Document:

Exhibit 4.1

 

FEI COMPANY

 

2.875% CONVERTIBLE SUBORDINATED NOTES DUE
2013

 

 

INDENTURE

 

DATED AS OF MAY 19, 2006

 

 

THE BANK OF NEW YORK TRUST COMPANY, N.A.

 

AS TRUSTEE

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE

  	
  1

  
	
   

  	
   

  
	
  Section 1.01

  	
  Definitions

  	
  1

  
	
  Section 1.02

  	
  Other Definitions

  	
  9

  
	
  Section 1.03

  	
  Trust Indenture Act Provisions

  	
  10

  
	
  Section 1.04

  	
  Rules of Construction

  	
  10

  
	
   

  	
   

  	
   

  
	
  ARTICLE 2 THE SECURITIES

  	
  11

  
	
   

  	
   

  
	
  Section 2.01

  	
  Form and Dating

  	
  11

  
	
  Section 2.02

  	
  Execution and Authentication

  	
  13

  
	
  Section 2.03

  	
  Registrar, Paying Agent and Conversion Agent

  	
  14

  
	
  Section 2.04

  	
  Paying Agent to Hold Money in Trust

  	
  14

  
	
  Section 2.05

  	
  Lists of Holders of Securities

  	
  14

  
	
  Section 2.06

  	
  Transfer and Exchange

  	
  15

  
	
  Section 2.07

  	
  Replacement Securities

  	
  16

  
	
  Section 2.08

  	
  Outstanding Securities

  	
  16

  
	
  Section 2.09

  	
  Treasury Securities

  	
  17

  
	
  Section 2.10

  	
  Temporary Securities

  	
  17

  
	
  Section 2.11

  	
  Cancellation

  	
  17

  
	
  Section 2.12

  	
  Legend; Additional Transfer and Exchange Requirements

  	
  18

  
	
  Section 2.13

  	
  CUSIP Numbers

  	
  22

  
	
   

  	
   

  	
   

  
	
  ARTICLE 3 PURCHASE

  	
  22

  
	
   

  	
   

  	
   

  
	
  Section 3.01

  	
  Repurchase of Securities at Option of the Holder upon a Fundamental
  Change

  	
  22

  
	
  Section 3.02

  	
  Effect of Fundamental Change Repurchase Notice

  	
  24

  
	
  Section 3.03

  	
  Deposit of Fundamental Change Repurchase Price

  	
  25

  
	
  Section 3.04

  	
  Repayment to the Company

  	
  26

  
	
  Section 3.05

  	
  Securities Purchased in Part

  	
  26

  
	
  Section 3.06

  	
  Compliance with Securities Laws upon Purchase of Securities

  	
  26

  
	
  Section 3.07

  	
  Purchase of Securities in Open Market

  	
  26

  
	
   

  	
   

  	
   

  
	
  ARTICLE 4 CONVERSION

  	
  27

  
	
   

  	
   

  
	
  Section 4.01

  	
  Conversion Privilege and Conversion Rate

  	
  27

  
	
  Section 4.02

  	
  Conversion Procedure

  	
  29

  
	
  Section 4.03

  	
  Fractional Shares

  	
  30

  
	
  Section 4.04

  	
  Taxes on Conversion

  	
  30

  
	
  Section 4.05

  	
  Company to Provide Stock

  	
  31

  
	
  Section 4.06

  	
  Adjustment of Conversion Rate

  	
  31

  
	
  Section 4.07

  	
  No Adjustment

  	
  38

  
	
  Section 4.08

  	
  Notice of Adjustment

  	
  38

  
				

 

i

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  Section 4.09

  	
  Notice of Certain Transactions

  	
  39

  
	
  Section 4.10

  	
  Effect of Recapitalization, Reclassification, Consolidation, Merger
  or Sale

  	
  39

  
	
  Section 4.11

  	
  Trustee’s Disclaimer

  	
  40

  
	
  Section 4.12

  	
  Voluntary Increase

  	
  41

  
	
   

  	
   

  	
   

  
	
  ARTICLE 5 SUBORDINATION

  	
  41

  
	
   

  	
   

  	
   

  
	
  Section 5.01

  	
  Agreement of Subordination

  	
  41

  
	
  Section 5.02

  	
  Payments to Holders

  	
  41

  
	
  Section 5.03

  	
  Subrogation of Securities

  	
  44

  
	
  Section 5.04

  	
  Authorization to Effect Subordination

  	
  45

  
	
  Section 5.05

  	
  Notice to Trustee

  	
  45

  
	
  Section 5.06

  	
  Trustee’s Relation to Senior Indebtedness

  	
  46

  
	
  Section 5.07

  	
  No Impairment of Subordination

  	
  46

  
	
  Section 5.08

  	
  Certain Conversions Deemed Payment

  	
  46

  
	
  Section 5.09

  	
  Article Applicable to Paying Agents

  	
  47

  
	
  Section 5.10

  	
  Senior Indebtedness Entitled to Rely

  	
  47

  
	
   

  	
   

  	
   

  
	
  ARTICLE 6 COVENANTS

  	
  47

  
	
   

  	
   

  	
   

  
	
  Section 6.01

  	
  Payment of Securities

  	
  47

  
	
  Section 6.02

  	
  SEC and Other Reports

  	
  48

  
	
  Section 6.03

  	
  Compliance Certificates

  	
  48

  
	
  Section 6.04

  	
  Further Instruments and Acts

  	
  49

  
	
  Section 6.05

  	
  Maintenance of Corporate Existence

  	
  49

  
	
  Section 6.06

  	
  Rule 144A Information Requirement

  	
  49

  
	
  Section 6.07

  	
  Stay, Extension and Usury Laws

  	
  49

  
	
  Section 6.08

  	
  Payment of Liquidated Damages

  	
  49

  
	
  Section 6.09

  	
  Maintenance of Office or Agency

  	
  50

  
	
   

  	
   

  	
   

  
	
  ARTICLE 7 CONSOLIDATION; MERGER; CONVEYANCE; TRANSFER OR LEASE

  	
  50

  
	
   

  	
   

  
	
  Section 7.01

  	
  Company May Consolidate, etc., only on Certain Terms

  	
  50

  
	
  Section 7.02

  	
  Successor Substituted

  	
  51

  
	
   

  	
   

  	
   

  
	
  ARTICLE 8 DEFAULT AND REMEDIES

  	
  51

  
	
   

  	
   

  	
   

  
	
  Section 8.01

  	
  Events of Default

  	
  51

  
	
  Section 8.02

  	
  Acceleration

  	
  53

  
	
  Section 8.03

  	
  Other Remedies

  	
  53

  
	
  Section 8.04

  	
  Waiver of Defaults and Events of Default

  	
  54

  
	
  Section 8.05

  	
  Control by Majority

  	
  54

  
	
  Section 8.06

  	
  Limitations on Suits

  	
  54

  
	
  Section 8.07

  	
  Rights of Holders to Receive Payment and to Convert

  	
  55

  
				

 

ii

 

	
   

  	
   

  	
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  Section 8.08

  	
  Collection Suit by Trustee

  	
  55

  
	
  Section 8.09

  	
  Trustee may File Proofs of Claim

  	
  55

  
	
  Section 8.10

  	
  Priorities

  	
  56

  
	
  Section 8.11

  	
  Undertaking for Costs

  	
  56

  
	
   

  	
   

  	
   

  
	
  ARTICLE 9 TRUSTEE

  	
  57

  
	
   

  	
   

  	
   

  
	
  Section 9.01

  	
  Obligations of Trustee

  	
  57

  
	
  Section 9.02

  	
  Rights of Trustee

  	
  58

  
	
  Section 9.03

  	
  Individual Rights of Trustee

  	
  59

  
	
  Section 9.04

  	
  Trustee’s Disclaimer

  	
  59

  
	
  Section 9.05

  	
  Notice of Default or Events of Default

  	
  59

  
	
  Section 9.06

  	
  Reports by Trustee to Holders

  	
  60

  
	
  Section 9.07

  	
  Compensation and Indemnity

  	
  60

  
	
  Section 9.08

  	
  Replacement of Trustee

  	
  61

  
	
  Section 9.09

  	
  Successor Trustee by Merger, etc

  	
  62

  
	
  Section 9.10

  	
  Eligibility; Disqualification

  	
  62

  
	
  Section 9.11

  	
  Preferential Collection of Claims against Company

  	
  62

  
	
   

  	
   

  	
   

  
	
  ARTICLE 10 SATISFACTION AND DISCHARGE OF INDENTURE

  	
  62

  
	
   

  	
   

  	
   

  
	
  Section 10.01

  	
  Satisfaction and Discharge of Indenture

  	
  62

  
	
  Section 10.02

  	
  Application of Trust Money

  	
  63

  
	
  Section 10.03

  	
  Repayment to Company

  	
  63

  
	
  Section 10.04

  	
  Reinstatement

  	
  64

  
	
   

  	
   

  	
   

  
	
  ARTICLE 11 AMENDMENTS; SUPPLEMENTS AND WAIVERS

  	
  64

  
	
   

  	
   

  	
   

  
	
  Section 11.01

  	
  Without Consent of Holders

  	
  64

  
	
  Section 11.02

  	
  With Consent of Holders

  	
  64

  
	
  Section 11.03

  	
  Compliance with Trust Indenture Act

  	
  66

  
	
  Section 11.04

  	
  Revocation and Effect of Consents

  	
  66

  
	
  Section 11.05

  	
  Notation on or Exchange of Securities

  	
  66

  
	
  Section 11.06

  	
  Trustee to Sign Amendments, etc

  	
  66

  
	
  Section 11.07

  	
  Effect of Supplemental Indentures

  	
  66

  
	
   

  	
   

  	
   

  
	
  ARTICLE 12 MISCELLANEOUS

  	
  67

  
	
   

  	
   

  	
   

  
	
  Section 12.01

  	
  Trust Indenture Act Controls

  	
  67

  
	
  Section 12.02

  	
  Notices

  	
  67

  
	
  Section 12.03

  	
  Communications by Holders with other Holders

  	
  68

  
	
  Section 12.04

  	
  Certificate and Opinion as to Conditions Precedent

  	
  68

  
	
  Section 12.05

  	
  Record Date for Vote or Consent of Holders of Securities

  	
  68

  
	
  Section 12.06

  	
  Rules by Trustee, Paying Agent, Registrar and Conversion Agent

  	
  69

  
	
  Section 12.07

  	
  Legal Holidays

  	
  69

  
				

 

iii

 

	
   

  	
   

  	
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  Section 12.08

  	
  Governing Law

  	
  69

  
	
  Section 12.09

  	
  No Adverse Interpretation of other Agreements

  	
  69

  
	
  Section 12.10

  	
  No Recourse against Others

  	
  69

  
	
  Section 12.11

  	
  No Security Interest Created

  	
  69

  
	
  Section 12.12

  	
  Successors

  	
  69

  
	
  Section 12.13

  	
  Multiple Counterparts

  	
  70

  
	
  Section 12.14

  	
  Separability

  	
  70

  
	
  Section 12.15

  	
  Table of Contents, Headings, etc

  	
  70

  
	
   

  	
   

  	
   

  
	
  Exhibit A

  	
  A-1

  
				

 

iv

 

CROSS REFERENCE TABLE*

 

	
  TIA
  Section

  	
   

  	
  Indenture Section

  
	
  Section 310

  	
   

  	
  12.

  	
  01

  
	
  310(a)(1)

  	
   

  	
   

  	
  9.

  	
  10

  
	
  (a)(2)

  	
   

  	
   

  	
  9.

  	
  10

  
	
  (a)(3)

  	
   

  	
   

  	
  N.

  	
  A.**

  
	
  (a)(4)

  	
   

  	
   

  	
  N.

  	
  A.

  
	
  (a)(5)

  	
   

  	
   

  	
  9.

  	
  10

  
	
  (b)     

  	
   

  	
   

  	
  9.

  	
  10

  
	
  (c)     

  	
   

  	
   

  	
  N.

  	
  A.

  
	
  Section 311

  	
   

  	
   

  	
  12.

  	
  01

  
	
  311(a)     

  	
   

  	
   

  	
  9.

  	
  11

  
	
  (b)     

  	
   

  	
   

  	
  9.

  	
  11

  
	
  (c)     

  	
   

  	
   

  	
  N.

  	
  A.

  
	
  Section 312

  	
   

  	
   

  	
  12.

  	
  01

  
	
  312(a)     

  	
   

  	
   

  	
  N.

  	
  A

  
	
  (b)     

  	
   

  	
   

  	
  12.

  	
  03

  
	
  (c)     

  	
   

  	
   

  	
  12.

  	
  03

  
	
  Section 313

  	
   

  	
   

  	
  12.

  	
  01

  
	
  313(a)     

  	
   

  	
   

  	
  9.

  	
  06(a)

  
	
  (b)(1)

  	
   

  	
   

  	
  N.

  	
  A.

  
	
  (b)(2)

  	
   

  	
   

  	
  9.

  	
  06(a)

  
	
  (c)     

  	
   

  	
   

  	
  9.

  	
  06(a)

  
	
  Section 314

  	
   

  	
   

  	
  12.

  	
  01

  
	
  314(a)     

  	
   

  	
   

  	
  6.

  	
  02(a)

  
	
  (b)     

  	
   

  	
   

  	
  N.

  	
  A.

  
	
  (c)(1)

  	
   

  	
   

  	
  N.

  	
  A.

  
	
  (c)(2)

  	
   

  	
   

  	
  N.

  	
  A.

  
	
  (c)(3)

  	
   

  	
   

  	
  N.

  	
  A.

  
	
  (d)     

  	
   

  	
   

  	
  N.

  	
  A.

  
	
  (e)     

  	
   

  	
   

  	
  N.

  	
  A.

  
	
  (f)     

  	
   

  	
   

  	
  N.

  	
  A.

  
	
  Section 315

  	
   

  	
   

  	
  12.

  	
  01

  
	
  315(a)     

  	
   

  	
   

  	
  9.

  	
  01(b)

  
	
  (b)     

  	
   

  	
   

  	
  9.

  	
  05

  
	
  (d)(1)

  	
   

  	
   

  	
  9.

  	
  01(d)

  
	
  (d)(2)

  	
   

  	
   

  	
  9.

  	
  01(d)

  
	
  (d)(3)

  	
   

  	
   

  	
  9.

  	
  01(d)

  
	
  (e)     

  	
   

  	
   

  	
  8.

  	
  11

  
	
  Section 316

  	
   

  	
   

  	
  12.

  	
  01

  
	
  316(a)     

  	
   

  	
   

  	
  N.

  	
  A.

  
	
  (b)     

  	
   

  	
   

  	
  N.

  	
  A.

  
	
  (c)     

  	
   

  	
   

  	
  N.

  	
  A.

  
	
  Section 317

  	
   

  	
   

  	
  12.

  	
  01

  
	
  Section 318(c)

  	
   

  	
   

  	
  12.

  	
  01

  

 

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

**   N.A. means Not Applicable.

 

v

 

THIS INDENTURE dated as of May 19, 2006 is between FEI Company, a
corporation duly organized under the laws of the State of Oregon (the “Company”),
and The Bank of New York Trust Company, N.A., a national banking association
duly organized and existing under the laws of the United States of America, as
Trustee (the “Trustee”).

 

In consideration of the purchase of the Securities (as defined herein)
by the Holders thereof, both parties agree as follows for the benefit of the
other and for the equal and ratable benefit of the Holders of the Company’s
2.875% Convertible Subordinated Notes Due June 1, 2013.

 

ARTICLE 1

DEFINITIONS AND INCORPORATION BY REFERENCE

 

Section 1.01           Definitions.

 

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

 

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

 

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

 

“Beneficial Ownership” means the definition such term is given in
accordance with Rule 13d-3 promulgated by the SEC under the Exchange Act.

 

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

 

“Business Day” means any weekday that is not a day on which banking
institutions in The City of New York are authorized or obligated to close.

 

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

 

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

 

“Certificated Security” means a Security that is in substantially the form attached
as Exhibit A but that does not include the legend or the schedule called
for by footnote 1 thereof.

 

 

“Change of Control” means the occurrence of any of the following after
the date hereof: (i) the acquisition by any Person of Beneficial Ownership,
directly or indirectly, through a purchase, merger or other acquisition
transaction or series of transactions, of shares of the Company’s Capital
Stock entitling that Person to exercise 50% or more of the total voting power
of all shares of the Company’s Capital Stock entitled to vote generally in
elections of directors, other than any acquisition by the Company, any of its
subsidiaries or any of its employee benefit plans; or (ii) the
consolidation or merger of the Company with or into any other Person, any
merger of another Person into the Company, or any conveyance, transfer, sale,
lease or other disposition of all or substantially all of the Company’s
properties and assets to another Person other than to one or more of the
Company’s wholly-owned subsidiaries, provided that this clause (ii) shall
not apply to (A) any transaction (x) that does not result in any
reclassification, conversion, exchange or cancellation of outstanding shares of
the Company’s Capital Stock and (y) pursuant to which holders of the
Company’s Capital Stock immediately prior to the transaction have the
entitlement to exercise, directly or indirectly, 50% or more of the total
voting power of all shares of the Capital Stock entitled to vote generally in
elections of directors of the continuing or surviving Person immediately after
the transaction; or (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; or (iii) if, during any
consecutive two-year period, individuals who at the beginning of that two-year
period constituted the Company’s Board of Directors, together with any new
directors whose election to the Company’s Board of Directors, or whose
nomination for election by the Company’s stockholders, 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
was previously so approved, cease for any reason to constitute a majority of
the Company’s Board of Directors then in office. Notwithstanding anything to
the contrary set forth herein, it will not otherwise constitute a Change of
Control if 100% of the consideration for the Common Stock (excluding cash
payments for fractional shares and cash payments made in respect of dissenters’
appraisal rights) in the transaction or transactions constituting a Change of
Control consists of common stock or American Depositary Shares representing
shares of common stock, in each case which are traded on a U.S. national
securities exchange or quoted on the Nasdaq National Market, or which will be
so traded or quoted when issued or exchanged in connection with the Change of
Control, and as a result of such transaction or transactions the Securities
become convertible solely into such common stock or American Depositary Shares;
provided that, with respect to an entity organized under the laws of a
jurisdiction outside the United States, such entity has a worldwide total
market capitalization of its equity securities of at least three times the
market capitalization of the Company before giving effect to the consolidation
or merger.

 

“Closing Price” means on any Trading Day, the reported last sale price
per share (or if no last sale price is reported, the average of the bid and ask
prices per share or, if more than one in either case, the average of the
average bid and the average ask prices per share) on such date reported by the
Nasdaq National Market or, if the Common Stock (or the applicable security) is
not quoted on the Nasdaq National Market, as reported by the principal national
securities exchange on which the Common Stock (or such other security) is
listed, or if no such prices are available, the Closing Price per share shall
be the fair value of a share of Common Stock (or such other security) as
reasonably

 

2

 

determined by the Board of Directors (which determination shall be
conclusive and shall be evidenced by an Officers’ Certificate delivered to the
Trustee).

 

“Common Stock” means the common stock of the Company, no par value, as
it exists on the date of this Indenture and any shares of any class or
classes of Capital Stock of the Company resulting from any reclassification or
reclassifications thereof, or, in the event of a merger, consolidation or other
similar transaction involving the Company that is otherwise permitted hereunder
in which the Company is not the surviving corporation, the common stock, common
equity interests, ordinary shares or depositary shares or other certificates
representing common equity interests of such surviving corporation or its
direct or indirect parent corporation, and which have no preference in respect
of dividends or of amounts payable in the event of any voluntary or involuntary
liquidation, dissolution or winding-up of the Company and which are not subject
to redemption by the Company; provided, however, that if at any time there
shall be more than one such resulting class, the shares of each such class then
so issuable on conversion of Securities shall be substantially in the
proportion which the total number of shares of such class resulting from
all such reclassifications bears to the total number of shares of all such
classes resulting from all such reclassifications.

 

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

 

“Conversion Price” per share of Common Stock as of any day means the
result obtained by dividing (i) $1,000 by (ii) the then applicable
Conversion Rate, rounded to the nearest cent.

 

“Conversion Rate” means the rate at which shares of Common Stock shall
be delivered upon conversion, which rate shall be initially 34.0730 shares of
Common Stock for each $1,000 principal amount of Securities, as adjusted from
time to time pursuant to the provisions of this Indenture.

 

“Corporate Trust Office” means the office of the Trustee at which at
any particular time the trust created by this Indenture shall be administered,
which initially will be the office of The Bank of New York Trust Company, N.A.
located at 700 South Flower Street, Suite 500, Los Angeles, CA 90017,
Attention: Corporate Trust Department.

 

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

 

“Designated Senior Indebtedness” means the Company’s obligations under
any particular Senior Indebtedness in which the instrument creating or
evidencing the same or the assumption or guarantee thereof (or related agreements
or documents to which the Company is a party) expressly provides that such
Indebtedness shall be “Designated Senior Indebtedness” for purposes of this
Indenture (provided that such instrument, agreement or other document may place
limitations and conditions on the right of such Senior Indebtedness to exercise
the rights of Designated Senior Indebtedness). If any payment made to any
holder of any Designated Senior Indebtedness or its

 

3

 

representative with respect to such Designated Senior Indebtedness is
rescinded or must otherwise be returned by such holder or representative of
such holder upon the insolvency, bankruptcy or reorganization of the Company or
otherwise, the reinstated Indebtedness of the Company arising as a result of
such rescission or return shall constitute Designated Senior Indebtedness
effective as of the date of such rescission or return.

 

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

 

“Final Maturity Date” means June 1, 2013.

 

“Fundamental Change” means the occurrence of a Change of Control or a
Termination of Trading following the original issuance of the Securities.

 

“Fundamental Change Effective Date” means the date on which any
Fundamental Change becomes effective.

 

“Fundamental Change Repurchase Price” of any Security, means 100% of
the principal amount of the Security to be purchased plus accrued and unpaid
interest, if any, and Liquidated Damages, if any, to, but excluding, the
Fundamental Change Repurchase Date.

 

“GAAP” means generally accepted accounting principles in the United
States of America as in effect from time to time, including those set forth in (1) the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants, (2) the statements and
pronouncements of the Public Company Accounting Oversight Board and the
Financial Accounting Standards Board, (3) such other statements by such
other entity as approved by a significant segment of the accounting profession
and (4) the rules and regulations of the SEC governing the inclusion
of financial statements (including pro forma financial statements) in registration
statements filed under the Securities Act and periodic reports required to be
filed pursuant to Section 13 of the Exchange Act, including opinions and
pronouncements in staff accounting bulletins and similar written statements
from the accounting staff of the SEC.

 

“Global Security” means a Security in global form that is in
substantially the form attached as Exhibit A and that includes
the legend and schedule called for in footnote 1 thereof and which is
deposited with the Depositary or its custodian and registered in the name of
the Depositary or its nominee.

 

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

 

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

 

(1)           all indebtedness,
obligations and other liabilities (contingent or otherwise) for borrowed money
(including obligations in respect of overdrafts, foreign exchange contracts,
currency exchange agreements, interest rate protection agreements, and any loans
or

 

4

 

advances from
banks, whether or not evidenced by notes or similar instruments) or evidenced
by credit or loan agreements, bonds, debentures, notes or similar instruments
(whether or not the recourse of the lender is to the whole of our assets or to
only a portion thereof) (other than any trade accounts payable or other accrued
current expense incurred in the ordinary course of business in connection with
the obtaining of materials or services);

 

(2)           all reimbursement
obligations and other liabilities (contingent or otherwise) with respect to
letters of credit, bank guarantees, bankers’ acceptances, surety bonds,
performance bonds or other guaranty of contractual performance;

 

(3)           all obligations and liabilities
(contingent or otherwise)

 

(A)          in respect of leases
required, in conformity with GAAP, to be accounted for as capitalized lease
obligations on our balance sheet,

 

(B)           as lessee under other
leases for facilities equipment (and related assets leased together therewith),
whether or not capitalized, entered into or leased for financing purposes (as
determined by us), or

 

(C)           under any lease or
related document (including a purchase agreement) in connection with the lease
of real property or improvements (or any personal property included as part of
any such lease) which provides that we are contractually obligated to purchase
or cause a third party to purchase the leased property and thereby guarantee a
minimum residual value of the leased property to the lessor and all of our
obligations under such lease or related document to purchase or to cause a
third party to purchase such leased property (whether or not such lease
transaction is characterized as an operating lease or a capitalized lease in
accordance with generally accepted accounting principles);

 

(4)           all obligations
(contingent or otherwise) with respect to an interest rate, currency or other
swap, cap, floor or collar agreement, hedge agreement, forward contract, or
other similar instrument or foreign currency hedge, exchange, purchase or
similar instrument or agreement;

 

(5)           all direct or indirect
guarantees, agreements to be jointly liable or similar agreements in respect
of, and obligations or liabilities (contingent or otherwise) to purchase or
otherwise acquire or otherwise assure a creditor against loss in respect of,
indebtedness, obligations or liabilities of another person of the kind
described in clauses (1) through (4);

 

(6)           any indebtedness or
other obligations described in clauses (1) through (5) secured
by any mortgage, pledge, lien or other encumbrance existing on property which
is owned or held by us, regardless of whether the indebtedness or other
obligation secured thereby shall be assumed by us; and

 

5

 

(7)           any and all deferrals,
renewals, extensions, refinancings and refundings of, or amendments,
modifications or supplements to, any indebtedness, obligation or liability of
the kind described in clauses (1) through (6).

 

“Indenture” means this Indenture as amended or supplemented from time
to time pursuant to the terms of this Indenture, including the provisions of
the TIA that are automatically deemed to be a part of this Indenture by
operation of the TIA.

 

“Initial Purchasers” means Merrill Lynch & Co., Merrill Lynch,
Pierce, Fenner & Smith Incorporated, Needham & Company, LLC,
Thomas Weisel Partners LLC, D.A. Davidson & Co. and Merriman Curhan
Ford & Co.

 

“Interest Payment Date” means June 1 and December 1 of each
year, commencing December 1, 2006.

 

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

 

“Liquidated Damages” has the meaning specified in the Registration
Rights Agreement. All references herein to interest accrued or payable as of
any date shall include any Liquidated Damages accrued or payable as of such
date as provided in the Registration Rights Agreement.

 

“Officer” means the Chairman or any Co-Chairman of the Board, any Vice
Chairman of the Board, the Chief Executive Officer, the President, any Vice
President, the Chief Financial Officer, the Controller, the Secretary, any
Assistant Controller or any Assistant Secretary of the Company.

 

“Officers’ Certificate” means a certificate signed on behalf of the
Company by two Officers; provided, however, that for purposes of
Sections 4.11 and 6.03, “Officers’ Certificate” means a certificate signed
by (a) the principal executive officer, principal financial officer or
principal accounting officer of the Company and (b) one other officer.

 

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

 

“Person” or “person” means any individual, corporation, partnership,
limited liability company, joint venture, association, joint-stock company,
trust, unincorporated organization, government or any agency or political
subdivision thereof or any syndicate or group that would be deemed to be a “person”
under Section 13(d)(3) of the Exchange Act or any other entity.

 

“Principal” or “principal” of a debt security, including the
Securities, means the principal of the security plus, when appropriate, the
premium, if any, on the security.

 

6

 

“Registration Rights Agreement” means the Registration Rights
Agreement, dated as of May 19, 2006, among the Company and the Initial
Purchasers, as amended from time to time in accordance with its terms.

 

“Regular Record Date” means, with respect to each Interest Payment
Date, the May 15 or November 15, 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 services department of the Trustee with
direct responsibility for the administration of this Indenture and also means,
with respect to a particular corporate trust matter, any other officer to whom
such matter is referred because of such person’s knowledge of and familiarity
with the particular subject.

 

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

 

“Restricted Security” means a Security required to bear the restricted
legend set forth in the form of Security annexed as Exhibit A.

 

“Rule 144” means Rule 144 under the Securities Act or any
successor to such Rule.

 

“Rule 144A” means Rule 144A under the Securities Act or any
successor to such Rule.

 

“SEC” means the Securities and Exchange Commission.

 

“Securities” means the up to $100,000,000 aggregate principal amount
($115,000,000 aggregate principal amount if the initial purchasers exercise
their over-allotment option to purchase up to an additional $15,000,000
aggregate principal amount of notes in full) of 2.875% Convertible Subordinated
Notes due 2013, or any of them (each a “Security”), as amended or supplemented
from time to time, that are issued under this Indenture.

 

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

 

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

 

“Senior Indebtedness” means the principal of, premium, if any, interest
(including all interest accruing subsequent to the commencement of any
bankruptcy or similar proceeding, whether or not a claim for post-petition
interest is allowable as a claim in any such proceeding) and rent payable on or
in connection with, and all fees, costs, expenses and other amounts accrued or
due on or in connection with, indebtedness of the Company, whether secured or
unsecured, absolute or contingent, due or to become due, outstanding on the
date of the indenture or thereafter created, incurred, assumed, guaranteed or
in effect guaranteed by the Company, including all deferrals, renewals,
extensions or refundings of, or amendments, modifications or supplements to,
the foregoing, unless in the case of any particular indebtedness the instrument
creating or evidencing the

 

7

 

same or the assumption or guarantee thereof expressly provides that
such indebtedness shall not be senior in right of payment to the notes or
expressly provides that such indebtedness is on the same basis or junior to the
notes. Senior Indebtedness does not include:

 

(1)           indebtedness that
expressly provides that such indebtedness shall not be senior in right of
payment to the notes or expressly provides that such indebtedness is on the
same basis or junior to the notes;

 

(2)           indebtedness under the
Company’s 5.5% convertible subordinated notes due August 2008;

 

(3)           indebtedness under the
Company’s zero coupon convertible subordinated notes due June 2023, first
putable June 2008;

 

(4)           any indebtedness of the
Company to any of its subsidiaries; and

 

(5)           any obligation for
federal, state, local or other taxes.

 

“Stock Price” means the price paid, or deemed to be paid, per share of
the Common Stock in connection with a Fundamental Change as determined pursuant
to Section 4.01(e).

 

“Significant Subsidiary” means, in respect of any Person, as of any
date of determination, a Subsidiary of such Person that would constitute a “significant
subsidiary” as such term is defined under Rule 1-02(w) of
Regulation S-X under the Securities Act.

 

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

 

“Termination of Trading” means the termination (but not the temporary
suspension) of trading of the Common Stock, which will be deemed to have
occurred if the Common Stock or other common stock into which the Securities
are convertible is neither listed for trading on a United States national
securities exchange nor approved for listing on the Nasdaq National Market or
any similar United States system of automated dissemination of quotations of
securities prices, or traded in over-the-counter securities markets, and no
American Depository Shares or similar instruments for such common stock are so
listed or approved for listing in the United States.

 

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

 

8

 

“Trading Day” means any day on which the Nasdaq National Market or, if
the Common Stock is not quoted on the Nasdaq National Market, the principal
national securities exchange on which the Common Stock is listed, is open for
trading or, if the Common Stock is not so listed, admitted for trading or
quoted, any Business Day. A Trading Day only includes those days that have a
scheduled closing time of 4:00 p.m. (New York City time) or the then
standard closing time for regular trading on the relevant exchange or trading
system.

 

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

 

“Trust Officer” means, with respect to the Trustee, any officer
assigned to the Corporate Trust Office, and also, with respect to a particular
matter, any other officer to whom such matter is referred because of such
officer’s knowledge of and familiarity with the particular subject.

 

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

 

“Voting Stock” of a Person means all classes of Capital Stock or other
interests (including partnership interests) of such Person then outstanding and
normally entitled (without regard to the occurrence of any contingency within
the control of such person to satisfy) to vote in the election of directors,
managers or trustees thereof.

 

Section 1.02           Other
Definitions.

 

	
  Term

  	
   

  	
  Defined in Section

  	
   

  
	
  “Agent Members”

  	
   

  	
  2.01

  	
   

  
	
  “Bankruptcy Law”

  	
   

  	
  8.01

  	
   

  
	
  “Business Combination”

  	
   

  	
  4.10

  	
   

  
	
  “Company Order”

  	
   

  	
  2.02

  	
   

  
	
  “Conversion Agent”

  	
   

  	
  2.03

  	
   

  
	
  “Conversion Date”

  	
   

  	
  4.02

  	
   

  
	
  “Current Market Price”

  	
   

  	
  4.06

  	
   

  
	
  “DTC”

  	
   

  	
  2.01

  	
   

  
	
  “Depositary”

  	
   

  	
  2.01

  	
   

  
	
  “Determination Date”

  	
   

  	
  4.06

  	
   

  
	
  “Distributed Securities”

  	
   

  	
  4.06

  	
   

  
	
  “Event of Default”

  	
   

  	
  8.01

  	
   

  
	
  “Expiration Date”

  	
   

  	
  4.06

  	
   

  
	
  “Expiration Time”

  	
   

  	
  4.06

  	
   

  
	
  “Fundamental Change Company Notice”

  	
   

  	
  3.01

  	
   

  
	
  “Fundamental Change Repurchase Date”

  	
   

  	
  3.01

  	
   

  
	
  “Fundamental Change Repurchase Notice”

  	
   

  	
  3.01

  	
   

  
	
  “Legal Holiday”

  	
   

  	
  12.07

  	
   

  
	
  “Legend”

  	
   

  	
  2.12

  	
   

  
	
  “Make Whole Premium”

  	
   

  	
  4.01

  	
   

  
	
  “Notice of Default”

  	
   

  	
  8.01

  	
   

  

 

9

 

	
  Term

  	
   

  	
  Defined in Section

  	
   

  
	
  “Paying Agent”

  	
   

  	
  2.03

  	
   

  
	
  “Payment Blockage Notice”

  	
   

  	
  5.02

  	
   

  
	
  “Primary Registrar”

  	
   

  	
  2.03

  	
   

  
	
  “Purchase Agreement”

  	
   

  	
  2.01

  	
   

  
	
  “Purchased Shares”

  	
   

  	
  4.06

  	
   

  
	
  “record date”

  	
   

  	
  4.06

  	
   

  
	
  “QIB”

  	
   

  	
  2.01

  	
   

  
	
  “Receiver”

  	
   

  	
  8.01

  	
   

  
	
  “Registrar”

  	
   

  	
  2.03

  	
   

  
	
  “Rights”

  	
   

  	
  4.06

  	
   

  
	
  “Rights Plan”

  	
   

  	
  4.06

  	
   

  
	
  “Spinoff Securities”

  	
   

  	
  4.06

  	
   

  
	
  “Spinoff Valuation Period”

  	
   

  	
  4.06

  	
   

  
	
  “tender offer”

  	
   

  	
  4.06

  	
   

  
	
  “Triggering Distribution”

  	
   

  	
  4.06

  	
   

  

 

Section 1.03           Trust
Indenture Act Provisions.

 

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

 

“indenture securities” means the Securities;

 

“indenture security holder” means a Holder of a Security;

 

“indenture to be qualified” means this Indenture;

 

“indenture trustee” or “institutional trustee” means the Trustee; and “obligor”
on the indenture securities means the Company or any other obligor on the
Securities.

 

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

 

Section 1.04           Rules of
Construction.

 

(a)           Unless the context
otherwise requires:

 

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

 

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

 

10

 

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

 

(4)           provisions apply to
successive events and transactions;

 

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

 

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

 

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

 

(8)           all “Article”, “Exhibit”
and “Section” references are to Articles, Exhibits and Sections, respectively,
of or to this Indenture unless otherwise specified herein, and the terms “herein,”
“hereof” and other words of similar import refer to this Indenture as a whole
and not to any particular Article, Section or other subdivision.

