performance and observance of any of the terms, provisions and
conditions of this Indenture (without regard to any period of grace or
requirement of notice provided hereunder) and, if the Company shall be in
default, specifying all such defaults and the nature and status thereof of
which they may have knowledge. The fiscal year of the Company currently ends on
December 31; and the Company will give the Trustee prompt written notice
of any change of its fiscal year.

 

41

 

Section 10.5         Existence.

 

Subject to Article 8,
the Company will do or cause to be done all things necessary to preserve and
keep in full force and effect its existence.

 

Section 10.6         Waiver of Certain Covenants.

 

Except as
otherwise specified as contemplated by Section 3.1 for Securities of a
series, the Company may, with respect to the Securities of any series, omit in
any particular instance to comply with any term, provision or condition set
forth in any covenant provided pursuant to Section 3.1(19), 9.1(2) or
9.1(7) for the benefit of the Holders of such series if before the time
for such compliance the Holders of at least a majority in principal amount of
the Outstanding Securities of such series shall, by Act of such Holders, either
waive such compliance in such instance or generally waive compliance with such
term, provision or condition, but no such waiver shall extend to or affect such
term, provision or condition except to the extent so expressly waived, and,
until such waiver shall become effective, the obligations of the Company and
the duties of the Trustee in respect of any such term, provision or condition
shall remain in full force and effect.

 

ARTICLE 11

REDEMPTION OF SECURITIES

 

Section 11.1         Applicability of Article.

 

Securities of
any series that are redeemable before their Stated Maturity shall be redeemable
in accordance with their terms and (except as otherwise specified as
contemplated by Section 3.1 for such Securities) in accordance with this Article.

 

Section 11.2         Election to Redeem; Notice to Trustee.

 

The election
of the Company to redeem any Securities shall be evidenced by a Board
Resolution or in another manner specified as contemplated by Section 3.1
for such Securities. In case of any redemption at the election of the Company
of less than all the Securities of any series (including any such redemption
affecting only a single Security), the Company shall, at least 45 days prior to
the Redemption Date fixed by the Company (unless a shorter notice shall be
satisfactory to the Trustee), notify the Trustee of such Redemption Date, of
the principal amount of Securities of such series to be redeemed and, if
applicable, of the tenor of the Securities to be redeemed. In the case of any
redemption of Securities prior to the expiration of any restriction on such
redemption provided in the terms of such Securities or elsewhere in this
Indenture, the Company shall furnish the Trustee with an Officers’ Certificate
evidencing compliance with such restriction.

 

Section 11.3         Selection by Trustee of Securities to
Be Redeemed.

 

If less than
all the Securities of any series are to be redeemed (unless all the Securities
of such series and of a specified tenor are to be redeemed or unless such
redemption affects only a single Security), the particular Securities to be
redeemed shall be selected not more than 45 days prior to the Redemption Date
by the Trustee, from the Outstanding Securities of such series not previously
called for redemption, by lot, or in the Trustee’s discretion, on a pro-rata
basis, provided that the unredeemed portion of the principal amount of any
Security shall be in an authorized denomination (which shall not be less than
the minimum authorized denomination) for such Security. If less than all the
Securities of such series and of a specified tenor are to be redeemed (unless
such redemption affects only a single Security), the particular Securities to
be redeemed shall be selected not more than 45 days prior to the Redemption
Date by the Trustee, from the Outstanding Securities of such series and
specified tenor not previously called for redemption in accordance with the
preceding sentence.

 

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 

 

42

 

(so far as may be) to be the portion selected for redemption.
Securities that have been converted during a selection of Securities to be
redeemed shall be treated by the Trustee as Outstanding for the purpose of such
selection.

 

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

 

The provisions
of the two preceding paragraphs shall not apply with respect to any redemption
affecting only a single Security, whether such Security is to be redeemed in
whole or in part. In the case of any such redemption in part, the unredeemed
portion of the principal amount of the Security shall be in an authorized
denomination (which shall not be less than the minimum authorized denomination)
for such Security.

 

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

 

Section 11.4         Notice of Redemption.

 

Notice of
redemption shall be given by first-class mail, postage prepaid, mailed not
fewer than 30 nor more than 60 days prior to the Redemption Date, unless a
shorter period is specified in the Securities to be redeemed, to each Holder of
Securities to be redeemed, at its address appearing in the Security Register.

 

All notices of redemption shall state:

 

(1)   the
Redemption Date,

 

(2)   the
Redemption Price (including accrued interest, if any),

 

(3)   if less
than all the Outstanding Securities of any series consisting of more than a
single Security are to be redeemed, the identification (and, in the case of
partial redemption of any such Securities, the principal amounts) of the
particular Securities to be redeemed and, if less than all the Outstanding
Securities of any series consisting of a single Security are to be redeemed,
the principal amount of the particular Security to be redeemed,

 

(4)   in case any
Security is to be redeemed in part only, that on and after the Redemption Date,
upon surrender of such Security, the Holder of such Security will receive,
without charge, a new Security or Securities of authorized denominations for the
principal amount thereof remaining unredeemed,

 

(5)   that on the
Redemption Date the Redemption Price will become due and payable upon each such
Security to be redeemed and, if applicable, that interest thereon will cease to
accrue on and after said date,

 

(6)   the place
or places where each such Security is to be surrendered for payment of the
Redemption Price,

 

(7)   if
applicable, the conversion price or rate, the date on which the right to
convert the principal of the Securities or the portions thereof to be redeemed
will terminate, and the place or places where such Securities may be
surrendered for conversion,

 

(8)   that the
redemption is for a sinking fund, if such is the case, and

 

(9)   the CUSIP
number or numbers and/or common codes of the Security being redeemed; 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 and that reliance may be placed only on the other
identification numbers printed on the Securities, and any such redemption shall
not be affected by any defect in or omission of such numbers.

 

43

 

Notice of
redemption of Securities to be redeemed at the election of the Company shall be
given by the Company or, at the Company’s request, by the Trustee in the name
and at the expense of the Company and shall be irrevocable.

 

Section 11.5         Deposit of Redemption Price.

 

On or prior to
any Redemption Date, the Company shall deposit with the Trustee or with a
Paying Agent (or, if the Company is acting as its own Paying Agent, segregate
and hold in trust as provided in Section 10.3) an amount of money
sufficient to pay the Redemption Price of, and (except if the Redemption Date
shall be an Interest Payment Date) accrued interest on, all the Securities
which are to be redeemed on that date.

 

If any
Security called for redemption is converted, any money deposited with the
Trustee or with a Paying Agent or so segregated and held in trust for the
redemption of such Security shall (subject to the right of any Holder of such
Security to receive interest as provided in the last paragraph of Section 3.7)
be paid to the Company on Company Request, or if then held by the Company, shall
be discharged from such trust.

 

Section 11.6         Securities Payable on Redemption Date.

 

Notice of
redemption having been given as aforesaid, the Securities so to be redeemed
shall, on the Redemption Date, become due and payable at the Redemption Price
therein specified, and from and after such date (unless the Company shall
default in the payment of the Redemption Price and accrued interest) such
Securities shall cease to bear interest. Upon surrender of any such Security
for redemption in accordance with said notice, such Security shall be paid by
the Company at the Redemption Price, together with accrued interest to the
Redemption Date; provided, however, that, unless otherwise
specified as contemplated by Section 3.1, installments of interest whose
Stated Maturity is on or prior to the Redemption Date will be payable to the
Holders of such Securities, or one or more Predecessor Securities, registered
as such at the close of business on the relevant Record Dates according to
their terms and the provisions of Section 3.7.

 

If any
Security called for redemption shall not be so paid upon surrender thereof for
redemption, the principal and any premium shall, until paid, bear interest from
the Redemption Date at the rate prescribed therefor in the Security.

 

Section 11.7         Securities Redeemed in Part.

 

Any Security
which is to be redeemed only in part shall be surrendered at a Place of Payment
therefor (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 its attorney duly authorized in
writing), and 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 the same series and of like tenor, of any authorized
denomination as requested by such Holder, in aggregate principal amount equal
to and in exchange for the unredeemed portion of the principal of the Security
so surrendered.

 

ARTICLE 12

SINKING FUNDS

 

Section 12.1         Applicability of Article.

 

The provisions
of this Article shall be applicable to any sinking fund for the retirement
of Securities of any series except as otherwise specified as contemplated by Section 3.1
for such Securities.

 

The minimum
amount of any sinking fund payment provided for by the terms of any Securities
is herein referred to as a “mandatory sinking fund payment,” and any payment in
excess of such minimum amount provided for by the terms of such Securities is
herein referred to as an “optional sinking fund payment.” If provided for by
the terms of any Securities, the cash amount of any sinking fund payment may be
subject to reduction as provided in 

 

44

 

Section 12.2. Each sinking fund payment shall be applied to the
redemption of Securities as provided for by the terms of such Securities.

 

Section 12.2         Satisfaction of Sinking Fund Payments
with Securities.

 

The Company (1) may
deliver Outstanding Securities of a series (other than any previously called
for redemption) and (2) may apply as a credit Securities of a series which
have been redeemed either at the election of the Company pursuant to the terms
of such Securities or through the application of permitted optional sinking
fund payments pursuant to the terms of such Securities, in each case in
satisfaction of all or any part of any sinking fund payment with respect to any
Securities of such series required to be made pursuant to the terms of such Securities
as and to the extent provided for by the terms of such Securities; provided
that the Securities to be so credited have not been previously so credited. The
Securities to be so credited shall be received and credited for such purpose by
the Trustee at the Redemption Price, as specified in the Securities so to be
redeemed, for redemption through operation of the sinking fund and the amount
of such sinking fund payment shall be reduced accordingly.

 

Section 12.3         Redemption of Securities for Sinking Fund.

 

Not fewer than
60 days prior to each sinking fund payment date for any Securities, the Company
will deliver to the Trustee an Officers’ Certificate specifying the amount of
the next ensuing sinking fund payment for such Securities pursuant to the terms
of such Securities, the portion thereof, if any, which is to be satisfied by
payment of cash and the portion thereof, if any, which is to be satisfied by
delivering and crediting Securities pursuant to Section 12.2 and will also
deliver to the Trustee any Securities to be so delivered. Not fewer than 30
days prior to each such sinking fund payment date, the Trustee shall select the
Securities to be redeemed upon such sinking fund payment date in the manner
specified in Section 11.3 and cause notice of the redemption thereof to be
given in the name of and at the expense of the Company in the manner provided
in Section 11.4. Such notice having been duly given, the redemption of
such Securities shall be made upon the terms and in the manner stated in
Sections 11.6 and 11.7.

 

ARTICLE 13

DEFEASANCE AND COVENANT DEFEASANCE

 

Section 13.1         Company’s Option to Effect Defeasance
or Covenant Defeasance.

 

The Company
may elect, at its option at any time, to have Section 13.2 or Section 13.3
applied to any Securities or any series of Securities, as the case may be,
designated pursuant to Section 3.1 as being defeasible pursuant to such Section 13.2
or 13.3, in accordance with any applicable requirements provided pursuant to Section 3.1
and upon compliance with the conditions set forth below in this Article. Any
such election shall be evidenced by a Board Resolution or in another manner
specified as contemplated by Section 3.1 for such Securities.

 

Section 13.2         Defeasance and Discharge.

 

Upon the
Company’s exercise of its option (if any) to have this Section applied to
any Securities or any series of Securities, as the case may be, the Company
shall be deemed to have been discharged from its obligations, and the
provisions of Article 15 shall cease to be effective, with respect to such
Securities as provided in this Section on and after the date the
conditions set forth in Section 13.4 are satisfied (hereinafter called
“Defeasance”). For this purpose, such Defeasance means that the Company shall
be deemed to have paid and discharged the entire indebtedness represented by
such Securities and to have satisfied all its other obligations under such
Securities and this Indenture insofar as such Securities are concerned (and the
Trustee, at the expense of the Company, shall execute proper instruments
acknowledging the same), subject to the following which shall survive until
otherwise terminated or discharged hereunder:

 

(1)   the rights
of Holders of such Securities to receive, solely from the trust fund described
in Section 13.4 and as more fully set forth in such Section, payments in
respect of the principal of and any premium and interest on such Securities
when payments are due,

 

45

 

(2)   the
Company’s obligations with respect to such Securities under Sections 3.4, 3.5,
3.6, 10.2 and 10.3, and, if applicable, Article 14,

 

(3)   the rights,
powers, trusts, duties and immunities of the Trustee hereunder, and

 

(4)   this
Article.

 

Subject to
compliance with this Article, the Company may exercise its option (if any) to
have this Section applied to any Securities notwithstanding the prior
exercise of its option (if any) to have Section 13.3 applied to such
Securities.

 

Section 13.3         Covenant Defeasance.

 

Upon the
Company’s exercise of its option (if any) to have this Section applied to
any Securities or any series of Securities, as the case may be,

 

(1)   the Company
shall be released from its obligations under any covenants provided pursuant to
Sections 3.1(19), 9.1(2) or 9.1(7) for the benefit of the Holders of
such Securities,

 

(2)   the
occurrence of any event specified in Sections 5.1(4) (with respect to any
such covenants provided pursuant to Section 3.1(19), 9.1(2) or
9.1(7)) and the occurrence of any Event of Default specified pursuant to Section 3.1,
shall be deemed not to be or result in an Event of Default, and

 

(3)   the
provisions of Article 15 shall cease to be effective,

 

in each case
with respect to such Securities or series of Securities as provided in this Section on
and after the date the conditions set forth in Section 13.4 are satisfied
(hereinafter called “Covenant Defeasance”). For this purpose, such Covenant
Defeasance means that, with respect to such Securities, the Company may omit to
comply with and shall have no liability in respect of any term, condition or
limitation set forth in any such specified Section (to the extent so
specified in the case of Section 5.1(4) and the occurrence of any
Event of Default specified pursuant to Section 3.1) or Article 15,
whether directly or indirectly by reason of any reference elsewhere herein to
any such Section or Article or by reason of any reference in any such
Section or Article to any other provision herein or in any other
document, but the remainder of this Indenture and such Securities shall be
unaffected thereby.

 

Section 13.4         Conditions to Defeasance or Covenant
Defeasance.

 

The following
shall be the conditions to the application of Section 13.2 or Section 13.3
to any Securities or any series of Securities, as the case may be:

 

(1)   The Company
shall irrevocably have deposited or caused to be deposited with the Trustee (or
another trustee which satisfies the requirements contemplated by Section 6.9
and agrees to comply with the provisions of this Article applicable to it)
as trust funds in trust for the purpose of making the following payments,
specifically pledged as security for, and dedicated solely to, the benefits of
the Holders of such Securities,

 

(A)                          in the case of
Securities of a series denominated in currency of the United States of America,

 

(i)    cash in
currency of the United States of America in an amount, or

 

(ii)   U.S.
Government Obligations which through the scheduled payment of principal and
interest in respect thereof in accordance with their terms will provide, not
later than one day before the due date of any payment, an amount in cash, or

 

(iii)  a
combination thereof, or

 

46

 

(B)                           in the case of
Securities of a series denominated in currency other than that of the United
States of America,

 

(i)    cash in
the currency in which such series of Securities is denominated in an amount, or

 

(ii)   Foreign
Government Obligations which through the scheduled payment of principal and
interest in respect thereof in accordance with their terms will provide, not
later than one day before the due date of any payment, an amount in cash, or

 

(iii)  a
combination thereof,

 

in each case
sufficient, in the opinion of a nationally recognized firm of independent
public accountants expressed in a written certification thereof delivered to
the Trustee, to pay and discharge, and which shall be applied by the Trustee
(or any such other qualifying trustee) to pay and discharge, the principal of
and any premium and interest on such Securities on the respective Stated
Maturities, in accordance with the terms of this Indenture and such Securities.

 

(2)   For
Securities denominated in United States dollars, in the event of an election to
have Section 13.2 apply to any Securities or any series of Securities, as
the case may be, the Company shall have delivered to the Trustee an Opinion of
Counsel stating that

 

(A)                                                                              the
Company has received from, or there has been published by, the Internal Revenue
Service a ruling or

 

(B)                                                                                since
the date of this instrument, there has been a change in the applicable Federal
income tax law,

 

in either case
(A) or (B) to the effect that, and based thereon such opinion shall
confirm that, the Holders of such Securities will not recognize gain or loss
for Federal income tax purposes as a result of the deposit, Defeasance and
discharge to be effected with respect to such Securities and will be subject to
Federal income tax on the same amount, in the same manner and at the same times
as would be the case if such deposit, Defeasance and discharge were not to
occur.

 

(3)   For
Securities denominated in United States dollars, in the event of an election to
have Section 13.3 apply to any Securities or any series of Securities, as
the case may be, the Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that the Holders of such Securities will not recognize
gain or loss for Federal income tax purposes as a result of the deposit and
Covenant Defeasance to be effected with respect to such Securities and will be
subject to Federal income tax on the same amount, in the same manner and at the
same times as would be the case if such deposit and Covenant Defeasance were
not to occur.

 

(4)   The Company
shall have delivered to the Trustee an Officers’ Certificate to the effect that
neither such Securities nor any other Securities of the same series, if then
listed on any securities exchange, will be delisted as a result of such
deposit.

 

(5)   No event
which is, or after notice or lapse of time or both would become, an Event of
Default with respect to such Securities or any other Securities shall have
occurred and be continuing at the time of such deposit or, with regard to any
such event specified in Sections 5.1(5) and (6), at any time on or prior
to the 90th day after the date of such deposit (it being understood that this
condition shall not be deemed satisfied until after such 90th day).

 

(6)   Such
Defeasance or Covenant Defeasance shall not cause the Trustee to have a
conflicting interest within the meaning of the Trust Indenture Act (assuming
all Securities are in default within the meaning of such Act).

