Document:

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                                                                  Exhibit 10.1

                                BRUKER AXS INC.
                              AMENDED AND RESTATED
                             2000 STOCK OPTION PLAN

    1.  PURPOSE OF THE PLAN.

    This stock option plan (the "2000 Stock Option Plan") is intended to
encourage ownership of the stock of Bruker AXS Inc. (the "Company") by
management, employees, directors, consultants and advisors ("Optionees") of the
Company and its subsidiaries, to induce qualified personnel to enter and remain
in the employ of the Company or its subsidiaries and otherwise to provide
additional incentive for Optionees to promote the success of its business.

    2.  STOCK SUBJECT TO THE 2000 STOCK OPTION PLAN.

    (a) The total number of shares of the authorized but unissued or Treasury
       shares of the common stock, $.01 par value, of the Company ("Common
       Stock") for which options may be granted under the 2000 Stock Option Plan
       shall not exceed two million, four hundred and thirty-seven thousand, six
       hundred and twenty-five (2,437,625) of the issued and outstanding shares
       of Common Stock, subject to adjustment as provided in Section 12 hereof.

    (b) If an option granted hereunder shall expire or terminate for any reason
       without having vested fully or having been exercised in full, the
       unvested and/or unpurchased shares subject thereto shall again be
       available for subsequent option grants under the 2000 Stock Option Plan.

    (c) Stock issuable upon exercise of an option granted under the 2000 Stock
       Option Plan may be subject to such restrictions on transfer, repurchase
       rights (but not to exceed 20% of the stock issuable upon exercise of
       options granted under the 2000 Stock Option Plan) or other restrictions
       as shall be determined by the Board of Directors of the Company (the
       "Board").

    (d) Notwithstanding any other provision of this Plan to the contrary, the
       Compensation Committee of the Board shall have the right, in its sole
       discretion, to allocate and grant up to twenty percent (20%) of the
       Common Stock authorized to be granted as options hereunder as restricted
       stock to employees of the Company on such terms and conditions and
       pursuant to such restricted stock agreements as the Compensation
       Committee, in its discretion, shall deem appropriate.

    3.  ADMINISTRATION OF THE 2000 STOCK OPTION PLAN.

    The 2000 Stock Option Plan shall be administered by the Board or a Stock
Option Committee (the "Compensation Committee") consisting of two or more
persons appointed to such Compensation Committee from time to time by the Board;
provided, however, that (i) to the extent necessary in order to permit officers
and directors of the Company to be exempt from the provisions of Section 16(b)
of the 1934 Act with respect to transactions pursuant to the 2000 Stock Option
Plan, each of such persons shall be a "Non-Employee Director" within the meaning
of Rule 16b-3 ("Rule 16b-3") promulgated by the Securities and Exchange
Commission under the Securities Exchange Act of 1934, as amended (the "1934
Act") and (ii) if such qualification is deemed necessary in order for the grant
or exercise of awards made under the 2000 Stock Option Plan to qualify for any
tax or other material benefit to participants of the Company under applicable
regulations under Section 162(m) of the Code, each of such persons shall be an
"outside director" (as defined in applicable regulations thereunder). The term
"Compensation Committee" shall, for all purposes of the 2000 Stock Option Plan
be deemed to refer to the Board if the Board is administering the 2000 Stock
Option Plan. If the 2000 Stock Option Plan is administered by a Compensation
Committee, the Compensation Committee shall from time to time select a Chairman
from among its members and shall adopt such rules and regulations as it shall
deem appropriate concerning the holding of meetings and the administration of
the 2000 Stock Option Plan.

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A majority of the entire Compensation Committee shall constitute a quorum and
the actions of a majority of the members of the Compensation Committee present
at a meeting at which a quorum is present, or actions approved in writing by all
of the members of the Compensation Committee, shall be the actions of the
Compensation Committee; provided, however, that if the Compensation Committee
consists of only two members, both shall be required to constitute a quorum and
to act at a meeting or to approve actions in writing. Except as otherwise
expressly provided in the 2000 Stock Option Plan, the Compensation Committee
shall have all powers with respect to the administration of the 2000 Stock
Option Plan, including, without limitation, full power and authority to
interpret the provisions of the 2000 Stock Option Plan and any option agreement
grated hereunder, and to resolve all questions arising under the 2000 Stock
Option Plan. All decisions of the Compensation Committee shall be conclusive and
binding on all participants in the 2000 Stock Option Plan.

    4.  TYPE OF OPTIONS.

    Options granted pursuant to the 2000 Stock Option Plan shall be authorized
by action of the Compensation Committee and may be designated as either
incentive stock options meeting the requirements of Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code"), or non-qualified options which
are not intended to meet the requirements of such Section 422 of the Code, the
designation to be in the sole discretion of the Compensation Committee. The 2000
Stock Option Plan shall be administered by the Compensation Committee in such
manner as to permit options granted as incentive stock options to qualify as
incentive stock options under the Code. Employees of non-U.S. subsidiaries are
eligible to receive non-qualified stock options.

    5.  ELIGIBILITY.

    (a) As required by U.S. law, incentive stock options shall only be granted
       to Optionees who are employees. As a result, options designated as
       incentive stock options shall, subject to the limitation on amounts of
       more than 10% of the combined voting power of the Company as designated
       in Section 5(e), be granted only to employees (including officers and
       directors who are also employees) of the Company or any of its
       subsidiaries, including subsidiaries which become such after adoption of
       the 2000 Stock Option Plan.

    (b) The law permits more flexibility for the grant of non-qualified stock
       options. Accordingly, options designated as non-qualified options may be
       granted to officers, employees, consultants, advisors and directors of
       the Company or of any of its subsidiaries, including subsidiaries which
       become such after adoption of the 2000 Stock Option Plan.

    (c) As used herein, "subsidiary" or "subsidiaries" shall be as defined in
       Section 424 of the Code and the Treasury Regulations promulgated
       thereunder (the "Regulations").

    (d) The Compensation Committee shall, from time to time, at its sole
       discretion, select from such eligible persons those to whom options shall
       be granted and shall determine the number of shares to be subject to each
       option. In determining the eligibility of a person to be granted an
       option, as well as in determining the number of shares to be granted to
       any person, the Compensation Committee in its sole discretion shall take
       into account the position and responsibilities of the person being
       considered, the nature and value to the Company or its subsidiaries of
       his or her service and accomplishments, his or her present and potential
       contribution to the success of the Company or its subsidiaries, and such
       other factors as the Compensation Committee may deem relevant.

    (e) As required by law, no option designated as an incentive stock option
       shall be granted to any employee of the Company or any subsidiary if such
       employee owns, immediately prior to the grant of an option, stock
       possessing more than 10% of the total combined voting power of all
       classes of stock of the Company or of a parent or a subsidiary, unless
       the purchase price for the stock under such option shall be at least 110%
       of its fair market value at the time such

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       option is granted and the option, by its terms, shall not be exercisable
       more than five years from the date it is granted. In determining the
       stock ownership under this paragraph, the provisions of Section 424(d) of
       the Code shall be controlling.

    (f) In determining the fair market value under this paragraph, the
       provisions of Section 7 hereof shall apply.

    (g) Subject to the provisions of Section 12 relating to adjustments upon
       changes in the shares of Common Stock, no employee shall be eligible to
       be granted Options covering more than 100,000 shares of Common Stock
       during any calendar year.

    6.  OPTION AGREEMENT.

    Each option shall be evidenced by an option agreement (the "Agreement") duly
executed on behalf of the Company and by the Optionee to whom such option is
granted, which Agreement shall comply with and be subject to the terms and
conditions of the 2000 Stock Option Plan. The Agreement may contain such other
terms, provisions and conditions which are not inconsistent with the 2000 Stock
Option Plan as may be determined by the Compensation Committee; provided that
(a) options designated as incentive stock options shall meet all of the
conditions for incentive stock options as defined in Section 422 of the Code;
(b) the vesting schedule contained in the form of incentive stock option
agreement approved by the Board shall not be altered by the Compensation
Committee for any grant of an incentive stock option, except for individual
Agreements, if any, to comply with section 5 (e) of the Plan; and (c) the
vesting schedule contained in the form of non-qualified stock option agreement
approved by the Board shall be the recommended vesting schedule for the grant of
non-qualified stock options by the Compensation Committee but may be altered by
the Compensation Committee. The date of grant of an option shall be as
determined by the Compensation Committee. More than one option may be granted to
an individual.

    7.  OPTION PRICE.

    The option price or prices of shares of the Company's Common Stock for
options designated as non-qualified stock options shall be as determined by the
Compensation Committee, but in no event shall the option price of a
non-qualified stock option be less than 50% of the fair market value of such
Common Stock at the time the option is granted, as determined by the
Compensation Committee. The option price or prices of shares of the Company's
Common Stock for incentive stock options shall be not less than the fair market
value of such Common Stock at the time the option is granted as determined by
the Compensation Committee in accordance with the Regulations promulgated under
Section 422 of the Code. If such shares are then listed on any national
securities exchange, the fair market value shall be the mean between the high
and low sales prices, if any, on the largest such exchange on the date of the
grant of the option or, if none, shall be determined by taking a weighted
average of the means between the highest and lowest sales prices on the nearest
date before and the nearest date after the date of grant in accordance with
Treasury Regulations Section 25.2512-2. If the shares are not then listed on any
such exchange, the fair market value of such shares shall be the mean between
the high and low sales prices, if any, as reported in the National Association
of Securities Dealers Automated Quotation National Market ("NASDAQ/NM") for the
date of the grant of the option, or, if none, shall be determined by taking a
weighted average of the means between the highest and lowest sales on the
nearest date before and the nearest date after the date of grant in accordance
with Treasury Regulations Section 25.2512-2. If the shares are not then either
listed on any such exchange or quoted in NASDAQ/NM, the fair market value shall
be the mean between the average of the "Bid" and the average of the "Ask"
prices, if any, as reported in the National Daily Quotation Service for the date
of the grant of the option, or, if none, shall be determined by taking a
weighted average of the means between the highest and lowest sales prices on the
nearest date before and the nearest date after the date of grant in accordance
with Treasury Regulations Section 25.2512-2. If the

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fair market value cannot be determined under the preceding three sentences, it
shall be determined in good faith by the Compensation Committee.

    8.  MANNER OF PAYMENT; MANNER OF EXERCISE.

    (a) Options granted under the 2000 Stock Option Plan may provide for the
       payment of the exercise price, as determined by the Compensation
       Committee and as set forth in the Option Agreement, by delivery of
       (i) cash or a check payable to the order of the Company in an amount
       equal to the exercise price of such options, (ii) shares of Common Stock
       of the Company owned by the optionee having a fair market value equal in
       amount to the exercise price of the options being exercised, (iii) any
       combination of (i) and (ii), provided, however, that payment of the
       exercise price by delivery of shares of Common Stock of the Company owned
       by such optionee may be made only if such payment does not result in a
       charge to earnings for financial accounting purposes as determined by the
       Compensation Committee or (iv) payment may also be made by delivery of a
       properly executed exercise notice to the Company, together with a copy of
       irrevocable instruments to a broker to deliver promptly to the Company
       the amount of sale or loan proceeds to pay the exercise price. To
       facilitate clause (iv) above, the Company may enter into agreements for
       coordinated procedures with one or more brokerage firms.

    (b) To the extent that the right to purchase shares under an option has
       accrued and is in effect, options may be exercised in full at one time or
       in part from time to time, by giving written notice, signed by the
       Optionee exercising the option, to the Company, stating the number of
       shares with respect to which the option is being exercised, accompanied
       by payment in full for such shares as provided in subparagraph
       (a) above. Upon such exercise, delivery of a certificate for paid-up
       non-assessable shares shall be made at the principal office of the
       Company to the Optionee exercising the option at such time, during
       ordinary business hours, not more than thirty (30) days from the date of
       receipt of the notice by the Company, as shall be designated in such
       notice, or at such time, place and manner as may be agreed upon by the
       Company and the person or persons exercising the option. Upon exercise of
       the option and payment as provided above, the Optionee shall become a
       shareholder of the Company as to the Shares acquired upon such exercise.

    9.  EXERCISE OF OPTIONS.

    Each option granted under the 2000 Stock Option Plan shall, subject to
Section 6, Section 10(b) and Section 12 hereof, be exercisable at such time or
times and during such period as determined by the Compensation Committee which
shall be set forth in the Agreement; provided, however, that no option granted
under the 2000 Stock Option Plan shall have a term in excess of ten (10) years
from the date of grant.

    To the extent that an option to purchase shares is not exercised by an
Optionee when it becomes initially exercisable it shall not expire but shall be
carried forward and shall be exercisable on a cumulative basis, until the
expiration of the exercise period. No partial exercise may be made for less than
fifty (50) full shares of Common Stock.

    Notwithstanding the foregoing, the Compensation Committee may in its
discretion accelerate the exerciseability of any option subject to such terms
and conditions as the Compensation Committee deems necessary and appropriate.

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    10. TERM OF OPTIONS; EXERCISEABILITY.

    (a) TERM.

       (1) Each option shall expire not more than ten (10) years from the date
           of the granting thereof, but shall be subject to earlier termination
           as herein provided. Certain options may expire after five (5) years
           to comply with section 5 (e) of the Plan.

       (2) Except as otherwise provided in this Section 10, an option granted to
           any employee who ceases to be an employee of the Company, or an
           option granted to any other Optionee who ceases to have the same
           relationship with the Company or one of its subsidiaries which was in
           effect on the date the option was granted, shall terminate
           immediately on the date such Optionee ceases to be an employee, or
           ceases to have such relationship with the Company or one of its
           subsidiaries, or on the date on which the option expires by its
           terms, whichever occurs first.

       (3) If such termination of employment or relationship is because the
           Optionee has become permanently disabled (within the meaning of
           Section 22(e)(3) of the Code), such option shall terminate thirty
           (30) days after the date such Optionee ceases to be an employee or to
           have such relationship, or on the date on which the option expires by
           its terms, whichever occurs first.

       (4) In the event of the death of any Optionee, any option granted to such
           Optionee shall terminate ninety (90) days after the date of death, or
           on the date on which the option expires by its terms, whichever
           occurs first.

       (5) Notwithstanding subparagraphs (2), (3) and (4) above, the
           Compensation Committee shall have the authority to extend the
           expiration date of any outstanding option in circumstances in which
           it deems such action to be appropriate, provided that no such
           extension shall extend the term of an option beyond the date on which
           the option would have expired if no termination of the Optionee's
           employment or relationship with the Company or its subsidiary had
           occurred.

    (b) EXERCISEABILITY.

    An option granted to an Optionee who ceases to be an employee, or ceases to
have the same relationship with the Company or one of its subsidiaries which was
in existence on the date the option was granted shall be exercisable only to the
extent that the right to purchase shares under such option has accrued and is in
effect on the date such Optionee ceases to be an employee, or ceases to have
such relationship with the Company or one of its subsidiaries.

    11. OPTIONS NOT TRANSFERABLE.

    The right of any Optionee to exercise any option granted to him or her shall
not be assignable or transferable by such Optionee otherwise than by will or the
laws of descent and distribution, and any such option shall be exercisable
during the lifetime of such Optionee only by him or her. Any option granted
under the 2000 Stock Option Plan shall be null and void and without effect upon
the bankruptcy of the Optionee to whom the option is granted, or upon any
attempted assignment or transfer, except as herein provided, including without
limitation any purported assignment, whether voluntary or by operation of law,
pledge, hypothecation or other disposition, attachment, divorce, trustee process
or similar process, whether legal or equitable, upon such option.

    12. RECAPITALIZATIONS, REORGANIZATIONS AND THE LIKE.

    (a) In the event that the outstanding shares of the Common Stock of the
       Company are changed into or exchanged for a different number or kind of
       shares or other securities of the Company or of another corporation by
       reason of any reorganization, merger, consolidation,

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       recapitalization, reclassification, stock split-up, combination of
       shares, or dividends payable in capital stock, appropriate adjustment
       shall be made in the number and kind of shares as to which options may be
       granted under the 2000 Stock Option Plan and as to which outstanding
       options or portions thereof then unexercised shall be exercisable to the
       end that the proportionate interest of the Optionee shall be maintained
       as before the occurrence of such event; such adjustment in outstanding
       options shall be made without change in the total price applicable to the
       unexercised portion of such options and with a corresponding adjustment
       in the option price per share.

    (b) In addition, unless otherwise determined by the Board in its sole
       discretion, in the case of any (i) sale or conveyance to another entity
       of all or substantially all of the property and assets of the Company,
       including, without limitation, by way of merger or consolidation, or
       (ii) Change in Control (as hereinafter defined) of the Company, the
       purchaser(s) of the Company's assets or stock may, in his, her or its
       discretion, deliver to the Optionee the same kind of consideration that
       is delivered to the shareholders of the Company as a result of such sale,
       conveyance or Change in Control, or the Board may cancel all outstanding
       options in exchange for consideration in cash or in kind which
       consideration in both cases shall be equal in value to the value of those
       shares of stock or other securities the Optionee would have received had
       the option been exercised (to the extent then exercisable) and no
       disposition of the shares acquired upon such exercise been made prior to
       such sale, conveyance or Change in Control, less the option price
       therefor. Upon receipt of such consideration by the Optionee, his or her
       option shall immediately terminate and be of no further force and effect.
       The value of the stock or other securities the Optionee would have
       received if the option had been exercised shall be determined in good
       faith by the Board, and in the case of shares of the Common Stock of the
       Company, in accordance with the provisions of Section 7 hereof. The Board
       shall also have the power and right to accelerate the exerciseability of
       any options, notwithstanding any limitations in this 2000 Stock Option
       Plan or in the Agreement upon such a sale, conveyance or Change in
       Control. Upon such acceleration, any options or portion thereof
       originally designated as incentive stock options that no longer qualify
       as incentive stock options under Section 422 of the Code as a result of
       such acceleration shall be redesignated as non-qualified stock options. A
       "Change in Control" shall be deemed to have occurred if any person, or
       any two or more persons acting as a group, and all affiliates of such
       person or persons, who prior to such time owned less than twenty percent
       (20%) of the then outstanding Common Stock of the Company, shall acquire,
       whether by purchase, exchange, tender offer, merger, consolidation or
       otherwise, such additional shares of the Company's Common Stock in one or
       more transactions, or series of transactions, such that following such
       transaction or transactions, such person or group and affiliates
       beneficially own at least fifty percent (50%) of the Company's Common
       Stock outstanding.

    (c) Upon dissolution or liquidation of the Company, all options granted
       under this 2000 Stock Option Plan shall terminate, but each Optionee (if
       at such time in the employ of or otherwise associated with the Company or
       any of its subsidiaries) shall have the right, immediately prior to such
       dissolution or liquidation, to exercise his or her option to the extent
       then exercisable.

    (d) No fraction of a share shall be purchasable or deliverable upon the
       exercise of any option, but in the event any adjustment hereunder of the
       number of shares covered by the option shall cause such number to include
       a fraction of a share, such fraction shall be adjusted to the nearest
       smaller whole number of shares.

    13. NO SPECIAL EMPLOYMENT OR OTHER RIGHTS.

    Nothing contained in the 2000 Stock Option Plan or in any option granted
under the Plan shall confer upon any Optionee right with respect to the
continuation of his or her employment or other

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relationship by the Company (or any subsidiary) or interfere in any way with the
right of the Company (or any subsidiary), subject to the terms of any separate
employment or other agreement, at any time to terminate such employment or other
relationship or to increase or decrease the compensation of the option holder
from the rate in existence at the time of the grant of an option. Whether an
authorized leave of absence, or absence in military or government service, shall
constitute termination of employment or another relationship shall be determined
by the Compensation Committee at the time.

    14. WITHHOLDING.

    The Company's obligation to deliver shares upon the exercise of any option
granted under the 2000 Stock Option Plan and any payments or transfers under
Section 12 hereof shall be subject to the Optionee's satisfaction of all
applicable Federal, state and local income, excise, employment and any other tax
withholding requirements. All non-U.S. Optionees must pay all applicable
employee and employers wage and other withholding taxes in advance of receiving
shares upon exercise of any vested option.

    15. RESTRICTIONS ON ISSUE OF SHARES.

    (a) Notwithstanding the provisions of Section 8, the Company may delay the
       issuance of shares covered by the exercise of an option and the delivery
       of a certificate for such shares until one of the following conditions
       shall be satisfied:

        (i) The shares with respect to which such option has been exercised are
            at the time of the issue of such shares effectively registered or
            qualified under applicable Federal and state securities acts now in
            force or as hereafter amended; or

        (ii) Counsel for the Company shall have given an opinion, which opinion
             shall not be unreasonably conditioned or withheld, that such shares
             are exempt from registration and qualification under applicable
             Federal and state securities acts now in force or as hereafter
             amended.

    (b) It is intended that all exercises of options shall be effective, and the
       Company shall use its best efforts to bring about compliance with the
       above conditions within a reasonable time, except that the Company shall
       be under no obligation to qualify shares or to cause a registration
       statement or a post-effective amendment to any registration statement to
       be prepared for the purpose of covering the issue of shares in respect of
       which any option may be exercised, except as otherwise agreed to by the
       Company in writing.

    16. PURCHASE FOR INVESTMENT; RIGHTS OF HOLDER ON SUBSEQUENT REGISTRATION.

    Unless the shares to be issued upon exercise of an option granted under the
2000 Stock Option Plan have been effectively registered under the Securities Act
of 1933, as now in force or hereafter amended, the Company shall be under no
obligation to issue any shares covered by any option unless the Optionee, in
whole or in part, shall give a written representation and undertaking to the
Company which is satisfactory in form and scope to counsel for the Company and
upon which, in the opinion of such counsel, the Company may reasonably rely,
that he or she is acquiring the shares issued pursuant to such exercise of the
option for his or her own account as an investment and not with a view to, or
for sale in connection with, the distribution of any such shares, and that he or
she will make no transfer of the same except in compliance with any rules and
regulations in force at the time of such transfer under the Securities Act of
1933, or any other applicable law, and that if shares are issued without such
registration, a legend to this effect may be endorsed upon the securities so
issued. In the event that the Company shall, nevertheless, deem it necessary or
desirable to register under the Securities Act of 1933 or other applicable
statutes any shares with respect to which an option shall have been exercised,
or to qualify any such shares for exemption from the Securities Act of 1933 or
other applicable statutes, then the Company may take such action and may require
from each Optionee such

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information in writing for use in any registration statement, supplementary
registration statement, prospectus, preliminary prospectus or offering circular
as is reasonably necessary for such purpose and may require reasonable indemnity
to the Company and its officers and directors and controlling persons from such
holder against all losses, claims, damages and liabilities arising from such use
of the information so furnished and caused by any untrue statement of any
material fact therein or caused by the omission to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading in the light of the circumstances under which they were made.

    17. MODIFICATION OF OUTSTANDING OPTIONS.

    The Board may authorize the amendment of any outstanding option with the
consent of the Optionee when and subject to such conditions as are deemed to be
in the best interests of the Company and in accordance with the purposes of this
2000 Stock Option Plan.

    18. APPROVAL OF STOCKHOLDERS.

    The 2000 Stock Option Plan shall be subject to approval by the vote of
stockholders holding at least a majority of the voting stock of the Company
present, or represented, and entitled to vote at a duly held stockholders'
meeting, or by written consent of the stockholders as provided for under
applicable state law, within twelve (12) months after the adoption of the 2000
Stock Option Plan by the Board of Directors and shall take effect as of the date
of adoption by the Board of Directors upon such approval. The Compensation
Committee may grant options under the 2000 Stock Option Plan prior to such
approval, but any such option shall become effective as of the date of grant
only upon such approval and, accordingly, no such option may be exercisable
prior to such approval.

    19. TERMINATION AND AMENDMENT.

    Unless sooner terminated as herein provided, the 2000 Stock Option Plan
shall terminate ten (10) years from the date upon which the 2000 Stock Option
Plan was duly adopted by the Board. The Board may at any time terminate the 2000
Stock Option Plan or make such modification or amendment thereof as it deems
advisable; provided, however, that except as provided in this Section 19, the
Board may not, without the approval of the stockholders of the Company obtained
in the manner stated in Section 18, increase the maximum number of shares for
which options may be granted or change the designation of the class of persons
eligible to receive options under the 2000 Stock Option Plan, or make any other
change in the 2000 Stock Option Plan which requires stockholder approval under
applicable law or regulations.

    20. RESERVATION OF STOCK.

    The Company shall at all times during the term of the 2000 Stock Option Plan
reserve and keep available such number of shares of stock as will be sufficient
to satisfy the requirements of the 2000 Stock Option Plan and shall pay all fees
and expenses necessarily incurred by the Company in connection therewith.

    21. LIMITATION OF RIGHTS IN THE OPTION SHARES.

    An Optionee shall not be deemed for any purpose to be a stockholder of the
Company with respect to any of the options except to the extent that the option
shall have been exercised with respect thereto and, in addition, a certificate
shall have been issued theretofore and delivered to the Optionee.

    22. NOTICES.

    Any communication or notice required or permitted to be given under the 2000
Stock Option Plan shall be in writing, and mailed by registered or certified
mail or delivered by hand, if to the Company, to its principal place of
business, attention: Treasurer, and, if to an Optionee, to the address as
appearing on the records of the Company.

                                      8Exhibit
4.1

 

	
  IDEC PHARMACEUTICALS
  CORPORATION

  
	
   

  
	
  Liquid Yield OptionTM
  Notes

  
	
  due 2032

  
	
  $1,264,950,000

  
	
  (Zero Coupon-Senior)

  
	
   

  
	
   

  
	
  INDENTURE

  
	
   

  
	
  Dated April 29, 2002

  
	
   

  
	
   

  
	
  J.P. Morgan Trust
  Company, National Association

  
	
   

  
	
  TRUSTEE

  
	
   

  
	
   

  
	
   

  
	
  TMTrademark of Merrill
  Lynch & Co., Inc.