 

ARTICLE 2

THE SECURITIES

 

Section 2.01           Form and
Dating. The Securities and the Trustee’s certificate of authentication
shall be substantially in the respective forms set forth in Exhibit A,
which Exhibit is incorporated in and made part of this Indenture. The
Securities may have notations, legends or endorsements required by law,
stock exchange or automated quotation system rule or regulation or usage. The
Company shall provide any such notations, legends or endorsements to the
Trustee in writing. Each Security shall be dated the date of its authentication.
The Securities are being offered and sold by the Company pursuant to a Purchase
Agreement dated May 16, 2006 (the “Purchase Agreement”) among the Company
and the Initial Purchasers, in transactions exempt from, or not subject to, the
registration requirements of the Securities Act.

 

(a)           Restricted Global
Securities. All of the Securities are initially being offered and sold to
qualified institutional buyers as defined in Rule 144A (collectively, “QIBS”
or individually, each a “QIB”) in reliance on Rule 144A under the
Securities Act and shall be issued initially in the form of one or more
Restricted Global Securities, which shall be deposited on behalf of the
purchasers of the securities represented thereby with the Trustee, at its
Corporate Trust Office, as custodian for the depositary, The Depository Trust
Company (“DTC”, and such depositary, or any successor thereto, being
hereinafter referred to as the “Depositary”), and registered in the name of its
nominee, Cede & Co. (or any successor thereto), for the accounts of
participants in the Depositary, duly executed by the Company and authenticated
by the Trustee as hereinafter provided. Subject to Section 2.02 hereof,
the aggregate principal amount of the Restricted Global Securities may from
time to time be increased or decreased by adjustments made on the records of
the Securities Custodian as hereinafter provided, subject in each case to
compliance with the Applicable Procedures.

 

11

 

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

 

Members of, or participants in, the Depositary (“Agent Members”) shall
have no rights under this Indenture with respect to any Global Security held on
their behalf by the Depositary or under the Global Security, and the Depositary
(including, for this purpose, its nominee) may be treated by the Company,
the Trustee and any agent of the Company or the Trustee as the absolute owner
and Holder of such Global Security for all purposes whatsoever. Notwithstanding
the foregoing, nothing herein shall (1) 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 (2) impair,
as between the Depositary and its Agent Members, the operation of customary
practices governing the exercise of the rights of a Holder of any Security.

 

(c)           Book Entry
Provisions. The Company shall execute and the Trustee shall, in accordance
with this Section 2.01(c), authenticate and deliver initially one or more
Global Securities that (1) shall be registered in the name of the
Depositary or its nominee, (2) shall be delivered by the Trustee to the
Depositary or pursuant to the Depositary’s instructions and (3) shall bear
legends substantially to the following effect:

 

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

 

12

 

DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR
ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.”

 

Section 2.02           Execution
and Authentication.

 

(a)           The aggregate principal
amount of Securities which may be authenticated and delivered under this
Indenture is limited to $100,000,000 aggregate principal amount ($115,000,000
aggregate principal amount if the Initial Purchasers exercise their
over-allotment option in full), except as provided in Sections 2.06 and
2.07.

 

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

 

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

 

(d)           A Security shall not be
valid until an authorized signatory of the Trustee by manual or facsimile
signature signs the certificate of authentication on the Security. The
signature shall be conclusive evidence that the Security has been authenticated
under this Indenture.

 

(e)           The Trustee shall
authenticate and make available for delivery Securities for original issue in
the aggregate principal amount of up to $100,000,000 aggregate principal amount
($115,000,000 aggregate principal amount if the Initial Purchasers exercise
their over-allotment option in full by executing an over-allotment exercise
notice and delivering such executed over-allotment exercise notice to the
Trustee) upon receipt of a written order or orders of the Company signed by an
Officer of the Company (a “Company Order”). The Company order shall specify the
amount of Securities to be authenticated, shall provide that all such
securities will be represented by a Restricted Global Security and the date on
which each original issue of Securities is to be authenticated.

 

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

 

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

 

13

 

Section 2.03           Registrar,
Paying Agent and Conversion Agent.

 

(a)           The Company shall
maintain one or more offices or agencies where Securities may be presented
for registration of transfer or for exchange (each, a “Registrar”), one or more
offices or agencies where Securities may be presented for payment (each, a
“Paying Agent”), one or more offices or agencies where Securities may be
presented for conversion (each, a “Conversion Agent”) and one or more offices
or agencies where notices and demands to or upon the Company in respect of the
Securities and this Indenture may be served. The Company will at all times
maintain a Paying Agent, Conversion Agent, Registrar and an office or agency
where notices and demands to or upon the Company in respect of the Securities
and this Indenture may be served in the Borough of Manhattan, The City of
New York. One of the Registrars (the “Primary Registrar”) shall keep a register
of the Securities and of their transfer and exchange. The Company shall provide
written notice to the Trustee of any Registrar, Securities Agent, Conversion
Agent or Paying Agent that is not also the Trustee.

 

(b)           The Company shall enter
into an appropriate agency agreement with any Agent not a party to this
Indenture, provided that the Agent may be an Affiliate of 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
Agent not a party to this Indenture. If the Company fails to maintain a
Registrar, Paying Agent, Conversion Agent, or agent for service of notices and
demands in any place required by this Indenture, or fails to give the foregoing
notice, the Trustee shall act as such. The Company or any Affiliate of the
Company may act as Paying Agent (except for the purposes of Section 6.01
and Article 10).

 

(c)           The Company hereby
initially designates the Trustee as Paying Agent, Registrar, Securities
Custodian and Conversion Agent, and designates the Corporate Trust Office of
the Trustee as an office or agency where notices and demands to or upon the
Company in respect of the Securities and this Indenture shall be served.

 

Section 2.04           Paying
Agent to Hold Money in Trust. Prior to 12:00 p.m. (noon), New York City
time, on each due date of the payment of principal of, or interest on, any
Securities, the Company shall deposit with the Paying Agent a sum sufficient to
pay such principal or interest so becoming due. Subject to Section 9.02, a
Paying Agent shall hold in trust for the benefit of Holders of Securities or
the Trustee all money held by the Paying Agent for the payment of principal of,
or interest on, the Securities, and shall notify the Trustee of any failure by
the Company (or any other obligor on the Securities) to make any such payment. If
the Company or an Affiliate of the Company acts as Paying Agent, it shall,
before 12:00 p.m.(noon), New York City time, on each due date of the
principal of, or interest on, any Securities, segregate the money 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 the Trustee may at
any time during the continuance of any Default, upon written request to a
Paying Agent, require such Paying Agent to pay forthwith to the Trustee all
sums so held in trust by such Paying Agent. Upon doing so, the Paying Agent
(other than the Company) shall have no further liability for the money.

 

Section 2.05           Lists
of Holders of Securities. 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 Holders

 

14

 

of Securities. If the Trustee is not the Primary Registrar, the Company
shall furnish to the Trustee on or before each Interest Payment Date and at
such other times as the Trustee may request in writing, a list in such form and
as of such date as the Trustee may reasonably require of the names and
addresses of Holders of Securities.

 

Section 2.06           Transfer
and Exchange.

 

(a)           Subject to compliance
with any applicable additional requirements contained in Section 2.12,
when a Security is presented to a Registrar with a request to register a
transfer thereof or to exchange such Security for an equal principal amount of
Securities of other authorized denominations, the Registrar shall register the
transfer or make the exchange as requested; provided, however, that every
Security presented or surrendered for registration of transfer or exchange
shall be duly endorsed or accompanied by an assignment form and, if
applicable, a transfer certificate each in the form included in Exhibit A,
and completed in a manner satisfactory to the Registrar and duly executed by
the Holder thereof or its attorney duly authorized in writing. To permit
registration of transfers and exchanges, upon surrender of any Security for
registration of transfer or exchange at an office or agency maintained pursuant
to Section 2.03, the Company shall execute and the Trustee shall
authenticate Securities of a like aggregate principal amount at the Registrar’s
request. Any exchange or transfer shall be without charge, except that the
Company or the Registrar may require payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in relation
thereto; provided that this sentence shall not apply to any exchange pursuant
to Section 2.10, 2.12(a), 3.05, 4.02(e) or 11.05.

 

(b)           Neither the Company,
any Registrar nor the Trustee shall be required to exchange or register a
transfer of any Securities or portions thereof in respect of which a
Fundamental Change Repurchase Notice has been delivered and not withdrawn by
the Holder thereof (except, in the case of the purchase of a Security in part,
the portion thereof not to be purchased).

 

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

 

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

 

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

 

(f)            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

 

15

 

law with
respect to any transfer of any interest in any Security (including any
transfers between or among Agent Members or other beneficial owners of
interests in any Global Security) other than to require delivery of such
certificates and other documentation or evidence as are expressly required by,
and to do so if and when expressly required by the terms of, this Indenture,
and to examine the same to determine substantial compliance as to form with
the express requirements hereof.

 

Section 2.07           Replacement
Securities.

 

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

 

(b)           If any such mutilated,
destroyed, lost or stolen Security has become or is about to become due and
payable, or is about to be purchased by the Company pursuant to Article 3,
or converted pursuant to Article 4, the Company in its discretion may,
instead of issuing a new Security, pay, purchase or convert such Security, as
the case may be.

 

(c)           Upon the issuance of
any new Securities 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 reasonable expenses
(including the reasonable fees and expenses of the Trustee or the Registrar) in
connection therewith.

 

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

 

(e)           The provisions of this Section 2.07
are (to the extent lawful) exclusive and shall preclude (to the extent lawful)
all other rights and remedies with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Securities.

 

Section 2.08           Outstanding
Securities.

 

(a)           Securities outstanding
at any time are all Securities authenticated by the Trustee, except for those
canceled by it, those purchased pursuant to Article 3, those converted
pursuant to Article 4, those delivered to the Trustee for cancellation or
surrendered for transfer or exchange and those described in this Section 2.08
as not outstanding.

 

16

 

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

 

(c)           If a Paying Agent
(other than the Company or an Affiliate of the Company) holds in respect of the
outstanding Securities on a Fundamental Change Repurchase Date or the Final
Maturity Date money sufficient to pay the principal of (including premium, if
any) and accrued interest on Securities (or portions thereof) payable on that
date, then on and after such Fundamental Change Repurchase Date or Final
Maturity Date, as the case may be, such Securities (or portions thereof,
as the case may be) shall cease to be outstanding and cash interest on
them shall cease to accrue.

 

(d)           Subject to the
restrictions contained in Section 2.09, a Security does not cease to be
outstanding because the Company or an Affiliate of the Company holds the
Security.

 

Section 2.09           Treasury
Securities. In determining whether the Holders of the required principal
amount of Securities have concurred in any notice, direction, waiver or
consent, Securities owned by the Company or any other obligor on the Securities
or by any Affiliate of the Company or of such other obligor shall be
disregarded, except that, for purposes of determining whether the Trustee shall
be protected in relying on any such notice, direction, waiver or consent, only
Securities which a Trust Officer of the Trustee with responsibility for this
Indenture actually knows are so owned shall be so disregarded. Securities so
owned which have been pledged in good faith shall not be disregarded if the
pledgee establishes to the satisfaction of the Trustee the pledgee’s right so
to act with respect to the Securities and that the pledgee is not the Company
or any other obligor on the Securities or any Affiliate of the Company or of
such other obligor.

 

Section 2.10           Temporary
Securities. Until definitive Securities are ready for delivery, the Company
may prepare and execute, and, upon receipt of a Company Order, the Trustee
shall authenticate and deliver, temporary Securities. Temporary Securities
shall be substantially in the form of definitive securities but may have
variations that the Company with the consent of the Trustee considers
appropriate for temporary Securities. Without unreasonable delay, the Company
shall prepare and the Trustee shall authenticate and deliver definitive
Securities in exchange for temporary Securities.

 

Section 2.11           Cancellation.
The Company at any time may deliver Securities to the Trustee for
cancellation. The Registrar, the Paying Agent and the Conversion Agent shall
forward to the Trustee or its agent any Securities surrendered to them for
transfer, exchange, purchase, payment or conversion. The Trustee and no one
else shall cancel, in accordance with its standard procedures, all Securities
surrendered for transfer, exchange, purchase, payment, conversion or
cancellation and shall dispose of the cancelled Securities in accordance with
its customary procedures or deliver the canceled Securities to the Company. All
Securities which are purchased or otherwise acquired by the Company or any of
its Subsidiaries prior to the Final Maturity Date pursuant to Article 3
shall be delivered to the Trustee for cancellation, and the Company may not
hold or resell such Securities or

 

17

 

issue any new Securities to replace any such Securities or any
Securities that any Holder has converted pursuant to Article 4.

 

Section 2.12           Legend;
Additional Transfer and Exchange Requirements.

 

(a)           If Securities are
issued upon the transfer, exchange or replacement of Securities subject to
restrictions on transfer and bearing the legends set forth on the forms of
Securities attached as Exhibit A (collectively, the “Legend”), or
if a request is made to remove the Legend on a Security, the Securities 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 if requested by the Company
or such Registrar, 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
Securities are not “restricted” within the meaning of Rule 144 under the
Securities Act; provided that no such evidence need be supplied in connection
with the sale of such Security pursuant to a registration statement that is
effective at the time of such sale. Upon (1) provision of such
satisfactory evidence if requested, or (2) notification by the Company to
the Trustee and Registrar of the sale of such Security pursuant to a registration
statement that is effective at the time of such sale, the Trustee, at the
written direction of the Company, shall authenticate and deliver a Security
that does not bear the Legend. If the Legend is removed from the face of a
Security and the Security is subsequently held by an Affiliate of the Company,
the Legend shall be reinstated.

 

(b)           A Global Security 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 the foregoing shall not prohibit
any transfer of a Security that is issued in exchange for a Global Security but
is not itself a Global Security. No transfer of a Security to any Person shall
be effective under this Indenture or the Securities unless and until such
Security has been registered in the name of such Person. Notwithstanding any
other provisions of this Indenture or the Securities, transfers of a Global
Security, in whole or in part, shall be made only in accordance with this Section 2.12.

 

(c)           Subject to Section 2.12(b) and
in compliance with Section 2.12(d), every Security shall be subject to the
restrictions on transfer provided in the Legend. Whenever any Restricted
Security other than a Restricted Global Security is presented or surrendered
for registration of transfer or in exchange for a Security registered in a name
other than that of the Holder, such Security must be accompanied by a
certificate in substantially the form set forth in Exhibit A,
dated the date of such surrender and signed by the Holder of such Security, as
to compliance with such restrictions on transfer. The Registrar shall not be
required to accept for such registration of transfer or exchange any Security
not so accompanied by a properly completed certificate.

 

(d)           The restrictions
imposed by the Legend upon the transferability of any Security shall cease and
terminate when such Security has been sold pursuant to an effective

 

18

 

registration
statement under the Securities Act or transferred in compliance with Rule 144
under 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 Security 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 Security 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, if requested by the Company or the Registrar, an Opinion of
Counsel reasonably acceptable to the Company and the Registrar and addressed to
the Company and the Registrar, to the effect that the transfer of such Security
has been made in compliance with Rule 144 or such successor provision), be
exchanged for a new Security, 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
offer and sale of the Securities under the Securities Act. 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.

 

As used in Sections 2.12(c) and (d), the term “transfer”
encompasses any sale, pledge, transfer, hypothecation or other disposition of
any Security.

 

(e)           The provisions below
shall apply only to Global Securities:

 

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

 

(2)           Notwithstanding any other
provisions of this Indenture or the Securities, a Global Security shall not be
exchanged in whole or in part for a Security registered, and no transfer
of a Global Security in whole or in part shall be registered in the name
of any Person other than the Depositary or one or more nominees thereof;
provided that a Global Security may be exchanged for securities registered
in the names of any person designated by the Depositary in the event that (A) the
Depositary has notified the Company that it is unwilling or unable to continue
as Depositary for such Global Security or such Depositary has ceased to be a “clearing
agency” registered under the Exchange Act, and a successor Depositary is not
appointed by the Company within 90 days after receiving such notice or
becoming aware that the Depositary has ceased to be a “clearing agency,” or (B) an
Event of Default has occurred and is continuing with respect to the Securities.
Any Global Security exchanged pursuant to subclause (A) above shall
be so exchanged in whole and not in part, and any Global Security exchanged
pursuant to subclause (B) above may be exchanged in whole or
from time to time in part as directed by the Depositary. Any Security
issued in exchange for a Global Security or any portion thereof shall be a
Global Security; provided further that any such Security so issued that is
registered in the name of a Person other than the Depositary or a nominee
thereof shall not be a Global Security.

 

19

 

(3)           Securities issued in
exchange for a Global Security 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 Security 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 Security to be exchanged in
whole shall be surrendered by the Depositary to the Trustee, as Registrar. With
regard to any Global Security to be exchanged in part, either such Global
Security 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
Security, 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 Security issuable on such exchange
to or upon the order of the Depositary or an authorized representative thereof.

 

(4)           Subject to clause (6) of
this Section 2.12(e), the registered Holder may grant proxies and
otherwise authorize any Person, including Agent Members 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 Securities.

 

(5)           In the event of the
occurrence of any of the events specified in clause (2) of this Section 2.12(e),
the Company will promptly make available to the Trustee a reasonable supply of
Certificated Securities in definitive, fully registered form, without interest
coupons.

 

(6)           Neither 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 Security registered in
the name of the Depositary or any nominee thereof, or under any such Global
Security, 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 Security 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
Member may act, the operation of customary practices of such Persons
governing the exercise of the rights of a holder of any Security.

 

(7)           At such time as all
interests in a Global Security have been converted, cancelled or exchanged for
Securities in certificated form, such Global Security shall, upon receipt
thereof, be cancelled by the Trustee in accordance with standing procedures and
instructions existing between the Depositary and the Securities Custodian,
subject to Section 2.11 of this Indenture. At any time prior to such
cancellation, if any interest in a Global Security is converted, canceled or
exchanged for Securities in certificated form, the principal amount of such
Global Security shall, in accordance with the standing procedures and
instructions existing between the Depositary and the Securities Custodian, be
appropriately reduced, and an endorsement shall be made on such Global

 

20

 

Security, by
the Trustee or the Securities Custodian, at the direction of the Trustee, to
reflect such reduction.

 

(f)            Until the expiration
of the holding period applicable to sales thereof under Rule 144(k) under
the Securities Act (or any successor provision thereto), any stock certificate
representing Common Stock issued upon conversion of any Security shall bear a
legend in substantially the following form, unless such Common Stock has been
sold pursuant to a registration statement that has been declared effective
under the Securities Act (and which continues to be effective at the time of
such transfer) or transferred in compliance with Rule 144 under the
Securities Act (or any successor provision thereto), or such Common Stock has
been issued upon conversion of Securities that have been transferred pursuant
to a registration statement that has been declared effective under the
Securities Act or pursuant to Rule 144 under the Securities Act (or any
successor provision thereto), or unless otherwise agreed by the Company in
writing with written notice thereof to the transfer agent:

 

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

 

BY ITS ACQUISITION HEREOF, THE HOLDER AGREES TO OFFER, SELL OR
OTHERWISE TRANSFER THE COMMON STOCK EVIDENCED HEREBY PRIOR TO THE DATE THAT IS
TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE
ON WHICH FEI COMPANY (THE “COMPANY”) OR ANY AFFILIATE OF THE COMPANY WAS THE
OWNER OF THE COMMON STOCK EVIDENCED HEREBY (OR ANY PREDECESSOR OF THE COMMON
STOCK EVIDENCED HEREBY) (THE “RESALE RESTRICTION TERMINATION DATE”) ONLY (A) TO
THE COMPANY OR ANY SUBSIDIARY THEREOF, (B) PURSUANT TO A REGISTRATION STATEMENT
WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, OR (C) PURSUANT
TO ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT, SUBJECT TO THE COMPANY’S AND THE TRANSFER AGENT’S RIGHT PRIOR
TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (C) PRIOR TO
THE RESALE RESTRICTION TERMINATION DATE TO REQUIRE THE DELIVERY OF AN OPINION
OF COUNSEL, CERTIFICATIONS AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF
THEM, AND IN EACH OF THE FOREGOING CASES, TO REQUIRE THAT A CERTIFICATE OF
TRANSFER IN THE FORM APPEARING ON THE OTHER SIDE OF THIS CERTIFICATE IS
COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE TRANSFER AGENT. THIS LEGEND
WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION
TERMINATION DATE.

 

21

 

Any such Common Stock as to which such restrictions on transfer shall
have expired in accordance with their terms or as to which the conditions for
removal of the foregoing legend set forth therein have been satisfied may, upon
surrender of the certificates representing such shares of Common Stock for
exchange in accordance with the procedures of the transfer agent for the Common
Stock, be exchanged for a new certificate or certificates for a like number of
shares of Common Stock, which shall not bear the restrictive legend required by
this section. The Trustee may reasonably rely on an Opinion of Counsel in
order to determine whether the legend is required upon transfer.

 

Section 2.13           CUSIP
Numbers. The Company in issuing the Securities may use one or more “CUSIP”
numbers (if then generally in use), and, if so, the Trustee shall use “CUSIP”
numbers in notices of purchase as a convenience to Holders; provided that any
such notice may state that no representation is made as to the correctness
of such numbers either as printed on the Securities or as contained in any
notice of a purchase and that reliance may be placed only on the other
identification numbers printed on the Securities, and any such purchase 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.

 

ARTICLE 3

PURCHASE

 

Section 3.01           Repurchase
of Securities at Option of the Holder upon a Fundamental Change.

 

(a)           If a Fundamental Change
occurs prior to the Final Maturity Date, each Holder of a Security shall have
the right, at the option of the Holder, to require the Company to repurchase
for cash all or any portion of the Securities of such Holder equal to $1,000
principal amount (or an integral multiple thereof) at the Fundamental Change
Repurchase Price, on the date that is not less than 30 days nor more than
45 days after the date of the Fundamental Change Company Notice pursuant to
subsection 3.01(b) (the “Fundamental Change Repurchase Date”).

 

(b)           Within 30 days after
the occurrence of a Fundamental Change, the Company shall mail a written notice
of the Fundamental Change and of the resulting repurchase right to the Trustee,
Paying Agent and to each Holder (and to beneficial owners as required by
applicable law) (the “Fundamental Change Company Notice”). The Fundamental
Change Company Notice shall include the form of a Fundamental Change
Repurchase Notice to be completed by the Holder and shall state:

 

(1)           the events causing such
Fundamental Change;

 

(2)           the date (or expected
date) of such Fundamental Change;

 

(3)           the last date by which
the Fundamental Change Repurchase Notice must be delivered to elect the
repurchase option pursuant to this Section 3.01;

 

22

 

(4)           the Fundamental Change
Repurchase Date;

 

(5)           the Fundamental Change
Repurchase Price;

 

(6)           the Holder’s right to
require the Company to purchase the Securities;

 

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

 

(8)           the then effective
Conversion Rate and any adjustments to the Conversion Rate resulting from such
Fundamental Change;

 

(9)           the procedures that the
Holder must follow to exercise rights under Article 4 and that Securities
as to which a Fundamental Change Repurchase Notice has been given may be
converted into Common Stock pursuant to Article 4 of this Indenture only
to the extent that the Fundamental Change Repurchase Notice has been withdrawn
in accordance with the terms of this Indenture;

 

(10)         the procedures that the
Holder must follow to exercise rights under this Section 3.01;

 

(11)         the procedures for
withdrawing a Fundamental Change Repurchase Notice;

 

(12)         that, unless the Company
fails to pay such Fundamental Change Repurchase Price, Securities covered by
any Fundamental Change Repurchase Notice will cease to be outstanding and
interest and Liquidated Damages, if any, will cease to accrue on and after the
Fundamental Change Repurchase Date; and

 

(13)         the CUSIP number of the
Securities.

 

At the Company’s request, the Trustee shall give such Fundamental
Change Company Notice in the Company’s name and at the Company’s expense;
provided, that, in all cases, the text of such Fundamental Change Company
Notice shall be prepared by the Company. If any of the Securities is in the form of
a Global Security, then the Company shall modify such notice to the extent
necessary to accord with the Applicable Procedures relating to the purchase of
Global Securities.

 

(c)           A Holder may exercise
its rights specified in Section 3.01(a) upon delivery of a written
notice (which shall be in substantially the form attached as Exhibit A
under the heading “Fundamental Change Repurchase Notice” and which may be
delivered by letter, overnight courier, hand delivery, facsimile transmission
or in any other written form and, in the case of Global Securities, may be
delivered electronically or by other means in accordance with the Depositary’s
Applicable Procedures) of the exercise of such rights (a “Fundamental Change
Repurchase Notice”) to the Company or any Paying Agent at any time prior to the
close of business on the Business Day next preceding the Fundamental Change
Repurchase Date, subject to extension to comply with applicable law.

 

23

 

(1)           The Fundamental Change
Repurchase Notice shall state: (A) the certificate number (if such
Security is held other than in global form) of the Security which the Holder
will deliver to be purchased (or, if the Security is held in global form, any
other items required to comply with the Applicable Procedures), (B) the
portion of the principal amount of the Security which the Holder will deliver
to be purchased and (C) that such Security shall be purchased as of the
Fundamental Change Repurchase Date pursuant to the terms and conditions
specified in the Securities and in this Indenture.

 

(2)           The delivery of a
Security for which a Fundamental Change Repurchase Notice has been timely
delivered to any Paying Agent and not validly withdrawn prior to, on or after
the Fundamental Change Repurchase Date (together with all necessary
endorsements) at the office of such Paying Agent shall be a condition to the
receipt by the Holder of the Fundamental Change Repurchase Price therefor.

 

(3)           The Company shall only
be obliged to purchase, pursuant to this Section 3.01, a portion of a
Security if the principal amount of such portion is $1,000 or an integral
multiple of $1,000 (provisions of this Indenture that apply to the purchase of
all of a Security also apply to the purchase of such portion of such Security).

 

(4)           Notwithstanding
anything herein to the contrary, any Holder delivering to a Paying Agent the
Fundamental Change Repurchase Notice contemplated by this Section 3.01(c) shall
have the right to withdraw such Fundamental Change Repurchase Notice in whole
or in a portion thereof that is a principal amount of $1,000 or in an integral
multiple thereof at any time prior to the close of business on the Business Day
prior to the Fundamental Change Repurchase Date by delivery of a written notice
of withdrawal to the Paying Agent in accordance with Section 3.02.

 

(5)           A Paying Agent shall
promptly notify the Company of the receipt by it of any Fundamental Change
Repurchase Notice or written withdrawal thereof.

 

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

 

Section 3.02           Effect
of Fundamental Change Repurchase Notice.

 

(a)           Upon receipt by any
Paying Agent of a properly completed Fundamental Change Repurchase Notice from
a Holder, the Holder of the Security in respect of which such Fundamental
Change Repurchase Notice was given shall (unless such Fundamental Change
Repurchase Notice is withdrawn as specified in Section 3.02(b)) thereafter
be entitled to receive the Fundamental Change Repurchase Price with respect to
such Security, subject to the occurrence of the Fundamental Change Effective
Date and an absence of an Event of Default, or a continuation thereof (other
than a Default in the payment of the Fundamental Change Repurchase Price). Such

 

24

 

Fundamental
Change Repurchase Price shall be paid to such Holder promptly following the
later of (1) the Fundamental Change Repurchase Date (provided that the
conditions in Section 3.01 have been satisfied) and (2) the time of
delivery of such Security to a Paying Agent by the Holder thereof in the manner
required by Section 3.01(c). Securities in respect of which a Fundamental
Change Repurchase Notice has been given by the Holder thereof may not be
converted into shares of Common Stock pursuant to Article 4 on or after
the date of the delivery of such Fundamental Change Repurchase Notice unless
such Fundamental Change Repurchase Notice has first been validly withdrawn in
accordance with Section 3.02(b) with respect to the Securities to be
converted.

 

(b)           A Fundamental Change
Repurchase Notice may be withdrawn by means of a written notice (which may be
delivered by mail, overnight courier, hand delivery, facsimile transmission or
in any other written form and, in the case of Global Securities, may be
delivered by other means in accordance with the Applicable Procedures) of
withdrawal delivered by the Holder to a Paying Agent at any time prior to the
close of business on the Business Day immediately prior to the Fundamental
Change Repurchase Date, specifying (1) the principal amount of the
Security or portion thereof (which must be a principal amount of $1,000 or an
integral multiple of $1,000 in excess thereof) with respect to which such
notice of withdrawal is being submitted, (2) if certificated Securities
have been issued, the certificate number of the Security being withdrawn in
whole or in withdrawable part (or if the Securities are not certificated,
such written notice must comply with the Applicable Procedures) and (3) the
portion of the principal amount of the Security that will remain subject to the
Fundamental Change Repurchase Notice, which portion must be a principal amount
of $1,000 or an integral multiple thereof.

 

Section 3.03           Deposit
of Fundamental Change Repurchase Price.

 

(a)           On or before 12:00 p.m.
(noon) New York City time on the Business Day following the applicable
Fundamental Change Repurchase Date, the Company shall deposit with the Trustee
or with a Paying Agent (or if the Company or an Affiliate of the Company 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 or after
such Fundamental Change Repurchase Date), sufficient to pay the aggregate
Fundamental Change Repurchase Price of all the Securities or portions thereof
that are to be purchased as of such Fundamental Change Repurchase Date.

 

(b)           If a Paying Agent or
the Trustee holds, in accordance with the terms hereof, money sufficient to pay
the Fundamental Change Repurchase Price of any Security for which a Fundamental
Change Repurchase Notice has been tendered and not withdrawn in accordance with
this Indenture then, on the Business Day following the applicable Fundamental
Change Repurchase Date, such Security will cease to be outstanding, whether or
not the Security is delivered to the Paying Agent or the Trustee, and interest
and Liquidated Damages, if any, shall cease to accrue, and the rights of the
Holder in respect of the Security shall terminate (other than the right to
receive the Fundamental Change Repurchase Price as aforesaid). The Company
shall publicly announce the principal amount of Securities repurchased on or as
soon as practicable after the Fundamental Change Repurchase Date.

 

25

 

(c)           The Paying Agent will
promptly return to the respective Holders thereof any Securities with respect
to which a Fundamental Change Repurchase Notice has been withdrawn in
compliance with this Indenture.

 

(d)           If a Fundamental Change
Repurchase Date falls after a Regular Record Date and on or before the related
Interest Payment Date, then interest on the Securities payable on such Interest
Payment Date will be payable to the Holders in whose names the Securities are
registered at the close of business on such Regular Record Date.

 

Section 3.04           Repayment
to the Company. To the extent that the aggregate amount of cash deposited
by the Company pursuant to Section 3.03 exceeds the aggregate Fundamental
Change Repurchase Price of the Securities or portions thereof that the Company
is obligated to purchase, then promptly after the Fundamental Change Repurchase
Date the Trustee or a Paying Agent, as the case may be, shall return any
such excess cash to the Company.

 

Section 3.05           Securities
Purchased in Part. Any Security that is to be purchased only in part shall
be surrendered at the office of a Paying Agent, and promptly after the
Fundamental Change Repurchase Date, the Company shall execute and the Trustee
shall authenticate and deliver to the Holder of such Security, without service
charge, a new Security or Securities, of such authorized denomination or
denominations as may be requested by such Holder (which must be equal to
$1,000 principal amount or any integral thereof), in aggregate principal amount
equal to, and in exchange for, the portion of the principal amount of the
Security so surrendered that is not purchased.

 

Section 3.06           Compliance
with Securities Laws upon Purchase of Securities. In connection with any
offer to purchase of Securities under Section 3.01, the Company shall (a) comply
with Rule 13e-4 and Rule 14e-1 (or any successor to either such
Rule), and any other tender offer rules, if applicable, under the Exchange Act,
(b) file the related Schedule TO (or any successor or similar
schedule, form or report) if required under the Exchange Act, and (c) otherwise
comply with all federal and state securities laws in connection with such offer
to purchase or purchase of Securities, all so as to permit the rights of the
Holders and obligations of the Company under Sections 3.01 through 3.04 to
be exercised in the time and in the manner specified therein. To the extent
that compliance with any such laws, rules and regulations would result in
a conflict with any of the terms hereof, this Indenture is hereby modified to
the extent required for the Company to comply with such laws, rules and
regulations.

 

Section 3.07           Purchase
of Securities in Open Market. The Company may surrender any Security
purchased by the Company pursuant to this Article 3 to the Trustee for
cancellation. Any securities surrendered to the Trustee for cancellation may not
be reissued or resold by the Company and will be canceled promptly in
accordance with Section 2.11. The Company may repurchase Securities
in the open market, by tender at any price or by negotiated transactions.

 

26

 

ARTICLE 4

CONVERSION

 

Section 4.01           Conversion
Privilege and Conversion Rate.

 

(a)           Subject to and upon
compliance with the provisions of this Article 4, at the option of the
Holder thereof, any Security or portion thereof that is an integral multiple of
$1,000 principal amount may be converted into fully paid and
non-assessable shares (calculated as to each conversion to the nearest 1/100th
of a share) of Common Stock prior to the close of business on the Business Day
immediately preceding the Final Maturity Date or such earlier date set forth in
this Article 4, unless purchased by the Company at the Holder’s option, at
the Conversion Rate in effect at such time, determined as hereinafter provided.

 

(b)           Provisions of this
Indenture that apply to conversion of all of a Security also apply to
conversion of a portion of a Security.

 

(c)           A Holder of Securities
is not entitled to any rights of a holder of Common Stock until such Holder has
converted its Securities into Common Stock, and only to the extent such
Securities are deemed to have been converted into Common Stock pursuant to this
Article 4.

 

(d)           The Conversion Rate
shall be adjusted in certain instances as provided in Section 4.01(e) and
Section 4.06.

 

(e)           If there shall have
occurred a Fundamental Change, the Company shall pay a “Make Whole Premium” to
the Holders of the Securities who convert their Securities during the period
beginning 10 Trading Days before the date the Company announces as the
anticipated Fundamental Change Effective Date and ending at the close of
business on the Trading Day immediately preceding the Fundamental Change
Repurchase Date by increasing the Conversion Rate for such Securities. The
number of additional shares of Common Stock per $1,000 principal amount of
Securities constituting the Make Whole Premium shall be determined by the
Company by reference to the table below, based on the Fundamental Change
Effective Date and the Stock Price of such Fundamental Change; provided that if
the Stock Price or Fundamental Change Effective Date are not set forth on the
table: (i) if the actual Stock Price on the Fundamental Change Effective
Date is between two Stock Prices on the table or the actual Fundamental Change
Effective Date is between two Fundamental Change Effective Dates on the table,
the Make Whole Premium will be determined by a straight-line interpolation
between the Make Whole Premiums set forth for the two Stock Prices and the two
Fundamental Change Effective Dates on the table based on a 365-day year, as
applicable, (ii) if the Stock Price on the Fundamental Change Effective
Date exceeds $55.00 per share, subject to adjustment as set forth herein, no
Make Whole Premium will be paid, and (iii) if the Stock Price on the
Fundamental Change Effective Date is less than $22.15 per share, subject to
adjustment as set forth herein, no Make Whole Premium will be paid. If Holders
of the Common Stock receive only cash in the Fundamental Change, the Stock
Price shall be the cash amount paid per share of the Common Stock in connection
with the Fundamental Change. Otherwise, the Stock Price shall be equal to the
average Closing Prices of the Common Stock for each of the 10 Trading Days
immediately preceding, but not including, the applicable Fundamental Change
Effective Date.