 

47

 

(7)   Such
Defeasance or Covenant Defeasance shall not result in a breach or violation of,
or constitute a default under, this Indenture or any other agreement or
instrument to which the Company is a party or by which it is bound.

 

(8)   Such
Defeasance or Covenant Defeasance shall not result in the trust arising from
such deposit constituting an investment company within the meaning of the Investment
Company Act unless such trust shall be registered under such Act or exempt from
registration thereunder.

 

(9)   At the time of such deposit,

 

(A)                                                                              no
default in the payment of any principal of or premium or interest on any Senior
Debt shall have occurred and be continuing,

 

(B)                                                                                no
event of default with respect to any Senior Debt shall have resulted in such
Senior Debt becoming, and continuing to be, due and payable prior to the date
on which it would otherwise have become due and payable (unless payment of such
Senior Debt has been made or duly provided for), and

 

(C)                                                                                no
other event of default with respect to any Senior Debt shall have occurred and
be continuing permitting (after notice or lapse of time or both) the holders of
such Senior Debt (or a trustee on behalf of such holders) to declare such
Senior Debt due and payable prior to the date on which it would otherwise have
become due and payable.

 

(10) The Company
shall have delivered to the Trustee an Officers’ Certificate and an Opinion of
Counsel, each stating that all conditions precedent with respect to such
Defeasance or Covenant Defeasance have been complied with.

 

Section 13.5         Deposited Money, U.S. Government
Obligations and Foreign Government Obligations to be Held in Trust;
Miscellaneous Provisions.

 

Subject to the
provisions of the last paragraph of Section 10.3, all money, U.S.
Government Obligations and Foreign Government Obligations (including the
proceeds thereof) deposited with the Trustee or other qualifying trustee
(solely for purposes of this Section and Section 13.6, the Trustee
and any such other trustee are referred to collectively as the “Trustee”)
pursuant to Section 13.4 in respect of any Securities shall be held in
trust and applied by the Trustee, in accordance with the provisions of such
Securities and this Indenture, to the payment, either directly or through any
such Paying Agent (including the Company acting as its own Paying Agent) as the
Trustee may determine, to the Holders of such Securities, of all sums due and
to become due thereon in respect of principal and any premium and interest, but
money so held in trust need not be segregated from other funds except to the
extent required by law. Money, U.S. Government Obligations and Foreign
Government Obligations so held in trust shall not be subject to the provisions
of Article 15.

 

The Company
shall pay and indemnify the Trustee against any tax, fee or other charge
imposed on or assessed against the U.S. Government Obligations or Foreign
Government Obligations deposited pursuant to Section 13.4 or the principal
and interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of Outstanding
Securities.

 

Anything in
this Article to the contrary notwithstanding, the Trustee shall deliver or
pay to the Company from time to time upon Company Request any money, U.S.
Government Obligations or Foreign Government Obligations held by it as provided
in Section 13.4 with respect to any Securities which, in the opinion of a
nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, are in excess of the
amount thereof which would then be required to be deposited to effect the
Defeasance or Covenant Defeasance, as the case may be, with respect to such
Securities.

 

48

 

Section 13.6         Reinstatement.

 

If the Trustee
or the Paying Agent is unable to apply any money in accordance with this Article with
respect to any Securities by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, then the obligations under this Indenture and such Securities from
which the Company has been discharged or released pursuant to Section 13.2
or 13.3 shall be revived and reinstated as though no deposit had occurred
pursuant to this Article with respect to such Securities, until such time
as the Trustee or Paying Agent is permitted to apply all money held in trust
pursuant to Section 13.5 with respect to such Securities in accordance
with this Article; provided, however, that if the Company makes
any payment of principal of or any premium or interest on any such Security
following such reinstatement of its obligations, the Company shall be
subrogated to the rights (if any) of the Holders of such Securities to receive
such payment from the money so held in trust.

 

ARTICLE 14

CONVERSION OF SECURITIES

 

Section 14.1         Applicability of Article.

 

The provisions
of this Article shall be applicable to the Securities of any series which
are convertible into shares of Common Stock of the Company, and the issuance of
such shares of Common Stock upon the conversion of such Securities, except as
otherwise specified as contemplated by Section 3.1 for the Securities of
such series or in a supplemental indenture for the Securities of such series.

 

Section 14.2         Exercise of Conversion Privilege.

 

In order to
exercise a conversion privilege, the Holder of a Security of a series with such
a privilege shall surrender such Security to the Company at the office or
agency maintained for that purpose pursuant to Section 10.2, accompanied
by a duly executed conversion notice to the Company substantially in the form
set forth in Section 2.6 stating that the Holder elects to convert such
Security or a specified portion thereof. Such notice shall also state, if
different from the name and address of such Holder, the name or names (with
address) in which the certificate or certificates for shares of Common Stock,
which shall be issuable on such conversion, shall be issued. Securities
surrendered for conversion shall (if so required by the Company or the Trustee)
be duly endorsed by or accompanied by instruments of transfer in forms satisfactory
to the Company and the Trustee duly executed by the Holder or its attorney duly
authorized in writing. As promptly as practicable after the receipt of such
notice and of any payment required pursuant to a Board Resolution and, subject
to Section 3.3, set forth, or determined in the manner provided, in an
Officers’ Certificate, or established in one or more indentures supplemental
hereto setting forth the terms of such series of Security, and the surrender of
such Security in accordance with such reasonable regulations as the Company may
prescribe, the Company shall issue and shall deliver, at the office or agency
at which such Security is surrendered, to such Holder or on its written order,
a certificate or certificates for the number of full shares of Common Stock
issuable upon the conversion of such Security (or specified portion thereof),
in accordance with the provisions of such Board Resolution, Officers’
Certificate or supplemental indenture, and cash as provided therein in respect
of any fractional share of such Common Stock otherwise issuable upon such
conversion. Such conversion shall be deemed to have been effected immediately
prior to the close of business on the date on which such notice and such
payment, if required, shall have been received in proper order for conversion
by the Company and such Security shall have been surrendered as aforesaid
(unless such Holder shall have so surrendered such Security and shall have
instructed the Company to effect the conversion on a particular date following
such surrender and such Holder shall be entitled to convert such Security on
such date, in which case such conversion shall be deemed to be effected
immediately prior to the close of business on such date) and at such time the
rights of the Holder of such Security as such Security Holder shall cease and
the person or persons in whose name or names any certificate or certificates
for shares of Common Stock of the Company shall be issuable upon such
conversion shall be deemed to have become the Holder or Holders of record of
the shares represented thereby. Except as set forth above and subject to the
final paragraph of Section 3.7, no payment or adjustment shall be made
upon any conversion on account of any interest accrued on the Securities (or
any part thereof) surrendered for conversion or on account of any dividends on
the Common Stock of the Company issued upon such conversion.

 

49

 

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

 

Section 14.3         No Fractional Shares.

 

No fractional
share of Common Stock of the Company shall be issued upon conversions of
Securities of any series. If more than one Security shall be surrendered for
conversion at one time by the same Holder, the number of full shares which
shall be issuable upon conversion shall be computed on the basis of the
aggregate principal amount of the Securities (or specified portions thereof to
the extent permitted hereby) so surrendered. If, except for the provisions of
this Section 14.3, any Holder of a Security or Securities would be
entitled to a fractional share of Common Stock of the Company upon the
conversion of such Security or Securities, or specified portions thereof, the
Company shall pay to such Holder an amount in cash equal to the current market
value of such fractional share computed, (i) if such Common Stock is
listed or admitted to unlisted trading privileges on a national securities
exchange or market, on the basis of the last reported sale price regular way on
such exchange or market on the last trading day prior to the date of conversion
upon which such a sale shall have been effected, or (ii) if such Common
Stock is not at the time so listed or admitted to unlisted trading privileges
on a national securities exchange or market, on the basis of the average of the
bid and asked prices of such Common Stock in the over-the-counter market, on
the last trading day prior to the date of conversion, as reported by the
National Quotation Bureau, Incorporated or similar organization if the National
Quotation Bureau, Incorporated is no longer reporting such information, or if
not so available, the fair market price as determined by the Board of
Directors. For purposes of this Section, “trading day” shall mean each Monday,
Tuesday, Wednesday, Thursday and Friday other than any day on which the Common
Stock is not traded on the Nasdaq Global Market, or if the Common Stock is not
traded on the Nasdaq Global Market, on the principal exchange or market on
which the Common Stock is traded or quoted.

 

Section 14.4         Adjustment of Conversion Price.

 

The conversion
price or rate of Securities of any series that is convertible into Common Stock
of the Company shall be adjusted for any stock dividends, stock splits,
reclassifications, combinations or similar transactions in accordance with the
terms of the supplemental indenture or Board Resolutions setting forth the
terms of the Securities of such series.

 

Whenever the
conversion price or rate is adjusted, the Company shall compute the adjusted
conversion price or rate in accordance with terms of the applicable Board
Resolution or supplemental indenture and shall prepare an Officers’ Certificate
setting forth the adjusted conversion price or rate and showing in reasonable
detail the facts upon which such adjustment is based, and such certificate
shall forthwith be filed at each office or agency maintained for the purpose of
conversion of Securities pursuant to Section 10.2 and, if different, with
the Trustee. The Company shall forthwith cause a notice setting forth the
adjusted conversion price or rate to be mailed, first class postage prepaid, to
each Holder of Securities of such series at its address appearing on the
Security Register and to any conversion agent other than the Trustee.

 

Section 14.5         Notice of Certain Corporate Actions.

 

In case:

 

(1)   the Company
shall declare a dividend (or any other distribution) on its Common Stock
payable otherwise than in cash out of its retained earnings (other than a
dividend for which approval of any shareholders of the Company is required)
that would require an adjustment pursuant to Section 14.4; or

 

(2)   the Company
shall authorize the granting to all or substantially all of the holders of its
Common Stock of rights, options or warrants to subscribe for or purchase any
shares of capital stock of any class or of any other rights (other than any
such grant for which approval of any shareholders of the Company is required);
or

 

50

 

(3)   of
any reclassification of the Common Stock of the Company (other than a
subdivision or combination of its outstanding shares of Common Stock, or of any
consolidation, merger or share exchange to which the Company is a party and for
which approval of any shareholders of the Company is required), or of the sale
of all or substantially all of the assets of the Company; or

 

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

 

then the
Company shall cause to be filed with the Trustee, and shall cause to be mailed
to all Holders at their last addresses as they shall appear in the Security
Register, at least 20 days (or 10 days in any case specified in clause (1) or
(2) above) prior to the applicable record date hereinafter specified, a
notice stating (i) the date on which a record is to be taken for the
purpose of such dividend, distribution, rights, options or warrants, or, if a
record is not to be taken, the date as of which the holders of Common Stock of
record to be entitled to such dividend, distribution, rights, options or
warrants are to be determined, or (ii) the date on which such
reclassification, consolidation, merger, share exchange, sale, dissolution,
liquidation or winding up is expected to become effective, and the date as of
which it is expected that holders of Common Stock of record shall be entitled
to exchange their shares of Common Stock for securities, cash or other property
deliverable upon such reclassification, consolidation, merger, share exchange,
sale, dissolution, liquidation or winding up. If at any time the Trustee shall
not be the conversion agent, a copy of such notice shall also forthwith be
filed by the Company with the Trustee.

 

Section 14.6         Reservation of Shares of
Common Stock.

 

The Company
shall at all times reserve and keep available, free from preemptive rights, out
of its authorized but unissued Common Stock, for the purpose of effecting the
conversion of Securities, the full number of shares of Common Stock of the
Company then issuable upon the conversion of all outstanding Securities of any
series that has conversion rights.

 

Section 14.7         Payment of Certain Taxes
upon Conversion.

 

Except as
provided in the next sentence, the Company will pay any and all taxes that may
be payable in respect of the issue or delivery of shares of its Common Stock on
conversion of Securities pursuant hereto. The Company shall not, however, be
required to pay any tax which may be payable in respect of any transfer
involved in the issue and delivery of shares of its Common Stock in a name
other than that of the Holder of the Security or Securities to be converted,
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 any such tax, or
has established, to the satisfaction of the Company, that such tax has been
paid.

 

Section 14.8         Nonassessability.

 

The Company
covenants that all shares of its Common Stock that may be issued upon
conversion of Securities will upon issue in accordance with the terms hereof be
duly and validly issued and fully paid and nonassessable.

 

Section 14.9         Provision in Case of
Consolidation, Merger or Sale of Assets.

 

In case of any
consolidation or merger of the Company with or into any other Person, any
merger of another Person with or into the Company (other than a merger which
does not result in any reclassification, conversion, exchange or cancellation
of outstanding shares of Common Stock of the Company) or any conveyance, sale,
transfer or lease of all or substantially all of the assets of the Company, the
Person formed by such consolidation or resulting from such merger or which
acquires such assets, as the case may be, shall execute and deliver to the
Trustee a supplemental indenture providing that the Holder of each Security of
a series then Outstanding that is convertible into Common Stock of the Company
shall have the right thereafter (which right shall be the exclusive conversion
right thereafter available to said Holder), during the period such Security
shall be convertible, to convert such Security only into the kind and amount of
securities, cash and other property receivable upon such consolidation, merger,
conveyance, sale, transfer or lease by a holder of the number of shares of
Common Stock of the Company into which such Security might have been converted
immediately prior to such consolidation,

 

51

 

merger, conveyance, sale, transfer or lease, assuming such holder of
Common Stock of the Company (i) is not a Person with which the Company
consolidated or merged with or into or which merged into or with the Company or
to which such conveyance, sale, transfer or lease was made, as the case may be
(a “Constituent Person”), or an Affiliate of a Constituent Person and (ii) failed
to exercise his rights of election, if any, as to the kind or amount of
securities, cash and other property receivable upon such consolidation, merger,
conveyance, sale, transfer or lease (provided that if the kind or amount of securities,
cash and other property receivable upon such consolidation, merger, conveyance,
sale, transfer, or lease is not the same for each share of Common Stock of the
Company held immediately prior to such consolidation, merger, conveyance, sale,
transfer or lease by others than a Constituent Person or an Affiliate thereof
and in respect of which such rights of election shall not have been exercised (“Non-electing
Share”), then for the purpose of this Section 14.9 the kind and amount of
securities, cash and other property receivable upon such consolidation, merger,
conveyance, sale, transfer or lease by the holders of each Non-electing Share
shall be deemed to be the kind and amount so receivable per share by a
plurality of the Non-electing Shares). Such supplemental indenture shall
provide for adjustments which, for events subsequent to the effective date of
such supplemental indenture, shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Article or in
accordance with the terms of the supplemental indenture or Board Resolutions
setting forth the terms of such adjustments. The above provisions of this Section 14.9
shall similarly apply to successive consolidations, mergers, conveyances,
sales, transfers or leases. Notice of the execution of such a supplemental
indenture shall be given by the Company to the Holder of each Security of a
series that is convertible into Common Stock of the Company as provided in Section 1.6
promptly upon such execution.

 

Neither the
Trustee nor any conversion agent, if any, shall be under any responsibility to
determine the correctness of any provisions contained in any such supplemental
indenture relating either to the kind or amount of shares of stock or other
securities or property or cash receivable by Holders of Securities of a series
convertible into Common Stock of the Company upon the conversion of their
Securities after any such consolidation, merger, conveyance, transfer, sale or
lease or to any such adjustment, but may accept as conclusive evidence of the
correctness of any such provisions, and shall be protected in relying upon, an
Opinion of Counsel with respect thereto, which the Company shall cause to be
furnished to the Trustee upon request.

 

Section 14.10       Duties of Trustee Regarding
Conversion.

 

Neither the
Trustee nor any conversion agent shall at any time be under any duty or
responsibility to any Holder of Securities of any series that is convertible
into Common Stock of the Company to determine whether any facts exist which may
require any adjustment of the conversion price or rate, or with respect to the
nature or extent of any such adjustment when made, or with respect to the
method employed, whether herein or in any supplemental indenture, any
resolutions of the Board of Directors or written instrument executed by one or
more officers of the Company provided to be employed in making the same.
Neither the Trustee nor any conversion agent shall be accountable with respect
to the validity or value (or the kind or amount) of any shares of Common Stock
of the Company, or of any securities or property, which may at any time be
issued or delivered upon the conversion of any Securities and neither the
Trustee nor any conversion agent makes any representation with respect thereto.
Subject to the provisions of Section 6.1, neither the Trustee nor any
conversion agent shall be responsible for any failure of the Company to issue,
transfer or deliver any shares of its Common Stock or stock certificates or
other securities or property upon the surrender of any Security for the purpose
of conversion or to comply with any of the covenants of the Company contained
in this Article 14 or in the applicable supplemental indenture,
resolutions of the Board of Directors or written instrument executed by one or
more duly authorized officers of the Company.

 

Section 14.11       Repayment of Certain Funds
upon Conversion.

 

Any funds
which at any time shall have been deposited by the Company or on its behalf
with the Trustee or any other paying agent for the purpose of paying the
principal of, and premium, if any, and interest, if any, on any of the
Securities (including, but not limited to, funds deposited for the sinking fund
referred to in Article 12 hereof and funds deposited pursuant to Article 13
hereof) and which shall not be required for such purposes because of the
conversion of such Securities as provided in this Article 14 shall after
such conversion be repaid to the Company by the Trustee upon the Company’s
written request.

 

52

 

ARTICLE 15

 

SUBORDINATION OF SECURITIES

 

Section 15.1         Agreement of
Subordination.

