Document:

Exhibit
10.1

 

Direct Dial: 
(702) 367-2484

Facsimile: 
(702) 221-6755

 

Glenn C. Christenson

Executive Vice President

Chief Financial Officer

Chief Administrative Officer

 

 

 

May 12, 2000

 

via hand
delivery

 

Ms. Fern Price, Trust Officer

BANK OF AMERICA, N.A.

300 South Fourth Street, Third Floor

Las Vegas, Nevada  89101

 

Re:                               Ground
Lease dated June 1, 1995, as amended (the “Lease”), between TGH&H Real
Estate Trust, as successor landlord (“Landlord”), and Texas Station, Inc.,
as successor tenant (“Tenant”).  

 

 

Dear Ms. Price:

 

                This letter agreement will confirm that, pursuant to
Section I.C.2 of the Lease, Landlord and Tenant have agreed that (a) the annual
Rent (as defined in the Lease) for the first Rental Period (as defined in the
Lease) shall be $3,450,000 per year, subject to adjustment pursuant to
subsection (b) of that Section, and (b) the first Rental Period shall commence
on August 1, 2000.  Except as expressly
modified hereby, the Lease remains in full force and effect.

 

1

 

                If the foregoing accurately sets forth Landlord’s
agreement with respect to these matters, please so indicate by executing the
attached copy of this letter in the space provided below and returning it to me
as soon as possible.

 

	
   

  	
  Sincerely,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  TEXAS
  STATION, INC.

  

 

	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /S/  GLENN C.
  CHRISTENSON

  
	
   

  	
   

  	
  Glenn C. Christenson

  
	
   

  	
   

  	
  Senior Vice President

  
	
   

  	
   

  	
  Treasurer

  

 

 

AGREED to and ACCEPTED

this _____ day of May, 2000

 

TGH&H
REAL ESTATE TRUST

By:          Bank of America,
N.A., as Trustee of

                the TGH&H Real
Estate Trust under

                Trust Agreement
dated January 8, 1997

 

                By:                                                                                          

                Name:                                                                     

                Title:                                                                                       

 

 

2

 

bcc:         Frank J. Fertitta,
III

                Blake L. Sartini

                Scott M Nielson

                William W. Warner

                Richard J. Haskins

                John HertigExhibit
10.2

 

Direct Dial: (702)
367-2848

Facsimile: (702) 221-6755

 

Glenn C. Christenson

Senior Vice President

Treasurer

 

March 28, 2003

 

via hand
delivery

Mr. William J. Bullard

KB Enterprises

c/o Fertitta Enterprises,
Inc.

2960 W. Sahara Avenue,
Suite 200

Las Vegas, Nevada 89102

 

	
  Re:

  	
   

  	
  Ground Lease and Sublease dated June 1, 1993, as amended
  (the “Lease”), between KB Enterprises, as landlord (“Landlord”), and Boulder
  Station, Inc., as tenant (“Tenant”)

  

 

Dear Bill:

 

This letter agreement will confirm that, pursuant to
Section I.C.2 of the Lease, Landlord and Tenant have agreed that (a) the annual
Rent (as defined in the Lease) for the first Rental Period (as defined in the
Lease) shall be $2,200,000 per year, subject to adjustment pursuant to
subsection (2) of that Section, and (b) the first Rental Period shall commence
on July 1, 2003.  Except as expressly
modified hereby, the Lease remains in full force and effect.

 

If the foregoing accurately sets forth Landlord’s
agreement with respect to these matters, please so indicate by executing the
attached copy of this letter on behalf of Landlord and returning it to me as
soon as possible.

 

	
   

  	
   

  	
  Sincerely,

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  BOULDER
  STATION, INC .

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /S/  GLENN C. CHRISTENSON

  	
   

  	
   

  
	
   

  	
   

  	
  Glenn C. Christenson

  	
   

  
	
   

  	
   

  	
  Senior Vice President
  Treasurer

  	
   

  
					

 

 

March
28, 2003

Mr.
William J. Bullard

 

 

	
  AGREED
  to and ACCEPTED

  this
              day of
  March, 2003:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  KB
  ENTERPRISES

  	
   

  
	
   

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  William J. Bullard,
  Secretary

  
				

 

2Exhibit
10.3

 

Direct Dial: (702) 221-6606

Facsimile: (702) 221-6613

 

 

Richard J. Haskins, Esq.

Vice President and General Counsel

 

 

January 27, 2003

 

 

via
facsimile (399-3048) and U.S. mail

Mr. R. Ian Ross

Sterling Realty

19 W. Brooks Avenue, Suite A

North Las Vegas, NV  89030

 

Re:          Notice
to Exercise Option (Flamingo Associates Property)

 

Dear Ian:

 

                Reference is made to that First Amendment to Lease
(With Option) dated April 1, 1999 (the “Agreement”), by and between Palace
Station Hotel & Casino, Inc. (“Optionee”) and Flamingo Associates,
Inc.  Capitalized terms used herein and
not otherwise defined shall have the meanings ascribed to them in the
Agreement.

 

                This letter serves as Optionee’s notice to exercise
the Option.  Pursuant to Section II.A.1
of the Agreement, Optionee will promptly open Escrow at Nevada Title Company
through which Closing will occur. 
Optionee anticipates that the Closing will occur on March 31, 2003.

 

                Upon receipt of this letter, please contact me to
coordinate Closing logistics.

 

Sincerely,

 

 

	
  /S/  RICHARD
  J. HASKINS

  
	
  Richard J. Haskins

  
	
  Vice President and General Counsel

  
	
   

  

cc:           Jim Shadlaus (via
facsimile:  382-9877)

                Troy Lochhead (via
facsimile:  966-5848)Exhibit 4.8

 

MSC.SOFTWARE
CORPORATION

 

21⁄2 %
Senior Subordinated Convertible Notes

 

due
2008

 

 

INDENTURE

 

Dated
as of May 5, 2003

 

 

J.P. MORGAN TRUST
COMPANY, NATIONAL ASSOCIATION

 

TRUSTEE

 

 

 

Table of Contents

 

	
  ARTICLE 1 DEFINITIONS AND OTHER PROVISIONS OF
  GENERAL APPLICATION

  
	
   

  
	
  SECTION 1.01

  	
   

  	
  Definitions

  
	
  SECTION 1.02

  	
   

  	
  Other Definitions

  
	
  SECTION
  1.03

  	
   

  	
  Incorporation
  by Reference of Trust Indenture Act

  
	
  SECTION 1.04

  	
   

  	
  Rules of
  Construction

  
	
  SECTION 1.05

  	
   

  	
  Acts of Holders

  
	
   

  	
   

  	
   

  
	
  ARTICLE 2 THE NOTES

  
	
   

  
	
  SECTION 2.01

  	
   

  	
  Form and Dating

  
	
  SECTION 2.02

  	
   

  	
  Execution and Authentication

  
	
  SECTION 2.03

  	
   

  	
  Registrar, Paying Agent and Conversion
  Agent

  
	
  SECTION 2.04

  	
   

  	
  Paying Agent to Hold Money and Notes in
  Trust

  
	
  SECTION 2.05

  	
   

  	
  Noteholder Lists

  
	
  SECTION 2.06

  	
   

  	
  Transfer and Exchange

  
	
  SECTION 2.07

  	
   

  	
  Replacement Notes

  
	
  SECTION 2.08

  	
   

  	
  Outstanding Notes; Determinations of
  Holders’ Action

  
	
  SECTION 2.09

  	
   

  	
  Temporary Notes

  
	
  SECTION 2.10

  	
   

  	
  Cancellation

  
	
  SECTION 2.11

  	
   

  	
  Persons Deemed Owners

  
	
  SECTION 2.12

  	
   

  	
  Global Notes

  
	
  SECTION 2.13

  	
   

  	
  CUSIP Numbers

  
	
  SECTION 2.14

  	
   

  	
  Defaulted Interest

  
	
  SECTION 2.15

  	
   

  	
  Registration Default

  
	
   

  	
   

  	
   

  
	
  ARTICLE 3 REDEMPTION AND PURCHASES

  
	
   

  	
   

  	
   

  
	
  SECTION 3.01

  	
   

  	
  Redemption

  
	
  SECTION 3.02

  	
   

  	
  Notice of Trustee

  
	
  SECTION 3.03

  	
   

  	
  Selection of Notes to be Redeemed

  
	
  SECTION 3.04

  	
   

  	
  Notice of Redemption

  
	
  SECTION 3.05

  	
   

  	
  Effect of Notice of Redemption

  
	
  SECTION 3.06

  	
   

  	
  Deposit of Redemption Price

  
	
  SECTION 3.07

  	
   

  	
  Notes Redeemed in Part

  
	
  SECTION 3.08

  	
   

  	
  Conversion Arrangement on Call for
  Redemption

  
	
  SECTION 3.09

  	
   

  	
  Repurchase of Notes at Option of the
  Holder upon Change in Control

  
	
  SECTION 3.10

  	
   

  	
  Effect of Change in Control Repurchase
  Notice

  
	
  SECTION 3.11

  	
   

  	
  Deposit of Change in Control Repurchase
  Price

  
	
  SECTION 3.12

  	
   

  	
  Notes Purchased in Part

  

 

i

 

	
  SECTION 3.13

  	
   

  	
  Covenant to Comply with Securities Laws
  upon Purchase of Notes

  
	
  SECTION 3.14

  	
   

  	
  Repayment to the Company

  
	
   

  	
   

  	
   

  
	
  ARTICLE 4 COVENANTS

  
	
   

  	
   

  	
   

  
	
  SECTION 4.01

  	
   

  	
  Payment of Principal and Interest on the
  Notes

  
	
  SECTION 4.02

  	
   

  	
  Reports to Holders

  
	
  SECTION 4.03

  	
   

  	
  Compliance Certificate

  
	
  SECTION 4.04

  	
   

  	
  Further Instruments and Acts

  
	
  SECTION 4.05

  	
   

  	
  Maintenance of Office or Agency

  
	
  SECTION 4.06

  	
   

  	
  Delivery of Certain Information

  
	
  SECTION 4.07

  	
   

  	
  No Senior Subordinated Indebtedness

  
	
  SECTION 4.08

  	
   

  	
  No Amendment of Subordination Provisions
  in Existing Subordinated Notes

  
	
   

  	
   

  	
   

  
	
  ARTICLE 5 SUCCESSOR CORPORATION

  
	
   

  
	
  SECTION 5.01

  	
   

  	
  When Company May Merge or Transfer Assets

  
	
   

  	
   

  	
   

  
	
  ARTICLE 6 DEFAULTS AND REMEDIES

  
	
   

  
	
  SECTION 6.01

  	
   

  	
  Events of Default

  
	
  SECTION 6.02

  	
   

  	
  Acceleration

  
	
  SECTION 6.03

  	
   

  	
  Other Remedies

  
	
  SECTION 6.04

  	
   

  	
  Waiver of Past Defaults

  
	
  SECTION 6.05

  	
   

  	
  Control by Majority

  
	
  SECTION 6.06

  	
   

  	
  Limitation on
  Suits

  
	
  SECTION 6.07

  	
   

  	
  Rights of Holders to Receive Payment

  
	
  SECTION 6.08

  	
   

  	
  Collection Suit by Trustee

  
	
  SECTION 6.09

  	
   

  	
  Trustee May File Proofs of Claim

  
	
  SECTION 6.10

  	
   

  	
  Priorities

  
	
  SECTION 6.11

  	
   

  	
  Undertaking for Costs

  
	
  SECTION 6.12

  	
   

  	
  Waiver of Stay, Extension or Usury Laws

  
	
   

  	
   

  	
   

  
	
  ARTICLE 7 TRUSTEE

  
	
   

  	
   

  	
   

  
	
  SECTION 7.01

  	
   

  	
  Duties and Responsibilities of the
  Trustee; During Default; Prior to Default

  
	
  SECTION 7.02

  	
   

  	
  Certain Rights of the Trustee

  
	
  SECTION 7.03

  	
   

  	
  Trustee Not Responsible for Recitals,
  Disposition of Notes or Application of Proceeds Thereof

  
	
  SECTION 7.04

  	
   

  	
  Trustee and Agents May Hold Notes;
  Collections, etc

  

 

ii

 

	
  SECTION 7.05

  	
   

  	
  Moneys Held by Trustee

  
	
  SECTION 7.06

  	
   

  	
  Compensation and Indemnification of
  Trustee and Its Prior Claim

  
	
  SECTION 7.07

  	
   

  	
  Right of Trustee to Rely on Officers’
  Certificate, etc

  
	
  SECTION 7.08

  	
   

  	
  Conflicting Interests

  
	
  SECTION 7.09

  	
   

  	
  Persons Eligible for Appointment as
  Trustee

  
	
  SECTION 7.10

  	
   

  	
  Resignation and Removal; Appointment of
  Successor Trustee

  
	
  SECTION 7.11

  	
   

  	
  Acceptance of Appointment by Successor
  Trustee

  
	
  SECTION 7.12

  	
   

  	
  Merger, Conversion, Consolidation or
  Succession to Business of Trustee

  
	
  SECTION 7.13

  	
   

  	
  Preferential Collection of Claims Against
  the Company

  
	
  SECTION 7.14

  	
   

  	
  Reports by the Trustee

  
	
  SECTION 7.15

  	
   

  	
  Trustee to Give Notice of Default, But May
  Withhold in Certain Circumstances

  
	
   

  	
   

  	
   

  
	
  ARTICLE 8 SATISFACTION AND DISCHARGE OF
  INDENTURE

  
	
   

  	
   

  	
   

  
	
  SECTION 8.01

  	
   

  	
  Satisfaction and Discharge

  
	
  SECTION 8.02

  	
   

  	
  Application of Trust Money

  
	
  SECTION 8.03

  	
   

  	
  Reinstatement

  
	
   

  	
   

  	
   

  
	
  ARTICLE 9. AMENDMENTS

  
	
   

  	
   

  	
   

  
	
  SECTION 9.01

  	
   

  	
  Without Consent of Holders

  
	
  SECTION 9.02

  	
   

  	
  With Consent of Holders

  
	
  SECTION 9.03

  	
   

  	
  Compliance with Trust Indenture Act

  
	
  SECTION 9.04

  	
   

  	
  Revocation and Effect of Consents, Waivers
  and Actions

  
	
  SECTION 9.05

  	
   

  	
  Notation on or Exchange of Notes

  
	
  SECTION 9.06

  	
   

  	
  Trustee to Sign Amendments or Supplemental
  Indentures

  
	
  SECTION 9.07

  	
   

  	
  Effect of Amendment or Supplemental
  Indentures

  
	
   

  	
   

  	
   

  
	
  ARTICLE 10 CONVERSION

  
	
   

  	
   

  	
   

  
	
  SECTION 10.01

  	
   

  	
  Conversion Right and Conversion Price

  
	
  SECTION 10.02

  	
   

  	
  Exercise of Conversion Right

  
	
  SECTION 10.03

  	
   

  	
  Fractions of Shares

  
	
  SECTION 10.04

  	
   

  	
  Adjustment of Conversion Price

  
	
  SECTION 10.05

  	
   

  	
  Notice of Adjustments of Conversion Price

  
	
  SECTION 10.06

  	
   

  	
  Notice Prior to Certain Actions

  
	
  SECTION 10.07

  	
   

  	
  Company to Reserve Common Stock

  
	
  SECTION 10.08

  	
   

  	
  Taxes on Conversions

  
	
  SECTION 10.09

  	
   

  	
  Covenant as to Common Stock

  
	
  SECTION 10.10

  	
   

  	
  Cancellation of Converted Notes

  

 

iii

 

	
  SECTION 10.11

  	
   

  	
  Effect of Reclassification,
  Consolidation, Merger or Sale

  
	
  SECTION 10.12

  	
   

  	
  Adjustment for Other Distributions

  
	
  SECTION 10.13

  	
   

  	
  Responsibility of Trustee for Conversion
  Provisions

  
	
   

  	
   

  	
   

  
	
  ARTICLE 11 SUBORDINATION

  
	
   

  	
   

  	
   

  
	
  SECTION 11.01

  	
   

  	
  Agreement to Subordinate

  
	
  SECTION 11.02

  	
   

  	
  Liquidation;
  Dissolution; Bankruptcy

  
	
  SECTION 11.03

  	
   

  	
  Default on Designated Senior Indebtedness

  
	
  SECTION 11.04

  	
   

  	
  [Intentionally Deleted]

  
	
  SECTION 11.05

  	
   

  	
  When Distribution Must Be Paid Over

  
	
  SECTION 11.06

  	
   

  	
  Notice by the Company

  
	
  SECTION 11.07

  	
   

  	
  Subrogation

  
	
  SECTION 11.08

  	
   

  	
  Relative Rights

  
	
  SECTION 11.09

  	
   

  	
  Subordination May Not Be Impaired by the
  Company

  
	
  SECTION 11.10

  	
   

  	
  Distribution or Notice to Representative

  
	
  SECTION 11.11

  	
   

  	
  Rights of Trustee and Paying Agent

  
	
   

  	
   

  	
   

  
	
  ARTICLE 12 SECURITY

  
	
   

  	
   

  	
   

  
	
  SECTION 12.01

  	
   

  	
  Security

  
	
   

  	
   

  	
   

  
	
  ARTICLE 13 MISCELLANEOUS

  
	
   

  	
   

  	
   

  
	
  SECTION 13.01

  	
   

  	
  Trust Indenture Act Controls

  
	
  SECTION 13.02

  	
   

  	
  Notices

  
	
  SECTION 13.03

  	
   

  	
  Communication by Holders with Other
  Holders

  
	
  SECTION 13.04

  	
   

  	
  Certificate and Opinion as to Conditions
  Precedent

  
	
  SECTION 13.05

  	
   

  	
  Statements Required in Certificate or
  Opinion

  
	
  SECTION 13.06

  	
   

  	
  Separability Clause

  
	
  SECTION 13.07

  	
   

  	
  Rules by Trustee, Paying Agent,
  Conversion Agent and Registrar

  
	
  SECTION 13.08

  	
   

  	
  Legal Holidays

  
	
  SECTION 13.09

  	
   

  	
  GOVERNING LAW

  
	
  SECTION 13.10

  	
   

  	
  No Recourse Against Others

  
	
  SECTION 13.11

  	
   

  	
  Successors

  
	
  SECTION 13.12

  	
   

  	
  Multiple Originals

  

 

	
  EXHIBITS

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit A-1

  	
   

  	
  Form of Global Note

  

 

iv

 

	
  Exhibit A-2

  	
   

  	
  Form of Face of
  Certificated Note

  
	
  Exhibit B-1

  	
   

  	
  Transfer
  Certificate

  

 

v

 

CROSS REFERENCE TABLE•

 

	
  TIA Section

  	
   

  	
  Indenture
  Section

  
	
  310

  	
  (a)(1)

  	
   

  	
  7.09

  
	
   

  	
  (a)(2)

  	
   

  	
  7.09

  
	
   

  	
  (a)(3)

  	
   

  	
  N.A.

  
	
   

  	
  (a)(4)

  	
   

  	
  N.A.

  
	
   

  	
  (a)(5)

  	
   

  	
  7.09

  
	
   

  	
  (b)

  	
   

  	
  7.08; 7.09;
  7.10;7.11

  
	
   

  	
  (c)

  	
   

  	
  N.A.

  
	
  311

  	
  (a)

  	
   

  	
  7.13

  
	
   

  	
  (b)

  	
   

  	
  7.13

  
	
   

  	
  (c)

  	
   

  	
  N.A.

  
	
  312

  	
  (a)

  	
   

  	
  2.05

  
	
   

  	
  (b)

  	
   

  	
  13.03

  
	
   

  	
  (c)

  	
   

  	
  13.03

  
	
  313

  	
  (a)

  	
   

  	
  7.14

  
	
   

  	
  (b)(1)

  	
   

  	
  7.14

  
	
   

  	
  (b)(2)

  	
   

  	
  7.14

  
	
   

  	
  (c)

  	
   

  	
  7.14, 13.02

  
	
   

  	
  (d)

  	
   

  	
  7.14

  
	
  314

  	
  (a)

  	
   

  	
  4.02; 4.03;
  13.02

  
	
   

  	
  (b)

  	
   

  	
  12.01(e)

  
	
   

  	
  (c)(1)

  	
   

  	
  13.04

  
	
   

  	
  (c)(2)

  	
   

  	
  13.04

  
	
   

  	
  (c)(3)

  	
   

  	
  N.A.

  
	
   

  	
  (d)

  	
   

  	
  12.01(d)

  
	
   

  	
  (e)

  	
   

  	
  13.05

  
	
   

  	
  (f)

  	
   

  	
  N.A.

  
	
  315

  	
  (a)

  	
   

  	
  7.01

  
	
   

  	
  (b)

  	
   

  	
  7.15; 13.02

  
	
   

  	
  (c)

  	
   

  	
  7.01

  
	
   

  	
  (d)

  	
   

  	
  7.01

  
	
   

  	
  (e)

  	
   

  	
  6.11

  
	
  316

  	
  (a) (last
  sentence)

  	
   

  	
  2.08

  
	
   

  	
  (a)(1)(A)

  	
   

  	
  6.05

  
	
   

  	
  (a)(1)(B)

  	
   

  	
  6.04

  
	
   

  	
  (a)(2)

  	
   

  	
  N.A.

  
	
   

  	
  (b)

  	
   

  	
  6.07

  
	
  317

  	
  (a)(1)

  	
   

  	
  6.08

  
	
   

  	
  (a)(2)

  	
   

  	
  6.09

  
	
   

  	
  (b)

  	
   

  	
  2.04

  
	
  318

  	
  (a)

  	
   

  	
  13.01

  

 

•                       Note:  This Cross Reference Table shall not, for
any purpose, be deemed to be part of the Indenture.

N. A. means Not
Applicable

 

 

INDENTURE dated as of May 5, 2003 between
MSC.SOFTWARE CORPORATION, a Delaware corporation (the “Company”), and J.P.
MORGAN TRUST COMPANY, NATIONAL ASSOCIATION a national banking association, as
Trustee hereunder (the “Trustee”).

 

RECITALS OF THE COMPANY

 

The Company has duly authorized the creation of an
issue of its 21⁄2% Senior Subordinated Convertible Notes due 2008 (herein called
the “Notes”) of substantially the tenor and amount hereinafter set forth, and
to provide therefor the Company has duly authorized the execution and delivery
of this Indenture.

 

All things necessary to make the Notes, when the Notes
are executed by the Company and authenticated and delivered hereunder, the
valid obligations of the Company, and to make this Indenture a valid agreement
of the Company, in accordance with their and its terms, have been done.  Further, all things necessary to duly
authorize the issuance of the Common Stock of the Company issuable upon the
conversion of the Notes, and to duly reserve for issuance the number of shares
of Common Stock issuable upon such conversion, have been done.

 

The Notes will be partially secured pursuant to the
terms of the Collateral Pledge and Security Agreement (as defined herein) by
Pledged Securities (as defined herein).

 

This Indenture is subject to, and shall be governed
by, the provisions of the Trust Indenture Act of 1939, as amended, that are
required to be a part of and to govern indentures qualified under the Trust
Indenture Act of 1939, as amended.

 

NOW,
THEREFORE, THIS INDENTURE WITNESSETH:

 

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

 

ARTICLE 1

 

DEFINITIONS AND
OTHER PROVISIONS OF GENERAL APPLICATION

 

SECTION 1.01                    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
accounting terms not otherwise defined herein have the meanings assigned to
them in accordance with GAAP; and

 

1

 

(3)                                  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.

 

“Additional Pledged Securities” has the meaning
specified in the Collateral Pledge and Security Agreement.

 

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

 

“Applicable Procedures” means, with respect to
any transfer or transaction involving a Global Note or beneficial interest
therein, the rules and procedures of the Depositary for such Note, in each case
to the extent applicable to such transaction and as in effect from time to
time.

 

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

 

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

 

“Business Day” means each day of the year other
than a Saturday or a Sunday on which banking institutions are not required or
authorized to close in The City of New York or the city in which the principal
corporate trust office of the Trustee is located.

 

“Capital Stock” of
any corporation means any and all shares, interests, rights to purchase,
warrants, options, participations or other equivalents of or interests in
(however designated) stock issued by that corporation.

 

“Certificated Notes” means Notes that are in
the form of the Notes attached hereto as Exhibit A-2.

 

“Closing Price” of any security on any date of
determination means:

 

(4)                                  the
closing sale price (or, if no closing sale price is reported, the last reported
sale price) of such security on the New York Stock Exchange on such date;

 

2

 

(5)                                  if
such security is not listed for trading on the New York Stock Exchange on any
such date, the closing sale price as reported in the composite transactions for
the principal U.S. securities exchange on which such security is so listed;

 

(6)                                  if
such security is not so listed on a U.S. national or regional securities
exchange, the closing sale price as reported by the NASDAQ National Market;

 

(7)                                  if
such security is not so reported, the last quoted bid price for such security
in the over-the-counter market as reported by the National Quotation Bureau or
similar organization; or

 

(8)                                  if
such bid price is not available, the average of the mid-point of the last bid
and ask prices of such security on such date from at least three nationally
recognized independent investment banking firms retained for this purpose by
the Company.

 

“Closing Time” has the meaning specified in the
Purchase Agreement.

 

“Collateral Account” means an account
established with the Collateral Agent pursuant to the terms of the Collateral
Pledge and Security Agreement for the deposit of the Pledged Securities to be
purchased by the Company with a portion of the proceeds from the sale of the
Notes.

 

“Collateral Agent” means, initially, J.P.
MORGAN TRUST COMPANY, NATIONAL ASSOCIATION, a national banking association, as
collateral agent under the Collateral Pledge and Security Agreement.

 

“Collateral Pledge and Security Agreement”
means the Collateral Pledge and Security Agreement, dated as of May 5,
2003, among the Company, the Trustee and the Collateral Agent, as such
agreement may be amended, restated, supplemented or otherwise modified from
time to time.

 

“Common Stock” means the Common Stock, par
value $0.01 per share, of the Company authorized at the date of this instrument
as originally executed.  Subject to the
provisions of Section 10.11, shares issuable on conversion or repurchase of
Notes shall include only shares of Common Stock or shares of any class or
classes of common stock resulting from any reclassification or
reclassifications thereof; provided, however, that if at any time there
shall be more than one such resulting class, the shares so issuable on
conversion of Notes shall include shares of all such classes, and 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.

 

“common stock” means any stock of any class of
capital stock 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 issuer.

 

3

 

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

 

“Company Request” or “Company Order”
means a written request or order signed in the name of the Company by any two
Officers.

 

“Conversion Agent” means any person authorized
by the Company to convert Notes in accordance with Article 10 hereof.

 

“Corporate Trust Office” means the principal
office of the Trustee at which at any time its corporate trust business shall
be administered, which office at the date hereof is located at 560 Mission
Street, 13th Floor, San Francisco, California 94105, or such
other address as the Trustee may designate from time to time by notice to the
Holders and the Company, or the principal corporate trust office of any
successor Trustee (or such other address as a successor Trustee may designate
from time to time by notice to the Holders and the Company).

 

“Date of Delivery” has the meaning specified in
the Purchase Agreement.

 

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

 

“Designated Senior Indebtedness” means the (i)
Indebtedness outstanding under the Loan Agreement, and (ii) after payment in
full of all obligations under the Loan Agreement, any other Senior Indebtedness
the principal amount of which is $25.0 million or more and that has been
designated by the Company as “Designated Senior Indebtedness” for purposes of
this Indenture.

 

“Dollar” or “U.S.$” means a dollar or
other equivalent unit in such coin or currency of the United States as at
the time shall be legal tender for the payment of public and private debts.

 

“GAAP” means United States generally accepted
accounting principles as in effect from time to time.

 

“Global Notes” means Notes that are in the form
of the Notes attached hereto as Exhibit A-1.

 

“Guarantee” means a guarantee (other than by
endorsement of negotiable instruments for collection in the ordinary course of
business), direct or indirect, contingent or otherwise, in any manner
(including, without limitation, letters of credit and reimbursement agreements
in respect thereof), of all or any part of any Indebtedness.