 

27

 

Make Whole Premium upon a Fundamental Change

(Number of Additional Shares)

 

	
   

  	
   

  	
  Effective Date

  	
   

  
	
  Stock Price

  	
   

  	
  May 19, 

  2006

  	
   

  	
  June 1, 

  2007

  	
   

  	
  June 1, 

  2008

  	
   

  	
  June 1, 

  2009

  	
   

  	
  June 1, 

  2010

  	
   

  	
  June 1, 

  2011

  	
   

  	
  June 1, 

  2012

  	
   

  	
  June 1, 

  2013

  	
   

  
	
  $22.15

  	
   

  	
  11.0

  	
   

  	
  11.0

  	
   

  	
  11.0

  	
   

  	
  11.0

  	
   

  	
  11.0

  	
   

  	
  11.0

  	
   

  	
  11.0

  	
   

  	
  11.0

  	
   

  
	
  $25.00

  	
   

  	
  9.0

  	
   

  	
  8.7

  	
   

  	
  8.4

  	
   

  	
  8.0

  	
   

  	
  7.6

  	
   

  	
  7.0

  	
   

  	
  6.4

  	
   

  	
  5.9

  	
   

  
	
  $28.00

  	
   

  	
  7.5

  	
   

  	
  7.2

  	
   

  	
  6.8

  	
   

  	
  6.3

  	
   

  	
  5.7

  	
   

  	
  5.0

  	
   

  	
  3.9

  	
   

  	
  1.6

  	
   

  
	
  $31.00

  	
   

  	
  6.5

  	
   

  	
  6.0

  	
   

  	
  5.6

  	
   

  	
  5.1

  	
   

  	
  4.4

  	
   

  	
  3.6

  	
   

  	
  2.5

  	
   

  	
  0.0

  	
   

  
	
  $35.00

  	
   

  	
  5.3

  	
   

  	
  4.9

  	
   

  	
  4.5

  	
   

  	
  4.0

  	
   

  	
  3.3

  	
   

  	
  2.5

  	
   

  	
  1.4

  	
   

  	
  0.0

  	
   

  
	
  $40.00

  	
   

  	
  4.4

  	
   

  	
  4.0

  	
   

  	
  3.6

  	
   

  	
  3.1

  	
   

  	
  2.5

  	
   

  	
  1.8

  	
   

  	
  0.9

  	
   

  	
  0.0

  	
   

  
	
  $45.00

  	
   

  	
  3.7

  	
   

  	
  3.4

  	
   

  	
  3.0

  	
   

  	
  2.5

  	
   

  	
  2.0

  	
   

  	
  1.3

  	
   

  	
  0.6

  	
   

  	
  0.0

  	
   

  
	
  $50.00

  	
   

  	
  2.9

  	
   

  	
  2.6

  	
   

  	
  2.2

  	
   

  	
  1.8

  	
   

  	
  1.4

  	
   

  	
  0.9

  	
   

  	
  0.4

  	
   

  	
  0.0

  	
   

  

 

The Stock Prices set forth in the first column of the table above will
be adjusted as of any date on which the Conversion Rate of the Securities is
adjusted. The adjusted Stock Prices will equal the Stock Prices applicable
immediately prior to such adjustment multiplied by a fraction, the numerator of
which is the Conversion Rate immediately prior to the adjustment giving rise to
the Stock Price adjustment and the denominator of which is the Conversion Rate
as so adjusted. The number of additional shares set forth in the table above
will be adjusted in the same manner as the Conversion Rate as set forth in Section 4.06
hereof, other than as a result of an adjustment of the Conversion Rate by adding
the Make Whole Premium as described above.

 

Notwithstanding the foregoing paragraph, in no event will the total
number of shares of Common Stock issuable upon conversion of a Security exceed
45.1467 per $1,000 principal amount, subject to proportional adjustment in the
same manner as the Conversion Rate as set forth in clauses (1) through
(4) of Section 4.06(a) hereof.

 

The additional shares issuable pursuant to this Section 4.01(e) shall
be delivered upon the later of (i) the settlement date for the conversion
and (ii) promptly following the Fundamental Change Effective Date.

 

28

 

(f)            By delivering the
number of shares of Common Stock issuable on conversion to the Trustee, or to
the Conversion Agent, if the Conversion Agent is other than the Trustee, the
Company will be deemed to have satisfied its obligation to pay the principal
amount of the Securities so converted and its obligation to pay accrued and
unpaid interest, and Liquidated Damages if any, attributable to the period from
the most recent Interest Payment Date through the Conversion Date (which amount
will be deemed paid in full rather than cancelled, extinguished or forfeited).

 

(g)           The Trustee may conclusively
rely on the Company’s calculations of the Make Whole Premium.

 

Section 4.02           Conversion
Procedure.

 

(a)           To convert a Security,
a Holder must (1) complete and manually sign the conversion notice on the
back of the Security and deliver such notice to a Conversion Agent, (2) surrender
the Security to a Conversion Agent, (3) furnish appropriate endorsements
and transfer documents if required by a Registrar or a Conversion Agent, and (4) pay
all transfer or similar taxes, if required pursuant to Section 4.04. The
date on which the Holder satisfies all of those requirements is the “Conversion
Date.”  Upon the conversion of a
Security, the Company will pay the cash and deliver the shares of Common Stock,
to the Trustee (or to the Conversion Agent, if the Conversion Agent is other
than the Trustee), as applicable, as promptly as practicable after the later of
the Conversion Date and the date that all calculations necessary to make such
payment and delivery have been made, but in no event later than five Business
Days after the later of those dates. Anything herein to the contrary
notwithstanding, in the case of Global Securities, conversion notices may be
delivered and such Securities may be surrendered for conversion in
accordance with the Applicable Procedures as in effect from time to time.

 

(b)           The person in whose
name the shares of Common Stock are issuable upon conversion shall be deemed to
be a holder of record of such Common Stock on the Conversion Date; provided,
however, that no surrender of a Security on any Conversion Date when the stock
transfer books of the Company shall be closed shall be effective to constitute
the person or persons entitled to receive the shares of Common Stock upon
conversion as the record holder or holders of such shares of Common Stock on
such date, but such surrender shall be effective to constitute the person or
persons entitled to receive such shares of Common Stock as the record holder or
holders thereof for all purposes at the close of business on the next
succeeding day on which such stock transfer books are open; provided further
that such conversion shall be at the Conversion Rate in effect on the
Conversion Date as if the stock transfer books of the Company had not been
closed. Upon conversion of a Security, such person shall no longer be a Holder
of such Security. Except as set forth in this Indenture, no payment or
adjustment will be made for dividends or distributions declared or made on
shares of Common Stock issued upon conversion of a Security prior to the
issuance of such shares.

 

(c)           Holders of Securities surrendered
for conversion (in whole or in part) 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 will receive the semi-annual interest payable
on such

 

29

 

Securities on
the corresponding Interest Payment Date notwithstanding the conversion. Upon
surrender of any such Securities 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, unless (1) such Securities have
been surrendered for conversion following the Regular Record Date immediately
preceding the final interest payment date (June 1, 2013), (2) the
Company has specified a Fundamental Change Purchase Date that is after a
Regular Record Date prior to the corresponding Interest Payment Date, or (3) to
the extent of overdue interest, if any, which exists at the time of the
Conversion with respect to such Security, such Securities shall also be
accompanied by payment in funds acceptable to the Company of an amount equal to
the interest payable on such corresponding Interest Payment Date. Except as
otherwise provided in this Section 4.02(c), no payment or adjustment will
be made for accrued interest on a converted Security.

 

(d)           Subject to Section 4.02(c),
nothing in this Section shall affect the right of a Holder in whose name
any Security is registered at the close of business on a Regular Record Date to
receive the interest payable on such Security on the related Interest Payment
Date in accordance with the terms of this Indenture, the Securities and the
Registration Rights Agreement. If a Holder converts more than one Security at
the same time, the number of shares of Common Stock issuable upon the
conversion, if any, (and the amount of any cash in lieu of fractional shares
pursuant to Section 4.03) shall be based on the aggregate principal amount
of all Securities so converted.

 

(e)           In the case of any
Security which is converted in part only, upon such conversion the Company
shall execute and the Trustee shall authenticate and deliver to the Holder
thereof, without service charge, a new Security or Securities of authorized
denominations in an aggregate principal amount equal to the, and in exchange
for, unconverted portion of the principal amount of such Security. A Security may be
converted in part, but only if the principal amount of such part is an
integral multiple of $1,000 and the principal amount of such Security to remain
outstanding after such conversion is equal to $1,000 or any integral multiple
of $1,000 in excess thereof.

 

Section 4.03           Fractional
Shares. The Company will not issue fractional shares of Common Stock upon
conversion of Securities. If more than one Security shall be surrendered for
conversion at one time by the same Holder, the number of full shares that shall
be issuable upon conversion shall be computed on the basis of the aggregate
principal amount of the Securities (or specified portions thereof to the extent
permitted hereby) so surrendered. In lieu of any fractional shares, the Company
will pay an amount in cash for the current market value of the fractional
shares. The current market value of a fractional share shall be determined
(calculated to the nearest 1/100th of a share) by multiplying the average of
the Closing Price of the Common Stock on the Trading Day immediately preceding
the Conversion Date by such fractional share and rounding the product to the
nearest whole cent.

 

Section 4.04           Taxes
on Conversion. If a Holder converts a Security, the Holder shall pay any
transfer, stamp or similar taxes or duties related to the issue or delivery of
shares of Common Stock upon such conversion. The Holder shall also pay any such
tax with respect to cash received in lieu of fractional shares. In addition,
the Holder shall pay any such tax which is due because the

 

30

 

Holder requests the shares to be issued in a name other than the Holder’s
name. The Conversion Agent may refuse to deliver the certificate
representing the Common Stock being issued in a name other than the Holder’s
name until the Conversion Agent receives a sum sufficient to pay any tax which
will be due because the shares are to be issued in a name other than the Holder’s
name. Nothing herein shall preclude any tax withholding required by law or
regulation.

 

Section 4.05           Company
to Provide Stock.

 

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

 

(b)           All shares of Common
Stock delivered upon conversion of the Securities shall be newly issued shares,
shall be duly authorized, validly issued, fully paid and nonassessable and
shall be free from preemptive or similar rights and free of any lien or adverse
claim as the result of any action by the Company.

 

(c)           The Company will
endeavor promptly to comply with all federal and state securities laws
regulating the offer and delivery of shares of Common Stock upon conversion of
Securities.

 

Section 4.06           Adjustment
of Conversion Rate.

 

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

 

(1)           If the Company shall
pay a dividend or make a distribution to all holders of outstanding Common
Stock in shares of Common Stock, the Conversion Rate in effect immediately
prior to the record date for the determination of shareholders entitled to
receive such dividend or other distribution shall be increased so that the same
shall equal the rate determined by the Company by multiplying the Conversion
Rate in effect immediately prior to such record date by a fraction of which the
numerator of shall be the sum of the number of shares of Common Stock
outstanding at the close of business on such record date plus the total number
of shares of Common Stock constituting such dividend or other distribution and
of which the denominator shall be the number of shares of Common Stock
outstanding at the close of business on such record date. Such adjustment shall
be made successively whenever any such dividend or distribution is made and
shall become effective immediately after such record date. For the purpose of
this clause (1), the number of shares of Common Stock at any time
outstanding shall not include shares held in the treasury of the Company. The
Company will not pay any dividend or make any distribution on Common Stock held
in the treasury of the Company. If any dividend or distribution of the type
described in this clause is declared but not so paid or made, the Conversion
Rate shall again be adjusted to the Conversion Rate that would then be in
effect if such dividend or distribution had not been declared.

 

31

 

(2)           If the Company shall
subdivide its outstanding Common Stock into a greater number of shares, or
combine its outstanding Common Stock into a smaller number of shares, the
Conversion Rate in effect immediately prior to the day upon which such
subdivision or combination becomes effective shall be, in the case of a
subdivision of Common Stock, proportionately increased and, in the case of a
combination of Common Stock, proportionately reduced. Such adjustment shall be
made successively whenever any such subdivision or combination of the Common
Stock occurs and shall become effective immediately after the date upon which
such subdivision or combination becomes effective.

 

(3)           If the Company shall
issue rights or warrants to all holders of its outstanding Common Stock
entitling them (for a period expiring within 45 days after such issuance)
to subscribe for or purchase shares of Common Stock (or securities convertible
into Common Stock) at a price per share (or having a conversion price per
share) less than the Current Market Price per share of Common Stock (as
determined in accordance with clause (9) of this Section 4.06(a))
on the record date for the determination of shareholders entitled to receive
such rights or warrants, the Conversion Rate in effect immediately prior
thereto shall be adjusted so that the same shall equal the rate determined by
multiplying the Conversion Rate in effect immediately prior to such record date
by a fraction of which the numerator shall be the number of shares of Common
Stock outstanding at the close of business on such record date plus the number
of additional shares of Common Stock that such rights or warrants entitle
holders thereof to subscribe for or purchase (or into which such convertible
securities are convertible) and of which the denominator shall be the number of
shares of Common Stock outstanding at the close of business on such record date
plus the number of shares which the aggregate offering price of the total
number of shares of Common Stock so offered for subscription or purchase (or
the aggregate conversion price of the convertible securities so offered for
subscription or purchase, which shall be determined by multiplying the number
of shares of Common Stock issuable upon conversion of such convertible
securities by the conversion price per share of Common Stock pursuant to the
terms of such convertible securities) would purchase at the Current Market
Price per share of Common Stock on such record date. Such adjustment shall be
made successively whenever any such rights or warrants (or convertible
securities) are issued, and shall become effective immediately after such
record date. To the extent that shares of Common Stock (or securities
convertible into Common Stock) are not delivered after the expiration of such
rights or warrants, the Conversion Rate shall be readjusted to the Conversion
Rate that would then be in effect had the adjustments made upon the issuance of
such rights or warrants been made on the basis of delivery of only the number
of shares of Common Stock (or securities convertible into Common Stock)
actually delivered. If such rights or warrants are not so issued, the Conversion
Rate shall again be adjusted to be the Conversion Rate that would then be in
effect if the record date for the determination of shareholders entitled to
receive such rights or warrants had not been fixed. In determining whether any
rights or warrants entitle the shareholders to subscribe for or purchase shares
of Common Stock at a price less than the Current Market Price per share of
Common Stock and in determining the aggregate offering price of the total
number of shares of Common Stock so offered, there shall be taken into account
any consideration received by the Company for such rights or warrants and any
amount payable on exercise or conversion thereof, the value of such
consideration, if other than cash, to be determined by the Board of Directors.

 

32

 

(4)           If the Company shall
make a dividend or other distribution to all holders of its Common Stock of
Capital Stock, other than Common Stock, or evidences of indebtedness or other
assets of the Company, including securities (excluding (x) any issuance of
rights or warrants for which an adjustment was made pursuant to Section 4.06(a)(3),
(y) dividends or distributions in connection with a reclassification,
change, consolidation, merger, combination, liquidation, dissolution, winding
up, sale or conveyance resulting in a change in the conversion consideration
pursuant to Section 4.10, or pursuant to any Rights Plan or (z) any
dividend or distribution paid exclusively in cash for which an adjustment was
made pursuant to Section 4.06(a)(6)) (the “Distributed Securities”), then
in each such case (unless the Company distributes such Distributed Securities
for distribution to the Holders of Securities on such dividend or distribution
date as if each Holder had converted such Security into Common Stock
immediately prior to the record date with respect to such distribution) the
Conversion Rate in effect immediately prior to the record date fixed for the
determination of shareholders entitled to receive such dividend or distribution
shall be adjusted so that the same shall equal the rate determined by
multiplying the Conversion Rate in effect immediately prior to such record date
by a fraction of which the numerator shall be the Current Market Price per
share of the Common Stock on such record date and of which the denominator
shall be Current Market Price per share on such record date less the fair
market value (as determined in good faith by the Board of Directors, whose
determination shall be conclusive evidence of such fair market value and which
shall be evidenced by an Officers’ Certificate delivered to the Trustee) on
such record date of the portion of the Distributed Securities so distributed
applicable to one share of Common Stock (determined on the basis of the number
of shares of Common Stock outstanding at the close of business on such record
date). Such adjustment shall be made successively whenever any such
distribution is made and shall become effective immediately after the record
date for the determination of shareholders entitled to receive such
distribution. In the event that such dividend or distribution is not so paid or
made, the Conversion Rate shall again be adjusted to be the Conversion Rate
that would then be in effect if such dividend or distribution had not been
declared.

 

If the fair market value (as so determined) of the portion of the
Distributed Securities so distributed applicable to one share of Common Stock
is equal to or greater than the Current Market Price per share of the Common
Stock on such record date, in lieu of the foregoing adjustment, adequate
provision shall be made so that each holder of a Security shall have the right
to receive upon conversion the amount of Distributed Securities so distributed
that such Holder would have received had such Holder converted each Security on
such record date. If the Board of Directors determines the fair market value of
any distribution for purposes of this Section 4.06(a)(4) by reference
to the actual or when issued trading market for any securities, it must in
doing so consider the prices in such market over the same period used in
computing the Current Market Price of the Common Stock.

 

Notwithstanding the foregoing, if the securities distributed by the
Company to all holders of its Common Stock consist of Capital Stock of, or
similar equity interests in, a Subsidiary or other business unit of the Company
(the “Spinoff Securities”), the Conversion Rate shall be adjusted, unless the
Company makes an equivalent distribution to the Holders of the Securities, so
that the same shall be equal to the rate determined by multiplying the
Conversion Rate in effect on the record

 

33

 

date fixed for the determination of shareholders entitled to receive
such distribution by a fraction, the numerator of which shall be the sum of (A) the
average Closing Price of one share of Common Stock over the ten consecutive
Trading Day period (the “Spinoff Valuation Period”) commencing on and including
the fifth Trading Day after the date on which ex-dividend trading commences for
such distribution on the Nasdaq National Market or such other U.S. national or
regional exchange or market on which the Common Stock is then listed or quoted
and (B) the average of the Closing Prices over the Spinoff Valuation
Period of the Spinoff Securities multiplied by the number of Spinoff Securities
distributed in respect of one share of Common Stock and the denominator of
which shall be the average Closing Price of one share of Common Stock over the
Spinoff Valuation Period, such adjustment to become effective immediately prior
to the opening of business on the fifteenth Trading Day after the date on which
ex-dividend trading commences; provided, however, that the Company may in
lieu of the foregoing adjustment elect to make adequate provision so that each
Holder of Securities shall have the right to receive upon conversion thereof
the amount of such Spinoff Securities that such Holder of Securities would have
received if such Securities had been converted on the record date with respect
to such distribution.

 

(5)           With respect to any
rights or warrants (the “Rights”) that may be issued or distributed
pursuant to any rights plan of the Company currently in effect or that the
Company implements after the date of this Indenture (a “Rights Plan”), or if
the Company’s current Rights Plan is still in effect, in lieu of any adjustment
required by any other provision of this Section 4.06 upon conversion of
the Securities into Common Stock, to the extent that such Rights Plan is in
effect upon such conversion, the Holders of Securities will receive, with
respect to the shares of Common Stock issued upon conversion, the Rights
described therein (whether or not the Rights have separated from the Common
Stock at the time of conversion), subject to the limitations set forth in and
in accordance with any such Rights Plan; provided that in the case of the
Company’s current Rights Plan or a future Rights Plan to the extent applicable,
if, at the time of conversion, however, the Rights have separated from the
shares of Common Stock in accordance with the provisions of the Rights Plan so
that Holders would not be entitled to receive any rights in respect of the
shares of Common Stock issuable upon conversion of the Securities as a result
of the timing of the Conversion Date, the Conversion Rate will be adjusted as
if the Company distributed to all holders of Common Stock Distributed
Securities constituting such rights as provided in the first paragraph of
clause (4) of this Section 4.06(a), subject to appropriate
readjustment in the event of the expiration, termination, repurchase or
redemption of the Rights. Any distribution of rights or warrants pursuant to a
Rights Plan complying with the requirements set forth in the immediately
preceding sentence of this paragraph shall not constitute a distribution of
rights or warrants pursuant to this Section 4.06(a). Other than as
specified in this clause (5) of this Section 4.06(a), there will
not be any adjustment to the Conversion Rate as the result of the issuance of
any Rights, the distribution of separate certificates representing such Rights,
the exercise or redemption of such Rights in accordance with any Rights Plan or
the termination or invalidation of any Rights.

 

(6)           If the Company shall,
by dividend or otherwise, at any time distribute (a “Triggering Distribution”)
to all holders of its Common Stock a payment consisting exclusively of cash
(excluding any dividend or distribution in connection with the liquidation,
dissolution or winding up of the Company, whether voluntary or involuntary) the
Conversion Rate shall be

 

34

 

increased so
that the same shall equal the rate determined by multiplying such Conversion
Rate in effect immediately prior to the close of business on the record date
for such Triggering Distribution (a “Determination Date”) by a fraction of
which the numerator shall be such Current Market Price per share of the Common
Stock on the Determination Date and the denominator of which shall be the
Current Market Price per share of the Common Stock on the Determination Date
less the amount of such cash dividend or distribution applicable to one share
of Common Stock (determined on the basis of the number of shares of Common
Stock outstanding at the close of business on the Determination Date), such
increase to become effective immediately prior to the opening of business on
the day following the date on which the Triggering Distribution is paid. If the
amount of cash dividend or distribution applicable to one share of Common Stock
is equal to or greater than the Current Market Price per share of the Common
Stock on the Determination Date, in lieu of the foregoing adjustment, adequate
provision shall be made so that each Holder of a Security shall have the right
to receive upon conversion the amount of cash so distributed that such Holder
would have received had such Holder converted each Security on such
Determination Date. In the event that such dividend or distribution is not so
paid or made, the Conversion Rate shall again be adjusted to be the Conversion
Rate that would then be in effect if such divided or distribution had not been
declared.

 

(7)           If any tender offer
made by the Company or any of its Subsidiaries for all or any portion of Common
Stock shall expire, then, if the tender offer shall require the payment to
shareholders of consideration per share of Common Stock having a fair market
value (determined as provided below) that exceeds Closing Price per share of
Common Stock on the Trading Day next succeeding the last date (the “Expiration
Date”) tenders could have been made pursuant to such tender offer (as it may be
amended) (the last time at which such tenders could have been made on the
Expiration Date is hereinafter sometimes called the “Expiration Time”), the
Conversion Rate shall be increased so that the same shall equal the rate
determined by multiplying the Conversion Rate in effect immediately prior to
the close of business on the Expiration Date by a fraction of which the
numerator shall be the sum of (A) the fair market value of the aggregate
consideration (the fair market value as determined in good faith by the Board
of Directors, whose determination shall be conclusive evidence of such fair
market value and which shall be evidenced by an Officer’s Certificate delivered
to the Trustee) payable to shareholders based on the acceptance (up to any
maximum specified in the terms of the tender offer) of all shares validly
tendered and not withdrawn as of the Expiration Time (the shares deemed so
accepted, up to any such maximum, being referred to as the “Purchased Shares”)
and (B) the product of the number of shares of Common Stock outstanding
(less any Purchased Shares and excluding any shares held in the treasury of the
Company) at the Expiration Time and the Closing Price per share of Common Stock
on the Trading Day next succeeding the Expiration Date and the denominator of
which shall be the product of the number of shares of Common Stock outstanding (including
Purchased Shares but excluding any shares held in the treasury of the Company)
at the Expiration Time multiplied by the Closing Price per share of the Common
Stock on the Trading Day next succeeding the Expiration Date, such increase to
become effective immediately prior to the opening of business on the day
following the Expiration Date. In the event that the Company is obligated to
purchase shares pursuant to any such tender offer, but the Company is
permanently prevented by applicable law from effecting any or all such
purchases or any or all such purchases are rescinded, the Conversion Rate shall
again be

 

35

 

adjusted to be
the Conversion Rate which would have been in effect based upon the number of
shares actually purchased, if any. If the application of this clause (7) of
Section 4.06(a) to any tender offer would result in a decrease in the
Conversion Rate, no adjustment shall be made for such tender offer under this
clause (7).

 

(8)           For purposes of this Section 4.06,
the term “tender offer” shall mean and include both tender offers and exchange
offers, all references to “purchases” of shares in tender offers (and all
similar references) shall mean and include both the purchase of shares in
tender offers and the acquisition of shares pursuant to exchange offers, and
all references to “tendered shares” (and all similar references) shall mean and
include shares tendered in both tender offers and exchange offers.

 

(9)           For purposes of any
computation under this Section 4.06, “Current Market Price” shall mean the
average of the daily Closing Prices per share of Common Stock for each of the
ten consecutive Trading Days immediately prior to the date in question;
provided, however, that if

 

(A)          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 Rate
pursuant to Section 4.06(a) (1), (2), (3), (4), (5), (6) or (7) 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 dividing
such Closing Price by the same fraction by which the Conversion Rate is so
required to be adjusted as a result of such other event;

 

(B)           the “ex” date for any
event (other than the issuance or distribution requiring such computation) that
requires an adjustment to the Conversion Rate pursuant to Section 4.06(a) (1),
(2), (3), (4), (5), (6) or (7) 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 dividing such Closing Price by the
reciprocal of the fraction by which the Conversion Rate is so required to be
adjusted as a result of such other event; and

 

(C)           the “ex” date for the
issuance or distribution requiring such computation is prior to the day in
question, after taking into account any adjustment required pursuant to the
immediately preceding clause (A) or (B) of this Section 4.06(a)(9),
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 in good faith by the Board of Directors in a manner consistent with
any determination of such value for purposes of Section 4.06(a)(4) or
(7), 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 4.06(a)(7), if the “ex”
date for any event (other than the tender offer that is the subject of the
adjustment pursuant to Section 4.06(a)(7)) that

 

36

 

requires an adjustment to the Conversion Rate pursuant to Section 4.06(a)(1),
(2), (3), (4), (5) or (6) occurs on the date of the Expiration Time
for the tender or exchange offer requiring such computation or on the Trading
Day next following the Expiration Time, the Closing Price for each Trading Day
on and after the “ex” date for such other event shall be adjusted by dividing
such Closing Price by the reciprocal of the fraction by which the Conversion
Rate is so required to be adjusted as a result of such other event. For
purposes of this Section 4.06(a)(9) 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 Rate are called for pursuant to this Section 4.06, such
adjustments shall be made to the Current Market Price as may be necessary
or appropriate to effectuate the intent of this Section 4.06 and to avoid
unjust or inequitable results as determined in good faith by the Board of
Directors and evidenced by an Officer’s Certificate delivered to the Trustee.

 

(b)           In any case in which
this Section 4.06 shall require that an adjustment be made following a
record date, a Determination Date or Expiration Date, as the case may be,
established for the purposes specified in this Section 4.06, the Company may elect
to defer (but only until five Business Days following the filing by the Company
with the Trustee of the certificate described in Section 4.08) issuing to
the Holder of any Security converted after such record date, Determination Date
or Expiration Date the shares of Common Stock and other Capital Stock of the
Company issuable upon such conversion over and above the shares of Common Stock
and other Capital Stock of the Company (or other cash, property or securities,
as applicable) issuable upon such conversion only on the basis of the
Conversion Rate prior to adjustment; and, in lieu of any cash, property or
securities the issuance of which is so deferred, the Company shall issue or
cause its transfer agents to issue due bills or other appropriate evidence
prepared by the Company of the right to receive such cash, property or
securities. If any distribution in respect of which an adjustment to the Conversion
Rate is required to be made as of the record date, Determination Date or
Expiration Date therefore is not thereafter made or paid by the Company for any
reason, the Conversion Rate shall be readjusted to the Conversion Rate which
would then be in effect if such record date had not been fixed or such record
date, Determination Date or Expiration Date had not occurred.

 

37

 

(c)           For purposes of this Section 4.06,
“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 or converted into any combination of
cash, securities or other property, the date fixed for determination of
shareholders entitled to receive such cash, security or other property (whether
or not such date is fixed by the Board of Directors or by statute, contract or
otherwise).

 

(d)           If one or more event
occurs requiring an adjustment be made to the Conversion Rate for a particular
period, adjustments to the Conversion Rate shall be determined by the Company’s
Board of Directors to reflect the combined impact of such Conversion Rate
adjustment events, as set out in this Section 4.06, during such period.

 

(e)           Notwithstanding the
provisions set forth in Section 4.06(a), in no event shall the total
number of shares of Common Stock issuable upon conversion of a Security exceed
45.1467 per $1,000 principal amount of Securities, subject to proportional
adjustments in the same manner as the Conversion Rate as set forth in
clauses (1) through (4) of Section 4.06(a).

 

Section 4.07           No
Adjustment.

 

(a)           No adjustment in the
Conversion Rate shall be required if Holders may participate in the
transactions set forth in Section 4.06 above (to the same extent as if the
Securities had been converted into Common Stock immediately prior to such
transactions) without converting the Securities held by such Holders.

 

(b)           No adjustment in the
Conversion Rate shall be required unless such adjustment would require an
increase or decrease of at least 1% in the Conversion Rate as last adjusted; provided,
however, that any adjustments which would be required to be made but for
this Section 4.07(b) shall be carried forward and taken into account
in any subsequent adjustment. All calculations under this Article 4 shall
be made to the nearest cent or to the nearest one-ten thousandth of a share, as
the case may be, with one half cent and 0.00005 of a share, respectively,
being rounded upward.

 

(c)           No adjustment in the
Conversion Rate shall be required for issuances of Common Stock pursuant to a
Company plan for reinvestment of dividends or interest or for a change to a par
value of the Common Stock.

 

(d)           To the extent that the
Securities become convertible into the right to receive cash, no adjustment
need be made thereafter as to the cash.

 

Section 4.08           Notice
of Adjustment. Whenever the Conversion Rate or conversion privilege is
required to be adjusted pursuant to this Indenture, the Company shall promptly
mail to Holders a notice of the adjustment and file with the Trustee an
Officers’ Certificate briefly stating the facts requiring the adjustment and
the manner of computing it. Failure to mail such notice or any defect therein
shall not affect the validity of any such adjustment. Unless and until the
Trustee shall receive

 

38

 

an Officers’ Certificate setting forth an adjustment of the Conversion
Rate, the Trustee may assume without inquiry that the Conversion Rate has
not been adjusted and that the last Conversion Rate of which it has knowledge
remains in effect.

 

Section 4.09           Notice
of Certain Transactions. In the event that there is a dissolution or
liquidation of the Company, the Company shall mail to Holders and file with the
Trustee a notice stating the proposed effective date. The Company shall mail
such notice at least 10 days before such proposed effective date. Failure
to mail such notice or any defect therein shall not affect the validity of any
transaction referred to in this Section 4.09.

 

Section 4.10           Effect
of Recapitalization, Reclassification, Consolidation, Merger or Sale. If
any of following events occur (each, a “Business Combination”):

 

(1)           any recapitalization,
reclassification or change of the Common Stock, other than changes resulting
from a subdivision or a combination,

 

(2)           a consolidation, merger
or combination involving the Company,

 

(3)           a sale, conveyance or
lease to another corporation of all or substantially all of the property and
assets of the Company, other than one or more of the Company’s subsidiaries, or

 

(4)           any statutory share
exchange,

 

in each case as a result of which holders of Common Stock are entitled
to receive stock, other securities, other property or assets (including cash or
any combination thereof) with respect to or in exchange for 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 the Holders of the Securities then outstanding will be entitled
thereafter to convert such Securities into the kind and amount of shares of
stock, other securities or other property or assets (including cash or any
combination thereof) which they would have owned or been entitled to receive
upon such Business Combination had such Securities been converted into Common
Stock immediately prior to such Business Combination, except that such Holders
will not receive the Make Whole Premium if such Holder does not convert its
Securities “in connection with” the relevant Fundamental Change. A conversion
of the Securities by a Holder will be deemed for these purposes to be “in
connection with” a Fundamental Change if the notice of such conversion is
provided in compliance with Section 4.02(a) to the Conversion Agent
on or subsequent to the date 10 Trading Days prior to the date announced
by the Company as the anticipated Fundamental Change Effective Date but before
the close of business on the Business Day immediately preceding the related Fundamental
Change Repurchase Date. In the event holders of Common Stock have the
opportunity to elect the form of consideration to be received in such
Business Combination, the Company shall make adequate provision whereby the
Holders of the Securities shall have a reasonable opportunity to determine the form of
consideration into which all

 

39

 

of the Securities, treated as a single class, shall be convertible from
and after the effective date of such Business Combination. Such determination
shall be (i) based on the weighted average of elections made by Holders of
the Securities who participate in such determination, (ii) subject to any
limitations to which all of the holders of the Common Stock are subject, such
as pro-rata reductions applicable to any portion of the consideration payable
in such Business Combination and (iii) conducted in such a manner as to be
completed by the date which is the earliest of (a) the deadline for
elections to be made by stockholders of the Company, and (b) two Trading
Days prior to the anticipated effective date of the Business Combination. The
Company shall provide notice of the opportunity to determine the form of
such consideration, as well as notice of the determination made by Holders of
the Securities (and the weighted average of elections), by posting such notice
with DTC and providing a copy of such notice to the Trustee. In the event the
effective date of the Business Combination is delayed beyond the initially
anticipated effective date, Holders of the Securities shall be given the
opportunity to make subsequent similar determinations in regard to such delayed
effective date. The Company may not become a party to any such transaction
unless its terms are consistent with this Section 4.10. 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 4. If, in the
case of any such Business Combination, 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 Business
Combination, 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 Securities 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 Article 3 hereof. Notwithstanding anything contained in this Section,
and for the avoidance of doubt, this Section shall not affect the right of
a Holder to convert its Securities into shares of Common Stock prior to the
effective date of the Business Combination.

 

Section 4.11           Trustee’s
Disclaimer.

 

(a)           The Trustee shall have
no duty to determine when an adjustment under this Article 4 should be
made, how it should be made or what such adjustment should be, but may accept
as conclusive evidence of that fact or the correctness of any such adjustment,
and shall be protected in relying upon, an Officers Certificate and/or an
Opinion of Counsel, including the Officers’ Certificate with respect thereto
which the Company is obligated to file with the Trustee pursuant to Section 4.08.
The Trustee makes no representation as to the validity or value of any
securities or assets issued upon conversion of Securities, and the Trustee
shall not be responsible for the Company’s failure to comply with any
provisions of this Article 4.

 

(b)           The Trustee shall not
be under any responsibility to determine the correctness of any provisions
contained in any supplemental indenture executed pursuant to Section 4.10,
but may accept as conclusive evidence of the correctness thereof, and
shall be fully protected in relying upon, the officers, Certificate and Opinion
of Counsel, with respect thereto which the Company is obligated to file with
the Trustee pursuant to Section 12.04.

 

40

 

Section 4.12           Voluntary
Increase. The Company from time to time may increase the Conversion
Rate, to the extent permitted by law, by any amount for any period of time if
the period is at least 20 days, and the Company provides 15 days
prior written notice to any increase in the Conversion Rate to the Trustee and
Holders. The Company may also make such an increase to the Conversion Rate
as the Board of Directors determines would avoid or diminish U.S. federal
income tax to holders of shares of Common Stock in connection with a dividend
or distribution of stock (or rights to acquire stock) or from any event treated
as such for U.S. federal income tax purposes.