 

Except as
otherwise provided in a supplemental indenture or pursuant to Section 3.1,
the Company covenants and agrees, and each Holder of Securities issued
hereunder by its acceptance thereof likewise covenants and agrees, that all
Securities shall be issued subject to the provisions of this Article 15;
and each Person holding any Security, whether upon original issue or upon
transfer, assignment or exchange thereof, accepts and agrees to be bound by
such provisions.

 

The payment of
the principal of, premium, if any, and interest on all Securities (including,
but not limited to, the redemption price with respect to the Securities called
for redemption in accordance with Article 11 as provided in the Indenture)
issued hereunder shall, to the extent and in the manner hereinafter set forth,
be subordinated and subject in right of payment to the prior payment in full of
all Senior Debt, whether outstanding at the date of this Indenture or
thereafter incurred.

 

No provision
of this Article 15 shall prevent the occurrence of any default or Event of
Default hereunder.

 

Section 15.2         Payments to Holders.

 

No payment
shall be made with respect to the principal of, or premium, if any, or interest
on the Securities (including, but not limited to, the redemption price with
respect to the Securities to be called for redemption in accordance with Article 11
as provided in the Indenture), except payments and distributions made by the
Trustee as permitted by the first or second paragraph of Section 15.5, if:

 

(i)    a
default in the payment of principal, premium, if any, interest, rent or other
obligations due on any Senior Debt occurs and is continuing (or, in the case of
Senior Debt for which there is a period of grace, in the event of such a
default that continues beyond the period of grace, if any, specified in the
instrument or lease evidencing such Senior Debt) (a “Payment Default”), unless
and until such default shall have been cured or waived or shall have ceased to
exist; or

 

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

 

If the Trustee
receives any Payment Blockage Notice pursuant to clause (ii) above, no
subsequent Payment Blockage Notice shall be effective for purposes of this Section unless
and until at least 365 days shall have elapsed since the initial effectiveness
of the immediately prior Payment Blockage Notice. No Non-Payment Default that
existed or was continuing on the date of delivery of any Payment Blockage
Notice to the Trustee shall be, or be made, the basis for a subsequent Payment
Blockage Notice.

 

The Company may and shall resume payments on
and distributions in respect of the Securities upon the earlier of:

 

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

 

(2)   in
the case of a Non-Payment Default, the earlier of (a) the date upon which
such Non-Payment Default is cured, waived or ceases to exist or (b) 179
days after the date on which the applicable Payment Blockage Notice is received
by the Trustee,

 

unless this Article 15
otherwise prohibits the payment or distribution at such time.

 

53

 

Upon any
payment or distribution of assets of the Company of any kind or character,
whether in cash, property or securities, to creditors upon any dissolution or
winding-up or liquidation or reorganization of the Company, whether voluntary
or involuntary or in bankruptcy, insolvency, reorganization, liquidation,
receivership or other proceedings, or upon an assignment for the benefit of
creditors or any marshalling of the assets and liabilities of the Company, or
otherwise, all amounts due or to become due upon all Senior Debt shall first be
paid in full in cash or other payment satisfactory to the holders of such
Senior Debt, or payment thereof in accordance with its terms provided for in
cash or other payment satisfactory to the holders of such Senior Debt, before
any payment is made on account of the principal of, premium, if any, or
interest on the Securities (except payments made pursuant to Article 4
from monies deposited with the Trustee pursuant thereto prior to commencement
of proceedings for such dissolution, winding-up, liquidation, reorganization,
assignment for the benefit of creditors or the marshalling of assets and
liabilities of the Company); and upon any such dissolution, winding-up,
liquidation, reorganization, assignment for the benefit of creditors or
marshalling of assets and liabilities of the Company or bankruptcy, insolvency,
receivership or other proceeding, any payment by the Company, or distribution
of assets of the Company of any kind or character, whether in cash, property or
securities, to which the Holders of the Securities or the Trustee would be
entitled, except for the provision of this Article 15, shall (except as
aforesaid) be paid by the Company or by any receiver, trustee in bankruptcy,
liquidating trustee, agent or other Person making such payment or distribution,
or by the Holders of the Securities or by the Trustee under this Indenture if
received by them or it, directly to the holders of Senior Debt (pro rata to
such holders on the basis of the respective amounts of Senior Debt held by such
holders, or as otherwise required by law or a court order) or their
Representative or Representatives, or to the trustee or trustees under any
indenture pursuant to which any instruments evidencing any Senior Debt may have
been issued, as their respective interests may appear, to the extent necessary
to pay all Senior Debt in full, in cash or other payment satisfactory to the
holders of such Senior Debt, after giving effect to any concurrent payment or
distribution to or for the holders of Senior Debt, before any payment or
distribution or provision therefor is made to the Holders of the Securities or
to the Trustee.

 

For purposes
of this Article 15, the words, “cash, property or securities” shall not be
deemed to include shares of stock of the Company as reorganized or readjusted,
or securities of the Company or any other corporation provided for by a plan of
reorganization or readjustment, the payment of which is subordinated at least
to the extent provided in this Article 15 with respect to the Securities
to the payment of all Senior Debt which may at the time be outstanding; provided
that (i) the Senior Debt is assumed by the new corporation, if any,
resulting from any reorganization or readjustment, and (ii) the rights of
the holders of Senior Debt (other than leases which are not assumed by the
Company or the new corporation, as the case may be) are not, without the
consent of such holders, altered by such reorganization or readjustment. The
consolidation of the Company with, or the merger of the Company into, another
corporation or the liquidation or dissolution of the Company following the
conveyance or transfer of its property as an entirety, or substantially as an
entirety, to another corporation upon the terms and conditions provided for in Article 8
shall not be deemed a dissolution, winding-up, liquidation or reorganization
for the purposes of this Section 15.2 if such other corporation shall, as
a part of such consolidation, merger, conveyance or transfer, comply with the
conditions stated in Article 8.

 

In the event
of the acceleration of the Securities because of an Event of Default, no
payment or distribution shall be made to the Trustee or any Holder of
Securities in respect of the principal of, premium, if any, or interest on the
Securities (including, but not limited to, the redemption price with respect to
the Securities called for redemption in accordance with Article 11 as
provided in the Indenture), except payments and distributions made by the
Trustee as permitted by the first or second paragraph of Section 15.5,
until all Senior Debt has been paid in full in cash or other payment
satisfactory to the holders of Senior Debt or such acceleration is rescinded in
accordance with the terms of this Indenture. If payment of the Securities is
accelerated because of an Event of Default, the Company shall promptly notify
holders of Senior Debt of the acceleration.

 

In the event
that, notwithstanding the foregoing provisions, any payment or distribution of
assets of the Company of any kind or character, whether in cash, property or
securities (including, without limitation, by way of setoff or otherwise),
prohibited by the foregoing, shall be received by the Trustee or the Holders of
the Securities before all Senior Debt is paid in full in cash or other payment
satisfactory to the holders of such Senior Debt, or provision is made for such
payment thereof in accordance with its terms in cash or other payment
satisfactory to the holders of such Senior Debt, such payment or distribution
shall be held in trust for the benefit of and shall be paid over or delivered
to the holders of Senior Debt or their Representative or Representatives, or to
the trustee or trustees under any indenture pursuant to which any instruments
evidencing any Senior Debt may have been issued,

 

54

 

as their respective interests may appear, as calculated by the Company,
for application to the payment of all Senior Debt remaining unpaid to the
extent necessary to pay all Senior Debt in full in cash or other payment
satisfactory to the holders of such Senior Debt, after giving effect to any
concurrent payment or distribution to or for the holders of such Senior Debt.

 

Nothing in
this Section 15.2 shall apply to claims of, or payments to, the Trustee
under or pursuant to Section 6.7. This Section 15.2 shall be subject
to the further provisions of Section 15.5.

 

Section 15.3         Subrogation of Securities

 

Subject to the
payment in full of all Senior Debt, the rights of the Holders of the Securities
shall be subrogated to the extent of the payments or distributions made to the
holders of such Senior Debt pursuant to the provisions of this Article 15
(equally and ratably with the holders of all indebtedness of the Company which
by its express terms is subordinated to other indebtedness of the Company to
substantially the same extent as the Securities are subordinated and is
entitled to like rights of subrogation) to the rights of the holders of Senior
Debt to receive payments or distributions of cash, property or securities of
the Company applicable to the Senior Debt until the principal, premium, if any,
and interest on the Securities shall be paid in full; and, for the purposes of
such subrogation, no payments or distributions to the holders of the Senior
Debt of any cash, property or securities to which the Holders of the Securities
or the Trustee would be entitled except for the provisions of this Article 15,
and no payment over pursuant to the provisions of this Article 15, to or
for the benefit of the holders of Senior Debt by Holders of the Securities or
the Trustee, shall, as between the Company, its creditors other than holders of
Senior Debt, and the Holders of the Securities, be deemed to be a payment by
the Company to or on account of the Senior Debt; and no payments or
distributions of cash, property or securities to or for the benefit of the
Holders of the Securities pursuant to the subrogation provisions of this Article 15,
which would otherwise have been paid to the holders of Senior Debt shall be
deemed to be a payment by the Company to or for the account of the Securities.
It is understood that the provisions of this Article 15 are and are
intended solely for the purposes of defining the relative rights of the Holders
of the Securities, on the one hand, and the holders of the Senior Debt, on the
other hand.

 

Nothing
contained in this Article 15 or elsewhere in this Indenture or in the
Securities is intended to or shall impair, as among the Company, its creditors
other than the holders of Senior Debt, and the Holders of the Securities, the
obligation of the Company, which is absolute and unconditional, to pay to the
Holders of the Securities the principal of (and premium, if any) and interest
on the Securities as and when the same shall become due and payable in
accordance with their terms, or is intended to or shall affect the relative
rights of the Holders of the Securities and creditors of the Company other than
the holders of the Senior Debt, nor shall anything herein or therein prevent
the Trustee or the Holder of any Security from exercising all remedies
otherwise permitted by applicable law upon default under this Indenture,
subject to the rights, if any, under this Article 15 of the holders of
Senior Debt in respect of cash, property or securities of the Company received
upon the exercise of any such remedy.

 

Upon any
payment or distribution of assets of the Company referred to in this Article 15,
the Trustee, subject to the provisions of Section 6.1, and the Holders of
the Securities shall be entitled to rely upon any order or decree made by any
court of competent jurisdiction in which such bankruptcy, dissolution,
winding-up, liquidation or reorganization proceedings are pending, or a
certificate of the receiver, trustee in bankruptcy, liquidating trustee, agent
or other person making such payment or distribution, delivered to the Trustee
or to the Holders of the Securities, for the purpose of ascertaining the
persons entitled to participate in such distribution, the holders of the Senior
Debt and other indebtedness of the Company, the amount thereof or payable
thereon and all other facts pertinent thereto or to this Article 15.

 

Section 15.4         Authorization to Effect
Subordination.

 

Each Holder of
a Security by the holder’s acceptance thereof authorizes and directs the
Trustee on the holder’s behalf to take such action as may be necessary or
appropriate to effectuate the subordination as provided in this Article 15
and appoints the Trustee to act as the holder’s attorney-in-fact for any and
all such purposes. If the Trustee does not file a proper proof of claim or
proof of debt in the form required in any proceeding referred to in Section 5.4
hereof at least 30 days before the expiration of the time to file such claim,
the holders of any Senior Debt or their representatives are hereby authorized
to file an appropriate claim for and on behalf of the Holders of the
Securities.

 

55

 

Section 15.5         Notice to Trustee.

 

The Company
shall give prompt written notice in the form of an Officers’ Certificate to a
Responsible Officer of the Trustee and to any Paying Agent of any fact known to
the Company which would prohibit the making of any payment of monies to or by
the Trustee or any Paying Agent in respect of the Securities pursuant to the
provisions of this Article 15. Notwithstanding the provisions of this Article 15
or any other provision of this Indenture, the Trustee shall not be charged with
knowledge of the existence of any facts which would prohibit the making of any
payment of monies to or by the Trustee in respect of the Securities pursuant to
the provisions of this Article 15, unless and until a Responsible Officer
of the Trustee shall have received written notice thereof at the Corporate
Trust Office from the Company (in the form of an Officers’ Certificate) or a
Representative or a holder or holders of Senior Debt or from any trustee
therefor; and before the receipt of any such written notice, the Trustee,
subject to the provisions of Section 6.1, shall be entitled in all
respects to assume that no such facts exist; provided that if on a date
not fewer than two Business Days prior to the date upon which by the terms
hereof any such monies may become payable for any purpose (including, without
limitation, the payment of the principal of, or premium, if any, or interest on
any Security) the Trustee shall not have received, with respect to such monies,
the notice provided for in this Section 15.5, then, anything herein
contained to the contrary notwithstanding, the Trustee shall have full power
and authority to receive such monies and to apply the same to the purpose for
which they were received, and shall not be affected by any notice to the
contrary which may be received by it on or after such prior date.

 

Notwithstanding
anything in this Article 15 to the contrary, nothing shall prevent any
payment by the Trustee to the Holders of monies deposited with it pursuant to Section 4.1,
and any such payment shall not be subject to the provisions of Section 15.1
or 15.2.

 

The Trustee,
subject to the provisions of Section 6.1, shall be entitled to rely on the
delivery to it of a written notice by a Representative or a person representing
himself to be a holder of Senior Debt (or a trustee on behalf of such holder)
to establish that such notice has been given by a Representative or a holder of
Senior Debt or a trustee on behalf of any such holder or holders. The Trustee
shall not be required to make any payment or distribution to or on behalf of a
holder of Senior Debt pursuant to this Article 15 unless it has received
satisfactory evidence as to the amount of Senior Debt held by such person, the
extent to which such person is entitled to participate in such payment or
distribution and any other facts pertinent to the rights of such person under
this Article 15.

 

Section 15.6         Trustee’s Relation to
Senior Debt.

 

The Trustee in
its individual capacity shall be entitled to all the rights set forth in this Article 15
in respect of any Senior Debt at any time held by it, to the same extent as any
other holder of Senior Debt, and nothing in this Indenture shall deprive the
Trustee of any of its rights as such holder.

 

With respect
to the holders of Senior Debt, the Trustee undertakes to perform or to observe
only such of its covenants and obligations as are specifically set forth in
this Article 15, and no implied covenants or obligations with respect to
the holders of Senior Debt shall be read into this Indenture against the
Trustee. The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Debt and, subject to the provisions of Section 6.1, the
Trustee shall not be liable to any holder of Senior Debt (i) for any
failure to make any payments or distributions to such holders or (ii) if
it shall pay over or deliver to Holders of Securities, the Company or any other
Person money or assets to which any holder of Senior Debt shall be entitled by
virtue of this Article 15 or otherwise.

 

Section 15.7         No Impairment of
Subordination.

 

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

 

56

 

Section 15.8         Certain
Conversions/Exchanges Deemed Payment.

 

For the
purposes of this Article 15 only, (1) the issuance and delivery of
junior securities upon conversion or exchange of Securities in accordance with Article 14
or otherwise (except upon conversion of the Securities in accordance with their
terms) shall not be deemed to constitute a payment or distribution on account
of the principal of (or premium, if any) or interest on Securities or on
account of the purchase or other acquisition of Securities, and (2) the
payment, issuance or delivery of cash (except in satisfaction of fractional
shares pursuant to Section 14.3), property or securities (other than
junior securities) upon conversion or exchange of a Security shall be deemed to
constitute payment on account of the principal of such Security. For the
purposes of this Section 15.8, the term “junior securities” means (a) shares
of any stock of any class of the Company, or (b) securities of the Company
which are subordinated in right of payment to all Senior Debt which may be
outstanding at the time of issuance or delivery of such securities to
substantially the same extent as, or to a greater extent than, the Securities
are so subordinated as provided in this Article. Nothing contained in this Article 15
or elsewhere in this Indenture or in the Securities is intended to or shall
impair, as among the Company, its creditors other than holders of Senior Debt
and the Holders of Securities, the right, which is absolute and unconditional,
of the Holder of any Security to convert such Security in accordance with Article 14.

 

Section 15.9         Article Applicable
to Paying Agents.

 

If at any time
any Paying Agent other than the Trustee shall have been appointed by the
Company and be then acting hereunder, the term “Trustee” as used in this Article shall
(unless the context otherwise requires) be construed as extending to and
including such Paying Agent within its meaning as fully for all intents and
purposes as if such Paying Agent were named in this Article in addition to
or in place of the Trustee; provided, however, that the first
paragraph of Section 15.5 shall not apply to the Company or any Affiliate
of the Company if the Company or such Affiliate acts as Paying Agent.

 

The Trustee
shall not be responsible for the actions or inactions of any other Paying
Agents (including the Company if acting as its own Paying Agent) and shall have
no control of any funds held by such other Paying Agents.

 

Section 15.10       Senior Debt Entitled to
Rely.

 

The holders of
Senior Debt (including, without limitation, Designated Senior Debt) shall have
the right to rely upon this Article 15, and no amendment or modification
of the provisions contained herein shall diminish the rights of such holders
unless such holders shall have agreed in writing thereto.

 

Section 15.11       Reliance on Judicial Order
or Certificate of Liquidating Agent.

 

Upon any
payment or distribution of assets of the Company referred to in this Article,
the Trustee and the Holders shall be entitled to rely upon any order or decree
entered by any court of competent jurisdiction in which such dissolution,
winding up, liquidation, reorganization, assignment for the benefit of
creditors or marshalling of assets and liabilities of the Company or
bankruptcy, insolvency, receivership or other like proceeding is pending, or a
certificate of the trustee in bankruptcy, liquidating trustee, custodian,
receiver, assignee for the benefit of creditors, agent or other person making
such payment or distribution, delivered to the Trustee or to the Holders, for
the purpose of ascertaining the persons entitled to participate in such payment
or distribution, the holders of Senior Debt and other indebtedness of the
Company, the amount thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this Article.