  

 

 

CROSS REFERENCE TABLE*

 

	
  TIA
  Section

  	
   

  	
  Indenture Section

  
	
  310

  	
  (a)(1)

  	
   

  	
  7.10

  
	
   

  	
  (a)(2)

  	
   

  	
  7.10

  
	
   

  	
  (a)(3)

  	
   

  	
  N.A.

  
	
   

  	
  (a)(4)

  	
   

  	
  N.A.

  
	
   

  	
  (b)

  	
   

  	
  7.08; 7.10

  
	
   

  	
  (c)

  	
   

  	
  N.A.

  
	
  311

  	
  (a)

  	
   

  	
  7.11

  
	
   

  	
  (b)

  	
   

  	
  7.11

  
	
   

  	
  (c)

  	
   

  	
  N.A.

  
	
  312

  	
  (a)

  	
   

  	
  2.05

  
	
   

  	
  (b)

  	
   

  	
  13.03

  
	
   

  	
  (c)

  	
   

  	
  13.03

  
	
  313

  	
  (a)

  	
   

  	
  7.06

  
	
   

  	
  (b)(1)

  	
   

  	
  N.A.

  
	
   

  	
  (b)(2)

  	
   

  	
  7.06

  
	
   

  	
  (c)

  	
   

  	
  13.02

  
	
   

  	
  (d)

  	
   

  	
  7.06

  
	
  314

  	
  (a)

  	
   

  	
  4.02; 4.03; 13.02

  
	
   

  	
  (b)

  	
   

  	
  N.A.

  
	
   

  	
  (c)(1)

  	
   

  	
  13.04

  
	
   

  	
  (c)(2)

  	
   

  	
  13.04

  
	
   

  	
  (c)(3)

  	
   

  	
  N.A.

  
	
   

  	
  (d)

  	
   

  	
  N.A.

  
	
   

  	
  (e)

  	
   

  	
  13.05

  
	
   

  	
  (f)

  	
   

  	
  N.A.

  
	
  315

  	
  (a)

  	
   

  	
  7.01

  
	
   

  	
  (b)

  	
   

  	
  7.05; 13.02

  
	
   

  	
  (c)

  	
   

  	
  7.01

  
	
   

  	
  (d)

  	
   

  	
  7.01

  
	
   

  	
  (e)

  	
   

  	
  6.11

  
	
  316

  	
  (a) (last sentence)

  	
   

  	
  2.08

  
	
   

  	
  (a)(1)(A)

  	
   

  	
  6.05

  
	
   

  	
  (a)(1)(B)

  	
   

  	
  6.04

  
	
   

  	
  (a)(2)

  	
   

  	
  N.A.

  
	
   

  	
  (b)

  	
   

  	
  6.07

  
	
  317

  	
  (a)(1)

  	
   

  	
  6.08

  
	
   

  	
  (a)(2)

  	
   

  	
  6.09

  
	
   

  	
  (b)

  	
   

  	
  2.04

  
	
  318

  	
  (a)

  	
   

  	
  13.01

  

 

N.A. means Not
Applicable.

 

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

 

 

TABLE OF CONTENTS*

 

	
  ARTICLE 1

  
	
  DEFINITIONS
  AND INCORPORATION BY REFERENCE

  
	
   

  
	
  SECTION 1.01

  	
  Definitions.

  
	
  SECTION 1.02

  	
  Other Definitions.

  
	
  SECTION 1.01

  	
  Incorporation by Reference of Trust
  Indenture Act.

  
	
  SECTION 1.02

  	
  Rules of Construction.

  
	
  SECTION 1.03

  	
  Acts of Holders.

  
	
   

  	
   

  
	
  ARTICLE 2

  
	
  THE SECURITIES

  
	
   

  
	
  SECTION 2.01

  	
  Form and Dating.

  
	
  SECTION 2.02

  	
  Execution and Authentication.

  
	
  SECTION 2.03

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

  
	
  SECTION 2.04

  	
  Paying Agent to Hold Money and Securities
  in Trust.

  
	
  SECTION 2.05

  	
  Securityholder Lists.

  
	
  SECTION 2.06

  	
  Transfer and Conversion.

  
	
  SECTION 2.07

  	
  Replacement Securities.

  
	
  SECTION 2.08

  	
  Outstanding Securities; Determinations of
  Holders’ Action.

  
	
  SECTION 2.09

  	
  Temporary Securities.

  
	
  SECTION 2.10

  	
  Cancellation.

  
	
  SECTION 2.11

  	
  Persons Deemed Owners.

  
	
  SECTION 2.12

  	
  Global Securities.

  
	
  SECTION 2.13

  	
  CUSIP Numbers.

  
	
   

  	
   

  
	
  ARTICLE 3

  
	
  REDEMPTION
  AND PURCHASES

  
	
   

  	
   

  
	
  SECTION 3.01

  	
  Right to Redeem; Notices to Trustee.

  
	
  SECTION 3.02

  	
  Selection of Securities to Be Redeemed.

  
	
  SECTION 3.03

  	
  Notice of Redemption.

  
	
  SECTION 3.04

  	
  Effect of Notice of Redemption.

  
	
  SECTION 3.05

  	
  Deposit of Redemption Price.

  
	
  SECTION 3.06

  	
  Securities Redeemed in Part.

  
	
  SECTION 3.07

  	
  Conversion Arrangement on Call for
  Redemption.

  
	
  SECTION 3.08

  	
  Purchase of Securities at Option of the Holder.

  

 

*Note : This Table of Contents shall not, for any purpose, be deemed to
be part of the Indenture.

 

i

 

	
  SECTION 3.09

  	
  Purchase of Securities at Option of the Holder
  upon Change in Control.

  
	
  SECTION 3.10

  	
  Effect of Purchase Notice or Change in Control
  Purchase Notice.

  
	
  SECTION 3.11

  	
  Deposit of Purchase Price or Change in
  Control Purchase Price.

  
	
  SECTION 3.12

  	
  Securities Purchased in Part.

  
	
  SECTION 3.13

  	
  Covenant to Comply With Securities Laws
  Upon Purchase of Securities.

  
	
  SECTION 3.14

  	
  Repayment to the Company.

  
	
   

  	
   

  
	
  ARTICLE 4

  
	
  COVENANTS

  
	
   

  	
   

  
	
  SECTION 4.01

  	
  Payment of Securities.

  
	
  SECTION 4.02

  	
  SEC and Other Reports.

  
	
  SECTION 4.03

  	
  Compliance Certificate.

  
	
  SECTION 4.04

  	
  Further Instruments and Acts.

  
	
  SECTION 4.05

  	
  Maintenance of Office or Agency.

  
	
  SECTION 4.06

  	
  Delivery of Certain Information.

  
	
  SECTION 4.07

  	
  Calculation of Tax Original Issue Discount.

  
	
   

  	
   

  
	
  ARTICLE 5

  
	
  SUCCESSOR
  CORPORATION

  
	
   

  
	
  SECTION 5.01

  	
  When Company May Merge or Transfer Assets.

  
	
   

  	
   

  
	
  ARTICLE 6

  
	
  DEFAULTS
  AND REMEDIES

  
	
   

  
	
  SECTION 6.01

  	
  Events of Default.

  
	
  SECTION 6.02

  	
  Acceleration.

  
	
  SECTION 6.03

  	
  Other Remedies.

  
	
  SECTION 6.04

  	
  Waiver of Past Defaults.

  
	
  SECTION 6.05

  	
  Control by Majority.

  
	
  SECTION 6.06

  	
  Limitation on Suits.

  
	
  SECTION 6.07

  	
  Rights of Holders to Receive Payment.

  
	
  SECTION 6.08

  	
  Collection Suit by Trustee.

  
	
  SECTION 6.09

  	
  Trustee May File Proofs of Claim.

  
	
  SECTION 6.10

  	
  Priorities.

  
	
  SECTION 6.11

  	
  Undertaking for Costs.

  
	
  SECTION 6.12

  	
  Waiver of Stay, Extension or Usury Laws.

  
	
   

  	
   

  
	
  ARTICLE 7

  
	
  TRUSTEE

  
	
   

  
	
  SECTION 7.01

  	
  Duties of Trustee.

  

 

ii

 

	
  SECTION 7.02

  	
  Rights of Trustee.

  
	
  SECTION 7.03

  	
  Individual Rights of Trustee.

  
	
  SECTION 7.04

  	
  Trustee’s Disclaimer.

  
	
  SECTION 7.05

  	
  Notice of Defaults.

  
	
  SECTION 7.06

  	
  Reports by Trustee to Holders.

  
	
  SECTION 7.07

  	
  Compensation and Indemnity.

  
	
  SECTION 7.08

  	
  Replacement of Trustee.

  
	
  SECTION 7.09

  	
  Successor Trustee by Merger.

  
	
  SECTION 7.10

  	
  Eligibility; Disqualification.

  
	
   

  	
   

  
	
  ARTICLE 8

  
	
  DISCHARGE
  OF INDENTURE

  
	
   

  
	
  SECTION 8.01

  	
  Discharge of Liability on Securities.

  
	
  SECTION 8.02

  	
  Repayment to the Company.

  
	
   

  	
   

  
	
  ARTICLE 9

  
	
  AMENDMENTS

  
	
   

  
	
  SECTION 9.01

  	
  Without Consent of Holders.

  
	
  SECTION 9.02

  	
  With Consent of Holders.

  
	
  SECTION 9.03

  	
  Compliance with Trust Indenture Act.

  
	
  SECTION 9.04

  	
  Revocation and Effect of Consents, Waivers
  and Actions.

  
	
  SECTION 9.05

  	
  Notation on or Exchange of Securities.

  
	
  SECTION 9.06

  	
  Trustee to Sign Supplemental Indentures.

  
	
  SECTION 9.07

  	
  Effect of Supplemental Indentures.

  
	
   

  	
   

  
	
  ARTICLE 10

  
	
  CONVERSION

  
	
   

  	
   

  
	
  SECTION 10.01

  	
  Conversion Privilege.

  
	
  SECTION 10.02

  	
  Conversion Procedure.

  
	
  SECTION 10.03

  	
  Fractional Shares.

  
	
  SECTION 10.04

  	
  Taxes on Conversion.

  
	
  SECTION 10.05

  	
  Company to Provide Stock.

  
	
  SECTION 10.06

  	
  Adjustment for Change In Capital Stock.

  
	
  SECTION 10.07

  	
  Adjustment for Rights Issue.

  
	
  SECTION 10.08

  	
  Adjustment for Other Distributions.

  
	
  SECTION 10.09

  	
  When Adjustment May Be Deferred.

  
	
  SECTION 10.10

  	
  When No Adjustment Required.

  
	
  SECTION 10.11

  	
  Notice of Adjustment.

  
	
  SECTION 10.12

  	
  Voluntary Increase.

  
	
  SECTION 10.13

  	
  Notice of Certain Transactions.

  
	
  SECTION 10.14

  	
  Reorganization of Company; Special
  Distributions.

  
	
  SECTION 10.15

  	
  Company Determination Final.

  
	
  SECTION 10.16

  	
  Trustee’s Adjustment Disclaimer.

  
	
  SECTION 10.17

  	
  Simultaneous Adjustments.

  

 

iii

 

	
  SECTION 10.18

  	
  Successive Adjustments.

  
	
  SECTION 10.19

  	
  Rights Issued in Respect of Common Stock
  Issued Upon Conversion.

  
	
   

  	
   

  
	
  ARTICLE 11

  
	
  PAYMENT
  OF INTEREST

  
	
   

  
	
  SECTION 11.01

  	
  Interest Payments.

  
	
  SECTION 11.02

  	
  Defaulted Interest.

  
	
  SECTION 11.03

  	
  Interest Rights Preserved.

  
	
   

  	
   

  
	
  ARTICLE 12

  
	
  MISCELLANEOUS

  
	
   

  
	
  SECTION 12.01

  	
  Trust Indenture Act Controls.

  
	
  SECTION 12.02

  	
  Notices; Address of Agency.

  
	
  SECTION 12.03

  	
  Communication by Holders with Other
  Holders.

  
	
  SECTION 12.04

  	
  Certificate and Opinion as to Conditions
  Precedent.

  
	
  SECTION 12.05

  	
  Statements Required in Certificate or
  Opinion.

  
	
  SECTION 12.06

  	
  Separability Clause.

  
	
  SECTION 12.07

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

  
	
  SECTION 12.08

  	
  Calculations.

  
	
  SECTION 12.09

  	
  Legal Holidays.

  
	
  SECTION 12.10

  	
  Governing Law.

  
	
  SECTION 12.11

  	
  No Recourse Against Others.

  
	
  SECTION 12.12

  	
  Successors.

  
	
  SECTION 12.13

  	
  Multiple Originals.

  

 

	
  LIST OF EXHIBITS

  
	
   

  	
   

  
	
  Exhibit A-1

  	
  Form of Global
  Security

  
	
  Exhibit A-2

  	
  Form of Certificated
  Security

  
	
  Exhibit
  B-1

  	
  Transfer Certificate

  
	
  Exhibit
  B-2

  	
  Form
  of Letter to be Delivered by Accredited Investors

  
	
   

  	
   

  
	
  Annex
  C

  	
  Projected
  Payment Schedule

  

 

iv

 

INDENTURE dated as
of April 29, 2002 between IDEC PHARMACEUTICALS CORPORATION, a Delaware
corporation (the “Company”), and J.P. Morgan Trust Company, National
Association, a national banking association (“Trustee”).

 

Each party agrees
as follows for the benefit of the other party and for the equal and ratable
benefit of the Holders of the Company’s Liquid Yield OptionTM Notes due 2032
(Zero Coupon – Senior) (the “Securities”):

 

ARTICLE 1

 

DEFINITIONS AND INCORPORATION BY REFERENCE

 

SECTION 1.01       Definitions.

 

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

 

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

 

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

 

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

 

“Business Day”
means each day of the year other than a Saturday or a Sunday or other day on
which banking institutions in the City of New York or the City of San Francisco
are required or authorized to close.

 

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

 

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

 

“Common Stock”
shall mean the shares of common stock, $0.0005 par value, of the Company as it exists
on the date of this Indenture or any other shares of Capital Stock of the
Company into which the Common Stock shall be reclassified or changed.

 

 

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

 

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

 

“Consolidated
Net Assets” means the total amount of assets of the Company and its
Subsidiaries (less applicable depreciation, amortization and other valuation
reserves), after deducting therefrom all current liabilities of the Company and
its Subsidiaries (other than intercompany liabilities and the current portion
of long-term debt, capitalized lease obligations and other indebtedness), all
as set forth on the latest consolidated balance sheet of the Company at the end
of each calendar quarter prepared in accordance with generally accepted
accounting principles.

 

“Corporate
Trust Office” means the principal office of the Trustee at which at any
time its corporate trust business shall be administered, which office at the
date hereof is located at 101 California, Suite 3800, San Francisco, CA 94111,
Attention:  Corporate Trust Services
Division, or such other address as the Trustee may designate from time to time
by notice to the Holders and the Company, or the principal corporate trust
office of any successor Trustee (or such other address as a successor Trustee
may designate from time to time by notice to the Holders and the Company).

 

“Debt”
means with respect to the Company at any date, without duplication, obligations
(other than nonrecourse obligations) for borrowed money or evidenced by bonds,
debentures, notes or similar instruments.

 

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

 

“Global
Securities” means Securities that are in the form of the Securities
attached hereto as Exhibit A-1, and to the extent that such Securities are
required to bear the Legend required by Section 2.06, such Securities will be
in the form of a 144A Global Security.

 

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

 

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

 

“Institutional
Accredited Investor Security” means a Security substantially in the form of
the Security attached hereto as Exhibit A-2, representing Securities sold to
institutional “accredited investors” (as defined in Rule 501(a)(1), (2),
(3) and (7) under the Securities Act).

 

“Interest
Payment Date” means April 29 and October 29 of each year.

 

2

 

“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.

 

“Issue Price”
of any Security means, in connection with the original issuance of such
Security, the initial issue price at which the Security is sold as set forth on
the face of the Security.

 

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

 

“Officers’
Certificate” means a written certificate containing the information
specified in Sections 12.04 and 12.05, signed in the name of the Company by any
two Officers, and delivered to the Trustee.

 

“Opinion of
Counsel” means a written opinion containing the information specified in
Sections 12.04 and 12.05, from legal counsel who is reasonably acceptable to
the Trustee.  The counsel may be an
employee of, or counsel to, the Company or the Trustee.

 

“Original Issue
Discount” of any Security means the difference between the Issue Price and
the Principal Amount at Maturity of the Security as set forth on the face of
the Security.

 

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

 

“Principal
Amount at Maturity” of a Security means the Principal Amount at Maturity as
set forth on the face of the Security.

 

“Protected
Purchaser” shall have the meaning set forth in Section 2.07.

 

“Purchase Date”
means each date specified as such in paragraph 7 of the Securities.

 

“Purchase Price”
means, with respect to any Purchase Date, the applicable amount specified as
such in paragraph 7 of the Securities.

 

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

 

“Redemption
Price” or “redemption price” shall have the meaning set forth in
paragraph 6 of the Securities.

 

“Registration
Rights Agreement” means the registration rights agreement, dated as of
April 29, 2002, between the Company and Merrill Lynch, Pierce, Fenner
& Smith Incorporated.

 

3

 

“Regular Record
Date” means, with respect to any Interest Payment Date, April 14 and
October 14, as applicable, of each year.

 

“Regulation S”
means Regulation S under the Securities Act or any successor provision, as it
may be amended from time to time.

 

“Regulation S
Global Security” means a permanent Global Security  that is deposited with and registered in the
name of the Depositary and represents Securities sold in reliance on Regulation
S.

 

“Responsible
Officer” means, when used with respect to the Trustee, any officer within
the corporate trust department of the Trustee, including any vice president,
assistant vice president, assistant secretary, or trust officer.

 

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

 

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

 

“SEC” means
the Securities and Exchange Commission.

 

“Securities”
means any of the Company’s Liquid Yield OptionTM Notes due 2032 (Zero
Coupon-Senior), as amended or supplemented from time to time, issued under this
Indenture.

 

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

 

“Significant
Subsidiary” means a “significant subsidiary,” as such term is defined in
Rule 1-02 of Regulation S-X under the Securities Act of 1933, as amended.

 

“Special Record
Date” means for the payment of any Defaulted Interest, the date fixed by
the Trustee pursuant to Section 11.02.

 

“Stated
Maturity,” when used with respect to any Security or any installment of
semiannual or contingent interest thereon, means the date specified in such
Security as the fixed date on which an amount equal to the Principal Amount at
Maturity of such Security or such installment of semiannual or contingent
interest is due and payable.

 

“Subsidiary”
means (i) a corporation, a majority of whose Voting Stock is, at the date of
determination, directly or indirectly owned by the Company, by one or more
Subsidiaries of the Company, or by the Company and one or more Subsidiaries of
the Company, (ii) a partnership in which the Company, a Subsidiary of the
Company or the Company and one or more Subsidiaries of the Company, holds a
majority interest in the equity capital or profits of such partnership, or
(iii) any other person (other than a corporation or a partnership) in which the
Company, a Subsidiary of the Company, or the Company and one or more
Subsidiaries of the Company, directly or indirectly, at the date of
determination, has (x) at least a majority

 

4

 

ownership
interest or (y) the power to elect or direct the election of a majority of the
directors or trustees, as the case may be, or other governing body of such
person.

 

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

 

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

 

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

 

“Voting Stock”
means, with respect to any corporation, association, company or business trust,
stock or other securities of the class or classes having general voting power
under ordinary circumstances to elect at least a majority of the board of
directors, managers or trustees of such corporation, association, company or
business trust, provided that, for the purposes hereof, stock or other
securities which carry only the right to vote conditionally on the happening of
an event shall not be considered Voting Stock whether or not such event shall
have happened.

 

SECTION 1.02       Other Definitions.

 

	 
	
  Term

  	
   

  	
  Defined in

  Section

  
	 
	
  “Act”

  	
   

  	
  1.05(a)

  
	 
	
  “Agent Members”

  	
   

  	
  2.12(e)

  
	 
	
  “Associate”

  	
   

  	
  3.09(a)

  
	 
	
  “Average Sale Price”

  	
   

  	
  10.01

  
	 
	
  “Bankruptcy Law”

  	
   

  	
  6.01

  
	 
	
  “beneficial owner”

  	
   

  	
  3.09(a)

  
	 
	
  “Bid Solicitation Agent”

  	
   

  	
  2.03

  
	 
	
  “cash”

  	
   

  	
  3.08(b)

  
	 
	
  “Change in Control”

  	
   

  	
  3.09(a)

  
	 
	
  “Change in Control Purchase Date”

  	
   

  	
  3.09(a)

  
	 
	
  “Change in Control Purchase Notice”

  	
   

  	
  3.09(c)

  
	 
	
  “Change in Control Purchase Price”

  	
   

  	
  3.09(a)

  
	 
	
  “Company Notice”

  	
   

  	
  3.08(e)

  
	 
	
  “Company Notice Date”

  	
   

  	
  3.08(c)

  
	 
	
  “Conversion Agent”

  	
   

  	
  2.03

  
	 
	
  “Conversion Date”

  	
   

  	
  10.02

  
	
  “Conversion Rate”

  	
   

  	
  10.01

  
	
  “Custodian”

  	
   

  	
  6.01

  
	
  “Defaulted Interest”

  	
   

  	
  11.03

  
	
  “Depositary”

  	
   

  	
  2.01(a)

  
	
  “DTC”

  	
   

  	
  2.01(a)

  
	
  “Event of Default”

  	
   

  	
  6.01

  
	
  “Exchange Act”

  	
   

  	
  3.08(d)

  
	
  “Ex-Dividend Date”

  	
   

  	
  10.08(b)

  
	
  “Ex-Dividend Time”

  	
   

  	
  10.01

  
	
  “Extraordinary Cash Dividend”

  	
   

  	
  10.08

  
	
  “Institutional Accredited Investors”

  	
   

  	
  2.01(b)

  
	
  “Legal Holiday”

  	
   

  	
  12.08

  
	
  “Legend”

  	
   

  	
  2.06(f)

  
	
  “LYON Market Price”

  	
   

  	
  Exhibit A-1

  
	
  “Market Price”

  	
   

  	
  3.08(d)

  
	
  “Measurement Period”

  	
   

  	
  10.08(a)

  
	
  “noncontingent bond method”

  	
   

  	
  4.07

  
	
  “Notice of Default”

  	
   

  	
  6.01

  
	
  “Paying Agent”

  	
   

  	
  2.03

  
	
  “Post-Distribution Price”

  	
   

  	
  10.08(b)

  
	
  “Purchase Notice”

  	
   

  	
  3.08(a)

  
	
  “QIB”

  	
   

  	
  2.01(a)

  
	
  “Registrar”

  	
   

  	
  2.03

  
	
  “Relevant Cash Dividends”

  	
   

  	
  10.08(a)

  
	
  “Rights”

  	
   

  	
  10.19

  
	
  “Rights Agreement”

  	
   

  	
  10.19

  
	
  “Rule 144A Information”

  	
   

  	
  4.06

  
	
  “Sale Price”

  	
   

  	
  3.08(d)

  
	
  “Securities Act”

  	
   

  	
  3.08(d)

  
	
  “Special Record Date”

  	
   

  	
  11.02

  
	
  “Time of Determination”

  	
   

  	
  10.01

  
				

 

5

 

SECTION 1.01       Incorporation
by Reference of Trust Indenture Act.

 

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

 

“Commission”
means the SEC.

 

“indenture
securities” means the Securities.

 

“indenture
security holder” means a Securityholder.

 

“indenture to
be qualified” means this Indenture.

 

6

 

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

 

“obligor”
on the indenture securities means the Company.

 

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

 

SECTION 1.02       Rules of
Construction.

 

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 United
States generally accepted accounting principles as in effect from time to time;

 

(3)           “or” is not
exclusive;

 

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

 

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

 

SECTION 1.03       Acts of Holders.

 

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

 

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

 

7

 

and date of the execution of any such instrument or writing (electronic
or otherwise), or the authority of the Person executing the same, may also be
proved in any other manner which the Trustee deems sufficient.

 

(b)           The
ownership of Securities shall be proved by the register for the Securities
maintained by the Registrar.

 

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

 

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

 

ARTICLE 2

 

THE SECURITIES

 

SECTION 2.01       Form and Dating.

 

The Securities and
the Trustee’s certificate of authentication shall be substantially in the form
of Exhibits A-1 and A-2, which are parts of this Indenture.  The Securities may have notations, legends
or endorsements required by law, stock exchange rule or usage (provided that
any such notation, legend or endorsement required by usage is in a form
acceptable to the Company).  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.

 

(a)           144A
Global Securities.  Securities
offered and sold (i) within the United States to qualified institutional buyers
as defined in Rule 144A (“QIBs”) in reliance on Rule 144A
shall be issued, initially in the form of a 144A Global Security, and (ii) in
reliance on Regulation S shall be issued initially in the form of a Regulation
S Global Security, which, in each case, shall be deposited with the Trustee at
its Corporate Trust Office, as custodian for the

 

8

 

Depositary and registered in the name of The Depository Trust Company
(“DTC”) or the nominee thereof (such depositary, or any successor
thereto, and any such nominee being hereinafter referred to as the “Depositary”),
duly executed by the Company and authenticated by the Trustee as hereinafter
provided.  The aggregate Principal
Amount at Maturity of the 144A Global Securities and the Regulation S Global
Security, if any, may from time to time be increased or decreased by
adjustments made on the records of the Trustee and the Depositary as
hereinafter provided.

 

(b)           Institutional
Accredited Investor Securities. 
Securities offered and sold within the United States to institutional
accredited investors as defined in Rule 501(a)(1), (2) (3) and (7) under
the Securities Act (“Institutional Accredited Investors”) shall be
issued, initially in the form of an Institutional Accredited Investor Security,
duly executed by the Company and authenticated by the Trustee as hereinafter
provided.