 

Notwithstanding the foregoing paragraph, in no event will the total
number of shares of Common Stock issuable upon conversion of a Security exceed
45.1467 per $1,000 principal amount, subject to proportional adjustment in the
same manner as the Conversion Rate as set forth in clauses (1) through
(4) of Section 4.06(a) hereof.

 

ARTICLE 5

SUBORDINATION

 

Section 5.01           Agreement
of Subordination. The Company covenants and agrees, and each Holder of
Securities issued hereunder by its acceptance thereof likewise covenants and
agrees, that all Securities shall be issued subject to the provisions of this Article 5;
and each Person holding any Security, whether upon original issue or upon
transfer, assignment or exchange thereof, accepts and agrees to be bound by
such provisions.

 

The payment of the principal of, premium, if any, and interest on, all
Securities (including, but not limited to, the Change in Control Purchase Price
with respect to the Securities subject to purchase in accordance with Article 3
as provided in this Indenture) issued hereunder shall, to the extent and in the
manner hereinafter set forth, be subordinated and subject in right of payment
to the prior payment in full in cash, or other payment satisfactory to the
holders of Senior Indebtedness, of all Senior Indebtedness, whether outstanding
at the date of this Indenture or thereafter incurred.

 

No provision of this Article 5 shall prevent the occurrence of any
default or Event of Default hereunder.

 

Section 5.02           Payments
to Holders. The Company shall not make any payment with respect to the
principal of, or premium, if any, or interest on the Securities (including, but
not limited to, the Change in Control Purchase Price with respect to the
Securities subject to purchase in accordance with Article 3 as provided in
this Indenture), except payments and distributions made by the Trustee as
permitted by the first or second paragraph of Section 5.05, and shall not
purchase or otherwise acquire for value any Securities if:

 

(a)           a default in the
payment of principal, premium, interest, rent or other obligations due on any
Senior Indebtedness occurs and is continuing (or, in the case of Senior
Indebtedness for which there is a period of grace, in the event of such a
default that continues beyond the period of grace, if any, specified in the
instrument or lease evidencing such Senior

 

41

 

Indebtedness),
unless and until such default shall have been cured or waived or shall have
ceased to exist and notice thereof has been given to the Trustee; or

 

(b)           a default, other than a
payment default, on Designated Senior Indebtedness occurs and is continuing
that then permits holders of such Designated Senior Indebtedness to accelerate
its maturity and the Trustee receives a notice of the default (a “Payment
Blockage Notice”) from the Company or a holder of Designated Senior
Indebtedness or a representative of such holder.

 

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

 

(1)           in the case of a
payment default of Senior Indebtedness, upon the date on which such default is
cured or waived or otherwise ceases to exist; and

 

(2)           in the case of a
non-payment default on Designated Senior Indebtedness referred to in clause (b) above,
the earlier of (i) 179 days after the date on which a Payment
Blockage Notice is received, and (ii) the date on which the non-payment
default is cured or waived or otherwise ceases to exist, unless this Article 5
otherwise prohibits the payment or distribution at the time of such payment or
distribution.

 

Subject to the provisions of Section 5.05, no subsequent Payment
Blockage pursuant to this Section 5.02 may be commenced unless (i) at
least 365 days shall have elapsed since the Company’s receipt of the
immediately prior Payment Blockage Notice and (ii) all scheduled payments
of principal premium or interest on the Securities that have come due have been
paid in full in cash. No nonpayment default that existed or was continuing on
the date of delivery of any Payment Blockage Notice to the Trustee (unless such
default was waived, cured or otherwise ceased to exist and thereafter
subsequently reoccurred) shall be, or be made, the basis for a subsequent
Payment Blockage Notice.

 

Upon any payment by the Company, or distribution of assets of the
Company of any kind or character, whether in cash, property or securities, to
creditors upon any dissolution or winding-up or liquidation or reorganization
of the Company (whether voluntary or involuntary) or in bankruptcy, insolvency,
receivership or similar proceedings, all amounts due or to become due upon all
Senior Indebtedness shall first be paid in full in cash, or other payment
satisfactory to the holders of Senior Indebtedness (except payments made pursuant
to Article 10 from monies deposited with the Trustee pursuant thereto
prior to commencement of proceedings for such dissolution, winding-up,
liquidation or reorganization); and upon any such dissolution or winding-up or
liquidation or reorganization of the Company or bankruptcy, insolvency,
receivership or other similar proceeding, any payment by the Company, or
distribution of assets of the Company of any kind or character, whether in
cash, property or securities, to which the Holders of the Securities or the
Trustee would be entitled, except for the provision of this Article 5,
shall (except as aforesaid) be paid by the Company or by any receiver, trustee
in bankruptcy, liquidating trustee, agent or other Person making such payment
or distribution, or by the Holders of the Securities or by the Trustee under
this

 

42

 

Indenture if received by them or it, directly to the holders of Senior
Indebtedness (pro rata to such holders on the basis of the respective amounts
of Senior Indebtedness held by such holders, or as otherwise required by law or
a court order) or their representative or representatives, or to the trustee or
trustees under any indenture pursuant to which any instruments evidencing any
Senior Indebtedness may have been issued, as their respective interests may appear,
to the extent necessary to pay all Senior Indebtedness in full in cash, or
other payment satisfactory to the holders of Senior Indebtedness, after giving
effect to any concurrent payment or distribution to or for the holders of
Senior Indebtedness, before any payment or distribution is made to the Holders
of the Securities or to the Trustee.

 

In the event of the acceleration of the Securities because of an Event
of Default, no payment or distribution shall be made to the Trustee or any
Holder of Securities in respect of the principal of, premium, if any, or
interest on the Securities (including, but not limited to, the Change in
Control Purchase Price with respect to the Securities subject to purchase in
accordance with Article 3 as provided in this Indenture), except payments
and distributions made by the Trustee as permitted by the first or second
paragraph of Section 5.05, until all Senior Indebtedness has been paid in
full in cash or other payment satisfactory to the holders of Senior
Indebtedness or such acceleration is rescinded in accordance with the terms of
this Indenture. If payment of the Securities is accelerated because of an Event
of Default, the Company shall promptly notify holders of Senior Indebtedness of
such acceleration.

 

In the event that, notwithstanding the foregoing provisions, any
payment or distribution of assets of the Company of any kind or character,
whether in cash, property or securities (including, without limitation, by way
of setoff or otherwise), prohibited by the foregoing, shall be received by the
Trustee or the Holders of the Securities before all Senior Indebtedness is paid
in full, in cash or other payment satisfactory to the holders of Senior Indebtedness,
or provision is made for such payment thereof in accordance with its terms in
cash or other payment satisfactory to the holders of Senior Indebtedness, such
payment or distribution shall be held in trust for the benefit of and shall be
paid over or delivered to the holders of Senior Indebtedness or their
representative or representatives, or to the trustee or trustees under any
indenture pursuant to which any instruments evidencing any Senior Indebtedness may have
been issued, as their respective interests may appear, as calculated by
the Company, for application to the payment of all Senior Indebtedness
remaining unpaid to the extent necessary to pay all Senior Indebtedness in
full, in cash or other payment satisfactory to the holders of Senior Indebtedness,
after giving effect to any concurrent payment or distribution to or for the
holders of such Senior Indebtedness.

 

Nothing in this Section 5.02 shall apply to claims of, or payments
to, the Trustee under or pursuant to Section 9.07. This Section 5.02
shall be subject to the further provisions of Section 5.05.

 

For purposes of this Article 5, the words, “cash, property or
securities” shall not be deemed to include shares of stock of the Company as
reorganized or readjusted, or securities of the Company or any other
corporation provided for by a plan of reorganization or readjustment, the
payment of which is subordinated at least to the extent provided in this Article 5
with respect to the Securities to the payment of all Senior Indebtedness which may at
the time be outstanding; provided that (i) the

 

43

 

Senior Indebtedness is assumed by the new corporation, if any,
resulting from any reorganization or readjustment, and (ii) the rights of
the holders of Senior Indebtedness (other than leases which are not assumed by
the Company or the new corporation, as the case may be) are not, without
the consent of such Holders, altered by such reorganization or readjustment. The
consolidation of the Company with, or the merger of the Company into, another
corporation or the liquidation or dissolution of the Company following the
conveyance or transfer of its property as an entirety, or substantially as an
entirety, to another corporation upon the terms and conditions provided for in Article 7
shall not be deemed a dissolution, winding-up, liquidation or reorganization
for the purposes of this Section 5.02 if such other corporation shall, as
a part of such consolidation, merger, conveyance or transfer, comply with
the conditions stated in Article 7.

 

Section 5.03           Subrogation
of Securities. Subject to the payment in full, in cash or other payment
satisfactory to the holders of Senior Indebtedness, of all Senior Indebtedness,
the rights of the Holders of the Securities shall be subrogated to the extent
of the payments or distributions made to the holders of such Senior
Indebtedness pursuant to the provisions of this Article 5 (equally and
ratably with the holders of all indebtedness of the Company which by its
express terms is subordinated to other indebtedness of the Company to
substantially the same extent as the Securities are subordinated and is
entitled to like rights of subrogation) to the rights of the holders of Senior
Indebtedness to receive payments or distributions of cash, property or
securities of the Company applicable to the Senior Indebtedness until the
principal, premium, if any, and interest on the Securities shall be paid in
full in cash or other payment satisfactory to the holders of Senior Indebtedness.
For the purposes of such subrogation, no payments or distributions to the
holders of the Senior Indebtedness of any cash, property or securities to which
the Holders of the Securities or the Trustee would be entitled except for the
provisions of this Article 5, and no payment pursuant to the provisions of
this Article 5, to or for the benefit of the holders of Senior
Indebtedness by Holders of the Securities or the Trustee, shall, as between the
Company, its creditors other than holders of Senior Indebtedness, and the
Holders of the Securities, be deemed to be a payment by the Company to or on
account of the Senior Indebtedness. No payments or distributions of cash,
property or securities to or for the benefit of the Holders of the Securities,
pursuant to the subrogation provisions of this Article 5, which would
otherwise have been paid to the holders of Senior Indebtedness shall be deemed
to be a payment by the Company to or for the account of the Securities. It is
understood that the provisions of this Article 5 are and are intended
solely for the purposes of defining the relative rights of the Holders of the
Securities, on the one hand, and the holders of the Senior Indebtedness, on the
other hand.

 

Nothing contained in this Article 5 or elsewhere in this Indenture
or in the Securities is intended to or shall impair, as among the Company, its
creditors other than the holders of Senior Indebtedness, and the Holders of the
Securities, the obligation of the Company, which is absolute and unconditional,
to pay to the Holders of the Securities the principal of, and premium, if any,
and interest on the Securities as and when the same shall become due and
payable in accordance with their terms, or is intended to or shall affect the
relative rights of the Holders of the Securities and creditors of the Company
other than the holders of the Senior Indebtedness, nor shall anything herein or
therein prevent the Trustee or the Holder of any Security from exercising all
remedies otherwise permitted by applicable law upon default under this
Indenture, subject to the rights, if any, under this

 

44

 

Article 5 of the holders of Senior Indebtedness in respect of
cash, property or securities of the Company received upon the exercise of any
such remedy.

 

Upon any payment or distribution of assets of the Company referred to
in this Article 5, the Trustee, subject to the provisions of Section 9.01,
and the Holders of the Securities shall be entitled to rely upon any order or
decree made by any court of competent jurisdiction in which such bankruptcy,
dissolution, winding-up, liquidation or reorganization proceedings are pending,
or a certificate of the receiver, trustee in bankruptcy, liquidating trustee,
agent or other person making such payment or distribution, delivered to the
Trustee or to the Holders of the Securities, for the purpose of ascertaining
the persons entitled to participate in such distribution, the holders of the
Senior Indebtedness and other indebtedness of the Company, the amount thereof
or payable thereon and all other facts pertinent thereto or to this Article 5.

 

Section 5.04           Authorization
to Effect Subordination. Each Holder of a Security by the Holder’s
acceptance thereof authorizes and directs the Trustee on the Holder’s behalf to
take such action as may be necessary or appropriate to effectuate the
subordination as provided in this Article 5 and appoints the Trustee to
act as the Holder’s attorney-in-fact for any and all such purposes. If the
Trustee does not file a proper proof of claim or proof of debt in the form required
in any proceeding referred to in Section 5.03 hereof at least 30 days
before the expiration of the time to file such claim, the holders of any Senior
Indebtedness or their representatives are hereby authorized to file an
appropriate claim for and on behalf of the Holders of the Securities.

 

Section 5.05           Notice
to Trustee. The Company shall give prompt written notice in the form of
an Officers’ Certificate to a Trust Officer of the Trustee and to any Paying
Agent of (a) all Senior Indebtedness incurred by the Company, including
the names of representatives of such holders (if actually known by the Company)
of holders of Senior Indebtedness and (b) any fact known to the Company
which would prohibit the making of any payment of monies to or by the Trustee
or any Paying Agent in respect of the Securities pursuant to the provisions of
this Article 5. Notwithstanding the provisions of this Article 5 or
any other provision of this Indenture, the Trustee shall not be charged with
knowledge of the existence of any facts which would prohibit the making of any
payment of monies to or by the Trustee in respect of the Securities pursuant to
the provisions of this Article 5, unless and until a Trust Officer of the
Trustee shall have received written notice thereof at the Corporate Trust
Office from the Company (in the form of an Officers’ Certificate) or a
holder or holders of Senior Indebtedness (or a representative of such holder or
holders) or from any trustee thereof; and before the receipt of any such
written notice, the Trustee, subject to the provisions of Section 9.01,
shall be entitled in all respects to assume that no such facts exist; provided
that if on a date not fewer than one Business Day prior to the date upon which
by the terms hereof any such monies may become payable for any purpose
(including, without limitation, the payment of the principal of, or premium, if
any, or interest on any Security) the Trustee shall not have received, with
respect to such monies, the notice provided for in this Section 5.05,
then, anything herein contained to the contrary notwithstanding, the Trustee
shall have full power and authority to receive such monies and to apply the
same to the purpose for which they were received, and shall not be affected by
any notice to the contrary which may be received by it on or after such
prior date. Notwithstanding anything in this Article 5 to the contrary,
nothing shall prevent any

 

45

 

payment by the Trustee to the Holders of monies deposited with it
pursuant to Article 10, and any such payment shall not be subject to the
provisions of Article 5.

 

The Trustee, subject to the provisions of Section 9.01, shall be
entitled to rely on the delivery to it of a written notice by a representative
of such a holder of Senior Indebtedness or a person representing himself to be
a holder of Senior Indebtedness (or a trustee on behalf of such holder) to
establish that such notice has been given by a representative of a holder of
Senior Indebtedness or a trustee on behalf of any such holder or holders. In
the event that the Trustee determines in good faith that further evidence is
required with respect to the right of any person as a holder of Senior
Indebtedness to participate in any payment or distribution pursuant to this Article 5,
the Trustee may request such Person to furnish evidence to the reasonable
satisfaction of the Trustee as to the amount of Senior Indebtedness held by
such Person, the extent to which such Person is entitled to participate in such
payment or distribution and any other facts pertinent to the rights of such
Person under this Article 5, and if such evidence is not furnished the
Trustee may defer any payment to such Person pending judicial
determination as to the right of such Person to receive such payment.

 

Section 5.06           Trustee’s
Relation to Senior Indebtedness. The Trustee in its individual capacity
shall be entitled to all the rights set forth in this Article 5 in respect
of any Senior Indebtedness at any time held by it, to the same extent as any
other holder of Senior Indebtedness, and nothing in Section 9.11 or
elsewhere in this Indenture shall deprive the Trustee of any of its rights as
such holder.

 

With respect to the holders of Senior Indebtedness, the Trustee
undertakes to perform or to observe only such of its covenants and
obligations as are specifically set forth in this Article 5, 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
deemed to owe any fiduciary duty to the holders of Senior Indebtedness and,
subject to the provisions of Section 9.01, the Trustee shall not be liable
to any holder of Senior Indebtedness if it shall pay over or deliver to Holders
of Securities, the Company or any other person money or assets to which any
holder of Senior Indebtedness shall be entitled by virtue of this Article 5
or otherwise.

 

Section 5.07           No
Impairment of Subordination. No right of any present or future holder of
any Senior Indebtedness to enforce subordination as herein provided shall at
any time in any way be prejudiced or impaired by any act or failure to act on
the part of the Company or by any act or failure to act, in good faith, by
any such holder, or by any noncompliance by the Company with the terms,
provisions and covenants of this Indenture, regardless of any knowledge thereof
which any such holder may have or otherwise be charged with.

 

Section 5.08           Certain
Conversions Deemed Payment. For the purposes of this Article 5 only, (1) the
issuance and delivery of junior securities upon conversion of Securities in
accordance with Article 4 shall not be deemed to constitute a payment or
distribution on account of the principal of (or premium, if any) or interest on
Securities or on account of the purchase or other acquisition of Securities,
and (2) the payment, issuance or delivery of cash (except in satisfaction
of fractional shares pursuant to Section 4.03), property or securities
(other than junior securities) upon conversion

 

46

 

of a Security shall be deemed to constitute payment on account of the
principal of such Security. For the purposes of this Section 5.08, the
term “junior securities” means (a) shares of any Capital Stock of any class of
the Company, or (b) securities of the Company which are subordinated in
right of payment to all Senior Indebtedness which may be outstanding at
the time of issuance or delivery of such securities to substantially the same
extent as, or to a greater extent than, the Securities are so subordinated as
provided in this Article. Nothing contained in this Article 5 or elsewhere
in this Indenture or in the Securities is intended to or shall impair, as among
the Company, its creditors other than holders of Senior Indebtedness and the
Holders, the right, which is absolute and unconditional, of the Holder of any
Security to convert such Security in accordance with Article 4.

 

Section 5.09           Article Applicable
to Paying Agents. If at any time any Paying Agent other than the Trustee
shall have been appointed by the Company and be then acting hereunder, the term
“Trustee” as used in this Article shall (unless the context otherwise
requires) be construed as extending to and including such Paying Agent within
its meaning as fully for all intents and purposes as if such Paying Agent were
named in this Article in addition to or in place of the Trustee; provided,
however, that the first paragraph of Section 5.05 shall not apply to the
Company or any Affiliate of the Company if it or such Affiliate acts as Paying
Agent.

 

Section 5.10           Senior
Indebtedness Entitled to Rely. The holders of Senior Indebtedness
(including, without limitation, Designated Senior Indebtedness) shall have the
right to rely upon this Article 5, and no amendment or modification of the
provisions contained herein shall diminish the rights of such holders unless
such holders shall have agreed in writing thereto.

 

ARTICLE 6

COVENANTS

 

Section 6.01           Payment
of Securities.

 

(a)           The Company shall
promptly make all payments in respect of the Securities on the dates and in the
manner provided in the Securities and this Indenture. A payment of principal or
interest or Liquidated Damages, if any, shall be considered paid on the date it
is due if the Paying Agent (other than the Company) holds by 12:00 p.m.
(noon), New York City time, on that date money, deposited by or on behalf of
the Company sufficient to make the payment. Subject to Section 4.02,
accrued and unpaid interest on any Security that is payable, and is punctually
paid or duly provided for, on any Interest Payment Date shall be paid to the
Person in whose name that Security is registered at the close of business on the
Regular Record Date for such interest at the office or agency of the Company
maintained for such purpose. Principal, Fundamental Change Repurchase Price,
and interest and Liquidated Damages, if any, in each case if payable, shall be
considered paid on the applicable date due if on such date (or, in the case of
Fundamental Change Repurchase Price, on the Business Day following the
applicable Fundamental Change Repurchase Date) the Trustee or the Paying Agent
holds, in accordance with this Indenture, money sufficient to pay all such
amounts then due. The Company shall, to the fullest extent permitted by law,
pay interest in immediately available funds on overdue principal amount and
interest at the annual rate borne by the Securities compounded semiannually,
which interest shall accrue from the date such

 

47

 

overdue amount
was originally due to the date payment of such amount, including interest
thereon, has been made or duly provided for. All such interest shall be payable
on demand.

 

(b)           Payment of the
principal of and interest, if any, on the Securities shall be made at the
office or agency of the Company maintained for that purpose (which shall
initially be at the address set forth in Section 2.03(c)) in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts; provided, however, that at the
option of the Company payment of interest may be made by check mailed to
the address of the Person entitled thereto as such address appears in the
Register; provided further that a Holder with an aggregate principal amount in
excess of $2,000,000 will be paid by wire transfer in immediately available
funds at the election of such Holder if such Holder has provided wire transfer
instructions to the Trustee at least 10 Business Days prior to the payment
date. Any wire transfer instructions received by the Trustee will remain in
effect until revoked by the Holder. Notwithstanding the foregoing, so long as
this Security is registered in the name of a Depositary or its nominee, all
payments hereon shall be made by wire transfer of immediately available funds
to the account of the Depositary or its nominee.

 

Section 6.02           SEC
and Other Reports.

 

(a)           The Company shall file
all reports and other information and documents which it is required to file
with the SEC pursuant to Section 13 or 15(d) of the Exchange Act, and
within 15 days after it files them with the SEC, the Company shall file
copies of all such reports, information and other documents with the Trustee;
provided that any such reports, information and documents filed with the SEC
pursuant to its Electronic Data Gathering, Analysis and Retrieval (or EDGAR)
system shall be deemed to be filed with the Trustee. The Company also shall
comply with the provisions of TIA Section 314(a).

 

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

 

Section 6.03           Compliance
Certificates. 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 December 31, 2006), an Officers’ Certificate as to
the signer’s knowledge of the Company’s compliance with all conditions and
covenants on its part contained in this Indenture and stating whether or
not the signer knows of any Default or Event of Default. If such signer knows
of such a Default or Event of Default, the Officers’ Certificate shall describe
the Default or Event of Default and the efforts to remedy the same. For the
purposes of this Section 6.03, compliance shall be determined without
regard to any grace period or requirement of notice provided pursuant to the
terms of this Indenture.

 

48

 

Section 6.04           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 6.05           Maintenance
of Corporate Existence. Subject to Article 7, the Company will do or
cause to be done all things necessary to preserve and keep in full force and
effect its corporate existence.

 

Section 6.06           Rule 144A
Information Requirement. Within the period prior to the expiration of the
holding period applicable to sales thereof under Rule 144(k) under the
Securities Act (or any successor provision), the Company covenants and agrees
that it shall, during any period in which it is not subject to Section 13
or 15(d) under the Exchange Act, upon the request of any Holder or
beneficial holder of the Securities make available to such Holder or beneficial
holder of Securities or any Common Stock issued upon conversion thereof which
continue to be Restricted Securities in connection with any sale thereof and
any prospective purchaser of Securities or such Common Stock designated by such
Holder or beneficial holder, the information required pursuant to Rule 144A(d)(4) under
the Securities Act and it will take such further action as any Holder or
beneficial holder of such Securities or such Common Stock may reasonably
request, all to the extent required from time to time to enable such Holder or
beneficial holder to sell its Securities or Common Stock without registration
under the Securities Act within the limitation of the exemption provided by Rule 144A,
as such Rule may be amended from time to time. Whether a person is a
beneficial holder shall be determined by the Company.

 

Section 6.07           Stay,
Extension and Usury Laws. The Company covenants (to the extent that it may lawfully
do so) that it shall not at any time insist upon, plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay, extension or
usury law or other law which would prohibit or forgive the Company from paying
all or any portion of the principal of or accrued but unpaid interest or
Liquidated Damages, if any, on the Securities as contemplated herein, wherever
enacted, now or at any time hereafter in force, or which may affect the
covenants or the performance of this Indenture, and the Company (to the extent
it may lawfully do so) hereby expressly waives all benefit or advantage of
any such law and covenants that it will not, by resort to any such law, hinder,
delay or impede the execution of any power herein granted to the Trustee, but
will suffer and permit the execution of every such power as though no such law
had been enacted.

 

Section 6.08           Payment
of Liquidated Damages. If Liquidated Damages are payable by the Company
pursuant to the Registration Rights Agreement, the Company shall deliver to the
Trustee an Officers’ Certificate to that effect stating (i) the amount of
such Liquidated Damages that are payable, (ii) the reason why such
Liquidated Damages are payable and (iii) the date on which such Liquidated
Damages are payable. Unless and until a Trust Officer of the Trustee receives
such a certificate, the Trustee may assume without inquiry that no such
Liquidated Damages are payable. If the Company has paid Liquidated Damages
directly to the Persons entitled to such Liquidated Damages, the Company shall
deliver to the Trustee a certificate setting forth the particulars of such payment.
The Trustee may conclusively rely on the correctness of the Liquidated
Damages calculations provided by the Company without investigation.

 

49

 

Section 6.09           Maintenance
of Office or Agency. The Company will maintain an office or agency of the
Trustee, Registrar and Paying Agent where securities may be presented or
surrendered for payment, where Securities may be surrendered for
registration of transfer or purchase and where notices and demands to or upon the
company in respect of the Securities and this Indenture may be served. The
Corporate Trust Office shall initially be one 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 12.02.

 

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

 

ARTICLE 7

CONSOLIDATION; MERGER; CONVEYANCE; TRANSFER
OR LEASE

 

Section 7.01           Company
May Consolidate, etc., only on Certain Terms. The Company may not
consolidate with or merge into any Person (unless the Company is the surviving
corporation) or convey, transfer or lease the property and assets,
substantially as an entity, of the Company to another Person, other than to one
or more of the Company’s wholly-owned subsidiaries, unless:

 

(1)           the Person (if other
than the Company) formed by such consolidation or into which the Company is
merged, or the Person which acquires by conveyance, transfer or lease all or
substantially all of the properties and assets of the Company, shall (i) be
a corporation, limited liability company, partnership, trust or other business
entity organized and existing under the laws of the United States of America,
any State thereof or the District of Columbia and (ii) such Person (if
other than the Company) expressly assumes, by an indenture supplemental hereto,
executed and delivered to the Trustee, in form satisfactory to the
Trustee, the obligations of the Company under the Securities and this Indenture
and the performance or observance of every covenant and provision of this
Indenture and the Securities required on the part of the Company to be
performed or observed and the conversion rights shall be provided for in
accordance with Article 4, by supplemental indenture satisfactory in form to
the Trustee, executed and delivered to the Trustee, by the Person (if other
than the Company) formed by such consolidation or into which the Company shall
have been merged or by the Person which shall have acquired the Company’s
assets;

 

(2)           after giving effect to
such transaction, no Event of Default, and no event which, after notice or
lapse of time or both, would become an Event of Default, shall have occurred
and be continuing; and

 

50

 

(3)           if the Company will not
be the resulting or surviving corporation, the Company shall have, at or prior
to the effective date of such consolidation, merger or transfer, delivered to
the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating
that such consolidation, merger or transfer complies with this Section 7.01
and, if a supplemental indenture is required in connection with such
transaction, such supplemental indenture complies with this Article, and that
all conditions precedent herein provided for relating to such transaction have
been complied with.

 

Section 7.02           Successor
Substituted. Upon any consolidation of the Company with, or merger of the
Company into, any other Person or any conveyance, transfer or lease
substantially as an entity, of the properties and assets of the Company and its
Subsidiaries, taken as a whole, in accordance with Section 7.01, the
successor Person formed by such consolidation or into which the Company is
merged or to which such conveyance, transfer or lease is made shall succeed to,
and be substituted for, and may exercise every right and power of, the
Company under this Indenture with the same effect as if such successor Person
had been named as the Company herein, and thereafter, except in the case of a
lease, and except for obligations the predecessor Person may have under a
supplemental indenture, the predecessor Person shall be relieved of all
obligations and covenants under this Indenture and the Securities.

 

ARTICLE 8

DEFAULT AND REMEDIES

 

Section 8.01           Events
of Default.

 

(a)           An “Event of Default”
shall occur if:

 

(1)           the Company shall fail
to pay when due the Principal or any Fundamental Change Repurchase Price of any
Security, including any Make-Whole Premium, when the same becomes due and
payable whether at the Final Maturity Date, upon repurchase, acceleration or
otherwise; or

 

(2)           the Company shall fail
to pay an installment of interest or Liquidated Damages, if any, on any of the
Securities, which failure continues for 30 days after the date when due;
or

 

(3)           the Company shall fail
to deliver when due all shares of Common Stock, if any, deliverable upon
conversion of the Securities, which failure continues for 15 days; or

 

(4)           the Company shall fail
to perform or observe (or obtain a waiver with respect to) any other term,
covenant or agreement contained in the Securities or this Indenture for a
period of 60 days after receipt by the Company of a Notice of Default
specifying such failure; or

 

(5)           the Company shall fail
to pay any principal by the end of any applicable grace period or resulting in
acceleration of other Indebtedness of the Company for borrowed money where the
aggregate principal amount with respect to which the default or

 

51

 

acceleration
has occurred exceeds $30 million and such acceleration has not been
rescinded or annulled or such Indebtedness repaid within a period of
30 days after receipt of a Notice of Default, provided that if any such
default is cured, waived, rescinded or annulled, then the Event of Default by
reason thereof would be deemed not to have occurred; or

 

(6)           the Company pursuant to
or within the meaning of any Bankruptcy Law:

 

(A)          commences as a debtor a
voluntary case or proceeding; or

 

(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 Receiver of it or for all or substantially all of its
property; or

 

(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 Receiver; or

 

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

 

(A)          grants relief against
the Company in an involuntary case or proceeding or adjudicates the Company
insolvent or bankrupt;

 

(B)           appoints a Receiver of
the Company or for all or substantially all of the property of the Company; or

 

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

 

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

 

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

 

(b)           Notwithstanding Section 8.01(a),
no Event of Default under clauses (4) or (5) of Section 8.01(a) shall
occur until the Trustee notifies the Company in writing upon the written
direction of the Holders of at least 25% in aggregate principal amount of the
Securities then outstanding, or the Holders of at least 25% in aggregate
principal amount of the Securities then

 

52

 

outstanding
notify the Company and the Trustee in writing, of the Default (a “Notice of
Default”), and the Company does not cure the Default within the time specified
in clause (4) or (5) of Section 8.01(a), as applicable,
after receipt of such notice. A notice given pursuant to this Section 8.01
shall be given by registered or certified mail, must specify the Default,
demand that it be remedied and state that the notice is a Notice of Default. When
any Default under this Section 8.01 is cured, it ceases.

 

(c)           The Company will
deliver to the Trustee, within five Business Days after becoming aware of the
occurrence of a Default or Event of Default, written notice thereof.

 

The Trustee shall not be charged with knowledge of any Event of Default
unless written notice thereof shall have been given to a Trust Officer with
responsibility for this Indenture at the Corporate Trust Office of the Trustee
by the Company, a Paying Agent, any Holder or any agent of any Holder or unless
a Trust Officer with responsibility for this Indenture acquires actual
knowledge of such Event of Default in the course of performing other duties
pursuant to this Indenture.

 

Section 8.02           Acceleration.
If an Event of Default (other than an Event of Default specified in
clause (6) or (7) of Section 8.01(a)) occurs and is
continuing with respect to the Company, the Trustee may, by notice to the
Company, and shall upon the written direction of the Holders of at least 25% in
aggregate principal amount of the Securities then outstanding, or the Holders
of at least 25% in aggregate principal amount of the Securities then
outstanding may, by notice to the Company and the Trustee, declare the
principal amount and accrued and unpaid interest, if any, and accrued and
unpaid Liquidated Damages, if any, through the date of declaration on all the
Securities to be immediately due and payable. Upon such a declaration, such
principal amount and such accrued and unpaid interest, if any, and such accrued
and unpaid Liquidated Damages, if any, shall be due and payable immediately. If
an Event of Default specified in Section 8.01(a)(6) or (7) occurs
in respect of the Company and is continuing, the principal amount and accrued
but unpaid interest, if any, and accrued and unpaid Liquidated Damages, if any,
on all the Securities shall become and be immediately due and payable without
any declaration or other act on the part of the Trustee or any Holders of
Securities. The Holders of a majority in aggregate principal amount of the
Securities then outstanding by notice to the Trustee may rescind an
acceleration and its consequences if (a) all existing Events of Default,
other than the nonpayment of the principal of the Securities which have become
due solely by such declaration of acceleration, have been cured or waived; (b) to
the extent the payment of such interest is lawful, interest (calculated at the
rate per annum borne by the Securities) on overdue installments of interest and
overdue principal, which has become due otherwise than by such declaration of
acceleration, has been paid; (c) the rescission would not conflict with
any judgment or decree of a court of competent jurisdiction; and (d) all
payments due to the Trustee and any predecessor Trustee under Section 9.07
have been made. No such rescission shall affect any subsequent Default or
impair any right consequent thereto.

 

Section 8.03           Other
Remedies.

 

(a)           If an Event of Default
occurs and is continuing, the Trustee may, but shall not be obligated to,
pursue any available remedy by proceeding at law or in equity to collect
payment of

 

53

 

the principal
amount and accrued and unpaid interest, if any, and accrued and unpaid
Liquidated Damages, if any, on the Securities or to enforce the performance of
any provision of the Securities or this Indenture.

 

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

 

Section 8.04           Waiver
of Defaults and Events of Default. Subject to Sections 8.02, 8.07 and
11.02, the Holders of a majority in aggregate principal amount of the
Securities then outstanding by notice to the Trustee may waive an existing
Default or Event of Default and its consequences, except an uncured Default or
Event of Default in the payment of the principal of, premium, if any, or any
accrued but unpaid interest on any Security, an uncured failure by the Company
to convert any Securities into Common Stock or any Default or Event of Default
in respect of any provision of this Indenture or the Securities which, under Section 11.02,
cannot be modified or amended without the consent of the Holder of each
Security affected. When a Default or Event of Default is waived, it is cured
and ceases to exist.

 

Section 8.05           Control
by Majority. The Holders of a majority in aggregate principal amount of the
Securities then outstanding may direct the time method and place of
conducting any proceeding for any remedy available to the Trustee or exercising
any trust or power conferred on it. However, the Trustee may refuse to
follow any direction that conflicts with law or this Indenture, that the
Trustee determines may be unduly prejudicial to the rights of another
Holder or the Trustee, or that may involve the Trustee in personal
liability unless the Trustee is offered security or indemnity satisfactory to
it; provided, however, that the Trustee may take any other action deemed
proper by the Trustee which is not inconsistent with such direction.

 

Section 8.06           Limitations
on Suits.

 

(a)           A Holder may not
pursue any remedy with respect to this Indenture or the Securities (except
actions for payment of overdue principal, premium, if any, or interest or for
the conversion of the Securities pursuant to Article 4) unless:

 

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

 

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

 

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

 

54

 

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

 

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

 

(b)           No Holder of a Security
shall have any right under any provision of this Indenture or the Securities to
affect, disturb, or prejudice the rights of another Holder of a Security or to
obtain a preference or priority over another Holder of a Security.

 

Section 8.07           Rights
of Holders to Receive Payment and to Convert. Notwithstanding any other
provision of this Indenture, the right of any Holder of a Security to receive
payment of the principal amount, Fundamental Change Repurchase Price, or Make-Whole
Premium and interest, if any or Liquidated Damages, if any, in respect of the
Securities held by such Holder, on or after the respective due dates expressed
in the Securities and this Indenture, (whether upon repurchase or otherwise),
and to convert such Security in accordance with Article 4, and to bring
suit for the enforcement of any such payment on or after such respective due
dates or for the right to convert in accordance with Article 4, is,
subject to compliance with the provisions of Section 8.06, absolute and
unconditional and shall not be impaired or affected without the consent of the
Holder.