 

Section 15.12       Trust Monies Not
Subordinated.

 

Notwithstanding
anything contained herein to the contrary, payments from money, U.S. Government
Obligations and/or Foreign Government Obligations held in trust under Article 4
or Article 13 by the Trustee for the payment of the principal of, premium,
if any, and interest on the Securities shall not be subordinated to the prior
payment in full of any Senior Debt of the Company or subject to the
restrictions set forth in this Article 15, and none

 

57

 

of the Holders shall be obligated to pay over any such amount to the
Company or any holder of Senior Debt of the Company or any other creditor of
the Company.

 

[The remainder of this page is
intentionally left blank.]

 

58

 

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

 

 

	
   

  	
  OVERSTOCK.COM,
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  

 

 

	
   

  	
  [TRUSTEE]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  

 

59Exhibit 10.1

 

NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED
BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE
CONVERTIBLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR APPLICABLE STATE SECURITIES LAWS.  THE
SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN
THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF
COUNSEL, IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED
UNDER SAID ACT.  ANY TRANSFEREE OF THIS
NOTE SHOULD CAREFULLY REVIEW THE TERMS OF THIS NOTE, INCLUDING SECTIONS 3(c)(iii) AND
19(a) HEREOF.  THE PRINCIPAL AMOUNT
REPRESENTED BY THIS NOTE AND, ACCORDINGLY, THE SECURITIES ISSUABLE UPON
CONVERSION HEREOF MAY BE LESS THAN THE AMOUNTS SET FORTH ON THE FACE
HEREOF PURSUANT TO SECTION 3(c)(iii) OF THIS NOTE.

 

CONVERTIBLE
SUBORDINATED NOTE

 

	
  Issuance
  Date: April 1, 2008

  	
   

  	
  Principal:
  U.S. $[

  	
  ]

  

 

FOR VALUE
RECEIVED, LIQUIDMETAL
TECHNOLOGIES, INC., a Delaware corporation (the “Company”), hereby promises to pay to the order of [INSERT
HOLDER]  or registered assigns (“Holder”) the amount set out above as the
Principal (as reduced pursuant to the terms hereof pursuant to redemption,
conversion or otherwise, the “Principal”)
when due, whether upon the Maturity Date (as defined below), acceleration,
redemption or otherwise (in each case in accordance with the terms hereof) and
to pay interest (“Interest”) on
any outstanding Principal at the rate of interest as determined pursuant to Section 2,
from the date set out above as the Issuance Date (the “Issuance Date”) until the same becomes due
and payable, whether upon an Interest Date (as defined below), the Maturity
Date, acceleration, conversion, redemption or otherwise (in each case in
accordance with the terms hereof).  This
Convertible Subordinated Note (including all Convertible Subordinated Notes
issued in exchange, transfer or replacement hereof, this “Note”) is one of an issue of Convertible
Subordinated Notes issued on January 3, 2007 (the “Original
Date”) pursuant to the Securities Purchase Agreement (the “Original Notes”) or issued after January 3, 2007 in
satisfaction of interest and/or other amounts owing by the Company to the holders
of the Original Notes (the “Interest Notes”)
(the Original Notes and Interest Notes are collectively referred to as the “Notes” herein, and any Notes other than this Note are
collectively referred to as the “Other Notes”).  This Note is deemed to be issued pursuant to Section 2
of the Holder’s Original Note and is subject to the terms and provisions of the
Securities Purchase Agreement.  Certain
capitalized terms are defined in Section 29.

 

 

(1)           MATURITY
AND AMORTIZATION PAYMENTS.

 

(a)           Payment on Maturity.  On January 3, 2010 (the “Maturity Date”), the Holder shall
surrender this Note to the Company and the Company shall pay to the Holder an
amount in cash representing all outstanding Principal and accrued and unpaid
Interest, and following receipt of such payment, the Holder shall mark this
Note as “Cancelled” and shall surrender such cancelled Note to the Company by
courier, registered mail, or other traceable means.  Beginning on the first day of the eighteenth
(18th) calendar month following the calendar month in which the
Original Date occurs, the Company may, upon thirty (30) calendar days prior
written notice to Holder and at the sole election of the Company, prepay this
Note in whole or in part for a cash redemption price equal to One Hundred Five
Percent (105%) of the the portion of the principal amount being redeemed plus
all accrued and unpaid interest on the portion of the principal amount being
redeemed, provided that following such notice the Holder may convert all or any
part of the portion of the Note to be redeemed so long as the Company receives
a duly executed Conversion Notice pursuant to Section 3 of this Note prior
to the date on which prepayment is actually made.  Notwithstanding the foregoing, in the event
that prior to the Maturity Date the Company completes a public or private
equity or debt offering or an Asset Sale pursuant to which the Company receives
aggregate cash proceeds (net of placement agent fees, underwriter’s discouns,
and other similar fees or commissions, and net of transaction fees) in excess
of Five Million Dollars ($5,000,000), but excluding financings for the purpose
of purchasing capital assets, then any net proceeds from such transaction after
payment in full of transaction expenses and the full payment of the Company’s
8% Unsecured Subordinated Notes Due 2007 shall, within five (5) Business
Days of the Company’s receipt of such net proceeds, be paid to reduce the
Principal and accrued but unpaid interest under this Note and the other
Interest Notes (and if such net proceeds are insufficient to pay the Interest
Notes in full, then such net proceeds will be paid to the holders of the
Interest Notes on a pro rata basis in accordance with the then-outstanding
Principal under the Interest Notes held by them).  For this purpose, an “Asset Sale” means any
sale of assets by the Company in a single transaction or series of related
transactions, other than (i) sales of inventory or other assets in the
ordinary course of the Company’s business, (ii) sale of obsolete equipment.

 

(b)           Amortization
Payments.  Beginning on July 31,
2008 and at the end of each month thereafter (each, an “Amortization
Date”) until there is no outstanding Principal of this Note, the
Company shall redeem $[            ] [1/36th of the original Principal amount of this Note] of
this Note (each, an “Amortization Redemption
Amount”).  If the Company is
unable to redeem all Principal and Interest with respect to all Amortization
Redemption Amounts on this Note and the Other Notes, then the Company shall
redeem a pro rata amount from each holder of the Notes (including the Holder)
based on the principal amount of the Notes subject to payment of an
Amortization Redemption Amount on such Amortization Date pursuant to this Note
and the Other Notes.

 

2

 

(c)           Payment of
Amortization Redemption Amount.  The
Company shall pay the Amortization Redemption Amount in cash in accordance with
the provisions of Section 12; provided, however, that if the Conditions to
Amortization Conversion (as defined below) are satisfied or waived in writing
by the Holder and the Company provides the Amortization Conversion Notice (as
defined below), then the Company shall have the right to require the Holder to
convert all or any such portion of the Amortization Redemption Amount
designated in the Amortization Conversion Notice into fully paid, validly
issued and nonassessable shares of Common Stock in accordance with the
applicable provisions of Section 3(c)(i). 
The Company may exercise its right to require conversion under this Section 1(c) by
delivering at least 20 Trading Days prior to such Amortization Date a written
notice thereof by facsimile and overnight courier to all, but not less than
all, of the holders of Notes and the Transfer Agent that specifically describes
the portion of the Amortization Redemption Amount for this Note and the Other
Notes that will be paid in Common Stock (the “Amortization
Conversion Notice” and the date all of the holders received such
notice is referred to as the “Amortization
Conversion Notice Date”).  The
Amortization Conversion Notice shall be irrevocable; provided; that if
any of the Conditions to Amortization Conversion is not satisfied on the
applicable Amortization Date or waived by the Holder, the Company will
notwithstanding delivery of the Amortization Conversion Notice be required to
pay the Amortization Redemption Amount in cash. 
The conversion price applicable to an Amortization Conversion (the “Amortization
Price”) that is being paid in Common Stock pursuant to this Section 1(c) shall
be 90% of the Weighted Average Price of the Common Stock for the 20 consecutive
Trading Days immediately preceding the Amortization Date.  For purposes of this Section 1(c), “Conditions to Amortization Conversion”
means  the following conditions: (i) the
Common Stock shall be traded on the Principal Market, the NASDAQ Gobal Market
or NASDAQ Capital Market, or the American Stock Exchange on the applicable
Amortization Date, (ii) on the Amortization Date, either (x) the
Registration Statement or Registration Statements contemplated by the
Registration Rights Agreement shall be effective and available for the sale for
all of the Registrable Securities (as defined in the Registration Rights
Agreement) then outstanding, together with the Common Stock to be issued on
such Amortization Date, in accordance with the terms of the Registration Rights
Agreement or (y) all shares of Common Stock issuable upon conversion of
the Notes shall be eligible for sale without restriction and without the need
for registration under any applicable federal or state securities laws, (iii) an
Authorized Share Failure shall not be in effect on the Amortization Date; and (iv) any
such payment of the Amortization Redemption Amount in Common Stock shall not
consist of more than 20% of the total dollar volume traded in the Common Stock
for the 20 Trading Days prior to the Amortization Date.

 

(d)           Special
Redemption Right.  Within two (2) trading
days after the closing of one or more Qualified Transactions resulting in
$25,000,000 (Twenty Five Million Dollars) in aggregate proceeds after
transaction expenses and placement agent or broker commissions or fees, the
Company will notify the Holder of said closing (a “Transaction Notice”).  Upon the closing of the Qualified
Transaction, the Holder may elect to have all or part of the outstanding
principal amount of this Note and all accrued but unpaid interest thereunder
redeemed within five (5) Trading Days of the Company’s receipt of written
notice of the Holder’s election to effect such redemption.  In order to
elect such redemption, the Holder must deliver written notice of redemption to
the Company within twenty (20) Trading Days after its receipt of the
Transaction Notice, and such written notice must be accompanied by the
surrender of the originally executed Note, which must be marked “cancelled”
(provided that in lieu of 

 

3

 

surrendering
the Notes (if not fully redeemed), the Holder may deliver a certification to
the Company affirming that the requisite principal amount of Notes is being
forfeited as a result of such redemption, in which case the change in the Notes
will be noted by book entry by the Company).  For purposes hereof, the
term “Qualified Transactions”
means (A) the sale of Liquidmetal Korea’s manufacturing facility in
Pyong-Taek, Republic of Korea and that the appropriate authorities or banks in
the Republic of Korea approve the transfer of such proceeds from Liquidmetal
Korea to the Company and/or (B) the raising of capital in a debt or equity
offering after the date hereof (subject to any restrictions or limitations
thereon set forth in the Purchase Agreement or the Notes).

 

(2)           INTEREST;
INTEREST RATE.  Interest on this Note
shall commence accruing on the Issuance Date and shall be computed on the basis
of a 365-day year and actual days elapsed and shall be payable in arrears on
the first day of each Calendar Quarter and on the Maturity Date during the
period beginning on the Issuance Date and ending on, and including, the
Maturity Date (each, an “Interest Date”)
with the first Interest Date being January 1, 2008.  Interest shall be payable on each Interest
Date in cash at the rate of 8.00% per annum (the “Interest Rate”).  Prior
to the payment of Interest on an Interest Date, Interest on this Note shall
accrue at the Interest Rate and be payable by way of inclusion of the Interest
in the Conversion Amount in accordance with Section 3(b)(i).  From and after the occurrence of an Event of
Default, the Interest Rate shall be increased so that the Interest Rate shall
be twelve percent (12.00%) per annum.  In
the event that such Event of Default is subsequently cured, the adjustment
referred to in the preceding sentence shall cease to be effective as of the
date of such cure; provided that the Interest as calculated at such increased
rate during the continuance of such Event of Default shall continue to apply to
the extent relating to the days after the occurrence of such Event of Default
through and including the date of cure of such Event of Default.

 

(3)           CONVERSION OF NOTES.  This
Note shall be convertible into shares of the Company’s common stock, par value
$0.001 per share (the “Common Stock”),
on the terms and conditions set forth in this Section 3.

 

(a)           Conversion Right. 
Subject to the provisions of Section 3(d), at any time or times on
or after the Issuance Date, the Holder shall be entitled to convert any portion
of the outstanding and unpaid Conversion Amount (as defined below) in increments
of at least $50,000 of Principal (or such lesser amount if such amount
represents the remaining Principal amount) into fully paid and nonassessable
shares of Common Stock in accordance with Section 3(c), at the Conversion
Rate (as defined below).  The Company
shall not issue any fraction of a share of Common Stock upon any
conversion.  If the issuance would result
in the issuance of a fraction of a share of Common Stock, the Company shall
round such fraction of a share of Common Stock up to the nearest whole
share.  The Company shall pay any and all
taxes that may be payable with respect to the issuance and delivery of Common
Stock upon conversion of any Conversion Amount.

 

4

 

(b)           Conversion Rate.  The number of shares of Common Stock issuable
upon conversion of any Conversion Amount pursuant to Section 3(a) shall
be determined by dividing (x) such Conversion Amount by (y) the
Conversion Price (as defined below) (the “Conversion
Rate”).

 

(i)            “Conversion Amount” means the sum of (A) the
portion of the Principal to be converted, redeemed or otherwise with respect to
which this determination is being made, plus (B) accrued and unpaid
Interest with respect to such Principal.

 

(ii)           “Conversion Price” means, as of any
Conversion Date (as defined below) or other date of determination, and subject
to adjustment as provided herein, $1.10.

 

(c)           Mechanics of
Conversion.

 

(i)            Optional
Conversion.  To convert any
Conversion Amount into shares of Common Stock on any date (a “Conversion Date”), the Holder shall (A) transmit
by facsimile (or otherwise deliver), for receipt on or prior to 5:00 p.m.,
New York Time, on such date, a copy of an executed notice of conversion in the
form attached hereto as Exhibit I (the “Conversion Notice”) to the Company and (B) if required
by Section 3(c)(iii), surrender this Note to a common carrier for delivery
to the Company as soon as practicable on or following such date (or an
indemnification undertaking with respect to this Note in the case of its loss,
theft or destruction).  On or before the
first Business Day following the date of receipt of a Conversion Notice, the
Company shall transmit by facsimile a confirmation of receipt of such
Conversion Notice to the Holder and the Company’s transfer agent (the “Transfer Agent”).  On or before the second Business Day
following the date of receipt of a Conversion Notice (the “Share Delivery Date”), the Company shall (X) credit
such aggregate number of shares of Common Stock to which the Holder shall be
entitled to the Holder’s or its designee’s balance account with Depository
Trust Company (“DTC”) through its
Deposit Withdrawal At Custodian system or (Y) if the Transfer Agent is not
participating in DTC Fast Automated Securities Transfer Program, issue and
deliver to the address as specified in the Conversion Notice, a certificate,
registered in the name of the Holder or its designee, for the number of shares
of Common Stock to which the Holder shall be entitled.  If this Note is physically surrendered for
conversion as required by Section 3(c)(iii) and the outstanding
Principal of this Note is greater than the Principal portion of the Conversion
Amount being converted, then the Company shall as soon as practicable and in no
event later than five Business Days after receipt of this Note and at its own
expense, issue and deliver to the holder a new Note (in accordance with Section 19(d))
representing the outstanding Principal not converted.  The Person or Persons entitled to receive the
shares of Common Stock issuable upon a conversion of this Note shall be treated
for all purposes as the record holder or holders of such shares of Common Stock
on the Conversion Date.

 

5

 

(ii)           Company’s
Failure to Timely Convert.  If the
Company shall fail to issue a certificate to the Holder or credit the Holder’s
balance account with DTC for the number of shares of Common Stock to which the
Holder is entitled upon conversion of any Conversion Amount on or prior to the
date which is five Business Days after the Conversion Date (a “Conversion Failure”), then (A) the
Company shall pay liquidated damages to the Holder for each day of such
Conversion Failure in an amount equal to 1.0%
of the product of (I) the sum of the number of shares of Common
Stock not issued to the Holder on or prior to the Share Delivery Date and to
which the Holder is entitled, and (II) the Closing Sale Price of the
Common Stock on the Share Delivery Date and (B) the Holder, upon written
notice to the Company, may void its Conversion Notice with respect to, and
retain or have returned, as the case may be, any portion of this Note that has
not been converted pursuant to such Conversion Notice; provided that the
voiding of a Conversion Notice shall not affect the Company’s obligations to
make any payments which have accrued prior to the date of such notice pursuant
to this Section 3(c)(ii) or otherwise.  In addition to the foregoing, if within three
(3) Trading Days after the Company’s receipt of the facsimile copy of a
Conversion Notice the Company shall fail to issue and deliver a certificate to
the Holder or credit the Holder’s balance account with DTC for the number of
shares of Common Stock to which the Holder is entitled upon such holder’s
conversion of any Conversion Amount, and if on or after such Trading Day the
Holder purchases (in an open market transaction or otherwise) Common Stock to
deliver in satisfaction of a sale by the Holder of Common Stock issuable upon
such conversion that the Holder anticipated receiving from the Company (a “Buy-In”), then the Company shall, within
five (5) Business Days after the Holder’s request and in the Holder’s
discretion, either (i) pay cash to the Holder in an amount equal to the
Holder’s total purchase price (including brokerage commissions and other
out-of-pocket expenses, if any) for the shares of Common Stock so purchased
(the “Buy-In Price”), at which
point the Company’s obligation to deliver such certificate (and to issue such
Common Stock) shall terminate, or (ii) promptly honor its obligation to
deliver to the Holder a certificate or certificates representing such Common
Stock and pay cash to the Holder in an amount equal to the excess (if any) of
the Buy-In Price over the product of (A) such number of shares of Common
Stock, times (B) the Closing Bid Price on the Conversion Date.