 

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

 

4

 

“Indebtedness” means, with respect to any
person, without duplication:

 

(9)                                  all
indebtedness, obligations and other liabilities, contingent or otherwise, of
such person for borrowed money (including overdrafts) or for the deferred
purchase price of property or services, excluding any trade payables and other
accrued current liabilities incurred in the ordinary course of business, but
including, without limitation, all obligations, contingent or otherwise, of
such person in connection with any letters of credit and acceptances issued
under letter of credit facilities, acceptance facilities or other similar
facilities;

 

(10)                            all
obligations of such person evidenced by bonds, credit or loan agreements,
notes, debentures or other similar instruments;

 

(11)                            indebtedness
of such person created or arising under any conditional sale or other title
retention agreement with respect to property acquired by such person (even if
the rights and remedies of the seller or lender under such agreement in the
event of default are limited to repossession or sale of such property), but
excluding trade payables arising in the ordinary course of business;

 

(12)                            all
obligations and liabilities, contingent or otherwise, in respect of leases of
the person required, in conformity with GAAP, to be accounted for as
capitalized lease obligations on the balance sheet of the person and all
obligations and other liabilities, contingent or otherwise, under any lease or
related document, including a purchase agreement, in connection with the lease
of real property or improvements thereon which provides that the person is
contractually obligated to purchase or cause a third party to purchase the
leased property or pay an agreed upon residual value of the leased property to
the lessor and the obligations of the person under the lease or related document
to purchase or to cause a third party to purchase the leased property whether
or not such lease transaction is characterized as an operating lease or a
capitalized lease in accordance with GAAP, including, without limitations,
synthetic lease obligations;

 

(13)                            all
obligations of such person under or in respect of interest rate agreements,
currency agreements or other swap, cap floor or collar agreement, hedge
agreement, forward contract or similar instrument or agreement or foreign
currency, hedge, exchange or purchase or similar instrument or agreement;

 

(14)                            all
indebtedness referred to in (but not excluded from) the preceding clauses (1)
through (5) of other persons and all dividends of other persons, the payment of
which is secured by (or for which the holder of such indebtedness has an
existing right, contingent or otherwise, to be secured by) any Lien on or with
respect to property (including, without limitation, accounts and contract
rights) owned by such person, even though such person has not assumed or become
liable for the payment of such indebtedness (the amount of such obligation
being deemed to be the lesser of the value of such property or asset or the
amount of the obligation so secured);

 

5

 

(15)                            all
guarantees by such person of indebtedness referred to in this definition or of
any other person;

 

(16)                            all
Redeemable Capital Stock of such person valued at the greater of its voluntary
or involuntary maximum fixed repurchase price plus accrued and unpaid
dividends;

 

(17)                            the
present value of the obligation of such person as lessee for net rental
payments (excluding all amounts required to be paid on account of maintenance
and repairs, insurance, taxes, assessments, water, utilities and similar charges
to the extent included in such rental payments) during the remaining term of
the lease included in any such sale and leaseback transaction including any
period for which such lease has been extended or may, at the option of the
lessor, be extended.  Such present value
shall be calculated using a discount rate equal to the rate of interest
implicit in such transaction, determined in accordance with GAAP; and

 

(18)                            any
and all refinancings, replacements, deferrals, renewals, extensions and
refundings of or amendments, modifications or supplements to, any indebtedness,
obligation or liability of the kind described in clauses (1) through (9) above.

 

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

 

“Initial Pledged Securities” has the meaning
specified in the Collateral Pledge and Security Agreement.

 

“Initial Purchaser” means Merrill Lynch,
Pierce, Fenner & Smith Incorporated.

 

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

 

“Interest Rate” means 21⁄2% per annum.

 

“Issue Date” of any Note means the date on
which the Note was originally issued or deemed issued as set forth on the face
of the Note.

 

“Lien” means, with
respect to any asset, any mortgage, lien, pledge, charge, security interest or
encumbrance of any kind in respect of such asset given to secure Indebtedness,
whether or not filed, recorded or otherwise perfected under applicable law
(including any conditional sale or other title retention agreement, any lease
in the nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement under
the Uniform Commercial Code (or equivalent statutes) of any jurisdiction with
respect to any such lien, pledge, charge or security interest).

 

6

 

“Liquidated Damages” means the increase in
Interest Rate in the event of a Registration Default (as defined in the
Registration Rights Agreement).

 

“Loan Agreement” means the Loan and Security
Agreement, dated as of November 18, 2002, between the Company, the Lenders
signatory thereto and Foothill Capital Corporation, as the Arranger and
Administrative Agent, as amended from time to time, and all refunding,
refinancings and replacements of any Loan Agreement.

 

“Notes” has the
meaning ascribed to it in the first paragraph under the caption “Recitals of
the Company”.

 

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

 

“Officers’ Certificate” means a written
certificate containing the information specified in Sections 13.04 and 13.05,
signed in the name of the Company by any two Officers, and delivered to the
Trustee.  An Officers’ Certificate given
pursuant to Section 4.03 shall be signed by one authorized financial or
accounting Officer of the Company but need not contain the information
specified in Sections 13.04 and 13.05.

 

“144A Global Note” means a permanent Global
Note in the form of the Note attached hereto as Exhibit A-1 that is deposited
with and registered in the name of the Depositary, representing Notes sold in
reliance on Rule 144A under the Securities Act.

 

“Opinion of Counsel” means a written opinion
containing the information specified in Sections 13.04 and 13.05, from legal
counsel who is reasonably acceptable to the Trustee.  The counsel may be an employee of, or counsel to, the Company or
the Trustee.

 

“Overallotment Option” means the overallotment
option granted by the Company to the Initial Purchaser to purchase up to an
additional $15,000,000 aggregate principal amount of Notes to cover
overallotments pursuant to the Purchase Agreement.

 

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

 

“Pledged Securities” means the U.S. Government
Obligations to be purchased by the Company and held in the Collateral Account
in accordance with the Collateral Pledge and Security Agreement.

 

“principal” of a Note means the principal
amount due on the Stated Maturity as set forth on the face of the Note.

 

7

 

“Purchase Agreement” means the Purchase
Agreement, dated as of April 29, 2003, between the Company and the Initial
Purchaser.

 

“Redeemable Capital Stock” means any class of
the Company’s Capital Stock that, either by its terms, by the terms of any
securities into which it is convertible or exchangeable or by contract or
otherwise, is, or upon the happening of an event or passage of time would be,
required to be redeemed (whether by sinking fund or otherwise) prior to the
date that is 91 days after the Stated Maturity of the Notes or is redeemable at
the option of the Holder thereof at any time prior to such date, or is
convertible into or exchangeable for debt securities at any time prior to such
date (unless it is convertible or exchangeable solely at the Company’s option).

 

“Redemption Date” or “redemption date”
means the date specified for redemption of the Notes in accordance with the
terms of the Notes and this Indenture.

 

“Redemption Price” or “redemption price”
shall have the meaning set forth in Section 3.01 of this Indenture and
paragraph 5 on the reverse side of the Notes.

 

“Registration Rights Agreement” means the
Registration Rights Agreement of even date herewith entered into by the Company
and the Initial Purchaser.

 

“Regular Record Date” means, with respect to
the interest payable on any Interest Payment Date, the close of business on
April 20 and October 21 (whether
or not a Business Day), as the case may be, next preceding such Interest
Payment Date.

 

“Responsible Officer” means, when used with
respect to the Trustee, any officer within the corporate trust department of
the Trustee, including any vice president, assistant vice president, assistant
secretary, assistant treasurer, trust officer or any other officer of the
Trustee who customarily performs functions similar to those performed by the
Persons who at the time shall be such officers, respectively, or to whom any
corporate trust matter is referred because of such person’s knowledge of and
familiarity with the particular subject.

 

“Restricted Note” means a Note required to bear
the restrictive legend set forth in the form of Note set forth in Exhibits A-1
and A-2 of this Indenture.

 

“Restriction Termination Date” means, with
respect to any Note, the date that is two years after the later of:

 

(1)                                  the
Issue Date of the Note, or, in the case of Common Stock, the Issue Date of the
Note upon the conversion of which such Common Stock was issued; and

 

(2)                                  the
last date on which any “affiliate,” as defined in Rule 144 (or successor
provision) under the Securities Act, of the Company was the owner of such Note
or Common Stock.

 

8

 

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

 

“SEC” means the Securities and Exchange
Commission.

 

“Securities Act” means the United States
Securities Act of 1933 (or any successor statute), as amended from time to
time.

 

“Senior Indebtedness” means:

 

(1)                                  the
indebtedness outstanding under the Loan Agreement and any future line of credit
or term loan or other credit facility;

 

(2)                                  the
indebtedness under the Company’s Senior Secured Promissory Note dated June 22,
1999 (originally made by Advanced Enterprise Solutions, and subsequently
assumed by the Company);

 

(3)                                  the
indebtedness under those Subordinated Promissory Notes made by the Company
dated August 1, 2002 in aggregate principal amount at issuance of $20,000,000;

 

(4)                                  the
principal of and premium, if any, and interest on, and fees, costs, enforcement
expenses, collateral protection expenses and other reimbursement or indemnity
obligations in respect of all of the Indebtedness of the Company or obligations
to any person for money borrowed that is evidenced by a note, bond, debenture,
loan agreement, or similar instrument or agreement including default interest
and interest accruing after a bankruptcy;

 

(5)                                  commitment
or standby fees due and payable to lending institutions with respect to credit
facilities available to the Company;

 

(6)                                  all
of the Company’s noncontingent obligations (i) for the reimbursement of
any obligor on any letter of credit, banker’s acceptance or similar credit
transaction, (ii) under interest rate swaps, caps, collars, options and
similar arrangements and (iii) under any foreign exchange contract,
currency swap agreement, futures contract, currency option contract or other
foreign currency hedge;

 

(7)                                  all
of the Company’s obligations under leases for real estate, facilities,
equipment or related assets, whether or not capitalized (including, without
limitation, synthetic leases), entered into or leased for financing purposes;

 

(8)                                  any
liabilities of others described in clauses (1) through (7) above that the
Company has guaranteed or which are otherwise the Company’s legal liability;
and

 

(9)                                  renewals,
extensions, refundings, refinancings, restructurings, amendments and
modifications of any such indebtedness or guarantee.

 

9

 

Notwithstanding the foregoing, “Senior Indebtedness”
shall not include:

 

(b)                                 Indebtedness
or other obligations of the Company that by its terms ranks equal or junior in
right of payment to the Notes;

 

(c)                                  Indebtedness
evidenced by the Notes;

 

(d)                                 Indebtedness
of the Company that by operation of law is subordinate to any general unsecured
obligations of the Company;

 

(e)                                  accounts
payable or other liabilities owed or owing by the Company to trade creditors
(including guarantees thereof or instruments evidencing such liabilities);

 

(f)                                    amounts
owed by the Company for compensation to employees or for services rendered to
the Company;

 

(g)                                 Indebtedness
of the Company to any Subsidiary or any other Affiliate of the Company or any
of such Affiliate’s Subsidiaries, except the Indebtedness described in clauses
(2) and (3) above, each as outstanding on the date hereof;

 

(h)                                 Capital
Stock of the Company;

 

(i)                                     Indebtedness
of the Company evidenced by any Guarantee of any such Indebtedness ranking
equal or junior in right of payment to the Notes; and

 

(j)                                     Indebtedness
of the Company which, when incurred and without respect to any election under
Section 1111(b) of Title 11 of the United States Code, is without recourse
to the Company.

 

“Significant Subsidiary” means a Subsidiary of
the Company, including the Subsidiaries of such Subsidiary, that meets any of
the following conditions:

 

(1)                                  the
Company’s and its other Subsidiaries’ investments in and advances to the
Subsidiary exceed 10 percent of the total assets of the Company and its
Subsidiaries consolidated as of the end of the most recently completed fiscal
year; or

 

(2)                                  the
Company’s and its other Subsidiaries’ proportionate share of the total assets
(after intercompany eliminations) of the Subsidiary exceeds 10 percent of the
total assets of the Company and its Subsidiaries consolidated as of the end of
the most recently completed fiscal year; or

 

(3)                                  the
Company’s and its other Subsidiaries’ equity in the income from continuing
operations before income taxes, extraordinary items and cumulative effect of a
change in accounting principles of the Subsidiary exceeds 10 percent of such
income of the Company and its Subsidiaries consolidated as of the end of the
most recently completed fiscal year.

 

10

 

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

 

“Subordinated Indenture” means that certain
Indenture by and between The MacNeal-Schwendler Corporation and Chase Manhattan
Bank and Trust Company N.A., Trustee, dated June 17, 1999 relating to the
Subordinated Notes.

 

“Subordinated Notes” means those certain 8%
Subordinate Promissory Notes due 2009, issued under the Subordinated Indenture.

 

“Subsidiary” means (i) a corporation, a
majority of whose Capital Stock with voting power, under ordinary
circumstances, to elect directors is, at the date of determination, directly or
indirectly owned by the Company, by one or more Subsidiaries of the Company or
by the Company and one or more Subsidiaries of the Company, (ii) a partnership
in which the Company or a Subsidiary of the Company holds a majority interest
in the equity capital or profits of such partnership, or (iii) any other person
(other than a corporation) in which the Company, a Subsidiary of the Company or
the Company and one or more Subsidiaries of the Company, directly or
indirectly, at the date of determination, has (x) at least a majority ownership
interest or (y) the power to elect or direct the election of a majority of the
directors or other governing body of such person.

 

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

 

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

 

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

 

“United States” means the United States of
America (including the States and the District of Columbia), its territories,
its possessions and other areas subject to its jurisdiction (its “possessions”
including Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake
Island and the Northern Mariana Islands).

 

11

 

“U.S. Government Obligations” means securities
that are (i) direct obligations of the United States of America,
the payment of which its full faith and credit is pledged or (ii) obligations
of a Person controlled or supervised by or 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, are not callable or redeemable at the option of
the issuer thereof at any time prior to the Stated Maturity of the Notes, and
shall also include a depository receipt issued by a bank or trust company as
custodian with respect to any such U.S. Government Obligation or a specific
payment of interest on or principal of any such U.S. Government Obligation held
by such custodian for the account of the holder of a depository receipt; 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 depository receipt from
any amount received by the custodian in respect of the U.S. Government
Obligation for the specific payment of interest on or principal of the U.S.
Government Obligation evidenced by such depository receipt.

 

SECTION 1.02                    Other
Definitions.

 

	
  Term

  	
   

  	
  Defined in

  Section

  
	
  “Act”

  	
   

  	
  1.05

  	
  (a)

  
	
  “Agent Members”

  	
   

  	
  2.12

  	
  (f)(5)

  
	
  “Bankruptcy Law”

  	
   

  	
  6.01

  	
   

  
	
  “Change in Control”

  	
   

  	
  3.09

  	
  (a)

  
	
  “Change in Control Repurchase Date”

  	
   

  	
  3.09

  	
  (a)

  
	
  “Change in Control Repurchase Notice”

  	
   

  	
  3.09

  	
  (c)

  
	
  “Change in Control Repurchase Price”

  	
   

  	
  3.09

  	
  (a)

  
	
  “Conversion Agent”

  	
   

  	
  2.03

  	
   

  
	
  “Conversion Price”

  	
   

  	
  10.01

  	
   

  
	
  “Current Market Price”

  	
   

  	
  10.04

  	
  (g)

  
	
  “Custodian”

  	
   

  	
  6.01

  	
   

  
	
  “Depositary”

  	
   

  	
  2.01

  	
  (a)

  
	
  “DTC”

  	
   

  	
  2.01

  	
  (a)

  
	
  “Event of Default”

  	
   

  	
  6.01

  	
   

  
	
  “Exchange Act”

  	
   

  	
  3.09

  	
  (a)

  
	
  “excluded securities”

  	
   

  	
  10.04

  	
  (d)

  
	
  “Expiration Time”

  	
   

  	
  10.04

  	
  (f)

  
	
  “fair market value”

  	
   

  	
  10.04

  	
  (g)

  
	
  “Legal Holiday”

  	
   

  	
  13.08

  	
   

  
	
  “Legend”

  	
   

  	
  2.06

  	
  (f)

  
	
  “Non-Electing Share”

  	
   

  	
  10.11

  	
   

  
	
  “Non-Payment Default”

  	
   

  	
  11.03

  	
  (b)

  
	
  “Notice of Default”

  	
   

  	
  6.01

  	
   

  
	
  “Paying Agent”

  	
   

  	
  2.03

  	
   

  
	
  “Payment Blockage Period”

  	
   

  	
  11.03

  	
  (b)

  

 

12

 

	
  “Payment Default”

  	
   

  	
  11.03

  	
  (a)

  
	
  “Permitted Junior Securities”

  	
   

  	
  11.02

  	
   

  
	
  “Post-Distribution Price”

  	
   

  	
  10.12

  	
   

  
	
  “Protected Purchaser”

  	
   

  	
  2.07

  	
   

  
	
  “Purchased Shares”

  	
   

  	
  10.04

  	
  (f)

  
	
  “QIBs”

  	
   

  	
  2.01

  	
  (a)

  
	
  “Record Date”

  	
   

  	
  10.04

  	
  (g)

  
	
  “Reference Period”

  	
   

  	
  10.04

  	
  (d)

  
	
  “Registrar”

  	
   

  	
  2.03

  	
   

  
	
  “Rights”

  	
   

  	
  10.04

  	
  (d)

  
	
  “Rights Agreement”

  	
   

  	
  10.04

  	
  (d)

  
	
  “Rule 144A Information”

  	
   

  	
  4.06

  	
   

  
	
  “Trigger Event”

  	
   

  	
  10.04

  	
  (d)

  

 

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

 

“Commission” means the SEC.

 

“indenture Notes” means the Notes.

 

“indenture Note holder” means a Noteholder.

 

“indenture to be qualified” means this Indenture.

 

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

 

“obligor” on the indenture Notes means the Company.

 

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

 

SECTION 1.04                    Rules
of Construction.

 

Unless the context otherwise requires:

 

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

 

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

 

(c)                                  “or”
is not exclusive;

 

13

 

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

 

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

 

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

 

SECTION 1.05                    Acts
of Holders.

 

(a)                                  Any
request, demand, authorization, direction, notice, consent, waiver or other
action provided by this Indenture to be given or taken by Holders may be
embodied in and evidenced by one or more instruments (which may take the form
of an electronic writing or message or is otherwise in accordance with
customary procedures of the Depositary or the Trustee) of substantially similar
tenor signed by such Holders in person or by their agent duly appointed in
writing (which may be in electronic form); 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.  Such instrument
or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the “Act” of Holders signing such
instrument or instruments.  Proof of
execution of any such instrument or of a writing appointing any such agent
(either of which may be in electronic form) shall be sufficient for any purpose
of this Indenture and conclusive in favor of the Trustee and the Company, if
made in the manner provided in this Section.

 

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

 

The ownership of Notes shall be proved by the register
for the Notes or by a certificate of the Registrar.

 

Any request, demand, authorization, direction, notice,
consent, waiver or other Act of the Holder of any Note shall bind every future
Holder of the same Note and the holder of every Note 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 Note.

 

If the Company shall solicit from the Holders any
request, demand, authorization, direction, notice, consent, waiver or other
Act, the Company may, at its option, by or pursuant to

 

14

 

a resolution of the Board of Directors, fix in advance
a record date for the determination of Holders entitled to give such request,
demand, authorization, direction, notice, consent, waiver or other Act, but the
Company shall have no obligation to do so. 
If such a record date is fixed, such request, demand, authorization,
direction, notice, consent, waiver or other Act may be given before or after
such record date, but only the Holders of record at the close of business on such
record date shall be deemed to be Holders for purposes of determining whether
Holders of the requisite proportion of outstanding Notes have authorized or
agreed or consented to such request, demand, authorization, direction, notice,
consent, waiver or other Act, and for that purpose the outstanding Notes shall
be computed as of such record date; provided that no such authorization,
agreement or consent by the Holders on such record date shall be deemed
effective unless it shall become effective pursuant to the provisions of this
Indenture not later than six months after the record date.

 

ARTICLE 2

 

THE NOTES

 

SECTION 2.01                    Form
and Dating.The Notes and the Trustee’s certificate of authentication to be
borne by such Notes shall be substantially in the form annexed hereto as
Exhibits A-1 and A-2, which are incorporated in and made a part of this
Indenture.  The terms and provisions
contained in the form of Note shall constitute, and are hereby expressly made,
a part of this Indenture and to the extent applicable,
the Company and the Trustee, by their execution and delivery of this Indenture,
expressly agree to such terms and provisions and to be bound thereby.

 

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

 

(a)                                  Global
Notes.  Notes offered and sold
within the United States to qualified institutional buyers as defined in
Rule 144A (“QIBs”) in reliance on Rule 144A shall be issued,
initially in the form of a 144A Global Note, which shall be deposited with the
Trustee at its Corporate Trust Office, as custodian for, and registered in the
name of, The Depository Trust Company (“DTC”) or the nominee thereof (such
depositary, or any successor thereto, and any such nominee being hereinafter
referred to as the “Depositary”), duly executed by the Company and
authenticated by the Trustee as hereinafter provided.  The aggregate principal amount of the 144A Global Notes may from
time to time be increased or decreased by adjustments made on the records of
the Trustee and the Depositary as hereinafter provided.

 

(b)                                 Global
Notes in General.  Each Global Note
shall represent such of the outstanding Notes as shall be specified therein and
each shall provide that it shall represent the

 

15

 

aggregate amount
of outstanding Notes from time to time endorsed thereon and that the aggregate
amount of outstanding Notes represented thereby may from time to time be
reduced or increased, as appropriate, to reflect exchanges, redemptions and
conversions.

 

Any adjustment of the aggregate principal amount of a
Global Note to reflect the amount of any increase or decrease in the amount of
outstanding Notes represented thereby shall be made by the Trustee in
accordance with instructions given by the Holder thereof as required by Section
2.12 hereof and shall be made on the records of the Trustee and the Depositary.

 

(c)                                  Book-Entry
Provisions.  This Section 2.01(c)
shall apply only to Global Notes deposited with or on behalf of the Depositary.

 

The Company shall execute and the Trustee shall, in
accordance with this Section 2.01(c), authenticate and deliver initially one or
more Global Notes that (a) shall be registered in the name of the Depositary,
(b) shall be delivered by the Trustee to the Depositary or pursuant to the
Depositary’s instructions or held by the Trustee as custodian for the
Depositary and (c) shall bear legends substantially to the following effect:

 

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

 

TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO
TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF THE DEPOSITORY TRUST
COMPANY OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF
PORTIONS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE
WITH THE RESTRICTIONS SET FORTH IN ARTICLE TWO OF THE INDENTURE REFERRED TO ON
THE REVERSE HEREOF.”

 

(d)                                 Restrictive
Legends.  Until the Restriction
Termination Date, all Global Notes and all Certificated Notes shall bear the
Legend, unless such Notes have been transferred pursuant to a registration
statement that has been declared effective under the Securities Act.  Until the Restriction Termination Date, the
Company covenants that any stock certificate representing shares of Common
Stock delivered by the Company upon conversion of any Notes

 

16

 

will bear the
Legend, unless such shares have been sold pursuant to a registration statement
that has been declared effective under the Securities Act.

 

(e)                                  Certificated
Notes.  Notes not issued as
interests in the Global Notes will be issued in certificated form substantially
in the form of Exhibit A-2 attached hereto.

 

SECTION 2.02                    Execution
and Authentication.  An Officer
shall sign the Notes for the Company by manual or facsimile signature.

 

Notes bearing the manual or facsimile signatures of
individuals who were at the time of the execution of the Notes 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 Notes or did not hold such offices at the
date of authentication of such Notes.

 

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

 

The Trustee shall authenticate and deliver Notes for
original issue in an aggregate principal amount of up to $85,000,000, or an
aggregate principal amount of up to $100,000,000 if the Overallotment Option is
exercised fully, upon a Company Order without any further action by the
Company.  The aggregate principal amount
of Notes outstanding at any time may not exceed the amount set forth in the
foregoing sentence, except as provided in Section 2.07.

 

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

 

SECTION 2.03                    Registrar,
Paying Agent and Conversion Agent. 
The Company shall maintain an office or agency where Notes may be
presented for registration of transfer or for exchange (“Registrar”), an office
or agency where Notes may be presented for purchase or payment (“Paying Agent”)
and an office or agency where Notes may be presented for conversion
(“Conversion Agent”).  The Registrar
shall keep a register of the Notes and of their transfer and exchange.  The Company may have one or more co-registrars,
one or more additional paying agents and one or more additional conversion
agents.  The term Paying Agent includes
any additional paying agent, including any named pursuant to Section 4.05.  The term Conversion Agent includes any
additional conversion agent, including any named pursuant to Section 4.05.

 

The Company shall enter into an appropriate agency
agreement with any Registrar, Paying Agent, Conversion Agent or co-registrar
(other than the Trustee).  The agreement
shall implement the provisions of this Indenture that relate to such
agent.  The Company shall notify the
Trustee of the name and address of any such agent.  If the Company fails to maintain a Registrar, Paying Agent or
Conversion Agent, the Trustee shall act as such

 

17

 

and shall be entitled to appropriate compensation
therefor pursuant to Section 7.06.  The
Company or any Subsidiary or an Affiliate of either of them may act as Paying
Agent, Registrar, Conversion Agent or co-registrar.

 

The Company initially appoints the Trustee as
Registrar, Conversion Agent and Paying Agent in connection with the Notes.

 

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

 

SECTION 2.05                    Noteholder
Lists.  The Trustee shall preserve
in as current a form as is reasonably practicable the most recent list
available to it of the names and addresses of Noteholders.  If the Trustee is not the Registrar, the
Company shall cause to be furnished to the Trustee at least semiannually on
January 1 and July 1 a listing of Noteholders dated within 13 days of the date
on which the list is furnished and at such other times as the Trustee may
request in writing a list in such form and as of such date as the Trustee may
reasonably require of the names and addresses of Noteholders.

 

SECTION 2.06                    Transfer
and Exchange.  Subject to Section
2.12 hereof,

 

(a)                                  upon
surrender for registration of transfer of any Note, together with a written
instrument of transfer satisfactory to the Registrar duly executed by the
Noteholder or such Noteholder’s attorney duly authorized in writing, at the
office or agency of the company designated as Registrar or co-registrar
pursuant to Section 2.03, the Company shall execute, and the Trustee shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Notes of any authorized denomination or
denominations, of a like aggregate principal amount.  The Company shall not charge a service charge for any
registration of transfer or exchange, but the Company may require payment of a
sum sufficient to pay all taxes, assessments or other governmental charges that
may be imposed in connection with the transfer or exchange of the Notes from
the Noteholder requesting such transfer or exchange.

 

At the option of the Holder, Notes may be exchanged
for other Notes of any authorized denomination or denominations, of a like
aggregate principal amount, upon surrender

 

18

 

of the Notes to be exchanged, together with a written
instrument of transfer satisfactory to the Registrar duly executed by the
Noteholder or such Noteholder’s attorney duly authorized in writing, at such
office or agency.  Whenever any Notes
are so surrendered for exchange, the Company shall execute, and the Trustee
shall authenticate and deliver, the Notes which the Holder making the exchange
is entitled to receive.

 

The Company shall not be required to make, and the
Registrar need not register, transfers or exchanges of Notes selected for
redemption (except, in the case of Notes to be redeemed in part, the portion
thereof not to be redeemed) or any Notes in respect of which a Change in
Control Repurchase Notice (as defined in Section 3.09(c)) has been given and
not withdrawn by the Holder thereof in accordance with the terms of this
Indenture (except, in the case of Notes to be purchased in part, the portion
thereof not to be purchased) or any Notes for a period of 15 days before the
mailing of a notice of redemption of Notes to be redeemed.

 

(b)                                 Notwithstanding
any provision to the contrary herein, so long as a Global Note remains
outstanding and is held by or on behalf of the Depositary, transfers of a
Global Note, in whole or in part, shall be made only in accordance with Section
2.12 and this Section 2.06(b). 
Transfers of a Global Note shall be limited to transfers of such Global
Note in whole, or in part, to nominees of the Depositary or to a successor of
the Depositary or such successor’s nominee.

 

(c)                                  Successive
registrations and registrations of transfers and exchanges as aforesaid may be
made from time to time as desired, and each such registration shall be noted on
the register for the Notes.