 

(c)           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
Principal Amount at Maturity of outstanding Securities from time to time
endorsed thereon and that the aggregate Principal Amount at Maturity of
outstanding Securities represented thereby may from time to time be reduced or
increased, as appropriate, to reflect exchanges, redemptions and
conversions.  Except as provided in this
Section 2.01, 2.06 or 2.12, owners of beneficial interests in Global Securities
will not be entitled to receive physical delivery of Certificated Securities.

 

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

 

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

 

The Company shall
execute and the Trustee shall, in accordance with this Section 2.01(d),
authenticate and deliver initially one or more Global Securities that (i) shall
be registered in the name of the Depositary, (ii) shall be delivered by the
Trustee to the Depositary or pursuant to the Depositary’s instructions and
(iii) shall bear legends substantially to the following effect:

 

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

 

9

 

HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.

 

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

 

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

 

SECTION 2.02       Execution
and Authentication.

 

The Securities
shall be executed on behalf of the Company by any Officer.  The signature of the Officer on the
Securities may be manual or facsimile.

 

Securities bearing
the manual or facsimile signatures of an individual who was at the time of the
execution of the Securities the proper Officer of the Company shall bind the
Company, notwithstanding that such individual has ceased to hold such office
prior to the authentication and delivery of such Securities or did not hold
such office at the date of authentication of such Securities.

 

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

 

Subject to the
terms of Sections 12.04 and 12.05 hereof, the Trustee shall authenticate and
deliver Securities for original issue in an aggregate Principal Amount at
Maturity of up to $1,264,950,000 (subject to Section 2.07 hereof) upon a
Company Order without any further action by the Company.  The aggregate Principal Amount at Maturity
of Securities outstanding at any time may not exceed the amount set forth in
the foregoing sentence, except as provided in Section 2.07.

 

The Securities
shall be issued only in registered form without coupons and only in
denominations of $1,000 of Principal Amount at Maturity and any integral
multiple thereof.

 

The Trustee shall
have the right to decline to authenticate and deliver any securities under this
Section if the Trustee, being advised by counsel, determines that such action
may not be lawfully taken or if the Trustee in good faith shall determine that
such action would expose the Trustee to personal liability to existing Holders.

 

10

 

SECTION 2.03       Registrar, Paying Agent, Conversion
Agent and Bid Solicitation Agent.

 

The Company shall
maintain an office or agency where Securities may be presented for registration
of transfer or for exchange for other Securities (“Registrar”), an
office or agency where Securities may be presented for purchase or payment (“Paying
Agent”) and an office or agency where Securities may be presented for
conversion into Common Stock (“Conversion Agent”).  The Company shall also appoint a bid
solicitation agent (the “Bid Solicitation Agent”) to act pursuant to
paragraph 5 of the Securities.  The
Registrar shall keep a register of the Securities and of their transfer and
exchange.  The Company may have one or
more co-registrars, one or more additional paying agents and one or more
additional conversion agents.  The term
Paying Agent includes any additional paying agent, including any named pursuant
to Section 4.05.  The term Conversion
Agent includes any additional conversion agent, including any named pursuant to
Section 4.05.

 

The Company shall
enter into an appropriate agency agreement with any Registrar or co-registrar,
Paying Agent, Conversion Agent or Bid Solicitation Agent (other than the
Trustee).  The agreement shall implement
the provisions of this Indenture that relate to such agent.  The Company shall notify the Trustee of the
name and address of any such agent.  If
the Company fails to maintain a Registrar, Paying Agent, Conversion Agent or
Bid Solicitation Agent, the Trustee shall act as such and shall be entitled to
appropriate compensation therefor pursuant to Section 7.07.  The Company or any Subsidiary or an
Affiliate of either of them may act as Paying Agent, Registrar, Conversion
Agent or co-registrar.  None of the
Company or any Subsidiary or any Affiliate of either of them may act as Bid
Solicitation Agent.

 

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

 

SECTION 2.04       Paying Agent
to Hold Money and Securities in Trust.

 

Except as
otherwise provided herein, by no later than 10:00 a.m., New York City time, on
or prior to each due date of payments in respect of any Security, the Company
shall deposit with the Paying Agent a sum of money (in immediately available
funds if deposited on the due date) or Common Stock sufficient to make such
payments when so becoming due.  The
Company shall require each Paying Agent (other than the Trustee) to agree in
writing that the Paying Agent shall hold in trust for the benefit of Securityholders
or the Trustee all money and Common Stock held by the Paying Agent for the
making of payments in respect of the Securities and shall notify the Trustee of
any default by the Company in making any such payment.  At any time during the continuance of any
such default, the Paying Agent shall, upon the written request of the Trustee,
forthwith pay to the Trustee all money and Common Stock so held in trust.  If the Company, a Subsidiary or an Affiliate
of either of them acts as Paying Agent, it shall segregate the money and Common
Stock held by it as Paying Agent and hold it as a separate trust fund.  The Company at any time may require a Paying
Agent to pay all money and Common Stock held by it to the Trustee and to
account for any funds and Common Stock disbursed by it.  Upon doing so, the Paying Agent shall have
no further liability for the money or Common Stock.

 

11

 

SECTION 2.05       Securityholder
Lists.

 

The Trustee shall
preserve in as current a form as is reasonably practicable the most recent list
available to it of the names and addresses of Securityholders.  If the Trustee is not the Registrar, the
Company shall cause to be furnished to the Trustee at least semiannually on
May 1 and November 1 a listing of Securityholders dated within 15
days of the date on which the list is furnished and at such other times as the
Trustee may request in writing a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of Securityholders.

 

SECTION 2.06       Transfer and
Conversion.

 

Subject to Section
2.12 hereof:

 

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

 

At the option of
the Holder, Certificated Securities may be exchanged for other Securities of
any authorized denomination or denominations, of a like aggregate Principal
Amount at Maturity, upon surrender of the Securities to be exchanged, together
with a written instrument of transfer satisfactory to the Registrar duly
executed by the Securityholder or such Securityholder’s attorney duly
authorized in writing, at such office or agency.  Whenever any Securities are so surrendered for exchange, the
Company shall execute, and the Trustee upon receipt of a Company Order shall
authenticate and deliver, the Securities which the Holder making the exchange
is entitled to receive.

 

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

 

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

 

12

 

Transfers of a Global Security shall be limited to transfers of such
Global Security in whole, or in part, to nominees of the Depositary or to a
successor of the Depositary or such successor’s nominee.

 

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

 

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

 

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

 

(f)            If
Securities are issued upon the registration of transfer, exchange or
replacement of Securities subject to restrictions on transfer and bearing the
legends set forth on the form of Security attached hereto as Exhibits A-1 and
A-2 setting forth such restrictions (collectively, the “Legend”), or if
a request is made to remove the Legend on a 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, 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.  Upon (i) provision of such satisfactory
evidence, or (ii) 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 Company shall use its reasonable best efforts to reinstate the
Legend.

 

The Trustee and
the Registrar shall have no obligation or duty to monitor, determine or inquire
as to compliance with any restrictions on transfer imposed under this Indenture
or under applicable law with respect to any transfer of any interest in any
Security (including any transfers between or among Depositary participants or
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
(i) any mutilated Security is surrendered to the Trustee, or (ii) the Company
and the Trustee receive evidence to their satisfaction of the destruction, loss
or theft of any Security, and there is delivered to the Company and the Trustee
such security or indemnity

 

13

 

as may be required by them to save each of them harmless, then, in the
absence of notice to the Company or the Trustee that such Security has been
acquired by a protected purchaser within the meaning of Article 8 of the
Uniform Commercial Code as in effect from time to time in the State of New York
(a “Protected Purchaser”), the Company shall execute and upon its
written request the Trustee shall authenticate and deliver, in exchange for any
such mutilated Security or in lieu of any such destroyed, lost or stolen
Security, a new Security of like tenor and Principal Amount at Maturity,
bearing a number not contemporaneously outstanding.

 

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

 

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

 

(d)           Every
new Security issued pursuant to this Section 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 are exclusive and shall preclude (to the extent
lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities.

 

SECTION 2.08       Outstanding Securities;
Determinations of Holders’ Action.

 

(a)           Securities
outstanding at any time are all the Securities authenticated by the Trustee
except for those cancelled by it, those paid pursuant to Section 2.07 and
delivered to it for cancellation and those described in this Section 2.08 as
not outstanding.  A Security does not
cease to be outstanding because the Company or an Affiliate thereof holds the
Security; provided,
however, that in determining whether the Holders of the requisite
Principal Amount at Maturity of Securities have given or concurred in any
request, demand, authorization, direction, notice, consent or waiver hereunder,
Securities owned by the Company or any other obligor upon the Securities or any
Affiliate of the Company or such other obligor shall be disregarded and deemed
not to be outstanding, except that, in determining whether the Trustee shall be
protected in relying upon any such request, demand, authorization, direction,
notice, consent or waiver, only Securities which a Responsible Officer of the
Trustee actually knows to be so owned shall be so disregarded.  Subject to the foregoing, only Securities
outstanding at the time of such determination shall be considered in any such
determination (including, without limitation, determinations pursuant to
Articles 6 and 9).

 

14

 

(b)           If
a Security is replaced pursuant to Section 2.07, the replaced Security ceases
to be outstanding unless the Trustee and the Company receive proof satisfactory
to each of them that the replaced Security is held by a Protected Purchaser.

 

(c)           If
the Paying Agent holds, in accordance with this Indenture, on a Redemption
Date, or on the Business Day following the Purchase Date or a Change in Control
Purchase Date, or on Stated Maturity, money or securities, if permitted
hereunder, sufficient to pay Securities payable on that date, then immediately
after such Redemption Date, Purchase Date, Change in Control Purchase Date or
Stated Maturity, as the case may be, such Securities shall cease to be
outstanding and Original Issue Discount and interest (including contingent
interest), if any, on such Securities shall cease to accrue whether or not the
Security is delivered to the Paying Agent; provided, that if such Securities
are to be redeemed, notice of such redemption has been duly given pursuant to
this Indenture.

 

(d)           If
a Security is converted in accordance with Article 11, then from and after the
time of conversion on the Conversion Date, such Security shall cease to be
outstanding and Original Issue Discount and interest (including contingent
interest), if any, shall cease to accrue on such Security.

 

SECTION 2.09       Temporary
Securities.

 

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

 

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

 

SECTION 2.10       Cancellation.

 

All Securities
surrendered for payment, purchase by the Company pursuant to Article 3,
conversion, redemption or registration of transfer or exchange shall, if
surrendered to any person other than the Trustee, be delivered to the Trustee
and shall be promptly cancelled by it. 
The Company may at any time deliver to the Trustee for cancellation any
Securities previously authenticated and delivered hereunder which the Company
may have acquired in any

 

15

 

manner
whatsoever, and all Securities so delivered shall be promptly cancelled by the
Trustee.  The Company may not issue new
Securities to replace Securities it has paid or delivered to the Trustee for
cancellation or that any Holder has converted pursuant to Article 11.  No Securities shall be authenticated in lieu
of or in exchange for any Securities cancelled as provided in this Section,
except as expressly permitted by this Indenture.  All cancelled Securities held by the Trustee shall be disposed of
by the Trustee in accordance with the Trustee’s customary procedure.

 

SECTION 2.11       Persons
Deemed Owners.

 

Prior to due
presentment of a Security for registration of transfer, the Company, the
Trustee and any agent of the Company or the Trustee may treat the Person in
whose name such Security is registered as the owner of such Security for the
purpose of receiving payment of principal of the Security or the payment of any
Redemption Price, Purchase Price or Change in Control Purchase Price in respect
thereof, and interest (including contingent interest, if any) thereon, for the
purpose of conversion and for all other purposes whatsoever, whether or not such
Security be overdue, and neither the Company, the Trustee nor any agent of the
Company or the Trustee shall be affected by notice to the contrary.

 

SECTION 2.12       Global Securities.

 

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

 

(i)                                     Transfer
of Global Security.  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 this clause (i) 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.  Nothing in
this Section 2.12(a)(i) shall prohibit or render ineffective any transfer of a
beneficial interest in a Global Security effected in accordance with the other
provisions of this Section 2.12(a).

 

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

 

16

 

(a)                                  so
long as the Securities are Restricted Securities, certification, in the form
set forth in Exhibit B-1, and, if requested by the Company or the Registrar,
certification in the form set forth in Exhibit B-2, that such beneficial
interest in the Global Security is being transferred to an Institutional
Accredited Investor in accordance with subparagraphs (a)(1), (2), (3) or (7) of
Rule 501 under the Securities Act;

 

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

 

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

 

then the Trustee
shall cause, or direct the Registrar to cause, in accordance with Applicable
Procedures and the standing instructions and procedures existing between the
Depositary and the Registrar, the aggregate Principal Amount at Maturity of
Securities represented by the Global Security to be decreased by the aggregate
Principal Amount at Maturity of the Certificated Security to be issued, shall
authenticate and deliver such Certificated Security and shall debit or cause to
be debited to the account of the Person specified in such instructions a
beneficial interest in the Global Security equal to the Principal Amount at
Maturity of the Certificated Security so issued.

 

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

 

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

 

(y)           to
exchange such Certificated Securities for an equal Principal Amount at Maturity
of Certificated Securities of other authorized denominations,

 

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

 

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

 

(b)           so
long as such Securities are Restricted Securities, such Securities are being
transferred or exchanged pursuant to an effective registration statement under
the Securities Act or pursuant to clause (A), (B) or (C) below, and are

 

17

 

accompanied by the following additional information
and documents, as applicable:

 

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

 

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

 

(C)           if such Certificated Securities are
being transferred pursuant to an exemption from or in a transaction not subject
to registration (i) a certification to that effect (in the form set forth in
Exhibit B-1 and B-2, if applicable) and (ii) if the Company or Registrar so
requests, an opinion of counsel or other evidence reasonably satisfactory to
them as to the compliance with the restrictions set forth in the Legend.

 

(iv)                              Restrictions
on Transfer of a Certificated Security for a Beneficial Interest in a Global
Security.  A Certificated Security may
not be exchanged for a beneficial interest in a Global Security except upon
satisfaction of the requirements set forth below.

 

Upon receipt by the Trustee of a Certificated
Security, duly endorsed or accompanied by appropriate instruments of transfer,
in form satisfactory to the Trustee, together with:

 

(a)           so
long as the Securities are Restricted Securities, certification, in the form
set forth in Exhibit B-1, that such Certificated Security is being transferred
to a QIB in accordance with Rule 144A or to a Person in reliance on
Regulation S; and

 

(b)           written
instructions directing the Trustee to make, or to direct the Registrar to make,
an adjustment on its books and records with respect to such Global Security to
reflect an increase in the aggregate Principal Amount at Maturity of the
Securities represented by the Global Security, such instructions to contain
information regarding the Depositary account to be credited with such increase,

 

then the Trustee shall cancel such Certificated
Security and cause, or direct the Registrar to cause, in accordance with
Applicable Procedures and the standing instructions and procedures existing
between the Depositary and the Registrar, the aggregate Principal Amount at
Maturity of Securities represented by the Global Security to be increased by
the aggregate Principal Amount at Maturity of the Certificated Security to be
exchanged, and shall credit or cause to be credited to the account of the
Person specified in such instructions a beneficial interest in the Global
Security equal to the Principal Amount at Maturity of the Certificated Security
so cancelled.  If no Global Securities
are then outstanding, the Company

 

18

 

shall issue and the Trustee upon receipt of a Company
Order shall authenticate a new Global Security in the appropriate Principal
Amount at Maturity.

 

(b)           Subject
to the succeeding paragraph, every Security shall be subject to the
restrictions on transfer provided in the Legend including the delivery of an
Opinion of Counsel, if so provided. 
Whenever any Restricted Security is presented or surrendered for
registration of transfer or for 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 B-1, 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.

 

(c)           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 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 an opinion of counsel having substantial experience in
practice under the Securities Act and otherwise reasonably acceptable to the
Company, addressed to the Company, the Trustee and the Registrar and in form
acceptable to the Company, 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 at
Maturity, which shall not bear the restrictive Legend.  The Company shall inform the Trustee of the
effective date of any registration statement registering the Securities under
the Securities Act.  The Trustee and the
Registrar shall not be liable for any action taken or omitted to be taken by it
in good faith in accordance with the aforementioned Opinion of Counsel or
registration statement.

 

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

 

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

 

(1)           Notwithstanding
any other provisions of this Indenture or the Securities, except as provided in
Section 2.12(a)(ii), a Global Security shall not be exchanged in whole or in
part for a Security 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 (i) the Depositary has notified the Company
that it is unwilling

 

19

 

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, (ii) the Company decides to discontinue use of the
system of book-entry transfer through DTC (or any successor depositary); or
(iii) an Event of Default has occurred and is continuing with respect to the
Securities.  Any Global Security
exchanged pursuant to clause (i) or (ii) above shall be so exchanged in whole
and not in part, and any Global Security exchanged pursuant to clause (iii)
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 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.

 

(2)           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 at Maturity 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 at Maturity 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.

 

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

 

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

 

(5)           Neither
any members of, or participants in, the Depositary (collectively, the “Agent
Members”) nor any other Persons on whose behalf Agent Members may act shall
have any rights under this Indenture 

 

20

 

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.

 

SECTION 2.13       CUSIP Numbers.

 

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

 

ARTICLE 3

 

REDEMPTION AND PURCHASES

 

SECTION 3.01       Right to
Redeem; Notices to Trustee.

 

The Company, at
its option, may redeem the Securities in accordance with the provisions of
paragraphs 6 and 8 of the Securities. 
If the Company elects to redeem Securities pursuant to paragraph 6 of
the Securities, it shall notify the Trustee in writing of the Redemption Date,
the Principal Amount at Maturity of Securities to be redeemed, the CUSIP number
of Securities to be redeemed, the Redemption Price and the amount of semiannual
and contingent interest, if any, payable on the Redemption Date.

 

The Company shall
give the notice to the Trustee provided for in this Section 3.01 by a Company
Order, at least 45 days before the Redemption Date (unless a shorter notice
shall be satisfactory to the Trustee).

 

SECTION 3.02       Selection of
Securities to Be Redeemed.

 

If less than all
the Securities are to be redeemed, the Trustee shall select the Securities to
be redeemed pro rata or by lot or by any other method selected by the Trustee
in its sole discretion (so long as such method is not prohibited by the rules
of any stock exchange on

 

21

 

which
the Securities are then listed).  The
Trustee shall make the selection at least 30 days but not more than 60 days
before the Redemption Date from outstanding Securities not previously called
for redemption.

 

Securities and
portions of them the Trustee selects shall be in Principal Amounts at Maturity
of $1,000 or an integral multiple of $1,000. 
Provisions of this Indenture that apply to Securities called for
redemption also apply to portions of Securities called for redemption.  The Trustee shall notify the Company
promptly of the Securities or portions of Securities to be redeemed.

 

If any Security
selected for partial redemption is converted in part before termination of the
conversion right with respect to the portion of the Security so selected, the
converted portion of such Security shall be deemed (so far as may be) to be the
portion selected for redemption. 
Securities which have been converted during a selection of Securities to
be redeemed may be treated by the Trustee as outstanding for the purpose of
such selection.

 

SECTION 3.03       Notice of Redemption.

 

At least 30 days
but not more than 60 days before a Redemption Date, the Company shall mail a notice
of redemption by first-class mail, postage prepaid, to each Holder of
Securities to be redeemed.

 

The notice shall
identify the Securities to be redeemed and shall state:

 

(1)           the Redemption Date;

 

(2)           the
Redemption Price and, to the extent known at the time of such notice, the
amount of semiannual and contingent interest, if any, payable on the Redemption
Date;

 

(3)           the
Conversion Rate;

 

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

 

(5)           that
Securities called for redemption may be converted at any time before the close
of business on the second Business Day immediately preceding the Redemption
Date;

 

(6)           that
Holders who want to convert Securities must satisfy the requirements set forth
in paragraph 9 of the Securities;

 

(7)           that
Securities called for redemption must be surrendered to the Paying Agent to
collect the Redemption Price and semiannual and contingent interest, if any;

 

(8)           if
fewer than all the outstanding Securities are to be redeemed, the certificate
number and Principal Amounts at Maturity of the particular Securities to be
redeemed;

 

22

 

(9)           that,
unless the Company defaults in making payment of such Redemption Price and
semiannual and contingent interest, if any, Original Issue Discount and
interest (including semiannual and contingent interest), if any, on Securities
called for redemption will cease to accrue on and after the Redemption Date and
the Securities will cease to be convertible; and

 

(10)         the
CUSIP number of the Securities.

 

At the Company’s
request, the Trustee shall give the notice of redemption in the Company’s name
and at the Company’s expense, provided that the Company makes such request at
least three Business Days (unless a shorter period shall be satisfactory to the
Trustee) prior to the date such notice of redemption must be mailed.

 

SECTION 3.04       Effect of
Notice of Redemption.

 

Once notice of
redemption is given, Securities called for redemption become due and payable on
the Redemption Date and at the Redemption Price (together with accrued
semiannual and contingent interest, if any, to but not including the date of
redemption) stated in the notice except for Securities which are converted in
accordance with the terms of this Indenture. 
Upon surrender to the Paying Agent, such Securities shall be paid at the
Redemption Price (together with accrued semiannual and contingent interest, if
any, to but not including the date of redemption) stated in the notice.

 

SECTION 3.05       Deposit of
Redemption Price.

 

Prior to 10:00
a.m. (New York City time) on any Redemption Date, the Company shall deposit
with the Paying Agent (or if the Company or a Subsidiary or an Affiliate of
either of them is the Paying Agent, shall segregate and hold in trust) money
sufficient to pay the Redemption Price of, and any accrued and unpaid
semiannual and contingent interest to but not including the date of redemption
with respect to, all Securities to be redeemed on that date other than
Securities or portions of Securities called for redemption which on or prior
thereto have been delivered by the Company to the Trustee for cancellation or
have been converted.  The Paying Agent
shall as promptly as practicable return to the Company any money, not required
for that purpose because of conversion of Securities pursuant to
Article 10.  If such money is then
held by the Company in trust and is not required for such purpose it shall be
discharged from such trust.

 

SECTION 3.06       Securities
Redeemed in Part.

 

Upon surrender of
a Security that is redeemed in part, the Company shall execute and the Trustee
shall authenticate and deliver to the Holder a new Security in an authorized
denomination equal in Principal Amount at Maturity to the unredeemed portion of
the Security surrendered.

 

SECTION 3.07       Conversion
Arrangement on Call for Redemption.

 

In connection with
any redemption of Securities, the Company may arrange for the purchase and
conversion of any Securities called for redemption by an agreement with one or

 

23

 

more
investment banks or other purchasers to purchase such Securities by paying to
the Trustee in trust for the Securityholders, on or prior to 10:00 a.m. New
York City time on the Redemption Date, an amount that, together with any amounts
deposited with the Trustee by the Company for the redemption of such
Securities, is not less than the Redemption Price of, and any accrued and
unpaid semiannual and contingent interest with respect to, such Securities.  Notwithstanding anything to the contrary
contained in this Article 3, the obligation of the Company to pay the
Redemption Prices of such Securities shall be deemed to be satisfied and
discharged to the extent such amount is so paid by such purchasers.  If such an agreement is entered into, any
Securities not duly surrendered for conversion by the Holders thereof may, at
the option of the Company, be deemed, to the fullest extent permitted by law,
acquired by such purchasers from such Holders and (notwithstanding anything to
the contrary contained in Article 10) surrendered by such purchasers for
conversion, all as of immediately prior to the close of business on the
Business Day prior to the Redemption Date, subject to payment of the above
amount as aforesaid.  The Trustee shall
hold and pay to the Holders whose Securities are selected for redemption any
such amount paid to it for purchase and conversion in the same manner as it
would moneys deposited with it by the Company for the redemption of Securities.  Without the Trustee’s prior written consent,
no arrangement between the Company and such purchasers for the purchase and
conversion of any Securities shall increase or otherwise affect any of the
powers, duties, responsibilities or obligations of the Trustee as set forth in
this Indenture, and the Company agrees to indemnify the Trustee from, and hold
it harmless against, any loss, liability or expense arising out of or in
connection with any such arrangement for the purchase and conversion of any
Securities between the Company and such purchasers, including the costs and
expenses incurred by the Trustee in the defense of any claim or liability
arising out of or in connection with the exercise or performance of any of its
powers, duties, responsibilities or obligations under this Indenture.

 

SECTION 3.08       Purchase of
Securities at Option of the Holder.

 

(a)           General.  Securities shall be purchased by the Company
pursuant to paragraph 7 of the Securities at the option of the Holder thereof,
upon:

 

(1)           delivery to the Paying Agent by the
Holder of a written notice of purchase (a “Purchase Notice”) at any time
from the opening of business on the date that is 20 Business Days prior to a
Purchase Date until the close of business on such Purchase Date stating:

 

(A)          the
certificate number of the Security which the Holder will deliver to be
purchased,

 

(B)           the
portion of the Principal Amount at Maturity of the Security which the Holder
will deliver to be purchased, which portion must be a Principal Amount at
Maturity of $1,000 or an integral multiple thereof,

 

(C)           that
such Security shall be purchased as of the Purchase Date pursuant to the terms
and conditions specified in paragraph 7 of the Securities and in this
Indenture, and

 

24

 

(D)          in
the event the Company elects, pursuant to Section 3.08(b), to pay the Purchase
Price to be paid as of such Purchase Date, in whole or in part, in shares of
Common Stock but such portion of the Purchase Price shall ultimately be payable
to such Holder entirely in cash because any of the conditions to payment of the
Purchase Price in Common Stock is not satisfied prior to the close of business
on such Purchase Date, as set forth in Section 3.08(d), whether such Holder
elects (i) to withdraw such Purchase Notice as to some or all of the Securities
to which such Purchase Notice relates (stating the Principal Amount at Maturity
and certificate numbers of the Securities as to which such withdrawal shall
relate), or (ii) to receive cash in respect of the entire Purchase Price for
all Securities (or portions thereof) to which such Purchase Notice relates; and

 

(2)           delivery of such Security to the
Paying Agent prior to, on or after the Purchase Date (together with all
necessary endorsements) at the offices of the Paying Agent, such delivery being
a condition to receipt by the Holder of the Purchase Price therefor; provided,
however, that such Purchase Price shall be so paid pursuant to this
Section 3.08 only if the Security so delivered to the Paying Agent shall
conform in all respects to the description thereof in the related Purchase
Notice, as determined by the Company.