 

(iii)          Book-Entry.
Notwithstanding anything to the contrary set forth herein, upon conversion of
any portion of this Note in accordance with the terms hereof, the Holder shall
not be required to physically surrender this Note to the Company unless (A) the
full Conversion Amount represented by this Note is being converted or (B) the
Holder has provided the Company with prior written notice (which notice may be
included in a Conversion Notice) requesting physical surrender and reissue of
this Note.  The Holder and the Company
shall maintain records showing the Principal and Interest converted and the
dates of such conversions or shall use such other method, reasonably
satisfactory to the Holder and the Company, so as not to require physical
surrender of this Note upon conversion.

 

6

 

(iv)          Pro Rata
Conversion; Disputes.  In the event
that the Company receives a Conversion Notice from more than one holder of
Notes for the same Conversion Date and the Company can convert some, but not
all, of such portions of the Notes submitted for conversion, the Company,
subject to Section 3(d), shall convert from each holder of Notes electing
to have Notes converted on such date a pro rata amount of such holder’s portion
of its Notes submitted for conversion based on the principal amount of Notes
submitted for conversion on such date by such holder relative to the aggregate
principal amount of all Notes submitted for conversion on such date.  In the event of a dispute as to the number of
shares of Common Stock issuable to the Holder in connection with a conversion
of this Note, the Company shall issue to the Holder the number of shares of
Common Stock not in dispute and resolve such dispute in accordance with Section 24.

 

(d)           Limitations on
Conversions.

 

(i)            Beneficial
Ownership.  Unless waived by the
Holder upon no less than sixty one (61) days prior written notice to the
Company, the Company shall not effect any conversion of this Note pursuant to Section 3(a) to
the extent that after giving effect to such conversion the Holder (together
with the Holder’s affiliates) would beneficially own in excess of 4.99% of the
number of shares of Common Stock outstanding immediately after giving effect to
such conversion.  Even if the Holder
waives the limitation set forth in the preceding sentence, the Company shall in
no event effect any conversion of this Note, and the Holder of this Note shall
not have the right to convert any portion of this Note pursuant to Section 3(a),
to the extent that after giving effect to such conversion, the Holder (together
with the Holder’s affiliates) would beneficially own in excess of 9.99% of the
number of shares of Common Stock outstanding immediately after giving effect to
such conversion.  For purposes of the
foregoing sentences, the number of shares of Common Stock beneficially owned by
the Holder and its affiliates shall include the number of shares of Common
Stock issuable upon conversion of this Note with respect to which the
determination of such sentence is being made, but shall exclude the number of
shares of Common Stock which would be issuable upon (A) conversion of the
remaining, nonconverted portion of this Note beneficially owned by the Holder
or any of its affiliates and (B) exercise or conversion of the unexercised
or nonconverted portion of any other securities of the Company (including,
without limitation, any Other Notes or warrants) subject to a limitation on
conversion or exercise analogous to the limitation contained herein
beneficially owned by the Holder or any of its affiliates.  Except as set forth in the preceding
sentence, for purposes of this Section 3(d)(i), beneficial ownership shall
be calculated in accordance with Section 13(d) of the Securities
Exchange Act of 1934, as amended.  For
purposes of this Section 3(d)(i), in determining the number of outstanding
shares of Common Stock, the Holder may rely on the number of outstanding shares
of Common Stock as reflected in (x) the Company’s most recent Form 10-Q
or Form 10-K, (y) a more recent public announcement by the Company or
(z) any other notice by the Company or the Transfer Agent setting forth
the number of shares of Common Stock outstanding.  For any reason at any time, upon the written
or oral request of the Holder, the Company shall within two Business Days
confirm orally and in writing to the Holder the number of shares of Common
Stock then outstanding.  In any case, the
number of outstanding shares of Common Stock shall be determined after giving
effect to the conversion or exercise of securities of the Company, including
this Note, by the Holder or its affiliates since the date as of which such
number of outstanding shares of Common Stock was reported.

 

7

 

(ii)           Principal Market
Regulation.  The Company shall not be
obligated to issue any shares of Common Stock upon conversion of this Note if
the issuance of such shares of Common Stock would exceed that number of shares
of Common Stock that the Company may issue upon conversion of the Notes without
breaching the Company’s obligations under the rules or regulations of the
Principal Market (the “Exchange Cap”),
except that such limitation shall not apply in the event that the Company (A) obtains
the approval of its stockholders as required by the applicable rules of
the Principal Market for issuances of Common Stock in excess of such amount or (B) obtains
a written opinion from outside counsel to the Company that such approval is not
required, which opinion shall be reasonably satisfactory to the holders of the
Notes representing at least a majority of the principal amounts of the Notes
then outstanding.  Until such approval or
written opinion is obtained, no holders of Notes (the “Purchasers”) shall be issued, upon
conversion of Notes, shares of Common Stock in an amount greater than the
product of the Exchange Cap multiplied by a fraction, the numerator of which is
the principal amount of Original Notes issued to such Purchaser pursuant to the
Securities Purchase Agreement on the Issuance Date and the denominator of which
is the aggregate principal amount of all Original Notes issued to the
Purchasers pursuant to the Securities Purchase Agreement on the Issuance Date
(with respect to each Purchaser, the “Exchange
Cap Allocation”).  In the
event that any Purchaser shall sell or otherwise transfer any of such Purchaser’s
Notes, the transferee shall be allocated a pro rata portion of such Purchaser’s
Exchange Cap Allocation, and the restrictions of the prior sentence shall apply
to such transferee with respect to the portion of the Exchange Cap Allocation
allocated to such transferee.  In the
event that any holder of Notes shall convert all of such holder’s Notes into a
number of shares of Common Stock which, in the aggregate, is less than such
holder’s Exchange Cap Allocation, then the difference between such holder’s
Exchange Cap Allocation and the number of shares of Common Stock actually
issued to such holder shall be allocated to the respective Exchange Cap
Allocations of the remaining holders of Notes on a pro rata basis in proportion
to the aggregate principal amount of the Notes then held by each such holder.

 

(4)           RIGHTS UPON EVENT OF DEFAULT.

 

(a)           Event of Default.  Each
of the following events shall constitute an “Event
of Default”:

 

(i)            the Company’s
failure to pay to the Holder any amount of Principal or Interest when and as
due under this Note if such failure continues for a period of at least five
Business Days;

 

(ii)           the Company’s
failure to pay to the Holder any amounts other than Principal or Interest when
and as due under this Note, the Securities Purchase Agreement, or the 

 

8

 

Registration Rights Agreement, which failure is not cured within five
Business Days after notice of such default sent by the Holder to the Company;

 

(iii)          any default under, redemption of or acceleration prior to maturity of
any Indebtedness (as defined below) of the Company or any of its Subsidiaries
(as defined in the Securities Purchase Agreement) other than with respect to
any Other Notes and the Senior Indebtedness; provided that in the case of a
payment default of such Indebtedness, such default is not cured within
applicable cure periods; further provided that in the case of a non-payment
default of such Indebtedness that has not resulted in an acceleration or
redemption of such Indebtedness prior to its maturity, only upon acceleration
or redemption of such Indebtedness;

 

(iv)          the Company shall
fail to observe or perform any other material covenant or agreement contained
in the Securities Purchase Agreement, which failure is not cured within ten
Business Days after notice of such default sent by the Holder to the Company;

 

(v)           the Company or any
of its Subsidiaries, pursuant to or within the meaning of Title 11, U.S. Code,
or any similar Federal or state law for the relief of debtors (collectively, “Bankruptcy Law”), (A) commences a
voluntary case, (B) consents to the entry of an order for relief against
it in an involuntary case, (C) consents to the appointment of a receiver,
trustee, assignee, liquidator or similar official (a “Custodian”), or (D) makes a general assignment for the
benefit of its creditors;

 

(vi)          a court of competent
jurisdiction enters an order or decree under any Bankruptcy Law that (A) is
for relief against the Company or any of its Subsidiaries in an involuntary
case that remains undismissed for a period of 90 days, (B) appoints a
Custodian of the Company or any of its Subsidiaries that remains undischarged
or unstayed for a period of 90 days, or (C) orders the liquidation of the
Company or any of its Subsidiaries;

 

(vii)         a final judgment or
judgments for the payment of money aggregating in excess of $500,000 are
rendered against the Company or any of its Subsidiaries and which judgments are
not, within 60 days after the entry thereof, bonded, discharged or stayed
pending appeal, or are not discharged within 60 days after the expiration of
such stay; provided, however, that any judgment which is covered by insurance
or an indemnity from a credit worthy party shall not be included in calculating
the $500,000 amount set forth above;

 

(viii)        any breach or
failure to comply with Section 15 of this Note; or

 

(ix)           any Event of
Default (as defined in the Other Notes) occurs with respect to any Other Notes.

 

9

 

(b)           Redemption Right.  Promptly after the occurrence of an Event of
Default with respect to this Note or any Other Note, the Company shall deliver
written notice thereof via facsimile and overnight courier (an “Event of Default Notice”) to the
Holder.  At any time after the earlier of
the Holder’s receipt of an Event of Default Notice and the Holder becoming
aware of an Event of Default, the Holder may require the Company to redeem all
or any portion of this Note by delivering written notice thereof (the “Event of Default Redemption Notice”) to
the Company, which Event of Default Redemption Notice shall indicate the portion
of this Note the Holder is electing to redeem. 
Each portion of this Note subject to redemption by the Company pursuant
to this Section 4(b) shall be redeemed by the Company at a price
equal to the greater of (i) the Conversion Amount to be redeemed and (ii) the
product of (A) the Conversion Rate with respect to such Conversion Amount
in effect at such time as the Holder delivers an Event of Default Redemption
Notice and (B) the Closing Sale Price of the Common Stock on the date
immediately preceding such Event of Default (the “Event of Default Redemption Price”).  Redemptions required by this Section 4(b) shall
be made in accordance with the provisions of Section 12.

 

(5)           RIGHTS UPON
CHANGE OF CONTROL.

 

(a)           Change of Control.  Each of the following events shall constitute
a “Change of Control”:

 

(i)            the consolidation,
merger or other business combination (including, without limitation, a
reorganization or recapitalization) of the Company with or into another Person
(other than (A) a consolidation, merger or other business combination
(including, without limitation, reorganization or recapitalization) in which
holders of the Company’s voting power immediately prior to the transaction
continue after the transaction to hold, directly or indirectly, the voting
power of the surviving entity or entities necessary to elect a majority of the
members of the board of directors (or their equivalent if other than a
corporation) of such entity or entities, or (B) pursuant to a migratory
merger effected solely for the purpose of changing the jurisdiction of
incorporation of the Company);

 

(ii)           the sale or
transfer of all or substantially all of the Company’s assets; or

 

(iii)          a purchase, tender
or exchange offer made to and accepted by the holders of more than the 50% of
the outstanding shares of Common Stock.

 

No
sooner than 15 days nor later than 10 days prior to the consummation of a
Change of Control, but not prior to the public announcement of such Change of
Control, the Company shall deliver written notice thereof via facsimile and
overnight courier to the Holder (a “Change of
Control Notice”).

 

(b)           Assumption.  Prior to the consummation of any Change of
Control, the Company will secure from any Person purchasing the Company’s
assets or Common Stock or any successor resulting from such Change of Control
(in each case, an “Acquiring Entity”)
a written agreement (in form and substance satisfactory to the holders of Notes
representing at least a majority of the aggregate principal amount of the Notes
then outstanding) to deliver to 

 

10

 

each holder of Notes in exchange for such Notes, a security of the
Acquiring Entity evidenced by a written instrument substantially similar in
form and substance to the Notes, including, without limitation, having a
principal amount and interest rate equal to the principal amounts and the
interest rates of the Notes held by such holder, and satisfactory to the
holders of Notes representing at least a majority of the principal amount of
the Notes then outstanding.  In the event
that an Acquiring Entity is directly or indirectly controlled by a company or
entity whose common stock or similar equity interest is listed, designated or
quoted on a securities exchange or trading market, the holders of Notes
representing at least a majority of the aggregate principal amount of the Notes
then outstanding may elect to treat such Person as the Acquiring Entity for
purposes of this Section 5(b).

 

(c)           Redemption Right.  At any time during the period beginning after
the Holder’s receipt of a Change of Control Notice and ending on the date of
the consummation of such Change of Control (or, in the event a Change of
Control Notice is not delivered at least 10 days prior to a Change of Control,
at any time on or after the date which is 10 days prior to a Change of Control
and ending ten days after the consummation of such Change of Control), the
Holder may require the Company to redeem all or any portion of this Note by
delivering written notice thereof (“Change of
Control Redemption Notice”) to the Company, which Change of Control
Redemption Notice shall indicate the Conversion Amount the Holder is electing
to redeem; provided, however, that the Company shall not be under any
obligation to redeem all or any portion of this Note or to deliver the
applicable Change of Control Redemption Price unless and until the applicable
Change of Control is consummated.  The
portion of this Note subject to redemption pursuant to this Section 5
shall be redeemed by the Company in cash at a price equal to the greater of (i) the
sum of (x) the product of (A) the Applicable Percentage (as defined
below) and (B) the Conversion Amount being redeemed and (y) the
amount of any accrued but unpaid Interest on such Conversion Amount being redeemed
through the date of such redemption payment and (ii) the product of (x) the
Applicable Percentage and (y) the sum of (1) the product of (A) the
Conversion Amount being redeemed multiplied by (B) the quotient determined
by dividing (I) the aggregate cash consideration and the aggregate cash
value of any non-cash consideration per Common Share to be paid to the holders
of the Common Shares upon consummation of the Change of Control (any such
non-cash consideration in the form of securities to be valued at the higher of
the Closing Sale Price of such securities as of the Trading Day immediately
prior to the consummation of such Change of Control, the Closing Sale Price on
the Trading Day immediately following the public announcement of such proposed
Change of Control and the Closing Sale Price on the Trading Day immediately
prior to the public announcement of such proposed Change of Control) by (II) the
Conversion Price plus (2) the amount of any accrued but unpaid Interest on
such Conversion Amount being redeemed through the date of such redemption
payment, (the “Change of Control Redemption
Price”).  Redemptions required by this Section 5(c) shall
be made in accordance with the provisions of Section 12 and shall have
priority to payments to stockholders in connection with a Change of
Control.  For purposes of this Note, the
term “Applicable Percentage” means 120% if
the Change of Control is consummated on or before the first (1st)
anniversary of the Original Date, 115% if the Change of Control is consummated
after the first (1st) anniversary of the Original Date but on or
before the second (2nd) anniversary of the Original Date, and 110%
if the Change of Control is consummated at any time after the second (2nd)
anniversary of the Original Date.

 

11

 

(6)           RIGHTS UPON
ISSUANCE OF PURCHASE RIGHTS AND OTHER CORPORATE EVENTS.

 

(a)           Purchase Rights.  If
at any time the Company grants, issues or sells any Options, Convertible
Securities or rights to purchase stock, warrants, securities or other property
pro rata to the record holders of any class of Common Stock (the “Purchase Rights”), then the Holder will be
entitled to acquire, upon the terms applicable to such Purchase Rights, the
aggregate Purchase Rights which the Holder could have acquired if the Holder
had held the number of shares of Common Stock acquirable upon complete
conversion of this Note (without taking into account any limitations or
restrictions on the convertibility of this Note) immediately before the date on
which a record is taken for the grant, issuance or sale of such Purchase
Rights, or, if no such record is taken, the date as of which the record holders
of Common Stock are to be determined for the grant, issue or sale of such
Purchase Rights.

 

(b)           Other Corporate Events. Prior to the consummation of any
recapitalization, reorganization, consolidation, merger, spin-off or other
business combination (other than a Change of Control) pursuant to which holders
of Common Stock are entitled to receive securities or other assets with respect
to or in exchange for Common Stock (a “Corporate
Event”), the Company shall make appropriate provision to insure that
the Holder will thereafter have the right to receive upon a conversion of this
Note, (i) in addition to the shares of Common Stock receivable upon such
conversion, such securities or other assets to which the Holder would have been
entitled with respect to such shares of Common Stock had such shares of Common
Stock been held by the Holder upon the consummation of such Corporate Event or (ii) in
lieu of the shares of Common Stock otherwise receivable upon such conversion,
such securities or other assets received by the holders of Common Stock in
connection with the consummation of such Corporate Event in such amounts as the
Holder would have been entitled to receive had this Note initially been issued
with conversion rights for the form of such consideration (as opposed to shares
of Common Stock) at a conversion rate for such consideration commensurate with
the Conversion Rate.  Provision made
pursuant to the preceding sentence shall be in a form and substance
satisfactory to the holders of Notes representing at least a majority of the
aggregate principal amount of the Notes then outstanding.

 

(7)           RIGHTS UPON ISSUANCE OF OTHER SECURITIES.

 

(a)           Adjustment of
Conversion Price upon Issuance of Common Stock.  If and whenever on or after the Issuance
Date, the Company issues or sells, or in accordance with this Section 7(a) is
deemed to have issued or sold, any shares of Common Stock (including the
issuance or sale of shares of Common Stock owned or held by or for the account
of the Company, but excluding shares of Common Stock deemed to have been issued
or sold by the Company in connection with any Excluded Security) for a
consideration per share (the “New Securities
Issuance Price”) less than a price (the “Applicable Price”) equal to the Conversion Price in effect
immediately prior to such issue or sale (the foregoing a “Dilutive Issuance”),

 

12

 

then
immediately after such Dilutive Issuance, the Conversion Price then in effect
shall be reduced to an amount (rounded to the nearest cent) equal to the New
Securities Issuance Price.  For purposes
of determining the adjusted Conversion Price under this Section 7(a), the
following shall be applicable:

 

(i)            Issuance of
Options.  If the Company in any
manner grants or sells any Options and the lowest price per share for which one
share of Common Stock is issuable upon the exercise of any such Option or upon
conversion or exchange or exercise of any Convertible Securities issuable upon
exercise of such Option is less than the Applicable Price, then such share of
Common Stock shall be deemed to be outstanding and to have been issued and sold
by the Company at the time of the granting or sale of such Option for such
price per share.  For purposes of this Section 7(a)(i),
the “lowest price per share for which one share of Common Stock is issuable
upon the exercise of any such Option or upon conversion or exchange or exercise
of any Convertible Securities issuable upon exercise of such Option” shall be
equal to the sum of the lowest amounts of consideration (if any) received or
receivable by the Company with respect to any one share of Common Stock upon
granting or sale of the Option, upon exercise of the Option and upon conversion
or exchange or exercise of any Convertible Security issuable upon exercise of
such Option.  No further adjustment of
the Conversion Price shall be made upon the actual issuance of such Common
Stock or of such Convertible Securities upon the exercise of such Options or
upon the actual issuance of such Common Stock upon conversion or exchange or
exercise of such Convertible Securities.