 

Section 8.08           Collection
Suit by Trustee. If an Event of Default described in clause (1) or
(2) of Section 8.01(a) occurs and is continuing, the Trustee may recover
judgment in its own name and as trustee of an express trust against the Company
or another obligor on the Securities for the whole amount owing with respect to
the Securities and such further amount as shall be sufficient to cover the
costs and expenses of collection, including the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel.

 

Section 8.09           Trustee
may File Proofs of Claim. The Trustee may file such proofs of
claim and other papers or documents as may be necessary or advisable in
order to have the claims of the Trustee (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel) and the Holders allowed in any judicial proceedings relative to
the Company (or any other obligor on the Securities), its creditors or its
property and shall be entitled and empowered to collect and receive any money
or other property payable or deliverable on any such claims and to distribute
the same, and any Receiver in any such judicial proceeding is hereby authorized
by each Holder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the Holders,
to pay to the Trustee any amount due to it for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel,
and any other amounts due the Trustee under Section 9.07, and to the
extent that such payment of the reasonable compensation, expenses,
disbursements and advances in any such proceedings shall be denied for any
reason, payment of the same shall be secured by a lien on, and shall be paid
out of, any and all distributions, dividends, money, securities and other
property which the Holders may be entitled to receive in such proceedings,
whether in liquidation or under any plan of reorganization or arrangement or
otherwise. Nothing herein contained shall be

 

55

 

deemed to authorize the Trustee to authorize or consent to, or, on
behalf of any Holder, to authorize, accept or adopt any plan of reorganization,
arrangement, adjustment or composition affecting the Securities or the rights
of any Holder thereof, or to authorize the Trustee to vote in respect of the
claim of any Holder in any such proceeding.

 

Section 8.10           Priorities.

 

(a)           If the Trustee collects
any money pursuant to this Article 8, it shall pay out the money in the
following order:

 

(1)           First, to the Trustee
for amounts due under Section 9.07;

 

(2)           Second, to the Holders
of Senior Indebtedness to the extent required by Article 5;

 

(3)           Third, to Holders for
amounts due and unpaid on the Securities for the principal amount, interest,
and Liquidated Damages, as applicable, ratably, without preference or priority
of any kind, according to such respective amounts due and payable on the
Holders’ Securities;

 

(4)           Fourth, to such other
Person or Persons, if any, to the extent entitled thereto; and

 

(5)           Fifth, the balance, if
any, to the Company.

 

(b)           The Trustee may fix
a record date and payment date for any payment to Holders pursuant to this Section 8.10.

 

Section 8.11           Undertaking
for Costs. In any suit for the enforcement of any right or remedy under
this Indenture or in any suit against the Trustee for any action taken or
omitted by it as Trustee, a court in its discretion may require the filing
by any party litigant in the suit of an undertaking to pay the costs of the
suit, and the court in its discretion may assess reasonable costs,
including reasonable attorneys’ fees and expenses (whether incurred before
trial, at trial, on appeal or in any bankruptcy or arbitration or other
administrative proceeding), 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 8.11 does not apply to a suit made by the Trustee,
a suit by a Holder pursuant to Section 8.07, or a suit by Holders of more
than 10% in aggregate principal amount of the Securities then outstanding. This
Section 8.11 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.

 

56

 

ARTICLE 9
TRUSTEE

 

Section 9.01           Obligations
of Trustee.

 

(a)           If an Event of Default
of which a Responsible Officer of the Trustee shall have actual knowledge has
occurred and is continuing, the Trustee may (and shall upon the written
direction of the Holders of at least 25% in aggregate principal amount of the
Securities then outstanding and being furnished with indemnity acceptable to
it) exercise such of the rights and powers vested in it by this Indenture.  If an Event of Default of which a Responsible
Officer of the Trustee shall have actual knowledge has occurred and is
continuing, the Trustee shall use the same degree of care and skill in its
exercise as a prudent person would exercise or use under the circumstances in
the conduct of his or her own affairs.

 

(b)           Except
during the continuance of an Event of Default of which a Responsible Officer of
the Trustee shall have actual knowledge, the Trustee need perform only those
duties as are specifically set forth in this Indenture and no others.

 

This Section 9.01(b)
shall be in lieu of Section 315(a) of the TIA and such Section 315(a)
is hereby expressly excluded from this Indenture, as permitted by the TIA.

 

(c)           In the absence of bad
faith on its part, the Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Trustee and conforming to the
requirements of this Indenture.  The
Trustee, however, shall examine any certificates and opinions which by any
provision hereof are specifically required to be delivered to the Trustee to
determine whether or not they conform on their face to the requirements of this
Indenture, but need not confirm or investigate the accuracy of mathematical
calculations or other facts stated therein

 

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

 

(1)           this paragraph does not
limit the effect of Section 9.01(b);

 

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

 

(3)           the
Trustee shall not be liable with respect to any action it takes or omits to
take in good faith in accordance with this Indenture or a direction received by
it pursuant to Section 8.05.

 

This
Section 9.01(d) shall be in lieu of Sections 315(d)(1), 315(d)(2) and
315(d)(3) of the TIA and such Sections are hereby expressly excluded from this
Indenture as permitted by the TIA.

 

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

 

57

 

(f)            Every
provision of this Indenture that in any way relates to the Trustee is subject
to subsections (a), (b), (c), (d) and (e) of this Section 9.01.

 

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

 

(h)           The
Trustee shall not be liable for any delays occurring as a result of force
majeure.

 

Section 9.02           Rights
of Trustee.

 

(a)           Subject to
Section 9.01:

 

(1)           The Trustee may rely
conclusively and shall be protected in acting or refraining from acting upon
any document believed by it to be genuine and to have been signed or presented by
the proper person.  The Trustee need not
investigate any fact or matter stated in the document.

 

(2)           Before
the Trustee acts or refrains from acting, it may require an Officers’
Certificate or an Opinion of Counsel, which shall conform to
Section 12.04(b).  The Trustee shall
not be liable for any action it takes or omits to take in good faith in
reliance on such Officers’ Certificate or Opinion of Counsel.

 

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

 

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

 

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

 

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

 

58

 

(7)           The
Trustee shall not be bound to make any investigation into the facts or matters
stated in any resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture, note, other
evidence of indebtedness or other paper or document, but the Trustee, in its
discretion, may make such further inquiry or investigation into such facts or
matters as it may see fit, and, if the Trustee shall determine to make such
further inquiry or investigation, it shall be entitled to examine the books,
records and premises of the Company, personally or by agent or attorney at the
sole cost of the Company, and shall incur no liability or additional liability
of any kind by reason of such inquiry or investigation.

 

(8)           The
Trustee shall not be deemed to have notice or knowledge of any Default or Event
of Default, or Fundamental Change unless a Responsible Officer of the Trustee
has actual knowledge thereof or unless written notice of any event which is in
fact such a Default is received by the Trustee at the Corporate Trust Office,
and such notice references the Securities and this Indenture.  In the absence of receipt of such notice or
actual knowledge, the Trustee may conclusively assume that there is no Default,
Event of Default, or Fundamental Change.

 

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

 

Section 9.03           Individual
Rights of Trustee.  The Trustee in its individual or any other capacity
may become the owner or pledgee of Securities and may otherwise deal with the
Company or an Affiliate of the Company with the same rights it would have if it
were not Trustee.  Any Agent may do the
same with like rights.  However, the
Trustee is subject to Sections 9.10 and 9.11.

 

Section 9.04           Trustee’s
Disclaimer.  The Trustee makes no representation as to the validity or
adequacy of this Indenture or the Securities. 
It shall not be accountable for the Company’s use of the proceeds from
the Securities and it shall not be responsible for any statement in the
Securities other than its certificate of authentication.

 

Section 9.05           Notice
of Default or Events of Default.  If a Default or an Event of Default
occurs and is continuing and if it is known to a Responsible Officer of the
Trustee, the Trustee shall mail to each Holder of a Security notice of all
uncured Defaults or Events of Default known to it within 90 days after it
occurs or, if later, within 15 days after it becomes known to the Trustee.  However, the Trustee may withhold the notice
if and for so long as a committee of its Trust Officers in good faith
determines that withholding notice is in the interests of Holders of
Securities, except in the case of a Default or an Event of Default in payment
of the principal of, or premium, if any, or interest on any Security when due
or in the payment of any purchase obligation, or the Company’s failure to
convert Securities when obligated to convert them.  This Section 9.05 is in lieu of
section 315(b) of the TIA and such provision is expressly excluded from
this Indenture as permitted by the TIA.

 

59

 

Section 9.06           Reports
by Trustee to Holders.

 

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

 

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

 

Section 9.07           Compensation
and Indemnity.

 

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

 

(b)           The
Company shall indemnify and hold harmless the Trustee or any predecessor Trustee
(which for purposes of this Section 9.07 shall include its officers,
directors, employees and agents) for, and hold it harmless against, any and all
loss, liability or expense including taxes (other than franchise taxes and
taxes based upon, measured by or determined by the income of the Trustee),
incurred by it in connection with the acceptance or administration of its
duties under this Indenture or any action or failure to act as authorized or
within the discretion or rights or powers conferred upon the Trustee hereunder
including the reasonable costs and expenses of the Trustee and its counsel in
defending (including reasonable legal fees and expenses whether incurred before
trial, at trial, on appeal or in any bankruptcy or arbitration or other administrative
proceeding) itself against any claim or liability in connection with the
exercise or performance of any of its powers or duties hereunder.  The Trustee shall notify the Company promptly
of any claim asserted against the Trustee for which it may seek indemnity.  The Company need not pay for any settlement
effected without its prior written consent, which shall not be unreasonably
withheld.

 

(c)           The
Company need not reimburse the Trustee for any expense or indemnify it against
any loss or liability incurred by it resulting from its gross negligence,
willful misconduct or bad faith.

 

(d)           To
secure the Company’s payment obligations in this Section 9.07, the Trustee
shall have a senior claim to which the Securities are hereby made subordinate
on all money or property held or collected by the Trustee.  The obligations of the Company under this

 

60

 

Section 9.07 shall survive the
satisfaction and discharge of this Indenture or the resignation or removal of the
Trustee.

 

(e)           When
the Trustee incurs expenses or renders services after an Event of Default
specified in clause (7) or (8) of Section 8.01(a) occurs, the
expenses and the compensation for the services are intended to constitute
expenses of administration under any Bankruptcy Law.  The provisions of this Section shall survive
the termination of this Indenture.

 

Section 9.08           Replacement
of Trustee.

 

(a)           The Trustee may resign
by so notifying the Company.  The Holders
of a majority in aggregate principal amount of the Securities then outstanding
may remove the Trustee by so notifying the Trustee and the Company and may,
with the Company’s written consent, appoint a successor Trustee.  The Company may remove the Trustee at any
time, so long as no Default or Event of Default has occurred and is continuing,
and appoint a Successor Trustee in accordance with this Section 9.08.

 

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

 

(c)           If
a successor Trustee does not take office within 45 days after the retiring
Trustee resigns or is removed, the retiring Trustee, the Company or the Holders
of 10% in principal amount of the Securities then outstanding may petition any
court of competent jurisdiction for the appointment of a successor Trustee at
the expense of the Company.

 

(d)           If
the Trustee fails to comply with Section 9.10, any Holder may petition any
court of competent jurisdiction for the removal of the Trustee and the
appointment of a successor Trustee.

 

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

 

(f)            A
retiring Trustee shall not be liable for the acts or omissions of any successor
Trustee after its succession.

 

(g)           Notwithstanding
replacement of the Trustee pursuant to this Section 9.08, the Company’s
obligations under Section 9.07 shall continue for the benefit of the
retiring Trustee.

 

61

 

Section 9.09           Successor
Trustee by Merger, etc.  If the Trustee consolidates with, merges or
converts into, or transfers all or substantially all of its corporate trust
business (including the administration of this Indenture) to, another
corporation, the resulting, surviving or transferee corporation, without any
further act, shall be the successor Trustee; provided such transferee
corporation shall qualify and be eligible under Section 9.10.  Such successor Trustee shall promptly mail
notice of its succession to the Company and each Holder.

 

Section 9.10           Eligibility;
Disqualification.  The Trustee shall always satisfy the requirements
of paragraphs (1), (2) and (5) of TIA Section 310(a).  The Trustee (or its parent holding company)
shall have a combined capital and surplus of at least $50,000,000 as set forth
in its most recent published annual report of condition.  If at any time the Trustee shall cease to
satisfy any such requirements, it shall resign immediately in the manner and
with the effect specified in this Article 9.  The Trustee shall be subject to the provisions
of TIA Section 310(b).  Nothing
herein shall prevent the Trustee from filing with the SEC the application
referred to in the penultimate paragraph of TIA Section 310(b).

 

Section 9.11           Preferential
Collection of Claims against Company.  The Trustee shall comply with
TIA Section 311(a), excluding any creditor relationship listed in TIA
Section 311(b).  A Trustee who has
resigned or been removed shall be subject to TIA Section 311(a) to the
extent indicated therein.

 

ARTICLE 10
SATISFACTION AND DISCHARGE OF
INDENTURE

 

Section 10.01         Satisfaction
and Discharge of Indenture.

 

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

 

(A)          all Securities
theretofore authenticated and delivered (other than (i) Securities which
have been destroyed, lost or stolen and which have been replaced or paid as
provided in Section 2.07 and (ii) Securities for whose payment money
has theretofore been deposited in trust and thereafter repaid to the Company as
provided in Section 10.03) have been delivered to the Trustee for
cancellation; or

 

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

 

(i)    have become due and payable,
or

 

(ii)           will
become due and payable at the Final Maturity Date within one year;

 

62

 

provided in
the case of clause (B), that

 

(1)           the Company has
deposited with the Trustee or a Paying Agent (other than the Company or any of
its Affiliates) as trust funds in trust for the purpose of and in an amount
sufficient to pay and discharge all indebtedness related to such Securities not
theretofore delivered to the Trustee for cancellation, for principal and
interest to the date of such deposit (in the case of Securities which have
become due and payable) or to the Final Maturity Date, as the case may be;

 

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

 

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

 

(b)           Notwithstanding the
satisfaction and discharge of this Indenture, the obligations of the Company
with respect to the conversion privilege and the Conversion Rate of the
Securities pursuant to Article 4, the obligations of the Company to the
Trustee under Section 9.07 and, if money shall have been deposited with
the Trustee pursuant to clause (2) of Section 10.01(a), the
provisions of Sections 2.03, 2.04, 2.05, 2.06, 2.07, 2.12, 6.01 and 12.05,
Article 4, and this Article 10, shall survive until the Securities
have been paid in full.

 

Section 10.02         Application
of Trust Money.  Subject to the provisions of Section 10.03, the
Trustee or a Paying Agent shall hold in trust, for the benefit of the Holders,
all money deposited with it pursuant to Section 10.01 and shall apply the
deposited money in accordance with this Indenture and the Securities to the
payment of the principal of and interest on the Securities.

 

Section 10.03         Repayment
to Company.

 

(a)           The
Trustee and each Paying Agent shall promptly pay to the Company upon request
any excess money (1) deposited with them pursuant to Section 10.01
and (2) held by them at any time.

 

(b)           The Trustee and each
Paying Agent shall, subject to applicable abandonment property laws, pay to the
Company upon request any money held by them for the payment of principal or
interest that remains unclaimed for two years after a right to such money has
matured; provided, however, that the Trustee or such Paying Agent, before being
required to make any such payment, may at the expense of the Company cause to
be mailed to each Holder entitled to such money notice that such money remains
unclaimed and that after a date specified therein, which shall be at least
30 days from the date of such mailing, any unclaimed balance of such money
then remaining will be repaid to the Company. 
After payment to the Company, Holders entitled to money must look to the
Company for payment as general creditors unless an applicable abandoned
property law designates another person.

 

63

 

Section 10.04         Reinstatement. 
If the Trustee or any Paying Agent is unable to apply any money in accordance
with Section 10.02 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, then the Company’s obligations under
this Indenture and the Securities shall be revived and reinstated as though no
deposit had occurred pursuant to Section 10.01 until such time as the
Trustee or such Paying Agent is permitted to apply all such money in accordance
with Section 10.02; provided, however, that if the Company has made any
payment of the principal of or interest on any Securities because of the
reinstatement of its obligations, the Company shall be subrogated to the rights
of the Holders of such Securities to receive any such payment from the money
held by the Trustee or such Paying Agent.

 

ARTICLE 11
AMENDMENTS; SUPPLEMENTS AND
WAIVERS

 

Section 11.01         Without
Consent of Holders.

 

(a)           The Company and the
Trustee may amend or supplement this Indenture or the Securities without notice
to or consent of any Holder of a Security for the purpose of:

 

(1)           evidencing a successor
to the Company and the assumption by that successor of the Company’s
obligations under this Indenture and the Securities;

 

(2)           adding
to the Company’s covenants for the benefit of the Holders or surrendering any
right or power conferred upon the Company;

 

(3)           securing
the Company’s obligations in respect of the Securities;

 

(4)           evidencing
and providing for the acceptance of the appointment of a successor trustee in
accordance with Article 9;

 

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

 

(6)           curing
any ambiguity, omission, inconsistency or correcting or supplementing any
defective provision contained in this Indenture; or

 

(7)           making
any other changes to the Indenture that does not adversely affect the interests
of the Holders in any material respect.

 

Section 11.02         With
Consent of Holders.

 

(a)           The Company and the
Trustee may amend or supplement this Indenture or the Securities with the
written consent of the Holders of at least a majority in aggregate principal
amount

 

64

 

of the
Securities then outstanding.  However,
subject to Section 11.04, without the written consent of each Holder
affected, an amendment, supplement or waiver may not:

 

(1)           alter the manner of
calculation or rate of accrual of interest on any Security or change the time
of payment of any installment of interest on, or any Liquidated Damages with
respect to, any Security;

 

(2)           make
any of the Securities payable in money or securities other than that stated in
the Securities;

 

(3)           change
the stated maturity of any Security;

 

(4)           reduce
the principal amount or Fundamental Change Repurchase Price (including any Make
Whole Premium payable) (as applicable) with respect to any of the Securities,
or any Liquidated Damages, or the amount payable upon purchase pursuant to
Article 3, with respect to any Security;

 

(5)           make
any change that adversely affects the conversion rights of a Holder in any
material respect other than as provided herein;

 

(6)           make
any change that adversely affects the rights of Holders to require the Company
to purchase Securities at the option of Holders;

 

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

 

(8)           change
the currency of payment of principal of, or interest on, the Securities;

 

(9)           except
as otherwise permitted or contemplated by Section 4.11, adversely affect
the conversion rights of the Securities; or

 

(10)         change
the percentage in aggregate principal amount of Securities outstanding
necessary to modify or amend this Indenture or to waive any past Default.

 

(b)           Without limiting the
provisions of Section 11.02(a) hereof, the Holders of a majority in
principal amount of the Securities then outstanding may, on behalf of all the
Holders of all Securities, (i) waive compliance by the Company with the
restrictive provisions of this Indenture, and (ii) waive any past Default
of Event of Default under this Indenture and its consequences, except an
uncured failure to pay when due the principal amount, accrued and unpaid
interest, accrued and unpaid Liquidated Damages or Fundamental Change
Repurchase Price, or in the obligation to deliver Common Stock, if any and as
applicable, or in respect of any provision which under this Indenture cannot be
modified or amended without the consent of the Holder of each outstanding
Security affected.

 

65

 

(c)           After
an amendment, supplement or waiver under this Section 11.02 becomes
effective, the Company shall promptly mail to the Holders affected thereby a
notice briefly describing the amendment, supplement or waiver.  Any failure of the Company to mail such
notice, or any defect therein, shall not, however, in any way impair or affect
the validity of any such amendment, supplement or waiver.

 

Section 11.03         Compliance
with Trust Indenture Act.  Every amendment to or supplement of this
Indenture or the Securities shall comply with the TIA as in effect at the date
of such amendment or supplement.

 

Section 11.04         Revocation
and Effect of Consents.

 

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

 

(b)           After
an amendment, supplement or waiver becomes effective, it shall bind every
Holder of a Security.

 

Section 11.05         Notation
on or Exchange of Securities.  If an amendment, supplement or waiver
changes the terms of a Security, the Trustee may require the Holder of the
Security to deliver it to the Trustee. 
The Trustee may place an appropriate notation on the Security about the
changed terms and return it to the Holder. 
Alternatively, if the Company or the Trustee so determines, the Company
in exchange for the Security shall issue and the Trustee shall authenticate a
new Security that reflects the changed terms.

 

Section 11.06         Trustee
to Sign Amendments, etc.  The Trustee shall sign any amendment or
supplemental indenture authorized pursuant to this Article 11 if the
amendment or supplemental indenture does not adversely affect the rights,
duties, liabilities or immunities of the Trustee.  If it does, the Trustee may, in its sole
discretion, but need not sign it.  In
signing or refusing to sign such amendment or supplemental indenture, the
Trustee shall be entitled to receive and, subject to Section 9.01, shall
be fully protected in relying upon, an Opinion of Counsel stating that such
amendment or supplemental indenture is authorized or permitted by this
Indenture.  The Company may not sign an
amendment or supplemental indenture until the Board of Directors approves it.

 

Section 11.07         Effect
of Supplemental Indentures.  Upon the execution of any supplemental
indenture under this Article 11, this Indenture shall be modified in
accordance therewith, and such supplemental indenture shall form a part of this
Indenture for all purposes; and every Holder of Securities theretofore or
thereafter authenticated and delivered hereunder shall be bound thereby.

 

66

 

ARTICLE 12
MISCELLANEOUS

 

Section 12.01         Trust
Indenture Act Controls.  If any provision of this Indenture limits,
qualifies or conflicts with the duties imposed by any of Sections 310 to
317, inclusive, of the TIA through operation of Section 318(c) thereof,
such imposed duties shall control.

 

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

 

If to the Company, to:

 

FEI Company

5350 NE Dawson Creek Drive

Hillsboro, Oregon 97124

Attention: Chief Financial Officer

Fax: (503) 726-7570

 

with a copy to:

 

Wilson Sonsini Goodrich & Rosati,
Professional Corporation

650 Page Mill Road

Palo Alto, California 94304

Attention: N. Anthony Jeffries

Fax: (650) 493-6811

 

if to the Trustee, to:

 

The Bank of New York Trust Company, N.A.

One Embarcadero Center, Suite 2050

San Francisco, California 94111

Attention: Corporate Trust Department

(FEI Company        %
Convertible Subordinated Notes due 2013)

 

Such notices
or communications shall be effective when received.

 

The Company or
the Trustee by notice to the other may designate additional or different
addresses for subsequent notices or communications.  Notice to or from the Trustee shall not be
via electronic mail.  Notices to the
Trustee via facsimile shall promptly be followed by the original written
notice.

 

67

 

Any notice or
communication mailed to a Holder of a Security shall be mailed by first-class
mail or delivered by an overnight delivery service to it at its address shown
on the register kept by the Primary Registrar.

 

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

 

If the Company
mails any notice to a Holder of a Security, it shall mail a copy to the Trustee
and each Registrar, Paying Agent and Conversion Agent.

 

Section 12.03         Communications
by Holders with other Holders.  Holders of Securities may communicate
pursuant to TIA Section 312(b) with other Holders of Securities with
respect to their rights under this Indenture or the Securities.  The Company, the Trustee, the Registrar and
any other person shall have the protection of TIA Section 312(c).

 

Section 12.04         Certificate
and Opinion as to Conditions Precedent.

 

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

 

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

 

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

 

(b)           Each Officers’
Certificate and Opinion of Counsel with respect to compliance with a condition
or covenant provided for in this Indenture shall include:

 

(1)           a statement that the
person making such certificate or opinion has read such covenant or condition;

 

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

 

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

 

68

 

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

 

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

 

Section 12.05         Record
Date for Vote or Consent of Holders of Securities.  The Company (or,
in the event deposits have been made pursuant to Section 10.01, the
Trustee) may set a record date for purposes of determining the identity of
Holders entitled to vote or consent to any action by vote or consent authorized
or permitted under this Indenture, which record date shall not be more than
30 days prior to the date of the commencement of solicitation of such
action.  Notwithstanding the provisions
of Section 11.04, if a record date is fixed, those persons who were
Holders of Securities at the close of business on such record date (or their
duly designated proxies), and only those persons, shall be entitled to take
such action by vote or consent or to revoke any vote or consent previously
given, whether or not such persons continue to be Holders after such record
date.

 

Section 12.06         Rules
by Trustee, Paying Agent, Registrar and Conversion Agent.  The Trustee
may make reasonable rules (not inconsistent with the terms of this Indenture)
for action by or at a meeting of Holders. 
Any Registrar, Paying Agent or Conversion Agent may make reasonable
rules for its functions.

 

Section 12.07         Legal
Holidays.  A “Legal Holiday” is a Saturday, Sunday or a day on which
state or federally chartered banking institutions in New York, New York or Los
Angeles, California are authorized or obligated to close.  If a payment date is a Legal Holiday, payment
shall be made on the next succeeding day that is not a Legal Holiday, and no
interest shall accrue for the intervening period.  If a Regular Record Date is a Legal Holiday,
the record date shall not be affected.

 

Section 12.08         Governing
Law.  This Indenture and the Securities shall be governed by, and construed
in accordance with, the laws of the State of New York.

 

Section 12.09         No
Adverse Interpretation of other Agreements.  This Indenture may not be
used to interpret another indenture, loan or debt agreement of the Company or a
Subsidiary of the Company.  Any such
indenture, loan or debt agreement may not be used to interpret this Indenture.

 

Section 12.10         No
Recourse against Others.  All liability described in paragraph 17
of the Securities of any director, officer, employee or shareholder, as such,
of the Company hereby is waived and released by each of the Holders.

 

Section 12.11         No
Security Interest Created.  Nothing in this Indenture or in the
Securities, express or implied, shall be construed to constitute a security
interest under the Uniform Commercial Code or similar legislation, now in
effect or hereafter enacted and made effective, in any jurisdiction.

 

Section 12.12         Successors. 
All agreements of the Company in this Indenture and the Securities shall bind
its successor.  All agreements of the Trustee
in this Indenture shall bind its successor.

 

69

 

Section 12.13         Multiple
Counterparts.  The parties may sign multiple counterparts of this
Indenture.  Each signed counterpart shall
be deemed an original, but all of them together represent the same agreement.

 

Section 12.14         Separability. 
If any provisions in this Indenture or in the Securities shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.

 

Section 12.15         Table
of Contents, Headings, etc.  The table of contents, cross-reference
sheet and headings of the Articles and Sections of this Indenture have been
inserted for convenience of reference only, are not to be considered a part
hereof, and shall in no way modify or restrict any of the terms or provisions
hereof.

 

 

[SIGNATURE PAGE FOLLOWS]

 

70

 

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

 

	
   

  	
  FEI COMPANY

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Raymond
  A. Link

  	
   

  
	
   

  	
  Name:
  Raymond A. Link

  
	
   

  	
  Title: EVP,
  CFO and CEO

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  THE BANK OF
  NEW YORK TRUST 

  
	
   

  	
  COMPANY,
  N.A.

  
	
   

  	
  a national
  banking association duly organized and existing under the laws of the United
  States of America in successor interest to BNY Western Trust Company, as
  Trustee

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Sandee
  Parks

  	
   

  
	
   

  	
  Name: Sandee
  Parks

  
	
   

  	
  Title: Vice
  President

  

 

 

EXHIBIT A

 

[FORM OF FACE OF SECURITY]

 

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

 

THIS SECURITY
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 UNDER THE SECURITIES ACT.(2)

 

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

 

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

 

A-1

 

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

 

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

 

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

 

A-2

 

FEI COMPANY

 

2.875% Convertible Subordinated Notes due 2013

 

No. [            ]                                                                                                                                         CUSIP:  [                      ]

 

FEI Company,
an Oregon corporation, promises to pay to Cede & Co. or registered
assigns the principal amount of                                                   
($                    )
on June 1, 2013.

 

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

 

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

 

Dated:

 

 

SIGNATURE PAGE FOLLOWS

 

A-3

 

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

 

	
   

  	
   

  	
   

  	
  FEI COMPANY

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   Name:

  
	
   

  	
   

  	
   

  	
   

  	
   Title:

  

 

 

Dated:

 

Trustee’s Certificate of Authentication:

This is one of the Securities referred to

in the within-mentioned Indenture.

 

	
  THE BANK OF
  NEW YORK TRUST COMPANY, N.A.

  	
   

  
	
  as Trustee

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Authorized
  Signatory

  	
   

  	
   

  

 

A-4

 

[FORM OF REVERSE SIDE OF SECURITY]

 

FEI COMPANY

2.875% CONVERTIBLE SUBORDINATED NOTES DUE 2013

 

1.             INTEREST

 

FEI Company,
an Oregon corporation (the “Company”, which term shall include any successor
corporation under the Indenture hereinafter referred to), promises to pay
interest on the principal amount of this Security at the rate of 2.875% per
annum.  The Company shall pay interest
semiannually on June 1 and December 1 of each year (each an “Interest
Payment Date”), commencing December 1, 2006.  Each payment of interest will include
interest accrued through the day before the relevant Interest Payment Date (or
purchase date, as the case may be).  Cash
interest will be computed on the basis of a 360-day year comprised of twelve 30-day
months.  Any payment required to be made
on a day that is not a Business Day shall be made on the next succeeding
Business Day.  Any reference herein to
interest accrued or payable as of any date shall include any Liquidated Damages
accrued or payable on such date as provided in the Registration Rights
Agreement.

 

No sinking
fund is provided for the Securities.

 

2.             METHOD OF PAYMENT

 

The Company
shall pay interest on this Security (except defaulted interest) to the person
who is the Holder of this Security at the close of business on May 15 or
November 15, as the case may be, (each, a “Regular Record Date”) next
preceding the related Interest Payment Date. 
The Holder must surrender this Security to a Paying Agent to collect
payment of principal.  The Company will
pay principal and interest in money of the United States that at the time of
payment is legal tender for payment of public and private debts.  The Company may pay principal and interest in
respect of any Certificated Security by check or wire payable in such money;
provided, however, that a Holder with an aggregate principal amount in excess
of $2,000,000 will be paid by wire transfer in immediately available funds at
the election of such Holder if such Holder has provided wire transfer
instructions to the Trustee at least 10 Business Days prior to the Payment
Date.  The Company may mail an interest
check to the Holder’s registered address. 
Notwithstanding the foregoing, so long as this Security is registered in
the name of a Depositary or its nominee, all payments hereon shall be made by
wire transfer of immediately available funds to the account of the Depositary
or its nominee.

 

Any wire
transfer instructions received by the Trustee will remain in effect until
revoked by the Holder.

 

A-5

 

3.             PAYING
AGENT, REGISTRAR AND CONVERSION AGENT

 

Initially, The Bank of New York Trust
Company, N.A. (the “Trustee”, which term shall include any successor trustee
under the Indenture hereinafter referred to) will act as Paying Agent,
Registrar and Conversion Agent.  The
Company may change any Paying Agent, Registrar or Conversion Agent without
notice to the Holder.  The Company or any
of its Subsidiaries may, subject to certain limitations set forth in the
Indenture, act as Paying Agent or Registrar.

 

4.             INDENTURE,
LIMITATIONS

 

This Security
is one of a duly authorized issue of Securities of the Company designated as
its 2.875% Convertible Subordinated Notes Due 2013 (the “Securities”), issued
under an Indenture dated as of May 19, 2006 (together with any supplemental
indentures thereto, the “Indenture”), between the Company and the Trustee.  The terms of this Security include those
stated in the Indenture and those required by or made part of the Indenture by
reference to the Trust Indenture Act of 1939, as amended, as in effect on the
date of the Indenture.  This Security is
subject to all such terms, and the Holder of this security is referred to the
Indenture and said Act for a statement of them. 
Capitalized terms not defined herein have the meaning ascribed to such
terms in the Indenture.

 

The Securities
are unsecured, subordinated obligations of the Company limited to $100,000,000
aggregate principal amount ($115,000,000 aggregate principal amount if the
Initial Purchasers exercise their over-allotment option in full, except as
provided for in the Indenture).  The
Indenture does not limit other debt of the Company, secured or unsecured.

 

5.             PURCHASE OF
SECURITIES AT OPTION OF HOLDER UPON A FUNDAMENTAL CHANGE

 

If a
Fundamental Change occurs prior to the Final Maturity Date, at the option of
the Holder and subject to the terms and conditions of the Indenture, the
Company shall become obligated to purchase for cash, subject to certain
exceptions described in the Indenture all or any part specified by the Holder
(so long as the principal amount of such part is $1,000 or an integral multiple
of $1,000) of the Securities held by such Holder on a date specified by the
Company that is not less than 30 nor more than 45 days after the date of
the Fundamental Change Company Notice, at a purchase price equal to 100% of the
principal amount thereof together with accrued and unpaid interest, if any, and
accrued and unpaid Liquidated Damages, if any, to, but excluding, the
Fundamental Change Repurchase Date.  The
Holder shall have the right to withdraw any Fundamental Change Repurchase Notice
(in whole or in a portion thereof that is $1,000 or an integral multiple of
$1,000) at any time prior to the close of business on the Business Day next
preceding the Fundamental Change Repurchase Date by delivering a written notice
of withdrawal to the Paying Agent in accordance with the terms of the
Indenture.

 

A-6

 

6.             CONVERSION

 

Subject to and upon compliance with the
provisions of the Indenture, a Holder may surrender for conversion any Security
that is $1,000 principal amount or integral multiples thereof.

 

7.             SUBORDINATION

 

To the extent provided in the Indenture, the
Securities are subordinated to Senior Indebtedness, as defined in the
Indenture, of the Company.  To the extent
provided in the Indenture, Senior Indebtedness must be paid in full before the
Securities may be paid.  The Company
agrees, and each Security holder by accepting a Security agrees, to the
subordination provisions contained in the Indenture and authorizes the Trustee
to give it effect and appoints the Trustee as attorney-in-fact for such
purpose.

 

8.             DENOMINATIONS,
TRANSFER, EXCHANGE

 

The Securities
are in registered form, without coupons, in denominations of $1,000 principal
amount and integral multiples of $1,000 principal amount.  A Holder may register the transfer of or
exchange Securities in accordance with the Indenture.  The Registrar may require a Holder, among
other things, to furnish appropriate endorsements and transfer documents and to
pay any taxes or other governmental charges that may be imposed in relation
thereto by law or permitted by the Indenture.

 

9.             PERSONS DEEMED OWNERS

 

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

 

10.           UNCLAIMED MONEY

 

If money for
the payment of principal or interest remains unclaimed for two years, the
Trustee and any Paying Agent will pay the money back to the Company at its
written request, subject to applicable unclaimed property law and the
provisions of the Indenture.  After that,
Holders entitled to money must look to the Company for payment as general
creditors unless an applicable abandoned property law designates another
person.

 

11.           AMENDMENT, SUPPLEMENT
AND WAIVER

 

Subject to
certain exceptions, the Indenture or the Securities may be amended or supplemented
with the consent of the Holders of at least a majority in aggregate principal
amount of the Securities then outstanding, and an existing Default or Event of
Default and its consequence or compliance with any provision of the Indenture
or the Securities may be waived in a particular instance with the consent of
the Holders of a majority in aggregate principal amount of the Securities then
outstanding.  Without the consent of or
notice to any Holder, the Company and the Trustee may amend or supplement the
Indenture or the Securities as provided in the Indenture.