 

If a Holder, in
such Holder’s Purchase Notice and in any written notice of withdrawal delivered
by such Holder pursuant to the terms of Section 3.10, fails to indicate such
Holder’s choice with respect to the election set forth in clause (D) of Section
3.08(a)(1), such Holder shall be deemed to have elected to receive cash in
respect of the Purchase Price for all Securities subject to such Purchase
Notice in the circumstances set forth in such clause (D).

 

The Company shall
purchase from the Holder thereof, pursuant to this Section 3.08, a portion of a
Security if the Principal Amount at Maturity 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.

 

Any purchase by
the Company contemplated pursuant to the provisions of this Section 3.08 shall
be consummated by the delivery of the consideration to be received by the
Holder (including accrued and unpaid semiannual and contingent interest, if
any) promptly following the later of the Purchase Date and the time of delivery
of the Security.

 

Notwithstanding
anything herein to the contrary, any Holder delivering to the Paying Agent the
Purchase Notice contemplated by this Section 3.08(a) shall have the right to
withdraw such Purchase Notice at any time prior to the close of business on the
Purchase Date by delivery of a written notice of withdrawal to the Paying Agent
in accordance with Section 3.10.

 

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

 

25

 

(b)           Company’s
Right to Elect Manner of Payment of Purchase Price.  The Securities to be purchased pursuant to Section 3.08(a) may be
paid for, at the election of the Company, in U.S. legal tender (“cash”)
or Common Stock, or in any combination of cash and Common Stock, subject to the
conditions set forth in Sections 3.08(c) and (d).  The Company shall designate, in the Company Notice delivered
pursuant to Section 3.08(e), whether the Company will purchase the Securities
for cash or Common Stock, or, if a combination thereof, the percentages of the
Purchase Price of Securities in respect of which it will pay in cash or Common
Stock; provided that the Company will pay cash for fractional interests in
Common Stock.  For purposes of
determining the existence of potential fractional interests, all Securities
subject to purchase by the Company held by a Holder shall be considered
together (no matter how many separate certificates are to be presented).  Each Holder whose Securities are purchased
pursuant to this Section 3.08 shall receive the same percentage of cash or
Common Stock in payment of the Purchase Price for such Securities, except (i)
as provided in Section 3.08(d) with regard to the payment of cash in lieu of
fractional shares of Common Stock and (ii) in the event that the Company is
unable to purchase the Securities of a Holder or Holders for Common Stock
because any necessary qualifications or registrations of the Common Stock under
applicable state securities laws cannot be obtained, the Company may purchase
the Securities of such Holder or Holders for cash.  The Company may not change its election with respect to the
consideration (or components or percentages of components thereof) to be paid
once the Company has given its Company Notice to Securityholders except
pursuant to this Section 3.08(b) or pursuant to Section 3.08(d) in the event of
a failure to satisfy, prior to the close of business on the Purchase Date, any
condition to the payment of the Purchase Price, in whole or in part, in Common
Stock.

 

At least three
Business Days before the Company Notice Date, the Company shall deliver an
Officers’ Certificate to the Trustee specifying:

 

(i)            the
manner of payment selected by the Company,

 

(ii)           the
information required by Section 3.08(e),

 

(iii)          if
the Company elects to pay the Purchase Price, or a specified percentage
thereof, in Common Stock, that the conditions to such manner of payment set
forth in Section 3.08(d) have been or will be complied with, and

 

(iv)          whether
the Company desires the Trustee to give the Company Notice required by Section
3.08(e).

 

(c)           Purchase
with Cash.  On each Purchase Date, at
the option of the Company, the Purchase Price of Securities in respect of which
a Purchase Notice pursuant to Section 3.08(a) has been given, or a specified
percentage thereof, may be paid by the Company with cash equal to the aggregate
Purchase Price of such Securities.  If
the Company elects to purchase Securities with cash, the Company Notice, as provided
in Section 3.08(e), shall be sent to Holders (and to beneficial owners as
required by applicable law) not less than 20 Business Days prior to such
Purchase Date (the “Company Notice Date”).

 

26

 

(d)           Payment
by Issuance of Common Stock.  On each
Purchase Date, at the option of the Company, the Purchase Price of Securities
in respect of which a Purchase Notice pursuant to Section 3.08(a) has been
given, or a specified percentage thereof, may be paid by the Company by the
issuance of a number of shares of Common Stock equal to the quotient obtained
by dividing (i) the amount of cash to which the Securityholders would have been
entitled had the Company elected to pay all or such specified percentage, as
the case may be, of the Purchase Price of such Securities in cash by (ii) the
Market Price of a share of Common Stock, subject to the next succeeding
paragraph.

 

The Company will
not issue a fractional share of Common Stock in payment of the Purchase
Price.  Instead the Company will pay
cash for the current market value of the fractional share.  The current market value of a fraction of a
share shall be determined by multiplying the Market Price by such fraction and
rounding the product to the nearest whole cent.  It is understood that if a Holder elects to have more than one
Security purchased, the number of shares of Common Stock shall be based on the
aggregate amount of Securities to be purchased.

 

If the Company
elects to purchase the Securities by the issuance of shares of Common Stock,
the Company Notice, as provided in Section 3.08(e), shall be sent to the
Holders (and to beneficial owners as required by applicable law) not later than
the Company Notice Date.

 

The Company’s
right to exercise its election to purchase the Securities pursuant to Section
3.08 through the issuance of shares of Common Stock shall be conditioned upon:

 

(i)            the
Company’s not having given its Company Notice of an election to pay entirely in
cash and its giving of timely Company Notice of election to purchase all or a
specified percentage of the Securities with Common Stock as provided herein;

 

(ii)           the
shares of Common Stock having been admitted for listing or admitted for listing
subject to notice of issuance on the principal United States securities
exchange on which the Common Stock is then listed or causing such shares of
Common Stock to be quoted on the Nasdaq National Market System if not so
quoted;

 

(iii)          the
registration of the shares of Common Stock to be issued in respect of the
payment of the Purchase Price under the Securities Act of 1933, as amended (the
“Securities Act”), or the Securities Exchange Act of 1934, as amended
(the “Exchange Act”), in each case, if required;

 

(iv)          any
necessary qualification or registration under applicable state securities laws
or the availability of an exemption from such qualification and registration;
and

 

(v)           the
receipt by the Trustee of an Officers’ Certificate and an Opinion of Counsel
each stating that (A) the terms of the issuance of the Common Stock are in
conformity with this Indenture and (B) the shares of Common Stock to be issued
by the Company in payment of the Purchase Price in respect of Securities

 

27

 

have been duly authorized and, when issued and
delivered pursuant to the terms of this Indenture in payment of the Purchase
Price in respect of the Securities, will be validly issued, fully paid and
non-assessable and, to the best of such counsel’s knowledge, free from
preemptive rights, and, in the case of such Officers’ Certificate, stating that
conditions (i), (ii), (iii) and (iv) above and the condition set forth in the
second succeeding sentence have been satisfied and, in the case of such Opinion
of Counsel, stating that conditions (ii), (iii) and (iv) above have been
satisfied.

 

Such Officers’
Certificate shall also set forth the number of shares of Common Stock to be
issued for each $1,000 Principal Amount at Maturity of Securities and the Sale
Price of a share of Common Stock on each Trading Day during the period for
which the Market Price is calculated. 
The Company may pay the Purchase Price (or any portion thereof) in
Common Stock only if the information necessary to calculate the Market Price is
published in a daily newspaper of national circulation.  If the foregoing conditions are not
satisfied with respect to a Holder or Holders prior to the close of business on
the Purchase Date and the Company has elected to purchase the Securities
pursuant to this Section 3.08 through the issuance of shares of Common Stock,
the Company shall pay the entire Purchase Price of the Securities of such
Holder or Holders in cash.

 

The “Market
Price” means the average of the Sale Prices of the Common Stock for the
five Trading Day period ending on the third Business Day prior to the
applicable Purchase Date (if the third Business Day prior to the applicable
Purchase Date is a Trading Day, otherwise the Five Trading Day period shall end
on the last Trading Day prior to such third Business Day), appropriately
adjusted to take into account the occurrence, during the period commencing on
the first of such Trading Days during such five Trading Day period and ending
on such Purchase Date, of any event described in Section 10.06, 10.07 or 10.08;
subject, however, to the conditions set forth in Sections 10.09 and 10.10.

 

The “Sale Price”
of the Common Stock on any date means the closing per share sale price (or, if
no closing sale price is reported, the average of the bid and ask prices or, if
more than one in either case, the average of the average bid and average ask
prices) on such date as reported in composite transactions for the principal
United States securities exchange on which the Common Stock is traded or, if
the Common Stock is not listed on a United States national or regional securities
exchange, (i) as reported by the National Association of Securities Dealers
Automated Quotation System or by the National Quotation Bureau Incorporated, or
(ii) if such bid and ask prices are not reported by the National Association of
Securities Dealers Automated Quotation System or by the National Quotation
Bureau Incorporated, in a manner to be determined by the Company on the basis
of such quotation as the Company considers appropriate in its sole and absolute
discretion.

 

(e)           Notice
of Election.  The Company’s notice of
election to purchase with cash or Common Stock or any combination thereof shall
be sent to the Holders (and to beneficial owners as required by applicable law)
in the manner provided in Section 12.02 at the time specified in Section
3.08(c) or (d), as applicable (the “Company Notice”).  Such Company Notice shall state the manner
of payment elected and shall contain the following information:

 

28

 

In the event the
Company has elected to pay the Purchase Price (or a specified percentage
thereof) with Common Stock, the Company Notice shall:

 

(1)           state
that each Holder will receive Common Stock with a Market Price determined as of
a specified date prior to the Purchase Date equal to such specified percentage
of the Purchase Price of the Securities held by such Holder (except any cash
amount to be paid in lieu of fractional shares);

 

(2)           set
forth the method of calculating the Market Price of the Common Stock; and

 

(3)           state
that because the Market Price of Common Stock will be determined prior to the
Purchase Date, Holders will bear the market risk with respect to the value of
the Common Stock to be received from the date such Market Price is determined
to the Purchase Date.

 

In any case, each
Company Notice shall include a form of Purchase Notice to be completed by a
Securityholder and shall state:

 

(i)            the
Purchase Price, the Conversion Rate and, to the extent known at the time of
such notice, the amount of semiannual and contingent interest, if any, that
will be accrued and payable with respect to the Securities as of the Purchase
Date;

 

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

 

(iii)          that
Securities as to which a Purchase Notice has been given may be converted
pursuant to Article 10 hereof only if the applicable Purchase Notice has
been withdrawn in accordance with the terms of this Indenture;

 

(iv)          that
Securities must be surrendered to the Paying Agent to collect payment of the
Purchase Price and contingent interest, if any;

 

(v)           that
the Purchase Price for any Security as to which a Purchase Notice has been
given and not withdrawn, together with any accrued semiannual and contingent
interest payable with respect thereto, will be paid promptly following the
later of the Purchase Date and the time of surrender of such Security as
described in (iv);

 

(vi)          the
procedures the Holder must follow to exercise rights under Section 3.08 and a
brief description of those rights;

 

(vii)         briefly,
the conversion rights of the Securities;

 

(viii)        the
procedures for withdrawing a Purchase Notice (including, without limitation,
for a conditional withdrawal pursuant to the terms of Section 3.08(a)(1)(D) or
Section 3.10);

 

29

 

(ix)           that,
unless the Company defaults in making payment of such Purchase Price and
semiannual and contingent interest, if any, Original Issue Discount and
interest (including semiannual and contingent interest), if any, on Securities
surrendered for purchase will cease to accrue on and after the Purchase Date;
and

 

(x)            the
CUSIP number of the Securities.

 

At the Company’s
request, the Trustee shall give such Company Notice in the Company’s name and
at the Company’s expense; provided, however, that, in all cases, the
text of such Company Notice shall be prepared by the Company.

 

Upon determination
of the actual number of shares of Common Stock to be delivered for each $1,000
Principal Amount at Maturity of Securities, the Company will issue a press
release and publish such determination on the Company’s web site on the World
Wide Web or though such other public medium as the Company may use at that
time.

 

(f)            Covenants
of the Company.  All shares of Common
Stock delivered upon purchase of the Securities shall be newly issued shares or
treasury shares, shall be duly authorized, validly issued, fully paid and
nonassessable and shall be free from preemptive rights and free of any lien or
adverse claim.

 

(g)           Procedure
upon Purchase.  The Company shall
deposit cash (in respect of a cash purchase under Section 3.08(c) or for
fractional interests or contingent interest, as applicable) or shares of Common
Stock, or a combination thereof, as applicable, at the time and in the manner
as provided in Section 3.11, sufficient to pay the aggregate Purchase Price of,
and any accrued and unpaid semiannual and contingent interest with respect to,
all Securities to be purchased pursuant to this Section 3.08.  As soon as practicable after the Purchase
Date, the Company shall deliver to each Holder entitled to receive Common Stock
through the Paying Agent, a certificate for the number of full shares of Common
Stock issuable in payment of the Purchase Price and cash in lieu of any
fractional interests.  The person in
whose name the certificate for Common Stock is registered shall be treated as a
holder of record of shares of Common Stock on the Business Day following the
Purchase Date.  No payment or adjustment
will be made for dividends on the Common Stock the record date for which occurred
on or prior to the Purchase Date.

 

(h)           Taxes.  If a Holder of a Security is paid in Common
Stock, the Company shall pay any documentary, stamp or similar issue or
transfer tax due on such issue of shares of Common Stock.  However, the Holder shall pay any such tax
which is due because the Holder requests the shares of Common Stock to be
issued in a name other than the Holder’s name. 
The Paying Agent may refuse to deliver the certificates representing the
Common Stock being issued in a name other than the Holder’s name until the
Paying Agent receives a sum sufficient to pay any tax which will be due because
the shares of Common Stock are to be issued in a name other than the Holder’s
name.  Nothing herein shall preclude any
income tax withholding required by law or regulations.

 

30

 

SECTION 3.09       Purchase of
Securities at Option of the Holder upon Change in Control.

 

(a)           If
on or prior to the date specified in paragraph 7 of the Securities, there shall
have occurred a Change in Control, Securities shall be purchased by the
Company, at the option of the Holder thereof, at a purchase price specified in
paragraph 7 of the Securities (the “Change in Control Purchase Price”), as of
the date that is no later than 35 Business Days after the occurrence of the
Change in Control but in no event prior to the date on which such Change in
Control occurs (the “Change in Control Purchase Date”), subject to satisfaction
by or on behalf of the Holder of the requirements set forth in Section 3.09(c).

 

A “Change in
Control” shall be deemed to have occurred at such time as either of the
following events shall occur:

 

(1)           any
person (as the term “person” is used in Section 13(d)(3) or
Section 14(d)(2) of the Exchange Act), other than the Company, its
Subsidiaries or any employee benefits plan of the Company or its Subsidiaries,
files a Schedule 13D or 14D-1 (or any successor schedule, form or report)
under the Exchange Act, disclosing that such person has become the beneficial owner
of 50% or more of the voting power of the Common Stock or other capital stock
into which the Common Stock is reclassified or changed; provided, however, that a
person shall not be deemed beneficial owner of, or to own beneficially, (A) any
securities tendered pursuant to a tender or exchange offer made by or on behalf
of such person or any of such person’s Affiliates until such tendered
securities are accepted for purchase or exchange thereunder, or (B) any
securities if such beneficial ownership (1) arises solely as a result of a
revocable proxy delivered in response to a proxy or consent solicitation made
pursuant to the applicable rules and regulations under the Exchange Act, and
(2) is not also then reportable on Schedule 13D (or any successor schedule)
under the Exchange Act; or

 

(2)           there
shall be consummated any consolidation or merger of the Company pursuant to
which the Common Stock would be converted into cash, securities or other
property, in each case other than a consolidation or merger of the Company in
which the holders of the Common Stock immediately prior to the consolidation or
merger have, directly or indirectly, at least a majority of the total voting
power in the aggregate of all classes of capital stock of the continuing or
surviving corporation immediately after the consolidation or merger.

 

(b)           Within
15 Business Days after the occurrence of a Change in Control, the Company shall
mail a written notice of Change in Control by first-class mail to the Trustee
and to each Holder (and to beneficial owners as required by applicable
law).  The notice shall include a form
of Change in Control Purchase Notice to be completed by the Securityholder and
shall state:

 

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

 

31

 

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

 

(3)           the
Change in Control Purchase Date;

 

(4)           the
Change in Control Purchase Price and, to the extent known at the time of such
notice, the amount of semiannual and contingent interest, if any, that will be
accrued and payable with respect to the Securities as of the Change in Control
Purchase Date;

 

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

 

(6)           the
Conversion Rate and any adjustments thereto;

 

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

 

(8)           that
Securities must be surrendered to the Paying Agent to collect payment of the
Change in Control Purchase Price and contingent interest, if any;

 

(9)           that
the Change in Control Purchase Price for any Security as to which a Change in
Control Purchase Notice has been duly given and not withdrawn, together with
any accrued semiannual and contingent interest payable with respect thereto,
will be paid promptly following the later of the Change in Control Purchase
Date and the time of surrender of such Security as described in clause (8);

 

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

 

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

 

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

 

(13)         that,
unless the Company defaults in making payment of such Change in Control
Purchase Price and semiannual and contingent interest, if any, Original Issue
Discount and interest (including semiannual and contingent interest), if any,
on Securities surrendered for purchase will cease to accrue on and after the
Change in Control Purchase Date; and

 

(14)         the
CUSIP number of the Securities.

 

(c)           A
Holder may exercise its rights specified in Section 3.09(a) upon delivery of a
written notice of purchase (a “Change in Control Purchase Notice”) to
the Paying Agent at any time prior to the close of business on the Change in
Control Purchase Date, stating:

 

32

 

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

 

(2)           the
portion of the Principal Amount at Maturity of the Security which the Holder
will deliver to be purchased, which portion must be $1,000 or an integral
multiple thereof; and

 

(3)           that
such Security shall be purchased pursuant to the terms and conditions specified
in paragraph 7 of the Securities.

 

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

 

The Company shall
purchase from the Holder thereof, pursuant to this Section 3.09, a portion of a
Security if the Principal Amount at Maturity 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.

 

Any purchase by
the Company contemplated pursuant to the provisions of this Section 3.09 shall
be consummated by the delivery of the consideration to be received by the
Holder (together with accrued and unpaid semiannual and contingent interest, if
any) promptly following the later of the Change in Control Purchase Date and
the time of delivery of the Security to the Paying Agent in accordance with
this Section 3.09.

 

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

 

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

 

The Company shall
not be required to comply with this Section 3.09 if a third party mails a
written notice of Change in Control in the manner, at the times and otherwise
in compliance with this Section 3.09 and repurchases all Securities for which a
Change in Control Purchase Notice shall be delivered and not withdrawn.

 

SECTION 3.10       Effect of
Purchase Notice or Change in Control Purchase Notice.

 

Upon receipt by
the Paying Agent of the Purchase Notice or Change in Control Purchase Notice
specified in Section 3.08(a) or Section 3.09(c), as applicable, the Holder of
the

 

33

 

Security
in respect of which such Purchase Notice or Change in Control Purchase Notice,
as the case may be, was given shall (unless such Purchase Notice or Change in
Control Purchase Notice is withdrawn as specified in the following two
paragraphs) thereafter be entitled to receive solely the Purchase Price or
Change in Control Purchase Price, as the case may be, and any accrued and
unpaid semiannual interest, with respect to such Security.  Such Purchase Price or Change in Control
Purchase Price and semiannual interest, if any, shall be paid to such Holder,
subject to receipt of funds and/or securities by the Paying Agent, promptly
following the later of (x) the Purchase Date or the Change in Control Purchase
Date, as the case may be, with respect to such Security (provided the
conditions in Section 3.08(a) or Section 3.09(c), as applicable, have been
satisfied) and (y) the time of delivery of such Security to the Paying Agent by
the Holder thereof in the manner required by Section 3.08(a) or Section
3.09(c), as applicable.  Securities in
respect of which a Purchase Notice or Change in Control Purchase Notice, as the
case may be, has been given by the Holder thereof may not be converted pursuant
to Article 10 hereof on or after the date of the delivery of such Purchase
Notice or Change in Control Purchase Notice, as the case may be, unless such
Purchase Notice or Change in Control Purchase Notice, as the case may be, has
first been validly withdrawn as specified in the following two paragraphs.

 

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

 

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

 

(2)           the
Principal Amount at Maturity of the Security with respect to which such notice
of withdrawal is being submitted, and

 

(3)           the
Principal Amount at Maturity, if any, of such Security which remains subject to
the original Purchase Notice or Change in Control Purchase Notice, as the case
may be, and which has been or will be delivered for purchase by the Company.

 

A written notice
of withdrawal of a Purchase Notice may be in the form set forth in the
preceding paragraph or may be in the form of (i) a conditional withdrawal
contained in a Purchase Notice pursuant to the terms of Section 3.08(a)(1)(D)
or (ii) a conditional withdrawal containing the information set forth in
Section 3.08(a)(1)(D) and the preceding paragraph and contained in a written
notice of withdrawal delivered to the Paying Agent as set forth in the
preceding paragraph.

 

There shall be no
purchase of any Securities pursuant to Section 3.08 (other than through the
issuance of Common Stock in payment of the Purchase Price, including cash in
lieu of fractional shares) or 3.09 if there has occurred (prior to, on or
after, as the case may be, the giving, by the Holders of such Securities, of
the required Purchase Notice or Change in Control Purchase Notice, as the case
may be) and is continuing an Event of Default (other than a default in the
payment of the Purchase Price or Change in Control Purchase Price, as the case
may be,

 

34

 

and any accrued and unpaid contingent interest with respect to such
Securities).  The Paying Agent will
promptly return to the respective Holders thereof any Securities (x) with
respect to which a Purchase Notice or Change in Control Purchase Notice, as the
case may be, has been withdrawn in compliance with this Indenture, or (y) held
by it during the continuance of an Event of Default (other than a default in
the payment of the Purchase Price or Change in Control Purchase Price, as the
case may be, and any accrued and unpaid contingent interest with respect to
such Securities) in which case, upon such return, the Purchase Notice or Change
in Control Purchase Notice with respect thereto shall be deemed to have been
withdrawn.

 

SECTION 3.11       Deposit of
Purchase Price or Change in Control Purchase Price.

 

Prior to 10:00
a.m. (local time in the City of New York) on the Business Day following the
Purchase Date or the Change in Control Purchase Date, as the case may be, the
Company shall deposit with the Trustee or with the Paying Agent (or, if the
Company or a Subsidiary or an Affiliate of either of them is acting as the
Paying Agent, shall segregate and hold in trust as provided in Section 2.04) an
amount of money (in immediately available funds if deposited on such Business
Day) or Common Stock, if permitted hereunder, sufficient to pay the aggregate
Purchase Price or Change in Control Purchase Price, as the case may be, of, and
any accrued and unpaid contingent interest with respect to, all the Securities
or portions thereof which are to be purchased as of the Purchase Date or Change
in Control Purchase Date, as the case may be.

 

SECTION 3.12       Securities
Purchased in Part.

 

Any Security which
is to be purchased only in part shall be surrendered at the office of the
Paying Agent (with, if the Company or the Trustee so requires, due endorsement
by, or a written instrument of transfer in form satisfactory to the Company and
the Trustee duly executed by, the Holder thereof or such Holder’s attorney duly
authorized in writing) and the Company shall execute and the Trustee shall
authenticate and deliver to the Holder of such Security, without service
charge, a new Security or Securities, of any authorized denomination as
requested by such Holder in aggregate Principal Amount at Maturity equal to,
and in exchange for, the portion of the Principal Amount at Maturity of the
Security so surrendered which is not purchased.

 

SECTION 3.13       Covenant to
Comply With Securities Laws Upon Purchase of Securities.

 

In connection with
any offer to purchase or purchase of Securities under Section 3.08 or 3.09
hereof (provided that such offer or purchase constitutes an “issuer tender
offer” for purposes of Rule 13e-4 (which term, as used herein, includes
any successor provision thereto) under the Exchange Act at the time of such
offer or purchase), the Company shall, to the extent required by law, (i)
comply with Rule 13e-4, Rule 14e-1 and any other tender offer rules
under the Exchange Act which may then apply, (ii) file the related Schedule TO
(or any other required schedule) under the Exchange Act, and (iii) otherwise
comply with all Federal and state securities laws so as to permit the rights
and obligations under Sections 3.08 and 3.09 to be exercised in the time and in
the manner specified in Sections 3.08 and 3.09.

 

35

 

SECTION 3.14       Repayment to
the Company.

 

The Trustee and
the Paying Agent shall return to the Company any cash or shares of Common Stock
that remain unclaimed as provided in paragraph 14 of the Securities,
together with interest or dividends, if any, thereon (subject to the provisions
of Section 7.01(f)), held by them for the payment of the Purchase Price or
Change in Control Purchase Price, as the case may be, or contingent interest,
if any; provided,
however, that to the extent that the aggregate amount of cash or
shares of Common Stock deposited by the Company pursuant to Section 3.11
exceeds the aggregate Purchase Price or Change in Control Purchase Price, as
the case may be, of, and the accrued and unpaid contingent interest with
respect to, the Securities or portions thereof which the Company is obligated
to purchase as of the Purchase Date or Change in Control Purchase Date, as the
case may be, whether as a result of withdrawal or otherwise, then promptly
after the Business Day following the Purchase Date or Change in Control
Purchase Date, as the case may be, the Trustee shall return any such excess to
the Company together with interest or dividends, if any, thereon (subject to
the provisions of Section 7.01(f)).