 

(d)                                 Any
Registrar appointed pursuant to Section 2.03 hereof shall provide to the
Trustee such information as the Trustee may reasonably require in connection
with the delivery by such Registrar of Notes upon transfer or exchange of
Notes.

 

(e)                                  No
Registrar shall be required to make registrations of transfer or exchange of
Notes during any periods designated in the text of the Notes or in this
Indenture as periods during which such registration of transfers and exchanges
need not be made.

 

(f)                                    If
Notes are issued upon the transfer, exchange or replacement of Notes subject to
restrictions on transfer and bearing the legends set forth on the form of Note
attached hereto as Exhibits A-1 and A-2 setting forth such restrictions
(collectively, the “Legend”), or if a request is made to remove the Legend on a
Note, the Notes so issued shall bear the Legend, or the Legend shall not be
removed, as the case may be, unless there is delivered to the Company and the
Registrar such satisfactory evidence, which shall include an Opinion of
Counsel, as may be reasonably required by the Company and the Registrar, that
neither the Legend nor the restrictions on transfer set forth therein are
required to ensure that transfers thereof comply with the provisions of
Rule 144A or Rule 144 under the Securities Act or that such Notes are
not “restricted” within the meaning of Rule 144 under the Securities
Act.  Upon (i) provision of such
satisfactory evidence, or (ii) notification by the Company to the Trustee
and  Registrar of the sale of such Note
pursuant to a registration statement that is effective at the time of such
sale, the

 

19

 

Trustee, at the
written direction of the Company, shall authenticate and deliver a Note that
does not bear the Legend.  If the Legend
is removed from the face of a Note and the Note is subsequently held by an
Affiliate of the Company, the Legend shall be reinstated.

 

SECTION 2.07                    Replacement
Notes.  If (a) any mutilated Note is
surrendered to the Trustee, or (b) the Company and the Trustee receive evidence
to their satisfaction of the destruction, loss or theft of any Note, and there
is delivered to the Company and the Trustee such Note or indemnity as may be
required by them to save each of them harmless, then, in the absence of notice
to the Company or the Trustee that such Note has been acquired by a protected
purchaser within the meaning of Article 8 of the Uniform Commercial Code
(a “Protected Purchaser”), the Company shall execute and upon its written
request the Trustee shall authenticate and deliver, in exchange for any such
mutilated Note or in lieu of any such destroyed, lost or stolen Note, a new
Note of like tenor and principal amount, bearing a number not contemporaneously
outstanding.

 

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

 

Upon the issuance of any new Notes under this Section
2.07, 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 Note issued pursuant to this Section 2.07 in
lieu of any mutilated, destroyed, lost or stolen Note shall constitute an
original additional contractual obligation of the Company, whether or not the
destroyed, lost or stolen Note shall be at any time enforceable by anyone, and
shall be entitled to all benefits of this Indenture equally and proportionately
with any and all other Notes duly issued hereunder.

 

The provisions of this Section 2.07 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 Notes.

 

SECTION 2.08                    Outstanding
Notes; Determinations of Holders’ Action. 
Notes outstanding at any time are all the Notes authenticated by the
Trustee except for those cancelled by it or delivered to it for cancellation,
those paid pursuant to Section 2.07 and those described in this Section 2.08 as
not outstanding.  A Note does not cease
to be outstanding because the Company or an Affiliate thereof holds the Note; provided,
however, that in determining whether the Holders of the requisite principal
amount of the outstanding Notes have given or concurred in any request, demand,
authorization, direction, notice, consent or waiver hereunder, Notes owned by
the Company or any other obligor upon the Notes or any Affiliate of the Company
or such other obligor shall be disregarded and deemed not to be outstanding,
except that, in determining whether the Trustee shall be protected in relying
upon any such

 

20

 

request, demand, authorization, direction, notice, consent or waiver,
only Notes which a Responsible Officer of the Trustee knows to be so owned
shall be so disregarded.  Subject to the
foregoing, only Notes outstanding at the time of such determination shall be
considered in any such determination (including, without limitation,
determinations pursuant to Articles 6 and 9).

 

If a Note is replaced pursuant to Section 2.07, it
ceases to be outstanding unless the Trustee receives proof satisfactory to it
that the replaced Note is held by a Protected Purchaser unaware that such Note
had been replaced, in which case the replacement Note shall be deemed not to be
outstanding.

 

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

 

If a Note is converted in accordance with Article 10,
then from and after the time of conversion on the conversion date, such Note
shall cease to be outstanding and interest shall cease to accrue on such Note.

 

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

 

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

 

SECTION 2.10                    Cancellation.  All Notes surrendered for payment, purchase
by the Company pursuant to Article 3, conversion, redemption or registration of
transfer or exchange shall, if surrendered to any person other than the Trustee,
be delivered to the Trustee and shall be promptly cancelled by it.  The Company may at any time deliver to the
Trustee for

 

21

 

cancellation any Notes previously authenticated and delivered hereunder
which the Company may have acquired in any manner whatsoever, and all Notes so
delivered shall be promptly cancelled by the Trustee.  The Company may not reissue, reoffer or resell new Notes to replace Notes it has
paid or delivered to the Trustee for cancellation or that any Holder has
converted pursuant to Article 10.  No
Notes shall be authenticated in lieu of or in exchange for any Notes cancelled
as provided in this Section 2.10, except as expressly permitted by this
Indenture.  All cancelled Notes held by
the Trustee shall be destroyed by the Trustee and the Trustee shall, upon
request, deliver a certificate of destruction to the Company.

 

SECTION 2.11                    Persons
Deemed Owners.  Prior to due
presentment of a Note 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 Note is registered as the owner of such Note for the purpose of receiving
payment of principal of the Note or the payment of any Redemption Price or Change
in Control Repurchase Price in respect thereof, and interest thereon, for the
purpose of conversion and for all other purposes whatsoever, whether or not
such Note 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.

 

SECTION 2.12                    Global
Notes.

 

(a)                                  Notwithstanding
any other provisions of this Indenture or the Notes, (A) transfers of a
Global Note, in whole or in part, shall be made only in accordance with Section
2.06 and Section 2.12(a)(i), (B) transfer of a beneficial interest in a Global
Note for a Certificated Note shall comply with Section 2.06 and Section
2.12(a)(ii) below, and (C) transfers of a Certificated Note shall comply with
Section 2.06 and Sections 2.12(a)(iii) and (iv) below.

 

(i)                                     Transfer of
Global Note.  A Global Note
may not be transferred, in whole or in part, to any Person other than the
Depositary or a nominee or any successor thereof, and no such transfer to any
such other Person may be registered; provided that this clause (i) shall
not prohibit any transfer of a Note that is issued in exchange for a Global
Note but is not itself a Global Note. 
No transfer of a Note to any Person shall be effective under this Indenture
or the Notes unless and until such Note has been registered in the name of such
Person.  Nothing in this Section
2.12(a)(i) shall prohibit or render ineffective any transfer of a beneficial
interest in a Global Note effected in accordance with the other provisions of
this Section 2.12(a).

 

(ii)                                  Restrictions
on Transfer of a Beneficial Interest in a Global Note for a Certificated Note.  A beneficial interest in a Global Note may
not be exchanged for a Certificated Note except upon satisfaction of the
requirements set forth below.  Upon receipt
by the Trustee of a transfer of a beneficial interest in a Global Note in
accordance with Applicable Procedures for a Certificated Note in the form
satisfactory to the Trustee, together with:

 

(a)                                  so
long as the Notes are Restricted Notes, certification, in the form set forth in
Exhibit B-1;

 

22

 

(b)                                 written
instructions to the Trustee to make, or direct the Registrar to make, an
adjustment on its books and records with respect to such Global Note to reflect
a decrease in the aggregate principal amount of the Notes represented by the
Global Note, such instructions to contain information regarding the Depositary
account to be credited with such decrease; and

 

(c)                                  if
the Company or Registrar so requests, an opinion of counsel or other evidence
reasonably satisfactory to them as to the compliance with the restrictions set
forth in the Legend,

 

then the Trustee shall
cause, or direct the Registrar to cause, in accordance with the standing
instructions and procedures existing between the Depositary and the Registrar,
the aggregate principal amount of Notes represented by the Global Note to be
decreased by the aggregate principal amount of the Certificated Note to be
issued, shall issue such Certificated Note and shall debit or cause to be
debited to the account of the Person specified in such instructions a
beneficial interest in the Global Note equal to the principal amount of the
Certificated Note so issued.

 

(iii)                               Transfer and Exchange of Certificated
Notes.  When Certificated
Notes are presented to the Registrar with a request:

 

(x)                                   to
register the transfer of such Certificated Notes; or

 

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

 

the Registrar shall register the transfer or make the
exchange as requested if its reasonable requirements for such transaction are
met; provided, however, that the Certificated Notes surrendered for
transfer or exchange:

 

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

 

(b)                                 so
long as such Notes are Restricted Notes, such Notes are being transferred or
exchanged pursuant to an effective registration statement under the Securities
Act or pursuant to clause (A), (B) or (C) below, and are accompanied by the
following additional information and documents, as applicable:

 

(A)                              if
such Certificated Notes are being delivered to the Registrar by a Holder for
registration in the name of such Holder, without transfer, a certification from
such Holder to that effect; or

 

(B)                                if
such Certificated Notes are being transferred to the Company, a certification
to that effect; or

 

23

 

(C)                                if
such Certificated Notes are being transferred pursuant to an exemption from
registration, (i) a certification to that effect (in the form set forth in
Exhibits B-1, if applicable) and (ii) if the Company or Registrar so requests,
an opinion of counsel or other evidence reasonably satisfactory to them as to
the compliance with the restrictions set forth in the Legend.

 

(iv)                              Restrictions
on Transfer of a Certificated Note for a Beneficial Interest in a Global Note.  A Certificated Note may not be exchanged for
a beneficial interest in a Global Note except upon satisfaction of the
requirements set forth below.  Upon
receipt by the Trustee of a Certificated Note, duly endorsed or accompanied by
appropriate instruments of transfer, in form reasonably satisfactory to the
Trustee, together with:

 

(v)                                 so
long as the Notes are Restricted Notes, certification, in the form set forth in
Exhibit B-1, that such Certificated Note is being transferred to a QIB in
accordance with Rule 144A; and

 

(a)                                  written
instructions directing the Trustee to make, or to direct the Registrar to make,
an adjustment on its books and records with respect to such Global Note to
reflect an increase in the aggregate principal amount of the Notes represented
by the Global Note, such instructions to contain information regarding the
Depositary account to be credited with such increase, then the Trustee shall
cancel such Certificated Note and cause, or direct the Registrar to cause, in
accordance with the standing instructions and procedures existing between the
Depositary and the Registrar, the aggregate principal amount of Notes
represented by the Global Note to be increased by the aggregate principal amount
of the Certificated Note to be exchanged, and shall credit or cause to be
credited to the account of the Person specified in such instructions a
beneficial interest in the Global Note equal to the principal amount of the
Certificated Note so cancelled.  If no
Global Notes are then outstanding, the Company shall issue and the Trustee
shall authenticate, upon written order of the Company in the form of an
Officers’ Certificate, a new Global Note in the appropriate principal amount.

 

(b)                                 Subject
to the succeeding paragraph, every Note shall be subject to the restrictions on
transfer provided in the Legend including the delivery of an opinion of
counsel, if so provided.  Whenever any
Restricted Note is presented or surrendered for registration of transfer or for
exchange for a Note registered in a name other than that of the Holder, such
Note must be accompanied by a certificate in substantially the form set forth
in Exhibit B-1, dated the date of such surrender and signed by the Holder of
such Note, as to compliance with such restrictions on transfer.  The Registrar shall not be required to
accept for such registration of transfer or exchange any Note not so
accompanied by a properly completed certificate.

 

(c)                                  The
restrictions imposed by the Legend upon the transferability of any Note shall
cease and terminate when such Note has been sold pursuant to an effective
registration statement under the Securities Act or transferred in compliance
with Rule 144 under

 

24

 

the Securities Act
(or any successor provision thereto) or, if earlier, upon the expiration of the
holding period applicable to sales thereof under Rule 144(k) under the
Securities Act (or any successor provision). 
Any Note as to which such restrictions on transfer shall have expired in
accordance with their terms or shall have terminated may, upon a surrender of
such Note for exchange to the Registrar in accordance with the provisions of
this Section 2.12 (accompanied, in the event that such restrictions on transfer
have terminated by reason of a transfer in compliance with Rule 144 or any
successor provision, by an opinion of counsel having substantial experience in
practice under the Securities Act and otherwise reasonably acceptable to the Company,
addressed to the Company and in form acceptable to the Company, to the effect
that the transfer of such Note has been made in compliance with Rule 144
or such successor provision), be exchanged for a new Note, of like tenor and
aggregate principal amount, which shall not bear the restrictive Legend.  The Company shall inform the Trustee of the
effective date of any registration statement registering the Notes under the
Securities Act.  The Trustee shall have
no obligation or duty to monitor, determine or inquire as to compliance with
any restrictions on transfer imposed under this Indenture or under applicable
law with respect to any transfer of any interest in any Note (including any
transfers between or among DTC participants, members or beneficial owners in
any Global Note) other than to require delivery of such certificates and other
documentation or evidence as are expressly required by, and to do so if and
when expressly required by, the terms of this Indenture, and to examine the
same to determine substantial compliance as to form with the express
requirements hereof.  The Trustee shall
not be liable for any action taken or omitted to be taken by it in good faith
in accordance with the aforementioned opinion of counsel or registration
statement.

 

(d)                                 In
the event that Rule 144(k) as promulgated under the Securities Act is
amended to shorten the two-year restriction period, then restrictions on
transfer on the Notes and the Common Stock will be deemed to refer to the
shortened restriction period.  The Company
undertakes to inform the Trustee if such change to Rule 144(k) occurs and the
effect (if any) to the restrictions on transfer applicable to the Notes and
Common Stock and shall provide additional information (including an Opinion of
Counsel and/or an Officers’ Certificate) if so requested by the Trustee.

 

(e)                                  As
used in the preceding two paragraphs of this Section 2.12, the term “transfer”
encompasses any sale, pledge, transfer, hypothecation or other disposition of
any Note.

 

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

 

(1)                                  Notwithstanding
any other provisions of this Indenture or the Notes, except as provided in
Section 2.12(a)(i), a Global Note shall not be exchanged in whole or in part
for a Note registered in the name of any Person other than the Depositary or
one or more nominees thereof, provided that a Global Note may be exchanged for
Notes registered in the names of any person designated by the  Depositary in the event that (i) the
Depositary has notified the Company that it is unwilling or unable to continue
as Depositary for such Global Note or such Depositary has ceased to be a
“clearing agency” 

 

25

 

registered under the
Exchange Act, and a successor Depositary is not appointed by the Company within
90 days or (ii) an Event of Default has occurred and is continuing with
respect to the Notes.  Any Global Note
exchanged pursuant to clause (i) above shall be so exchanged in whole and not
in part, and any Global Note exchanged pursuant to clause (ii) above may be
exchanged in whole or from time to time in part as directed by the
Depositary.  Any Note issued in exchange
for a Global Note or any portion thereof shall be a Global Note; provided
that any such Note so issued that is registered in the name of a Person other
than the Depositary or a nominee thereof shall not be a Global Note.

 

(2)                                  Notes
issued in exchange for a Global Note or any portion thereof shall be issued in
definitive, fully registered form, without interest coupons, shall have an
aggregate principal amount equal to that of such Global Note or portion thereof
to be so exchanged, shall be registered in such names and be in such authorized
denominations as the Depositary shall designate and shall bear the applicable
legends provided for herein.  Any Global
Note to be exchanged in whole shall be surrendered by the Depositary to the
Trustee, as Registrar.  With regard to
any Global Note to be exchanged in part, either such Global Note shall be so
surrendered for exchange or, if the Trustee is acting as custodian for the
Depositary or its nominee with respect to such Global Note, the principal
amount thereof shall be reduced, by an amount equal to the portion thereof to
be so exchanged, by means of an appropriate adjustment made on the records of
the Trustee.  Upon any such surrender or
adjustment, the Trustee shall authenticate and deliver the Note issuable on
such exchange to or upon the order of the Depositary or an authorized
representative thereof.

 

(3)                                  Subject
to the provisions of clause (5) below, the registered Holder may grant proxies
and otherwise authorize any Person, including Agent Members (as defined below)
and persons that may hold interests through Agent Members, to take any action
which a holder is entitled to take under this Indenture or the Notes.

 

(4)                                  In
the event of the occurrence of any of the events specified in clause (1) above,
the Company will promptly make available to the Trustee a reasonable supply of
Certificated Notes in definitive, fully registered form, without interest
coupons.

 

(5)                                  Neither
any members of, or participants in, the Depositary (collectively, the “Agent
Members”) nor any other Persons on whose behalf Agent Members may act shall
have any rights under this Indenture with respect to any Global Note registered
in the name of the Depositary or any nominee thereof, or under any such Global
Note, and the Depositary or such nominee, as the case may be, may be treated by
the Company, the Trustee and any agent of the Company or the Trustee as the
absolute owner and holder of such Global Note for all purposes whatsoever.  Notwithstanding the foregoing, nothing
herein shall prevent the Company, the Trustee or any agent of the Company or
the Trustee from giving effect to any written certification, proxy or other
authorization furnished by the Depositary or such nominee, as the case may be,
or impair, as between the Depositary, its Agent Members and any other person on
whose behalf an Agent

 

26

 

Member may act,
the operation of customary practices of such Persons governing the exercise of
the rights of a holder of any Note.

 

SECTION 2.13                    CUSIP
Numbers.  The Company in issuing the
Notes may use “CUSIP” numbers and, if so, the Trustee shall use “CUSIP” numbers
in notices of redemption as a convenience to Holders; provided that any
such notice may state that no representation is made as to the correctness of
such numbers either as printed on the Notes or as contained in any notice of a
redemption and that reliance may be placed only on the other identification
numbers printed on the Notes, and any such redemption shall not be affected by
any defect in or omission of such numbers. 
The Company will promptly notify the Trustee of any change in the CUSIP
numbers.

 

SECTION 2.14                    Defaulted
Interest.  If the Company defaults
in a payment of interest on the Notes, it shall pay, or shall deposit with the
Paying Agent money in immediately available funds sufficient to pay, the defaulted
interest, plus (to the extent lawful) any interest payable on the defaulted
interest, to the Persons who are Holders on a subsequent special record
date.  A special record date, as used in
this Section 2.14 with respect to the payment of any defaulted interest, shall
mean the 15th day next preceding the date fixed by the Company for the payment
of defaulted interest, whether or not such day is a Business Day.  At least 15 days before the subsequent
special record date, the Company shall mail to each Holder and to the Trustee a
notice that states the subsequent special record date, the payment date and the
amount of defaulted interest to be paid.

 

SECTION 2.15                    Registration
Default.  Liquidated Damages shall
be payable by the Company upon a Registration Default (as defined in the
Registration Rights Agreement) as provided in the Notes.  If a Registration Default occurs, the
Company shall deliver to the Trustee an Officers’ Certificate stating (1) the
amount of the Liquidated Damages, and (2) when such Liquidated Damages are
payable.

 

ARTICLE 3

 

REDEMPTION
AND PURCHASES

 

SECTION 3.01                    Redemption.  The Notes are not redeemable prior to
May 5, 2006.  On and after
May 5, 2006, the Company may, at its option, redeem the Notes in whole at
any time or in part from time to time, on any date prior to Stated Maturity, upon notice as set forth in Section 3.04,
at a redemption price equal to 100% of the principal amount (the
“Redemption Price”), plus any interest accrued but not paid prior to (but not
including) the Redemption Date, if the Closing Price of the Common Stock has
exceeded 140% of the Conversion Price (as defined in Article 10 and as such may
be adjusted from time to time) then in effect for at least 20 Trading Days in
any consecutive 30-Trading Day period ending on the Trading Day prior to the
date of mailing of the notice of optional redemption pursuant to Section 3.04.

 

27

 

SECTION 3.02                    Notice
of Trustee.  If the Company elects
to redeem Notes pursuant to the redemption provisions of Section 3.01
hereof, it shall notify the Trustee at least 30 days prior but not more than 60
days prior to the Redemption Date of such intended Redemption Date, the
principal amount of Notes to be redeemed and the CUSIP numbers of the Notes to
be redeemed.

 

SECTION 3.03                    Selection
of Notes to be Redeemed.  If fewer
than all the Notes are to be redeemed, the Trustee shall select the particular
Notes to be redeemed from the outstanding Notes by a method that complies with
the requirements of any exchange on which the Notes are listed, or, if the
Notes are not listed on an exchange, on a pro rata basis or by lot or in
accordance with any other method the Trustee considers fair and
appropriate.  Notes and portions thereof
that the Trustee selects shall be in principal amounts equal to $1,000 or any
whole multiple thereof.

 

If any Note selected for partial redemption is
converted in part before termination of the conversion right with respect to
the portion of the Note so selected, the converted portion of such Note shall
be deemed to be the portion selected for redemption (provided, however, that
the Holder of such Note so converted and deemed redeemed shall not be entitled
to any additional interest payment as a result of such deemed redemption than
such Holder would have otherwise been entitled to receive upon conversion of
such Note). Notes which have been converted during a selection of Notes to be
redeemed may be treated by the Trustee as outstanding for the purpose of such
selection.

 

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

 

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

 

SECTION 3.04                    Notice
of Redemption.  Notice of redemption
shall be given in the manner provided in Section 13.02 hereof to the Holders of
Notes to be redeemed.  Such notice shall
be given not less than 20 nor more than 60 days prior to the Redemption Date
for redemption pursuant to Section 3.01.

 

All notices of redemption shall state:

 

(1)                                  the
Redemption Date;

 

(2)                                  the
Redemption Price and interest accrued and unpaid to, but not including, the
Redemption Date, if any;

 

28

 

(3)                                  if
fewer than all the outstanding Notes are to be redeemed, the aggregate
principal amount of Notes to be redeemed and the aggregate principal amount of
Notes which will be outstanding after such partial redemption;

 

(4)                                  that
on the Redemption Date the Redemption Price and interest accrued and unpaid to,
but not including, the Redemption Date, if any, will become due and payable
upon each such Note to be redeemed, and that interest thereon shall cease to
accrue on and after such date;

 

(5)                                  the
Conversion Price, the date on which the right to convert the principal of the
Notes to be redeemed will terminate and the places where such Notes may be
surrendered for conversion;

 

(6)                                  the
place or places where such Notes are to be surrendered for payment of the
Redemption Price and accrued and unpaid interest, if any; and

 

(7)                                  the
CUSIP number of the Notes.

 

The notice given shall specify the last date on which
exchanges or transfers of Notes may be made pursuant to Section 2.06
hereof, and shall specify the serial numbers of Notes and the portions thereof
called for redemption.

 

Notice of redemption of Notes to be redeemed at the
election of the Company shall be given by the Company.

 

SECTION 3.05                    Effect
of Notice of Redemption.  Notice of
redemption having been given as provided in Section 3.04 hereof, the Notes 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 and unpaid interest) such Notes shall cease to bear
interest.  Upon surrender of any such
Note for redemption in accordance with such notice, such Note shall be paid by
the Company at the Redemption Price plus accrued and unpaid interest, if any,
to, but not including, the Redemption Date; provided, however, that the
installments of interest on Notes whose Stated Maturity is prior to or on the
Redemption Date shall be payable to the Holders of such Notes, or one or more
predecessor Notes, registered as such on the relevant Record Date according to
their terms and the provisions of Section 2.01 hereof.

 

If any Note called for redemption shall not be so paid
upon surrender thereof for redemption, the principal, shall, until paid, bear
interest from the Redemption Date at the Interest Rate.

 

SECTION 3.06                    Deposit
of Redemption Price.  Prior to or on
any Redemption Date, the Company shall deposit with the Trustee or with a
Paying Agent an amount of money sufficient to pay the Redemption Price of all
the Notes to be redeemed on that Redemption Date, other than any Notes called
for redemption on that date which have been

 

29

 

converted prior to the date of such deposit, and accrued and unpaid
interest, if any, on such Notes.

 

If any Note 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 Note shall (subject to any right of
the Holder of such Note or any predecessor Note to receive interest as provided
in Section 4.01 hereof) be paid to the Company on Company Request or, if
then held by the Company, shall be discharged from such trust.

 

SECTION 3.07                    Notes
Redeemed in Part.  Any Note which is
to be redeemed only in part shall be surrendered at an office or agency of the
Company designated for that purpose pursuant to Section 4.05 hereof (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 the Holder’s attorney duly authorized in
writing), and the Company shall execute, and the Trustee shall authenticate and
deliver to the Holder of such Note without service charge, a new Note or Notes
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 Note so surrendered.

 

SECTION 3.08                    Conversion
Arrangement on Call for Redemption. 
In connection with any redemption of Notes, the Company may arrange for
the purchase and conversion of any Notes called for redemption by an agreement
with one or more investment banks or other purchasers to purchase such Notes by
paying to the Trustee in trust for the Noteholders, on or prior to 11:00 a.m.
New York City time on the Redemption Date, an amount that, together with any
amounts deposited with the Trustee by the Company for the redemption of such
Notes, is not less than the Redemption Price of such Notes, plus accrued and
unpaid interest.  Notwithstanding
anything to the contrary contained in this Article 3, the obligation of the
Company to pay the Redemption Price of such Notes shall be deemed to be satisfied
and discharged to the extent such amount is so paid by such purchasers; provided,
however, that nothing in this Section 3.08 shall relieve the Company of its
obligation to pay the Redemption Price, plus accrued and unpaid interest, to
but excluding the relevant Redemption Date on Notes called for redemption.  If such an agreement is entered into, any
Notes not duly surrendered for conversion by the Holders thereof may, at the
option of the Company, be deemed, to the fullest extent
permitted by law, acquired by such purchasers from such Holders and
(notwithstanding anything to the contrary contained in Article 10) surrendered
by such purchasers for conversion, all as of immediately prior to the close of
business on the Redemption Date, subject to payment of the above amount as
aforesaid.  The Trustee shall hold and
pay to the Holders whose Notes are selected for redemption any such amount paid
to it for purchase and conversion in the same manner as it would moneys
deposited with it by the Company for the redemption of Notes.  Without the Trustee’s prior written consent,
no arrangement between the Company and such purchasers for the purchase and
conversion of any Notes shall increase or otherwise affect any of the powers,
duties, responsibilities or obligations of the Trustee as set forth in this
Indenture, and the Company agrees to indemnify the Trustee from, and hold it
harmless against, any loss, liability or expense arising out of or in
connection with any such arrangement for the purchase and conversion of any
Notes between the Company and such purchasers, including the costs and

 

30

 

expenses incurred by the
Trustee in the defense of any claim or liability arising out of or in
connection with the exercise or performance of any of its powers, duties,
responsibilities or obligations under this Indenture, except to the extent such
loss, liability, expense or cost results from Trustee’s gross negligence or
willful misconduct.

 

SECTION 3.09                    Repurchase
of Notes at Option of the Holder upon Change in Control.

 

(a)                                  If
there shall have occurred a Change in Control, all or any portion of the Notes
of any Holder equal to $1,000 or a whole multiple of $1,000, not previously
called for redemption, shall be repurchased by the Company, at the option of
such Holder, at a repurchase price equal to 100% of the principal amount of the
Notes to be repurchased, together with interest accrued and unpaid to, but
excluding, the repurchase date (the “Change in Control Repurchase Price”), on
the date (the “Change in Control Repurchase Date”) that is 45 days after the
Change in Control Repurchase Notice; provided, however, that
installments of interest on Notes whose Stated Maturity is prior to or on the
Change in Control Repurchase Date shall be payable to the Holders of such
Notes, or one or more predecessor Notes, registered as such on the relevant
Regular Record Date according to their terms.

 

Whenever in this Indenture (including Sections 2.01,
6.01(a) and 6.07 hereof) or Exhibit A-1 annexed hereto there is a reference, in
any context, to the principal of any Note as of any time, such reference shall
be deemed to include reference to the Change in Control Repurchase Price
payable in respect to such Note to the extent that such Change in Control
Repurchase Price is, was or would be so payable at such time, and express
mention of the Change in Control Repurchase Price in any provision of this
Indenture shall not be construed as excluding the Change in Control Repurchase
Price in those provisions of this Indenture when such express mention is not
made; provided, however, that, for the purposes of Article 11 hereof,
such reference shall be deemed to include reference to the Change in Control
Repurchase Price only to the extent the Change in Control Repurchase Price is
payable in cash.