 

A-7

 

12.           SUCCESSOR ENTITY

 

When a
successor corporation assumes all the obligations of its predecessor under the
Securities and the Indenture in accordance with the terms and conditions of the
Indenture, the predecessor corporation (except in certain circumstances
specified in the Indenture) shall be released from those obligations.

 

13.           DEFAULTS AND REMEDIES

 

Under the
Indenture, an Event of Default shall occur if:

 

(1)           the Company shall fail
to pay when due the Principal or any Fundamental Change Repurchase Price of any
Security, including any Make-Whole Premium, when the same becomes due and
payable whether at the Final Maturity Date, upon repurchase, acceleration or
otherwise; or

 

(2)           the
Company shall fail to pay an installment of interest or Liquidated Damages, if
any, on any of the Securities, which failure continues for 30 days after
the date when due; or

 

(3)           the
Company shall fail to deliver when due all shares of Common Stock, if any,
deliverable upon conversion of the Securities, which failure continues for
15 days; or

 

(4)           the
Company shall fail to perform or observe (or obtain a waiver with respect to)
any other term, covenant or agreement contained in the Securities or the
Indenture for a period of 60 days after receipt by the Company of a Notice
of Default specifying such failure; or

 

(5)           the
Company shall fail to pay any principal by the end of any applicable grace
period or resulting in acceleration of other Indebtedness of the Company for
borrowed money where the aggregate principal amount with respect to which the
default or acceleration has occurred exceeds $30 million and such
acceleration has not been rescinded or annulled or such Indebtedness repaid
within a period of 30 days after receipt of a Notice of Default, provided
that if any such default is cured, waived, rescinded or annulled, then the
Event of Default by reason thereof would be deemed not to have occurred; or

 

(6)           the
Company pursuant to or within the meaning of any Bankruptcy Law:

 

(A)          commences as a debtor a
voluntary case or proceeding; or

 

(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 Receiver of it or for all or substantially all of its
property; or

 

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

 

A-8

 

(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 Receiver; or

 

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

 

(A)          grants relief against
the Company in an involuntary case or proceeding or adjudicates the Company
insolvent or bankrupt;

 

(B)           appoints
a Receiver of the Company or for all or substantially all of the property of
the Company; or

 

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

 

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

 

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

 

Notwithstanding
the above, no Event of Default under clauses (4) or (5) above shall occur
until the Trustee notifies the Company in writing upon the written direction of
the Holders of at least 25% in aggregate principal amount of the Securities
then outstanding, or the Holders of at least 25% in aggregate principal amount of
the Securities then outstanding notify the Company and the Trustee in writing,
of the Default (a “Notice of Default”), and the Company does not cure the
Default within the time specified in clause (4) or (5), as applicable,
after receipt of such notice.

 

If an Event of
Default (other than an Event of Default specified in clause (6) or (7)
above) occurs and is continuing with respect to the Company, the Trustee may,
by notice to the Company, and shall upon the written direction of the Holders
of at least 25% in aggregate principal amount of the Securities then
outstanding, or the Holders of at least 25% in aggregate principal amount of
the Securities then outstanding may, by notice to the Company and the Trustee,
declare the principal amount and accrued and unpaid interest, if any, and
accrued and unpaid Liquidated Damages, if any, through the date of declaration
on all the Securities to be immediately due and payable.  Upon such a declaration, such principal
amount and such accrued and unpaid interest, if any, and such accrued and
unpaid Liquidated Damages, if any, shall be due and payable immediately.  If an Event of Default specified in
clauses (6) or (7) occurs in respect of the Company and is continuing, the
principal amount and accrued but unpaid interest, if any, and accrued and
unpaid Liquidated Damages, if any, on all the Securities shall become and be
immediately due and payable without any declaration or other act on the part of
the Trustee or any Holders of Securities. 
The Holders of a majority in aggregate principal amount of the
Securities then outstanding by notice to the Trustee may rescind an
acceleration and its consequences if (a) all existing Events of Default,
other than the

 

A-9

 

nonpayment of the principal of
the Securities which have become due solely by such declaration of
acceleration, have been cured or waived; (b) to the extent the payment of
such interest is lawful, interest (calculated at the rate per annum borne by
the Securities) on overdue installments of interest and overdue principal,
which has become due otherwise than by such declaration of acceleration, has
been paid; (c) the rescission would not conflict with any judgment or
decree of a court of competent jurisdiction; and (d) all payments due to
the Trustee and any predecessor Trustee under the Indenture have been
made.  No such rescission shall affect
any subsequent Default or impair any right consequent thereto.  Holders may not enforce the Indenture or the
Securities except as provided in the Indenture. 
The Trustee may require indemnity satisfactory to it before it enforces
the Indenture or the Securities.  Subject
to certain limitations, Holders of a majority in aggregate principal amount of
the Securities then outstanding may direct the Trustee in its exercise of any
trust or power.  The Trustee may withhold
from Holders notice of any continuing Default (except a Default in payment of
principal or interest) if and so long as it determines that withholding notice
is in their interests.  The Company is
required to file periodic certificates with the Trustee as to the Company’s
compliance with the Indenture and knowledge or status of any Default.

 

14.           TRUSTEE
DEALINGS WITH THE COMPANY

 

The Bank of
New York Trust Company, N.A., the initial Trustee under the Indenture, in its
individual or any other capacity, may make loans to, accept deposits from and
perform services for the Company or an Affiliate of the Company, and may
otherwise deal with the Company or an Affiliate of the Company, as if it were
not the Trustee.

 

15.           NO RECOURSE AGAINST
OTHERS

 

A director,
officer, employee or shareholder, as such, of the Company shall not have any
liability for any obligations of the Company under the Securities or the
Indenture nor for any claim based on, in respect of or by reason of such
obligations or their creation.  The
Holder of this Security by accepting this Security waives and releases all such
liability.  The waiver and release are
part of the consideration for the issuance of this Security.

 

16.           AUTHENTICATION

 

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

 

17.           ABBREVIATIONS AND
DEFINITIONS

 

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

 

All terms
defined in the Indenture and used in this Security but not specifically defined
herein are defined in the Indenture and are used herein as so defined.

 

A-10

 

18.           INDENTURE TO CONTROL;
GOVERNING LAW

 

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

 

The Company
will furnish to any Holder, upon written request and without charge, a copy of
the Indenture.  Requests may be made to:
FEI Company, 5350 NE Dawson Creek Drive, Hillsboro, Oregon 97124, Attention:
Chief Financial Officer (Fax: 503-726-7570).

 

A-11

 

ASSIGNMENT FORM

 

To assign this
Security, fill in the form below:

 

I or we assign
and transfer this Security to

 

 

	
   

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

  

 

	
   

  
	
   

  
	
   

  
	
   

  
	
   

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

  

 

and
irrevocably appoint

 

	
   

  

 

agent to
transfer this Security on the books of the Company.  The agent may substitute another to act for
him or her.

 

	
   

  	
   

  	
  Your
  Signature

  
	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (Sign
  exactly as your name appears on the other

  
	
   

  	
   

  	
  side of this
  Security)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  * Signature
  guaranteed by:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
					

 

*         The
signature must be guaranteed by an institution which is a member of one of the
following recognized signature guaranty programs: (i) the Securities
Transfer Agent Medallion Program (STAMP); (ii) the New York Stock Exchange
Medallion Program (MSP); (iii) the Stock Exchange Medallion Program
(SEMP); or (iv) such other guaranty program acceptable to the Trustee.

 

A-12

 

 

CONVERSION NOTICE

 

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

 

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

 

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

 

 

	
   

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

  

 

	
   

  
	
   

  
	
   

  
	
   

  
	
   

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

  

 

 

	
   

  	
   

  	
  Your
  Signature

  
	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (Sign
  exactly as your name appears on the other

  
	
   

  	
   

  	
  side of this
  Security)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  * Signature
  guaranteed by:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
					

 

*         The
signature must be guaranteed by an institution which is a member of one of the
following recognized signature guaranty programs: (i) the Securities
Transfer Agent Medallion Program (STAMP); (ii) the New York Stock Exchange
Medallion Program (MSP); (iii) the Stock Exchange Medallion Program
(SEMP); or (iv) such other guaranty program acceptable to the Trustee.

 

A-13

 

FUNDAMENTAL CHANGE REPURCHASE NOTICE

 

To:  FEI Company

 

The
undersigned registered owner of this Security hereby irrevocably acknowledges
receipt of a notice from FEI Company (the “Company”) as to the occurrence of a
Fundamental Change with respect to the Company and requests and instructs the
Company to purchase the entire principal amount of this Security, or the
portion thereof (which is $1,000 or an integral multiple thereof) below
designated, in accordance with the terms of the Security and the Indenture
referred to in the Security at the Fundamental Change Repurchase Price,
together with accrued and unpaid interest and Liquidated Damages, if any, to,
but excluding, such date, to the registered Holder hereof.

 

	
  Dated:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Signature
  (s)

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Signature(s)
  must be guaranteed by a qualified

  
	
   

  	
   

  	
   

  	
  guarantor
  institution with membership in an

  
	
   

  	
   

  	
   

  	
  approved
  signature guarantee program pursuant

  
	
   

  	
   

  	
   

  	
  to
  Rule 17Ad-15 under the Securities Exchange

  
	
   

  	
   

  	
   

  	
  Act of 1934.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Signature
  Guaranty

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Principal
  amount to be redeemed

  	
   

  	
   

  	
   

  
	
  (in an
  integral multiple of $1,000,

  	
   

  	
   

  	
   

  
	
  if less than
  all):

  	
   

  	
   

  	
   

  

 

NOTICE: The signature to the
foregoing Election must correspond to the Name as written upon the face of this
Security in every particular, without any alteration or change whatsoever.

 

A-14

 

SCHEDULE OF EXCHANGES OF SECURITIES(1)

 

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

 

	
  Principal Amount of this

  Global Note Following

  Such Decrease Date of

  Exchange (or Increase)

  	
   

  	
  Authorized Signatory of

  Securities Custodian

  	
   

  	
  Amount of Decrease in

  Principal Amount of this

  Global Note

  	
   

  	
  Amount of Increase in

  Principal Amount of this

  Global Note

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

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

 

A-15

 

CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR
REGISTRATION OF

TRANSFER OF RESTRICTED SECURITIES

 

Re:          2.875%
Convertible Subordinated Notes Due 2013 (the “Securities”) of FEI Company

 

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

 

	
  o

  	
   

  	
  book-entry
  or

  	
  o

  	
  definitive
  form by                               
  (the “Transferor”).

  

 

The Transferor
has requested a Registrar or the Trustee to exchange or register the transfer
of such Securities.

 

In connection
with such request and in respect of each such Security, the Transferor does
hereby certify that the Transferor is familiar with transfer restrictions
relating to the Securities as provided in Section 2.12 of the Indenture
dated as of May 19, 2006 between FEI Company and The Bank of New York Trust
Company, N.A., as trustee (the “Indenture”), and the transfer of such Security
is being made pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the “Securities Act”) (check applicable
box) or the transfer or exchange, as the case may be, of such Security does not
require registration under the Securities Act because (check applicable box):

 

 

	
  o

  	
   

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

  
	
   

  	
   

  	
   

  
	
  o

  	
   

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

  
	
   

  	
   

  	
   

  
	
  o

  	
   

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

  
	
   

  	
   

  	
   

  
	
  o

  	
   

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

  
	
   

  	
   

  	
   

  
	
  o

  	
   

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

  
	
   

  	
   

  	
   

  
	
  o

  	
   

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

  
	
   

  	
   

  	
   

  
	
  o

  	
   

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

  

 

A-16

 

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

 

	
  Date:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (Insert Name of Transferor)

  

 

A-17Exhibit 4.3

 

Execution
Copy

 

FEI COMPANY

(an Oregon corporation)

 

$100,000,000

2.875% Convertible Subordinated Notes due 2013

 

PURCHASE AGREEMENT

 

May 16, 2006

 

Merrill Lynch & Co.

Merrill Lynch, Pierce, Fenner & Smith

Incorporated

4 World Financial Center

New York, New York 10080

as Representative of the
several Initial Purchasers

 

Ladies
and Gentlemen:

 

FEI Company, an Oregon
corporation (the ”Company”),
confirms its agreement with Merrill Lynch & Co., Merrill Lynch, Pierce,
Fenner & Smith Incorporated (“Merrill Lynch”),
and each of the other initial purchasers named in Schedule I hereto
(collectively, the ”Initial Purchasers,”
which term shall also include any initial purchaser substituted as provided in
Section 11 hereof), for whom Merrill Lynch is acting as representative (in
such capacity, the “Representative”),
with respect to the issue and sale by the Company and the purchase by the
Initial Purchasers, acting severally and not jointly, of the respective
principal amounts set forth in said Schedule I of $100,000,000
aggregate principal amount of the Company’s 2.875% Convertible Subordinated
Notes due 2013 (the ”Firm Notes”),
and with respect to the grant by the Company to the Initial Purchasers, acting
severally and not jointly, of the option described in Section 2(b) hereof
(the ”Option”) to purchase all or any
part of an additional $15,000,000 principal
amount of the Company’s 2.875% Convertible Subordinated Notes due 2013
(the ”Optional Notes” and, together with
the Firm Notes, the ”Notes”).

 

The Notes will be
convertible into fully paid, nonassessable shares of common stock of the
Company, no par value per share (the ”Common Stock”),
on the terms, and subject to the conditions, set forth in the Indenture (as
defined below). As used herein, “Conversion Shares”
means the shares of Common Stock into which the Notes are convertible, and each
Conversion Share will have attached thereto the right to purchase one
one-thousandth (0.001) of a share of the Series A Participating Preferred
Stock of the Company (each, a ”Right”),
issuable by the Company pursuant to the Preferred Stock Rights Agreement by and between the Company and Mellon
Investor Services LLC, as rights agent, dated as of July 21, 2005. The Notes will be issued pursuant to an
indenture (the ”Indenture”) to
be dated as of the First Delivery Date (as defined in Section 2(a)),
between the Company and The Bank of New York Trust Company, a California state
chartered banking corporation (the ”Trustee”).

 

1

 

The Company understands that
the Initial Purchasers propose to make an offering of the Notes on the terms
and in the manner set forth herein and agrees that the Initial Purchasers may
resell, subject to the conditions set forth herein, all or a portion of the
Notes to purchasers (the ”Subsequent Purchasers”)
at any time after this agreement (the ”Agreement”)
has been executed and delivered. The Notes are to be sold to the Initial
Purchasers and subsequently offered and sold by the Initial Purchasers without
being registered under the Securities Act of 1933, as amended (the ”1933 Act”), in reliance upon exemptions therefrom. Pursuant
to the terms of the Notes and the Indenture, investors that acquire the Notes
may only resell or otherwise transfer such Notes if such Notes are hereafter
registered under the 1933 Act or if an exemption from the registration
requirements of the 1933 Act is available (including the exemption afforded by
Rule 144A (“Rule 144A”) of the rules and regulations promulgated under the 1933 Act
by the Securities and Exchange Commission (the ”Commission”)).

 

The Company (a) has prepared and delivered to each
Initial Purchaser an electronic copy of a preliminary offering memorandum dated
May 15, 2006, and a pricing term sheet attached hereto as Schedule II,
which includes the pricing terms and other information with respect to the
Notes and other matters not included in the Final Offering Memorandum (the “Pricing Term Sheet”) setting forth the terms of the Notes
omitted in the preliminary offering memorandum and (b) has prepared and will
deliver to each Initial Purchaser, no later than the second day after the date
hereof, copies of a final offering memorandum dated May 16, 2006 (the ”Final Offering Memorandum”), each for use by such Initial Purchaser
in connection with its solicitation of purchases of, or offering of, the Notes.
As used herein, the term “Offering Memorandum”
means, with respect to any date or time referred to in this Agreement, the most
recent offering memorandum (whether the Preliminary Offering Memorandum or the
Final Offering Memorandum, or any amendment or supplement to either such
document), including annexes and exhibits thereto and any documents
incorporated therein by reference, which in each case has been prepared and delivered
by the Company to the Initial Purchasers in connection with their solicitation
of purchases of, or offering of, the Notes.

 

All references in this
Agreement to financial statements and schedules and other information which is “contained,” “included” or “stated” in the Offering Memorandum (or other references of
like import) shall be deemed to include all such financial statements and
schedules and other information which are incorporated by reference in the
Offering Memorandum; and all references in this Agreement to amendments or
supplements to the Offering Memorandum shall be deemed to mean and include the
filing of any document under the Securities Exchange Act of 1934 (the ”1934 Act”) which is incorporated by reference in the
Offering Memorandum.

 

Holders of the Notes
(including the Initial Purchasers and their direct and indirect transferees)
will be entitled to the benefits of a Registration Rights Agreement, to be
dated as of the First Delivery Date and to be entered into by and between the Company
and the Initial Purchasers (the ”Registration Rights
Agreement”), pursuant to which the Company will agree to file with
the Commission a shelf registration statement (the ”Registration
Statement”) covering the resale of the Notes and the Conversion Shares
under the 1933 Act, and to use its commercially reasonable efforts to cause the
Registration Statement to be declared effective.

 

The preliminary offering
memorandum dated May 15, 2006, as amended and supplemented immediately prior to
the Applicable Time (as defined below), including any documents filed under the
1934 Act prior to the Applicable Time and incorporated by reference therein, is
referred to herein as the “Preliminary Offering
Memorandum,” and the Preliminary

 

2

 

Offering Memorandum together with the Pricing Term Sheet and any of the
documents listed on Schedule III hereto are collectively referred to herein as
the “Disclosure Package.”  “Applicable Time”
means 7:00 a.m. (Eastern time) on May 16, 2006 or such other time as agreed by
the Company and the Initial Purchasers.

 

This Agreement, the
Indenture, the Notes and the Registration Rights Agreement are referred to
herein collectively as the “Operative Documents.”

 

1.             Representations,
Warranties and Agreements of the Company. The Company represents and warrants
to each Initial Purchaser as of the date hereof and as of each Delivery Date
(as defined in Section 2(b)), and agrees with each Initial Purchaser, as
follows:

 

(a)           Disclosure Package and Final
Offering Memorandum. At the
Applicable Time, the Disclosure Package did not, and at any Deliver Date (as
defined below), the Disclosure Package and the Final Offering Memorandum will
not, include an untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided
that this representation, warranty and agreement shall not apply to statements
in or omissions from the Disclosure Package and the Final Offering Memorandum
made in reliance upon and in conformity with written information furnished to
the Company by any Initial Purchaser for use in the Offering Memorandum.

 

(b)           Incorporated Documents. The Offering Memorandum as delivered from
time to time shall incorporate by reference the most recent Annual Report of
the Company on Form 10-K filed with the Commission and each Quarterly Report of
the Company on Form 10-Q and each Current Report of the Company on Form 8-K
filed with the Commission since the end of the fiscal year to which such Annual
Report relates. The documents incorporated or deemed to be incorporated by
reference in the Offering Memorandum at the time they were or hereafter are
filed with the Commission complied and will comply in all material respects
with the requirements of the 1934 Act and the rules and regulations of the
Commission thereunder (the ”1934 Act Regulations”),
and, when read together with the other information in the Disclosure Package at
the Applicable Time, and the Disclosure Package and the Final Offering
Memorandum at the Closing Time, did not and will not include an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading.

 

(c)           Independent Accountants. Deloitte & Touche LLP, who certified
the financial statements and supporting schedules, if any, included or
incorporated by reference in the Disclosure Package and the Final Offering Memorandum
are independent public accountants with respect to the Company and its
subsidiaries within the meaning of Regulation S-X promulgated under the 1933
Act.

 

(d)           Financial Statements. The financial statements, together with the
related schedules and notes, included, or incorporated by reference, in the
Disclosure Package and the Final Offering Memorandum present fairly the
financial position of the Company and its consolidated subsidiaries at the
dates indicated and the statement of operations, stockholders’ equity and cash
flows of the Company and its consolidated subsidiaries for the periods
specified; said financial statements have been prepared in conformity with
generally accepted accounting principles (“GAAP”) applied
on a consistent basis throughout the periods involved. The supporting
schedules, if any, included, or incorporated by reference, in the Disclosure
Package

 

3

 

and
the Final Offering Memorandum present fairly in accordance with GAAP the information
required to be stated therein. The summary consolidated financial information
included in the Disclosure Package and the Final Offering Memorandum present
fairly the information shown therein and have been compiled on a basis
consistent with that of the audited financial statements included in the
Disclosure Package and the Final Offering Memorandum. All disclosures included
or incorporated by reference in the Disclosure Package and the Final Offering
Memorandum regarding “non-GAAP financial measures” (as such term is defined by
the rules and regulations of the Commission) comply in all material respects
with Regulation G of the 1934 Act and Item 10 of Regulation S-K under the 1933
Act, to the extent applicable. There are no material weaknesses or significant
deficiencies in the Company’s process for recording and reporting bookings and
backlog of orders, and disclosure related to the Company’s bookings and backlog
of orders included or incorporated by reference in the Disclosure Package and
the Final Offering Memorandum is true, correct and complete in all material
respects.

 

(e)           Material Adverse Change. Since the respective dates as of which
information is given in the Disclosure Package and the Final Offering
Memorandum, except as otherwise stated therein, (i) there has been no
material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, whether or not arising in the ordinary
course of business (a ”Material Adverse Effect”),
(ii) there have been no transactions entered into by the Company or any of
its subsidiaries, other than those in the ordinary course of business, which
are material with respect to the Company and its subsidiaries considered as one
enterprise, (iii) there has not been any change in the capital stock or
long-term debt of the Company or any of its “significant subsidiaries” (as
defined in Rule 1-02(w) of Regulation S-X of the 1933 Act) (each, a ”Significant Subsidiary”) and (iv) there has been no
dividend or distribution of any kind declared, paid or made by the Company on
any class of its capital stock.

 

(f)            Good Standing of the Company. The Company has been duly organized and is
validly existing as a corporation in good standing under the laws of the State
of Oregon and has corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the Disclosure Package
and the Final Offering Memorandum and to enter into and perform its obligations
under this Agreement; and the Company is duly qualified as a foreign
corporation to transact business and is in good standing under the laws of the
State of California, which is the only other jurisdiction in which it owns or
leases properties or conducts any business so as to require such qualification,
other than such jurisdictions in which the failure so to qualify or be in good
standing would not result in a Material Adverse Effect.

 

(g)           Good Standing of Significant Subsidiaries. Each Significant Subsidiary of the Company
has been duly organized and is validly existing in good standing under the laws
of the jurisdiction of its organization, has all requisite power and authority
to own, lease and operate its properties and to conduct its business as
described in the Disclosure Package and the Final Offering Memorandum and is
duly qualified to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by reason of the ownership
or leasing of property or the conduct of business, except where the failure so
to qualify or to be in good standing would not result in a Material Adverse
Effect; all of the issued and outstanding shares of capital stock of each
Significant Subsidiary have been duly authorized and validly issued, are fully
paid and non-assessable and are owned by the Company, directly or through
subsidiaries, free and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equity; none

 

4

 

of
the outstanding shares of capital stock of the Significant Subsidiaries were
issued in violation of any preemptive or similar rights of any securityholder
of such Significant Subsidiary. The subsidiaries of the Company other than the
Significant Subsidiaries, considered in the aggregate as a single subsidiary,
do not constitute a ”significant subsidiary” as defined in Rule 1-02
of Regulation S-X.

 

(h)           Capitalization. The authorized, issued and outstanding capital
stock of the Company is as set forth in the Disclosure Package and the Final
Offering Memorandum in the column entitled ”Actual” under the caption “Capitalization”
(except for subsequent issuances, if any, pursuant to this Agreement, pursuant
to reservations, agreements, employee benefit plans referred to in the
Disclosure Package and the Final Offering Memorandum or pursuant to the
exercise of options referred to in the Disclosure Package and the Final
Offering Memorandum). The shares of issued and outstanding capital stock of the
Company have been duly authorized and validly issued and are fully paid and
non-assessable; none of the holders of outstanding shares of capital stock of
the Company and no other person has or will have any preemptive or other rights
to purchase, subscribe for or otherwise acquire (i) the Conversion Shares or
any rights to such shares, or any Rights attached thereto, (other than those
granted by the holders of the Notes) or (ii) as a result of or in connection
with the transactions contemplated by the Operative Documents, any other
capital stock of the Company or rights thereto; the capital stock of the
Company conforms to the description thereof contained in the Disclosure Package
and the Final Offering Memorandum and such description conforms to the rights
set forth in the instruments defining the same; the Conversion Shares have been
duly authorized and reserved for issuance upon conversion of the Notes by all
necessary corporate action of the Company; all Conversion Shares, when so
issued in accordance with the Third Amended and Restated Articles of
Incorporation of the Company and delivered upon such conversion in accordance
with the terms of the Indenture and the Notes, will be duly authorized and
validly issued, fully paid and nonassessable and free and clear of all liens,
encumbrances, equities or claims and will conform to the description of the
Common Stock contained in the Disclosure Package and the Final Offering
Memorandum.

 

(i)            Certain Disclosure Package and
the Final Offering Memorandum Statements. The statements set forth in
the Disclosure Package and the Final Offering Memorandum under the captions “Description
of the Notes” and “Description of Capital Stock”, insofar as they purport to
constitute summaries of the terms of the Notes and the Common Stock,
respectively, and under the caption “Certain United States Federal Income Tax
Consequences,” insofar as it purports to describe the provisions of the laws
and documents referred to therein, fairly and accurately present the matters
described therein in all material respects.

 

(j)            Authorization of the Operative
Documents. The Company has
all requisite corporate right, power and authority to enter into this
Agreement, the Indenture and the Registration Rights Agreement and to perform
its obligations hereunder and thereunder and the transactions contemplated
hereby and thereby have been duly authorized by the Company. This Agreement has
been and, as of the First Delivery Date, the Indenture and the Registration
Rights Agreement will have been, duly authorized, executed and delivered by the
Company and upon such execution by the Company (assuming the due authorization,
execution and delivery of such agreements by the other parties thereto) this
Agreement, the Indenture and the Registration Rights Agreement will constitute
valid and binding agreements of the Company, enforceable against the Company in
accordance with their terms, except as the enforcement thereof may be limited
by

 

5

 

bankruptcy,
insolvency (including, without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium or similar laws affecting enforcement of
creditors’ rights generally and except as enforcement thereof is subject to
general principles of equity, including specific performance (regardless of
whether enforcement is considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing, and subject to the limitations
on rights to indemnification and contribution under applicable law or equitable
principles; and the Indenture and Registration Rights Agreement conform in all
material respects to the descriptions thereof contained in the Disclosure
Package and the Final Offering Memorandum.

 

(k)           Authorization of the Notes. The Company has all necessary corporate
right, power and authority to execute, issue and deliver the Notes and perform
its obligations thereunder; the Notes have been duly authorized by the Company
and, when authenticated, issued and delivered in the manner provided for in the
Indenture and delivered against payment of the Purchase Price therefor as
provided in this Agreement (assuming due authentication of the Notes by the
Trustee), will constitute valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms, except as the
enforcement thereof may be limited by bankruptcy, insolvency (including,
without limitation, all laws relating to fraudulent transfers), reorganization,
moratorium or similar laws affecting enforcement of creditors’ rights generally
and except as enforcement thereof is subject to general principles of equity,
including specific performance (regardless of whether enforcement is considered
in a proceeding in equity or at law) and an implied covenant of good faith and
fair dealing, and subject to the limitations on rights to indemnification and
contribution under applicable law or equitable principles, and will be in the
form contemplated by, and entitled to the benefits of, the Indenture; and the
Notes conform in all material respects to the description of the Common Stock
contained in the Disclosure Package and the Final Offering Memorandum.

 

(l)            Defaults and Conflicts. Neither the Company nor any of its
subsidiaries is in violation of its charter or bylaws or in default in the
performance or observance of any obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, deed of trust, loan or credit
agreement, note, lease or other agreement or instrument to which the Company or
any of its subsidiaries is a party or by which any of them may be bound, or to
which any of the property or assets of the Company or any of its subsidiaries
is subject (collectively, ”Agreements and Instruments”),
except for such defaults that would not result in a Material Adverse Effect;
and the execution, delivery and performance of the Operative Documents by the
Company and the issuance of the Notes and Conversion Shares and the
consummation of the transactions contemplated herein and in the Disclosure
Package and the Final Offering Memorandum (including the issuance and sale of
the Notes and the use of the proceeds from the sale of the Notes as described
in the Disclosure Package and the Final Offering Memorandum under the
caption ”Use of Proceeds”) and compliance by the Company with its
obligations hereunder have been duly authorized by all necessary corporate
action and do not and will not, whether with or without the giving of notice or
passage of time or both, conflict with or constitute a breach of, or default or
Repayment Event (as defined below) under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets of
the Company or any of its subsidiaries pursuant to, the Agreements and
Instruments except for such conflicts, breaches or defaults or Repayment Events
or liens, charges or encumbrances that, singly or in the aggregate, would not
result in a Material Adverse Effect, nor will such action result in any violation
of the provisions of the charter or bylaws of the Company or any of its
subsidiaries or any applicable law, statute, rule, regulation, judgment, order,
writ or decree of any government, government

 

6

 

instrumentality
or court, domestic or foreign, having jurisdiction over the Company or any of
its subsidiaries or any of their assets, properties or operations. As used
herein, a ”Repayment Event” means any event
or condition which gives the holder of any note, debenture or other evidence of
indebtedness (or any person acting on such holder’s behalf) the right to
require the repurchase, redemption or repayment of all or a portion of such
indebtedness by the Company or any of its subsidiaries.

 

(m)          Labor Disputes. No material labor dispute with the
employees of the Company or any of its subsidiaries exists or, to the knowledge
of the Company, is imminent, and the Company is not aware of any existing or
imminent labor disturbance by the employees of any of its or any of its
subsidiaries’ principal suppliers, manufacturers, customers or contractors,
which, in either case, would result in a Material Adverse Effect.

 

(n)           Legal Proceedings. There is no action, suit, proceeding,
inquiry or investigation before or brought by any court or governmental agency
or body, domestic or foreign, now pending, or, to the knowledge of the Company,
threatened, against or affecting the Company or any of its subsidiaries which
might result in a Material Adverse Effect, or which might materially and
adversely affect the properties or assets of the Company or any of its
subsidiaries or the consummation of the transactions contemplated by this
Agreement or the performance by the Company of its obligations hereunder. The
aggregate of all pending legal or governmental proceedings to which the Company
or any of its subsidiaries is a party or of which any of their respective
property or assets is the subject which are not described in the Disclosure
Package and the Final Offering Memorandum, including ordinary routine
litigation incidental to the business, would not reasonably be expected to
result in a Material Adverse Effect.

 

(o)           Stabilization or Manipulation. Neither the Company nor any affiliate, as
such term is defined in Rule 501(b) under the 1933 Act (each, an ”Affiliate”), of the Company has taken, directly or
indirectly, any action which is designed to or which has constituted or which
would be reasonably expected to cause or result in unlawful stabilization or
manipulation of the price of any security of the Company to facilitate the sale
or resale of the Notes.

 

(p)           Intellectual Property. Except where such failure to own or possess
would not reasonably be expected to have a Material Adverse Effect, to the
Company’s knowledge after due inquiry, the Company and its subsidiaries own or
possess, or can acquire on reasonable terms, adequate patents, patent rights,
licenses, inventions, copyrights, know-how (including, without limitation,
trade secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures), trademarks, service marks,
trade names, URLs or other intellectual property (collectively, ”Intellectual Property”) necessary to carry
on the business now operated by them. No current or former shareholder,
officer, director or employee of the Company or its subsidiaries has any claim,
right (whether or not exercisable) or interest in any Intellectual Property of
the Company or its subsidiaries. The Company and its subsidiaries have taken
all reasonable steps in accordance with normal industry practice to protect
their rights in confidential and proprietary information. Neither the Company
nor any of its subsidiaries has received any notice or is otherwise aware of
any currently unresolved infringement of or conflict with asserted rights of
others with respect to any Intellectual Property or of any facts or
circumstances which would render any Intellectual Property invalid or
inadequate to protect the interest of the Company or any of its subsidiaries
therein, and which infringement or conflict (if

 

7

 

the
subject of any unfavorable decision, ruling or finding) or invalidity or
inadequacy, singly or in the aggregate, would result in a Material Adverse
Effect.

 

(q)           Licenses and Permits. The Company and its subsidiaries possess
such permits, licenses, approvals, consents and other authorizations
(collectively, ”Governmental Licenses”)
issued by the appropriate federal, state, local or foreign regulatory agencies
or bodies necessary to conduct the business now operated by them, except where
the failure so to possess would not, singly or in the aggregate, result in a
Material Adverse Effect; the Company and its subsidiaries are in compliance
with the terms and conditions of all such Governmental Licenses, except where
the failure so to comply would not, singly or in the aggregate, result in a
Material Adverse Effect; all of the Governmental Licenses are valid and in full
force and effect, except where the invalidity of such Governmental Licenses or
the failure of such Governmental Licenses to be in full force and effect would
not, singly or in the aggregate, result in a Material Adverse Effect; and
neither the Company nor any of its subsidiaries has received any notice of
proceedings relating to the revocation or modification of any such Governmental
Licenses which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would result in a Material Adverse Effect.

 

(r)            Real Property. The Company and its subsidiaries have good
and marketable title to all real property owned by the Company and its
subsidiaries and good title to all other properties owned by them, in each
case, free and clear of all mortgages, pledges, liens, security interests,
claims, restrictions or encumbrances of any kind except such as do not,
singly or in the aggregate, materially affect the value of such property and do
not interfere with the use made and proposed to be made of such property by the
Company or any of its subsidiaries; and all of the leases and subleases
material to the business of the Company and its subsidiaries, considered as one
enterprise, and under which the Company or any of its subsidiaries holds
properties described in the Disclosure Package and the Final Offering
Memorandum, are in full force and effect, and neither the Company nor any of
its subsidiaries has any notice of any material claim of any sort that has been
asserted by anyone adverse to the rights of the Company or any of its
subsidiaries under any of the leases or subleases mentioned above, or affecting
or questioning the rights of the Company or any subsidiary thereof to the
continued possession of the leased or subleased premises under any such lease
or sublease.

 

(s)           Environmental Laws. Except as described in the Disclosure
Package and the Final Offering Memorandum and except for such matters as would
not, singly or in the aggregate, result in a Material Adverse Effect, (i)
neither the Company nor any of its subsidiaries is in violation of any federal,
state, local or foreign statute, law, rule, regulation, ordinance, code, policy
or rule of common law or any judicial or administrative interpretation thereof,
including any judicial or administrative order, consent, decree or judgment,
relating to pollution or protection of human health, the environment
(including, without limitation, ambient air, surface water, groundwater, land
surface or subsurface strata) or wildlife, including, without limitation, laws
and regulations relating to the release or threatened release of chemicals,
pollutants, contaminants, wastes, toxic substances, hazardous substances,
petroleum or petroleum products, asbestos-containing materials or mold
(collectively, ”Hazardous Materials”)
or to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Hazardous Materials (collectively, ”Environmental Laws”), (ii) the Company and its
subsidiaries have all permits, authorizations and approvals required under any applicable
Environmental Laws and are each in compliance with their requirements,
(iii) there are no

 

8

 

pending
or threatened administrative, regulatory or judicial actions, suits, demands,
demand letters, claims, liens, notices of noncompliance or violation,
investigation or proceedings relating to any Environmental Law against the
Company or any of its subsidiaries and (iv) there are no events or
circumstances that would reasonably be expected to form the basis of an order
for clean-up or remediation, or an action, suit or proceeding by any private
party or governmental body or agency, against or affecting the Company or any
of its subsidiaries relating to Hazardous Materials or Environmental Laws.