 

ARTICLE 4

 

COVENANTS

 

SECTION 4.01       Payment of
Securities.

 

The Company shall
promptly make all payments in respect of the Securities on the dates and in the
manner provided in the Securities or pursuant to this Indenture.  Any amounts to be given to the Trustee or
Paying Agent, shall be deposited with the Trustee or Paying Agent by 10:00
a.m., New York City time, by the Company. 
Principal Amount at Maturity, Issue Price plus accrued Original Issue
Discount, Redemption Price, Purchase Price, Change in Control Purchase Price,
and semiannual and contingent interest, if any, shall be considered paid on the
applicable date due if on such date (or, in the case of a Purchase Price or
Change in Control Purchase Price, on the Business Day following the applicable
Purchase Date or Change in Control Purchase Date, as the case may be) the
Trustee or the Paying Agent holds, in accordance with this Indenture, money or
securities, if permitted hereunder, sufficient to pay all such amounts then
due.

 

The Company shall,
to the extent permitted by law, pay interest on overdue amounts at the rate per
annum set forth in paragraph 1 of the Securities, compounded semiannually,
which interest shall accrue from the date such overdue amount was originally
due to the date payment of such amount, including interest thereon, has been
made or duly provided for.  All such
interest shall be payable on demand. 
The accrual of such interest on overdue amounts shall be in lieu of, and
not in addition to, the continued accrual of Original Issue Discount.

 

SECTION 4.02       SEC and Other Reports.

 

The Company shall
deliver to the Trustee, within 15 days after it files such annual and quarterly
reports, information, documents and other reports with the SEC, copies of its
annual report and of the information, documents and other reports (or copies of
such portions of

 

36

 

any of the foregoing as the SEC may by rules and regulations prescribe)
which the Company is required to file with the SEC pursuant to Section 13 or
15(d) of the Exchange Act.  The Company
also shall comply with the other provisions of TIA Section 314(a).  Delivery of such reports,
information and documents to the Trustee is for informational purposes only and
the Trustee’s receipt of the same 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 4.03       Compliance
Certificate.

 

The Company shall
deliver to the Trustee within 120 days after the end of each fiscal year of the
Company (beginning with the fiscal year ending on December 31, 2002) an
Officers’ Certificate, stating whether or not to the knowledge of the signers
thereof the Company is in default in the performance and observance of any of
the terms, provisions and conditions of this Indenture (without regard to any
period of grace or requirement of notice provided hereunder) and if the Company
shall be in default, specifying all such defaults and the nature and status
thereof of which they may have knowledge.

 

SECTION 4.04       Further
Instruments and Acts.

 

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

 

SECTION 4.05       Maintenance
of Office or Agency.

 

The Company will
maintain an office or agency of the Trustee, Registrar, Paying Agent and
Conversion Agent where Securities may be presented or surrendered for payment,
where Securities may be surrendered for registration of transfer, exchange for
other Securities, purchase, redemption or conversion for Common Stock and where
notices and demands to or upon the Company in respect of the Securities and
this Indenture may be served.  The
agency specified in Section 12.02 shall initially be such office or agency for
all of the aforesaid purposes.  The
Company shall give prompt written notice to the Trustee of the location, and of
any change in the location, of any such office or agency (other than a change
in the location of the office of the Trustee). 
If at any time the Company shall fail to maintain any such required
office or agency or shall fail to furnish the Trustee with the address thereof,
such presentations, surrenders, notices and demands may be made or served at
the address of the Trustee set forth in Section 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.

 

SECTION 4.06       Delivery of
Certain Information.

 

At any time when
the Company is not subject to Section 13 or 15(d) of the Exchange Act, upon the
request of a Holder or any beneficial holder of Securities or shares of

 

37

 

Common Stock that are restricted securities issued upon conversion
thereof, the Company will promptly furnish or cause to be furnished
Rule 144A Information (as defined below) to such Holder or any beneficial
holder of Securities or holder of shares of Common Stock issued upon conversion
of Securities, or to a prospective purchaser of any such security designated by
any such holder, as the case may be, to the extent required to permit
compliance by such Holder or holder with Rule 144A under the Securities
Act in connection with the resale of any such security.  “Rule 144A Information” shall be
such information as is specified pursuant to Rule 144A(d)(4) under the
Securities Act.

 

SECTION 4.07       Calculation
of Tax Original Issue Discount.

 

The Company
agrees, and each Holder and any beneficial owner of a Security by its purchase
thereof shall be deemed to agree, to treat, for United States federal income
tax purposes, the Securities as debt instruments that are subject to Treasury
Regulations Section 1.1275-4(b).  For
United States federal income tax purposes, the Company and each Holder agree to
treat the fair market value of the Common Stock received upon the conversion of
a Security as a contingent payment for purposes of Treasury Regulation Section
1.1275-4(b) and to accrue interest with respect to outstanding Securities as
original issue discount for United States federal income tax purposes (“Tax
Original Issue Discount”) according to the “noncontingent bond method,” set
forth in Section 1.1275-4(b) of the Treasury Regulations, using the comparable
yield set forth in Annex C to this Indenture compounded semiannually and the
projected payment schedule attached as Annex C to this Indenture.

 

The Company
acknowledges and agrees, and each Holder and any beneficial holder of a
Security by its purchase thereof shall be deemed to acknowledge and agree, that
(i) the comparable yield means the annual yield the Company would pay, as of
the IssueDate, on a fixed rate, nonconvertible debt security with no
contingent payments, but with terms and conditions otherwise comparable to
those of the Securities, (ii) the schedule of projected payments is determined
on the basis of an assumption of linear growth of the stock price and a
constant dividend yield and is not determined for any purpose other than for
the determination of interest accruals and adjustments thereof in respect of
the Securities for United States federal income tax purposes and (iii) the
comparable yield and the schedule of projected payments do not constitute a
projection or representation regarding the amounts payable on the Securities.

 

ARTICLE 5

 

SUCCESSOR CORPORATION

 

SECTION 5.01       When Company
May Merge or Transfer Assets.

 

The Company shall
not consolidate with or merge with or into any other person or convey, transfer
or lease all or substantially all its properties and assets to another person,
unless:

 

(a)           either
(1) the Company shall be the continuing corporation or (2) the person (if other
than the Company) formed by such consolidation or into which the Company is
merged or the person which acquires by conveyance, transfer or lease all or
substantially all the properties and assets of the Company (i) shall be
organized and validly existing under the laws of

 

38

 

the United States, any State thereof or the District of Columbia and
(ii) shall expressly assume, by an indenture supplemental hereto, executed and
delivered to the Trustee, in form satisfactory to the Trustee, all of the
obligations of the Company under the Securities and this Indenture;

 

(b)           immediately
after giving effect to such transaction, no Default shall have occurred and be
continuing; and

 

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

 

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

 

The successor
person formed by such consolidation or into which the Company is merged or the
successor person to which such conveyance, transfer or lease is made shall
succeed to, and be substituted for, and may exercise every right and power of,
the Company under this Indenture with the same effect as if such successor had
been named as the Company herein; and thereafter, except in the case of a lease
and obligations the Company may have under a supplemental indenture pursuant to
Section 10.14, the Company shall be discharged from all obligations and
covenants under this Indenture and the Securities.  Subject to Section 9.06, the Company, the Trustee and the
successor person shall enter into a supplemental indenture to evidence the
succession and substitution of such successor person and such discharge and
release of the Company.

 

ARTICLE 6

 

DEFAULTS AND REMEDIES

 

SECTION 6.01       Events of Default.

 

An “Event of Default” occurs if:

 

(1)           the
Company defaults in payment of any contingent interest, which default continues
for 30 days;

 

(2)           the
Company defaults in the payment of the Principal Amount at Maturity, Issue
Price plus accrued Original Issue Discount, Redemption Price, Purchase Price or
Change in Control Purchase Price on any Security when the same becomes due and
payable at its Stated Maturity, upon redemption, upon declaration, when due for
purchase by the Company or otherwise;

 

39

 

(3)           the
Company fails to comply with any of its agreements in the Securities or this
Indenture (other than those referred to in clauses (1) and (2) above) and such
failure continues for 60 days after receipt by the Company of a Notice of
Default;

 

(4)           the
Company fails to make any payment by the end of any applicable grace period
after maturity of Debt having an aggregate outstanding principal amount in
excess of the greater of (a) $10,000,000 or (b) 5% of Consolidated Net Assets,
which default shall have resulted in at least that amount of such Debt being
accelerated, without such Debt having been discharged or such acceleration
having been rescinded or annulled, within 15 days after receipt by the Company
of a Notice of Default (under such default has been cured or waived);

 

(5)           the
Company fails to deliver shares of Common Stock or cash in lieu thereof
(together with cash in lieu of fractional shares) when such Common Stock or
cash in lieu thereof (or cash in lieu of fractional shares) is required to be
delivered following conversion of a Security and continuance of such default
for 10 days;

 

(6)           the
Company [or any Significant Subsidiary], pursuant to or under or within the
meaning of any Bankruptcy Law:

 

(A)          commences
a voluntary case or proceeding;

 

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

 

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

 

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

 

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

 

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

 

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

 

(A)          is for relief against the Company or
any Significant Subsidiary in an involuntary case or proceeding, or adjudicates
the Company or any Significant Subsidiary insolvent or bankrupt;

 

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

 

40

 

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

 

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

 

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

 

(b)           “Custodian”
means any receiver, trustee, assignee, liquidator, custodian or similar
official under any Bankruptcy Law.

 

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

 

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

 

SECTION 6.02       Acceleration.

 

If an Event of
Default (other than an Event of Default specified in Section 6.01(6) or (7) in
respect of the Company) occurs and is continuing, the Trustee by Notice to the
Company, or the Holders of at least 25% in aggregate Principal Amount at
Maturity of the Securities at the time outstanding by notice to the Company and
the Trustee, may declare the Issue Price plus accrued Original Issue Discount
through the date of declaration, and any accrued and unpaid interest (including
semiannual and contingent interest) through the date of such declaration, on
all the Securities to be immediately due and payable.  Upon such a declaration, such Issue Price plus accrued Original
Issue Discount, and such accrued and unpaid interest (including semiannual and
contingent interest) if any, shall be due and payable immediately.  If an Event of Default specified in Section
6.01(6) or (7) in respect of the Company occurs and is continuing, the Issue
Price plus accrued Original Issue Discount plus accrued and unpaid interest
(including semiannual and contingent interest) 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 Securityholders.  The Holders of a majority in aggregate
Principal Amount at Maturity of the Securities at the time outstanding, by
notice to the Trustee (and without notice to any other Securityholder) may
rescind an acceleration and its consequences if the rescission would not
conflict with any judgment or decree and if all existing Events of Default have
been cured or waived except nonpayment of the Issue Price plus accrued Original
Issue Discount plus accrued and unpaid contingent interest that have become due
solely as a result of acceleration and if all amounts due to the Trustee under
Section 7.07 have been paid.  No such
rescission shall affect any subsequent Default or impair any right consequent
thereto.

 

41

 

SECTION 6.03       Other Remedies.

 

If an Event of
Default occurs and is continuing, the Trustee may pursue any available remedy
to collect the payment of the Issue Price plus accrued Original Issue Discount
plus any accrued and unpaid interest (including semiannual and contingent
interest) if any, on the Securities or to enforce the performance of any
provision of the Securities or this Indenture.

 

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

 

SECTION 6.04       Waiver of
Past Defaults.

 

Subject to
Section 6.02, the Holders of a majority in aggregate Principal Amount at
Maturity of the Securities at the time outstanding, by notice to the Trustee
(and without notice to any other Securityholder), may waive an existing Default
and its consequences except (a) an Event of Default described in Section
6.01(1) or (2), (b) a Default in respect of a provision that under Section 9.02
cannot be amended without the consent of each Securityholder affected or (c) a
Default which constitutes a failure to convert any Security in accordance with
the terms of Article 10.  When a
Default is waived, it is deemed cured, but no such waiver shall extend to any
subsequent or other Default or impair any consequent right.  This Section 6.04 shall be in lieu of
Section 316(a)1(A) of the TIA and such Section 316(a)1(A) is hereby expressly
excluded from this Indenture, as permitted by the TIA.

 

SECTION 6.05       Control by Majority.

 

The Holders of a
majority in aggregate Principal Amount at Maturity of the Securities at the
time outstanding may direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or of exercising any trust
or power conferred on the Trustee. 
However, the Trustee may refuse to follow any direction that conflicts
with law or this Indenture or that the Trustee determines in good faith is
unduly prejudicial to the rights of other Securityholders or could, in
reasonable likelihood, impose personal liability upon the Trustee unless the
Trustee is offered indemnity satisfactory to it.  This Section 6.05 shall be in lieu of Section 316(a)1(B) of the
TIA and such Section 316(a)1(B) is hereby expressly excluded from this
Indenture, as permitted by the TIA.

 

SECTION 6.06       Limitation on Suits.

 

A Securityholder
may not pursue any remedy with respect to this Indenture or the Securities
unless:

 

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

 

42

 

(2)           the Holders of at least 25% in
aggregate Principal Amount at Maturity of the Securities at the time
outstanding make a written request to the Trustee to pursue the remedy;

 

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

 

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

 

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

 

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

 

SECTION 6.07       Rights of
Holders to Receive Payment.

 

Notwithstanding
any other provision of this Indenture, the right of any Holder to receive
payment of the Principal Amount at Maturity, Issue Price plus accrued Original
Issue Discount, Redemption Price, Purchase Price, Change in Control Purchase
Price, and semiannual or contingent interest, if any, in respect of the
Securities held by such Holder, on or after the respective due dates expressed
in the Securities or any Redemption Date, and to convert the Securities in
accordance with Article 10, or to bring suit for the enforcement of any
such payment on or after such respective dates or the right to convert, shall
not be impaired or affected adversely without the consent of such Holder.

 

SECTION 6.08       Collection
Suit by Trustee.

 

If an Event of
Default described in Section 6.01(1) or (2) occurs and is continuing, the
Trustee may recover judgment in its own name and as trustee of an express trust
against the Company for the whole amount owing with respect to the Securities
and the amounts provided for in Section 7.07.

 

SECTION 6.09       Trustee May
File Proofs of Claim.

 

In case of the
pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to the Company or any other obligor upon the Securities or
the property of the Company or of such other obligor or their creditors, the
Trustee (irrespective of whether the Principal Amount at Maturity, Issue Price
plus accrued Original Issue Discount, Redemption Price, Purchase Price, Change
in Control Purchase Price, and semiannual or contingent interest, if any, in
respect of the Securities shall then be due and payable as therein expressed or
by declaration or otherwise and irrespective of whether the Trustee shall have
made any demand on the Company for the payment of any such amount) shall be
entitled and empowered, by intervention in such proceeding or otherwise,

 

43

 

(a)           to
file and prove a claim for the whole amount of the Principal Amount at
Maturity, Issue Price plus accrued Original Issue Discount, Redemption Price,
Purchase Price, Change in Control Purchase Price as the case may be, or
contingent interest or semiannual interest, if any, and to file such other
papers or documents as may be necessary or advisable in order to have the
claims of the Trustee (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel or
any other amounts due the Trustee under Section 7.07) and of the Holders
allowed in such judicial proceeding, and

 

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

 

and any custodian,
receiver, assignee, trustee, liquidator, sequestrator or similar official in
any such judicial proceeding is hereby authorized by each Holder to make such
payments to the Trustee and, in the event that the Trustee shall consent to the
making of such payments directly to the Holders, to pay the Trustee any amount
due it for the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel, and any other amounts due the Trustee
under Section 7.07.

 

Nothing herein
contained shall be deemed to authorize the Trustee to authorize or consent to
or accept or adopt on behalf of any Holder any plan of reorganization,
arrangement, adjustment or composition affecting the 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 6.10       Priorities.

 

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

 

FIRST: to the Trustee for amounts due under Section
7.07;

 

SECOND: to Securityholders for amounts due and unpaid
on the Securities for the Principal Amount at Maturity, Issue Price plus
accrued Original Issue Discount, Redemption Price, Purchase Price, Change in
Control Purchase Price, as the case may be, and contingent interest or
semiannual interest, if any, ratably, without preference or priority of any
kind, according to such amounts due and payable on the Securities; and

 

THIRD: the balance, if any, to the Company.

 

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

 

44

 

SECTION 6.11       Undertaking
for Costs.

 

In any suit for
the enforcement of any right or remedy under this Indenture or in any suit
against the Trustee for any action taken or omitted by it as Trustee, a court
in its discretion may require the filing by any party litigant in the suit
(other than the Trustee) of an undertaking to pay the costs of the suit, and
the court in its discretion may assess reasonable costs, including reasonable
attorneys’ fees and expenses, against any party litigant in the suit (other
than the Trustee), having due regard to the merits and good faith of the claims
or defenses made by the party litigant. 
This Section 6.11 does not apply to a suit by the Trustee, a suit by a
Holder pursuant to Section 6.07 or a suit by Holders of more than 10% in
aggregate Principal Amount at Maturity of the Securities at the time
outstanding.  This Section 6.11 shall be
in lieu of Section 315(e) of the TIA and such Section 315(e) is hereby
expressly excluded from this Indenture, as permitted by the TIA.

 

SECTION 6.12       Waiver of Stay, Extension or Usury
Laws.

 

The Company
covenants (to the extent that it may lawfully do so) that it will not at any
time insist upon, or plead, or in any manner whatsoever claim or take the
benefit or advantage of, any stay or extension law or any usury or other law
wherever enacted, now or at any time hereafter in force, which would prohibit
or forgive the Company from paying all or any portion of the Principal Amount
at Maturity, Issue Price plus accrued Original Issue Discount, Redemption
Price, Purchase Price, Change in Control Purchase Price, as the case may be,
and contingent interest or semiannual interest, if any, in respect of
Securities, or any interest on such amounts, as contemplated herein, or which
may affect the covenants or the performance of this Indenture; and the Company
(to the extent that it may lawfully do so) hereby expressly waives all benefit
or advantage of any such law, and covenants that it will not hinder, delay or
impede the execution of any power herein granted to the Trustee, but will
suffer and permit the execution of every such power as though no such law had
been enacted.

 

ARTICLE 7

 

TRUSTEE

 

SECTION 7.01       Duties of Trustee.

 

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

 

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

 

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

 

(2)           in
the absence of bad faith on its part, the Trustee may conclusively rely, as to
the truth of the statements and the correctness of the opinions expressed
therein, upon any certificate or opinion furnished to the Trustee and
conforming

 

45

 

to the requirements of this Indenture, but in case of
any such certificates or opinions which by any provision hereof are
specifically required to be furnished to the Trustee, the Trustee shall examine
the certificates and opinions to determine whether or not they conform to the
requirements of this Indenture, but need not confirm or investigate the
accuracy of mathematical calculations or other facts stated therein.

 

This Section 7.01(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)           The
Trustee may not be relieved from liability for its own negligent action, its
own negligent failure to act or its own willful misconduct, except that:

 

(1)           this
paragraph (c) does not limit the effect of paragraph (b) of this Section 7.01;

 

(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 negligent in
ascertaining the pertinent facts; and

 

(3)           the
Trustee shall not be liable with respect to any action it takes or omits to
take in good faith in accordance with a direction received by it pursuant to
Section 6.05.

 

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

 

(d)           Every
provision of this Indenture that in any way relates to the Trustee is subject
to paragraphs (a), (b), (c) and (e) of this Section 7.01.

 

(e)           The
Trustee may refuse to perform any duty or exercise any right or power or extend
or risk its own funds or otherwise incur any financial liability unless it
receives indemnity satisfactory to it against any loss, liability or expense.

 

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

 

SECTION 7.02       Rights of Trustee.

 

Subject to its
duties and responsibilities under the provisions of Section 7.01, and, except
as expressly excluded from this Indenture pursuant to said Section 7.01,
subject also to its duties and responsibilities under the TIA:

 

(a)           the
Trustee may conclusively rely and shall be protected in acting or refraining
from acting upon any resolution, certificate, statement, instrument, opinion,
report,

 

46

 

notice, request, direction, consent, order, bond, debenture, note,
other evidence of indebtedness or other paper or document believed by it to be
genuine and to have been signed or presented by the proper party or parties;

 

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

 

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

 

(d)           the
Trustee shall not be liable for any action taken, suffered, or omitted to be
taken by it in good faith which it believes to be authorized or within its
rights or powers conferred under this Indenture;

 

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

 

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

 

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

 

(h)           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, including, without limitation, any
Company Request, Company Order or Officers’ Certificate, 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 or lack thereof;

 

(i)            the
Trustee shall not be deemed to have notice of any Default or Event of Default
unless a Responsible Officer of the Trustee received written notice of an event
which is in fact such a Default or Event of Default, and such notice references
the Securities and this

 

47

 

Indenture, describes the event with specificity, and alleges that the
occurrence of this event is a Default or an Event of Default under this
Indenture;

 

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

 

(k)           the
Trustee may request that the Company deliver an Officers’ Certificate setting
forth the names of individuals and/or titles of officers authorized at such
time to take specified actions pursuant to this Indenture, which Officers’
Certificate may be signed by any person authorized to sign an Officers’
Certificate, including any person specified as so authorized in any such
certificate previously delivered and not superseded; and

 

(l)            any discretionary right afforded the
Trustee hereunder shall not be construed as a duty.

 

SECTION 7.03       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 its Affiliates with the same rights
it would have if it were not Trustee. 
Any Paying Agent, Registrar, Conversion Agent or co-registrar may do the
same with like rights.  However, the
Trustee must comply with Sections 7.10 and 7.11.

 

SECTION 7.04       Trustee’s Disclaimer.

 

The Trustee makes
no representation as to the validity, adequacy or priority of this Indenture or
the Securities, it shall not be accountable for the Company’s use or
application of the proceeds from the Securities, it shall not be responsible for
any statement in the registration statement for the Securities under the
Securities Act or in the Indenture or the Securities (other than its
certificate of authentication), or the determination as to which beneficial
owners are entitled to receive any notices hereunder.

 

SECTION 7.05       Notice of Defaults.

 

If a Default
occurs and if it is known to the Trustee, the Trustee shall give to each
Securityholder notice of the Default within 90 days after the Trustee gains
knowledge of the Default unless such Default shall have been cured or waived
before the giving of such notice. 
Except in the case of a Default described in Section 6.01(1) or (2), the
Trustee may withhold the notice if and so long as a committee of its Responsible
Officers in good faith determines that withholding the notice is in the
interests of Securityholders.  The
second sentence of this Section 7.05 shall be in lieu of the proviso to Section
315(b) of the TIA and such proviso is hereby expressly excluded from this
Indenture, as permitted by the TIA.  The
Trustee shall not be deemed to have knowledge of a Default unless a Responsible
Officer of the Trustee has received written notice of such Default in the
manner described in Section 7.02(i).

 

48

 

SECTION 7.06       Reports by
Trustee to Holders.

 

Within 60 days
after each May 15 beginning with the May 15 following the date of this
Indenture, the Trustee shall transmit to each Securityholder requesting such,
in the manner and to the extent provided in Section 12.02, a brief report,
dated as of such May 15, with respect to:

 

(1)           any
change to its eligibility under Section 7.10;

 

(2)           the
character and amount of any advances made by the Trustee, as Trustee, which
remain unpaid on the date of such report, and for the reimbursement of which it
claims or may claim a lien or charge, prior to that of the Securityholders, on
the trust estate or on property or funds held or collected by it, if such
advances so remaining unpaid aggregate more than one-half of one percent of the
aggregate Principal Amount at Maturity of Securities outstanding on such date;

 

(3)           any
change to the property and funds physically in the Trustee’s possession as
Trustee on the date of such report; and

 

(4)           any
action taken by it in the performance of its duties under this Indenture which
it has not previously reported and which in its opinion materially affects the
Securities or the trust estate, except action in respect of a Default, notice
of which has been or is to be withheld by it in accordance with
Section 7.05.

 

SECTION 7.07       Compensation
and Indemnity.

 

The Company agrees:

 

(a)           to
pay to the Trustee from time to time such reasonable compensation as the
Company and the Trustee shall from time to time agree in writing for all
services rendered by it hereunder (which compensation shall not be limited (to
the extent permitted by law) by any provision of law in regard to the
compensation of a trustee of an express trust);

 

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

 

(c)           to
indemnify the Trustee or any predecessor Trustee and their directors, officers,
employees and agents for, and to hold them harmless against, any loss, damage,
claim, liability, cost or expense (including reasonable attorney’s fees and
expenses and taxes (other than taxes based upon, measured by or determined by
the income of the Trustee)) reasonably incurred without negligence or willful
misconduct on its part, arising out of or in connection with the acceptance or
administration of this trust, including the reasonable costs and expenses of 

 

49

 

defending itself against any claim (whether asserted
by the Company or any Holder or any other Person) or liability in connection
with the acceptance, exercise or performance of any of its powers or duties
hereunder.

 

To secure the
Company’s payment obligations in this Section 7.07, Holders shall have been
deemed to have granted to the Trustee a lien prior to the Securities on all
money or property held or collected by the Trustee, except that held in trust
to pay the Principal Amount at Maturity, Issue Price plus accrued Original
Issue Discount, Redemption Price, Purchase Price, Change in Control Purchase
Price, contingent interest or interest, if any, as the case may be, on
particular Securities.

 

The Company’s
payment obligations pursuant to this Section 7.07 shall survive the discharge
of this Indenture and the resignation or removal of the Trustee.  When the Trustee incurs expenses after the
occurrence of a Default specified in Section 6.01(6) or (7), the expenses
including the reasonable charges and expenses of its counsel, are intended to
constitute expenses of administration under any Bankruptcy Law.

 

SECTION 7.08       Replacement
of Trustee.

 

The Trustee may
resign by so notifying the Company; provided, however, no such resignation
shall be effective until a successor Trustee has accepted its appointment
pursuant to this Section 7.08.  The
Holders of a majority in aggregate Principal Amount at Maturity of the
Securities at the time outstanding may remove the Trustee by so notifying the
Trustee and the Company.  The Company
shall remove the Trustee if:

 

(1)           the
Trustee fails to comply with Section 7.10;

 

(2)           the
Trustee is adjudged bankrupt or insolvent;

 

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

 

(4)           the
Trustee otherwise becomes incapable of acting.