 

(ii)           Issuance of
Convertible Securities.  If the Company
in any manner issues or sells any Convertible Securities and the lowest price
per share for which one share of Common Stock is issuable upon such conversion
or exchange or exercise thereof is less than the Applicable Price, then such
share of Common Stock shall be deemed to be outstanding and to have been issued
and sold by the Company at the time of the issuance of sale of such Convertible
Securities for such price per share.  For
the purposes of this Section 7(a)(ii), the “price per share for which one
share of Common Stock is issuable upon such conversion or exchange or exercise”
shall be equal to the sum of the lowest amounts of consideration (if any)
received or receivable by the Company with respect to any one share of Common
Stock upon the issuance or sale of the Convertible Security and upon the
conversion or exchange or exercise of such Convertible Security.  No further adjustment of the Conversion Price
shall be made upon the actual issuance of such Common Stock upon conversion or
exchange or exercise of such Convertible Securities, and if any such issue or
sale of such Convertible Securities is made upon exercise of any Options for
which adjustment of the Conversion Price had been or are to be made pursuant to
other provisions of this Section 7(a), no further adjustment of the
Conversion Price shall be made by reason of such issue or sale.  Notwithstanding anything in this Note to the
contrary, in the event that the Company agrees to decrease the conversion price
of any of its 7% Convertible Secured Promissory Notes due August 2007 in
connection with an agreement by the holder of any such notes to convert the
same, such decrease in the conversion price will not result in any adjustment
to the Conversion Price pursuant to this Section 7(a) of this Note.

 

13

 

(iii)          Change in Option
Price or Rate of Conversion.  If the
purchase price provided for in any Options, the additional consideration, if
any, payable upon the issue, conversion, exchange or exercise of any
Convertible Securities, or the rate at which any Convertible Securities are
convertible into or exchangeable or exercisable for Common Stock changes at any
time, the Conversion Price in effect at the time of such change shall be
adjusted to the Conversion Price which would have been in effect at such time
had such Options or Convertible Securities provided for such changed purchase
price, additional consideration or changed conversion rate, as the case may be,
at the time initially granted, issued or sold.

 

(iv)          Calculation of
Consideration Received.  In case any
Option is issued in connection with the issue or sale of other securities of
the Company, together comprising one integrated transaction in which no
specific consideration is allocated to such Options by the parties thereto, the
Options will be deemed to have been issued for a consideration of $.01.  If any Common Stock, Options or Convertible
Securities are issued or sold or deemed to have been issued or sold for cash,
the consideration received therefor will be deemed to be the net amount
received by the Company therefor.  If any
Common Stock, Options or Convertible Securities are issued or sold for a
consideration other than cash, the amount of the consideration other than cash
received by the Company will be the fair value of such consideration, except
where such consideration consists of securities, in which case the amount of
consideration received by the Company will be the Closing Sale Price of such
securities on the date of receipt.  If
any Common Stock, Options or Convertible Securities are issued to the owners of
the non-surviving entity in connection with any merger in which the Company is
the surviving entity, the amount of consideration therefor will be deemed to be
the fair value of such portion of the net assets and business of the
non-surviving entity as is attributable to such Common Stock, Options or
Convertible Securities, as the case may be. 
The fair value of any consideration other than cash or securities will
be determined jointly by the Company and the holders of Notes representing at
least a majority of the principal amounts of the Notes then outstanding.  If such parties are unable to reach agreement
within ten days after the occurrence of an event requiring valuation (the “Valuation Event”), the fair value of such
consideration will be determined within five Business Days after the tenth day
following the Valuation Event by an independent, reputable appraiser jointly
selected by the Company and the holders of Notes representing at least a
majority of the principal amounts of the Notes then outstanding.  The determination of such appraiser shall be
deemed binding upon all parties absent manifest error and the fees and expenses
of such appraiser shall be borne equally by the Company, on the hand, and the
holders of the Notes, on the other hand.

 

(v)           Record Date.  If the Company takes a record of the holders
of Common Stock for the purpose of entitling them (A) to receive a
dividend or other distribution payable in Common Stock, Options or in
Convertible Securities or (B) to subscribe for or purchase 

 

14

 

Common Stock, Options or Convertible Securities, then such record date
will be deemed to be the date of the issue or sale of the shares of Common
Stock deemed to have been issued or sold upon the declaration of such dividend
or the making of such other distribution or the date of the granting of such
right of subscription or purchase, as the case may be.

 

(b)           Adjustment of Conversion Price upon
Subdivision or Combination of Common Stock.  If the Company at any time
subdivides (by any stock split, stock dividend, recapitalization or otherwise)
one or more classes of its outstanding shares of Common Stock into a greater
number of shares, the Conversion Price in effect immediately prior to such
subdivision will be proportionately reduced. 
If the Company at any time combines (by combination, reverse stock split
or otherwise) one or more classes of its outstanding shares of Common Stock
into a smaller number of shares, the Conversion Price in effect immediately
prior to such combination will be proportionately increased.

 

(c)           Other Events.  If
any event occurs of the type contemplated by the provisions of this Section 7
but not expressly provided for by such provisions (including, without
limitation, the granting of stock appreciation rights, phantom stock rights or
other rights with equity features), then the Company’s Board of Directors will
make an appropriate adjustment in the Conversion Price so as to protect the
rights of the Holder under this Note; provided that no such adjustment will
increase the Conversion Price as otherwise determined pursuant to this Section 7.

 

(9)           COMPANY’S RIGHT OF MANDATORY CONVERSION.  (a) Mandatory
Conversion.  If at any time from and
after the Issuance Date, the Weighted Average Price of the Common Stock exceeds
250% of the conversion price of the Original Notes as of the Original Date
(subject to appropriate adjustments for stock splits, stock dividends, stock
combinations and other similar transactions after the Original Date) for each
of any 20 consecutive Trading Days (the “Mandatory
Conversion Measuring Period”) and the Conditions to Mandatory
Conversion (as set forth in Section 9(c)) are satisfied or waived in
writing by the Holder, the Company shall have the right to require the Holder
to convert all or any such portion of the Conversion Amount of this Note
designated in the Mandatory Conversion Notice into fully paid, validly issued
and nonassessable shares of Common Stock in accordance with Section 3(c) hereof
at the Conversion Rate as of the Mandatory Conversion Date (as defined below)
(a “Mandatory Conversion”).  The Company may exercise its right to require
conversion under this Section 9(a) by delivering within not more than
five Trading Days following the end of such Mandatory Conversion Measuring
Period a written notice thereof by facsimile and overnight courier to all, but
not less than all, of the holders of Notes and the Transfer Agent (the “Mandatory Conversion Notice” and the date
all of the holders received such notice is referred to as the “Mandatory Conversion Notice Date”).  The Mandatory Conversion Notice shall be
irrevocable.

 

15

 

(b)           Pro Rata Conversion Requirement.  If
the Company elects to cause a conversion of all or any portion of the
Conversion Amount of this Note pursuant to Section 9(a), then it must
simultaneously take the same action with respect to the Other Notes (except
that the Company is not required to take the same action with respect to the
Other Notes to the extent limited by Section 3(d) in this Note or
similar provisions under the Other Notes). 
If the Company elects to cause the conversion of this Note pursuant to Section 9(a) (or
similar provisions under the Other Notes) with respect to less than all of the
Conversion Amounts of the Notes then outstanding, then the Company shall
require conversion of a Conversion Amount from each of the holders of the Notes
equal to the product of (I) the aggregate Conversion Amount of Notes which
the Company has elected to cause to be converted pursuant to Section 9(a),
multiplied by (II) the fraction, the numerator of which is the sum of the
aggregate principal amount of the Original Notes purchased by such holder
pursuant to the Securities Purchase Agreement and the denominator of which is
the sum of the aggregate principal amount of the Original Notes purchased by
all holders pursuant to the Securities Purchase Agreement (except to the extent
limited by Section 3(d) in this Note or similar provisions under the
Other Notes) (such fraction with respect to each holder is referred to as its “Allocation Percentage,” and such amount
with respect to each holder is referred to as its “Pro Rata Conversion Amount”). 
In the event that the initial holder of any Notes shall sell or
otherwise transfer any of such holder’s Notes, the transferee shall be
allocated a pro rata portion of such holder’s Allocation Percentage.  The Mandatory Conversion Notice shall state (i) the
Trading Day selected for the Mandatory Conversion in accordance with Section 9(a),
which Trading Day shall be at least 10 Business Days but not more than 60
Business Days following the Mandatory Conversion Notice Date (the “Mandatory Conversion Date”), (ii) the
aggregate Conversion Amount of the Notes which the Company has elected to be
subject to mandatory conversion from all of the holders of the Notes pursuant
to this Section 9 (and analogous provisions under the Other Notes), (iii) each
holder’s Pro Rata Conversion Amount of the Conversion Amount of the Notes the
Company has elected to cause to be converted pursuant to this Section 9
(and analogous provisions under the Other Notes) and (iv) the number of
shares of Common Stock to be issued to such Holder as of the Mandatory
Conversion Date.  All Conversion Amounts
converted by the Holder after the Mandatory Conversion Notice Date shall reduce
the Conversion Amount of this Note required to be converted on the Mandatory
Conversion Date.  If the Company has
elected a Mandatory Conversion, the mechanics of conversion set forth in Section 3(c) shall
apply, to the extent applicable, as if the Company and the Transfer Agent had
received from the Holder on the Mandatory Conversion Date a Conversion Notice
with respect to the Conversion Amount being converted pursuant to the Mandatory
Conversion.

 

(c)           Conditions to
Mandatory Conversion.  For purposes
of this Section 9, “Conditions to
Mandatory Conversion” means  the
following conditions: (i) during the period beginning on the date that is
six months prior to the Mandatory Conversion Date and ending on and including
the Mandatory Conversion Date, the Company shall have delivered shares of
Common Stock upon any conversion of Conversion Amounts as set forth in Section 3(c)(i);
(ii) on each day during the period beginning on the first Trading Day of
the Mandatory Conversion Measuring Period and ending on and including the
Mandatory Conversion Date, the Common Stock shall be traded on the Principal
Market, the NASDAQ Global Market or Global Select Market, the NASDAQ Capital
Market, the New York Stock Exchange, or the American Stock Exchange; (iii) on
the Mandatory Conversion Date either (x) the Registration Statement or 

 

16

 

Registration Statements
contemplated by the Registration Rights Agreement shall be effective and
available for the sale for all of the Registrable Securities in accordance with
the terms of the Registration Rights Agreement or (y) all shares of Common
Stock issuable upon conversion of the Notes shall be eligible for sale without
restriction and without the need for registration under any applicable federal
or state securities laws; (iv) on the Mandatory Conversion Date, an Authorized
Share Failure shall not be in effect; and (v) any such payment of the
Conversion Amount in Common Stock shall not consist of more than 20% of the
total dollar volume traded in the Common Stock for the 20 Trading Days prior to
the Mandatory Conversion Date.

 

(10)         NONCIRCUMVENTION.  The Company hereby covenants and agrees that
the Company will not, by amendment of its Certificate of Incorporation or
through any reorganization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities, or any other voluntary action, avoid
or seek to avoid the observance or performance of any of the terms of this
Note, and will at all times in good faith carry out all of the provisions of
this Note and take all action as may be required to protect the rights of the
Holder of this Note.

 

(11)         RESERVATION OF
AUTHORIZED SHARES.

 

(a)           Reservation.  The Company shall initially reserve out of
its authorized and unissued Common Stock a number of shares of Common Stock for
each of the Notes equal to 100% of the Conversion Rate with respect to the
Conversion Amount of each such Note as of the Issuance Date.  Thereafter, the Company, so long as any of
the Notes are outstanding, shall use commercially reasonable efforts to reserve
and keep available out of its authorized and unissued Common Stock, solely for
the purpose of effecting the conversion of the Notes, 100% of the number of
shares of Common Stock as shall from time to time be necessary to effect the
conversion of all of the Notes then outstanding (without regard to any
limitations on conversions) (the “Required
Reserve Amount”).  The number
of shares of Common Stock reserved for conversions of the Notes shall be
allocated pro rata among the holders of the Notes based on the principal amount
of the Notes held by each holder at the time of Issuance Date or increase in
the number of reserved shares, as the case may be (the “Authorized Share Allocation”).  In the event that a holder shall sell or
otherwise transfer any of such holder’s Notes, each transferee shall be
allocated a pro rata portion of such holder’s Authorized Share Allocation.  Any shares of Common Stock reserved and
allocated to any Person which ceases to hold any Notes shall be allocated to
the remaining holders of Notes, pro rata based on the principal amount of the
Notes then held by such holders.

 

(b)           Insufficient
Authorized Shares.  If at any time
while any of the Notes remain outstanding the Company does not have a
sufficient number of authorized and unreserved shares of Common Stock to satisfy
its obligation to reserve for issuance upon conversion of the Notes at least a
number of shares of Common Stock equal to the Required Reserve Amount (an “Authorized Share Failure”), then the
Company shall as soon as practicable use commercially reasonable efforts to
increase the Company’s authorized shares of Common Stock to an amount
sufficient to allow the Company to reserve the Required Reserve Amount for the
Notes then outstanding.

 

17

 

(12)         HOLDER’S REDEMPTIONS.

 

(a)           Mechanics.  In the event that the Holder
has sent an Event of Default Redemption Notice or a Change of Control
Redemption Notice to the Company pursuant to Section 4(b) or Section 5(c),
respectively (each, a “Redemption Notice”),
the Holder shall promptly submit this Note to the Company.  If the Holder has submitted an Event of
Default Redemption Notice in accordance with Section 4(b), the Company
shall deliver the applicable Event of Default Redemption Price to the Holder
within five Business Days after the Company’s receipt of the Holder’s Event of
Default Redemption Notice.  If the Holder
has submitted a Change of Control Redemption Notice in accordance with Section 5(c),
the Company shall deliver the applicable Change of Control Redemption Price to
the Holder concurrently with the consummation of such Change of Control if such
notice is received prior to the consummation of such Change of Control and
within five Business Days after the Company’s receipt of such notice if such
notice is received after the consummation of such Change of Control.  With respect to an Amortization Redemption,
the Company shall deliver the applicable Amortization Redemption Amount to the
Holder within five Business Days after the end of the applicable month for such
Amortization Redemption.  In the event of
a redemption of less than all of the Conversion Amount of this Note, the
Company shall promptly cause to be issued and delivered to the Holder, at the
Holder’s request, a new Note (in accordance with Section 19(d))
representing the outstanding Principal which has not been redeemed.  In the event that the Company does not pay
the Event of Default Redemption Price, the Change of Control Redemption Price,
or the Amortization Redemption Amount (each, the “Redemption Price”), as applicable, to the Holder (or deliver
any Common Stock to be issued pursuant to a Redemption Notice) within the time
period required, at any time thereafter and until the Company pays such unpaid
Redemption Price (and issues any Common Stock required pursuant to a Redemption
Notice) in full, the Holder shall have the option, in lieu of redemption, to
require the Company to promptly return to the Holder all or any portion of this
Note representing the Conversion Amount that was submitted for redemption and
for which the applicable Redemption Price (or any Common Stock required to be
issued pursuant to a Redemption Notice) has not been paid.  Upon the Company’s receipt of such notice, (x) the
Redemption Notice shall be null and void with respect to such Conversion
Amount, (y) the Company shall immediately return this Note, or issue a new
Note (in accordance with Section 19(d)) to the Holder representing such
Conversion Amount and (z) the Conversion Price of this Note or such new
Notes shall be adjusted to the lesser of (A) the Conversion Price as in
effect on the date on which the Redemption Notice is voided and (B) the
Closing Bid Price on the date on which the Redemption Notice is voided.

 

(b)           Redemption by
Other Holders.  Upon the Company’s receipt
of notice from any of the holders of the Other Notes for redemption or
repayment as a result of an event or occurrence substantially similar to the
events or occurrences described in Section 4(b) or Section 5(c) (each,
an “Other Redemption Notice”), the
Company shall immediately forward to the Holder by facsimile a copy of such
notice.  If the Company receives a
Redemption Notice and one or more Other Redemption Notices during the seven
Business Day period beginning on and including the date which is three Business
Days prior to the Company’s receipt of the 

 

18

 

Holder’s Redemption Notice and ending on and including the date which
is three Business Days after the Company’s receipt of the Holder’s Redemption
Notice and the Company is unable to redeem all principal, interest and other
amounts designated in such Redemption Notice and such Other Redemption Notices
received during such seven Business Day period, then the Company shall redeem a
pro rata amount from each holder of the Notes (including the Holder) based on
the principal amount of the Notes submitted for redemption pursuant to such
Redemption Notice and such Other Redemption Notices received by the Company
during such seven Business Day period.