 

(t)            Investment Company Act. The Company is not, and upon the issuance
and sale of the Notes as herein contemplated and the application of the net
proceeds therefrom as described in the Disclosure Package and the Final
Offering Memorandum will not be, an “investment company” or an entity “controlled”
by an “investment company” as such terms are defined in the Investment Company
Act of 1940, as amended.

 

(u)           Offering Integration. Within the preceding six months, neither
the Company nor any other person acting on behalf of the Company has offered or
sold to any person any Notes, or any securities of the same class as the Notes,
other than (i) shares of stock offered or sold to directors, consultants or
employees or upon redemption or exchange of special shares of the Company’s
subsidiaries, which, in each case would not be integrated with the offering
contemplated hereby and (ii) Notes offered or sold to the Initial Purchasers
hereunder.

 

(v)           Federal Reserve System
Regulations. None of the
transactions contemplated by this Agreement (including, without limitation, the
use of the proceeds from the, sale of the Notes) will violate or result in a
violation of Section 7 of the 1934 Act, or any regulation promulgated
thereunder, including, without limitation, Regulations T, U, and X of the Board
of Governors of the Federal Reserve System.

 

(w)          Rule 144A Eligibility. The Notes are eligible for resale pursuant
to Rule 144A and, when they are issued and delivered pursuant to this
Agreement, will not be, of the same class (within the meaning of Rule 144A
under the 1933 Act) as securities listed on a national securities exchange
registered under Section 6 of the 1934 Act, or quoted in a U.S. automated
interdealer quotation system.

 

(x)            General Solicitation. None of the Company, its Affiliates or any
person acting on its or any of their behalf (other than the Initial Purchasers,
as to whom the Company makes no representation) has, directly or through an
agent, engaged or will engage, in connection with the offering of the offered
Notes, in any form of general solicitation or general advertising within the
meaning of Rule 502(c) under the 1933 Act.

 

(y)           1933 Act Registration. Subject to compliance by the Initial
Purchasers with the representations and warranties set forth in Section 2
and the procedures set forth in Section 6 hereof, it is not necessary in
connection with the offer, sale and delivery of the Notes to the Initial
Purchasers and the offer, initial resale and delivery of the Notes by the
Initial Purchasers in the manner contemplated by this Agreement, the Indenture,
the Registration Rights Agreement and the Disclosure Package and the Final
Offering Memorandum, to register the Notes or the Conversion Shares under the
1933 Act (except as may be required under the 1933 Act and the rules and
regulations promulgated thereunder in connection with the registration of the
Notes and the Conversion Shares pursuant to the Registration Rights Agreement)
or to qualify the Indenture

 

9

 

under
the Trust Indenture Act of 1939, as amended (except as may be required in
connection with the registration of the Notes pursuant to the Registration
Rights Agreement).

 

(z)            1934 Act Reporting. The Company is subject to the reporting
requirements of Section 13 or Section 15(d) of the 1934 Act. The
Company has timely and properly filed with the Commission all reports and other
documents required to have been filed by it with the Commission pursuant to the
1934 Act and the 1934 Act Regulations (together, the “1934 Act
Reports”).

 

(aa)         Employee Retirement Income
Security Act. Except as such
matters would not, singly or in the aggregate, result in a Material Adverse
Effect, the Company is in compliance in all material respects with all
presently applicable provisions of the Employee Retirement Income Security Act
of 1974, as amended, including the regulations and published interpretations
thereunder (“ERISA”); no “reportable event” (as
defined in ERISA) has occurred with respect to any “pension plan” (as defined in
ERISA) for which the Company would have any liability; the Company has not
incurred and does not expect to incur liability under (i) Title IV of
ERISA with respect to termination of, or withdrawal from, any “pension plan” or
(ii) Sections 412 or 4971 of the Internal Revenue Code of 1986, as
amended, including the regulations and published interpretations thereunder
(the ”Code”); and each “pension plan”
for which the Company would have any liability that is intended to be qualified
under Section 401(a) of the Code is so qualified in all material respects
and nothing has occurred, whether by action or by failure to act, which would
cause the loss of such qualification.

 

(bb)         Insurance. The Company and its subsidiaries carry or
are entitled to the benefits of insurance, with financially sound and reputable
insurers, in such amounts and covering such risks as is generally maintained by
companies of established repute engaged in the same or similar business, and
all such insurance is in full force and effect. Neither of the Company nor any
subsidiary has been denied any insurance coverage which it has sought or for
which it has applied.

 

(cc)         Tax Matters. All United States federal income tax
returns of the Company and its subsidiaries required by law to be filed have
been filed, except insofar as the failure to file such returns would not result
in a Material Adverse Effect, and all taxes shown by such returns or otherwise
assessed, which are due and payable, have been paid, except assessments against
which appeals have been or will be promptly taken and as to which adequate
reserves have been provided. The Company and its subsidiaries have filed all
other tax returns that are required to have been filed by them pursuant to
applicable foreign, state, local or other law except insofar as the failure to
file such returns would not result in a Material Adverse Effect, and has paid
all taxes due pursuant to such returns or pursuant to any assessment received
by the Company and its subsidiaries, except for such taxes, if any, as are
being contested in good faith and as to which adequate reserves have been
provided. The charges, accruals and reserves on the books of the Company in
respect of any income and corporation tax liability for any years not finally
determined are adequate to meet any assessments or re-assessments for
additional income tax for any years not finally determined, except to the
extent of any inadequacy that would not result in a Material Adverse Effect.

 

(dd)         Accounting Controls and
Disclosure Controls and Procedures. The Company and each of its subsidiaries maintain a system of
disclosure controls and procedures (as defined in

 

10

 

Rule
13a-15(e) and 15d-15(e) of the 1934 Act) sufficient to provide reasonable
assurances that information required to be disclosed in reports that the
Company files or submits under the 1934 Act is recorded, processed, summarized
and reported within the time periods specified in the Commissions rules,
regulations and forms. Except as described in the Disclosure Package and the
Final Offering Memorandum, since the end of the Company’s most recent audited
fiscal year, there has been (i) no material weakness in the Company’s internal
control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) of
the 1934 Act) (whether or not remediated) and (ii) no change in the Company’s
internal control over financial reporting that has materially affected, or is
reasonably likely to materially affect, the Company’s internal control over
financial reporting.

 

(ee)         Preemptive Rights. There are no contracts, agreements or
understandings between the Company and any person granting such person the
right (other than rights which have been waived or satisfied) to require the
Company to file a registration statement under the 1933 Act with respect to any
securities of the Company owned or to be owned by such person or to require the
Company to include such securities in any securities being registered pursuant
to any registration statement filed by the Company under the 1933 Act.

 

(ff)           Foreign Transactions Reporting
Act. The operations of the
Company are and have been conducted at all times in compliance with applicable
financial recordkeeping and reporting requirements of the Currency and Foreign
Transactions Reporting Act of 1970, as amended, the money laundering statutes
of all jurisdictions, the rules and regulations thereunder and any related or
similar rules, regulations or guidelines, issued, administered or enforced by
any governmental agency (collectively, the “Money
Laundering Laws”) and no action, suit or proceeding by or before any
court or governmental agency, authority or body or any arbitrator involving the
Company with respect to the Money Laundering Laws is pending or, to the best
knowledge of the Company, threatened.

 

(gg)         Foreign Corrupt Practices Act. Neither the Company nor, to the knowledge
of the Company, any director, officer, agent, employee, affiliate or other
person acting on behalf of the Company or any of its subsidiaries is aware of
or has taken any action, directly or indirectly, that would result in a
violation by such persons of the Foreign Corrupt Practices Act of 1977, as
amended, and the rules and regulations thereunder (the ”FCPA”), including, without limitation, making use of the
mails or any means or instrumentality of interstate commerce corruptly in
furtherance of an offer, payment, promise to pay or authorization of the
payment of any money, or other property, gift, promise to give, or
authorization of the giving of anything of value to any “foreign official” (as
such term is defined in the FCPA) or any foreign political party or official
thereof or any candidate for foreign political office, in contravention of the
FCPA and the Company and, to the knowledge of the Company, its affiliates have
conducted their businesses in compliance with the FCPA and have instituted and
maintain policies and procedures designed to ensure, and which are reasonably
expected to continue to ensure, continued compliance therewith.

 

(hh)         Sarbanes-Oxley Act. There is and has been no failure on the
part of the Company or any of the Company’s directors or officers, in their
capacities as such, to comply in all material respects with any provision of
the Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated in
connection therewith (the ”Sarbanes-Oxley Act”),
including Section 402 related to loans and Sections 302 and 906 related to
certifications.

 

11

 

(ii)           Foreign Assets Control. Neither the Company nor, to the knowledge
of the Company, any director, officer, agent, employee, affiliate or person
acting on behalf of the Company is currently subject to any U.S. sanctions
administered by the Office of Foreign Assets Control of the U.S. Treasury
Department (the ”OFAC”); and the
Company will not directly or indirectly use the proceeds of the offering, or
lend, contribute or otherwise make available such proceeds to any subsidiary,
joint venture partner or other person or entity, for the purpose of financing
the activities of any person currently subject to any U.S. sanctions
administered by OFAC.

 

Any certificate signed by
any officer of the Company or any of its subsidiaries delivered to the
Representative or to counsel for the Initial Purchasers shall be deemed a
representation and warranty by the Company to each Initial Purchaser as to the
matters covered thereby.

 

2.             Purchase, Sale and Delivery of Notes.

 

(a)           Subject to the terms and conditions, and in
reliance upon the representations and warranties, herein set forth, the Company
agrees to sell to each Initial Purchaser, severally and not jointly, and each
Initial Purchaser agrees, severally and not jointly, to purchase from the
Company, at a purchase price of 97.5% of the principal amount thereof
(the ”Purchase Price”), the principal
amount of Firm Notes set forth opposite such Initial Purchaser’s name in Schedule I
hereto (or such number increased as set forth in Section 11). Payment of
the Purchase Price and delivery of certificates for the Firm Notes shall be
made at the office of Latham & Watkins LLP, 505 Montgomery Street,
Suite 2000, San Francisco, California, or at such other place as shall be
agreed upon by the Representative and the Company, at 10:00 a.m. (Eastern
time) on May 19, 2006, or such later date as the Representative shall
designate, which date and time may be postponed by agreement between the
Representative and the Company or as provided in Section 11 (such date and
time of delivery and payment for the Firm Notes being herein called the ”First Delivery Date”). Delivery of the Firm Notes shall be
made to the Initial Purchasers against payment of the Purchase Price by the
Initial Purchasers. Payment for the Firm Notes shall be effected either by wire
transfer of immediately available funds to a bank account, the account number
and the ABA number for such bank to be provided by the Company to the
Representative at least two business days in advance of the First Delivery
Date, or by such other manner of payment as may be agreed in writing by the
Company and the Representative. It is understood that each Initial Purchaser
has authorized the Representative, for its account, to accept delivery of,
issue a receipt for, and make payment of the Purchase Price for, the Firm Notes
that it has agreed to purchase. Merrill Lynch, individually and not as
representative of the Initial Purchasers, may (but shall not be obligated to)
make payment of the Purchase Price for the Firm Notes to be purchased by any
Initial Purchaser whose funds have not been received by the First Delivery
Date, but such payment shall not relieve such Initial Purchaser from its
obligations hereunder.

 

(b)           Subject to the terms and conditions and in
reliance upon the representations and warranties herein set forth, the Company
hereby grants the Option to the Initial Purchasers to purchase, severally and
not jointly, the Optional Notes at the same price as the Initial Purchasers
shall pay for the Firm Notes and the principal amount of the Optional Notes to be
sold to each Initial Purchaser shall be that principal amount which bears the
same ratio to the aggregate principal amount of Optional Notes being purchased
as the principal amount of Firm Notes set forth opposite the name of such
Initial Purchaser in Schedule I hereto (or such number increased as
set forth in Section 11). The Option may be exercised only to cover
over-allotments in the sale

 

12

 

of
the Firm Notes by the Initial Purchasers. The Option may be exercised once in
whole or in part at any time not more than 30 days subsequent to the date
of this Agreement upon notice in writing or by facsimile by the Representative
to the Company setting forth the amount (which shall be an integral multiple of
$1,000) of Optional Notes as to which the Initial Purchasers are exercising the
Option.

 

The date for payment of the Purchase Price for, and
delivery of certificates for the Optional Notes, being herein referred to as
an ”Optional Delivery Date,” which may be the
First Delivery Date (the First Delivery Date and the Optional Delivery Date, if
any, being sometimes referred to as a ”Delivery
Date”), shall be determined by the Representative but shall not be
later than five full business days after written notice of election to purchase
Optional Notes is given. Delivery of the Optional Notes shall be made to the
Initial Purchasers against payment of the Purchase Price by the Initial
Purchasers. Payment for the Optional Notes shall be effected either by wire
transfer of immediately available funds to a bank account, the account number
and the ABA number for such bank to be provided by the Company to the
Representative at least two business days in advance of the Optional Delivery
Date, or by such other manner of payment as may be agreed in writing by the
Company and the Representative. It is understood that each Initial Purchaser
has authorized the Representative, for its account, to accept delivery of,
issue a receipt for, and make payment of the Purchase Price for, the Optional
Notes that it has agreed to purchase. Merrill Lynch, individually and not as
representative of the Initial Purchasers, may (but shall not be obligated to)
make payment of the Purchase Price for the Optional Notes to be purchased by
any Initial Purchaser whose funds have not been received by the Optional
Delivery Date, but such payment shall not relieve such Initial Purchaser from
its obligations hereunder.

 

(c)           The Company will deliver against payment of
the Purchase Price the Notes initially sold to qualified institutional buyers (“QIBs”), as defined in Rule 144A under the 1933 Act (“Rule 144A”) in the form of one or more permanent global
certificates (the ”Global Notes”),
registered in the name of Cede & Co., as nominee for The Depository
Trust Company (“DTC”). Beneficial interests in the
Notes initially sold to QIBs will be shown on, and transfers thereof will be
effected only through, records maintained in book-entry form by DTC and its
participants.

 

3.             Further
Agreements of the Company. The Company further agrees with each Initial
Purchaser as follows:

 

(a)           Prior to the earlier of nine months from the
date of this Agreement or the completion of the distribution of the Notes by
the Initial Purchasers, the Company, as promptly as possible, will furnish to
each Initial Purchaser and to Latham & Watkins LLP, counsel to the
Initial Purchasers, without charge, such number of copies of the Final Offering
Memorandum and any amendments and supplements thereto and documents
incorporated by reference therein in each case as soon as available and in such
quantities as such Initial Purchaser may reasonably request. The Company will
pay the expenses of printing and distributing to the Initial Purchasers all
such documents.

 

(b)           The Company will immediately notify each
Initial Purchaser, and confirm such notice in writing, of (i) any filing
made by the Company of information relating to the offering of the Notes with
any securities exchange or any other regulatory body in the United States or
any other jurisdiction, and (ii) prior to the completion of the placement
of the Notes by the Initial Purchasers as evidenced promptly by a notice in
writing from the Representative to the Company,

 

13

 

any
material changes in or affecting the condition, financial or otherwise, or the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise which (A) make any statement in
the Disclosure Package and the Final Offering Memorandum false or misleading or
(B) are not disclosed in the Offering Memorandum. In such event or if
during such time any event shall occur or condition exist as a result of which
it is necessary, in the reasonable opinion of any of the Company, its counsel,
the Initial Purchasers or counsel for the Initial Purchasers, to amend or
supplement the Offering Memorandum in order that the Offering Memorandum not
include any untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein not misleading in the
light of the circumstances then existing, the Company will forthwith amend or
supplement the Offering Memorandum by preparing and furnishing to each Initial
Purchaser an amendment or amendments of, or a supplement or supplements to, the
Offering Memorandum (in form and substance satisfactory in the reasonable
opinion of counsel for the Initial Purchasers) so that, as so amended or
supplemented, the Offering Memorandum will not include an untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances existing at the time it
is delivered to a Subsequent Purchaser, not misleading.

 

(c)           Prior to the completion of the distribution
of the Notes, the Company will advise each Initial Purchaser promptly of any
proposal to amend or supplement the Final Offering Memorandum and will not
effect such amendment or supplement without the consent of the Representative,
which consent shall not be unreasonably withheld. Neither the consent of the
Initial Purchasers, nor the Initial Purchasers’ delivery of any such amendment
or supplement, shall constitute a waiver of any of the conditions set forth in
Section 5 hereof. If at any time prior to the completion of the placement
of the Notes by the Initial Purchaser, the Company has issued or shall have
issued any written communication, which would be deemed an “issuer free writing
prospectus” as defined in Rule 433 of the 1933 Act Regulations if the placement
of the Notes contemplated by this Agreement were conducted as a public offering
made pursuant to a registration statement filed with the Commission under the
1933 Act (a “Supplemental Offering Document”),
and there occurred or occurs an event or development as a result of which such
Supplemental Offering Document conflicted or would conflict with the
information contained in the Disclosure Package or the Final Offering
Memorandum or included or would include an untrue statement of a material fact
or omitted or would omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances prevailing at that
subsequent time, not misleading, the Company will promptly notify the Initial
Purchasers and will promptly amend or supplement, at its own expense, such
Supplemental Offering Document to eliminate or correct such conflict, untrue
statement or omission.

 

(d)           The Company will arrange, if necessary, to
qualify the Notes and the Conversion Shares for offering and sale by the
Initial Purchasers under the applicable securities laws of such states and
other jurisdictions as the Initial Purchasers may designate and will maintain
such qualifications in effect as long as required for the sale of the Notes and
the Conversion Shares; provided, however, that the Company shall not be obligated to file any
general consent to service of process or to qualify as a foreign corporation or
as a dealer in securities in any jurisdiction in which it is not so qualified
or to subject itself to taxation in respect of doing business in any
jurisdiction in which it is not otherwise so subject.

 

14

 

(e)           The Company will cooperate with the Initial
Purchasers and use its commercially reasonable efforts to permit the offered
Notes to be eligible for clearance and settlement through the facilities of
DTC.

 

(f)            The Company will use the net proceeds
received by it from the sale of the Notes in the manner specified in the
Disclosure Package and the Final Offering Memorandum under “Use of Proceeds.”

 

(g)           During a period of 75 days from the date
of the Final Offering Memorandum (the ”Lockup
Period”), the Company will not, without the prior written consent of
the Representative, (i) directly or indirectly, offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase any option
or contract to sell, grant any option right or warrant to purchase or lend or
otherwise transfer or dispose of any Common Stock or any securities convertible
into or exercisable or exchangeable for Common Stock
(collectively, the ”Restricted Securities”)
or (except as contemplated by the Registration Rights Agreement) file any
registration statement under the 1933 Act with respect to any Restricted
Securities, or (ii) enter into any swap or any other derivative
transaction (other than the Operative Documents) that transfers, in whole or in
part, directly or indirectly, the economic consequence of ownership of any
Restricted Securities, whether any such swap or transaction described in
clause (i) or (ii) above is to be settled by delivery of Restricted
Securities, in cash or otherwise. The foregoing sentence shall not apply to
(A) the Notes to be sold hereunder or the Conversion Shares to be
delivered upon conversion thereof, (B) the issuance of shares of Common
Stock upon conversion or exchange of convertible or exchangeable securities of
the Company outstanding as of the date hereof, (C) the resale registration
statement to be filed by the Company pursuant to the Registration Rights
Agreement relating to the resale of the Notes and the Conversion Shares, or
(D) the issuance of shares of Common Stock or options or rights to
purchase shares of Common Stock pursuant to the Company’s employee benefit plans
in effect on the date of this Agreement or the Company’s stockholder rights
plan or the issuance of rights thereunder.

 

Notwithstanding the foregoing, if (1) during the
last 17 days of the 75-day restricted period the Company issues an earnings
release or material news or a material event relating to the Company occurs or
(2) prior to the expiration of the 75-day restricted period, the Company
announces that it will release earnings results or becomes aware that material
news or a material event will occur during the 16-day period beginning on the
last day of the 75-day restricted period, the restrictions imposed in this
clause (g) shall continue to apply until the expiration of the 18-day period
beginning on the issuance of the earnings release or the occurrence of the
material news or material event.

 

(h)           The Company will use its commercially
reasonable efforts to assist the Initial Purchasers in arranging to permit the
Notes to be designated PORTAL securities in accordance with the rules and
regulations adopted by the National Association of Securities Dealers, Inc. (“NASD”) relating to trading in the PORTAL Market.

 

(i)            The Company will execute and deliver the
Registration Rights Agreement in form and substance reasonably satisfactory to
the Initial Purchasers and the Company.

 

15

 

(j)            The Company will use its commercially
reasonable efforts to have the Conversion Shares approved by The Nasdaq
National Market (“Nasdaq”) for
inclusion prior to the effectiveness of the Registration Statement.

 

(k)           Until the completion of the distribution of
the Notes, the Company will file all documents required to be filed with the
Commission pursuant to the 1934 Act and the 1934 Act Regulations within the
time periods required thereby.

 

(l)            The Company will reserve and keep available
at all times, free of preemptive rights, shares of Common Stock for the purpose
of enabling the Company to satisfy any obligations to issue Conversion Shares
upon the conversion of the Notes.

 

(m)          The Company agrees that it will not, and will
use its commercially reasonable efforts to cause its Affiliates not to,
directly or indirectly, solicit any offer to buy, sell or make any offer or
sale of, or otherwise negotiate in respect of, securities of the Company of any
class if, as a result of the doctrine of ”integration” referred to in
Rule 502 under the 1933 Act, such offer or sale would render invalid (for
the purpose of (i) the sale of the Notes by the Company to the Initial
Purchasers, (ii) the resale of the Notes by the Initial Purchasers to
subsequent purchasers or (iii) the resale of the Notes or Conversion
Shares by such Subsequent Purchasers to others) the exemption from the
registration requirements of the 1933 Act provided by Section 4(2) thereof
or by Rule 144A or otherwise.

 

(n)           Until the expiration of two years after the
original issuance of the Notes, the Company will not, and will use its
commercially reasonable efforts to cause its Affiliates not to, resell any
Notes or Conversion Shares which are “restricted securities” (as such term is
defined under Rule 144(a)(3) under the 1933 Act), whether as beneficial
owner or otherwise (except as agent acting as a securities broker on behalf of
and for the account of customers in the ordinary course of business in
unsolicited broker’s transactions).

 

(o)           Each of the Notes will bear, to the extent
applicable, the legend contained in “Transfer Restrictions” in the Disclosure
Package and the Final Offering Memorandum for the time period and upon the
other terms stated therein, except after the Notes are resold pursuant to a
registration statement effective under the 1933 Act.

 

(p)           The Company will not, and will use its
commercially reasonable efforts to cause its Affiliates not to, take, directly
or indirectly, any action which is designed to unlawfully stabilize or
manipulate, or which constitutes or which might reasonably be expected to cause
or result in unlawful stabilization or manipulation, of the price of any
security of the Company in connection with the offering of the Notes.

 

(q)           The Company acknowledges and agrees that
(i) the purchase and sale of the Notes pursuant to this Agreement is an
arm’s-length commercial transaction between the Company, on the one hand, and
the several Initial Purchasers, on the other hand, (ii) in connection with
the offering contemplated hereby and the process leading to such transaction
each Initial Purchaser is and has been acting solely as a principal and is not
the agent or fiduciary of the Company, or its stockholders, creditors,
employees or any other party, (iii) no Initial Purchaser has assumed or
will assume an advisory or fiduciary responsibility in favor of the Company
with respect to the offering contemplated hereby or the process leading thereto

 

16

 

(irrespective
of whether such Initial Purchaser has advised or is currently advising the
Company on other matters) and no Initial Purchaser has any obligation to the
Company with respect to the offering contemplated hereby except the obligations
expressly set forth in this Agreement, (iv) the Initial Purchasers and
their respective affiliates may be engaged in a broad range of transactions
that involve interests that differ from those of the Company and (v) the Initial
Purchasers have not provided any legal, accounting, regulatory or tax advice
with respect to the offering contemplated hereby and the Company has consulted
its own legal, accounting, regulatory and tax advisors to the extent it deemed
appropriate.

 

(r)            The Company represents and agrees that,
unless it obtains the prior consent of the Initial Purchasers, and the Initial
Purchasers represent and agree that, unless they obtain the prior consent of
the Company, it has not made and will not make any offer relating to the Notes
that, if the placement of the Notes contemplated by this Agreement were
conducted as a public offering pursuant to a registration statement filed with
the Commission, would constitute an “issuer free writing prospectus,” as
defined in Rule 433, or that would otherwise constitute a “free writing
prospectus,” as defined in Rule 405, required to be filed with the Commission. Any
such free writing prospectus consented to by the Company and the Initial
Purchasers is hereinafter referred to as a “Permitted
Supplemental Offering Document.”

 

4.             Expenses.

 

(a)           The Company will pay all expenses incident to
the performance of its obligations under this Agreement, including (i) the
preparation, printing, delivery to the Initial Purchasers and any filing of the
Disclosure Package or any Offering Memorandum (including financial statements
and any schedules or exhibits and any document incorporated therein by
reference) and of each amendment or supplement thereto or of any Supplemental
Offering Document, (ii) the preparation, printing and delivery to the
Initial Purchasers of the Operative Documents and such other documents as may
be required in connection with the offering, purchase, sale, issuance or
delivery of the Notes, (iii) the preparation, issuance and delivery of the
certificates for the Notes to the Initial Purchasers, including any transfer
taxes, any stamp or other duties payable upon the sale, issuance and delivery
of the Notes to the Initial Purchasers and any charges of DTC in connection
therewith, (iv) the fees and disbursements of the Company’s counsel,
accountants and other advisors, (v) the qualification of the Notes and
Conversion Shares under securities laws in accordance with the provisions of
Section 3(d) hereof, (vi) the fees and expenses of the Trustee,
including the fees and disbursements of counsel for the Trustee in connection
with the Indenture and the Notes, and the costs and charges of any registrar,
transfer agent, paying agent or conversion agent, (vii) the costs and expenses
of the Company relating to investor presentations on any “road show” undertaken
in connection with the marketing of the Notes including, without limitation,
expenses associated with the production of road show slides and graphics, fees
and expenses of any consultants engaged in connection with the road show
presentations, (viii) any fees payable in connection with the rating of
the Notes, (ix) any fees and expenses payable in connection with the
initial and continued designation of the Notes as PORTAL securities under the
PORTAL Market Rules pursuant to NASD Rule 5322 and the inclusion of the
Conversion Shares on Nasdaq, (x) any fees and expenses payable in
connection with the initial and continued listing of the Notes on any non-U.S.
securities exchange and (xi) all other costs and expenses incident to the
performance of the obligations of the Company under this Agreement; provided that, except as provided in this Agreement, the
Initial Purchasers shall pay their own costs and expenses, including the costs
and expenses of their counsel.

 

17

 

(b)           If this Agreement is terminated by the
Representative in accordance with the provisions of Section 5 or
Section 10(a)(i) hereof, the Company shall reimburse the Initial
Purchasers for all of their reasonable out-of-pocket expenses, including the
reasonable fees and disbursements of counsel for the Initial Purchasers.

 

5.             Conditions
of the Initial Purchasers’ Obligations. The obligations of the several
Initial Purchasers hereunder are subject to the accuracy, when made and on each
Delivery Date, of the representations and warranties of the Company contained
in Section 1 hereof or in certificates of any officer of the Company or any of
its subsidiaries delivered pursuant to the provisions hereof, to the
performance by the Company of its obligations hereunder, and to each of the
following additional terms and conditions:

 

(a)           no Initial Purchaser shall have discovered
and disclosed to the Company prior to or on such Delivery Date that the
Offering Memorandum or any amendment or supplement thereto contains any untrue
statement of a fact which, in the reasonable opinion of counsel to the Initial
Purchasers, is material or omits to state any fact which is material and necessary
to make the statements therein, in the light of the circumstances under which
they were made, not misleading;

 

(b)           on each Delivery Date, Wilson Sonsini
Goodrich & Rosati, Professional Corporation, shall have furnished to the
Initial Purchasers their written opinion, as counsel to the Company, addressed
to the Initial Purchasers and dated such Delivery Date, substantially in the
form of Annex 1 attached hereto;

 

(c)           on each Delivery Date, Stoel Rives LLP shall
have furnished to the Initial Purchasers their written opinion, as special
Oregon counsel to the Company, addressed to the Initial Purchasers and dated
such Delivery Date, substantially in the form of Annex 2 attached
hereto;

 

(d)           on each Delivery Date, Michael O. Scheinberg,
special patent counsel to the Company, shall have furnished to the Initial
Purchasers their written opinion, addressed to the Initial Purchasers and dated
such Delivery Date, substantially in the form of Annex 3 attached
hereto;

 

(e)           on each Delivery Date, AKD Prinsen van Wijmen
N.V., special Netherlands counsel to the Company, shall have furnished to the
Initial Purchasers their written opinion, addressed to the Initial Purchasers
and dated such Delivery Date, substantially in the form of Annex 4
attached hereto;

 

(f)            Latham & Watkins LLP, shall have
furnished to the Initial Purchasers their written opinion, as counsel to the
Initial Purchasers, addressed to the Initial Purchasers and dated such Delivery
Date, in form and substance satisfactory to the Initial Purchasers;

 

(g)           at the Delivery Date, there shall not have
been, since the date hereof or since the respective dates as of which
information is given in the Disclosure Package or the Final Offering Memorandum
(exclusive of any amendments or supplements thereto subsequent to the
Applicable Time), any material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, and the Representative 

 

18

 

shall
have received a certificate of the Chief Executive Officer and President of the
Company and of the Executive Vice President and Chief Financial Officer of the
Company, dated as of the Delivery Date, to the effect that (i) there has
been no such material adverse change, (ii) the representations and
warranties in Section 1 hereof are true and correct with the same force
and effect as though expressly made at and as of the Delivery Date, and
(iii) the Company has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied at or prior to the Delivery
Date;

 

(h)           at the time of the execution of this
Agreement, the Representative shall have received from Deloitte & Touche
LLP a letter dated such date, in form and substance satisfactory to the
Representative, together with signed or reproduced copies of such letter for
each of the other Initial Purchasers containing statements and information of
the type ordinarily included in accountants’ “comfort letters” to Initial
Purchasers with respect to the financial statements and certain financial
information contained in the Offering Memorandum;

 

(i)            at the Delivery Date, the Representative
shall have received from Deloitte & Touche LLP a letter, dated as of the
Delivery Date, to the effect that they reaffirm the statements made in the
letter furnished pursuant to subsection (g) of this Section, except that
the specified date referred to shall be a date not more than three business
days prior to the Delivery Date;

 

(j)            the Indenture shall have been duly executed
and delivered by the Company and the Trustee and the Notes shall have been duly
executed and delivered by the Company and duly authenticated by the Trustee;

 

(k)           the Company and the Representative shall have
executed and delivered the Registration Rights Agreement (in form and substance
reasonably satisfactory to the Initial Purchasers) and the Registration Rights
Agreement shall be in full force and effect;

 

(l)            at the First Delivery Date, the Notes shall
have been approved for designation as a PORTAL security;

 

(m)          subsequent to the date of this Agreement,
there shall not have occurred a downgrading in the rating assigned to the
Notes, if any, by any “nationally recognized statistical rating organization,”
as that term is defined by the Commission for purposes of Rule 436(g)(2)
under the 1933 Act, and no such organization shall have publicly announced that
it has under surveillance or review, with possible negative implications, its
rating of the Notes;

 

(n)           on or prior to the date of this Agreement,
the Representative shall have received an agreement substantially in the form
of Exhibit A attached hereto signed by the persons listed in Schedule IV
attached hereto, and shall have received an agreement substantially in the form
of Exhibit B attached hereto signed by Philips Business Electronics
International B.V.; and

 

(o)           at the Delivery Date, counsel for the Initial
Purchasers shall have been furnished with such documents and opinions as they
may reasonably require for the purpose of enabling them to pass upon the
issuance and sale of the Notes as herein contemplated, or in order to evidence
the accuracy of any of the representations or warranties, or the fulfillment of
any of the conditions, herein contained; and all proceedings taken by the
Company in connection with the

 

19

 

issuance
and sale of the Notes as herein contemplated shall be reasonably satisfactory
in form and substance to the Representative and counsel for the Initial
Purchasers.

 

If any condition specified
in this Section 5 shall not have been fulfilled when and as required to be
fulfilled, this Agreement may be terminated by the Representative by notice to
the Company at any time at or prior to the applicable Delivery Date, and such
termination shall be without liability of any party to any other party except
as provided in Section 4 and except that Sections 1, 7, 8 and 9 shall
survive any such termination and remain in full force and effect.

 

6.             Subsequent Offers and Resales of the Notes.

 

(a)           Each
of the Initial Purchasers and the Company hereby establish and agree to observe
the following procedures in connection with the offer and sale of the Notes:

 

i.      Offers and Sales. Offers and sales of the Notes shall be
made to such persons and in such manner as is contemplated by the Offering
Memorandum.

 

ii.     Rule 144A Compliance. The Notes have not been and will not be
offered or sold by the Initial Purchasers or their Affiliates acting on their
behalf, except in accordance and in compliance with Rule 144A under the Act and
the Initial Purchasers will effect such offers and sales only in compliance
with all applicable securities laws in any jurisdiction in which the Initial
Purchasers effect such offers or sales.

 

iii.    General Solicitation. No general solicitation or general
advertising (within the meaning of Rule 502(c) under the 1933 Act) will be
used in the United States in connection with the offering or sale of the Notes.

 

iv.    Non-Bank Fiduciaries. In the case of a non-bank Subsequent
Purchaser of a Note acting as a fiduciary for one or more third parties, each
third party shall, in the judgment of the applicable Initial Purchaser, be an
institutional accredited investor within the meaning of Rule 501(a) under
the 1933 Act (an ”Accredited Investor”)
or a “qualified institutional buyer” within the meaning of Rule 144A under
the 1933 Act (a ”Qualified Institutional
Buyer”) or a non-U.S. person outside the United States.

 

v.     Subsequent Purchaser Notification. Each Initial Purchaser will take reasonable
steps to inform, and use its commercially reasonable efforts to cause each of
its U.S. Affiliates to take reasonable steps to inform, persons acquiring Notes
from such Initial Purchaser or affiliate, as the case may be, in the United
States that the Notes (A) have not been and will not be registered under
the 1933 Act, (B) are being sold to them without registration under the
1933 Act in reliance on Rule 144A or in accordance with another exemption
from registration under the 1933 Act, as the case may be, and (C) may not
be offered, sold or otherwise transferred except (1) to the Company,
(2) outside the United States in accordance with Regulation S, or
(3) inside the United States in accordance with (x) Rule 144A to
a person

 

20

 

whom the seller reasonably
believes is a Qualified Institutional Buyer that is purchasing such Notes for
its own account or for the account of a Qualified Institutional Buyer to whom
notice is given that the offer, sale or transfer is being made in reliance on
Rule 144A or (y) pursuant to another available exemption from
registration under the 1933 Act.