 

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, by resolution of the Board of
Directors, a successor Trustee.

 

A successor
Trustee shall deliver a written acceptance of its appointment to the retiring
Trustee and to the Company satisfactory in form and substance to the retiring
Trustee and the Company.  Thereupon 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.  The successor
Trustee shall mail a notice of its succession to Securityholders.  The retiring Trustee shall promptly transfer
all property held by it as Trustee to the successor Trustee, subject to the
lien provided for in Section 7.07.

 

If a successor
Trustee does not take office within 30 days after the retiring Trustee resigns
or is removed, the retiring Trustee, the Company or the Holders of a majority
in aggregate Principal Amount at Maturity of the Securities at the time
outstanding may petition

 

50

 

any court of competent jurisdiction at the expense of the Company for
the appointment of a successor Trustee.

 

If the Trustee
fails to comply with Section 7.10, any Securityholder may petition any court of
competent jurisdiction for the removal of the Trustee and the appointment of a
successor Trustee.

 

The resignation or
removal of a Trustee shall not diminish, impair or terminate its rights to
indemnification pursuant to Section 7.07 as they relate to periods prior to
such resignation or removal.

 

SECTION 7.09       Successor
Trustee by Merger.

 

If the Trustee
consolidates with, merges or converts into, or transfers all or substantially
all its corporate trust business or assets to, by sale or otherwise, another
corporation, the resulting, surviving or transferee corporation without any
further act shall be the successor Trustee.

 

SECTION 7.10       Eligibility;
Disqualification.

 

There shall at all
times be a Trustee hereunder which shall be eligible to act as Trustee and
shall have a combined capital and surplus of at least $50,000,000.  If such corporation or bank holding company
publishes reports of condition at least annually, pursuant to law or to the
requirements of federal, state, territorial or District of Columbia supervising
or examining authority, then, for the purposes of this Section 7.10, the
combined capital and surplus of such corporation or bank holding company shall
be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. 
If at any time the Trustee shall cease to be eligible in accordance with
the provisions of this Section 7.10, it shall resign immediately in the
manner and with the effect hereinafter specified in this Article 7.

 

ARTICLE 8

 

DISCHARGE OF INDENTURE

 

SECTION 8.01       Discharge of
Liability on Securities.

 

When (i) the
Company delivers to the Trustee all outstanding Securities (other than
Securities replaced pursuant to Section 2.07) for cancellation or (ii) all
outstanding Securities have become due and payable and the Company deposits
with the Trustee, the Paying Agent (if the Paying Agent is not the Company or
any Subsidiary or any Affiliate of either of them) or the Conversion Agent cash
or, if expressly permitted by the terms of the Securities or the Indenture,
Common Stock or governmental obligations sufficient to pay all amounts due and
owing on all outstanding Securities (other than Securities replaced pursuant to
Section 2.07), and if in either case the Company pays all other sums payable
hereunder by the Company, then this Indenture shall, subject to Section 7.07,
cease to be of further effect.  The
Trustee shall join in the execution of a document prepared by the Company
acknowledging satisfaction and discharge of this Indenture on demand of the
Company accompanied by an Officers’ Certificate and Opinion of Counsel and at
the cost and expense of the Company.

 

51

 

SECTION 8.02       Repayment to
the Company.

 

The Trustee and
the Paying Agent shall return to the Company upon written request any money or
securities held by them for the payment of any amount with respect to the
Securities that remains unclaimed for two years, subject to applicable
unclaimed property law.  In the absence
of a written request from the Company to return unclaimed funds to the Company,
the Trustee shall from time to time deliver all unclaimed funds to or as
directed by applicable escheat authorities as determined by the Trustee in its
sole discretion in accordance with customary practices and procedures of the
Trustee.  After return to the Company,
Holders entitled to the money or securities must look to the Company for
payment as general creditors unless an applicable abandoned property law
designates another person and the Trustee and the Paying Agent shall have no
further liability to the Securityholders with respect to such money or
securities for that period commencing after the return thereof.  Any unclaimed funds held by the Trustee
pursuant to this Section shall be held uninvested and without liability for
interest.

 

ARTICLE 9

 

AMENDMENTS

 

SECTION 9.01       Without
Consent of Holders.

 

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

 

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

 

(2)           to
comply with Article 5 or Section 10.14;

 

(3)           to
secure the Company’s obligations under the Securities and this Indenture;

 

(4)           to
add to the Company’s covenants for the benefit of the Securityholders or to
surrender any right or power conferred upon the Company;

 

(5)           to
make any change to comply with the TIA, or any amendment thereto, or to comply
with any requirement of the SEC in connection with the qualification of the Indenture
under the TIA, or as necessary in connection with the registration of the
Securities under the Securities Act if at any time the Company seeks to
register the Securities thereunder;

 

(6)           to
make any change that does not adversely affect the rights of any Holder; or

 

(7)           to
declare additional Purchase Dates and corresponding Purchase Prices under
Section 7 of the Securities.

 

Notwithstanding
the foregoing, no amendment contemplated pursuant to clause (1), (3), (4) or
(5) of the preceding paragraph may be made without the written consent of the

 

52

 

Holders of at least a majority in aggregate Principal Amount at
Maturity of Securities at the time outstanding if such amendment may materially
and adversely affect the interests of the Holders, it being understood that no
amendment described in clause (1) above made solely to conform this Indenture
to the final offering memorandum provided to investors in connection with the
initial offering of the Securities by the Company will be deemed to materially
and adversely affect the interests of the Holders.

 

SECTION 9.02       With Consent
of Holders.

 

With the written
consent of the Holders of at least a majority in aggregate Principal Amount at
Maturity of the Securities at the time outstanding, the Company and the Trustee
may amend this Indenture or the Securities. 
However, without the consent of each Securityholder affected, an
amendment to this Indenture or the Securities may not:

 

(1)           change
the provisions of this Indenture that relate to modifying or amending this
Indenture;

 

(2)           make
any change in the manner of calculation or rate of accrual of, or that
adversely affects the right to receive, Original Issue Discount; make any
change in the manner of calculation or rate of accrual of, or that adversely
affects the right to receive, semiannual or contingent interest; reduce the
rate of interest referred to in paragraph 1 of the Securities; or extend the
time for payment of Original Issue Discount, semiannual or contingent interest,
if any, on any Security;

 

(3)           reduce
the Principal Amount at Maturity or the Issue Price of or change the Stated
Maturity of any Security;

 

(4)           reduce
the Redemption Price, Purchase Price or Change in Control Purchase Price of any
Security;

 

(5)           make
any Security payable in money or securities other than that stated in the
Security;

 

(6)           make
any change in Section 6.04, Section 6.07 or this Section 9.02, except to
increase any percentage set forth therein;

 

(7)           make
any change that adversely affects the right to convert any Security;

 

(8)           make
any change that adversely affects the right to require the Company to purchase
the Securities in accordance with the terms thereof and this Indenture;

 

(9)           impair
the right to convert or receive payment with respect to, a Security, or right
to institute suit for the enforcement of any payment with respect to, or
conversion of, the Securities;

 

(10)         reduce
the amount of principal payable upon acceleration of maturity of any Security
following a Default; or

 

53

 

(11)         reduce
the percentage of Principal Amount at Maturity of any Security whose holders’
consent is required to modify or amend this Indenture.

 

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

 

After an amendment
under this Section 9.02 becomes effective, the Company shall mail to each Holder
a notice briefly describing the amendment. 
Failure to mail such notice or a defect in the notice shall not affect
the validity of the amendment.

 

SECTION 9.03       Compliance
with Trust Indenture Act.

 

Every supplemental
indenture executed pursuant to this Article shall comply with the TIA.

 

SECTION 9.04       Revocation
and Effect of Consents, Waivers and Actions.

 

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

 

SECTION 9.05       Notation on
or Exchange of Securities.

 

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

 

SECTION 9.06       Trustee to
Sign Supplemental Indentures.

 

The Trustee shall
sign any supplemental indenture authorized pursuant to this Article 9 if the
amendment contained therein does not materially adversely affect the rights,
duties, liabilities or immunities of the Trustee.  If it does, the Trustee may, but need not, sign such supplemental
indenture.  In signing such supplemental
indenture the Trustee shall receive, and (subject to the provisions of Section
7.01) shall be fully protected in relying upon, in addition to the documents
required by Section 12.04, an Officers’ Certificate and an Opinion of
Counsel stating that such amendment is authorized or permitted by this
Indenture.

 

54

 

SECTION 9.07       Effect of
Supplemental Indentures.

 

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

 

ARTICLE 10

 

CONVERSION

 

SECTION 10.01     Conversion
Privilege.

 

A Holder of a
Security may convert such Security into Common Stock at any time during the
period stated in paragraph 9 of the Securities subject to the provisions of this
Article 10. The number of shares of Common Stock issuable upon conversion of a
Security per $1,000 of Principal Amount at Maturity thereof (the “Conversion
Rate”) shall be that set forth in paragraph 9 in the Securities, subject to
adjustment as herein set forth.

 

A Holder may
convert a portion of the Principal Amount at Maturity of a Security if the
portion is $1,000 or an integral multiple of $1,000.  Provisions of this Indenture that apply to conversion of all of a
Security also apply to conversion of a portion of a Security.

 

“Average Sale
Price” means the average of the Sale Prices of the Common Stock for the
shorter of

 

(i)            30 consecutive Trading Days ending
on the last full Trading Day prior to the Time of Determination with respect to
the rights, warrants or options or 
distribution in respect of which the Average Sale Price is being
calculated, or

 

(ii)           the period (x) commencing on the date
next succeeding the first public announcement of (a) the issuance of rights,
warrants or options or (b) the distribution, in each case, in respect of which
the Average Sale Price is being calculated and (y) proceeding through the last
full Trading Day prior to the Time of Determination with respect to the rights,
warrants or options or distribution in respect of which the Average Sale Price
is being calculated (excluding days within such period, if any, which are not
Trading Days), or

 

(iii)          the period, if any, (x) commencing on
the date next succeeding the Ex-Dividend Time with respect to the next
preceding (a) issuance of rights, warrants or options or (b) distribution, in
each case, for which an adjustment is required by the provisions of Section
10.06(4), 10.07 or 10.08 and (y) proceeding through the last full Trading Day
prior to the Time of Determination with respect to the rights, warrants or
options or distribution in respect of which the Average Sale Price is being
calculated (excluding days within such period, if any, which are not Trading
Days).

 

55

 

In the event that
the Ex-Dividend Time (or in the case of a subdivision, combination or
reclassification, the effective date with respect thereto) with respect to a
dividend, subdivision, combination or reclassification to which Section
10.06(1), (2), (3) or (5) applies occurs during the period applicable for
calculating “Average Sale Price” pursuant to the definition in the preceding
sentence, “Average Sale Price” shall be calculated for such period in a manner
determined by the Board of Directors to reflect the impact of such dividend,
subdivision, combination or reclassification on the Sale Price of the Common
Stock during such period.

 

“Time of
Determination” means the time and date of the earlier of (i) the
determination of stockholders entitled to receive rights, warrants or options
or a distribution, in each case, to which Section 10.07 or 10.08 applies and
(ii) the time (“Ex-Dividend Time”) immediately prior to the commencement
of “ex-dividend” trading for such rights, warrants or options or distribution on
the Nasdaq National Market or such other national or regional exchange or
market on which the Common Stock is then listed or quoted.

 

SECTION 10.02     Conversion
Procedure.

 

To convert a
Security a Holder must satisfy the requirements in paragraph 9 of the
Securities.  The date on which the
Holder satisfies all those requirements is the conversion date (the “Conversion
Date”).  The Conversion Agent shall
notify the Company of the Conversion Date within one Business Day of the
Conversion Date.  Within two Business
Days following the Conversion Date, the Company shall deliver to the Holder,
through the Conversion Agent, a certificate for the number of full shares of
Common Stock issuable upon the conversion and cash in lieu of any fractional
share determined pursuant to Section 10.03 hereof.  The person in whose name the certificate representing such shares
is registered shall be treated as a stockholder of record on and after the
Conversion Date; provided, however, that no surrender of a Security on any
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 such 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; such conversion shall be at the Conversion Rate in effect on the date
that such Security shall have been surrendered for conversion, 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.

 

No payment or
adjustment will be made for dividends on, or other distributions with respect
to, any Common Stock except as provided in this Article 10.  On conversion of a Security, the greater of that
portion of accrued Original Issue Discount or Tax Original Issue Discount
attributable to the period from the Issue Date of the Security through but not
including the Conversion Date and (except as provided below) accrued semiannual
and contingent interest with respect to the converted Security shall not be
cancelled, extinguished or forfeited, but rather shall be deemed to be paid in
full to the Holder thereof through delivery of the Common Stock (together with
the cash payment, if any, in lieu of fractional shares) in exchange for the
Security being converted pursuant to the provisions hereof; and the fair market
value of such shares of Common Stock (together with any such cash payment in
lieu of fractional shares) shall be treated as issued, to the extent thereof,
first in exchange for the greater of Original Issue Discount or Tax

 

56

 

Original Issue Discount accrued through the Conversion Date and accrued
contingent interest, and the balance, if any, of the fair market value of such
Common Stock (and any such cash payment in lieu of fractional shares) shall be
treated as delivered in exchange for the Issue Price of the Security being
converted pursuant to the provisions hereof.

 

If the Holder
converts more than one Security at the same time, the number of shares of
Common Stock issuable upon the exchange shall be based on the total Principal
Amount at Maturity of the Securities converted.

 

If the last day on
which a Security may be converted is a Legal Holiday, the Security may be
surrendered on the next succeeding day that is not a Legal Holiday.

 

Upon surrender of
a Security that is converted in part, the Company shall execute, and the
Trustee shall authenticate and deliver to the Holder, a new Security in an
authorized denomination equal in Principal Amount at Maturity to the
unconverted portion of the Security surrendered.

 

SECTION 10.03     Fractional Shares.

 

The Company will
not issue a fractional share of Common Stock upon conversion of a
Security.  Instead, the Company will
deliver cash for the current market value of the fractional share.  The current market value of a fractional
share shall be determined, to the nearest 1/1,000th of a share, by multiplying
the Sale Price of the Common Stock, on the last Trading Day prior to the
Conversion Date, of a full share by the fractional amount and rounding the
product to the nearest whole cent.

 

SECTION 10.04     Taxes on Conversion.

 

If a Holder
converts a Security, the Company shall not charge a service charge for such
conversion but the Company may require payment of a sum sufficient to pay all
taxes, assessment or other governmental charges, if not already paid by the
Holder, that may be imposed in connection therewith and to pay any such tax
that is due because the Holder requests the shares of Common Stock to be issued
in a name other than such Holder’s name. 
If any such tax or governmental charge has not already been paid by the
Holder, the Conversion Agent may refuse to deliver the certificates
representing the Common Stock being issued until the Conversion Agent receives
a sum sufficient to pay any such tax or other governmental charge. Nothing
herein shall preclude any tax withholding required by law or regulations.

 

SECTION 10.05     Company to
Provide Stock.

 

The Company shall,
prior to issuance of any Securities under this Article 10, 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
the Securities.

 

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

 

57

 

The Company will
comply with all federal and state securities laws regulating the offer and
delivery of shares of Common Stock upon conversion of Securities, if any, and
will list or cause to have quoted such shares of Common Stock on each national
securities exchange or in the over-the-counter market or such other market on
which the Common Stock is then listed or quoted.

 

SECTION 10.06     Adjustment
for Change In Capital Stock.

 

If, after the
Issue Date of the Securities, the Company:

 

(1)           pays
a dividend or makes a distribution on its Common Stock payable in shares of its
Common Stock or shares of other Capital Stock;

 

(2)           subdivides
its shares of Common Stock;

 

(3)           combines
its shares of Common Stock;

 

(4)           issues
by reclassification of its Common Stock any shares of its Capital Stock (other
than rights, warrants or options for its Capital Stock);

 

(5)           makes
a distribution to all holders of its Common Stock of rights to purchase shares
of its Common Stock for a period expiring within 60 days after the record date
for such distribution at less than the Sale Price at the time of the
distribution; or

 

(6)           makes
a distribution to the holders of its Common Stock of its assets including shares
of any Subsidiary or business unit of the Company or debt securities or rights
to purchase the Securities (excluding cash dividends or other Cash
Distributions from current or retained earnings other than Extraordinary Cash
Dividends);

 

then the conversion
privilege and the Conversion Rate in effect immediately prior to such action
shall be adjusted so that the Holder of a Security thereafter converted may
receive the number of shares of Capital Stock of the Company which such Holder
would have owned immediately following such action if such Holder had converted
the Security immediately prior to such action.

 

In the event the
Company makes a distribution pursuant to subsection 5 or 6 of this Section
10.06 which, in the case of subsection 6, has a per share value equal to more
than 15% of the Sale Price of shares of its Common Stock on the day preceding
the declaration date for such distribution, the Company will be required to
give notice to the holders of Securities at least 20 days prior to the Ex-Dividend
Date, as defined below, for such distribution.

 

The adjustment
shall become effective immediately after the record date in the case of a
dividend or distribution and immediately after the effective date in the case
of a subdivision, combination or reclassification.

 

58

 

If after an
adjustment a Holder of a Security upon conversion of such Security may receive
shares of two or more classes of Capital Stock of the Company, the Conversion
Rate shall thereafter be subject to adjustment upon the occurrence of an action
taken with respect to any such class of Capital Stock as is contemplated by
this Article 10 with respect to the Common Stock, on terms comparable to those
applicable to Common Stock in this Article 10.

 

SECTION 10.07     Adjustment
for Rights Issue.

 

If after the Issue
Date of the Securities, the Company distributes any rights, warrants or options
to all holders of its Common Stock entitling them, for a period expiring within
60 days after the record date for such distribution, to purchase shares of
Common Stock at a price per share less than the Sale Price of the Common Stock
as of the Time of Determination, the Conversion Rate shall be adjusted in
accordance with the formula:

 

R’  = 
R  x                       (O + N)

-------------------

(O + (N x P)/M)

where:

 

R’ = the adjusted Conversion Rate.

 

R  = the
current Conversion Rate.

 

O  = the number
of shares of Common Stock outstanding on the record date for the distribution
to which this Section 10.07 is being applied.

 

N  = the number
of additional shares of Common Stock offered pursuant to the distribution.

 

P  = the
offering price per share of the additional shares.

 

M  = the
Average Sale Price, minus, in the case of (i) a distribution to which Section
10.06(4) applies or (ii) a distribution to which Section 10.08 applies, for
which, in each case, (x) the record date shall occur on or before the record
date for the distribution to which this 10.07 applies and (y) the Ex-Dividend
Time shall occur on or after the date of the Time of Determination for the
distribution to which this Section 10.07 applies, the fair market value (on the
record date for the distribution to which this Section 10.07 applies) of the

 

(1)           Capital Stock of the Company
distributed in respect of each share of Common Stock in such Section 10.06(4)
distribution and

 

(2)           assets of the Company or debt
securities or any rights, warrants or options to purchase securities of the
Company distributed in respect of each share of Common Stock in such Section
10.08 distribution.

 

The Board of Directors shall determine fair market
values for the purposes of this Section 10.07.

 

59

 

The adjustment
shall become effective immediately after the record date for the determination
of shareholders entitled to receive the rights, warrants or options to which
this Section 10.07 applies.  If all of
the shares of Common Stock subject to such rights, warrants or options have not
been issued when such rights, warrants or options expire, then the Conversion
Rate shall promptly be readjusted to the Conversion Rate which would then be in
effect had the adjustment upon the issuance of such rights, warrants or options
been made on the basis of the actual number of shares of Common Stock issued
upon the exercise of such rights, warrants or options.

 

No adjustment
shall be made under this Section 10.07 if the application of the formula stated
above in this Section 10.07 would result in a value of R’ that is equal to or
less than the value of R.

 

SECTION 10.08     Adjustment
for Other Distributions.

 

(a)           If,
after the Issue Date of the Securities, the Company distributes to all holders
of its Common Stock any of its assets excluding distributions of Capital Stock
or equity interests referred to in Section 10.08 (b), or debt securities or any
rights, warrants or options to purchase securities of the Company (including
securities or cash, but excluding (x) distributions of Capital Stock referred
to in Section 10.06 and distributions of rights, warrants or options referred
to in Section 10.07 and (y) cash dividends or other cash distributions that are
paid out of consolidated current net earnings or earnings retained in the
business as shown on the books of the Company unless such cash dividends or other
cash distributions are Extraordinary Cash Dividends), the Conversion Rate shall
be adjusted, subject to the provisions of Section 10.08(c), in accordance with
the formula:

 

R’   =   R
x M

M-F

 

where:

 

R’ = the adjusted Conversion Rate.

 

R  = the
current Conversion Rate.

 

M  = the
Average Sale Price, minus, in the case of a distribution to which Section
10.06(4) applies, for which (i) the record date shall occur on or before the
record date for the distribution to which this Section 10.08(a) applies and (ii)
the Ex-Dividend Time shall occur on or after the date of the Time of
Determination for the distribution to which this Section 10.08(a) applies, the
fair market value (on the record date for the distribution to which this
Section 10.08(a) applies) of any Capital Stock of the Company distributed in
respect of each share of Common Stock in such Section 10.06(4) distribution.

 

F  = the fair
market value (on the record date for the distribution to which this Section
10.08(a) applies) of the assets, securities, rights, warrants or options to be
distributed in respect of each share of Common Stock in the distribution to
which this Section 10.08(a) is being applied (including, in the case of cash
dividends or other cash distributions giving rise to an adjustment, all such
cash distributed concurrently).

 

60

 

The Board of
Directors shall determine fair market values for the purposes of this Section
10.08(a).

 

The adjustment
shall become effective immediately after the record date for the determination
of shareholders entitled to receive the distribution to which this Section
10.08(a) applies.

 

For purposes of
this Section 10.08(a), the term “Extraordinary Cash Dividend” shall mean
any cash dividend with respect to the Common Stock the amount of which,
together with the aggregate amount of cash dividends on the Common Stock to be
aggregated with such cash dividend in accordance with the provisions of this
paragraph, equals or exceeds the threshold percentage set forth in item (i)
below.  For purposes of item (i) below,
the “Measurement Period” with respect to a cash dividend on the Common
Stock shall mean the 365 consecutive day period ending on the date prior to the
Ex-Dividend Time with respect to such cash dividend, and the “Relevant Cash
Dividends” with respect to a cash dividend on the Common Stock shall mean
the cash dividends on the Common Stock with Ex-Dividend Times occurring in the
Measurement Period.

 

(i)            If, upon the date prior to the
Ex-Dividend Time with respect to a cash dividend on the Common Stock, the
aggregate amount of such cash dividend together with the amounts of all
Relevant Cash Dividends equals or exceeds on a per share basis 5% of the Sale
Price of the Common Stock on the last Trading Day preceding the date of
declaration by the Board of Directors of the cash dividend or distribution with
respect to which this provision is being applied, then such cash dividend
together with all Relevant Cash Dividends, shall be deemed to be an
Extraordinary Cash Dividend and for purposes of applying the formula set forth
above in this Section 10.08(a), the value of “F” shall be equal to (y) the
aggregate amount of such cash dividend together with the amount of all Relevant
Cash Dividends, minus (z) the aggregate amount of all Relevant Cash Dividends
for which a prior adjustment in the Conversion Rate was previously made under
this Section 10.08(a).

 

In making the determinations required by item (i)
above, the amount of cash dividends paid on a per share basis and the amount of
any Relevant Cash Dividends specified in item (i) above, shall be appropriately
adjusted to reflect the occurrence during such period of any event described in
Section 10.06.

 

(b)           If,
after the Issue Date of the Securities, the Company pays a dividend or makes a
distribution to all holders of its Common Stock consisting of Capital Stock of
any class or series, or similar equity interests, of or relating to a
Subsidiary or other business unit of the Company, then the Conversion Rate
shall be adjusted in accordance with the formula:

 

R’  = 
R  x  (1 + F/M)

 

where:

 

R’ = the adjusted Conversion Rate.

 

61

 

R  = the
current Conversion Rate.

 

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

 

F  = the fair
market value of the securities distributed in respect of each share of Common
Stock for which this Section 10.08(b) shall mean the number of securities
distributed in respect of each share of Common Stock multiplied by the average
of the Post-Distribution Prices of those securities distributed for the 10
Trading Days commencing on and including the fifth Trading Day after the
Ex-Dividend Date.

 

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

 

(c)           In
the event that, with respect to any distribution to which Section 10.08(a)
would otherwise apply, the difference “M-F” as defined in the formula set forth
in Section 10.08(a) is less than $1.00 or “F” is equal to or greater than “M,”
then the adjustment provided by Section 10.08(a) shall not be made and in lieu
thereof the provisions of Section 10.14 shall apply to such distribution.

 

SECTION 10.09     When Adjustment
May Be Deferred.

 

No adjustment in
the Conversion Rate need be made unless the adjustment would require an
increase or decrease of at least 1% in the Conversion Rate.  Any adjustments that are not made shall be
carried forward and taken into account in any subsequent adjustment.

 

62

 

All calculations
under this Article 10 shall be made to the nearest cent or to the nearest
1/1,000th of a share, as the case may be (with one-half cent and 5/10,000ths of
a share being rounded upward).

 

SECTION 10.10     When No
Adjustment Required.

 

No adjustment need
be made for a transaction referred to in Section 10.06, 10.07, 10.08 or 10.14
if Securityholders are to participate in the transaction on a basis and with
notice that the Board of Directors determines to be fair and appropriate in
light of the basis and notice on which holders of Common Stock participate in
the transaction.  Such participation by
Securityholders may include participation upon conversion provided that an
adjustment shall be made at such time as the Securityholders are no longer
entitled to participate.