 

A “Change in Control” of the Company, or any successor
entity who is subject to the terms of this Indenture, shall be deemed to have
occurred at such time after the original issuance of Notes as any of the
following events shall occur:

 

(i)                                     the
acquisition by any person of beneficial ownership, directly or indirectly,
through a purchase, merger (except a merger by the Company described in Section
3.09(a)(ii)(A) or (B)) or other acquisition transaction or series of
transactions, of shares of the Capital Stock of the Company entitling that
person to exercise 50% or more of the total voting power of all shares of such
Capital Stock entitled to vote generally in elections of directors, other than
any acquisition by the Company, any of its Subsidiaries or any employee benefit
plans of the Company; or

 

(ii)                                  any
consolidation or merger of the Company with or into any other person, any
merger of another person into the Company, or any conveyance, transfer,

 

31

 

sale, lease or
other disposition of all or substantially all of the Company’s properties and
assets to another person, other than:

 

(A)                              any
transaction (1) that does not result in any reclassification, conversion,
exchange or cancellation of outstanding shares of the Capital Stock of the
Company and (2) pursuant to which holders of the Capital Stock of the Company
immediately prior to the transaction are entitled to exercise, directly or
indirectly, 50% or more of the total voting power of all shares of the Capital
Stock of the Company entitled to vote generally in the election of directors of
the continuing or surviving person immediately after the transaction;

 

(B)                                any
merger solely for the purpose of changing the Company’s jurisdiction of
incorporation and resulting in a reclassification, conversion or exchange of
outstanding shares of Common Stock solely into shares of Common Stock of the
surviving entity;

 

(iii)                               during any consecutive
two-year period, individuals who at the beginning of that two-year period
constituted the Board of Directors (together with any new directors whose
election to the Board of Directors, or whose nomination for election by the
shareholders of the Company, was approved by a vote of a majority of the
directors then still in office who were either directors at the beginning of
such period or whose election or nomination for election were previously so
approved) cease for any reason to constitute a majority of the Board of
Directors then in office; or

 

(iv)                              the
Company is liquidated or dissolved or a resolution is passed by the Company’s
stockholders approving a plan of liquidation or dissolution of the Company
other than in a transaction which complies with the provisions described in Article
5 of the Indenture.

 

Beneficial ownership shall be determined in accordance
with Rule 13d-3 promulgated by the SEC under the Securities and Exchange Act of
1934, as amended (the “Exchange Act”). 
The term “person” shall include any syndicate or group that would be
deemed to be a “person” under Section 13(d)(3) of the Exchange Act.

 

(b)                                 Unless
the Company shall have theretofore called for redemption all of the outstanding
Notes, prior to or on the 30th day after the occurrence of a Change in Control,
the Company, or, at the written request and expense of the Company prior to or
on the 30th day after such occurrence, the Trustee, shall give to all
Noteholders, in the manner provided in Section 13.02 hereof, notice of the
occurrence of the Change in Control and of the repurchase right set forth
herein arising as a result thereof.  The
Company shall also deliver a copy of such notice of a repurchase right to the
Trustee.  The notice shall include a
form of Change in Control Repurchase Notice (as defined in Section 3.09(c))
to be completed by the Noteholder and shall state:

 

32

 

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

 

(2)                                  
the date by which the Change in Control Repurchase Notice pursuant to this
Section 3.09 must be given;

 

(3)                                  
the Change in Control Repurchase Date;

 

(4)                                  
the Change in Control Repurchase Price;

 

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

 

(6)                                  
the Conversion Price and any adjustments thereto;

 

(7)                                  
that Notes as to which a Change in Control Repurchase Notice has been given may
be converted pursuant to Article 10 hereof only if the Change in Control
Repurchase Notice has been withdrawn in accordance with the terms of this
Indenture;

 

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

 

(9)                                  
that the Change in Control Repurchase Price for any Note as to which a Change
in Control Repurchase Notice has been duly given and not withdrawn will be paid
promptly following the later of the Change in Control Repurchase Date and the
time of surrender of such Note as described in (8) above;

 

(10)                            
briefly, the procedures the Holder must follow to exercise rights under this
Section 3.09;

 

(11)                            
briefly, the conversion rights of the Notes;

 

(12)                            the
procedures for withdrawing a Change in Control Repurchase Notice;

 

(13)                            that,
unless the Company defaults in making payment of such Redemption Price,
interest on Notes called for redemption will cease to accrue on and after the
Redemption Date; and

 

(14)                            the
CUSIP number of the Notes.

 

(c)                                  A
Holder may exercise its rights specified in Section 3.09(a) hereof upon
delivery of a written notice of purchase (a “Change in Control Repurchase
Notice”) to the Paying Agent on or prior to the 30th day after the
date of the Company’s notice pursuant to 3.09(b) above, stating:

 

(1)                                  the
certificate number of the Note which the Holder will deliver to be purchased;

 

33

 

(2)                                  the
portion of the principal amount of the Note which the Holder will deliver to be
purchased, which portion must be $1,000 or any whole multiple thereof; and

 

(3)                                  that
such Note shall be purchased pursuant to the terms and conditions specified in
paragraph 6 on the reverse side of the Notes.

 

The delivery of such Note to the Paying Agent prior
to, on or after the Change in Control Repurchase Date (together with all
necessary endorsements) at the offices of the Paying Agent shall be a condition
to the receipt by the Holder of the Change in Control Repurchase Price
therefor; provided, however, that such Change in Control Repurchase
Price shall be so paid pursuant to this Section 3.09 only if the Note so
delivered to the Paying Agent shall conform in all respects to the description
thereof set forth in the related Change in Control Repurchase Notice.

 

The Company shall purchase from the Holder thereof,
pursuant to this Section 3.09, a portion of a Note if the principal amount of
such portion is $1,000 or an integral multiple of $1,000.  Provisions of this Indenture that apply to
the purchase of all of a Note also apply to the purchase of such portion of
such Note.

 

Any purchase by the Company contemplated pursuant to
the provisions of this Section 3.09 shall be consummated by the delivery of the
consideration to be received by the Holder promptly following the later of the
Change in Control Repurchase Date and the time of delivery of the Note to the
Paying Agent in accordance with this Section 3.09.

 

Notwithstanding anything herein to the contrary, any
Holder delivering to the Paying Agent the Change in Control Repurchase Notice
contemplated by this Section 3.09(c) shall have the right to withdraw such
Change in Control Repurchase Notice at any time prior to the close of business
on the Change in Control Repurchase Date by delivery of a written notice of
withdrawal to the Paying Agent in accordance with Section 3.10.

 

The Paying Agent shall promptly notify the Company of
the receipt by it of any Change in Control Repurchase Notice or written
withdrawal thereof.

 

SECTION 3.10                    Effect
of Change in Control Repurchase Notice. 
Upon receipt by the Paying Agent of the Change in Control Repurchase
Notice specified in Section 3.09(c), the Holder of the Note in respect of which
such Change in Control Repurchase Notice was given shall (unless such Change in
Control Repurchase Notice is withdrawn as specified in the following two
paragraphs) thereafter be entitled to receive solely the Change in Control
Repurchase Price with respect to such Note. 
Such Change in Control Repurchase Price shall be paid to such Holder,
subject to receipt of consideration for the Notes and/or Notes from the Holders
by the Paying Agent, promptly following the later of (x) the Change in Control
Repurchase Date with respect to such Note (provided the conditions in Section
3.09(c) have been satisfied) and (y) the time of delivery of such Note to the
Paying Agent by the Holder thereof in the manner required by Section
3.09(c).  Notes in respect of which a
Change in Control Repurchase Notice has been given by the Holder thereof may
not be converted pursuant to Article 10 hereof on or
after the date of the delivery of such Change in Control Repurchase

 

34

Notice unless such Change
in Control Repurchase Notice has first been validly withdrawn as specified in
the following two paragraphs.

 

A Change in Control Repurchase Notice may be withdrawn
by means of a written notice of withdrawal delivered to the office of the Paying
Agent in accordance with the Change in Control Repurchase Notice at any time
prior to the close of business on the Change in Control Repurchase Date
specifying:

 

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

 

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

 

(3)                                  the
principal amount, if any, of such Note which remains subject to the original
Change in Control Repurchase Notice and which has been or will be delivered for
purchase by the Company.

 

There shall be no repurchase of any Notes pursuant to
Section 3.09 if there has occurred (prior to, on or after, as the case may be,
the giving, by the Holders of such Notes, of the required Change in Control
Repurchase Notice) and is continuing an Event of Default (other than a default
in the payment of the Change in Control Repurchase Price with respect to such
Notes).  The Paying Agent will promptly
return to the respective Holders thereof any Notes (x) with respect to which a
Change in Control Repurchase Notice has been withdrawn in compliance with this
Indenture, or (y) held by it during the continuance of an Event of Default
(other than a default in the payment of the Change in Control Repurchase Price
with respect to such Notes) in which case, upon such return, the Change in
Control Repurchase Notice with respect thereto shall be deemed to have been
withdrawn.

 

SECTION 3.11                    Deposit
of Change in Control Repurchase Price. 
Prior to 11:00 a.m. (New York City time) on the Business Day following
the Change in Control Repurchase Date the Company shall deposit with the
Trustee or with the Paying Agent (or, if the Company or a Subsidiary or an
Affiliate of either of them is acting as the Paying Agent, shall segregate and
hold in trust as provided in Section 2.04) an amount of money (in immediately
available funds if deposited on such Business Day) sufficient to pay the
aggregate Change in Control Repurchase Price of all the Notes or portions
thereof which are to be purchased as of the Change in Control Repurchase Date.

 

SECTION 3.12                    Notes
Purchased in Part.  Any Note which
is to be purchased only in part shall be surrendered at the office of the
Paying Agent (with, if the Company or the Trustee so requires, due endorsement
by, or a written instrument of transfer in form satisfactory to the Company and
the Trustee duly executed by, the Holder thereof or such Holder’s attorney duly
authorized in writing) and the Company shall execute and the Trustee shall authenticate
and deliver to the Holder of such Note, without service charge, a new Note or
Notes, of any authorized denomination as requested by such Holder in aggregate
principal

 

35

 

amount equal to, and in exchange for, the portion of
the principal amount of the Note so surrendered which is not purchased.

 

SECTION 3.13                    Covenant
to Comply with Securities Laws upon Purchase of Notes.  In connection with any offer to purchase or
repurchase of Notes under Section 3.09 hereof (provided that such offer or
purchase constitutes an “issuer tender offer” for purposes of Rule 13e-4
(which term, as used herein, includes any successor provision thereto) under
the Exchange Act at the time of such offer or purchase), the Company shall
(i) comply with Rule 13e-4, Rule 14e-1 and any other tender
offer rules under the Exchange Act which may then be applicable, (ii) file the
related Schedule TO (or any successor schedule, form or report) or any other
schedule required under the Exchange Act, and (iii) otherwise comply with all
federal and state securities laws so as to permit the rights and obligations
under Section 3.09 to be exercised in the time and in the manner specified in
Section 3.09.

 

SECTION 3.14                    Repayment
to the Company.  The Trustee and the
Paying Agent shall return to the Company any cash that remains unclaimed as
provided in paragraph 12 of the Notes, together with interest, if any, thereon,
held by them for the payment of the Change in Control Repurchase Price; provided,
however, that to the extent that the aggregate amount of cash deposited by the
Company pursuant to Section 3.11 exceeds the aggregate Change in Control
Repurchase Price of the Notes or portions thereof which the Company is
obligated to purchase as of the Change in Control Repurchase Date then promptly
after the Business Day following the Change in Control Repurchase Date the
Trustee shall return any such excess to the Company together with interest, if
any, thereon.

 

ARTICLE 4

 

COVENANTS

 

SECTION 4.01                    Payment
of Principal and Interest on the Notes. 
The Company will duly and punctually pay the principal of and Liquidated
Damages, if any, and interest at the Interest Rate in respect of the Notes in
accordance with the terms of the Notes and this Indenture.  The Company will deposit or cause to be
deposited with the Trustee as directed by the Trustee, no later than 11:00
a.m., New York time on the day of the Stated Maturity of any Note or
installment of interest, all payments so due. 
Principal amount, Redemption Price, Change in Control Repurchase Price,
and cash interest shall be considered paid on the applicable date due if at
11:00 a.m., New York time on such date (or, in the case of a Change in Control
Repurchase Price on the Business Day following the applicable Change in Control
Repurchase Date) the Trustee or the Paying Agent holds, in accordance with this
Indenture, money or securities, if permitted hereunder, sufficient to pay all
such amounts then due.

 

The Company shall, to the extent permitted by law, pay
cash interest on overdue amounts at the rate per annum set forth in paragraph 1
on the reverse side of the Notes, compounded semiannually, which interest shall
accrue from the date such overdue amount was originally due to the date payment
of such amount, including interest thereon, has been made or duly provided
for.  All such overdue interest shall be
payable on demand.

 

36

 

SECTION 4.02                    Reports
to Holders.  The Company shall file
with the Trustee, within 15 days after it files such annual and quarterly
reports, information, documents and other reports with the SEC, copies of its
annual report and of the information, documents and other reports (or copies of
such portions of any of the foregoing as the SEC may by rules and regulations
prescribe) which the Company is required to file with the SEC pursuant to
Section 13 or 15(d) of the Exchange Act (the “SEC Reports”).  If at any time the Company is not subject to
Section 13 or 15(d) of the Exchange Act, the Company shall provide reports
containing substantially the same information as that contained in the SEC
Reports (the “Trustee Reports”), such reports to be provided at the same
times the Company would have been required to provide the SEC Reports to the
Trustee pursuant to the immediately preceding sentence had it then been subject
to section 13 or 15(d) of the Exchange Act, provided that the Trustee Reports
need not include any certifications from officers of the Company.  The Company also shall comply with the other
provisions of TIA Section 314(a).

 

SECTION 4.03                    Compliance
Certificate.  The Company shall
deliver to the Trustee within 120 days after the end of each fiscal year of the
Company (beginning with the fiscal year ending on December 31, 2003) 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.

 

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

 

SECTION 4.05                    Maintenance
of Office or Agency.  The Company
will maintain in The Borough of Manhattan, The City of New York, an office or
agency of the Trustee, Registrar, Paying Agent and Conversion Agent where Notes
may be presented or surrendered for payment, where Notes may be surrendered for
registration of transfer, exchange, purchase, redemption or conversion and
where notices and demands to or upon the Company in respect of the Notes and
this Indenture may be served.  The
office of J.P.Morgan Chase Bank, 4 New York Plaza, 1st Floor,
New York, New York 10004-2413, attention: Institutional Trust and Securities
Window, shall initially be such office or agency for all of the aforesaid
purposes.  The Company shall give prompt
written notice to the Trustee of the location, and of any change in the
location, of any such office or agency (other than a change in the location of
the office of the Trustee).  If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the address of the
Trustee set forth in Section 13.02.

 

The Company may also from time to time designate one
or more other offices or agencies where the Notes may be presented or
surrendered for any or all such purposes and may from time to time rescind such
designations; provided, however, that no such designation or

 

37

 

rescission shall in any manner relieve the Company of
its obligation to maintain an office or agency in the Borough of Manhattan, The
City of New York, for such purposes.

 

SECTION 4.06                    Delivery
of Certain Information.  At any time
when the Company is not subject to Section 13 or 15(d) of the Exchange Act,
upon the request of a holder or any beneficial holder of Notes or shares of
Common Stock issued upon conversion thereof, the Company will promptly furnish
or cause to be furnished Rule 144A Information (as defined below) to such
Holder or any beneficial holder of Notes or holder of shares of Common Stock issued upon conversion of Notes, or to a prospective
purchaser of any such security designated by any such holder, as the case may
be, to the extent required to permit compliance by such Holder or holder with
Rule 144A under the Securities Act in connection with the resale of any
such security.  “Rule 144A
Information” shall be such information as is specified pursuant to
Rule 144A(d)(4) under the Securities Act.

 

SECTION 4.07                    No
Senior Subordinated Indebtedness. 
The Company will not incur, create, issue, assume, guarantee or
otherwise become liable for any Indebtedness that is subordinate or junior in
right of payment to any Senior Indebtedness of the Company and senior in any
respect in right of payment to the Notes.

 

SECTION 4.08                    No
Amendment of Subordination Provisions in Existing Subordinated Notes.  Without the consent of the Holders of at
least a majority in aggregate principal amount of the Notes then outstanding,
the Company will not amend, modify or alter the Subordinated Indenture in any
way to:

 

(a)                                  increase
the rate of or accelerate the time for payment of interest on any Subordinated
Notes;

 

(b)                                 increase
the principal of or advance the final maturity date of any Subordinated Notes;

 

(c)                                  alter
the redemption provisions or the price or terms at which the Company is
required to offer to purchase any Subordinated Notes; or

 

(d)                                 amend
the provisions of Article XIII of the Subordinated Indenture (which relates to
subordination).

 

ARTICLE 5

 

SUCCESSOR
CORPORATION

 

SECTION 5.01                    When
Company May Merge or Transfer Assets. 
The Company shall not consolidate with, merge with or into any other
person or convey, transfer or lease its properties and assets substantially as
an entirety to any person, unless:

 

(a)                                  either
(1) the Company shall be the continuing corporation or (2) the person (if other
than the Company) formed by such consolidation or into which the

 

38

 

Company is merged
or the person which acquires by conveyance, transfer or lease the properties
and assets of the Company substantially as an entirety (i) shall be organized
and validly existing as a corporation under the laws of the United States or
any state of the United States and (ii) shall expressly assume, by an indenture
supplemental hereto, executed and delivered to the Trustee, in form reasonably
satisfactory to the Trustee, all of the obligations of the Company under the
Notes and this Indenture;

 

(b)                                 at
the time of such transaction, no Event of Default and no event which, after
notice or lapse of time, would become an Event of Default, shall have happened
and be continuing; and

 

(c)                                  the
Company shall have delivered to the Trustee an Officers’ Certificate and an
Opinion of Counsel, each stating that such consolidation, merger, conveyance,
transfer or lease and, if a supplemental indenture is required in connection
with such transaction, such supplemental indenture, comply with this Article 5
and that all conditions precedent herein provided for relating to such transaction
have been satisfied.

 

For purposes of the foregoing, the transfer (by lease,
assignment, sale or otherwise) of the properties and assets of one or more
Subsidiaries (other than to the Company or another Subsidiary), which, if such
assets were owned by the Company, would constitute all or substantially all of
the properties and assets of the Company, shall be deemed to be the transfer of
all or substantially all of the properties and assets of the Company.

 

The successor person formed by such consolidation or
into which the Company is merged or the successor person to which such
conveyance, transfer or lease is made shall succeed to, and be substituted for,
and may exercise every right and power of, the Company under this Indenture
with the same effect as if such successor had been named as the Company herein;
and thereafter, except in the case of a lease and obligations the Company may
have under a supplemental indenture pursuant to Section 10.11, the Company
shall be discharged from all obligations and covenants under this Indenture and
the Notes.  Subject to Section 9.06, the
Company, the Trustee and the successor person shall enter into a supplemental
indenture to evidence the succession and substitution of such successor person
and such discharge and release of the Company.

 

ARTICLE 6

 

DEFAULTS AND
REMEDIES

 

SECTION 6.01                    Events
of Default.  An “Event of Default”
occurs if:

 

(1)                                  the
Company fails to pay when due the principal of any of the Notes at maturity,
upon redemption or exercise of a repurchase right or otherwise, whether or not
such payment is prohibited by Article 11 of this Indenture;

 

(2)                                  the
Company fails to pay an installment of interest on, or any Liquidated Damages
with respect to, any of the Notes that continues for three (3) Business Days

 

39

 

after the date when due,
whether or not such payment is prohibited by Article 11 of this Indenture;

 

(3)                                  the
Company fails to perform or observe any other term, covenant or agreement
contained in the Notes or this Indenture for a period of 60 days after receipt
by the Company of a Notice of Default (as defined in this Section 6.01);

 

(4)                                  (A)
one or more defaults in the payment of principal of or premium, if any, on any
of the Company’s Indebtedness aggregating $5.0 million or more, when the same
becomes due and payable at the scheduled maturity thereof, and such default or
defaults shall have continued after any applicable grace period and shall not
have been cured or waived within a 30-day period after the date of a Notice of
Default or (B) any of the Company’s Indebtedness aggregating $5.0 million or
more shall have been accelerated or otherwise declared due and payable, or
required to be prepaid or repurchased (other than by regularly scheduled
required prepayment) prior to the scheduled maturity thereof and such
acceleration is not rescinded or annulled within a 30-day period after a Notice
of Default;

 

(5)                                  the
Company, or any Significant Subsidiary, or any Subsidiaries of the Company
which in the aggregate would constitute a Significant Subsidiary pursuant to or
under or within the meaning of any Bankruptcy Law:

 

(A)                              commences
a voluntary case or proceeding;

 

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

 

(C)                                consents
to the appointment of a Custodian (as defined in this Section 6.01) of it or
for any substantial part of its property;

 

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

 

(E)                                 files
a petition in bankruptcy or answer or consent seeking reorganization or relief;
or

 

(F)                                 consents
to the filing of such a petition or the appointment of or taking possession by
a Custodian; or

 

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

 

(A)                              is
for relief against the Company or any Significant Subsidiary or any
Subsidiaries of the Company which in the aggregate would constitute a
Significant Subsidiary in an involuntary case or proceeding, or adjudicates the
Company or any Significant Subsidiary or

 

40

 

any Subsidiaries of the Company which in the aggregate
would constitute a Significant Subsidiary insolvent or bankrupt;

 

(B)                                appoints
a Custodian of the Company or any Significant Subsidiary or any Subsidiaries of
the Company which in the aggregate would constitute a Significant Subsidiary or
for any substantial part of its or their properties; or

 

(C)                                orders
the winding up or liquidation of the Company or any Significant Subsidiary or
any Subsidiaries of the Company which in the aggregate would constitute a
Significant Subsidiary;

 

and the order or decree remains unstayed and in effect
for 60 days.

 

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

 

“Custodian” means any receiver, trustee, assignee,
liquidator, custodian or similar official under any Bankruptcy Law;

 

(7)                                  the
Collateral Pledge and Security Agreement shall cease to be in full force and
effect or enforceable other than in accordance with its terms.

 

A Default under clause (3) or (4) above is not an
Event of Default until the Trustee notifies the Company, or the Holders of at
least 25% in aggregate principal amount of the Notes at the time outstanding
notify the Company and the Trustee, of the Default and the Company does not
cure such Default (and such Default is not waived) within the time specified in
clause (3) or (4) above after actual receipt of such notice.  Any such notice must specify the Default,
demand that it be remedied and state that such notice is a “Notice of Default”.

 

The Company will deliver to the Trustee, within five
Business Days of becoming aware of the occurrence of an Event of Default,
written notice thereof.  In addition,
the Company shall deliver to the Trustee, within 30 days after it becomes aware
of the occurrence thereof, written notice of any event which with the lapse of
time would become an Event of Default under clause (3) or (4) above, its status
and what action the Company is taking or proposes to take with respect thereto.

 

SECTION 6.02                    Acceleration.  If an Event of Default (other than an Event
of Default specified in Section 6.01(5) or (6)) occurs and is continuing, the
Trustee by written notice to the Company, or the Holders of at least 25% in
aggregate principal amount of the Notes at the time outstanding by notice to
the Company and the Trustee, may declare the Notes due and payable at their
principal amount together with accrued interest.  Upon a declaration of acceleration, such principal and accrued
and unpaid interest to the date of payment shall be immediately due and
payable.

 

41

 

If an Event of Default specified in Section 6.01(5) or
(6) above occurs and is continuing, then the principal and the interest on all
the Notes shall become and be immediately due and payable without any
declaration or other act on the part of the Trustee or any Noteholders.

 

The Holders of a majority in aggregate principal
amount of the Notes at the time outstanding, by notice to the Trustee (and
without notice to any other Noteholder) may rescind or annul an acceleration
and its consequences if the rescission would not conflict with any judgment or
decree and if all existing Events of Default have been cured or waived except
nonpayment of the principal and any accrued cash interest that have become due
solely as a result of acceleration and if all amounts due to the Trustee under
Section 7.06 have been paid.  No such
rescission shall affect any subsequent Default or impair any right consequent
thereto.

 

SECTION 6.03                    Other
Remedies.  If an Event of Default
occurs and is continuing, the Trustee may pursue any available remedy to
collect the payment of the principal and any accrued cash interest on the Notes
or to enforce the performance of any provision of the Notes or this Indenture.

 

The Trustee may maintain a proceeding even if the
Trustee does not possess any of the Notes or does not produce any of the Notes
in the proceeding.  A delay or omission
by the Trustee or any Noteholder in exercising any right or remedy accruing
upon an Event of Default shall not impair the right or remedy or constitute a
waiver of, or acquiescence in, the Event of Default.  Except as set forth in Section 2.07 here of, no remedy is
exclusive of any other remedy.  All
available remedies are cumulative.

 

SECTION 6.04                    Waiver
of Past Defaults.  The Holders of a
majority in aggregate principal amount of the Notes at the time outstanding, by
notice to the Trustee (and without notice to any other Noteholder), may waive
an existing Default and its consequences except (1) an Event of Default
described in Section 6.01(1) or (2), (2) a Default in respect of a provision that under Section 9.02 cannot be amended
without the consent of each Noteholder affected or (3) a Default which
constitutes a failure to convert any Note in accordance with the terms of
Article 10.  When a Default is waived,
it is deemed cured, but no such waiver shall extend to any subsequent or other
Default or impair any consequent right. 
This Section 6.04 shall be in lieu of Section 316(a)1(B) of the TIA and
such Section 316(a)1(B) is hereby expressly excluded from this Indenture, as
permitted by the TIA.

 

SECTION 6.05                    Control
by Majority.  The Holders of a
majority in aggregate principal amount of the Notes at the time outstanding may
direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee or of exercising any trust or power conferred on the Trustee.  However, the Trustee may refuse to follow
any direction that conflicts with law or this Indenture or that the Trustee
determines in good faith is unduly prejudicial to the rights of other
Noteholders or would involve the Trustee in personal liability unless the
Trustee is offered indemnity reasonably satisfactory to it against loss,
liability or expense.  This Section 6.05
shall be in lieu of Section 316(a)1(A) of the TIA and such Section 316(a)1(A)
is hereby expressly excluded from this Indenture, as permitted by the TIA.

 

42

 

SECTION 6.06                    Limitation on Suits.  A Noteholder may not pursue any remedy with
respect to this Indenture or the Notes unless:

 

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

 

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

 

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

 

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

 

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

 

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

 

SECTION 6.07                    Rights
of Holders to Receive Payment. 
Notwithstanding any other provision of this Indenture, the right of any
Holder to receive payment of the principal amount plus Redemption Price, Change
in Control Repurchase Price or any accrued cash interest in respect of the
Notes held by such Holder, on or after the respective due dates expressed in
the Notes or any Redemption Date, and to convert the Notes in accordance with
Article 10, or to bring suit for the enforcement of any such payment on or
after such respective dates or the right to convert, shall not be impaired or
affected adversely without the consent of such Holder.

 

SECTION 6.08                    Collection
Suit by Trustee.  If an Event of
Default described in Section 6.01(1) or (2) occurs and is continuing, the
Trustee may recover judgment in its own name and as trustee of an express trust
against the Company for the whole amount owing with respect to the Notes and
the amounts provided for in Section 7.06.

 

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

 

43

 

(a)                                  to
file and prove a claim for the whole amount of the principal amount, Redemption
Price, Change in Control Repurchase Price or any accrued cash interest and to
file such other papers or documents as may be necessary or advisable in order
to have the claims of the Trustee (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel or any other amounts due the Trustee under Section 7.06) and of the
Holders allowed in such judicial proceeding, and

 

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

 

and any custodian, receiver, assignee, trustee,
liquidator, sequestrator or similar official in any such judicial proceeding is
hereby authorized by each Holder to make such payments to the Trustee and, in
the event that the Trustee shall consent to the making of such payments
directly to the Holders, to pay the Trustee any amount due it for the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel, and any other amounts due the Trustee under Section
7.06.