 

vi.    Minimum Principal Amount. No sale of the Notes to any one Subsequent
Purchaser will be for less than U.S. $1,000 principal amount and no Security
will be issued in a smaller principal amount. If the Subsequent Purchaser is a
non-bank fiduciary acting on behalf of others, each person for whom it is
acting must purchase at least U.S. $1,000 principal amount of the Notes.

 

(b)           Each Initial Purchaser severally and not
jointly represents and warrants to, and agrees with, the Company that (i) it is
a Qualified Institutional Buyer and an Accredited Investor, and (ii) it has not
taken any action, directly or indirectly, designed to cause or result in, or
which has constituted or which might reasonably be expected to constitute,
unlawful stabilization or manipulation of the price of any security of the
Company in connection with the offering of the Notes.

 

7.             Indemnification.

 

(a)           Indemnification of Initial
Purchasers. The Company
agrees to indemnify and hold harmless each Initial Purchaser, its Affiliates,
its selling agents and each person, if any, who controls any Initial Purchaser
within the meaning of Section 15 of the 1933 Act or Section 20 of the
1934 Act as follows:

 

i.      against any and all loss, liability, claim,
damage and expense whatsoever, as incurred, arising out of any untrue statement
or alleged untrue statement of a material fact contained in any preliminary
offering memorandum, any Supplemental Offering Document, the Disclosure Package
or the Final Offering Memorandum (or any amendment or supplement thereto), or
the omission or alleged omission therefrom of a material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading;

 

ii.     against any and all loss, liability, claim,
damage and expense whatsoever, as incurred, to the extent of the aggregate
amount paid in settlement of any litigation, or any investigation or proceeding
by any governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission; provided that (subject to
Section 7(d) below) any such settlement is effected with the written
consent of the Company; and

 

iii.    against any and all expense whatsoever, as
incurred (including the fees and disbursements of counsel chosen by Merrill
Lynch), reasonably incurred in investigating, preparing or defending against
any litigation, or any investigation or proceeding by any governmental agency
or body, commenced or threatened, or any claim whatsoever based upon any such

 

21

 

untrue statement or
omission, or any such alleged untrue statement or omission, to the extent that
any such expense is not paid under (i) or (ii) above;

 

provided, however, that
this indemnity agreement shall not apply to any loss, liability, claim, damage
or expense to the extent arising out of any untrue statement or omission or
alleged untrue statement or omission made in reliance upon and in conformity
with written information furnished to the Company by or on behalf of any
Initial Purchaser through Merrill Lynch expressly for use in any preliminary
offering memorandum, any Supplemental Offering Document, the Disclosure Package
or the Final Offering Memorandum (or any amendment or supplement thereto).

 

(b)           Indemnification of the Company. Each Initial Purchaser severally agrees to
indemnify and hold harmless the Company, its Affiliates, and each person, if
any, who controls the Company within the meaning of Section 15 of the 1933
Act or Section 20 of the 1934 Act against any and all loss, liability,
claim, damage and expense described in the indemnity contained in
subsection (a) of this Section, as incurred, but only with respect to
untrue statements or omissions, or alleged untrue statements or omissions, made
in any preliminary offering memorandum, any Supplemental Offering Document, the
Disclosure Package or the Final Offering Memorandum in reliance upon and in
conformity with written information furnished to the Company by such Initial
Purchaser through Merrill Lynch expressly for use therein.

 

(c)           Actions against Parties; Notice. Each indemnified party shall give notice as
promptly as reasonably practicable to each indemnifying party of any action
commenced against it in respect of which indemnity may be sought hereunder, but
failure to so notify an indemnifying party shall not relieve such indemnifying
party from any liability hereunder to the extent it is not materially
prejudiced as a result thereof and in any event shall not relieve it from any
liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 7(a)
above, counsel to the indemnified parties shall be selected by Merrill Lynch,
and, in the case of parties indemnified pursuant to Section 7(b) above,
counsel to the indemnified parties shall be selected by the Company. An
indemnifying party may participate at its own expense in the defense of any
such action; provided, however,
that counsel to the indemnifying party shall not (except with the consent of
the indemnified party) also be counsel to the indemnified party. In no event
shall the indemnifying parties be liable for fees and expenses of more than one
counsel (in addition to any local counsel) separate from their own counsel for
all indemnified parties in connection with any one action or separate but
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances. No indemnifying party shall, without the
prior written consent of the indemnified parties, settle or compromise or
consent to the entry of any judgment with respect to any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever in respect of which indemnification or
contribution could be sought under this Section or Section 8 hereof
(whether or not the indemnified parties are actual or potential parties
thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising out
of such litigation, investigation, proceeding or claim and (ii) does not
include a statement as to or an admission of fault, culpability or a failure to
act by or on behalf of any indemnified party.

 

22

 

(d)           Settlement without Consent if
Failure to Reimburse. If at
any time an indemnified party shall have requested in writing an indemnifying
party to reimburse the indemnified party for fees and expenses of counsel, such
indemnifying party agrees that it shall be liable for any settlement of the
nature contemplated by Section 7(a)(ii) effected without its written
consent if (i) such settlement is entered into more than 45 days after
receipt by such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall have received notice of the terms of such settlement
at least 30 days prior to such settlement being entered into and
(iii) such indemnifying party shall not have reimbursed such indemnified
party in accordance with such request prior to the date of such settlement.

 

8.             Contribution.
If the indemnification provided for in Section 7 hereof is for any reason
unavailable to or insufficient to hold harmless an indemnified party in respect
of any losses, liabilities, claims, damages or expenses referred to therein,
then each indemnifying party shall contribute to the aggregate amount of such
losses, liabilities, claims, damages and expenses incurred by such indemnified
party, as incurred, (a) in such proportion as is appropriate to reflect
the relative benefits received by the Company on the one hand and the Initial
Purchasers on the other hand from the offering of the Notes pursuant to this
Agreement or (b) if the allocation provided by clause (i) is not
permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also
the relative fault of the Company on the one hand and of the Initial Purchasers
on the other hand in connection with the statements or omissions which resulted
in such losses, liabilities, claims, damages or expenses, as well as any other
relevant equitable considerations.

 

The relative benefits
received by the Company on the one hand and the Initial Purchasers on the other
hand in connection with the offering of the Notes pursuant to this Agreement
shall be deemed to be in the same respective proportions as the total net
proceeds from the offering of the Notes pursuant to this Agreement (before
deducting expenses) received by the Company and the total underwriting discount
received by the Initial Purchasers, bear to the aggregate initial offering
price of the Notes.

 

The relative fault of the
Company on the one hand and the Initial Purchasers on the other hand shall be
determined by reference to, among other things, whether any such untrue or
alleged untrue statement of a material fact or omission or alleged omission to
state a material fact relates to information supplied by the Company or by the
Initial Purchasers and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.

 

The Company and the Initial
Purchasers agree that it would not be just and equitable if contribution
pursuant to this Section were determined by pro rata allocation (even if the
Initial Purchasers were treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable
considerations referred to above in this Section. The aggregate amount of
losses, liabilities, claims, damages and expenses incurred by an indemnified
party and referred to above in this Section shall be deemed to include any
legal or other expenses reasonably incurred by such indemnified party in
investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged
untrue statement or omission or alleged omission.

 

Notwithstanding the
provisions of this Section 8, no Initial Purchaser shall be required to
contribute any amount in excess of the amount by which the total price at which
the Notes

 

23

 

purchased and sold by it hereunder exceeds the amount of any damages
which such Initial Purchaser has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission.

 

No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
1933 Act) shall be entitled to contribution from any person who was not guilty
of such fraudulent misrepresentation.

 

For purposes of this Section
8, each person, if any, who controls an Initial Purchaser within the meaning of
Section 15 of the 1933 Act or Section 20 of the 1934 Act and each
Initial Purchaser’s Affiliates and selling agents shall have the same rights to
contribution as such Initial Purchaser, and each person, if any, who controls
the Company within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act and each of the Company’s Affiliates shall have
the same rights to contribution as the Company. The Initial Purchasers’
respective obligations to contribute pursuant to this Section are several in
proportion to the principal amount of Notes set forth opposite their respective
names in Schedule I hereto and not joint.

 

9.             Representations,
Warranties and Agreements to Survive. All representations, warranties and
agreements contained in this Agreement or in certificates of officers of the
Company or any of its subsidiaries submitted pursuant hereto shall remain
operative and in full force and effect, regardless of (a) any investigation
made by or on behalf of any Initial Purchaser or its Affiliates or selling agents,
any person controlling any Initial Purchaser, its officers or directors or any
person controlling the Company and (b) delivery of and payment for the Notes.

 

10.           Termination.

 

(a)           Termination; General. The Representative may terminate this
Agreement, by notice to the Company, at any time at or prior to the applicable
Delivery Date if (i) there has been, since the time of execution of this
Agreement or since the respective dates as of which information is given in the
Disclosure Package or the Final Offering Memorandum (exclusive of any
amendments or supplements thereto subsequent to the date of this Agreement),
any material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business, (ii) there has occurred any material adverse
change in the financial markets in the United States or the international
financial markets, any outbreak of hostilities or escalation thereof or other
calamity or crisis or any change or development involving a prospective change
in national or international political, financial or economic conditions, in
each case the effect of which is such as to make it, in the judgment of the
Representative, impracticable or inadvisable to market the Notes or to enforce
contracts for the sale of the Notes, (iii) trading in any securities of
the Company has been suspended or materially limited by the Commission or the
NASDAQ System, or if trading generally on the American Stock Exchange or the
New York Stock Exchange or in the NASDAQ System has been suspended or
materially limited, or minimum or maximum prices for trading have been fixed,
or maximum ranges for prices have been required, by any of said exchanges or by
such system or by order of the Commission, the National Association of
Securities Dealers, Inc. or any other governmental authority, (iv) a material
disruption has occurred in commercial banking or securities settlement or
clearance services in the United States or (v) a banking moratorium has
been declared by either Federal or New York authorities.

 

24

 

(b)           Liabilities. If this Agreement is terminated pursuant to
this Section, such termination shall be without liability of any party to any
other party except as provided in Section 4 hereof; and provided further that Sections 1, 7, 8 and 9 shall
survive such termination and remain in full force and effect.

 

11.           Default
by One or More of the Initial Purchasers. If one or more of the Initial
Purchasers shall fail on any Delivery Date to purchase the Notes which it or
they are obligated to purchase under this Agreement (the ”Defaulted Notes”), the Representative shall have the right,
within 24 hours thereafter, to make arrangements for one or more of the
non-defaulting Initial Purchasers, or any other initial purchasers, to purchase
all, but not less than all, of the Defaulted Notes in such amounts as may be agreed
upon and upon the terms herein set forth; if, however, the Representative shall
not have completed such arrangements within such 24-hour period, then:

 

(a)           if the number of Defaulted Notes does not
exceed 10% of the aggregate principal amount of the Notes to be purchased
hereunder, each of the non-defaulting Initial Purchasers shall be obligated,
severally and not jointly, to purchase the full amount thereof in the
proportions that their respective underwriting obligations hereunder bear to
the underwriting obligations of all non-defaulting Initial Purchasers; or

 

(b)           if the number of Defaulted Notes exceeds 10%
of the aggregate principal amount of the Notes to be purchased hereunder, this
Agreement shall terminate without liability on the part of any non-defaulting
Initial Purchaser.

 

No action taken pursuant to
this Section shall relieve any defaulting Initial Purchaser from liability in
respect of its default. In the event of any such default which does not result
in a termination of this Agreement, either the Representative or the Company
shall have the right to postpone Delivery Date for a period not exceeding seven
days in order to effect any required changes in the Offering Memorandum or in
any other documents or arrangements. As used herein, the term “Initial
Purchaser” includes any person substituted for an Initial Purchaser under this
Section.

 

12.           Notices,
etc. All notices and other communications hereunder shall be in writing,
and:

 

(a)           if to the Initial Purchasers, shall be
delivered or sent by any standard form of telecommunication to the
Representative at 4 World Financial Center, New York, New York 10080,
Attention: Syndicate Department; and

 

(b)           if to the Company, shall be delivered or sent
by mail, telex or facsimile transmission to: FEI Company, 5350 NE Dawson Creek
Drive, Hillsboro, Oregon, 97124, Attention: General Counsel;

 

provided, however, that any notice to an Initial Purchaser pursuant to
Section 7(c) shall be delivered or sent by mail, telex or facsimile
transmission to each such Initial Purchaser, which address will be supplied to
any other party hereto by Merrill Lynch upon request. Any such statements,
requests, notices or agreements shall take effect at the time of receipt
thereof. The Company shall be entitled to act and rely upon any request,
consent, notice or agreement given or made on behalf of the Initial Purchasers
by Merrill Lynch.

 

25

 

13.           No Advisory or Fiduciary Relationship. The Company acknowledges and agrees that
(a) the purchase and sale of the Notes pursuant to this Agreement, including
the determination of the public offering price of the Notes and any related
discounts and commissions, is an arm’s-length commercial transaction between
the Company, on the one hand, and the Initial Purchasers, on the other hand,
(b) in connection with the offering contemplated hereby and the process leading
to such transaction each of the Initial Purchasers is and has been acting
solely as a principal and is not the agent or fiduciary of the Company, or its
shareholders, creditors, employees or any other party, (c)the Initial
Purchasers have not assumed or will not assume advisory or fiduciary
responsibilities in favor of the Company with respect to the offering
contemplated hereby or the process leading thereto (irrespective of whether any
Initial Purchaser has advised or is currently advising the Company on other
matters) and the Initial Purchasers do not have any obligation to the Company
with respect to the offering contemplated hereby except the obligations
expressly set forth in this Agreement, (d) the Initial Purchasers and their
affiliates may be engaged in a broad range of transactions that involve
interests that differ from those of the Company, and (e) the Initial Purchasers
have not provided any legal, accounting, regulatory or tax advice with respect
to the offering contemplated hereby and the Company has consulted its own
legal, accounting, regulatory and tax advisors to the extent it deemed
appropriate.

 

14.           Parties.
This Agreement shall inure to the benefit of and be binding upon the Initial
Purchasers and the Company and their respective successors. Nothing expressed
or mentioned in this Agreement is intended or shall be construed to give any
person, firm or corporation, other than the Initial Purchasers and the Company
and their respective successors and the controlling persons and officers and
directors referred to in Sections 7 and 8 and their heirs and legal
representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision herein contained. This Agreement and
all conditions and provisions hereof are intended to be for the sole and
exclusive benefit of the Initial Purchasers and the Company and their
respective successors, and said controlling persons and officers and directors
and their heirs and legal representatives, and for the benefit of no other
person, firm or corporation. No purchaser of Notes from any Initial Purchaser
shall be deemed to be a successor by reason merely of such purchase.

 

15.           GOVERNING
LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK.

 

16.           TIME.
TIME SHALL BE OF THE ESSENCE OF THIS AGREEMENT. EXCEPT AS OTHERWISE SET FORTH
HEREIN, SPECIFIED TIMES OF DAY REFER TO NEW YORK TIME.

 

17.           Counterparts.
This Agreement may be executed in any number of counterparts, each of which
shall be deemed to be an original, but all such counterparts shall together
constitute one and the same Agreement.

 

18.           Effect
of Headings. The Section headings herein are for convenience only and shall
not affect the construction hereof.

 

19.           Definition
of the Terms “Business Day” and “Subsidiary”. For purposes of this
Agreement, except as otherwise provided in this Agreement, the term (a) ”business day” means any day on which the New York Stock
Exchange, Inc. is open for trading, and (b) the term “subsidiary”
has the meaning set forth in Rule 405 of the rules and regulations
promulgated under the 1933 Act.

 

26

 

[Intentionally
Left Blank]

 

27

 

If the foregoing is in
accordance with your understanding of our agreement, please sign and return to
the Company a counterpart hereof, whereupon this instrument, along with all
counterparts, will become a binding agreement between the Initial Purchasers
and the Company in accordance with its terms.

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  FEI COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Bradley J. Thies

  	
   

  
	
   

  	
   

  	
  Name: Bradley J. Thies

  
	
   

  	
   

  	
  Title:  Vice President, General Counsel and

  
	
   

  	
   

  	
  Secretary

  

 

 

Accepted and agreed by:

 

MERRILL
LYNCH & CO.

MERRILL
LYNCH, PIERCE, FENNER & SMITH

INCORPORATED

 

 

	
  By:

  	
   /s/ Chet Bozdog

  	
   

  
	
  Authorized
  Signatory

  

 

 

For
itself and as Representative of the

other
Initial Purchasers named in Schedule I hereto.

 

28

SCHEDULE I

 

	
  Initial Purchasers

  	
   

  	
  Principal Amount

  of Firm Notes

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Merrill Lynch,
  Pierce, Fenner & Smith Incorporated

  	
   

  	
  $

  	
  75,000,000

  	
   

  
	
  Needham &
  Company, LLC

  	
   

  	
  7,500,000

  	
   

  
	
  Thomas Weisel
  Partners LLC

  	
   

  	
  7,500,000

  	
   

  
	
  D.A. Davidson
  & Co.

  	
   

  	
  5,000,000

  	
   

  
	
  Merriman Curhan
  Ford & Co.

  	
   

  	
  5,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
  $

  	
  100,000,000

  	
   

  

 

 

SCHEDULE II

 

 

Pricing Term Sheet

 

$100,000,000

2.875% Convertible Subordinated Notes Due 2013

 

1.             The
initial public offering price of the notes shall be 100% of the principal
amount thereof, plus accrued interest, if any, from the date of issuance.

 

2.             The net
proceeds to the Company shall be $97.2 million, after the Initial Purchasers’
discount and estimated offering expenses of $2.8 million.

 

3.             The
interest rate on the notes shall be 2.875% per annum.

 

4.             The
notes shall be convertible as described in the Preliminary Offering Memorandum
into shares of Common Stock, no par value, of the Company at an initial
conversion rate of 34.0730 shares per $1,000 principal amount of notes
(equivalent to a conversion price of $29.35 per share).

 

5.             The
following language revises the corresponding language that was included as the
last paragraph under the caption “Description of The Notes — Conversion Rights”:

 

Notwithstanding the
foregoing, in no event shall the conversion rate as adjusted in accordance with
the foregoing exceed 45.1467 per $1,000 principal amount of the notes, other
than on account of the proportional adjustments to the conversion rate in the
manner set forth in clauses (1) through (4) above.

 

6.             The
following table and the language following the table revise the corresponding
preliminary information that was included in the Preliminary Offering
Memorandum under the caption “Description of The Notes — Make Whole Premium
Upon a Fundamental Change”:

 

Make Whole
Premium Upon a Fundamental Change (Number of Additional Shares)

 

	
   

  	
   

  	
  Effective Date

  	
   

  
	
  Stock Price

  	
   

  	
  May 19,

  2006

  	
   

  	
  June 1,

  2007

  	
   

  	
  June 1,

  2008

  	
   

  	
  June 1,

  2009

  	
   

  	
  June 1,

  2010

  	
   

  	
  June 1,

  2011

  	
   

  	
  June 1,

  2012

  	
   

  	
  June 1,

  2013

  	
   

  
	
  $22.15

  	
   

  	
  11.0

  	
   

  	
  11.0

  	
   

  	
  11.0

  	
   

  	
  11.0

  	
   

  	
  11.0

  	
   

  	
  11.0

  	
   

  	
  11.0

  	
   

  	
  11.0

  	
   

  
	
  25.00

  	
   

  	
  9.0

  	
   

  	
  8.7

  	
   

  	
  8.4

  	
   

  	
  8.0

  	
   

  	
  7.6

  	
   

  	
  7.0

  	
   

  	
  6.4

  	
   

  	
  5.9

  	
   

  
	
  28.00

  	
   

  	
  7.5

  	
   

  	
  7.2

  	
   

  	
  6.8

  	
   

  	
  6.3

  	
   

  	
  5.7

  	
   

  	
  5.0

  	
   

  	
  3.9

  	
   

  	
  1.6

  	
   

  
	
  31.00

  	
   

  	
  6.5

  	
   

  	
  6.0

  	
   

  	
  5.6

  	
   

  	
  5.1

  	
   

  	
  4.4

  	
   

  	
  3.6

  	
   

  	
  2.5

  	
   

  	
  —

  	
   

  
	
  35.00

  	
   

  	
  5.3

  	
   

  	
  4.9

  	
   

  	
  4.5

  	
   

  	
  4.0

  	
   

  	
  3.3

  	
   

  	
  2.5

  	
   

  	
  1.4

  	
   

  	
  —

  	
   

  
	
  40.00

  	
   

  	
  4.4

  	
   

  	
  4.0

  	
   

  	
  3.6

  	
   

  	
  3.1

  	
   

  	
  2.5

  	
   

  	
  1.8

  	
   

  	
  0.9

  	
   

  	
  —

  	
   

  
	
  45.00

  	
   

  	
  3.7

  	
   

  	
  3.4

  	
   

  	
  3.0

  	
   

  	
  2.5

  	
   

  	
  2.0

  	
   

  	
  1.3

  	
   

  	
  0.6

  	
   

  	
  —

  	
   

  
	
  55.00

  	
   

  	
  2.9

  	
   

  	
  2.6

  	
   

  	
  2.2

  	
   

  	
  1.8

  	
   

  	
  1.4

  	
   

  	
  0.9

  	
   

  	
  0.4

  	
   

  	
  —

  	
   

  

 

 

The actual stock price and effective date may not be
set forth on the table, in which case:

 

•    if the actual stock price on the effective
date is between two stock prices on the table or the actual effective date is
between two effective dates on the table, the make whole premium will be
determined by a straight-line interpolation between the make whole premiums set
forth for the two stock prices and the two effective dates on the table based
on a 365-day year, as applicable.

 

•    if the stock price on the effective date
exceeds $55.00 per share, subject to adjustment as described below, no make
whole premium will be paid.

 

•    if the stock price on the effective date is
less than $22.15 per share, subject to adjustment as described below, no make whole
premium will be paid.

 

7.             The
following language revises the corresponding language that was included as the
sixth paragraph under the caption “Description of The Notes — Make Whole
Premium Upon a Fundamental Change”:

 

Notwithstanding the
foregoing, in no event shall the conversion rate exceed 45.1467 per $1,000
principal amount of the notes, subject to adjustments in the same manner as the
conversion rate..

 

8.             All
other terms of the notes shall be those set forth in the Preliminary Offering
Memorandum.

 

 

SCHEDULE III

 

Other Documents Comprising the Disclosure Package

 

[None]

 

 

SCHEDULE IV

 

	
  NAME

  	
   

  	
  TITLE

  
	
  Raymond
  A. Link

  	
   

  	
  Interim Chief Executive Officer, Executive Vice
  President and Chief Financial Officer

  
	
  Dr.
  Michael J. Attardo

  	
   

  	
  Director

  
	
  Lawrence
  A. Bock

  	
   

  	
  Director

  
	
  Wilfred
  J. Corrigan

  	
   

  	
  Director

  
	
  Thomas
  F. Kelly

  	
   

  	
  Director

  
	
  Dr.
  William W. Lattin

  	
   

  	
  Director

  
	
  Jan
  C. Lobbezoo

  	
   

  	
  Director

  
	
  Dr.
  Gerhard Parker

  	
   

  	
  Director

  
	
  James
  T. Richardson

  	
   

  	
  Director

  
	
  Donald
  R. VanLuvanee

  	
   

  	
  Director

  
	
  Steven
  D. Berger

  	
   

  	
  Senior
  Vice President

  
	
  John
  A. Doherty

  	
   

  	
  Senior
  Vice President, Worldwide Sales

  
	
  Rob
  H. J. Fastenau

  	
   

  	
  Senior
  Vice President and General Manager, Electron Optics Products Division

  
	
  Peter
  Frasso

  	
   

  	
  Executive
  Vice President and Chief Operating Officer

  
	
  Robert
  S. Gregg

  	
   

  	
  Executive
  Vice President of Worldwide Sales and Service

  
	
  Jim
  D. Higgs

  	
   

  	
  Senior
  Vice President, Human Resources

  
	
  Stephen
  F. Loughlin

  	
   

  	
  Vice
  President, Corporate Finance

  
	
  Bradley
  J. Thies

  	
   

  	
  Vice
  President, General Counsel and Secretary

  

 

 

Exhibit A

 

May 11, 2006

 

MERRILL LYNCH & CO.

MERRILL LYNCH, PIERCE,
FENNER & SMITH

INCORPORATED

as Representative of the
several

Initial Purchasers named
in the

within-mentioned Purchase
Agreement

4 World Financial Center

New York, New York 10080

 

Re:  Proposed Offering by FEI Company

 

Ladies and Gentlemen:

 

The undersigned
understands that you, as Representative of the several Initial Purchasers,
propose to enter into a Purchase Agreement (the “Purchase Agreement”) with FEI
Company, an Oregon corporation (the “Company”), providing for the offering (the
“Offering”), pursuant to Rule 144A under the Securities Act of 1933 (the “Securities
Act”), by the several Initial Purchasers named in Schedule A to the Purchase
Agreement (the “Initial Purchasers”) of the Company’s Convertible Subordinated
Notes due 2013.

 

In recognition of the
benefit that such an offering will confer upon the undersigned, and for other
good and valuable consideration the receipt and sufficiency of which are hereby
acknowledged, the undersigned hereby agrees that, without the prior written
consent of the Representative on behalf of the Initial Purchasers, the
undersigned will not, during the period commencing the date of the final
offering memorandum relating to the Offering and ending 75 days from the date
of the Offering Memorandum relating to the Offering, (1) offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase any option
or contract to sell, grant any option, right or warrant for the sale of, or
lend or otherwise dispose of or transfer any shares of the Company’s common
stock, no par value (the “Common Stock”), or any securities convertible into or
exercisable or exchangeable for or repayable with Common Stock (including,
without limitation, Common Stock that may be deemed to be beneficially owned by
the undersigned in accordance with the rules and regulations of the Securities
and Exchange Commission and securities that may be issued upon exercise of a
stock option or warrant), whether now owned or hereafter acquired by the
undersigned or with respect to which the undersigned has or thereafter acquires
the power of disposition (collectively, the “Undersigned’s Shares”), or (2)
enter into any swap or other derivative transaction that transfers to another,
in whole or in part, directly or indirectly, the economic consequence of
ownership of the Common Stock or such other securities, whether any such
transaction or swap described in clause (1) or (2) above is to be settled by
delivery of Common Stock or other securities, in cash or otherwise. The
foregoing sentence shall not apply to transfers of the Undersigned’s Shares (A)
as a bona fide gift, provided that each donee
thereof agrees to be bound in writing by the restrictions set forth herein, or
(B) to any trust or other entity formed for the direct or indirect benefit of
the undersigned or the immediate family of the undersigned, provided that the
trustee of the trust or authorized representative of such other entity, as
applicable, agrees to be bound in writing by the restrictions set

 

EXA-1

 

forth herein. In addition, beginning 45 days after the date of the
Offering Memorandum, the undersigned, together with the other individuals
listed on Schedule A hereto, may offer, sell or contract to sell in the
open market up to 250,000 shares of Common Stock; provided
that the Company shall determine in its reasonable discretion the number of
such shares of Common Stock to be disposed by each individual listed on Schedule
A hereto and shall inform the undersigned accordingly. [For Jim D. Higgs only: 
Notwithstanding the terms of this Lock-Up Letter Agreement, the
undersigned may also offer, sell or contract to sell in the open market up to
3,000 additional shares of Common Stock at any time.]  [For  Stephen F. Loughlin only: 
Notwithstanding the terms of this Lock-Up Letter Agreement, the
undersigned may also offer, sell or contract to sell in the open market up to
5,000 additional shares of Common Stock at any time.]

 

The undersigned agrees
that, without the prior written consent of the Representative on behalf of the
Initial Purchasers, it will not, during the period commencing the date hereof
and ending 75 days from the date of the Offering Memorandum, make any demand
for or exercise any right with respect to, the registration of any shares of
Common Stock or any security convertible into or exercisable or exchangeable
for or repayable with Common Stock.

 

Notwithstanding the
foregoing, if:

 

(1)           during
the last 17 days of the 75-day lock-up period, the Company issues an earnings
release or material news or a material event relating to the Company occurs; or

 

(2)           prior
to the expiration of the 75-day lock-up period, the Company announces that it
will release earnings results or becomes aware that material news or a material
event will occur during the 16-day period beginning on the last day of the
75-day lock-up period,

 

the restrictions imposed
by this Lock-Up Letter Agreement shall continue to apply until the expiration
of the 18-day period beginning on the issuance of the earnings release or the
occurrence of the material news or material event, as applicable, unless the
Representative waives, in writing, such extension.

 

The undersigned hereby
acknowledges and agrees that written notice of any extension of the 75-day
lock-up period pursuant to the previous paragraph will be delivered by the
Representative to the Company (in accordance with notice provisions set forth
in the Purchase Agreement) and that any such notice properly delivered will be
deemed to have been given to, and received by, the undersigned. The undersigned
further agrees that, prior to engaging in any transaction or taking any other
action that is subject to the terms of this Lock-Up Letter Agreement during the
period from the date of this Lock-Up Letter Agreement to and including

 

EXA-2

 

the 34th day following the expiration of the initial 75-day lock-up
period, he will give notice thereof to the Company and will not consummate such
transaction or take any such action unless he has received written confirmation
from the Company that the 75-day lock-up period (as may have been extended
pursuant to the previous paragraph) has expired.

 

In furtherance of the
foregoing, the Company, and any duly appointed transfer agent for the
registration or transfer of the securities described herein, is hereby
authorized to decline to make any transfer of securities if such transfer would
constitute a violation or breach of this Lock-Up Letter Agreement.

 

The undersigned hereby
represents and warrants that the undersigned has full power and authority to
enter into this Lock-Up Letter Agreement. All authority herein conferred or
agreed to be conferred and any obligations of the undersigned shall be binding
upon the successors, assigns, heirs or personal representatives of the
undersigned.

 

The undersigned
understands that, if the Purchase Agreement does not become

 

effective within 60 days
of the date hereof, or if the Purchase Agreement (other than the provisions
thereof which survive termination) shall terminate or be terminated prior to
payment for and delivery of the Securities to be sold thereunder, the
undersigned shall be released from all obligations under this Lock-Up Letter
Agreement.

 

The undersigned
understands that this Lock-Up Letter Agreement is irrevocable and that the
Company and the Initial Purchasers are entering into the Purchase Agreement and
proceeding with the Offering in reliance upon this agreement.

 

[signature
page follows]

 

EXA-3

 

This Lock-Up Letter
Agreement shall be governed by and construed in accordance with the internal
laws of the State of New York.

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  Signature: 

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Print Name: 

  	
   

  	
   

  
					

 

EXA-4

 

Exhibit B

 

May 11, 2006

 

MERRILL LYNCH & CO.

MERRILL LYNCH, PIERCE,
FENNER & SMITH

INCORPORATED

as Representative of the
several

Initial Purchasers named
in the

within-mentioned Purchase
Agreement

4 World Financial Center

New York, New York 10080

 

Re:  Proposed Offering by FEI Company

 

Ladies and Gentlemen:

 

The undersigned
understands that you, as Representative of the several Initial Purchasers,
propose to enter into a Purchase Agreement (the “Purchase Agreement”) with FEI
Company, an Oregon corporation (the “Company”), providing for the offering (the
“Offering”), pursuant to Rule 144A under the Securities Act of 1933 (the “Securities
Act”), by the several Initial Purchasers named in Schedule A to the Purchase
Agreement (the “Initial Purchasers”) of the Company’s Convertible Subordinated
Notes due 2013.

 

In recognition of the
benefit that such an offering will confer upon the undersigned, and for other
good and valuable consideration the receipt and sufficiency of which are hereby
acknowledged, the undersigned hereby agrees that, without the prior written
consent of the Representative on behalf of the Initial Purchasers, the
undersigned will not, during the period commencing the date of the final
offering memorandum relating to the Offering and ending 60 days from the date
of the Offering Memorandum relating to the Offering, (1) offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase any option
or contract to sell, grant any option, right or warrant for the sale of, or
lend or otherwise dispose of or transfer any shares of the Company’s common
stock, no par value (the “Common Stock”), or any securities convertible into or
exercisable or exchangeable for or repayable with Common Stock (including,
without limitation, Common Stock that may be deemed to be beneficially owned by
the undersigned in accordance with the rules and regulations of the Securities
and Exchange Commission and securities that may be issued upon exercise of a
stock option or warrant), whether now owned or hereafter acquired by the
undersigned or with respect to which the undersigned has or thereafter acquires
the power of disposition (collectively, the “Undersigned’s Shares”), or (2)
enter into any swap or other derivative transaction that transfers to another,
in whole or in part, directly or indirectly, the economic consequence of
ownership of the Common Stock or such other securities, whether any such
transaction or swap described in clause (1) or (2) above is to be settled by
delivery of Common Stock or other securities, in cash or otherwise. The
foregoing sentence shall

 

EXB-1

 

not apply to transfers of the Undersigned’s Shares by the undersigned
or any Affiliate (as defined in Rule 405 under the Securities Act of 1933, as
amended) of Koninklijke Philips Electronics N.V. (“Royal Philips”) to Royal
Philips or any of its Affiliates; provided,
however, that such transferee agrees to be bound in writing by the terms of this
Agreement.

 

The undersigned agrees
that, without the prior written consent of the Representative on behalf of the
Initial Purchasers, it will not, during the period commencing the date hereof
and ending 60 days from the date of the Offering Memorandum, make any demand
for or exercise any right with respect to, the registration of any shares of
Common Stock or any security convertible into or exercisable or exchangeable
for or repayable with Common Stock.

 

In furtherance of the
foregoing, the Company, and any duly appointed transfer agent for the
registration or transfer of the securities described herein, is hereby
authorized to decline to make any transfer of securities if such transfer would
constitute a violation or breach of this Lock-Up Letter Agreement.

 

The undersigned hereby
represents and warrants that the undersigned has full power and authority to
enter into this Lock-Up Letter Agreement. All authority herein conferred or
agreed to be conferred and any obligations of the undersigned shall be binding
upon the successors, assigns, heirs or personal representatives of the
undersigned.

 

The undersigned
understands that, if the Purchase Agreement does not become

 

effective by or on June
1, 2006, or if the Purchase Agreement (other than the provisions thereof which
survive termination) shall terminate or be terminated prior to payment for and
delivery of the Securities to be sold thereunder, the undersigned shall be
released from all obligations under this Lock-Up Letter Agreement.

 

The undersigned understands
that this Lock-Up Letter Agreement is irrevocable and that the Company and the
Initial Purchasers are entering into the Purchase Agreement and proceeding with
the Offering in reliance upon this agreement.

 

[signature
page follows]

 

EXB-2

 

This Lock-Up Letter
Agreement shall be governed by and construed in accordance with the internal
laws of the State of New York.

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  Signature:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Print Name:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Signature:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Print Name:

  	
   

  	
   

  
						

 

EXB-3

 

Annex 1

 

Form of Opinion of

Wilson Sonsini Goodrich & Rosati,

Professional Corporation

 

[Final Opinion to be Inserted]

 

1

 

Annex 2

 

Form of Opinion of

Stoel Rives, LLP

 

[Final Opinion to be Inserted]

 

2

 

Annex 3

 

Form of Opinion of

Michael O. Scheinberg

 

[Final Opinion to be Inserted]

 

3

 

Annex 4

 

Form of Opinion of

AKD Prinsen van Wijmen N.V.

 

[Final
Opinion to be Inserted]

 

4

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