 

(13)         SUBORDINATION TO SENIOR INDEBTEDNESS.

 

(a)           General.  The Company and the Holder
covenant and agree that this Note shall be subject to the provisions of this Section 13
and to the extent and in the manner set forth in this Section 13, the
indebtedness represented by this Note and the payment of Principal, Interest,
the Redemption Price, and any redemption amount, liquidated damages, fees,
expenses, or any other amounts in respect of this Note are hereby expressly
made subordinate and junior and subject in right of payment to the prior
payment in full in cash of all Senior Indebtedness of the Company now
outstanding or hereinafter incurred.

 

(b)           No Payment if Default Under Senior
Indebtedness.

 

(i)            [Intentionally left blank]

 

(ii)           No cash payment on account of Principal or Redemption Price of, or
Interest on, this Note or any other payment payable with respect to this Note
shall be made, and no portion of this Note shall be redeemed or purchased
directly or indirectly by the Company, if at the time of such payment or
purchase or immediately after giving effect thereto, (A) a default in the
payment of principal, premium, if any, interest or other obligations in respect
of any Senior Indebtedness having either an outstanding principal balance or a
commitment to lend greater than $500,000 (“Designated Senior Debt”)
occurs and is continuing (or, in the case of Senior Indebtedness for which
there is a period of grace, in the event of such a default that continues
beyond the period of grace, if any, specified in the instrument evidencing such
Senior Indebtedness) (a “Payment Default”),
unless and until such Payment Default shall have been cured or waived or shall
have ceased to exist or (B) the Company shall have received notice (a “Payment Blockage Notice”) from the holder or holders of
Designated Senior Debt that there exists under such Designated Senior Debt a
default, which shall not have been cured or waived, permitting the holder or
holders thereof to declare such Designated Senior Debt due and payable, but only
for the period (the “Payment Blockage Period”)
commencing on the date of receipt of the Payment Blockage Notice and ending on
the earlier of (a) the date such default shall have been cured or waived,
or (b) the 180th day immediately following the Company’s receipt of such
Payment Blockage Notice.  The Company
shall resume payments on and distributions in respect of this Note, including
any past scheduled payments of the principal of (and premium, if any) and
interest on this Note to which the 

 

19

 

Holder would have been entitled but for the provisions of this Section 13(b)(ii) in
the case of a Payment Default, within five (5) Business Days of the date upon
which such Payment Default is cured or waived or ceases to exist (and if
payment is made within such time period, any Event of Default with respect to
such nonpayment shall be cured).  In
addition, notwithstanding clauses (A) and (B) of this subsection
(ii), unless the holders of Designated Senior Debt shall have accelerated the
maturity of such Designated Senior Debt or there is a Payment Default, the
Company shall resume payments on this Note within (5) Business Days after the
end of each Payment Blockage Period.  In
any consecutive 365-day period, there shall be (i) no more than three
Payment Blockage Notices given in the aggregate on this Note and the Other
Notes, irrespective of the number of defaults with respect to Designated Senior
Debt during such period, and (ii) at least 90 days during which no Payment
Blockage Period shall be in effect.

 

(c)           Payment upon
Dissolution, Etc.  In the event of
any bankruptcy, insolvency, reorganization, receivership, composition,
assignment for benefit of creditors or other similar proceeding initiated by or
against the Company or any dissolution or winding up or total or partial
liquidation or reorganization of the Company (being hereinafter referred to as
a “Proceeding”), the Holder agrees
that such Holder shall, upon request of a holder of Senior Indebtedness, and at
such holder of Senior Indebtedness’ own expense, take all reasonable actions
(including but not limited to the execution and filing of documents and the
giving of testimony in any Proceeding, whether or not such testimony could have
been compelled by process) necessary to prove the full amount of all its claims
in any Proceeding, and the Holder shall not waive any claim in any Proceeding
without the written consent of such holder. 
If the Holder does not file a proper proof of claim or proof of debt in
the form required in any Proceeding at least thirty (30) days before the
expiration of the time to file such claim, the holders of any Senior
Indebtedness are hereby authorized to file an appropriate claim for and on
behalf of the Holder.

 

The
Holder shall retain the right to vote and otherwise act with respect to the
claims under this Note (including, without limitation, the right to vote to
accept or reject any plan of partial or complete liquidation, reorganization,
arrangement, composition or extension); provided
that the Holder shall not vote with respect to any such plan or take any other
action in any way so as to (i) contest the validity of any Senior
Indebtedness or any collateral therefor or guaranties thereof, (ii) contest
the relative rights and duties of any of the lenders under the Senior
Indebtedness established in any instruments or agreement creating or evidencing
the Senior Indebtedness with respect to any of such collateral or guaranties,
or (iii) contest the Holders’ obligations and agreements set forth in this
Section 13.

 

Upon
payment or distribution to creditors in a Proceeding of assets of the Company
of any kind or character, whether in cash, property or securities, all
principal and interest due upon any Senior Indebtedness shall first be paid in
full before the Holder shall be entitled to receive or, if received, to retain
any payment or distribution on account of this Note, and upon any such
Proceeding, any payment or distribution of assets of the Company of any kind or
character, whether in cash, property or securities, to which the Holder would
be entitled except for the 

 

20

 

provisions
of this Section 13 shall be paid by the Company or by any receiver,
trustee in bankruptcy, liquidating trustee, agent or other Person making such
payment or distribution, or by the Holder who shall have received such payment
or distribution, directly to the holders of the Senior Indebtedness (pro rata
to each such holder on the basis of the respective amounts of such Senior
Indebtedness held by such holder) or their representatives to the extent
necessary to pay all such Senior Indebtedness in full after giving effect to
any concurrent payment or distribution to or for the holders of such Senior
Indebtedness, before any payment or distribution is made to the Holder or any
holders of the Notes.

 

(d)           Payments on Notes.  Subject to Sections 13(b) and 13(c), the
Company may make regularly scheduled payments of the Principal of, or Interest
on, this Note or any other payment payable with respect to this Note, if at the
time of payment, and immediately after giving effect thereto, there exists no
Payment Default or a Payment Blockage Period.

 

(e)           Certain Rights.  Nothing contained in this Section 13 or
elsewhere in this Note is intended to or shall impair, as among the Company,
its creditors including the holders of Senior Indebtedness and the Holder, the
right, which is absolute and unconditional, of the Holder to convert this Note
in accordance herewith.

 

(f)            Subrogation.  Subject to payment in full in cash of all
Senior Indebtedness, the rights of the Holder shall be subrogated to the rights
of the holders of Senior Indebtedness to receive payments or distributions of
the assets of the Company made on such Senior Indebtedness until all principal
and interest on this Note shall be paid in full in cash; and for purposes of
such subrogation, no payments or distributions to the holders of Senior
Indebtedness of any cash, property or securities to which the Holder would be
entitled except for the subordination provisions of this Section 13 shall,
as between the Holder and the Company and/or its creditors other than the
holders of the Senior Indebtedness, be deemed to be a payment on account of the
Senior Indebtedness.

 

(g)           Rights of Holders
Unimpaired.  The provisions of this Section 13
are and are intended solely for the purposes of defining the relative rights of
the Holder and the holders of Senior Indebtedness and nothing in this Section 13
shall impair, as between the Company and the Holder, the obligation of the
Company, which is unconditional and absolute, to pay to the Holder the
principal thereof (and premium, if any) and interest thereon, in accordance
with the terms of this Note.

 

(h)           Holders of Senior
Indebtedness.  These provisions
regarding subordination will constitute a continuing offer to all Persons who,
in reliance upon such provisions, become holders of, or continue to hold,
Senior Indebtedness; such provisions are made for the benefit of the holders of
Senior Indebtedness, and such holders are hereby made obligees under such
provisions to the same extent as if they were named therein, and they or any of
them may proceed to enforce such subordination and no amendment or modification
of the provisions contained herein shall diminish the rights of such holders
unless such holders have 

 

21

 

agreed in writing thereto.  The
holders of Senior Indebtedness may, at any time and from time to time, without
the consent of or notice to the Holder, without incurring responsibility to the
Holder and without impairing or releasing the subordination provisions of this Section 13,
(i) subject to the limitations set forth herein, increase the amount of,
change the manner, terms or place of payment of, or renew or alter, any Senior
Indebtedness, or otherwise amend, modify, restate or supplement the same
(provided that any such modified indebtedness continues to be constitute Senior
Indebedness within the meaning of this Agreement), (ii) sell, exchange or
release any collateral mortgaged, pledged or otherwise securing the Senior
Indebtedness, (iii) release any Person liable in any manner for the Senior
Indebtedness and (iv) exercise or refrain from exercising any rights
against the Company or any other Person.

 

(i)            Proceeds Held in
Trust.  In the event that
notwithstanding the foregoing, any payment or distribution of assets of the
Company of any kind or character, whether in cash, property or securities
(including, without limitation, by way of setoff or otherwise) prohibited by
the provisions hereof shall be received by the Holder before all Senior
Indebtedness if paid in full in cash, such payment or distribution shall be
held in trust for the benefit of and shall be paid over or delivered to the
holders of Senior Indebtedness, as their respective interests may appear, as
calculated by the Company, for application to, or to be held as collateral for,
the payment of any Senior Indebtedness remaining unpaid to the extent necessary
to pay all Senior Indebtedness in full in cash after giving effect to any
concurrent payment or distribution to or for the holders of such Senior
Indebtedness.

 

(j)            Blockage of
Remedies.  During any Payment Default
or any Payment Blockage Period, if an Event of Default has occurred and is
continuing under this Note, the Holder will not commence or join with any
creditor of the Company in asserting or commencing any proceedings to collect
or enforce its rights hereunder or take any action to foreclose or realize upon
the indebtedness hereunder for a period beginning on the date of such Event of
Default and ending on the first to occur of (i) the date that is 180 days
following the date that the holders of the Senior Indebtedness are notified of
such Event of Default or (ii) the date such Payment Default is cured,
waived or ceases to exist or the date such Payment Blockage Period ends, as the
case may be; provided, however, that until all of the Senior
Indebtedness shall have been paid in full in cash, any payments, distributions
or proceeds received by the Holder resulting from the exercise of any action to
collect or enforce any right or remedy available to the Holder shall be subject
to the terms of this Note.

 

(k)           Subsequent Senior
Indebtedness Requested Modifications. 
In connection with the incurrence of any future Senior Indebtedness, the
Holder agrees that it shall act reasonably and negotiate in good faith any
modifications to the provisions of this Section 13 reasonably requested by
the holder of such Senior Indebtedness; provided that nothing in this section
shall restrict the holders of Notes representing at least a majority of the
aggregate principal amount of the Notes then outstanding from changing or
amending this Section 13 pursuant to Section 17 hereof.

 

22

 

(l)            Failure to Make
Payment.  In the event that the
Company is prohibited or restricted from making any payment required under
under this Note by reason of the provisions of this Section 13, such prohibition
or restriction shall not preclude the failure to make such payment from being
an Event of Default under Section 4(a) of this Note.

 

(14)         VOTING RIGHTS.  The Holder shall have no voting rights as the
holder of this Note, except as required by law, including but not limited to
the Delaware General Corporation Law, and as expressly provided in this Note.

 

(15)         RANK; ADDITIONAL
INDEBTEDNESS; LIENS.

 

(a)           Rank.      All payments due under this Note (a) shall rank pari passu with all Other Notes (“Pari Passu Indebtedness”), (b) shall
be subordinate in right of payment to the prior payment of all existing and
future Senior Indebtedness and (c) shall be senior to all other
Indebtedness of the Company and its Subsidiaries, other than Senior
Indebtedness and Pari Passu Indebtedness.

 

(b)           Incurrence
of Senior Indebtedness.  So long as
this Note is outstanding, the Company shall not, and the Company shall not
permit any of its Subsidiaries to, directly or indirectly, incur or guarantee,
assume or suffer to exist any Indebtedness which shall rank senior to the Notes
other than Senior Indebtedness.

 

(c)           Existence
of Liens.  So long as this Note is
outstanding, the Company shall not, and the Company shall not permit any of its
Subsidiaries to, directly or indirectly, allow or suffer to exist any mortgage,
lien, pledge, charge, security interest or other encumbrance upon or in any
property or assets (including accounts and contract rights) owned by the
Company or any of its Subsidiaries (collectively, “Liens”) other than Permitted Liens.  As used herein, “Permitted Liens” means (i) Liens incurred to secure
Senior Indebtedness, (ii) Liens on fixed or capital assets acquired,
constructed or improved by the Company or any Subsidiary, to the extent of
Indebtedness incurred within thirty days for such acquisition, construction or
improvement and incurred within thirty days of such acquisition, construction
or improvement, (iii) purchase money Liens, or (iv) carriers’,
warehousemen’s, mechanics’, materialmen’s, repairmen’s and other similar Liens
imposed by law.

 

(d)           Restricted
Payments.  The Company shall not, and
the Company shall not permit any of its Subsidiaries to, directly or
indirectly, redeem, defease, repurchase, repay or make any payments in respect
of, by the payment of cash or cash equivalents (in whole or in part, whether by
way of open market purchases, tender offers, private transactions or
otherwise), all or any portion of any Indebtedness, other than Senior
Indebtedness or Pari Passu Indebtedness, whether by way of payment in respect
of principal of (or premium, if any) or interest on, such Indebtedness if at
the time such payment is due or is otherwise made or, after giving effect to
such payment, an event constituting an Event of Default has occurred and is continuing.

 

23

 

(16)         PARTICIPATION.  The Holder, as the holder of this Note, shall
be entitled to such dividends paid and distributions made to the holders of
Common Stock (each, a “Distribution”),
in each such case to the extent of the Distribution as if the Holder had
converted this Note into Common Stock (without regard to any limitations on
conversion herein or elsewhere) and had held such shares of Common Stock on the
record date for such dividends and distributions.  Payments (if any) under the preceding
sentence shall be made concurrently with the dividend or distribution to the
holders of Common Stock.

 

(17)         VOTE TO ISSUE, OR
CHANGE THE TERMS OF, NOTES.  The
affirmative vote at a meeting duly called for such purpose or the written
consent without a meeting, of the holders of Notes representing not less than a
majority of the aggregate principal amount of the then outstanding Notes, shall
be required for any change or amendment to this Note or the Other Notes
provided such change or amendment is consented to by the Company, which such
consent may be granted or withheld in the sole discretion of the Company.

 

(18)         TRANSFER.  This Note may be offered, sold, assigned or
transferred by the Holder without the consent of the Company, subject only to
the provisions of Section 2(f) of the Securities Purchase Agreement.

 

(19)         REISSUANCE OF THIS
NOTE.

 

(a)           Transfer.  If this Note is to be
transferred, the Holder shall surrender this Note to the Company, whereupon the
Company will forthwith issue and deliver upon the order of the Holder a new
Note (in accordance with Section 19(d)), registered as the Holder may
request, representing the outstanding Principal being transferred by the Holder
and, if less then the entire outstanding Principal is being transferred, a new
Note (in accordance with Section 19(d)) to the Holder representing the
outstanding Principal not being transferred. 
The Holder and any assignee, by acceptance of this Note, acknowledge and
agree that, by reason of the provisions of Section 3(c)(iii) and this
Section 19(a), following conversion or redemption of any portion of this
Note, the outstanding Principal represented by this Note may be less than the
Principal stated on the face of this Note.

 

(b)           Lost, Stolen or Mutilated Note.  Upon
receipt by the Company of evidence reasonably satisfactory to the Company of
the loss, theft, destruction or mutilation of this Note, and, in the case of
loss, theft or destruction, of any indemnification undertaking by the Holder to
the Company in customary form and, in the case of mutilation, upon surrender
and cancellation of this Note, the Company shall execute and deliver to the
Holder a new Note (in accordance with Section 19(d)) representing the
outstanding Principal.

 

(c)           Note Exchangeable for Different Denominations.  This
Note is exchangeable, upon the surrender hereof by the Holder at the principal
office of the Company, for a new Note or Notes (in accordance with Section 19(d) and
in principal amounts of at least $100,000) representing in the aggregate the
outstanding Principal of this Note, and each such new Note will represent such
portion of such outstanding Principal as is designated by the Holder at the
time of such surrender.

 

24

 

(d)           Issuance of New Notes.  Whenever the Company is required to issue a
new Note pursuant to the terms of this Note, such new Note (i) shall be of
like tenor with this Note, (ii) shall represent, as indicated on the face
of such new Note, the Principal remaining outstanding (or in the case of a new
Note being issued pursuant to Section 19(a) or Section 19(c),
the Principal designated by the Holder which, when added to the principal
represented by the other new Notes issued in connection with such issuance,
does not exceed the Principal remaining outstanding under this Note immediately
prior to such issuance of new Notes), (iii) shall have an issuance date, as
indicated on the face of such new Note, which is the same as the Issuance Date
of this Note, (iv) shall have the same rights and conditions as this Note, and (v) shall
represent accrued Interest on the Principal and Interest of this Note, from the
Issuance Date.

 

(20)                            REMEDIES, CHARACTERIZATIONS, OTHER
OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF.  The remedies provided in this
Note shall be cumulative and in addition to all other remedies available under
this Note, the Securities Purchase Agreement and the Registration Rights
Agreement, at law or in equity (including a decree of specific performance and/or
other injunctive relief), and nothing herein shall limit the Holder’s right to
pursue actual and consequential damages for any failure by the Company to
comply with the terms of this Note. 
Amounts set forth or provided for herein with respect to payments,
conversion and the like (and the computation thereof) shall be the amounts to
be received by the Holder and shall not, except as expressly provided herein,
be subject to any other obligation of the Company (or the performance thereof).  The Company acknowledges that a breach by it
of its obligations hereunder will cause irreparable harm to the Holder and that
the remedy at law for any such breach may be inadequate.  The Company therefore agrees that, in the
event of any such breach or threatened breach, the Holder shall be entitled, in
addition to all other available remedies, to an injunction restraining any
breach, without the necessity of showing economic loss and without any bond or
other security being required.