 

Nothing herein contained shall be deemed to authorize
the Trustee to authorize or consent to or accept or adopt on behalf of any
Holder any plan of reorganization, arrangement, adjustment or composition
affecting the Notes 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.

 

SECTION 6.10                    Priorities.  If the Trustee collects any money pursuant
to this Article 6, it shall pay out the money in the following order:

 

(1)                                  FIRST:  to the Trustee for amounts due under Section
7.06;

 

(2)                                  SECOND:  to Noteholders for amounts due and unpaid on
the Notes for the principal amount, Redemption Price, Change in Control
Purchase Price, Liquidated Damages, if any, or any accrued cash interest as the
case may be, ratably, without preference or priority of any kind, according to
such amounts due and payable on the Notes; and

 

(3)                                  THIRD:  the balance, if any, to the Company.

 

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

 

SECTION 6.11                    Undertaking
for Costs.  In any suit for the
enforcement of any right or remedy under this Indenture or in any suit against
the Trustee for any action taken or omitted by it as Trustee, a court in its
discretion may require the filing by any party litigant (other than the
Trustee) in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys’ fees and expenses,

 

44

 

against any party litigant in the suit, having due regard to the merits
and good faith of the claims or defenses made by the party litigant.  This Section 6.11 does not apply to a suit
by the Trustee, a suit by a Holder pursuant to Section 6.07 or a suit by
Holders of more than 10% in aggregate principal amount of the Notes at the time
outstanding.  This Section 6.11 shall be
in lieu of Section 315(e) of the TIA and such Section 315(e) is hereby
expressly excluded from this Indenture, as permitted by the TIA.

 

SECTION 6.12                    Waiver
of Stay, Extension or Usury Laws. 
The Company covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, or plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay or extension law or any usury or other
law wherever enacted, now or at any time hereafter in force, which would
prohibit or forgive the Company from paying all or any portion of the principal
amount, Redemption Price, Change in Control Repurchase Price or any accrued
cash interest in respect of Notes, or any interest on such amounts, as
contemplated herein, or which may affect the covenants or the performance of
this Indenture; and the Company (to the extent that it may lawfully do so)
hereby expressly waives all benefit or advantage of any such 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 7

 

TRUSTEE

 

SECTION 7.01                    Duties
and Responsibilities of the Trustee; During Default; Prior to
Default.  The Trustee, prior to the
occurrence of an Event of Default hereunder and after the curing or waiving of
all such Events of Default which may have occurred, undertakes to perform such
duties and only such duties as are specifically set forth in this
Indenture.  In case an Event of Default
hereunder has occurred (which has not been cured or waived), the Trustee shall
exercise such of the rights and powers vested in it by this Indenture, and use
the same degree of care and skill in their exercise, as a prudent man would
exercise or use under the circumstances in the conduct of his own affairs.

 

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

 

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

 

(i)                                     the
duties and obligations of the Trustee shall be determined solely by the express
provisions of this Indenture, and the Trustee shall not be liable except for
the performance of such duties and obligations as are specifically set forth in
this Indenture, and no implied covenants or obligations shall be read into this
Indenture against the Trustee;

 

45

 

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

 

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

 

(c)                                  the
Trustee shall not be liable with respect to any action taken or omitted to be
taken by it in good faith in accordance with the direction of the Holders
pursuant to Section 6.05 relating to the time, method and place of conducting
any proceeding for any remedy available to the Trustee, or exercising any trust
or power conferred upon the Trustee, under this Indenture.

 

None of the provisions contained in this Indenture
shall require the Trustee to expend or risk its own funds or otherwise incur
personal financial liability in the performance of any of its duties or in the
exercise of any of its rights or powers.

 

The provisions of this Section 7.01 are in furtherance
of and subject to Sections 315 and 316 of the TIA.

 

SECTION 7.02                    Certain
Rights of the Trustee.  In
furtherance of and subject to the TIA and subject to Section 7.01:

 

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

 

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

 

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

 

46

 

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

 

(e)                                  the
Trustee shall not be liable for any action taken or omitted by it in good faith
and believed by it to be authorized or within the discretion, rights or powers
conferred upon it by this Indenture;

 

(f)                                    prior
to the occurrence of an Event of Default hereunder and after the curing or
waiving of all such Events of Default, 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, consent,
order, approval, appraisal, bond, debenture, note, coupon, security, or other
paper or document unless requested in writing to do so by the Holders of not
less than a majority in aggregate principal amount of the Notes then
outstanding but the Trustee in its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit; provided
that, if the payment within a reasonable time to the Trustee of the costs,
expenses or liabilities likely to be incurred by it in the making of such
investigation is, in the opinion of the Trustee, not reasonably assured to the
Trustee by the security afforded to it by the terms of this Indenture, the
Trustee may require reasonable indemnity against such expenses or liabilities
as a condition to proceeding; the reasonable expenses of every such
investigation shall be paid by the Company or, if paid by the Trustee or any
predecessor trustee, shall be repaid by the Company upon demand; and

 

(g)                                 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 not regularly in
its employ and the Trustee shall not be responsible for any misconduct or
negligence on the part of any such agent or attorney appointed with due care by
it hereunder.

 

(h)                                 the
Trustee shall not be deemed to have knowledge of any Default or Event of
Default under Article 6 unless it has actual knowledge thereof or has
received written notice thereof from the Company or any Holder.  Except as otherwise expressly provided
herein, the Trustee shall not be bound to ascertain or inquire as to the
performance or observance of any of the terms, conditions, covenants or
agreements herein or of any of the documents executed in connection with Notes
or as to the existence of an Event of Default hereunder.

 

(i)                                     whether
or not therein expressly so provided, every provision of this Indenture that in
any way relates to the Trustee including all activity undertaken in its role as
Registrar, Paying Agent, Collateral Agent or Conversion Agent, is subject to
this Article.  The provisions of this
Article shall survive the termination of this Indenture or the earlier resignation
or removal of the Trustee.

 

47

 

(j)                                     the
permissive rights of the Trustee to do things enumerated in this Indenture
shall not be construed as a duty unless so specified herein.

 

(k)                                  the
protections from liability provided to the Trustee hereunder, including the
right to indemnification, shall extend to its directors, officers, employees
and agents.

 

SECTION 7.03                    Trustee
Not Responsible for Recitals, Disposition of Notes or Application of Proceeds
Thereof.  The recitals contained
herein and in the Notes, except the Trustee’s certificates of authentication,
shall be taken as the statements of the Company, and the Trustee
assumes no responsibility for the correctness of the same.  The Trustee makes no representation as to
the validity or sufficiency of this Indenture or of the Notes.  The Trustee shall not be accountable for the
use or application by the Company of any of the Notes or of the proceeds
thereof.

 

SECTION 7.04                    Trustee
and Agents May Hold Notes; Collections, etc.  The Trustee or any agent of the Company or the Trustee, in
its individual or any other capacity, may become the owner or pledgee of Notes
with the same rights it would have if it were not the Trustee or such agent
and, subject to Sections 7.08 and 7.13, if operative, may otherwise deal with
the Company and receive, collect, hold and retain collections from the Company
with the same rights it would have if it were not the Trustee or such agent.

 

SECTION 7.05                    Moneys
Held by Trustee.  Subject to the
provisions of Section 8.02 hereof, all moneys received by the Trustee shall,
until used or applied as herein provided, be held in trust for the purposes for
which they were received, but need not be segregated from other funds except to
the extent required by mandatory provisions of law.  Neither the Trustee nor any agent of the Company or the Trustee
shall be under any liability for interest on any moneys received by it
hereunder.

 

SECTION 7.06                    Compensation
and Indemnification of Trustee and Its Prior Claim.  The Company covenants and agrees to pay to
the Trustee from time to time, and the Trustee shall be entitled to, such
compensation (which shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust) to be agreed to in writing
by the Trustee and the Company, and the Company covenants and agrees to pay or
reimburse the Trustee and each predecessor Trustee upon its request for all
reasonable expenses, disbursements and advances incurred or made by or on
behalf of it in accordance with any of the provisions of this Indenture
(including the reasonable compensation and the expenses and disbursements of
its counsel and of all agents and other persons not regularly in its employ)
except any such expense, disbursement or advance as may arise from its
negligence or bad faith.

 

The Company also covenants to indemnify the Trustee
and each predecessor Trustee for, and to hold it harmless against, any loss,
liability or expense incurred without negligence or bad faith on its part,
arising out of or in connection with the acceptance or administration of this
Indenture or the trusts hereunder and its duties hereunder, including the
reasonable costs and expenses of defending itself against or investigating any
claim of liability in connection with the performance of the Trustee’s duties
hereunder, and the Trustee has the right

 

48

 

to seek such indemnification from the Company before
proceeding to exercise any right or power
under the indenture at the request of the Company or the Noteholders.  The obligations of the Company under this
Section 7.06 to compensate and indemnify the Trustee and each predecessor
Trustee and to pay or reimburse the Trustee and each predecessor Trustee for
expenses, disbursements and advances shall constitute additional indebtedness
hereunder and shall survive the satisfaction and discharge of this
Indenture.  Such additional indebtedness
shall be a senior claim to that of the Notes upon all property and funds held
or collected by the Trustee as such, except funds held in trust for the benefit
of the Holders of particular Notes, and the Notes are hereby effectively
subordinated to such senior claim to such extent.  The provisions of this Section 7.06 shall survive the termination
of this Indenture.  When the Trustee
incurs expenses or renders services in connection with an Event of Default
specified in Section 6.01 or in connection with Article Six hereof, the
expenses (including the reasonable fees and expenses of its counsel) and the compensation for services in connection therewith are to
constitute expenses of administration under any bankruptcy law.

 

SECTION 7.07                    Right
of Trustee to Rely on Officers’ Certificate, etc.  Subject to Sections 7.01 and 7.02, whenever in the administration
of the trusts of this Indenture the Trustee shall deem it necessary or
desirable that a matter be proved or established prior to taking or suffering
or omitting any action hereunder, such matter (unless other evidence in respect
thereof be herein specifically prescribed) may, in the absence of negligence or
bad faith on the part of the Trustee, be deemed to be conclusively proved and
established by an Officers’ Certificate delivered to the Trustee at the
Trustee’s request.

 

SECTION 7.08                    Conflicting
Interests.  If the Trustee has or
shall acquire a conflicting interest within the meaning of the TIA, 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 TIA.  Notwithstanding anything in this Indenture
to the contrary, the Company and the Trustee acknowledge that the Trustee is
acting as trustee both under this Indenture and under the Subordinated
Indenture and upon a Default or an Event of Default under either or both indentures,
a conflict of interest may arise which would require the Trustee to resign as
Trustee from either or both indentures.

 

SECTION 7.09                    Persons
Eligible for Appointment as Trustee. 
The Trustee (or its parent holding company) shall at all times be a corporation
or banking association having a combined capital and surplus of at least
$50,000,000.  If such corporation or
banking association publishes reports of condition at least annually, pursuant
to law or to the requirements of the aforesaid supervising or examining
authority, then, for the purposes of this Section 7.09, the combined capital
and surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published.  In case at any time the Trustee shall cease
to be eligible in accordance with the provisions of this Section 7.09, the
Trustee shall resign immediately in the manner and with the effect specified in
Section 7.10.

 

49

 

SECTION 7.10                    Resignation
and Removal; Appointment of Successor Trustee.

 

(a)                                  The
Trustee, or any trustee or trustees hereafter appointed, may at any time resign
with respect to one or more or all series of Notes by giving written notice of
resignation to the Company and by mailing notice thereof by first class mail to
the Holders of Notes at their last addresses as they shall appear on the Note
register.  Upon receiving such notice of
resignation, the Company shall promptly appoint a successor trustee or trustees
by written instrument in duplicate, executed by authority of the Board of
Directors, one copy of which instrument shall be delivered to the resigning
Trustee and one copy to the successor trustee or trustees.  If no successor trustee shall have been so
appointed and have accepted appointment within 30 days after the mailing of
such notice of resignation, the resigning trustee may petition any court of
competent jurisdiction for the appointment of a successor trustee, or any
Noteholder who has been a bona fide Holder of a Note for at least six months
may, subject to the provisions of Section 7.11, on behalf of himself and all
others similarly situated, petition any such court for the appointment of a
successor trustee.  Such court may
thereupon, after such notice, if any, as it may deem proper and prescribe,
appoint a successor trustee.

 

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

 

(i)                                     the
Trustee shall fail to comply with the provisions of Section 7.08 with respect
to any Notes after written request therefor by the Company or by any Noteholder
who has been a bona fide Holder of a Note for at least six months; or

 

(ii)                                  the
Trustee shall cease to be eligible in accordance with the provisions of Section
7.09 and shall fail to resign after written request therefor by the Company or
by any Noteholder; or

 

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

 

then, in any such case, the Company may remove the
Trustee and appoint a successor trustee by written instrument, in duplicate,
executed by order of the Board of Directors of the Company, one copy of which
instrument shall be delivered to the Trustee so removed and one copy to the
successor trustee, or, subject to the provisions of Section 7.11, any Noteholder
who has been a bona fide Holder of a Note for at least six months may on behalf
of himself and all others similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
trustee.  Such court may thereupon,
after such notice, if any, as it may deem proper and prescribe, remove the
Trustee and appoint a successor trustee. 
If no successor trustee shall have been appointed and have accepted
appointment within 30 days after a notice of removal has been given, the
removed trustee may petition a court of competent jurisdiction for the
appointment of a successor trustee.

 

50

 

(c)                                  The
Holders of a majority in aggregate principal amount of the Notes at the time
outstanding may at any time remove the Trustee and appoint a successor trustee
by delivering to the Trustee so removed, to the successor trustee so appointed
and to the Company the evidence provided for in Section 1.05 of the action in
that regard taken by the Noteholders.

 

(d)                                 Any
resignation or removal of the Trustee and any appointment of a successor
trustee pursuant to any of the provisions of this Section 7.10 shall become
effective upon acceptance of appointment by the successor trustee as provided
in Section 7.11.

 

SECTION 7.11                    Acceptance
of Appointment by Successor Trustee. 
Any successor trustee appointed as provided in Section 7.10 shall
execute and deliver to the Company and to its predecessor trustee an instrument
accepting such appointment hereunder, and thereupon the resignation or removal
of the predecessor trustee shall become effective and such successor trustee,
without any further act, deed or conveyance, shall become vested with all
rights, powers, duties and obligations of its predecessor hereunder, with like
effect as if originally named as trustee hereunder; but, nevertheless, on the
written request of the Company or of the successor trustee, upon payment of its
charges then unpaid, the trustee ceasing to act shall pay over to the successor
trustee all moneys at the time held by it hereunder and shall execute and
deliver an instrument transferring to such successor trustee all such rights,
powers, duties and obligations.  Upon
request of any such successor trustee, the Company shall execute any and all
instruments in writing for more fully and certainly vesting in and confirming
to such successor trustee all such rights and powers.  Any trustee ceasing to act shall, nevertheless, retain a prior
claim upon all property or funds held or collected by such trustee to secure
any amounts then due it pursuant to the provisions of Section 7.06.

 

No successor trustee shall accept appointment as
provided in this Section 7.11 unless at the time of such acceptance such
successor trustee shall be qualified under the provisions of Section 7.08 and
eligible under the provisions of Section 7.09.

 

Upon acceptance of appointment by any successor
trustee as provided in this Section 7.11, the Company shall mail notice thereof
by first class mail to the Holders of Notes at their last addresses as they
shall appear in the register.  If the
acceptance of appointment is substantially contemporaneous with the
resignation, then the notice called for by the preceding sentence may be
combined with the notice called for by Section 7.10.  If the Company fails to mail such notice within ten days after
acceptance of appointment by the successor trustee, the successor trustee shall
cause such notice to be mailed at the expense of the Company.

 

SECTION 7.12                    Merger,
Conversion, Consolidation or Succession to Business of Trustee.  Any corporation or banking association into
which the Trustee may be merged or converted or with which it may be
consolidated, or any corporation or banking association resulting from any
merger, conversion or consolidation to which the Trustee shall be a party, or
any corporation or banking association succeeding to all or substantially all
of the corporate trust business of the Trustee, by sale or otherwise, shall be
the successor of the Trustee hereunder, provided that such corporation or
banking association shall be qualified under the provisions of Section 7.08 and
eligible under the provisions of Section 7.09, without the

 

51

 

execution or filing of any paper or any further act on the part of any
of the parties hereto, anything herein to the contrary notwithstanding.  In case at the time such successor to the
Trustee shall succeed to the trusts created by this Indenture any of the Notes
shall have been authenticated but not delivered, any such successor to the
Trustee may adopt the certificate of authentication of any predecessor Trustee
and deliver such Notes so authenticated; and, in case at that time any of the
Notes shall not have been authenticated, any successor to the Trustee may
authenticate such Notes either in the name of any predecessor hereunder or in
the name of the successor Trustee; and in all such cases such certificate shall
have the full force and effect that this Indenture provides for the certificate
of authentication of the Trustee; provided, that the right to adopt the
certificate of authentication of any predecessor Trustee or to authenticate
Notes in the name of any predecessor Trustee shall apply only to its successor
or successors by merger, conversion or consolidation.

 

SECTION 7.13                    Preferential
Collection of Claims Against the Company. 
The Trustee shall comply with the provisions of Section 311 of the
TIA.  A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent provided therein.

 

SECTION 7.14                    Reports
by the Trustee.

 

(a)                                  Within
60 days after each May 15 beginning with the May 15 following the date of this
Indenture, and for so long as Notes remain outstanding, the Trustee will mail
to the Holders of the Notes a brief report dated as of such reporting date that
complies with TIA Section 313(a) (but if no event described in TIA
Section 313(a) has occurred within the twelve months preceding the
reporting date, no report need be transmitted).  The Trustee also will comply with TIA
Section 313(b)(2).  The Trustee
will also transmit by mail all reports as required by TIA Section 313(c).

 

(b)                                 A
copy of each such report shall, at the time of such transmission to
Noteholders, be furnished to the Company and be filed by the Trustee with each
stock exchange upon which the Notes are listed and also with the SEC.  The Company agrees to notify the Trustee
when and as the Notes become admitted to trading on any national securities
exchange.

 

SECTION 7.15                    Trustee
to Give Notice of Default, But May Withhold in Certain Circumstances.  The Trustee shall transmit to the
Noteholders, as the names and addresses of such Holders appear on the Note
register, notice by mail of all Defaults which have occurred of which it has
actual knowledge, such notice to be transmitted within 90 days after the
occurrence thereof, unless such Defaults shall have been cured before the
giving of such notice; provided that, except in the case of Default in
the payment of the principal of, interest on, or other similar obligation with
respect to, any of the Notes, the Trustee shall be protected in withholding
such notice if and so long as the board of directors, the executive committee,
or a trust committee of directors or trustees and/or Responsible Officers of
the Trustee in good faith determines that the withholding of such notice is in
the best interests of the Noteholders.

 

52

 

ARTICLE 8

 

SATISFACTION AND
DISCHARGE OF INDENTURE

 

SECTION 8.01                    Satisfaction
and Discharge.  This Indenture will
be discharged and will cease to be of further effect as to all Notes issued
hereunder, when:

 

(a)                                  either:

 

(1)                                  all
Notes that have been authenticated (except lost, stolen or destroyed Notes that
have been replaced or paid and Notes for whose payment money has theretofore
been deposited in trust and thereafter repaid to the Company) have been
delivered to the Trustee for cancellation; or

 

(2)                                  all
Notes that have not been delivered to the Trustee for cancellation have become
due and payable by reason of the making of a notice of redemption or otherwise
or will become due and payable within one year and the Company has irrevocably
deposited or caused to be deposited with the Trustee as trust funds in trust
solely for the benefit of the Holders, cash in U.S. dollars, non-callable U.S.
Government Obligations, or a combination thereof, in such amounts as will be
sufficient without consideration of any reinvestment of interest, to pay and
discharge the entire indebtedness on the Notes not delivered to the Trustee for
cancellation for principal and Liquidated Damages, if any, and accrued interest
to the date of maturity or redemption;

 

(b)                                 no
Default or Event of Default has occurred and is continuing on the date of such
deposit or will occur as a result of such deposit and such deposit will not
result in a breach or violation of, or constitute a default under, any other
instrument to which the Company is a party or by which the Company is bound;

 

(c)                                  the
Company has paid or caused to be paid all sums payable by it under this
Indenture; and

 

(d)                                 the
Company has delivered irrevocable instructions to the Trustee under this
Indenture to apply the deposited money toward the payment of the Notes at
maturity or the redemption date, as the case may be.

 

In addition, the Company must deliver an Officers’
Certificate and an Opinion of Counsel to the Trustee stating that all
conditions precedent to satisfaction and discharge have been satisfied.

 

Notwithstanding the satisfaction and discharge of this
Indenture, if money has been deposited with the Trustee pursuant to subclause
(2) of clause (a) of this Section, the provisions of Sections 2.02, 2.03, 2.04,
2.05, 2.06, 2.07, 2.09, 2.13, 2.14, 3.07, 3.09, 4.05, 7.01, 7.02, 7.03, 7.04,
Article 10, the last paragraph of Section 4.02 and this Article 8 will survive
until the Notes have been paid in full. 
In addition, nothing in this Section 8.01 will be deemed to

 

53

 

discharge those provisions of Sections 7.06 and 8.03
hereof, that, by their terms, survive the satisfaction and discharge of this
Indenture.

 

SECTION 8.02                    Application
of Trust Money.  All money deposited
with the Trustee pursuant to Section 11.01 shall be held in trust and applied
by it, in accordance with the provisions of the Notes 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 interest for whose payment such money
has been deposited with the Trustee; but such money need not be segregated from
other funds except to the extent required by law.

 

SECTION 8.03                    Reinstatement.  If the Trustee or Paying Agent is unable to
apply any money or U.S. Government Obligations in accordance with Section 8.01
by reason of any legal proceeding or by reason of any order or judgment of any
court or governmental authority enjoining, restraining or otherwise prohibiting
such application, the Company’s obligations under this Indenture and the Notes
shall be revived and reinstated as though no deposit had occurred pursuant to
Section 8.01; provided that if the Company has made any payment of
principal of or interest on any Notes because of the reinstatement of its
obligations, the Company shall be subrogated to the rights of the Holders of
such Notes to receive such payment from the money or Government Securities held
by the Trustee or Paying Agent.

 

ARTICLE 9.

 

AMENDMENTS

 

SECTION 9.01                    Without
Consent of Holders.  The Company and
the Trustee may amend this Indenture or the Notes without the consent of any
Noteholder for the purposes of, among other things:

 

(1)                                  adding
to the Company’s covenants for the benefit of the Holders;

 

(2)                                  surrendering
any right or power conferred upon the Company;

 

(3)                                  providing
for conversion rights of Holders if any reclassification or change of Common
Stock or any consolidation, merger or sale of all or substantially all of the
Company’s assets occurs;

 

(4)                                  reducing
the Conversion Price, provided that the reduction will not adversely affect the
interests of Holders in any material respect;

 

(5)                                  complying
with the requirements of the SEC in order to effect or maintain the
qualification of this Indenture under the TIA;

 

(6)                                  making
any changes or modifications to this Indenture necessary in connection with the
registration of the Notes under the Securities Act as contemplated by 

 

54

 

the Registration Rights
Agreement, provided that this action does not adversely affect the interests of
the Holders in any material respect;

 

(7)                                  curing
any ambiguity, omission, inconsistency or correcting or supplementing any
defective provision contained in this Indenture; provided that such
modification or amendment does not, in the good faith opinion of the Board of
Directors and the Trustee, adversely affect the interests of the Holders in any
material respect;

 

(8)                                  adding
or modifying any other provisions which the Company and the Trustee may deem
necessary or desirable and which will not adversely affect the interests of the
Holders in any material respect;

 

(9)                                  complying
with Article 5; or

 

(10)                            providing
for uncertificated Notes in addition to the Certificated Notes so long as such
uncertificated Notes are in registered form for purposes of the Internal
Revenue Code of 1986, as amended.

 

SECTION 9.02                    With
Consent of Holders.  With the
written consent of the Holders of at least a majority in aggregate principal
amount of the Notes at the time outstanding or by the adoption of a resolution
at a meeting of Holders at which a quorum is present by at least a majority in
aggregate principal amount of the Notes represented at the meeting, the Company
may modify and amend this Indenture or the Notes and waive noncompliance by the
Company.  However, without the consent
of each Noteholder affected, a modification, amendment or waiver to this
Indenture or the Notes may not:

 

(1)                                  change
the maturity of the principal of or any installment of interest on, or any
Liquidated Damages with respect to, any Note;

 

(2)                                  reduce
the principal amount of or interest on, or any Liquidated Damages with respect
to, any Note;

 

(3)                                  reduce
the Interest Rate or interest on, or any Liquidated Damages with respect to,
any Note;

 

(4)                                  change
the currency of payment of principal of or interest on any Note;

 

(5)                                  impair
the right to institute suit for the enforcement of any payment on or with
respect to, or conversion of, any Note;

 

(6)                                  except
as otherwise permitted or contemplated by provisions of this Indenture
concerning corporate reorganizations, adversely affect the repurchase option of
Holders upon a Change in Control or the conversion rights of Holders;

 

(7)                                  modify
the provisions of this Indenture relating to the pledge of securities as
contemplated in Article 12 in a manner adverse to the Holders; or

 

55

 

(8)                                  reduce
the percentage in aggregate principal amount of Notes outstanding necessary to
modify or amend this Indenture or to waive any past default.

 

Furthermore, without the consent of Holders of at
least 75% in aggregate principal amount of the Notes outstanding, a
modification, amendment or waiver to this Indenture may not modify the
subordination provisions of the Notes in a manner adverse to the Holders.

 

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

 

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

 

SECTION 9.03                    Compliance
with Trust Indenture Act.  Every
amendment, supplement or waiver to this Indenture or the Notes executed
pursuant to this Article shall comply with the TIA.

 

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

 

SECTION 9.05                    Notation
on or Exchange of Notes.  Notes
authenticated and delivered after the execution of any amendment or
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 amendment or supplemental indenture.  If the Company shall so determine, new Notes
so modified as to conform, in the opinion of the Board of Directors, to any
such amendment or supplemental indenture may be prepared and executed by the
Company and authenticated and delivered by the Trustee in exchange for
outstanding Notes.

 

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

 

56

 

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

 

ARTICLE 10

 

CONVERSION

 

SECTION 10.01              Conversion
Right and Conversion Price.  Subject
to and upon compliance with the provisions of this Article, at the option of
the Holder thereof, any Note or any portion of the principal amount thereof
which is $1,000 or a whole multiple of $1,000 may be converted at the principal
amount thereof, or of such portion thereof, into duly authorized, fully paid
and nonassessable shares of Common Stock, at the Conversion Price, determined
as hereinafter provided, in effect at the time of conversion.  Such conversion right shall expire at the
close of business on the Business Day prior to the Stated Maturity of the
Notes.

 

In case a Note or portion thereof is called for
redemption, such conversion right in respect of the Note or the portion so
called shall expire at the close of business on the Business Day preceding the
Redemption Date, unless the Company defaults in making the payment due upon
redemption.  In the case of a Change in
Control for which the Holder exercises its repurchase right with respect to a
Note or portion thereof, such conversion right in respect of the Note or portion
thereof shall expire at the close of business on the Business Day immediately
preceding the Change in Control Repurchase Date.

 

The price at which shares of Common Stock shall be
delivered upon conversion (the “Conversion Price”) shall be initially equal to
$8.515 per share of Common Stock.  The
Conversion Price shall be adjusted in certain instances as provided in
paragraphs (a), (b), (c), (d), (e), (f), (h) and (i) of Section 10.04 and
Section 10.12 hereof.

 

SECTION 10.02              Exercise
of Conversion Right.  To exercise
the conversion right, the Holder of any Note to be converted shall surrender
such Note to the Company duly endorsed or assigned to the Company or in blank,
at the office of any Conversion Agent, accompanied by a duly signed conversion
notice substantially in the form attached to the Note stating that the Holder
elects to convert such Note or, if less than the entire principal amount
thereof is to be converted, the portion thereof to be converted.