 

No adjustment need
be made for rights to purchase Common Stock pursuant to a Company plan for
reinvestment of dividends or interest.

 

No adjustment need
be made for a change in the par value or no par value of the Common Stock.

 

To the extent the
Securities become convertible pursuant to this Article 10 into cash, no
adjustment need be made thereafter as to the cash.  Interest will not accrue on the cash.

 

SECTION 10.11     Notice of
Adjustment.

 

Whenever the
Conversion Rate is adjusted, the Company shall promptly mail to Securityholders
a notice of the adjustment.  The Company
shall file with the Trustee and the Conversion Agent such notice and a certificate
from the Company’s independent public accountants briefly stating the facts
requiring the adjustment and the manner of computing it.  The certificate shall be conclusive evidence
that the adjustment is correct.  Neither
the Trustee nor any Conversion Agent shall be under any duty or responsibility
with respect to any such certificate except to exhibit the same to any Holder
desiring inspection thereof.

 

SECTION 10.12     Voluntary Increase.

 

The Company from
time to time may increase the Conversion Rate by any amount for any period of
time.  Whenever the Conversion Rate is
increased, the Company shall mail to Securityholders and file with the Trustee
and the Conversion Agent a notice of the increase.  The Company shall mail the notice at least 15 days before the
date the increased Conversion Rate takes effect.  The notice shall state the increased Conversion Rate and the
period it will be in effect.

 

A voluntary
increase of the Conversion Rate does not change or adjust the Conversion Rate
otherwise in effect for purposes of Section 10.06, 10.07 or 10.08.

 

63

 

SECTION 10.13     Notice of
Certain Transactions.

 

If:

 

(1)           the
Company takes any action that would require an adjustment in the Conversion
Rate pursuant to Section 10.06, 10.07 or 10.08 (unless no adjustment is to
occur pursuant to Section 10.10); or

 

(2)           the
Company takes any action that would require a supplemental indenture pursuant
to Section 10.14; or

 

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

 

then the Company
shall mail to Securityholders and file with the Trustee and the Conversion
Agent a notice stating the proposed record date for a dividend or distribution
or the proposed effective date of a subdivision, combination, reclassification,
consolidation, merger, binding share exchange, transfer, liquidation or
dissolution.  The Company shall file and
mail the notice at least 15 days before such date.  Failure to file or mail the notice or any defect in it shall not
affect the validity of the transaction.

 

SECTION 10.14     Reorganization
of Company; Special Distributions.

 

If the Company is
a party to a transaction subject to Section 5.01 (other than a sale of all or
substantially all of the assets of the Company in a transaction in which the holders
of Common Stock immediately prior to such transaction do not receive
securities, cash or other assets of the Company or any other person) or a
merger or binding share exchange which reclassifies or changes the outstanding
Common Stock of the Company, the person obligated to deliver securities, cash
or other assets upon conversion of Securities shall enter into a supplemental
indenture.  If the issuer of securities
deliverable upon conversion of Securities is an Affiliate of the successor
Company, that issuer shall join in the supplemental indenture.

 

The supplemental
indenture shall provide that the Holder of a Security may convert it into the
kind and amount of securities, cash or other assets which such Holder would
have received immediately after the consolidation, merger, binding share
exchange or transfer if such Holder had converted the Security immediately
before the effective date of the transaction, assuming (to the extent
applicable) that such Holder (i) was not a constituent person or an Affiliate
of a constituent person to such transaction; (ii) made no election with respect
thereto; and (iii) was treated alike with the plurality of non-electing
Holders.  The supplemental indenture
shall provide for adjustments which shall be as nearly equivalent as may be
practical to the adjustments provided for in this Article 10.  The successor Company shall mail to
Securityholders a notice briefly describing the supplemental indenture.

 

If this Section
applies, neither Section 10.06 nor 10.07 applies.

 

If the Company
makes a distribution to all holders of its Common Stock of any of its assets,
or debt securities or any rights, warrants or options to purchase securities of
the Company that, but for the provisions of Section 10.08(c), would otherwise
result in an adjustment in the Conversion Rate pursuant to the provisions of
Section 10.08, then, from and

 

64

 

after the record date for determining the holders of Common Stock
entitled to receive the distribution, a Holder of a Security that converts such
Security in accordance with the provisions of this Indenture shall upon such
conversion be entitled to receive, in addition to the shares of Common Stock
into which the Security is convertible, the kind and amount of securities, cash
or other assets comprising the distribution that such Holder would have
received if such Holder had converted the Security immediately prior to the
record date for determining the holders of Common Stock entitled to receive the
distribution.

 

SECTION 10.15     Company
Determination Final.

 

Any determination
that the Company or the Board of Directors must make pursuant to Section 10.03,
10.06, 10.07, 10.08, 10.09, 10.10, 10.14 or 10.17 is conclusive.

 

SECTION 10.16     Trustee’s
Adjustment Disclaimer.

 

The Trustee has no
duty to determine when an adjustment under this Article 10 should be made, how
it should be made or what it should be. 
The Trustee has no duty to determine whether a supplemental indenture
under Section 10.14 need be entered into or whether any provisions of any
supplemental indenture are correct.  The
Trustee shall not be accountable for and makes no representation as to the
validity or value of any securities or assets issued upon conversion of
Securities.  The Trustee shall not be
responsible for the Company’s failure to comply with this Article 10.  Each Conversion Agent shall have the same
protection under this Section 10.16 as the Trustee.

 

SECTION 10.17     Simultaneous
Adjustments.

 

In the event that
this Article 10 requires adjustments to the Conversion Rate under more than one
of Sections 10.06(4), 10.07 or 10.08, and the record dates for the
distributions giving rise to such adjustments shall occur on the same date,
then such adjustments shall be made by applying, first, the provisions of
Section 10.06, second, the provisions of Section 10.08 and, third, the
provisions of Section 10.07.

 

SECTION 10.18     Successive
Adjustments.

 

After an
adjustment to the Conversion Rate under this Article 10, any subsequent event
requiring an adjustment under this Article 10 shall cause an adjustment to the
Conversion Rate as so adjusted.

 

SECTION 10.19     Rights Issued
in Respect of Common Stock Issued Upon Conversion.

 

Each share of
Common Stock issued upon conversion of Securities pursuant to this Article 10
shall be entitled to receive the appropriate number of rights (“Rights”),
if any, and the certificates representing the Common Stock issued upon such
conversion shall bear such legends, if any, in each case as may be provided by
the terms of the Company’s Amended and Restated Rights Agreement, dated as of
July 26, 2001, between the Company and Mellon Investor Services LLC, as Rights
Agent, or any successor shareholder rights agreement adopted by the Company, as
the same may be amended form time to time (in each case, a “Rights

 

65

 

Agreement”).  Provided that such Rights Agreement requires
that each share of Common Stock issued upon conversion of Securities at any
time prior to the distribution of separate certificates representing the Rights
be entitled to receive such Rights, then, notwithstanding anything else to the
contrary in this Article 10, there shall not be any adjustment to the
conversion privilege or Conversion Rate as a result of the issuance of Rights,
the distribution of separate certificates representing the Rights, the exercise
or redemption of such Rights in accordance with any Rights Agreement, or the
termination or invalidation of such Rights.

 

ARTICLE 11

 

PAYMENT OF INTEREST

 

SECTION 11.01     Interest Payments.

 

Semiannual or
contingent interest on any Security that is payable, and is punctually paid or
duly provided for, on any applicable 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 or accrual date, as the case may be, for such interest at
the office or agency of the Company maintained for such purpose.  Each installment of semiannual or contingent
interest payable in cash on any Security shall be paid in same-day funds by
transfer to an account maintained by the payee located inside the United
States, if the Trustee shall have received proper wire transfer instructions in
writing from such payee not later than the related Regular Record Date or
accrual date, as the case may be, or, if no such instructions have been
received by check drawn on a bank in the City of New York mailed to the payee
at its address set forth on the Registrar’s books.  In the case of a permanent Global Security, semiannual or
contingent interest payable on any applicable payment date will be paid to the
Depositary, with respect to that portion of such permanent Global Security held
for its account by Cede & Co. for the purpose of permitting such party to
credit the interest received by it in respect of such permanent Global Security
to the accounts of the beneficial owners thereof.

 

SECTION 11.02     Defaulted Interest.

 

Except as
otherwise specified with respect to the Securities, any semiannual or
contingent interest on any Security that is payable, but is not punctually paid
or duly provided for, within 30 days following any applicable payment date
(herein called “Defaulted Interest”, which term shall include any accrued and
unpaid interest that has accrued on such defaulted amount in accordance with
paragraph 1 of the Securities), shall forthwith cease to be payable to the
registered Holder thereof on the relevant Regular Record Date or accrual date,
as the case may be, by virtue of having been such Holder, and such Defaulted
Interest may be paid by the Company, at its election in each case, as provided
in clause (1) or (2) below:

 

(1)           The Company may elect to make payment
of any Defaulted Interest to the persons in whose names the Securities are
registered at the close of business on a Special Record Date for the payment of
such Defaulted Interest, which shall be fixed in the following manner.  The Company shall notify the Trustee in
writing of the amount of Defaulted Interest proposed to be paid on each
Security and the date of the proposed payment (which shall not be less than 20
days after such

 

66

 

notice is received by the
Trustee), and at the same time the Company shall deposit with the Trustee an
amount of money equal to the aggregate amount proposed to be paid in respect of
such Defaulted Interest or shall make arrangements satisfactory to the Trustee
for such deposit on or prior to the date of the proposed payment, such money
when deposited to be held in trust for the benefit of the persons entitled to
such Defaulted Interest as in this clause provided.  Thereupon the Trustee shall fix a special record date for the
payment of such Defaulted Interest which shall be not more than 15 days and not
less than 10 days prior to the date of the proposed payment and not less than
10 days after the receipt by the Trustee of the notice of the proposed payment
(the “Special Record Date”).  The
Trustee shall promptly notify the Company of such Special Record Date and, in
the name and at the expense of the Company, shall cause notice of the proposed
payment of such Defaulted Interest and the Special Record Date therefor to be
mailed, first-class postage prepaid, to each Holder of Securities at his
address as it appears on the list of Securityholders maintained pursuant to
Section 2.05 not less than 10 days prior to such Special Record Date.  Notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefor having been mailed as
aforesaid, such Defaulted Interest shall be paid to the persons in whose names
the Securities are registered at the close of business on such Special Record
Date and shall no longer be payable pursuant to the following clause (2).

 

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

 

SECTION 11.03     Interest
Rights Preserved.

 

Subject to the
foregoing provisions of this Article 11 and Section 2.06, each Security delivered
under this Indenture upon registration of transfer of or in exchange for or in
lieu of any other Security shall carry the rights to semiannual and contingent
interest accrued and unpaid, and to accrue, which were carried by such other
Security.

 

ARTICLE 12

 

MISCELLANEOUS

 

SECTION 12.01     Trust
Indenture Act Controls.

 

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

 

67

 

SECTION 12.02     Notices;
Address of Agency.

 

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

 

if to the Company:

 

IDEC
Pharmaceuticals Corporation

3030 Callan Road

San Diego, California  92121

Telephone No:  (858) 431-8800

Facsimile No:  (858) 431-8755

Attention:              John M. Dunn

 

with a copy to:

 

Pillsbury Winthrop LLP

101 West Broadway, Suite 1800

San Diego, CA  92101

Telephone No:  (619) 234-5000

Facsimile No:  (619) 236-1995

Attention:              David R. Snyder

 

if to the Trustee:

 

J.P. Morgan Trust
Company, National Association

101 California Street, Suite 3800

San Francisco, CA  94111

Telephone No:  (415) 954-2367

Facsimile No:  (415) 954-2331

Attention:              James Nagy

 

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

 

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

 

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

 

68

 

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

 

SECTION 12.03     Communication
by Holders with Other Holders.

 

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

 

SECTION 12.04     Certificate
and Opinion as to Conditions Precedent.

 

Upon any request or application by the Company to the Trustee to
take any action under this Indenture, the Company shall furnish to the Trustee:

 

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

 

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

 

SECTION 12.05     Statements
Required in Certificate or Opinion.

 

Unless the Trustee agrees, in its sole discretion, to accept a
different form or format, each Officers’ Certificate or Opinion of Counsel with
respect to compliance with a covenant or condition provided for in this
Indenture shall include:

 

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

 

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

 

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

 

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

 

SECTION 12.06     Separability
Clause.

 

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

 

69

 

SECTION 12.07     Rules by Trustee, Paying Agent,
Conversion Agent and Registrar.

 

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

 

SECTION 12.08     Calculations.

 

The calculation of the Purchase Price, Change in Control Purchase
Price, Conversion Rate, Market Price, Sale Price of the Common Stock and each
other calculation to be made hereunder (other than the LYON Market Price) shall
be the obligation of the Company.  All
calculations made by the Company as contemplated pursuant to this Section 12.08
shall be final and binding on the Company and the Holders absent manifest
error.  The Trustee, Paying Agent,
Conversion Agent and Bid Solicitation Agent shall not be obligated to
recalculate, recompute or confirm any such calculations.

 

SECTION 12.09     Legal Holidays.

 

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

 

SECTION 12.10     Governing Law.

 

THE LAWS OF THE STATE OF NEW YORK SHALL GOVERN THIS INDENTURE AND
THE SECURITIES.

 

SECTION 12.11     No Recourse
Against Others.

 

A director, officer, employee or stockholder, as such, of the
Company shall not have any liability for any obligations of the Company under
the Securities or this Indenture or for any claim based on, in respect of or by
reason of such obligations or their creation. 
By accepting a Security, each Securityholder shall waive and release all
such liability.  The waiver and release
shall be part of the consideration for the issue of the Securities.

 

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.

 

SECTION 12.13     Multiple Originals.

 

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

 

70

 

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

 

	
   

  	
  IDEC Pharmaceuticals
  Corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ William H.
  Rastetter

  	
   

  
	
   

  	
   

  	
  Name: William H.
  Rastetter, Ph.D.

  
	
   

  	
   

  	
  Title: Chief
  Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  J.P. Morgan
  Trust Company, National Association, 

  as Trustee

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ James Nagy

  	
   

  
	
   

  	
   

  	
  Name: James
  Nagy

  
	
   

  	
   

  	
  Title:   Assistant
  Vice President

  
					

 

71

 

EXHIBIT A-1

 

[FORM OF FACE OF
GLOBAL SECURITY]

 

FOR PURPOSES OF SECTIONS 1272, 1273 AND 1275 OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED, THIS SECURITY IS BEING ISSUED WITH ORIGINAL
ISSUE DISCOUNT AND THE ISSUE DATE OF THIS SECURITY IS APRIL APRIL 29, 2002. IN
ADDITION, THIS SECURITY IS SUBJECT TO UNITED STATES FEDERAL INCOME TAX
REGULATIONS GOVERNING CONTINGENT PAYMENT DEBT INSTRUMENTS.  UNDER SUCH REGULATIONS, THE COMPARABLE YIELD
OF THIS SECURITY IS 8.51% (WHICH WILL BE TREATED AS THE YIELD FOR UNITED STATES
FEDERAL INCOME TAX PURPOSES), COMPOUNDED SEMIANNUALLY.  THE YIELD FOR ACCRUING ORIGINAL ISSUE
DISCOUNT FOR NON-TAX PURPOSES IS 1.75%, COMPOUNDED SEMIANNUALLY.

 

THE ISSUER AGREES, AND BY ACCEPTING A BENEFICIAL OWNERSHIP
INTEREST IN THIS SECURITY EACH HOLDER OF THIS SECURITY WILL BE DEEMED TO HAVE
AGREED, FOR UNITED STATES FEDERAL INCOME TAX PURPOSES (1) TO TREAT THIS
SECURITY AS A DEBT INSTRUMENT THAT IS SUBJECT TO TREAS. REG. SEC. 1.1275-4 (THE
“CONTINGENT PAYMENT REGULATIONS”), (2) TO TREAT THE FAIR MARKET VALUE OF ANY
STOCK RECEIVED UPON ANY CONVERSION OF THIS SECURITY AS A CONTINGENT PAYMENT FOR
PURPOSES OF THE CONTINGENT PAYMENT REGULATIONS, AND (3) TO BE BOUND BY THE
ISSUER’S DETERMINATION OF THE “COMPARABLE YIELD” AND “PROJECTED PAYMENT
SCHEDULE,” WITHIN THE MEANING OF THE CONTINGENT PAYMENT REGULATIONS, WITH RESPECT
TO THIS SECURITY.  THE ISSUER AGREES TO
PROVIDE PROMPTLY TO THE HOLDER OF THIS SECURITY, UPON WRITTEN REQUEST, THE
AMOUNT OF ORIGINAL ISSUE DISCOUNT, ISSUE DATE, YIELD TO MATURITY, COMPARABLE
YIELD AND PROJECTED PAYMENT SCHEDULE. 
ANY SUCH WRITTEN REQUEST SHOULD BE SENT TO THE ISSUER AT THE FOLLOWING
ADDRESS:  IDEC PHARMACEUTICALS
CORPORATION, 3030 CALLAN ROAD, SAN DIEGO, CA 
92121, ATTENTION: CORPORATE SECRETARY.

 

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

 

TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO NOMINEES OF THE DEPOSITORY TRUST

 

 

COMPANY, OR TO A SUCCESSOR THEREOF
OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY
SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET
FORTH IN ARTICLE TWO OF THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.

 

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

 

THE HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF, AGREES TO
OFFER, SELL, OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE
“RESALE RESTRICTION TERMINATION DATE”), WHICH IS TWO YEARS AFTER THE LATER OF
THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH IDEC PHARMACEUTICALS
CORPORATION (THE “COMPANY” OR THE “ISSUER”) OR ANY AFFILIATE OF THE COMPANY WAS
THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY) ONLY (A) TO
THE COMPANY OR ANY SUBSIDIARY THEREOF, (B) FOR SO LONG AS THE SECURITIES ARE
ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON IT REASONABLY BELIEVES
IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER TO WHICH NOTICE IS GIVEN THAT THE TRANSFER IS
BEING MADE IN RELIANCE ON RULE 144A, (C) TO AN INSTITUTIONAL “ACCREDITED
INVESTOR” WITHIN THE MEANING OF SUBPARAGRAPH (A)(1), (2), (3) OR (7) OF RULE
501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THE SECURITY FOR ITS OWN
ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL “ACCREDITED INVESTOR,” FOR
INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION
WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, (D) PURSUANT TO A
REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES
ACT OR (E) PURSUANT TO ANOTHER 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 (C) OR (E)
TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER
INFORMATION SATISFACTORY TO EACH OF THEM, AND IN EACH OF THE FOREGOING CASES, A
CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THE OTHER SIDE OF THIS
SECURITY IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE TRUSTEE.

 

2

 

THE FOREGOING LEGEND MAY BE REMOVED FROM THIS SECURITY ON
SATISFACTION OF THE CONDITIONS SPECIFIED IN THE INDENTURE. THE HOLDER OF THIS
SECURITY WILL NOT, DIRECTLY OR INDIRECTLY, ENGAGE IN ANY HEDGING TRANSACTION
WITH REGARD TO THIS SECURITY EXCEPT AS PERMITTED BY THE SECURITIES ACT.

 

3

 

IDEC PHARMACEUTICALS
CORPORATION

Liquid Yield Option(TM) Note due 2032

(Zero Coupon-Senior)

 

	
  No. R-

  	
   

  	
  CUSIP:  [   
  ]

  	
   

  
	
  Issue Date:
  April 29, 2002

  	
   

  	
  Original Issue
  Discount: $407.09

  	
   

  
	
  Issue
  Price:  $592.91

  	
   

  	
  (for each $1,000
  Principal Amount at Maturity)

  	
   

  
	
  (for each $1,000
  Principal Amount at Maturity)

  	
   

  	
   

  	
   

  

 

IDEC Pharmaceuticals Corporation, a Delaware corporation, promises
to pay to Cede & Co. or registered assigns, the Principal Amount at
Maturity of [     ] DOLLARS
($[     ]) on April 29, 2032.

 

This Security
shall not bear interest except as specified on the other side of this
Security.  Original Issue Discount will
accrue 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: April 29,
  2002

  	
  IDEC
  PHARMACEUTICALS CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

TRUSTEE’S CERTIFICATE OF

AUTHENTICATION

 

J.P. Morgan Trust Company,

National Association,

as Trustee, certifies that this

is one of the Securities referred

to in the within-mentioned
Indenture.

 

	
  By:

  	
   

  	
   

  
	
  Authorized Officer

  	
   

  

 

 

[FORM OF REVERSE SIDE OF LYON]

Liquid Yield Option(TM) Note due 2032

(Zero Coupon-Senior)

1.                                       Interest.

 

This Security shall not bear interest, except as specified in this
paragraph or in paragraph 5 hereof.  If
the Principal Amount at Maturity hereof or any portion of such Principal Amount
at Maturity is not paid when due (whether upon acceleration pursuant to Section
6.02 of the Indenture, upon the date set for payment of the Redemption Price
pursuant to paragraph 6 hereof, upon the date set for payment of the Purchase
Price or Change in Control Purchase Price pursuant to paragraph 7 hereof or
upon the Stated Maturity of this Security) or if interest (including semiannual
or contingent interest, if any) due hereon or any portion of such interest is
not paid when due in accordance with paragraph 5 hereof, then in each such case
the overdue amount shall, to the extent permitted by law, bear interest at the
rate of 1.75% per annum, compounded semiannually, which interest shall accrue
from the date such overdue amount was originally due to the date payment of
such amount, including interest thereon, has been made or duly provided for.  All such interest shall be payable on
demand.  The accrual of such interest on
overdue amounts shall be in lieu of, and not in addition to, the continued
accrual of Original Issue Discount.

 

Original Issue Discount (the difference between the Issue Price
and the Principal Amount at Maturity of the Security), in the period during
which a Security remains outstanding, shall accrue at 1.75% per annum, on a
semiannual bond equivalent basis using a 360-day year composed of twelve 30-day
months, from the Issue Date of this Security.

 

2.                                       Method of Payment.

 

Subject to the terms and conditions of the Indenture, the Company
will make payments in respect of Redemption Prices, Purchase Prices, Change in
Control Purchase Prices and at Stated Maturity to Holders who surrender
Securities to a Paying Agent to collect such payments in respect of the
Securities.  The Company will pay any
cash amounts in money of the United States that at the time of payment is legal
tender for payment of public and private debts.  However, the Company may make such cash payments by check payable
in such money.

 

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

 

Initially, J.P. Morgan Trust Company, National Association, a
national banking association (the “Trustee”), will act as Paying Agent,
Conversion Agent, Registrar and Bid Solicitation Agent.  The Company may appoint and change any
Paying Agent, Conversion Agent, Registrar or co-registrar or Bid Solicitation
Agent without notice, other than notice to the Trustee.  The Company or any of its Subsidiaries or
any of their Affiliates may act as Paying Agent, Conversion Agent, Registrar or
co-registrar.  None of the Company, any
of its Subsidiaries or any of their Affiliates shall act as Bid Solicitation
Agent.

 

 

4.                                       Indenture.

 

The Company issued the Securities under an Indenture dated as of
April 29, 2002 (the “Indenture”), between the Company and the
Trustee.  The terms of the Securities
include those stated in the Indenture and those made part of the Indenture by
reference to the Trust Indenture Act of 1939, as in effect from time to time
(the “TIA”).  Capitalized terms used herein and not
defined herein have the meanings ascribed thereto in the Indenture.  The Securities are subject to all such
terms, and Securityholders are referred to the Indenture for a statement of
those terms.

 

The Securities are general unsecured and unsubordinated
obligations of the Company limited to $1,264,950,000 aggregate Principal Amount
at Maturity (subject to Section 2.07 of the Indenture).  The Indenture does not limit other
indebtedness of the Company, secured or unsecured.

 

5.                                       Contingent Interest.

 

Subject to the accrual and record date provisions specified in
this paragraph 5, the Company shall pay contingent cash interest to the Holders
during any six-month period (a “Contingent Interest Period”) from April 30 to
October 29 and from October 30 to April 29 commencing April 30, 2007, if the
average LYON Market Price for the Five-Day Period with respect to such
Contingent Interest Period equals 120% or more of the sum of the Issue Price of
a Security and Original Issue Discount accrued thereon to the day immediately
preceding the first day of the relevant Contingent Interest Period.

 

The amount of contingent interest payable per $1,000 Principal
Amount at Maturity hereof in respect of any Quarterly Period within a
Contingent Interest Period shall equal the greater of (x) Regular Cash
Dividends paid by the Company per share of Common Stock during that Quarterly
Period multiplied by the number of shares of Common Stock into which $1,000
Principal Amount at Maturity hereof is convertible pursuant to paragraph 9
hereof as of the accrual date for such contingent interest or (y) 0.0625%
of the average LYON Market Price of a LYON for the Five-Day Period, provided
that if the Company does not pay cash dividends during a semiannual period, the
Company will pay contingent interest semiannually at a rate of 0.125% of the
average LYON Market Price for the Five-Day Period.

 

Contingent interest, if any, will accrue and be payable to Holders
as of the record date for the related Regular Cash Dividend or, if no Regular
Cash Dividend is paid by the Company during a Quarterly Period, to Holders as
of the 15th day (whether or not a Business Day) preceding the last day
of the relevant Contingent Interest Period. 
Such payments shall be paid on the payment date of the related Regular
Cash Dividend or, if no Regular Cash Dividend is paid by the Company during any
Quarterly Period, on the last day of the relevant Contingent Interest
Period.  Original Issue Discount will
continue to accrue at 1.75% per annum whether or not contingent interest
is paid.

 

“Five-Day Period” means, with respect to any Contingent Interest Period, the five
Trading Days ending on the second Trading Day immediately preceding the first
day of such Contingent Interest Period; provided, however, if the Company shall
have declared a Regular Cash Dividend on its Common Stock that is payable
during such Contingent Interest Period but

 

2

 

for which the record date for
determining stockholders entitled thereto precedes the first day of such
Contingent Interest Period, then “Five-Day Period” shall mean, with respect to
such Contingent Interest Period, the five Trading Days ending on the second
Trading Day immediately preceding such record date.