 

(21)                            PAYMENT OF COLLECTION, ENFORCEMENT AND OTHER
COSTS.  If (a) this Note is placed in the hands
of an attorney for collection or enforcement or is collected or enforced
through any legal proceeding or the Holder otherwise takes action to collect
amounts due under this Note or to enforce the provisions of this Note or (b) there
occurs any bankruptcy, reorganization, receivership of the Company or other
proceedings affecting Company creditors’ rights and involving a claim under
this Note, then the Company shall pay the costs incurred by the Holder for such
collection, enforcement or action or in connection with such bankruptcy,
reorganization, receivership or other proceeding, including, but not limited
to, attorneys’ fees and disbursements.

 

(22)                            CONSTRUCTION; HEADINGS.  This
Note shall be deemed to be jointly drafted by the Company and all the
Purchasers and shall not be construed against any person as the drafter
hereof.  The headings of this Note are
for convenience of reference and shall not form part of, or affect the
interpretation of, this Note.

 

25

 

(23)                            FAILURE OR INDULGENCE NOT WAIVER.  No
failure or delay on the part of the Holder in the exercise of any power, right
or privilege hereunder shall operate as a waiver thereof, nor shall any single
or partial exercise of any such power, right or privilege preclude other or
further exercise thereof or of any other right, power or privilege.

 

(24)                            DISPUTE RESOLUTION.  In
the case of a dispute as to the determination of the Redemption Price or the
arithmetic calculation of the Conversion Rate or the Redemption Price, the
Company shall submit the disputed determinations or arithmetic calculations via
facsimile within one Business Day of receipt of the Conversion Notice or
Redemption Notice or other event giving rise to such dispute, as the case may
be, to the Holder.  If the Holder and the
Company are unable to agree upon such determination or calculation within one
Business Day of such disputed determination or arithmetic calculation being submitted
to the Holder, then the Company shall, within one Business Day submit via
facsimile (a) the disputed determination of the Closing Bid Price or the
Closing Sale Price to an independent, reputable investment bank selected by the
Company and approved by the Holder or (b) the disputed arithmetic
calculation of the Conversion Rate or the Redemption Price to the Company’s
independent, outside accountant.  The
Company, at the Company’s expense, shall cause the investment bank or the
accountant, as the case may be, to perform the determinations or calculations
and notify the Company and the Holder of the results no later than five
Business Days from the time it receives the disputed determinations or
calculations.  Such investment bank’s or
accountant’s determination or calculation, as the case may be, shall be binding
upon all parties absent demonstrable error.

 

(25)                            NOTICES; PAYMENTS.

 

(a)           Notices.  Whenever notice is required to
be given under this Note, unless otherwise provided herein, such notice shall be
given in accordance with Section 9(f) of the Securities Purchase
Agreement.  The Company shall provide the
Holder with prompt written notice of all actions taken pursuant to this Note,
including in reasonable detail a description of such action and the reason
therefore.  Without limiting the
generality of the foregoing, the Company will give written notice to the Holder
(i) immediately upon any adjustment of the Conversion Price, setting forth
in reasonable detail, and certifying, the calculation of such adjustment and (ii) at
least twenty days prior to the date on which the Company closes its books or
takes a record (A) with respect to any dividend or distribution upon the
Common Stock, (B) with respect to any pro rata subscription offer to
holders of Common Stock or (C) for determining rights to vote with respect
to any Change of Control, dissolution or liquidation, provided in each case
that such information shall be made known to the public prior to or in
conjunction with such notice being provided to the Holder.  Notwithstanding the foregoing, Section 4(i) of
the Securities Purchase Agreement shall apply to all notices given pursuant to
this Note.

 

(b)           Payments.  Whenever any payment of cash
is to be made by the Company to any Person pursuant to this Note, such payment
shall be made in lawful money of the United States of America by a check drawn
on the account of the Company and sent via overnight courier service to such
Person at such address as previously provided to the Company 

 

26

 

in
writing (which address, in the case of each of the Purchasers, shall initially
be as set forth on the Schedule of Buyers attached to the Securities Purchase
Agreement); provided that the Holder may elect to receive a payment of cash via
wire transfer of immediately available funds by providing the Company with
prior written notice setting out such request and the Holder’s wire transfer
instructions.  Whenever any amount
expressed to be due by the terms of this Note is due on any day which is not a
Business Day, the same shall instead be due on the next succeeding day which is
a Business Day and, in the case of any Interest Date which is not the date on
which this Note is paid in full, the extension of the due date thereof shall
not be taken into account for purposes of determining the amount of Interest
due on such date.

 

(26)                            CANCELLATION. 
After all Principal, accrued Interest and other amounts at any time owed
on this Note has been paid in full, this Note shall automatically be deemed
canceled, shall be surrendered to the Company for cancellation and shall not be
reissued.

 

(27)                            WAIVER OF NOTICE.  To
the extent permitted by law, the Company hereby waives demand, notice, protest
and all other demands and notices in connection with the delivery, acceptance,
performance, default or enforcement of this Note and the Securities Purchase
Agreement.

 

(28)                            GOVERNING LAW.  This
Note shall be construed and enforced in accordance with, and all questions
concerning the construction, validity, interpretation and performance of this
Note shall be governed by, the internal laws of the State of New York, without
giving effect to any choice of law or conflict of law provision or rule (whether
of the State of New York or any other jurisdictions) that would cause the
application of the laws of any jurisdictions other than the State of New York.

 

(29)                            CERTAIN DEFINITIONS.  For
purposes of this Note, the following terms shall have the following meanings:

 

(a)           “Approved Stock Plan” means any employee benefit, option or
incentive plan which has been approved by the Board of Directors of the
Company, pursuant to which the Company’s securities may be issued to any
employee, consultant, officer or director for services provided to the Company.

 

(b)           “Bloomberg”
means Bloomberg Financial Markets.

 

(c)           “Business Day” means any day other than Saturday, Sunday or
other day on which commercial banks in The City of New York are authorized or
required by law to remain closed.

 

(d)           “Calendar Quarter” means each of: the period beginning on and
including January 1 and ending on and including March 31; the period
beginning on and including April 1 and ending on and including June 30;
the period beginning on and including July 1 and ending on and including September 30;
and the period beginning on and including October 1 and ending on and
including December 31.

 

27

 

(e)           “Closing
Bid Price” and “Closing Sale Price”
means, for any security as of any date, the last closing bid price and last
closing trade price, respectively, for such security on the Principal Market,
as reported by Bloomberg, or, if the Principal Market begins to operate on an
extended hours basis and does not designate the closing bid price or the
closing trade price, as the case may be, then the last bid price or last trade
price, respectively, of such security prior to 4:00 p.m., New York Time,
as reported by Bloomberg, or, if the Principal Market is not the principal
securities exchange or trading market for such security, the last closing bid
price or last trade price, respectively, of such security on the principal
securities exchange or trading market where such security is listed or traded
as reported by Bloomberg, or if the foregoing do not apply, the last closing
bid price or last trade price, respectively, of such security in the
over-the-counter market on the electronic bulletin board for such security as
reported by Bloomberg, or, if no closing bid price or last trade price,
respectively, is reported for such security by Bloomberg, the average of the
bid prices, or the ask prices, respectively, of any market makers for such
security as reported in the “pink sheets” by Pink Sheets LLC (formerly the
National Quotation Bureau, Inc.). 
If the Closing Bid Price or the Closing Sale Price cannot be calculated
for a security on a particular date on any of the foregoing bases, the Closing
Bid Price or the Closing Sale Price, as the case may be, of such security on
such date shall be the fair market value as mutually determined by the Company
and the Holder.  If the Company and the
Holder are unable to agree upon the fair market value of such security, then
such dispute shall be resolved pursuant to Section 24.  All such determinations to be appropriately
adjusted for any stock dividend, stock split, stock combination or other
similar transaction during the applicable calculation period.

 

(f)            [Intentionally left blank]

 

(g)           “Contingent
Obligation” means, as to any Person, any direct or indirect
liability, contingent or otherwise, of that Person with respect to any
indebtedness, lease, dividend or other obligation of another Person if the
primary purpose or intent of the Person incurring such liability, or the
primary effect thereof, is to provide assurance to the obligee of such
liability that such liability will be paid or discharged, or that any
agreements relating thereto will be complied with, or that the holders of such
liability will be protected (in whole or in part) against loss with respect
thereto.

 

(h)           “Convertible
Securities” means any stock or securities (other than Options)
directly or indirectly convertible into or exercisable or exchangeable for
Common Stock.

 

(i)            “Excluded
Securities” means any shares of Common Stock issued or issuable: (i) in
connection with any Approved Stock Plan; (ii) upon conversion of the Notes
and the Other Notes; (iii) upon conversion of any Options or Convertible
Securities which are outstanding on the Issuance Date, (iv) pursuant to or
in connection with commercial credit arrangements, equipment lease financings,
acquisitions of other assets or businesses, strategic transactions not
primarily for financing purposes, or similar transactions into which the
Company may enter with a non-affiliate.

 

28

 

(j)            “Indebtedness”
of any Person means, without duplication (A) all indebtedness for borrowed
money, (B) all obligations issued, undertaken or assumed as the deferred
purchase price of property or services (other than trade payables entered into
in the ordinary course of business), (C) all reimbursement or payment
obligations with respect to letters of credit, surety bonds and other similar
instruments, (D) all obligations evidenced by notes, bonds, debentures or
similar instruments, including obligations so evidenced incurred in connection
with the acquisition of property, assets or businesses, (E) all
indebtedness created or arising under any conditional sale or other title
retention agreement, or incurred as financing, in either case with respect to
any property or assets acquired with the proceeds of such indebtedness (even
though the rights and remedies of the seller or bank under such agreement in
the event of default are limited to repossession or sale of such property), (F) all
monetary obligations under any leasing or similar arrangement which, in
connection with generally accepted accounting principles, consistently applied
for the periods covered thereby, is classified as a capital lease, (G) off-balance
sheet liabilities retained in connection with asset securitization programs,
synthetic leases, sale and leaseback transactions or other similar obligations
arising with respect to any other transaction which is the functional
equivalent of or takes the place of borrowing but which does not constitute a
liability on the consolidated balance sheet of such Person and its
subsidiaries, and (H) all indebtedness referred to in clauses (A) through
(G) above secured by (or for which the holder of such Indebtedness has an
existing right, contingent or otherwise, to be secured by) any mortgage, lien,
pledge, charge, security interest or other encumbrance upon or in any property
or assets (including accounts and contract rights) owned by any Person, even
though the Person which owns such assets or property has not assumed or become
liable for the payment of such indebtedness, and (I) all Contingent
Obligations in respect of indebtedness or obligations of others of the kinds
referred to in clauses (A) through (H) above.

 

(k)           “Issuance
Date” means October 1, 2007.

 

(l)            “Options”
means any rights, warrants or options to subscribe for or purchase Common Stock
or Convertible Securities.

 

(m)          “Person”
means an individual, a limited liability company, a partnership, a joint
venture, a corporation, a trust, an unincorporated organization, any other
entity and a government or any department or agency thereof.

 

(n)           “Principal
Market” means the OTC Bulletin Board.

 

(o)           “Registration
Rights Agreement” means that certain Registration Rights Agreement,
dated January 3, 2007, between the Company and the initial holders of the
Interest Notes.

 

29

 

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

 

(q)           “Securities
Purchase Agreement” means that certain Securities Purchase
Agreement, dated January 3, 2007, between the Company and the initial
holders of the Original Notes pursuant to which the Company issued the Original
Notes.

 

(r)            “Senior
Indebtedness” means the principal of (and premium, if any), interest
on, and all fees and other amounts (including, without limitation, any
reasonable costs, enforcement expenses (including reasonable legal fees and
disbursements, collateral protection expenses and other reimbursement or
indemnity obligations relating thereto)), and all other obligations of the
Company under (i) any of the agreements or instruments evidencing any
Indebtedness of the Company and its Subsidiaries arising after the Original
Date to an unaffiliated, third-party commercial lender (together with any
renewals, refundings, refinancings or other extensions thereof) for purposes of
purchasing equipment (which debt shall be secured only by the assets purchased
with such financing), and (ii) Indebtedness secured by up to a maximum of
eighty five percent (85%) of the Company’s accounts receivable and/or up to
sixty percent (60%) of the value of the Company’s inventory.  For the avoidance of doubt, Senior
Indebtedness shall not include the debt which is required to be paid by the
Company pursuant to Section 4(i) of the Securities Purchase
Agreement.

 

(s)           [Intentionally left blank]

 

(t)            “Trading
Day” means any day on which the Common Stock is traded on the
Principal Market, or, if the Principal Market is not the principal trading
market for the Common Stock, then on the principal securities exchange or
securities market on which the Common Stock is then traded; provided that “Trading
Day” shall not include any day on which the Common Stock is scheduled to trade
on such exchange or market for less than 4.5 hours or any day that the Common
Stock is suspended from trading during the final hour of trading on such
exchange or market (or if such exchange or market does not designate in advance
the closing time of trading on such exchange or market, then during the hour
ending at 4:00:00 p.m., New York Time).

 

(u)           [intentionally left blank]

 

(v)           “Weighted
Average Price” means, for any security as of any date, the dollar
volume-weighted average price for such security on the Principal Market during
the period beginning at 9:30:01 a.m., New York Time (or such other time as
the Principal Market publicly announces is the official open of trading), and
ending at 4:00:00 p.m., New York Time (or such other time as the Principal
Market publicly announces is the official close of trading) as reported by
Bloomberg through its “Volume at Price” functions, or, if the foregoing does
not apply, the dollar volume-weighted average price of such security in the
over-the-counter market on the electronic bulletin board for such security
during the period beginning at 9:30:01 a.m., New York Time (or such other
time as such market publicly announces is the official open of trading), and
ending at 4:00:00 p.m., New York Time (or such other time as such market
publicly 

 

30

 

announces
is the official close of trading) as reported by Bloomberg, or, if no dollar
volume-weighted average price is reported for such security by Bloomberg for
such hours, the average of the highest closing bid price and the lowest closing
ask price of any of the market makers for such security as reported in the “pink
sheets” by Pink Sheets LLC (formerly the National Quotation Bureau, Inc.).  If the Weighted Average Price cannot be
calculated for a security on a particular date on any of the foregoing bases,
the Weighted Average Price of such security on such date shall be the fair
market value as mutually determined by the Company and the Holder.  If the Company and the Holder are unable to
agree upon the fair market value of such security, then such dispute shall be
resolved pursuant to Section 24. 
All such determinations to be appropriately adjusted for any stock
dividend, stock split, stock combination or other similar transaction during
the applicable calculation period.

 

[Signature Page Follows]

 

31

 

IN WITNESS WHEREOF, the Company has caused this Note to be duly executed as of the
Issuance Date set out above.

 

	
   

  	
   

  	
  LIQUIDMETAL TECHNOLOGIES, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Gerald
  E. Morrow

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Chief
  Financial Officer

  
						

 

 

EXHIBIT I

 

LIQUIDMETAL TECHNOLOGIES, INC.

CONVERSION NOTICE

 

Reference
is made to the Convertible Subordinated Note (the “Note”) issued to the undersigned by Liquidmetal Technologies, Inc.
(the “Company”).  In accordance with and pursuant to the Note,
the undersigned hereby elects to convert the Conversion Amount (as defined in
the Note) of the Note indicated below into shares of Common Stock, par value
$0.001 per share (the “Common Stock”),
of the Company as of the date specified below.

 

Date of Conversion:

 

Aggregate Conversion Amount to be converted:

 

The
undersigned hereby certifies to the Company that the undersigned’s conversion
of the amount set forth above in accordance with Section 3(a) of the
Note will not directly result in the undersigned (together with the undersigned’s
affiliates) beneficially owning in excess of 4.99% of the number of shares of
Common Stock outstanding immediately after giving effect to such conversion,
calculated in accordance with Section 3(d)(i) of the Note; provided
that if the undersigned has previously waived the 4.99% beneficial ownership
limitation upon no less than sixty one (61) days prior written notice, the
undersigned certifies to the Company that the undersigned’s conversion of the
amount set forth above will not directly result in the undersigned (together
with the undersigned’s affiliates) beneficially owning in excess of 9.99% of
the number of shares of Common Stock outstanding immediately after giving
effect to such conversion, calculated in accordance with Section 3(d)(i) of
the Note.

 

Please
confirm the following information:

 

Conversion Price:

 

Number of shares of Common Stock to be issued:

 

Please
issue the Common Stock into which the Note is being converted in the following
name and to the following address:

 

	
  Issue
  to:

  	
   

  
	
   

  
	
   

  
	
  Facsimile
  Number:

  
	
   

  
	
  Authorization:

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
					

 

	
  Dated:

  	
   

  

 

 

	
   

  	
  Account
  Number:

  	
   

  
	
   

  	
  (if electronic book entry transfer)

  
	
   

  	
   

  
	
   

  	
  Transaction
  Code Number:

  	
   

  
	
   

  	
  (if electronic book entry transfer)

  
				

 

 

ACKNOWLEDGMENT

 

The
Company hereby acknowledges this Conversion Notice and hereby directs American
Stock Transfer & Trust Co. to issue the above indicated number of
shares of Common Stock in accordance with the Transfer Agent Instructions dated
January 3, 2007 from the Company.

 

	
   

  	
  LIQUIDMETAL TECHNOLOGIES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00146-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00146-of-00352.parquet"}]]