 

Except as described below, no payment or adjustment
will be made for accrued interest on, or Liquidated Damages with respect to, a
converted Note or for dividends on any Common Stock issued on conversion.  Notes surrendered for conversion during the
period from the close of business on any Regular Record Date to the opening of
business on the next succeeding Interest Payment Date shall be accompanied by
payment in New York Clearing House funds or other funds acceptable to the
Company of an amount equal to the interest to be

 

57

 

received on such Interest
Payment Date on the principal amount of Notes being surrendered for conversion.

 

Notes shall be deemed to have been converted
immediately prior to the close of business on the day of surrender of such
Notes for conversion in accordance with the foregoing provisions, and at such
time the rights of the Holders of such Notes as Holders shall cease, and the
Person or Persons entitled to receive the Common Stock issuable upon conversion
shall be treated for all purposes as the record holder or holders of such
Common Stock at such time.  As promptly
as practicable on or after the conversion date, the Company shall cause to be
issued and delivered to such Conversion Agent a certificate or certificates for
the number of full shares of Common Stock issuable upon conversion, together
with payment in lieu of any fraction of a share as provided in Section 10.03
hereof.

 

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

 

If shares of Common Stock to be issued upon conversion
of a Restricted Note, or securities to be issued upon conversion of a
Restricted Note in part only, are to be registered in a name other than that of
the Holder of such Restricted Note, such Holder must deliver to the Conversion
Agent a certificate in substantially the form set forth in the form of Note set
forth in Exhibit B-1 annexed hereto, dated the date of surrender of such
Restricted Note and signed by such Holder, as to compliance with the
restrictions on transfer applicable to such Restricted Note.  Neither the Trustee nor any Conversion
Agent, Registrar or Transfer Agent shall be required to register in a name
other than that of the Holder shares of Common Stock or Notes issued upon
conversion of any such Restricted Note not so accompanied by a properly
completed certificate.

 

The Company hereby initially appoints the Trustee as
the Conversion Agent.

 

SECTION 10.03              Fractions
of Shares.  No fractional
shares of Common Stock shall be issued upon conversion of any Note or
Notes.  If more than one Note shall be
surrendered for conversion at one time by the same Holder, the number of full
shares which shall be issued upon conversion thereof shall be computed on the
basis of the aggregate principal amount of the Notes (or specified portions thereof)
so surrendered.  Instead of any
fractional share of Common Stock which would otherwise be issued upon
conversion of any Note or Notes (or specified portions thereof), the Company
shall pay a cash adjustment in respect of such fraction (calculated to the
nearest one-100th of a share) in an amount equal to the same fraction of the
quoted price of the Common Stock as of the Trading Day preceding the date of
conversion.

 

SECTION 10.04              Adjustment of
Conversion Price.  The
Conversion Price shall be subject to adjustments, calculated by the Company,
from time to time as follows:

 

58

 

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

 

(1)                                  the
numerator of which shall be the number of shares of Common Stock outstanding at
the close of business on the Record Date (as defined in Section 10.4(g)) fixed
for such determination, and

 

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

 

Such reduction
shall become effective immediately after the opening of business on the day
following the Record Date.  If any
dividend or distribution of the type described in this Section 10.04(a) is
declared but not so paid or made, the Conversion Price shall again be adjusted
to the Conversion Price which would then be in effect if such dividend or
distribution had not been declared.

 

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

 

(c)                                  In
case the Company shall issue rights or warrants (other than any rights or
warrants referred to in Section 10.04(d)) to all holders of its outstanding
shares of Common Stock entitling them to subscribe for or purchase shares of
Common Stock (or securities convertible into Common Stock) at a price per share
(or having a conversion price per share) less than the Current Market Price (as
defined in Section 10.04(g)) on the Record Date fixed for the determination of
stockholders entitled to receive such rights or warrants, the Conversion Price
shall be adjusted so that the same shall equal the price determined by
multiplying the Conversion Price in effect at the opening of business on the
date after such Record Date by a fraction:

 

(1)                                  the
numerator of which shall be the number of shares of Common Stock outstanding at
the close of business on the Record Date plus the number of shares which the
aggregate offering price of the total number of shares so offered for
subscription or purchase (or the aggregate conversion price of the convertible
securities so offered) would purchase at such Current Market Price, and

 

(2)                                  the
denominator of which shall be the number of shares of Common Stock outstanding
on the close of business on the Record Date plus the total number of 

 

59

 

additional shares
of Common Stock so offered for subscription or purchase (or into which the
convertible securities so offered are convertible).

 

Such adjustment
shall become effective immediately after the opening of business on the day
following the Record Date fixed for determination of stockholders entitled to
receive such rights or warrants.  To the
extent that shares of Common Stock (or securities convertible into Common Stock)
are not delivered pursuant to such rights or warrants, upon the expiration or
termination of such rights or warrants the Conversion Price shall be readjusted
to the Conversion Price which would then be in effect had the adjustments made
upon the issuance of such rights or warrants been made on the basis of the
delivery of only the number of shares of Common Stock (or securities
convertible into Common Stock) actually delivered.  In the event that such rights or warrants are not so issued, the
Conversion Price shall again be adjusted to be the Conversion Price which would
then be in effect if such date fixed for the determination of stockholders
entitled to receive such rights or warrants had not been fixed.  In determining whether any rights or warrants
entitle the holders to subscribe for or purchase shares of Common Stock at less
than such Current Market Price, and in determining the aggregate offering price
of such shares of Common Stock, there shall be taken into account any
consideration received for such rights or warrants, the value of such
consideration if other than cash, to be determined by the Board of Directors.

 

(d)                                 In
case the Company shall, by dividend or otherwise, distribute to all holders of
its Common Stock shares of any class of capital stock of the Company (other
than any dividends or distributions to which Section 10.04(a) applies) or
evidences of its indebtedness or other assets, including securities, but
excluding (1) any rights or warrants referred to in Section 10.04(c), (2) any
dividends or distributions in connection with a reclassification, change,
merger, consolidation, statutory share exchange, combination, sale or
conveyance to which Section 10.11 hereof applies and (3) dividends and
distributions paid exclusively in cash (the securities described in foregoing
clauses (1), (2) and (3) hereinafter in this Section 10.04(d) called the
“excluded securities”), then, in each such case, subject to the second
succeeding paragraph of this Section 10.04(d), the Conversion Price shall be
adjusted so that the same shall be equal to the price determined by multiplying
the Conversion Price in effect immediately prior to the close of business on
the Record Date (as defined in Section 10.04(g)) with respect to such
distribution by a fraction:

 

(1)                                  the
numerator of which shall be the Current Market Price (determined as provided in
Section 10.04(g)) on such date less the fair market value (as determined by the
Board of Directors, whose determination shall be conclusive and set forth in a
Board Resolution) on such date of the portion of the securities so distributed
(other than excluded securities) applicable to one share of Common Stock
(determined on the basis of the number of shares of the Common Stock
outstanding on the Record Date), and

 

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

 

Such reduction
shall become effective immediately prior to the opening of business on the day
following the Record Date.  However, in
the event that the then fair market value (as so 

 

60

 

determined) of the
portion of the securities so distributed (other than excluded securities)
applicable to one share of Common Stock is equal to or greater than the Current
Market Price on the Record Date, in lieu of the foregoing adjustment, adequate
provision shall be made so that each Holder shall have the right to receive
upon conversion of a Note (or any portion thereof) the amount of securities so
distributed (other than excluded securities) such Holder would have received
had such Holder converted such Note (or portion thereof) immediately prior to
such Record Date.  In the event that
such dividend or distribution is not so paid or made, the Conversion Price
shall again be adjusted to be the Conversion Price which would then be in
effect if such dividend or distribution had not been declared.

 

If the Board of Directors determines the fair market
value of any distribution for purposes of this Section 10.04(d) by reference to
the actual or when issued trading market for any securities comprising all or
part of such distribution (other than excluded securities), it must in doing so
consider the prices in such market over the same period (the “Reference
Period”) used in computing the Current Market Price pursuant to Section
10.04(g) to the extent possible, unless the Board of Directors in a Board
Resolution determines in good faith that determining the fair market value
during the Reference Period would not be in the best interest of the Holder.

 

With respect to any shareholder rights plan existing
on the date hereof or in the event that the Company implements any other
shareholder rights plan (in each case, a “Rights Agreement”), such rights plan
shall provide, subject to customary exceptions and limitations, that upon
conversion of the Notes the Holders will receive, in addition to the Common
Stock issuable upon such conversion, the rights (the “Rights”) issued under
such Rights Agreement (notwithstanding the occurrence of an event causing such
Rights to separate from the Common Stock at or prior to the time of
conversion); provided, a Holder who is a holder of Common Stock (or
direct or indirect interests therein) at the time of conversion, but who is not
entitled as such a holder to such Rights pursuant to the terms of any such
Rights Agreement, shall not be eligible to receive any such Rights
hereunder.  Any distribution of Rights
pursuant to a Rights Agreement complying with the requirements set forth in the
immediately preceding sentence of this paragraph shall not constitute a
distribution of rights or warrants for the purposes of this Section 10.04(d).

 

Rights or warrants distributed by the Company to all
holders of Common Stock entitling the holders thereof to subscribe for or
purchase shares of the Company’s capital stock (either initially or under
certain circumstances), which rights or warrants, until the occurrence of a
specified event or events (“Trigger Event”):

 

(i)                                     are
deemed to be transferred with such shares of Common Stock;

 

(ii)                                  are
not exercisable; and

 

(iii)                               are also issued in
respect of future issuances of Common Stock,

 

shall be deemed
not to have been distributed for purposes of this Section 10.04(d) (and no
adjustment to the Conversion Price under this Section 10.04(d) will be
required) until the occurrence of the earliest Trigger Event.  If such right or warrant is subject to
subsequent events,

 

61

 

upon the
occurrence of which such right or warrant shall become exercisable to purchase
different securities, evidences of indebtedness or other assets or entitle the
holder to purchase a different number or amount of the foregoing or to purchase
any of the foregoing at a different purchase price, then the occurrence of each
such event shall be deemed to be the date of issuance and record date with
respect to a new right or warrant (and a termination or expiration of the
existing right or warrant without exercise by the holder thereof).  In addition, in the event of any
distribution (or deemed distribution) of rights or warrants, or any Trigger
Event or other event (of the type described in the preceding sentence) with
respect thereto, that resulted in an adjustment to the Conversion Price under
this Section 10.04(d):

 

(1)                                  in
the case of any such rights or warrants which shall all have been redeemed or
repurchased without exercise by any holders thereof, the Conversion Price shall
be readjusted upon such final redemption or repurchase to give effect to such
distribution or Trigger Event, as the case may be, as though it were a cash
distribution, equal to the per share redemption or repurchase price received by
a holder of Common Stock with respect to such rights or warrant (assuming such
holder had retained such rights or warrants), made to all holders of Common
Stock as of the date of such redemption or repurchase, and

 

(2)                                  in
the case of such rights or warrants all of which shall have expired or been
terminated without exercise, the Conversion Price shall be readjusted as if
such rights and warrants had never been issued.

 

For purposes of this Section 10.04(d) and Sections
10.04(a), 10.04(b) and 10.04(c), any dividend or distribution to which this
Section 10.04(d) is applicable that also includes shares of Common Stock, a
subdivision or combination of Common Stock to which Section 10.04(b) applies,
or rights or warrants to subscribe for or purchase shares of Common Stock to
which Section 10.04(c) applies (or any combination thereof), shall be deemed
instead to be:

 

(3)                                  a
dividend or distribution of the evidences of indebtedness, assets, shares of
capital stock, rights or warrants other than such shares of Common Stock, such
subdivision or combination or such rights or warrants to which Sections
10.04(a), 10.04(b) and 10.04(c) apply, respectively (and any Conversion Price
reduction required by this Section 10.04(d) with respect to such dividend or
distribution shall then be made), immediately followed by

 

(4)                                  a
dividend or distribution of such shares of Common Stock, such subdivision or
combination or such rights or warrants (and any further Conversion Price
reduction required by Sections 10.04(a), 10.04(b) and 10.04(c) with respect to
such dividend or distribution shall then be made), except:

 

(A)                              the
Record Date of such dividend or distribution shall be substituted as (x) “the
date fixed for the determination of stockholders entitled to receive such
dividend or other distribution”, “Record Date fixed

 

62

 

for such determinations” and “Record Date” within the
meaning of Section 10.04(a), (y) “the day upon which such subdivision becomes
effective” and “the day upon which such combination becomes effective” within
the meaning of Section 10.04(b), and (z) as “the date fixed for the
determination of stockholders entitled to receive such rights or warrants”,
“the Record Date fixed for the determination of the stockholders entitled to
receive such rights or warrants” and such “Record Date” within the meaning of
Section 10.04(c), and

 

(B)                                any
shares of Common Stock included in such dividend or distribution shall not be
deemed “outstanding at the close of business on the date fixed for such
determination” within the meaning of Section 10.04(a) and any reduction or
increase in the number of shares of Common Stock resulting from such
subdivision or combination shall be disregarded in connection with such
dividend or distribution.

 

(e)                                  In
case the Company shall, by dividend or otherwise, distribute to all holders of
its Common Stock cash (excluding any cash that is distributed upon a
reclassification, change, merger, consolidation, statutory share exchange,
combination, sale or conveyance to which Section 10.11 hereof applies or as
part of a distribution referred to in Section 10.04(d) hereof), in an aggregate
amount that, combined together with: 
(1) the aggregate amount of any other such distributions to all holders
of Common Stock made exclusively in cash within the 12 months preceding the
date of payment of such distribution, and in respect of which no adjustment
pursuant to this Section 10.04(e) has been made, and (2) the aggregate of any
cash plus the fair market value (as determined by the Board of Directors, whose
determination shall be conclusive and set forth in a Board Resolution) of
consideration payable in respect of any tender offer or exchange offer by the
Company or any of its Subsidiaries for all or any portion of the Common Stock
concluded within the 12 months preceding the date of such distribution, and in
respect of which no adjustment pursuant to Section 10.04(f) hereof has been
made, exceeds 5% of the product of the Current Market Price (determined as
provided in Section 10.04(g)) on the Record Date with respect to such
distribution times the number of shares of Common Stock outstanding on such
date, then and in each such case, immediately after the close of business on
such date, the Conversion Price shall be reduced so that the same shall equal
the price determined by multiplying the Conversion Price in effect immediately
prior to the close of business on such Record Date by a fraction:

 

(i)                                     the
numerator of which shall be equal to the Current Market Price on the Record
Date less an amount equal to the quotient of (x) the excess of such combined
amount over such 5% and (y) the number of shares of Common Stock outstanding on
the Record Date, and

 

(ii)                                  the
denominator of which shall be equal to the Current Market Price on such date.

 

63

 

However, in the
event that the then fair market value (as so determined) of the portion of the
securities so distributed (other than excluded securities) applicable to one
share of Common Stock is equal to or greater than the Current Market Price on
the Record Date, in lieu of the foregoing adjustment, adequate provision shall
be made so that each Holder shall have the right to receive upon conversion of
a Note (or any portion thereof) the amount of cash such Holder would have
received had such Holder converted such Note (or portion thereof) immediately
prior to such Record Date.  In the event
that such dividend or distribution is not so paid or made, the Conversion Price
shall again be adjusted to be the Conversion Price which would then be in
effect if such dividend or distribution had not been declared.

 

(f)                                    In
case a tender offer or exchange offer made by the Company or any of its
Subsidiaries for all or any portion of the Common Stock shall expire and such
tender offer or exchange offer (as amended upon the expiration thereof) shall
require the payment to stockholders (based on the acceptance (up to any maximum
specified in the terms of the tender offer or exchange offer) of Purchased
Shares (as defined below)) of an aggregate consideration having a fair market
value (as determined by the Board of Directors, whose determination shall be
conclusive and set forth in a Board Resolution) that combined together with:

 

(1)                                  the
aggregate of the cash plus the fair market value (as determined by the Board of
Directors, whose determination shall be conclusive and set forth in a Board
Resolution), as of the expiration of such tender offer or exchange offer, of
consideration payable in respect of any other tender offers or exchange offers,
by the Company or any of its Subsidiaries for all or any portion of the Common
Stock expiring within the 12 months preceding the expiration of such tender
offer or exchange offer and in respect of which no adjustment pursuant to this
Section 10.04(f) has been made, and

 

(2)                                  the
aggregate amount of any distributions to all holders of the Company’s Common
Stock made exclusively in cash within 12 months preceding the expiration of
such tender offer or exchange offer and in respect of which no adjustment
pursuant to Section 10.04(e) has been made,

 

exceeds 5% of the
product of the Current Market Price (determined as provided in Section
10.04(g)) as of the last time (the “Expiration Time”) tenders or exchanges
could have been made pursuant to such tender offer or exchange offer (as it may
be amended) times the number of shares of Common Stock outstanding (including any
tendered shares or exchanged shares) on the Expiration Time, then, and in each
such case, immediately prior to the opening of business on the day after the
date of the Expiration Time, the Conversion Price shall be adjusted so that the
same shall equal the price determined by multiplying the Conversion Price in
effect immediately prior to close of business on the date of the Expiration
Time by a fraction:

 

(3)                                  the
numerator of which shall be the number of shares of Common Stock outstanding
(including any tendered or exchanged shares) at the Expiration Time multiplied
by the Current Market Price of the Common Stock on the Trading Day next
succeeding the Expiration Time, and

 

64

 

(4)                                  the
denominator shall be the sum of (x) the fair market value (determined as
aforesaid) of the aggregate consideration payable to stockholders based on the
acceptance (up to any maximum specified in the terms of the tender offer or
exchange offer) of all shares validly tendered or exchanged and not withdrawn
as of the Expiration Time (the shares deemed so accepted, up to any such
maximum, being referred to as the “Purchased Shares”) and (y) the product of
the number of shares of Common Stock outstanding (less any Purchased Shares) on
the Expiration Time and the Current Market Price of the Common Stock on the
Trading Day next succeeding the Expiration Time.

 

Such reduction (if
any) shall become effective immediately prior to the opening of business on the
day following the Expiration Time.  In
the event that the Company is obligated to purchase shares pursuant to any such
tender offer or exchange offer, but the Company is permanently prevented by
applicable law from effecting any such purchases or all such purchases are
rescinded, the Conversion Price shall again be adjusted to be the Conversion
Price which would then be in effect if such tender offer or exchange offer had
not been made.  If the application of
this Section 10.04(f) to any tender offer or exchange offer would result in an
increase in the Conversion Price, no adjustment shall be made for such tender
offer or exchange offer under this Section 10.04(f).

 

(g)                                 For
purposes of this Section 10.04, the following terms shall have the meanings
indicated:

 

(1)                                  “Current
Market Price” shall mean the average of the daily Closing Prices per share of
Common Stock for the ten consecutive Trading Days immediately prior to the date
in question; provided, however, that if:

 

(i)                                     the
“ex” date (as hereinafter defined) for any event (other than the issuance or
distribution requiring such computation) that requires an adjustment to the
Conversion Price pursuant to Section 10.04(a), (b), (c), (d), (e) or (f) occurs
during such ten consecutive Trading Days, the Closing Price for each Trading
Day prior to the “ex” date for such other event shall be adjusted by
multiplying such Closing Price by the same fraction by which the Conversion
Price is so required to be adjusted as a result of such other event;

 

(ii)                                  the
“ex” date for any event (other than the issuance or distribution requiring such
computation) that requires an adjustment to the Conversion Price pursuant to
Section 10.04(a), (b), (c), (d), (e) or (f) occurs on or after the “ex” date
for the issuance or distribution requiring such computation and prior to the
day in question, the Closing Price for each Trading Day on and after the “ex”
date for such other event shall be adjusted by multiplying such Closing Price
by the reciprocal of the fraction by which the Conversion Price is so required
to be adjusted as a result of such other event; and

 

(iii)                               the “ex” date for the
issuance or distribution requiring such computation is prior to the day in
question, after taking into account any 

 

65

 

adjustment required pursuant to clause (i) or (ii) of
this proviso, the Closing Price for each Trading Day on or after such “ex” date
shall be adjusted by adding thereto the amount of any cash and the fair market
value (as determined by the Board of Directors in a manner consistent with any
determination of such value for purposes of Section 10.04(d) or (f), whose
determination shall be conclusive and set forth in a Board Resolution) of the
evidences of indebtedness, shares of capital stock or assets being distributed
applicable to one share of Common Stock as of the close of business on the day
before such “ex” date.

 

For purposes of
any computation under Section 10.04(f), the Current Market Price of the Common
Stock on any date shall be deemed to be the average of the daily Closing Prices
per share of Common Stock for such day and the next two succeeding Trading
Days; provided, however, that if the “ex” date for any event (other than
the tender offer requiring such computation) that requires an adjustment to the
Conversion Price pursuant to Section 10.04(a), (b), (c), (d), (e) or (f) occurs
on or after the Expiration Time for the tender or exchange offer requiring such
computation and prior to the day in question, the Closing Price for each
Trading Day on and after the “ex” date for such other event shall be adjusted
by multiplying such Closing Price by the reciprocal of the fraction by which
the Conversion Price is so required to be adjusted as a result of such other
event.  For purposes of this paragraph,
the term “ex” date, when used:

 

(A)                              with
respect to any issuance or distribution, means the first date on which the
Common Stock trades regular way on the relevant exchange or in the relevant
market from which the Closing Price was obtained without the right to receive
such issuance or distribution;

 

(B)                                with
respect to any subdivision or combination of shares of Common Stock, means the
first date on which the Common Stock trades regular way on such exchange or in
such market after the time at which such subdivision or combination becomes
effective, and

 

(C)                                with
respect to any tender or exchange offer, means the first date on which the
Common Stock trades regular way on such exchange or in such market after the
Expiration Time of such offer.

 

Notwithstanding
the foregoing, whenever successive adjustments to the Conversion Price are
called for pursuant to this Section 10.04, such adjustments shall be made to
the Current Market Price as may be necessary or appropriate to effectuate the
intent of this Section 10.04 and to avoid unjust or inequitable results as
determined in good faith by the Board of Directors.

 

(2)                                  “fair
market value” shall mean the amount which a willing buyer would pay a willing
seller in an arm’s length transaction.

 

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

 

66

 

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

 

(h)                                 The
Company may make such reductions in the Conversion Price, in addition to those
required by Section 10.04(a), (b), (c), (d), (e) or (f), as the Board of
Directors considers to be advisable to avoid or diminish any income tax to
holders of Common Stock or rights to purchase Common Stock resulting from any
dividend or distribution of stock (or rights to acquire stock) or from any
event treated as such for income tax purposes.

 

To the extent permitted by applicable law, the Company
from time to time may reduce the Conversion Price by any amount for any period
of time if the period is at least 20 days and the reduction is irrevocable
during the period and the Board of Directors determines in good faith that such
reduction would be in the best interests of the Company, which determination
shall be conclusive and set forth in a Board Resolution.  Whenever the Conversion Price is reduced
pursuant to the preceding sentence, the Company shall mail to the Trustee and
each Holder at the address of such Holder as it appears in the Register a
notice of the reduction at least 15 days prior to the date the reduced
Conversion Price takes effect, and such notice shall state the reduced
Conversion Price and the period during which it will be in effect.

 

(i)                                     No
adjustment in the Conversion Price shall be required unless such adjustment
would require an increase or decrease of at least 1% in the Conversion Price
then in effect; provided, however, that any adjustments which by reason
of this Section 10.04(i) are not required to be made shall be carried forward
and taken into account in any subsequent adjustment.  All calculations under this Article 10 shall be made by the
Company and shall be made to the nearest cent or to the nearest one hundredth
of a share, as the case may be.  No
adjustment need be made for a change in the par value or no par value of the
Common Stock.

 

(j)                                     In
any case in which this Section 10.04 provides that an adjustment shall become
effective immediately after a Record Date for an event, the Company may defer
until the occurrence of such event (i) issuing to the Holder of any Note
converted after such Record Date and before the occurrence of such event the
additional shares of Common Stock issuable upon such conversion by reason of
the adjustment required by such event over and above the Common Stock issuable
upon such conversion before giving effect to such adjustment and (ii) paying to
such holder any amount in cash in lieu of any fraction pursuant to Section
10.03 hereof.

 

(k)                                  For
purposes of this Section 10.04, the number of shares of Common Stock at any
time outstanding shall not include shares held in the treasury of the Company
but shall include shares issuable in respect of scrip certificates issued in
lieu of fractions of shares of Common Stock. 
The Company will not pay any dividend or make any distribution on shares
of Common Stock held in the treasury of the Company.

 

SECTION 10.05              Notice
of Adjustments of Conversion Price. 
Whenever the Conversion Price is adjusted as herein provided (other than
in the case of an adjustment pursuant to the second paragraph of Section
10.04(h) for which the notice required by such paragraph has

 

67

 

been provided), the Company shall promptly file with
the Trustee and any Conversion Agent other than the Trustee an Officers’
Certificate setting forth the adjusted Conversion Price and showing in
reasonable detail the facts upon which such adjustment is based.  Promptly after delivery of such Officers’
Certificate, the Company shall prepare a notice stating that the Conversion
Price has been adjusted and setting forth the adjusted Conversion Price and the
date on which each adjustment becomes effective, and shall mail such notice to
each Holder at the address of such Holder as it appears in the Register within
20 days of the effective date of such adjustment.  Failure to deliver such notice shall not effect the legality or
validity of any such adjustment.

 

SECTION 10.06              Notice Prior to
Certain Actions.  In case at
any time after the date hereof:

 

(1)                                  the
Company shall declare a dividend (or any other distribution) on its Common
Stock payable otherwise than in cash out of its capital surplus or its
consolidated retained earnings;

 

(2)                                  the
Company shall authorize the granting to the holders of its Common Stock of
rights or warrants to subscribe for or purchase any shares of capital stock of
any class (or of securities convertible into shares of capital stock of any
class) or of any other rights;

 

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

 

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

 

the Company shall
cause to be filed at each office or agency maintained for the purpose of conversion
of Notes pursuant to Section 4.05 hereof, and shall cause to be provided to the
Trustee and all Holders in accordance with Section 13.02 hereof, at least 20
days (or 10 days in any case specified in clause (1) or (2) above) prior to the
applicable record or effective date hereinafter specified, a notice stating:

 

(A)                              the
date on which a record is to be taken for the purpose of such dividend,
distribution, rights or warrants, or, if a record is not to be taken, the date
as of which the holders of Common Stock of record to be entitled to such
dividend, distribution, rights or warrants are to be determined, or

 

68

 

(B)                                the
date on which such reclassification, merger, consolidation, statutory share
exchange, combination, sale, transfer, conveyance, 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, merger, consolidation, statutory share exchange,
sale, transfer, dissolution, liquidation or winding up.

 

Neither the failure to give such notice nor any defect
therein shall affect the legality or validity of the proceedings or actions
described in clauses (1) through (4) of this Section 10.06.

 

SECTION 10.07              Company
to Reserve Common Stock.  The
Company shall at all times use its best efforts to reserve and keep available,
free from preemptive rights, out of its authorized but unissued Common Stock,
for the purpose of effecting the conversion of Notes, the full number of shares
of fully paid and nonassessable Common Stock then issuable upon the conversion
of all Notes outstanding.

 

SECTION 10.08              Taxes on
Conversions.  Except as
provided in the next sentence, the Company will pay any and all taxes (other
than taxes on income) and duties that may be payable in respect of the issue or
delivery of shares of Common Stock on conversion of Notes pursuant hereto.  A Holder delivering a Note for conversion
shall be liable for and will be required to pay any tax or duty which may be
payable in respect of any transfer involved in the issue and delivery of shares
of Common Stock in a name other than that of the Holder of the Note or Notes to
be converted, and no such issue or delivery shall be made unless the Person
requesting such issue has paid to the Company the amount of any such tax or
duty, or has established to the satisfaction of the Company that such tax or
duty has been paid.

 

SECTION 10.09              Covenant as to
Common Stock.  The Company
covenants that all shares of Common Stock which may be issued upon conversion
of Notes will upon issue be fully paid and nonassessable and, except as provided
in Section 10.08, the Company will pay all taxes, liens and charges with
respect to the issue thereof.

 

SECTION 10.10              Cancellation of
Converted Notes.  All Notes
delivered for conversion shall be delivered to the Trustee to be canceled by or
at the direction of the Trustee, which shall dispose of the same as provided in
Section 2.10.

 

SECTION 10.11              Effect of
Reclassification, Consolidation, Merger or Sale.  If any of following events occur, namely:

 

(1)                                  any
reclassification or change of the outstanding shares of Common Stock (other
than a change in par value, or from par value to no par value, or from no par
value to par value, or as a result of a subdivision or combination),

 

69

 

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

 

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

 

the Company or the successor or purchasing
corporation, as the case may be, shall execute with the Trustee a supplemental
indenture (which shall comply with the TIA as in force at the date of execution
of such supplemental indenture if such supplemental indenture is then required
to so comply) providing that such Note shall be convertible into the kind and
amount of shares of stock and other securities or property or assets (including
cash or any combination thereof) which such Holder would have been entitled to
receive upon such reclassification, change, merger, consolidation, statutory
share exchange, combination, sale or conveyance had such Notes been converted into
Common Stock immediately prior to such reclassification, change, merger,
consolidation, statutory share exchange, combination, sale or conveyance
assuming such holder of Common Stock did not exercise its rights of election,
if any, as to the kind or amount of securities, cash or other property
receivable upon such reclassification, change, merger, consolidation, statutory
share exchange, combination, sale or conveyance (provided that, if the kind or
amount of securities, cash or other property receivable upon such
reclassification, change, merger, consolidation, statutory share exchange,
combination, sale or conveyance is not the same for each share of Common Stock
in respect of which such rights of election shall not have been exercised
(“Non-Electing Share”), then for the purposes of this Section 10.11 the kind
and amount of securities, cash or other property receivable upon such
reclassification, change, merger, consolidation, statutory share exchange,
combination, sale or conveyance for each Non-Electing Share shall be deemed to
be the kind and amount so receivable per share by a plurality of the
Non-Electing Shares).  Such supplemental
indenture shall provide for adjustments which shall be as nearly equivalent as
may be practicable to the adjustments provided for in this Article 10.  If, in the case of any such
reclassification, change, merger, consolidation, statutory share exchange,
combination, sale or conveyance, the stock or other securities and assets
receivable thereupon by a holder of shares of Common Stock includes shares of
stock or other securities and assets of a corporation other than the successor
or purchasing corporation, as the case may be, in such reclassification,
change, merger, consolidation, statutory share exchange, combination, sale or
conveyance, then such supplemental indenture shall also be executed by such
other corporation and shall contain such additional provisions to protect the
interests of the Holders of the Notes as the Board of Directors shall
reasonably consider necessary by reason of the foregoing, including to the
extent practicable the provisions providing for the repurchase rights set forth
in Section 3.09 hereof.

 

The Company shall cause notice of the execution of
such supplemental indenture to be mailed to each Holder, at the address of such
Holder as it appears on the Register, within

 

70

 

20 days after execution
thereof.  Failure to deliver such notice
shall not affect the legality or validity of such supplemental indenture.

 

The above provisions of this Section 10.11 shall
similarly apply to successive reclassifications, mergers, consolidations,
statutory share exchanges, combinations, sales and conveyances.

 

If this Section 10.11 applies to any event or
occurrence, Section 10.04 hereof shall not apply.

 

SECTION 10.12              Adjustment
for Other Distributions.  If,
after the Issue Date of the Notes, the Company pays a dividend or makes a
distribution to all holders of its Common Stock consisting of Capital Stock of
any class or series, or similar equity interests, of or relating to a
Subsidiary or other business unit of the Company, the Conversion Price shall be
adjusted in accordance with the formula:

 

P’  =  P 
x  1/(1 + F/M)

 

where:

 

P’ = the adjusted Conversion Price.

 

P  = the
current Conversion Price.

 

M  = the
average of the Post-Distribution Prices of the Common Stock for the 10 trading
days commencing on and including the fifth trading day after the date on which
“ex-dividend trading” commences for such dividend or distribution on the
principal United States exchange or market which such securities are then
listed or quoted (the “Ex-Dividend Date”).

 

F  = the fair
market value of the securities distributed in respect of each share of Common
Stock shall mean the number of securities distributed in respect of each share
of Common Stock multiplied by the average of the Post-Distribution Prices of
those securities distributed for the 10 trading days commencing on and
including the fifth trading day after the Ex-Dividend Date.

 

“Post-Distribution Price” of Capital Stock or any
similar equity interest on any date means the closing per unit sale price (or,
if no closing sale price is reported, the average of the bid and ask prices or,
if more than one in either case, the average of the average bid and the average
ask prices) on such date for trading of such units on a “when issued” basis
without due bills (or similar concept) as reported in the composite
transactions for the principal United States securities exchange or market on
which such Capital Stock or equity interest is traded or, if the Capital Stock
or equity interest, as the case may be, is not listed on a United States
national or regional securities exchange or market, as reported by the National
Association of Securities Dealers Automated Quotation System or by the National
Quotation Bureau Incorporated; provided that if on any date such units
have not traded on a “when issued” basis, the Post-Distribution Price shall be
the closing per unit sale price (or, if no closing sale price is reported, the
average of the bid and ask prices or, if more than one in either case, the
average of the average bid and the average ask prices) on such date for trading
of such units on a “regular way”

 

71

 

basis without due bills
(or similar concept) as reported in the composite transactions for the
principal United States securities exchange on which such Capital Stock or
equity interest is traded or, if the Capital Stock or equity interest, as the
case may be, is not listed on a United States national or regional securities
exchange, as reported by the National Association of Securities Dealers
Automated Quotation System or by the National Quotation Bureau Incorporated.  In the absence of such quotation, the
Company shall be entitled to determine the Post-Distribution Price on the basis
of such quotations, which reflect the post-distribution value of the Capital
Stock or equity interests as it considers appropriate.

 

SECTION 10.13              Responsibility
of Trustee for Conversion Provisions.  The Trustee, subject to the provisions of Section 7.01 hereof,
and any Conversion Agent shall not at any time be under any duty or
responsibility to any Holder of Notes to determine whether any facts exist which
may require any adjustment of the Conversion Price, or with respect to the
nature or intent of any such adjustments when made, or with respect to the
method employed, or herein or in any supplemental indenture provided to be
employed, in making the same.  Neither
the Trustee, subject to the provisions of Section 7.01 hereof, nor any
Conversion Agent shall be accountable with respect to the validity or value (of
the kind or amount) of any Common Stock, or of any other securities or
property, which may at any time be issued or delivered upon the conversion of
any Note; and it or they do not make any representation with respect
thereto.  Neither the Trustee, subject
to the provisions of Section 7.01 hereof, nor any Conversion Agent shall be
responsible for any failure of the Company to make any cash payment or to
issue, transfer or deliver any shares of stock or share certificates or other
securities or property upon the surrender of any Note for the purpose of
conversion; and the Trustee, subject to the provisions of Section 7.01 hereof,
and any Conversion Agent shall not be responsible or liable for any failure of
the Company to comply with any of the covenants of the Company contained in
this Article.

 

ARTICLE 11

 

SUBORDINATION

 

SECTION 11.01              Agreement to Subordinate.  The Company agrees, and each Holder by
accepting a Note agrees, that the Indebtedness, interest and other obligations
of any kind evidenced by the Notes and this Indenture are subordinated in right
of payment, to the extent and in the manner provided in this Article 11, to the
prior payment in full in cash or cash equivalents of all Senior Indebtedness
(whether outstanding on the date hereof or hereafter created, incurred, assumed
or guaranteed), and that the subordination is for the benefit of the holders of
Senior Indebtedness.

 

SECTION 11.02              Liquidation; Dissolution; Bankruptcy.  In the event of any insolvency or bankruptcy
case or proceeding, or any receivership, liquidation, reorganization or other
similar case or proceeding in connection therewith, relating to the Company or
to its assets, or any liquidation, dissolution or other winding-up of the
Company, whether voluntary or involuntary, or any assignment for the benefit of
creditors or other marshaling of assets or liabilities of the Company (except
in connection with the consolidation or merger of the Company or its
liquidation or dissolution following the conveyance, transfer or lease of its

 

72

 

properties and assets substantially upon the terms and
conditions described in Article 5), the holders of Senior Indebtedness will be
entitled to receive payment in full in cash or cash equivalents of all Senior
Indebtedness, or provision shall be made for such payment in full, before the
Noteholders will be entitled to receive any payment or distribution of any kind
or character (other than (i) payments made pursuant to the Collateral Pledge
and Security Agreement, and (ii) any payment or distribution in the form of
equity securities or subordinated securities of the Company or any successor
obligor that, in the case of any such subordinated securities, are subordinated
in right of payment to all Senior Indebtedness that may at the time be
outstanding to at least the same extent as the Notes are so subordinated (such
equity securities or subordinated securities hereinafter being “Permitted
Junior Securities”)) on account of principal of, or Liquidated Damages, if any,
or interest on the Notes; and any payment or distribution of assets of the
Company of any kind or character, whether in cash, property or securities
(other than (x) any payments made pursuant to the Collateral Pledge and
Security Agreement or (y) a payment or distribution in the form of Permitted
Junior Securities), by set-off or otherwise, to which the Noteholders or the
Trustee would be entitled but for the provisions of this Article 11 shall be
paid by the liquidating trustee or agent or other person making such payment or
distribution, whether a trustee in bankruptcy, a receiver or liquidating
trustee or otherwise, directly to the holders of Senior Indebtedness or their
representative or representatives ratably according to the aggregate amounts
remaining unpaid on account of the Senior Indebtedness to the extent necessary
to make payment in full of all Senior Indebtedness remaining unpaid, after
giving effect to any concurrent payment or distribution to the holders of such
Senior Indebtedness.

 

SECTION 11.03              Default on
Designated Senior Indebtedness.

 

(a)                                  No
payment or distribution of any assets of the Company of any kind or character,
whether in cash, property or securities (other than (i) any payments made
pursuant to the Collateral Pledge and Security Agreement or (ii) payments
in the form of Permitted Junior Securities), may be made by or on behalf of the
Company on account of principal of or interest or Liquidated Damages, if any,
on the Notes or on account of the purchase, redemption or other acquisition of
Notes upon the occurrence of any Payment Default until such Payment Default
shall have been cured or waived in writing or shall have ceased to exist or
such Designated Senior Indebtedness shall have been discharged or paid in full
in cash or cash equivalents.  “Payment
Default” shall mean a default in payment, whether at scheduled maturity, upon
scheduled installment, by acceleration or otherwise, of principal of, or
premium, if any, or interest on Designated Senior Indebtedness beyond any
applicable grace period.

 

(b)                                 No
payment or distribution of any assets of the Company of any kind or character,
whether in cash, property or securities (other than (i) any payments made
pursuant to the Collateral Pledge and Security Agreement or (ii) payments
in the form of Permitted Junior Securities), may be made by or on behalf of the
Company on account of principal of or interest or Liquidated Damages, if any,
on the Notes or on account of the purchase, redemption or other acquisition of
Notes during a Payment Blockage Period (as defined below), arising as a result
of any default or event of default with respect to any Designated Senior
Indebtedness other than any Payment Default pursuant to which the maturity
thereof may be accelerated (a “Non-Payment

 

73

 

Default”) and receipt by the Trustee of written notice
thereof from the trustee or other representative of holders of Designated
Senior Indebtedness.

 

The Payment Blockage Period shall mean the period
(each, a “Payment Blockage Period”) that will commence upon the date of receipt
by the Trustee of written notice from the trustee or such other representative
of the holders of the Designated Senior Indebtedness in respect of which the
Non-Payment Default exists and shall end on the earliest of:

 

(i)                                     179
days thereafter (provided that any Designated Senior Indebtedness as to which
notice was given shall not theretofore have been accelerated);

 

(ii)                                  the
date on which such Non-Payment Default is cured, waived or ceases to exist;

 

(iii)                               the date on which such
Designated Senior Indebtedness is discharged or paid in full; or

 

(iv)                              the
date on which such Payment Blockage Period shall have been terminated by
written notice to the Trustee or the Company from the trustee or such other
representative initiating such Payment Blockage Period,

 

after which the Company will resume making any and all
required payments in respect of the Notes, including any missed payments.  In any event, not more than one Payment
Blockage Period may be commenced during any period of 365 consecutive
days.  No Non-Payment Default that
existed or was continuing on the date of the commencement of any Payment
Blockage Period will be, or can be made, the basis for the commencement of a
subsequent Payment Blockage Period, unless such Non-Payment Default has been
cured or waived for a period of not less than 90 consecutive days subsequent to
the commencement of such initial Payment Blockage Period.

 

SECTION 11.04              [Intentionally
Deleted]

 

SECTION 11.05              When
Distribution Must Be Paid Over. 
In the event that, notwithstanding the provisions of Sections 11.02 and
11.03, any payment or distribution of any kind or character, whether in cash,
property or securities, shall be received by the Trustee or any Noteholder
which is prohibited by such provisions, then and in such event such payment
shall be held in trust for the benefit of, and shall be paid over and delivered
by such Trustee or Noteholder to the trustee or any other representative of
holders of Senior Indebtedness, as their interest may appear, for application
to Senior Indebtedness remaining unpaid until all such Senior Indebtedness has
been paid in full in cash or cash equivalents after giving effect to any
concurrent distribution to or for the holders of Senior Indebtedness.

 

With respect to the holders of Senior Indebtedness,
the Trustee undertakes to perform only such obligations on the part of the
Trustee as are specifically set forth in this Article 11, and no implied
covenants or obligations with respect to the holders of Senior Indebtedness
shall be read into this Indenture against the Trustee.  The Trustee shall not be

 

74

 

deemed to owe any
fiduciary duty to the holders of Senior Indebtedness, and shall not be liable
to any such holders if the Trustee shall pay over or distribute to or on behalf
of Noteholders or the Company or any other Person money or assets to which any
holders of Senior Indebtedness shall be entitled by virtue of this Article 11,
except if such payment is made as a result of the willful misconduct or gross
negligence of the Trustee.

 

SECTION 11.06              Notice by the
Company.  The Company shall
promptly notify the Trustee and the Paying Agent of any facts known to the
Company that would cause a payment of any obligations with respect to the Notes
to violate this Article 11, but failure to give such notice shall not affect
the subordination of the Notes to the Senior Indebtedness as provided in this
Article 11.

 

SECTION 11.07              Subrogation.  After all Senior Indebtedness is paid in
full and until the Notes are paid in full, Noteholders shall be subrogated
(equally and ratably with all other Indebtedness that is equal in right of
payment to the Notes) to the rights of holders of Senior Indebtedness to
receive distributions applicable to Senior Indebtedness to the extent that distributions
otherwise payable to the Noteholders have been applied to the payment of Senior
Indebtedness.  A distribution made under
this Article 11 to holders of Senior Indebtedness that otherwise would have
been made to Noteholders is not, as between the Company and Noteholders, a
payment by the Company of the Notes.

 

SECTION 11.08              Relative Rights.  This Article 11 defines the relative rights
of Holders and holders of Senior Indebtedness. 
Nothing in this Indenture shall: 
(i) impair, as between the Company and Holders, the obligation of the
Company, which is absolute and unconditional, to pay principal of, Liquidated
Damages, if any, and interest on the Notes in accordance with their terms; (ii)
affect the relative rights of Holders and creditors of the Company other than
their rights in relation to holders of Senior Indebtedness; or (iii) prevent
the Trustee or any Holder from exercising its available remedies upon a Default
or Event of Default, subject to the rights of holders and owners of Senior
Indebtedness to receive distributions and payments otherwise payable to Holders
of Notes.  If the Company fails because
of this Article 11 to pay principal of or interest on, or Liquidated Damages
with respect to, a Note on the Stated Maturity date, the failure is still a
Default or Event of Default.

 

SECTION 11.09              Subordination May
Not Be Impaired by the Company. 
No right of any holder of Senior Indebtedness to enforce the
subordination of the Indebtedness evidenced by the Notes shall be impaired by
any act or failure to act by the Company or any Holder or by the failure of the
Company or any Holder to comply with this Indenture.

 

Without in any way limiting the generality of this
Section 11.09, the holders of Senior Indebtedness may, at any time and from
time to time, without the consent of or notice to the Trustee or the Holders,
without incurring responsibility to the Trustee or the Holders and without
impairing or releasing the subordination provided in this Article 11 or the
obligations hereunder of the Holders to the holders of Senior Indebtedness, do
any one or more of the following:  (a)
change the manner, place or terms of payment or extend the time of payment of,
or renew or alter, Senior Indebtedness, or any instrument evidencing the same
or any agreement

 

75

 

under which Senior
Indebtedness is outstanding or secured; (b) sell, exchange, release, foreclose
against or otherwise deal with any property pledged, mortgaged or otherwise
securing Senior Indebtedness; (c) release any Person liable in any manner for
the collection of Senior Indebtedness; and (d) exercise or refrain from
exercising any rights against the Company, and Subsidiary thereof or any other
Person.

 

SECTION 11.10              Distribution or
Notice to Representative. 
Whenever a distribution is to be made or a notice given to holders of
any Senior Indebtedness, the distribution may be made and the notice given to
their trustee or representative.

 

Upon any payment or distribution of assets of the
Company referred to in this Article 11, the Trustee and the Holders of Notes
shall be entitled to rely upon any order or decree made by any court of
competent jurisdiction or upon any certificate of such representative(s) or of
the liquidating trustee or agent or other Person making any distribution to the
Trustee or to the Holders for the purpose of ascertaining the Persons entitled
to participate in such distribution, all holders of the Senior Indebtedness 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 11.

 

SECTION 11.11              Rights
of Trustee and Paying Agent. 
Notwithstanding the provisions of this Article 11 or any other provision
of this Indenture, the Trustee shall not be charged with knowledge of the
existence of any facts that would prohibit the making of any payment or
distribution by the Trustee, and the Trustee and the Paying Agent may continue
to make payments on the Notes, unless a Responsible Officer of the Trustee
shall have received at its Corporate Trust Office at least three Business Days
prior to the date of such payment written notice of facts that would cause the
payment of any obligations with respect to the Notes to violate this Article
11.  Only the Company or representative
may give the notice.  Nothing in this
Article 11 shall impair the claims of, or payments to, the Trustee under or pursuant
to Section 7.06.

 

The Trustee in its individual or any other capacity may
hold Senior Indebtedness with the same rights it would have if it were not
Trustee.

 

ARTICLE 12

 

SECURITY

 

SECTION 12.01              Security.

 

(a)                                  At
the Closing Time, the Company shall (i) enter into the Collateral Pledge and
Security Agreement and comply with the terms and provisions thereof and
(ii) purchase the Initial Pledged Securities to be pledged to the
Collateral Agent for the benefit of the Trustee and the ratable benefit of the
Holders in such amount as will be sufficient upon receipt of scheduled interest
and principal payments of such Initial Pledged Securities, as computed by the
Company and verified for mathematical accuracy by KPMG  LLP, independent public accountants, or
another nationally recognized firm of independent public accountants selected by
the Company, to provide for payment in full of all scheduled interest payments
due

 

76

 

on the Notes. 
The Initial Pledged Securities shall be pledged by the Company to the
Collateral Agent for the benefit of the Trustee and the ratable benefit of the
Holders and shall be held by the Collateral Agent in the Collateral Account
pending disposition pursuant to the Collateral Pledge and Security Agreement.

 

(b)                                 On
each relevant Date of Delivery (if such Date of Delivery is different from the
Closing Time), the Company shall (i) enter into a supplement to the Collateral
Pledge and Security Agreement and comply with the terms and provisions thereof
and (ii) purchase the Additional Pledged Securities to be pledged to the
Collateral Agent for the benefit of the Trustee and the ratable benefit of the
Holders in such amount as will be sufficient upon receipt of scheduled interest
and principal payments of such Additional Pledged Securities, as computed by
the Company and verified for mathematical accuracy by KPMG  LLP, independent public accountants, or
another nationally recognized firm of independent public accountants selected
by the Company, to provide for payment in full of all scheduled interest
payments due on the Notes issued in connection therewith.  The Additional Pledged Securities shall be
pledged by the Company to the Collateral Agent for the benefit of the Trustee
and the ratable benefit of the Holders and shall be held by the Collateral
Agent in the Collateral Account pending disposition pursuant to the Collateral
Pledge and Security Agreement.

 

(c)                                  Each
Holder, by its acceptance of a Note, consents and agrees to the terms of the
Collateral Pledge and Security Agreement (including, without limitation, the provisions
providing for foreclosure and release of the Pledged Securities) as the same
may be in effect or may be amended from time to time in writing by the parties
thereto (provided that no amendment that would materially adversely affect the
rights of the Holders may be effected without the consent of each Holder
affected thereby), and authorizes and directs the Trustee and the Collateral
Agent to enter into the Collateral Pledge and Security Agreement and to perform
its respective obligations and exercise its respective rights thereunder in
accordance therewith.  The Company will
do or cause to be done all such acts and things as may be necessary or proper,
or as may be required by the provisions of the Collateral Pledge and Security
Agreement, to assure and confirm to the Trustee and the Collateral Agent the
security interest in the Pledged Securities contemplated hereby, by the
Collateral Pledge and Security Agreement or any part thereof, as from time to
time constituted, so as to render the same available for the security and
benefit of this Indenture and of the Notes secured hereby, according to the
intent and purpose herein expressed. 
The Company shall take, or shall cause to be taken, upon request of the
Trustee or the Collateral Agent, any and all actions reasonably required to
cause the Collateral Pledge and Security Agreement to create and maintain, as
security for the obligations of the Company under this Indenture and the Notes
as provided in the Collateral Pledge and Security Agreement, valid and
enforceable first priority perfected liens in and on all the Pledged
Securities, in favor of the Collateral Agent for the benefit of the Trustee and
the ratable benefit of the Holders, superior to and prior to the rights of
third Persons and subject to no other Liens.

 

(d)                                 The
release of any Pledged Securities pursuant to the Collateral Pledge and
Security Agreement will not be deemed to impair the security under this
Indenture in contravention of the provisions hereof if and to the extent the
Pledged Securities are released pursuant to this Indenture and the Collateral
Pledge and Security Agreement.  To the
extent

 

77

 

applicable, the Company shall cause Section 314(d) of
the TIA relating to the release of property or securities from the Lien and
security interest of the Collateral Pledge and Security Agreement and relating
to the substitution therefor of any property or securities to be subjected to
the Lien and security interest of the Collateral Pledge and Security Agreement
to be complied with.  Any certificate or
opinion required by Section 314(d) of the TIA may be made by an Officer of the
Company, except in cases where Section 314(d) of the TIA requires that such
certificate or opinion be made by an independent Person, which Person shall be
an independent engineer, appraiser or other expert selected by the Company.

 

(e)                                  The
Company shall cause Section 314(b) of the TIA, relating to opinions of counsel
regarding the Lien under the Collateral Pledge and Security Agreement, to be
complied with.  The Trustee may, to the
extent permitted by Section 7.01 and 7.02 hereof, accept as conclusive evidence
of compliance with the foregoing provisions the appropriate statements
contained in such Opinions of Counsel.

 

(f)                                    The
Trustee and the Collateral Agent each may, in its sole discretion and without
the consent of the Holders, on behalf of the Holders, take all reasonable
actions it deems necessary or appropriate in order to (i) enforce any of the
terms of the Collateral Pledge and Security Agreement and (ii) collect and
receive any and all amounts payable in respect of the obligations of the
Company thereunder.  The Trustee and the
Collateral Agent shall have the power to institute and maintain such suits and
proceedings as the Trustee and the Collateral Agent may reasonably deem
expedient to preserve or protect its interests and the interests of the Holders
in the Pledged Securities (including the power to institute and maintain suits
or proceedings to restrain the enforcement of, or compliance with, any
legislative or other governmental enactment, rule or order that may be
unconstitutional or otherwise invalid if the enforcement of, or compliance
with, such enactment, rule or order would impair the security interest
hereunder or be prejudicial to the interests of the Holders, the Collateral
Agent or the Trustee).

 

(g)                                 Beyond
the exercise of reasonable care in the custody and preservation thereof, the
Trustee and the Collateral Agent shall have no duty as to any Pledged
Securities in their possession or any income thereon or as to preservation of
rights against prior parties or any other rights pertaining thereto, and the
Trustee and the Collateral Agent shall not be responsible for filing any
financing or continuation statements or recording any documents or instruments
in any public office at any time or times or otherwise perfecting or
maintaining the perfection of any security interest in the Pledged
Securities.  The Trustee and the
Collateral Agent shall be deemed to have exercised reasonable care in the
custody and preservation of the Pledged Securities in its possession if the
Pledged Securities are accorded treatment substantially equal to that which it
accords its own property or property held in similar accounts and shall not be
liable or responsible for any loss or diminution in the value of any of the
Pledged Securities, by reason of the act or omission of the Collateral Agent,
any carrier, forwarding agency or other agent or bailee selected by the Trustee
in good faith.

 

(h)                                 The
Trustee shall not be responsible for the existence, genuineness or value of any
of the Pledged Securities or for the validity, perfection, priority or
enforceability of

 

78

 

the Liens in any of the Pledged Securities, whether
impaired by operation of law or otherwise, for the validity or sufficiency of
the Pledged Securities or any agreement or assignment contained therein, for
the validity of the title of the Company to the Pledged Securities, for
insuring the Pledged Securities or for the payment of taxes, charges,
assessments or Liens upon the Pledged Securities or otherwise as to the
maintenance of the Pledged Securities. 
The Trustee shall have no duty to ascertain or inquire as to the
performance or observance of any of the terms of this Indenture or the
Collateral Pledge and Security Agreement by the Company or the Collateral
Agent.

 

ARTICLE 13

 

MISCELLANEOUS

 

SECTION 13.01              Trust
Indenture Act Controls.  If
any provision of this Indenture limits, qualifies, or conflicts with another
provision which is required to be included in this Indenture by the TIA, the
required provision shall control.

 

SECTION 13.02              Notices.  Any request, demand, authorization, notice,
waiver, consent or communication shall be in writing and delivered in person or
delivery by courier guaranteeing overnight delivery or mailed by first-class
mail, postage prepaid, or sent by overnight delivery addressed as follows, or
transmitted by facsimile transmission (confirmed by guaranteed overnight
courier) to the following facsimile numbers:

 

if to the Company:

 

MSC.Software Corporation

2 MacArthur Place

Santa Ana, California 92707

Attention:                                         Chief
Financial Officer

Telephone No.:              (714)
540-8900

Facsimile No.:                      (714)
784-4155

 

with a copy of any notice
given pursuant to Article 6 to:

 

O’Melveny & Myers LLP

400 South Hope Street

Los Angeles, California 90071

Attention:                                         Richard
A. Boehmer, Esq.

Facsimile No.:                      (213)
430-6407

 

79

 

if to the Trustee:

 

J.P. Morgan Trust Company, National Association

560 Mission Street, 13th Floor

San Francisco, California 94105

Attention: Mitch Gardner
Telephone No.:              (415)
315-7745

Facsimile No.:                      (415)
315-7585

 

The Company or the Trustee by notice given to the
other in the manner provided above may designate additional or different
addresses for subsequent notices or communications.

 

Any notice or communication given to a Noteholder
shall be delivered to the Noteholder, by first-class mail, postage prepaid, or
by courier guaranteeing overnight delivery, at the Noteholder’s address as it
appears on the registration books of the Registrar and shall be sufficiently
given if so sent within the time prescribed.

 

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

 

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

 

SECTION 13.03              Communication
by Holders with Other Holders.

Noteholders may communicate pursuant to TIA Section
312(b) with other Noteholders with respect to their rights under this Indenture
or the Notes.  The Company, the Trustee,
the Registrar, the Paying Agent, the Conversion Agent and anyone else shall
have the protection of TIA Section 312(c).

 

SECTION 13.04              Certificate
and Opinion as to Conditions Precedent.  Upon any request or application by the Company to the Trustee to
take any action under this Indenture, the Company shall furnish to the Trustee,
if reasonably requested:

 

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

 

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

 

SECTION 13.05              Statements
Required in Certificate or Opinion. 
Each Officers’ Certificate or Opinion of Counsel with respect to
compliance with a covenant or condition provided for in this Indenture shall
include, to the extent required by the Trustee:

 

80

 

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

 

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

 

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

 

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

 

SECTION 13.06              Separability
Clause.  In case any
provision in this Indenture or in the Notes shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.

 

SECTION 13.07              Rules
by Trustee, Paying Agent, Conversion Agent and Registrar.  The Trustee may make reasonable rules for
action by or a meeting of Noteholders. 
The Registrar, Conversion Agent and the Paying Agent may make reasonable
rules for their functions.

 

SECTION 13.08              Legal Holidays.  A “Legal Holiday” is any day other than a
Business Day.  If any specified date
(including a date for giving notice) is a Legal Holiday, the action shall be
taken on the next succeeding day that is not a Legal Holiday, and, if the
action to be taken on such date is a payment in respect of the Notes, no
interest, if any, shall accrue for the intervening period.

 

SECTION 13.09              GOVERNING LAW.  THIS INDENTURE AND THE NOTES WILL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.

 

SECTION 13.10              No
Recourse Against Others.  A
director, officer, employee, agent, representative, stockholder or equity
holder, as such, of the Company shall not have any liability for any
obligations of the Company under the Notes or this Indenture or for any claim
based on, in respect of or by reason of such obligations or their
creation.  By accepting a Note, each
Noteholder shall waive and release all such liability.  The waiver and release shall be part of the
consideration for the issue of the Notes.

 

SECTION 13.11              Successors.  All agreements of the Company in this
Indenture and the Notes shall bind its successor.  All agreements of the Trustee in this Indenture shall bind its
successor.

 

81

 

SECTION 13.12              Multiple
Originals.  The parties may
sign any number of copies of this Indenture. 
Each signed copy shall be an original, but all of them together
represent the same agreement.  One
signed copy is enough to prove this Indenture.

 

82

 

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

 

	
   

  	
  MSC.SOFTWARE CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Louis A. Greco

  
	
   

  	
   

  	
  Louis A. Greco

  
	
   

  	
   

  	
  Executive Vice President, Chief Financial

  Officer and Corporate Secretary

  
	
   

  	
   

  
	
   

  	
  J.P. MORGAN TRUST COMPANY, NATIONAL

  ASSOCIATION,

  as Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mitch Gardner

  
	
   

  	
   

  	
  Name: Mitch Gardner

  
	
   

  	
   

  	
  Title: Vice President

  

 

83

 

EXHIBIT A-1

 

[FORM OF FACE OF GLOBAL
NOTE]

 

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

 

TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO
TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF THE DEPOSITORY TRUST
COMPANY, OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF
PORTIONS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE
WITH THE RESTRICTIONS SET FORTH IN ARTICLE TWO OF THE INDENTURE REFERRED TO ON
THE REVERSE HEREOF.

 

THIS SECURITY AND THE SHARES OF COMMON STOCK ISSUABLE
UPON CONVERSION OF THIS SECURITY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES
LAWS.  NEITHER THIS SECURITY, THE SHARES
OF COMMON STOCK ISSUABLE UPON CONVERSION OF THIS SECURITY NOR ANY INTEREST OR
PARTICIPATION HEREIN OR THEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED,
PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH
REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO,
REGISTRATION.  EACH PURCHASER OF THIS
SECURITY IS HEREBY NOTIFIED THAT THE SELLER OF THIS SECURITY MAY BE RELYING ON
THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT
PROVIDED BY RULE 144A THEREUNDER.

 

THE HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF,
AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE
(THE “RESALE RESTRICTION TERMINATION DATE”) WHICH IS TWO YEARS AFTER THE LATER
OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH MSC.SOFTWARE
CORPORATION OR ANY AFFILIATE OF MSC.SOFTWARE CORPORATION WAS THE OWNER OF THIS
SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY) ONLY (A) TO MSC.SOFTWARE
CORPORATION OR ANY SUBSIDIARY THEREOF, (B) FOR SO LONG AS THE SECURITIES
ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON IT REASONABLY
BELIEVES IS A 

 

A-1-1

 

“QUALIFIED INSTITUTIONAL
BUYER” AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS
OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHICH
NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (C)
PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER
THE SECURITIES ACT OR (D) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO MSC.SOFTWARE
CORPORATION’S AND THE TRUSTEE’S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER
PURSUANT TO CLAUSE (D) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM, AND IN
EACH OF THE FOREGOING CASES, A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON
THE OTHER SIDE OF THIS SECURITY IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO
THE TRUSTEE.  THIS LEGEND WILL BE
REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION
DATE.

 

A-1-2

 

MSC.SOFTWARE CORPORATION

 

21⁄2%
Senior Subordinated Convertible Notes due 2008

 

CUSIP NO. 553531
AD 6

No.: 1

 

Issue Date: 
May 5, 2003

 

MSC.SOFTWARE CORPORATION. a Delaware corporation,
promises to pay to Cede & Co. or registered assigns, the principal sum of
One Hundred Million Dollars ($100,000,000) on May 5, 2008.

 

This Note shall bear interest as specified on the
other side of this Note.  This Note is
convertible as specified on the other side of this Note.

 

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

 

	
  Dated: May 5, 2003

  	
  MSC.SOFTWARE CORPORATION

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Louis A. Greco

  
	
   

  	
   

  	
  Executive Vice President, Chief Financial

  Officer and Corporate Secretary

  

 

TRUSTEE’S CERTIFICATE OF

AUTHENTICATION

 

	
  J.P. Morgan Trust Company, National Association

  as Trustee, certifies that this

  is one of the Notes referred

  to in the within-mentioned Indenture (as

  defined on the other side of this Note).

  	
   

  
	
   

  	
   

  
	
  By

  	
   

  	
   

  	
   

  
	
   

  	
  Authorized Signatory

  	
   

  	
   

  
	
   

  
	
  Dated: 
  May 5, 2003

  	
   

  

 

A-1-3

 

[FORM
OF REVERSE SIDE OF NOTE]

 

21⁄2% Senior Subordinated Convertible Note due 2008

 

Capitalized terms used herein but not defined shall
have the meanings assigned to them in the Indenture referred to herein unless
otherwise indicated.

 

1.                                       Cash
Interest.

 

MSC.Software Corporation, a Delaware corporation (the
“Company”), which term shall include any successor corporation under the
Indenture referred to herein, promises to pay interest at the rate of 21⁄2% per
annum (the “Interest Rate”) in cash on the principal amount of this Note.  The Company will pay cash interest
semiannually in arrears on May 5 and November 5 of each year (each an
“Interest Payment Date”), beginning on November 5, 2003, to Holders of
record at the close of business on the preceding April 20 and
October 21 (whether or not a business day) (each a “Regular Record Date”),
as the case may be, immediately preceding such Interest Payment Date.  Cash interest on the Notes will accrue from
the most recent date to which interest has been paid or duly provided or, if no
interest has been paid, from the Issue Date. 
Cash interest will be computed on the basis of a 360-day year of twelve
30-day months.  The Company shall pay
cash interest on overdue principal, or if shares of Common Stock (or cash in
lieu of fractional shares) in respect of a conversion of this Note in
accordance with the terms of Article 10 of the Indenture are not delivered when
due, at the rate borne by the Notes, and it shall pay interest in cash on
overdue installments of cash interest at the same rate to the extent
lawful.  All such overdue cash interest
shall be payable on demand.

 

In accordance with the terms of the Registration
Rights Agreement, during the first 90 days following a Registration Default (as
defined in the Registration Rights Agreement), the Interest Rate shall be
increased by 0.25% per annum on:

 

(A)                              the
91st day after the earliest date of original issuance of any of the
Notes, if the Shelf Registration Statement (as defined in the Registration
Rights Agreement) is not filed with the SEC;

 

(B)                                the
181st day following the earliest date of original issuance of any of
the Notes, if the Shelf Registration Statement is not declared effective;

 

(C)                                the
day after the fifth Business Day after the Shelf Registration Statement,
previously declared effective, ceases to be effective or fails to be usable, if
a post-effective amendment (or report filed pursuant to the Exchange Act) that
cures the failure of the Shelf Registration Statement to be effective or usable
is not filed during such five Business Day period; or

 

(D)                               the
day after the 45th day in any consecutive three-month period or the
day after the 90th day in any consecutive 12-month period, as the
case may be, that the prospectus contained in the Shelf Registration Statement
has been suspended, if such suspension has not been terminated.

 

A-1-4

 

From and after the 91st day following a
Registration Default, the Interest Rate shall be increased by 0.50% per
annum.  In no event shall the Interest
Rate be increased by more than 0.50% per annum.

 

Any amount of such additional interest will constitute
Liquidated Damages and will be payable in cash semiannually, in arrears, on
each Interest Payment Date and will cease to accrue on the date the
Registration Default is cured.  The
Holder of this Security is entitled to the benefits of the Registration Rights
Agreement.

 

2.                                       Method
of Payment.

 

Subject to the terms and conditions of the Indenture,
the Company will make payments in respect of the principal of and cash interest
on this Note and in respect of Redemption Prices and Change in Control
Repurchase Prices to Holders who surrender Notes to a Paying Agent to collect
such payments in respect of the Notes. 
The Company will pay cash amounts in money of the United States that at
the time of payment is legal tender for payment of public and private debts.  However, the Company may make such cash
payments by check payable in such money. 
A Holder with an aggregate principal amount in excess of $5,000,000 will
be paid by wire transfer in immediately available funds at the election of such
Holder.  Any payment required to be made
on any day that is not a Business Day will be made on the next succeeding
Business Day.

 

3.                                       Paying
Agent, Conversion Agent and Registrar.

 

Initially, J.P. Morgan Trust Company, National
Association (the “Trustee”), will act as Paying Agent, Conversion Agent and
Registrar.  The Company may appoint and
change any Paying Agent, Conversion Agent, Registrar or co-registrar without
notice, other than notice to the Trustee except that the Company will maintain
at least one Paying Agent in the State of New York, City of New York, The Borough
of Manhattan, which shall initially be an office or agency of the Trustee.  The Company or any of its Subsidiaries or
any of their Affiliates may act as Paying Agent, Conversion Agent, Registrar or
co-registrar.

 

4.                                       Indenture.

 

The Company issued the Notes under an Indenture dated
as of May 5, 2003 (the “Indenture”), between the Company and the
Trustee.  The terms of the Notes include
those stated in the Indenture and those made part of the Indenture by reference
to the Trust Indenture Act of 1939, as in effect from time to time (the
“TIA”).  Capitalized terms used herein
and not defined herein have the meanings ascribed thereto in the
Indenture.  The Notes are subject to all
such terms, and holders of Notes are referred to the Indenture and the TIA for
a statement of those terms.

 

The Notes are general unsecured obligations of the
Company (except as provided in Paragraph 17 hereof) limited to $85,000,000
aggregate principal amount, or $100,000,000 aggregate principal amount if the
Overallotment Option is exercised fully (subject to Section 

 

A-1-5

 

2.07 of the
Indenture).  The Indenture does not
limit other indebtedness of the Company, secured or unsecured.

 

5.                                       Redemption.

 

This Note is not redeemable prior to May 5,
2006.  This Note may be redeemed in
whole or in part, upon not less than 20 nor more than 60 days notice, at any
time on or after May 5, 2006 and prior to Stated Maturity, at the option
of the Company, at the redemption price equal to 100% of the principal amount
(the “Redemption Price”), plus any interest accrued but not paid prior to (but
not including) the Redemption Date, if the Closing Price of the Common Stock
has exceeded 140% of the Conversion Price (as set forth in Section 8) then in
effect for at least 20 Trading Days in any consecutive 30-Trading Day period
ending on the Trading Day prior to the date of mailing of the notice of
optional redemption pursuant to Section 3.04.

 

If fewer than all the Notes are to be redeemed, the
Trustee shall select the particular Notes to be redeemed from the outstanding
Notes by the methods as provided in the Indenture.  If any Note selected for partial redemption is converted in part
before termination of the conversion right with respect to the portion of the
Note so selected, the converted portion of such Note shall be deemed to be the
portion selected for redemption (provided, however, that the Holder of such
Note so converted and redeemed shall not be entitled to any additional interest
payment as a result of such deemed redemption than such Holder would have
otherwise been entitled to receive upon conversion of such Note).  Notes which have been converted during a
selection of Notes to be redeemed may be treated by the Trustee as outstanding
for the purpose of such selection.

 

On and after the Redemption Date, interest ceases to
accrue on Notes or portions of Notes called for redemption, unless the Company
defaults in the payment of the Redemption Price and accrued and unpaid
interest.

 

Notice of redemption will be given by the Company to
the Holders as provided in the Indenture.

 

No sinking fund is provided for the Notes.

 

6.                                       Repurchase
by the Company at the Option of the Holder.

 

If a Change in Control occurs, the Holder, at the
Holder’s option, shall have the right, in accordance with the provisions of the
Indenture, to require the Company to repurchase the Notes (or any portion of
the principal amount hereof that is at least $1,000 or any whole multiple
thereof, provided that the portion of the principal amount of this Note to be
outstanding after such repurchase is at least equal to $1,000) at the Change in
Control Repurchase Price in cash or Common Stock or a combination thereof, plus
any interest accrued and unpaid to the Change in Control Repurchase Date.

 

A-1-6

 

A Change in Control Repurchase Notice will be given by
the Company to the Holders as provided in the Indenture.  To exercise a repurchase right, a Holder
must deliver to the Paying Agent a written notice as provided in the Indenture.

 

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

 

7.                                       Notice
of Redemption.

 

Notice of an optional redemption will be mailed at
least 20 days but not more than 60 days before the Redemption Date to each
Holder of Notes to be redeemed at the Holder’s registered address.  If money sufficient to pay the Redemption
Price of all Notes (or portions thereof) to be redeemed, plus any accrued but
unpaid interest, on the Redemption Date is deposited with the Paying Agent
prior to or on the Redemption Date, immediately after such Redemption Date
interest ceases to accrue on such Notes or portions thereof.  Notes in denominations larger than $1,000 of
principal amount may be redeemed in part but only in whole multiples of $1,000
of principal amount.

 

8.                                       Conversion.

 

Subject to the next two succeeding sentences, a Holder
of a Note may convert it into Common Stock of the Company at any time before
the close of business on the Business Day preceding May 5, 2008.  If the Note is called for redemption, the
Holder may convert it at any time before the close of business on the Business
Day preceding the Redemption Date.  A
Note in respect of which a Holder has delivered a Change in Control Repurchase
Notice exercising the option of such Holder to require the Company to purchase
such Note may be converted only if such notice of exercise is withdrawn in
accordance with the terms of the Indenture.

 

The initial Conversion Price shall be equal to $8.515
per share of Common Stock, subject to adjustment in certain events described in
the Indenture.  The Company shall pay a
cash adjustment as provided in the Indenture in lieu of any fractional share of
Common Stock.

 

To convert a Note, a Holder must (1) complete and
manually sign the conversion notice below (or complete and manually sign a
facsimile of such notice) and deliver such notice to the Conversion Agent, (2)
surrender the Note to the Conversion Agent, (3) furnish appropriate
endorsements and transfer documents if required by the Conversion Agent, the
Company or the Trustee and (4) pay any transfer or similar tax, if required.

 

9.                                       Conversion
Arrangement on Call for Redemption.

 

Any Notes called for redemption, unless surrendered
for conversion before the close of business on the Business Day preceding the
Redemption Date, may be deemed to be purchased from the Holders of such Notes
at an amount not less than the Redemption Price, by one or more investment
bankers or other purchasers who may agree with the Company to purchase such

 

A-1-7

 

Notes from the Holders,
to convert them into Common Stock of the Company and to make payment for such
Notes to the Trustee in trust for such Holders.

 

10.                                 Denominations;
Transfer; Exchange.

 

The Notes are in fully registered form, without
coupons, in denominations of $1,000 of principal amount and whole multiples of
$1,000.  A Holder may transfer or
exchange Notes in accordance with the Indenture.  The Registrar may require a Holder, among other things, to
furnish appropriate endorsements and transfer documents and to pay any taxes
and fees required by law or permitted by the Indenture.  The Registrar need not transfer or exchange
any Notes selected for redemption (except, in the case of a Note to be redeemed
in part, the portion of the Note not to be redeemed) or any Notes in respect of
which a Change in Control Repurchase Notice has been given and not withdrawn
(except, in the case of a Note to be purchased in part, the portion of the Note
not to be purchased) or any Notes for a period of 15 days before the mailing of
a notice of redemption of Notes to be redeemed.

 

11.                                 Persons
Deemed Owners.

 

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

 

12.                                 Unclaimed
Money or Notes.

 

The Trustee and the Paying Agent shall return to the
Company upon written request any money or Notes held by them for the payment of
any amount with respect to the Notes that remains unclaimed for two years,
subject to applicable unclaimed property law. 
After return to the Company, Holders entitled to the money or Notes must
look to the Company for payment as general creditors unless an applicable
abandoned property law designates another person.  In the absence of a written request from the Company to return
unclaimed funds to the Company, the Trustee shall from time to time deliver all
unclaimed funds to or as directed by applicable escheat authorities, as
determined by the Trustee in its sole discretion, in accordance with the
customary practices and procedures of the Trustee.  Any unclaimed funds held by the Trustee pursuant to this section
shall be held uninvested and without any liability for interest.

 

13.                                 Amendment;
Waiver.

 

Subject to certain exceptions set forth in the
Indenture, (i) the Indenture or the Notes may be amended with the written
consent of the Holders of at least a majority in aggregate principal amount of
the Notes at the time outstanding and (ii) certain Defaults may be waived with
the written consent of the Holders of a majority in aggregate principal amount
of the Notes at the time outstanding. 
Subject to certain exceptions set forth in the Indenture, without the
consent of any Noteholder, the Company and the Trustee may amend the Indenture
or the Notes, among other things, to cure any ambiguity, omission, defect or
inconsistency, or to comply with Article 5 of the Indenture, to provide for uncertificated
Notes in addition to or in place of certificated Notes or to make any change
that does not adversely affect the rights of any Noteholder, or to

 

A-1-8

 

comply with any
requirement of the SEC in connection with the qualification of the Indenture
under the TIA.

 

14.                                 Defaults
and Remedies.

 

Under the Indenture, Events of Default include (1) the
Company fails to pay when due the principal of any of the Notes at maturity,
upon redemption or exercise of a repurchase right or otherwise, whether or not
such payment is prohibited by Article 11 of the Indenture; (2) the Company
fails to pay an installment of interest on, or Liquidated Damages with respect
to, any of the Notes that continues for three (3) Business Days after the date
when due, whether or not such payment is prohibited by Article 11 of the
Indenture; (3) the Company fails to perform or observe any other term, covenant
or agreement contained in the Notes or the Indenture for a period of 60 days
after written notice of such failure, requiring the Company to remedy the same,
shall have been given to the Company by the Trustee or to the Company and the
Trustee by the Holders of at least 25% in aggregate principal amount of the
Notes then outstanding; (4) (A) one or more defaults in the payment of
principal of or premium, if any, on any of the Company’s Indebtedness
aggregating $5.0 million or more, when the same becomes due and payable at the
scheduled maturity thereof, and such default or defaults shall have continued
after any applicable grace period and shall not have been cured or waived
within a 30-day period after the date of a Notice of Default or (B) any of the
Company’s Indebtedness aggregating $5.0 million or more shall have been accelerated
or otherwise declared due and payable, or required to be prepaid or repurchased
(other than by regularly scheduled required prepayment) prior to the scheduled
maturity thereof and such acceleration is not rescinded or annulled within a
30-day period after the date of a Notice of Default; (5) certain events of
bankruptcy, insolvency or reorganization with respect to the Company or any
Significant Subsidiary or any Subsidiaries of the Company which in the
aggregate would constitute a Significant Subsidiary; (6) the Company’s filing
of, or any Significant Subsidiary’s filing
of, a voluntary petition seeking liquidation, reorganization arrangement,
readjustment of debts or for any other relief under the federal bankruptcy
code; and (7) the Collateral Pledge and Security Agreement shall
cease to be in full force and effect or enforceable other than in accordance
with its terms.  If an Event of Default
(other than an Event of Default specified in clause (5) or (6) of Section 6.01
of the Indenture) occurs and is continuing, the Trustee, or the Holders of at
least 25% in aggregate principal amount of the Notes at the time outstanding,
may declare all the Notes to be due and payable immediately.  Certain events of bankruptcy or insolvency
are Events of Default which will result in the Notes becoming due and payable
immediately upon the occurrence of such Events of Default.

 

Noteholders may not enforce the Indenture or the
Notes, except as provided in the Indenture. 
The Trustee may refuse to enforce the Indenture or the Notes unless it
receives reasonable indemnity or security. 
Subject to certain limitations, Holders of a majority in aggregate
principal amount of the Notes at the time outstanding may direct the Trustee in
its exercise of any trust or power.  The
Trustee may withhold from Noteholders notice of any continuing Default (except
a Default in payment of amounts specified in clause (1) or (2) above) if it
determines that withholding notice is in their interests.

 

A-1-9

 

15.                                 Subordination.

 

The payment of principal of and interest on the Notes
will be subordinated in right of payment, as set forth in the Indenture, to the
prior payment in full in cash or cash equivalents of all Senior Indebtedness
whether outstanding on the date of the Indenture or thereafter incurred.

 

16.                                 Trustee
Dealings with the Company.

 

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

 

17.                                 Security.

 

The Company has entered into the Collateral Pledge and
Security Agreement and purchased and pledged to the Collateral Agent for the
benefit of the Trustee and the ratable benefit of the Holders Pledged
Securities in an amount sufficient upon receipt of scheduled interest and
principal payments on such securities to provide for the payment in full of all
scheduled interest payments due on the Notes. 
The Pledged Securities will be pledged by the Company to the Collateral
Agent for the benefit of the Trustee and the ratable benefit of the Holders and
will be held by the Collateral Agent in the Collateral Account pending
disbursement pursuant to the Collateral Pledge and Security Agreement.

 

18.                                 No
Recourse Against Others.

 

A director, officer, employee, agent, representative, stockholder
or equity holder, as such, of the Company shall not have any liability for any
obligations of the Company under the Notes or the Indenture or for any claim
based on, in respect of or by reason of such obligations or their creation.  By accepting a Note, each Noteholder waives
and releases all such liability.  The
waiver and release are part of the consideration for the issue of the Notes.

 

19.                                 Authentication.

 

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

 

20.                                 Abbreviations.

 

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

 

A-1-10

 

21.                                 GOVERNING
LAW.

 

THE INDENTURE AND THIS NOTE WILL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

 

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

 

MSC.Software Corporation

2 MacArthur Place

Santa Ana, California 92707

Attention:  Chief Financial Officer

 

A-1-11

 

ASSIGNMENT FORM

 

To assign this Note, fill in the form below:

 

I or we assign and transfer this Note to

	
   

  
	
   

  

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

	
   

  
	
   

  
	
   

  

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

 

And irrevocably appoint

 

	
   

  	
   agent to
  transfer this Note on the books of the Company.  The agent may substitute 

  
	
  another to act for him.

  

 

 

CONVERSION NOTICE

 

To convert this Note into Common Stock of the Company, check the box:

 

o

 

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

 

	
  $

  	
   

  

 

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

	
   

  
	
   

  

(Insert other person’s social sec. or tax ID no.)

	
   

  
	
   

  
	
   

  
	
   

  

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

 

	
   

  
	
   

  
	
  Date:

  	
   

  	
  Your Signature:

  	
   

  
	
   

  
	
   

  
	
  (Sign exactly as
  your name appears on the other side of this Note)

  

 

A-1-12

 

EXHIBIT A-2

 

[Form of Certificated
Note]

 

“THIS SECURITY HAS NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT’’).  THE HOLDER HEREOF, BY
PURCHASING THIS SECURITY, AGREES FOR THE BENEFIT OF THE COMPANY THAT THIS
SECURITY MAY NOT BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED (X) PRIOR TO THE
EXPIRATION OF THE HOLDING PERIOD UNDER RULE 144(k) (OR ANY SUCCESSOR THERETO)
UNDER THE SECURITIES ACT WHICH IS APPLICABLE TO THIS SECURITY OR (Y) BY ANY
HOLDER THAT WAS AN “AFFILIATE” (WITHIN THE MEANING OF RULE 144 UNDER THE
SECURITIES ACT) OF THE COMPANY AT ANY TIME DURING THE THREE MONTHS PRECEDING
THE DATE OF SUCH TRANSFER, IN EITHER CASE, OTHER THAN (1) TO THE COMPANY, (2)
SO LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE
SECURITIES ACT (‘‘RULE 144A’’), TO A PERSON WHOM THE SELLER REASONABLY BELIEVES
IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A, PURCHASING
FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO
WHOM NOTICE IS GIVEN THAT THE RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN
RELIANCE ON RULE 144A, (3) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT PROVIDED BY RULE 144 (IF APPLICABLE) UNDER THE SECURITIES ACT OR
(4) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT,
IN EACH CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF
THE UNITED STATES.  THE HOLDER HEREOF,
BY PURCHASING THIS SECURITY, REPRESENTS AND AGREES FOR THE BENEFIT OF THE
COMPANY THAT IT IS A QUALIFIED INSTITUTIONAL BUYER AND THAT IT IS HOLDING THIS
SECURITY FOR INVESTMENT PURPOSES AND NOT FOR DISTRIBUTION.  IN ANY CASE THE HOLDER HEREOF WILL NOT,
DIRECTLY OR INDIRECTLY, ENGAGE IN ANY HEDGING TRANSACTION WITH REGARD TO THIS
SECURITY OR ANY COMMON STOCK ISSUABLE UPON CONVERSION OF THIS SECURITY EXCEPT
AS PERMITTED BY THE SECURITIES ACT.”

 

A-2-1

 

MSC.SOFTWARE
CORPORATION

 

21⁄2%
Senior Subordinated Convertible Notes due 2008

 

CUSIP
NO. 553531 AD 6

 

No.:

 

Issue Date: 
May 5, 2003

 

MSC.SOFTWARE CORPORATION, a Delaware corporation,
promises to pay to Cede & Co. or registered assigns, the principal sum of
[                                ]
DOLLARS ($[                                ])
on May 5, 2008.

 

This Note shall bear interest as specified on the
other side of this Note.  This Note is
convertible as specified on the other side of this Note.

 

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

 

	
   

  	
  Dated: 

  	
  MSC.SOFTWARE CORPORATION

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title :

  
				

 

TRUSTEE’S CERTIFICATE OF

AUTHENTICATION

 

	
   

  	
   

  
	
  as Trustee, certifies that this

  is one of the Notes referred

  to in the within-mentioned Indenture (as

  defined on the other side of this Note).

  	
   

  
	
   

  	
   

  
	
  By

  	
   

  	
   

  
	
   

  	
  Authorized Signatory

  	
   

  
	
   

  
	
  Dated:   May 5, 2003

  	
   

  

 

A-2-2

 

[Text
of Reverse Side of Note]

 

Use
Exhibit A-1 Text

 

A-2-3

 

EXHIBIT B-1

 

Transfer Certificate

 

In connection with any transfer of any of the Notes
within the period prior to the expiration of the holding period applicable to
the sales thereof under Rule 144(k) under the Securities Act of 1933, as
amended (the “Securities Act”) (or any successor provision), the undersigned
registered owner of this Note hereby certifies with respect to
$                principal
amount of the above-captioned Notes presented or surrendered on the date hereof
(the “Surrendered Notes”) for registration of transfer, or for exchange or
conversion where the Notes issuable upon such exchange or conversion are to be
registered in a name other than that of the undersigned registered owner (each
such transaction being a “transfer”), that such transfer complies with the
restrictive legend set forth on the face of the Surrendered Notes for the
reason checked below:

 

o                                  A
transfer of the Surrendered Notes is made to the Company or any Subsidiaries;
or

 

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

 

o                                  The
transfer of the Surrendered Notes is pursuant to an effective registration
statement under the Securities Act, or

 

o                                  The
transfer of the Surrendered Notes is pursuant to another available exemption
from the registration requirement of the Securities Act.

 

and unless the box below is checked, the undersigned
confirms that, to the undersigned’s knowledge, such Notes are not being transferred
to an “affiliate” of the Company as defined in Rule 144 under the
Securities Act (an “Affiliate”).

 

o                                  The
transferee is an Affiliate of the Company.

 

	
  DATE:

  	
   

  
	
   

  	
  Signature(s)

  

 

(If
the registered owner is a corporation, partnership or

fiduciary, the title of the Person signing on behalf of

such registered owner must be stated.)

 

B-1-1

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