 

“Regular Cash Dividends” means quarterly or other periodic
cash dividends on the Company’s Common Stock as declared by the Company’s Board
of Directors as part of its cash dividend payment practices and that are not
designated by them as extraordinary or special or other nonrecurring dividends.

 

“LYON Market Price” means, as of any date of determination,
the average of the secondary market bid quotations per $1,000 Principal Amount
at Maturity obtained by the Bid Solicitation Agent for $10 million Principal
Amount at Maturity of Securities at approximately 4:00 p.m., New York City
time, on such determination date from three recognized securities dealers in
The City of New York (none of which shall be an Affiliate of the Company)
selected by the Company; provided, however, if (a) at least three
such bids are not obtained by the Bid Solicitation Agent or (b) in the
Company’s reasonable judgment, the bid quotations are not indicative of the
secondary market value of the Securities as of such determination date, then
the LYON Market Price for such determination date shall equal (i) the
Conversion Rate in effect as of such determination date multiplied by
(ii) the average Sale Price of the Common Stock for the five Trading Days
ending on such determination date, appropriately adjusted to take into account
the occurrence, during the period commencing on the first of such Trading Days
during such five Trading Day period and ending on such determination date, of
any event described in Section 10.06, 10.07 or 10.08 (subject to the conditions
set forth in Sections 10.09 and 10.10) of the Indenture.

 

The term “Quarterly Period” shall mean, with respect to any
Contingent Interest Period, any quarterly period within such Contingent
Interest Period extending from April 30 to July 29, from July 30 to October 29,
from October 30 to January 29 or from January 30 to April 29.

 

Upon determination that Holders will be entitled to receive contingent
interest which may become payable during a Contingent Interest Period, on or
prior to the first day of such Contingent Interest Period, the Company shall
promptly notify the Trustee of such determination and shall issue a press
release and publish such information on its web site on the World Wide Web or
through such other public medium as the Company may use at that time.  The Company shall also notify the Trustee of
the declaration of any Regular Cash Dividends and the related record and
payment dates.

 

6.                                       Redemption at the Option of the
Company.

 

No sinking fund is provided for the Securities.  The Securities are redeemable for cash as a
whole, at any time, or in part from time to time at the option of the Company
in accordance with the Indenture at the Redemption Prices set forth below,
provided that the Securities are not redeemable prior to April 29, 2007.

 

The table below shows Redemption Prices of a Security per $1,000
Principal Amount at Maturity on the dates shown below and at Stated Maturity, which
prices reflect accrued Original

 

3

 

Issue Discount calculated to each
such date.  The Redemption Price of a
Security redeemed between such dates shall include an additional amount
reflecting the additional Original Issue Discount accrued since the preceding
date in the table but not including the Redemption Date.

 

	
  Redemption Date

  	
   

  	
  (1)

  LYON

  Issue Price

  	
   

  	
  (2)

  Accrued

  Original

  Issue Discount

  	
   

  	
  (3)

  Redemption

  Price

  (1)+(2)

  	
   

  
	
  April 29, 2007

  	
   

  	
  $

  	
  592.91

  	
   

  	
  $

  	
  53.97

  	
   

  	
  $

  	
  646.88

  	
   

  
	
  April
  29, 2008

  	
   

  	
  $

  	
  592.91

  	
   

  	
  $

  	
  65.34

  	
   

  	
  $

  	
  658.25

  	
   

  
	
  April
  29, 2009

  	
   

  	
  $

  	
  592.91

  	
   

  	
  $

  	
  76.91

  	
   

  	
  $

  	
  669.82

  	
   

  
	
  April
  29, 2010

  	
   

  	
  $

  	
  592.91

  	
   

  	
  $

  	
  88.68

  	
   

  	
  $

  	
  681.59

  	
   

  
	
  April
  29, 2011

  	
   

  	
  $

  	
  592.91

  	
   

  	
  $

  	
  100.66

  	
   

  	
  $

  	
  693.57

  	
   

  
	
  April
  29, 2012

  	
   

  	
  $

  	
  592.91

  	
   

  	
  $

  	
  112.85

  	
   

  	
  $

  	
  705.76

  	
   

  
	
  April
  29, 2013

  	
   

  	
  $

  	
  592.91

  	
   

  	
  $

  	
  125.26

  	
   

  	
  $

  	
  718.17

  	
   

  
	
  April
  29, 2014

  	
   

  	
  $

  	
  592.91

  	
   

  	
  $

  	
  137.88

  	
   

  	
  $

  	
  730.79

  	
   

  
	
  April
  29, 2015

  	
   

  	
  $

  	
  592.91

  	
   

  	
  $

  	
  150.73

  	
   

  	
  $

  	
  743.64

  	
   

  
	
  April
  29, 2016

  	
   

  	
  $

  	
  592.91

  	
   

  	
  $

  	
  163.80

  	
   

  	
  $

  	
  756.71

  	
   

  
	
  April
  29, 2017

  	
   

  	
  $

  	
  592.91

  	
   

  	
  $

  	
  177.10

  	
   

  	
  $

  	
  770.01

  	
   

  
	
  April
  29, 2018

  	
   

  	
  $

  	
  592.91

  	
   

  	
  $

  	
  190.63

  	
   

  	
  $

  	
  783.54

  	
   

  
	
  April
  29, 2019

  	
   

  	
  $

  	
  592.91

  	
   

  	
  $

  	
  204.40

  	
   

  	
  $

  	
  797.31

  	
   

  
	
  April
  29, 2020

  	
   

  	
  $

  	
  592.91

  	
   

  	
  $

  	
  218.42

  	
   

  	
  $

  	
  811.33

  	
   

  
	
  April
  29, 2021

  	
   

  	
  $

  	
  592.91

  	
   

  	
  $

  	
  232.68

  	
   

  	
  $

  	
  825.99

  	
   

  
	
  April
  29, 2022

  	
   

  	
  $

  	
  592.91

  	
   

  	
  $

  	
  247.19

  	
   

  	
  $

  	
  840.10

  	
   

  
	
  April
  29, 2023

  	
   

  	
  $

  	
  592.91

  	
   

  	
  $

  	
  261.95

  	
   

  	
  $

  	
  854.86

  	
   

  
	
  April
  29, 2024

  	
   

  	
  $

  	
  592.91

  	
   

  	
  $

  	
  276.98

  	
   

  	
  $

  	
  869.89

  	
   

  
	
  April
  29, 2025

  	
   

  	
  $

  	
  592.91

  	
   

  	
  $

  	
  292.27

  	
   

  	
  $

  	
  885.18

  	
   

  
	
  April
  29, 2026

  	
   

  	
  $

  	
  592.91

  	
   

  	
  $

  	
  307.83

  	
   

  	
  $

  	
  900.74

  	
   

  
	
  April
  29, 2027

  	
   

  	
  $

  	
  592.91

  	
   

  	
  $

  	
  323.66

  	
   

  	
  $

  	
  916.57

  	
   

  
	
  April
  29, 2028

  	
   

  	
  $

  	
  592.91

  	
   

  	
  $

  	
  339.77

  	
   

  	
  $

  	
  932.68

  	
   

  
	
  April
  29, 2029

  	
   

  	
  $

  	
  592.91

  	
   

  	
  $

  	
  356.16

  	
   

  	
  $

  	
  949.07

  	
   

  
	
  April
  29, 2030

  	
   

  	
  $

  	
  592.91

  	
   

  	
  $

  	
  372.84

  	
   

  	
  $

  	
  965.75

  	
   

  
	
  April
  29, 2031

  	
   

  	
  $

  	
  592.91

  	
   

  	
  $

  	
  389.82

  	
   

  	
  $

  	
  982.73

  	
   

  
	
  At
  Stated Maturity

  	
   

  	
  $

  	
  592.91

  	
   

  	
  $

  	
  407.09

  	
   

  	
  $

  	
  1,000.00

  	
   

  

 

In addition to the Redemption Price payable with respect to all
Securities or portions thereof to be redeemed as of a Redemption Date, the
Holders of such Securities (or portions thereof) shall be entitled to receive
accrued and unpaid semiannual and contingent interest, if any, with respect
thereto, which interest shall be paid in cash on the Redemption Date.

 

7.                                       Purchase by the Company at the
Option of the Holder.

 

Subject to the terms and conditions of the Indenture, the Company
shall become obligated to purchase, at the option of the Holder, the Securities
held by such Holder on the following Purchase Dates and at the following
Purchase Prices per $1,000 Principal Amount at Maturity, upon delivery of a
Purchase Notice containing the information set forth in the Indenture, at any
time from the opening of business on the date that is 20 Business Days prior to

 

4

 

such Purchase Date until the close
of business on such Purchase Date and upon delivery of the Securities to the
Paying Agent by the Holder as set forth in the Indenture.

 

	
  Purchase Date

  	
   

  	
  Purchase Price

  	
   

  
	
  April 29, 2005

  	
   

  	
  $

  	
  624.73

  	
   

  
	
  April 29, 2007

  	
   

  	
  $

  	
  646.88

  	
   

  
	
  April 29, 2012

  	
   

  	
  $

  	
  705.76

  	
   

  
	
  April 29, 2017

  	
   

  	
  $

  	
  770.01

  	
   

  

 

The Company may, from time to time, declare additional Purchase
Dates and corresponding Purchase Prices.

 

The Purchase Price (equal to the Issue Price plus accrued Original
Issue Discount to the Purchase Date) may be paid, at the option of the Company,
in cash or by the issuance and delivery of shares of Common Stock of the
Company, or in any combination thereof.

 

At the option of the Holder and subject to the terms and
conditions of the Indenture, the Company shall become obligated to purchase the
Securities held by such Holder no later than 35 Business Days after the
occurrence of a Change in Control of the Company, but in no event prior to the
date on which such Change in Control occurs, on or prior to April 29, 2007 for
a Change in Control Purchase Price equal to the Issue Price plus accrued
Original Issue Discount to the Change in Control Purchase Date, which Change in
Control Purchase Price shall be paid in cash.

 

A third party may make the offer and purchase of the Securities in
lieu of the Company in accordance with the Indenture.

 

In addition to the Purchase Price or Change in Control Purchase
Price, as the case may be, payable with respect to all Securities or portions
thereof to be purchased as of the Purchase Date or the Change in Control
Purchase Date, as the case may be, the Holders of such Securities (or portions
thereof) shall be entitled to receive accrued and unpaid semiannual and
contingent interest, if any, with respect thereto, which shall be paid in cash
promptly following the later of the Purchase Date or the Change in Control
Purchase Date, as the case may be and the time of delivery of such Securities
to the Paying Agent pursuant to the Indenture.

 

Holders have the right to withdraw any Purchase Notice or Change
in Control Purchase Notice, as the case may be, by delivering to the Paying Agent
a written notice of withdrawal in accordance with the provisions of the
Indenture.

 

If cash (and/or securities if permitted under the Indenture)
sufficient to pay the Purchase Price or Change in Control Purchase Price, as
the case may be, of, together with any accrued and unpaid semiannual and
contingent interest with respect to, all Securities or portions thereof to be
purchased as of the Purchase Date or the Change in Control Purchase Date, as
the case may be, is deposited with the Paying Agent on the Business Day
following the Purchase Date or the Change in Control Purchase Date, as the case
may be, Original Issue Discount and interest (including semiannual and
contingent interest), if any, shall cease to accrue on such Securities (or
portions thereof) immediately after such Purchase Date or Change in Control
Purchase Date, as the case may be, and the Holder thereof shall have no other
rights as such (other than the right to receive

 

5

 

the Purchase Price or Change in
Control Purchase Price, as the case may be, and accrued and unpaid semiannual
and contingent interest, if any, upon surrender of such Security).

 

8.                                       Notice of Redemption.

 

Notice of redemption will be mailed at least 30 days but not more
than 60 days before the Redemption Date to each Holder of Securities to be
redeemed at the Holder’s registered address. 
If money sufficient to pay the Redemption Price of, and accrued and
unpaid contingent interest, if any, with respect to, all Securities (or
portions thereof) to be redeemed on the Redemption Date is deposited with the
Paying Agent prior to or on the Redemption Date, on such Redemption Date,
Original Issue Discount and interest (including semiannual and contingent
interest), if any, shall cease to accrue on such Securities or portions
thereof.  Securities in denominations
larger than $1,000 of Principal Amount at Maturity may be redeemed in part but
only in integral multiples of $1,000 of Principal Amount at Maturity.

 

9.                                       Conversion.

 

Subject to the next two succeeding sentences, a Holder of a
Security may convert it into Common Stock of the Company at any time before the
close of business on April 29, 2032.  If
the Security is called for redemption, the Holder may convert it only until the
close of business on the second Business Day immediately preceding the
Redemption Date.  A Security in respect
of which a Holder has delivered a Purchase Notice or Change in Control Purchase
Notice exercising the option of such Holder to require the Company to purchase
such Security may be converted only if such notice of exercise is withdrawn in
accordance with the terms of the Indenture.

 

The initial Conversion Rate is 7.1881 shares of Common Stock per
$1,000 Principal Amount at Maturity, subject to adjustment in certain events
described in the Indenture.  The Company
will deliver cash or a check in lieu of any fractional share of Common Stock.

 

Accrued and unpaid semiannual and contingent interest will not be
paid in cash on Securities that are converted but will be paid in the manner
provided in the following paragraph; provided, however that Securities
surrendered for conversion during the period, in the case of semiannual
interest, from the close of business on any Regular Record Date next preceding
any Interest Payment Date to the opening of business on such Interest Payment
Date or, in the case of contingent interest, from the close of business on any
date on which contingent interest accrues to the opening of business on the
date on which such contingent interest is payable, shall be entitled to receive
such semiannual or contingent interest, as the case may be, payable on such
Securities on the corresponding Interest Payment Date or the date on which such
contingent interest is payable and (except Securities with respect to which the
Company has mailed a notice of redemption) Securities surrendered for
conversion during such periods must be accompanied by payment of an amount
equal to the semiannual or contingent interest with respect thereto that the registered
Holder is to receive.

 

A Holder may convert a portion of a Security if the Principal
Amount at Maturity of such portion is $1,000 or an integral multiple of
$1,000.  No payment or adjustment will
be made for dividends on the Common Stock except as provided in the
Indenture.  On conversion of a

 

6

 

Security, the greater of that
portion of accrued Original Issue Discount or Tax Original Issue Discount
attributable to the period from the Issue Date through the Conversion Date and
(except as provided above) accrued contingent interest with respect to the
converted Security shall not be cancelled, extinguished or forfeited, but
rather shall be deemed to be paid in full to the Holder thereof through the delivery
of the Common Stock (together with the cash payment, if any, in lieu of
fractional shares) in exchange for the Security being converted pursuant to the
terms hereof; and the fair market value of such shares of Common Stock
(together with any such cash payment in lieu of fractional shares) shall be
treated as issued, to the extent thereof, first in exchange for the greater of
Original Issue Discount or Tax Original Issue Discount accrued through the
Conversion Date and accrued contingent interest, and the balance, if any, of
such cash and/or the fair market value of such Common Stock (and any such cash
payment in lieu of fractional shares) shall be treated as issued in exchange
for the Issue Price of the Security being converted pursuant to the provisions
hereof.

 

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

 

The Conversion Rate will be adjusted for dividends or distributions
on Common Stock payable in Common Stock or other Capital Stock; subdivisions,
combinations or certain reclassifications of Common Stock; distributions to all
holders of Common Stock of certain rights to purchase Common Stock for a period
expiring within 60 days of the record date for such distribution at less than
the Sale Price of the Common Stock at the Time of Determination; and
distributions to such holders of assets (including shares of Capital Stock of a
Subsidiary) or debt securities of the Company or certain rights to purchase
securities of the Company (excluding certain cash dividends or
distributions).  However, no adjustment
need be made if Securityholders may participate in the transaction or in
certain other cases.  The Company from
time to time may voluntarily increase the Conversion Rate.

 

If the Company is a party to a consolidation, merger or binding
share exchange or a transfer of all or substantially all of its assets, or upon
certain distributions described in the Indenture, the right to convert a
Security into Common Stock may be changed into a right to convert it into the
kind and amount of securities, cash or other assets of the Company or another
person which the Holder would have received if the Holder had converted its
Securities immediately prior to the transaction.

 

10.                                 Conversion Arrangement on Call for
Redemption.

 

Any Securities called for redemption, unless surrendered for
conversion before the close of business on the Redemption Date, may be deemed
to be purchased from the Holders of such Securities at an amount not less than
the Redemption Price, by one or more investment bankers or other purchasers who
may agree with the Company to purchase such Securities from the Holders, to
convert them into Common Stock of the Company and to make payment for such
Securities to the Trustee in trust for such Holders.

 

7

 

11.                                 Defaulted Interest.

 

Except as otherwise specified with respect to the Securities, any
Defaulted Interest on any Security shall forthwith cease to be payable to the
registered Holder thereof on the relevant Regular Record Date or accrual date,
as the case may be, by virtue of having been such Holder, and such Defaulted
Interest may be paid by the Company as provided for in Section 11.02 of the
Indenture.

 

12.                                 Denominations; Transfer; Exchange.

 

The Securities are in fully registered form, without coupons, in
denominations of $1,000 of Principal Amount at Maturity and integral multiples
of $1,000.  A Holder may transfer 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 and fees
required by law or permitted by the Indenture. 
The Registrar need not register the transfer or exchange of any
Securities selected for redemption (except, in the case of a Security to be
redeemed in part, the portion of the Security not to be redeemed) or any
Securities in respect of which a Purchase Notice or Change in Control Purchase
Notice has been given and not withdrawn (except, in the case of a Security to
be purchased in part, the portion of the Security not to be purchased) or any
Securities for a period of 15 days before the mailing of a notice of redemption
of Securities to be redeemed.

 

13.                                 Persons Deemed Owners.

 

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

 

14.                                 Unclaimed Money or Securities.

 

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

 

15.                                 Amendment; Waiver.

 

Subject to certain exceptions set forth in the Indenture, (i) the
Indenture or the Securities may be amended with the written consent of the
Holders of at least a majority in aggregate Principal Amount at Maturity of the
Securities at the time outstanding and (ii) certain Defaults may be waived with
the written consent of the Holders of a majority in aggregate Principal Amount
at Maturity of the Securities at the time outstanding.  Subject to certain exceptions set forth in
the Indenture, without the consent of any Securityholder, the Company and the
Trustee may amend the Indenture or the Securities to cure any ambiguity,
omission, defect or inconsistency, or to comply with Article 5 or Section 10.14
of the Indenture, to secure the Company’s obligations under this Security or to
add to the Company’s covenants for the benefit of the Securityholders or to
surrender any right or power conferred, or to comply with any

 

8

 

requirement of the SEC in
connection with the qualification of the Indenture under the Trust Indenture
Act of 1939 and any amendment thereof, or as necessary in connection with the
registration of the Securities under the Securities Act or to make any change
that does not adversely affect the rights of any Holders.

 

16.                                 Defaults and Remedies.

 

Under the Indenture, Events of Default include (i) default in
the payment of contingent interest when the same becomes due and payable or
which default continues for 30 days; (ii) default in payment of the Principal
Amount at Maturity, Issue Price plus accrued Original Issue Discount,
Redemption Price, Purchase Price or Change in Control Purchase Price, as the
case may be, in respect of the Securities when the same becomes due and
payable; (iii) failure by the Company to comply with other agreements in the
Indenture or the Securities, subject to notice and lapse of time; (iv) failure
of the Company to make any payment by the end of any applicable grace period
after maturity of Debt having an aggregate outstanding principal amount in
excess of the greater of (a) $10,000,000 or (b) 5% of Consolidated
Net Assets, which default shall have resulted in at least that amount of such
Debt being accelerated, without such Debt having been discharged or such
acceleration having been rescinded or annulled, subject to notice and lapse of
time; (v) failure by the Company to deliver shares of Common Stock or cash
in lieu thereof (together with cash in lieu of fractional shares) when such
Common Stock or cash in lieu of (or cash in lieu of fractional shares) is
required to be delivered following conversion of a Security and continuance of
such default for 10 days; and (vi) certain events of bankruptcy or
insolvency.  If an Event of Default
occurs and is continuing, the Trustee, or the Holders of at least 25% in
aggregate Principal Amount at Maturity of the Securities at the time
outstanding, may declare the Issue Price plus the Original Issue Discount
through the date of such declaration, and any accrued and unpaid interest
(including semiannual interest and contingent interest) if any, through the date
of such declaration, on all the Securities to be due and payable
immediately.  Certain events of
bankruptcy or insolvency are Events of Default which will result in the Issue
Price plus the Original Issue Discount on the Securities, and any accrued and unpaid
interest (including semiannual interest and contingent interest) if any,
through the occurrence of such event, becoming due and payable immediately upon
the occurrence of such Events of Default.

 

Securityholders may not enforce the Indenture or the Securities
except as provided in the Indenture. 
The Trustee may refuse to enforce the Indenture or the Securities unless
it receives indemnity or security reasonably satisfactory to it.  Subject to certain limitations, Holders of a
majority in aggregate Principal Amount at Maturity of the Securities at the
time outstanding may direct the Trustee in its exercise of any trust or
power.  The Trustee may withhold from
Securityholders notice of any continuing Default (except a Default in payment
of amounts specified in clause (i) or (ii) above) if it determines that
withholding notice is in their interests.

 

17.                                 Trustee Dealings with the Company.

 

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

 

9

 

18.                                 No Recourse Against Others.

 

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

 

19.                                 Authentication.

 

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

 

20.           Abbreviations.

 

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

 

21.                                 Original Issue Discount Information
Reporting Requirements.

 

In accordance with the United States Treasury Regulation Section
1.1275-3, a Holder may obtain the projected payment schedule by submitting a
written request for such information to the following representative of the
Company: Corporate Secretary, IDEC Pharmaceuticals Corporation, 3030 Callan
Road, San Diego, CA  92121.

 

22.                                 GOVERNING LAW.

 

THE LAW OF THE STATE OF NEW YORK SHALL GOVERN THE INDENTURE AND
THIS SECURITY.

 

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

 

IDEC Pharmaceuticals Corporation

3030 Callan Road

San Diego, CA  92121 

Telephone No:  (858) 431-8800

Facsimile No:  (858) 431-8892

Attention:  Treasurer

 

10

 

	
  ASSIGNMENT FORM

  	
   

  	
  CONVERSION
  NOTICE

  
	
   

  	
   

  	
   

  
	
  To assign this Security, fill in the form below:

  	
   

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

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  I or we assign and transfer this Security to

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  To convert only part of this Security, state the Principal
  Amount at Maturity to be converted (which must be $1,000 or an integral
  multiple of $1,000):

  
	
   

  	
   

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

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

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

  
	
   

  	
   

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

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  and irrevocably appoint

  	
   

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

  
	
   

  	
   

  	
   

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

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

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

  
	
   

  
	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
  Your Signature:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

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

  
											

 

11

 

EXHIBIT A-2

 

[Form of
Certificated Security]

 

FOR PURPOSES OF SECTIONS 1272, 1273 AND 1275 OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED, THIS SECURITY IS BEING ISSUED WITH ORIGINAL
ISSUE DISCOUNT AND THE ISSUE DATE OF THIS SECURITY IS APRIL 29, 2002. IN
ADDITION, THIS SECURITY IS SUBJECT TO UNITED STATES FEDERAL INCOME TAX
REGULATIONS GOVERNING CONTINGENT PAYMENT DEBT INSTRUMENTS.  UNDER SUCH REGULATIONS, THE COMPARABLE YIELD
OF THIS SECURITY IS 8.51% (WHICH WILL BE TREATED AS THE YIELD FOR UNITED STATES
FEDERAL INCOME TAX PURPOSES), COMPOUNDED SEMIANNUALLY.  THE YIELD FOR ACCRUING ORIGINAL ISSUE
DISCOUNT FOR NON-TAX PURPOSES IS 1.75%, COMPOUNDED SEMIANNUALLY.

 

THE ISSUER AGREES, AND BY ACCEPTING A BENEFICIAL OWNERSHIP
INTEREST IN THIS SECURITY EACH HOLDER OF THIS SECURITY WILL BE DEEMED TO HAVE
AGREED, FOR UNITED STATES FEDERAL INCOME TAX PURPOSES (1) TO TREAT THIS
SECURITY AS A DEBT INSTRUMENT THAT IS SUBJECT TO TREAS. REG. SEC. 1.1275-4 (THE
“CONTINGENT PAYMENT REGULATIONS”), (2) TO TREAT THE FAIR MARKET VALUE OF ANY
STOCK RECEIVED UPON ANY CONVERSION OF THIS SECURITY AS A CONTINGENT PAYMENT FOR
PURPOSES OF THE CONTINGENT PAYMENT REGULATIONS, AND (3) TO BE BOUND BY THE
ISSUER’S DETERMINATION OF THE “COMPARABLE YIELD” AND “PROJECTED PAYMENT
SCHEDULE,” WITHIN THE MEANING OF THE CONTINGENT PAYMENT REGULATIONS, WITH
RESPECT TO THIS SECURITY.  THE ISSUER
AGREES TO PROVIDE PROMPTLY TO THE HOLDER OF THIS SECURITY, UPON WRITTEN
REQUEST, THE AMOUNT OF ORIGINAL ISSUE DISCOUNT, ISSUE DATE, YIELD TO MATURITY,
COMPARABLE YIELD AND PROJECTED PAYMENT SCHEDULE.  ANY SUCH WRITTEN REQUEST SHOULD BE SENT TO THE ISSUER AT THE
FOLLOWING ADDRESS:  IDEC PHARMACEUTICALS
CORPORATION, 3030 CALLAN ROAD, SAN DIEGO, CA 
92121, ATTENTION: CORPORATE SECRETARY.

 

[INCLUDE IF
SECURITY IS A CERTIFICATED SECURITY TO BE HELD BY AN INSTITUTIONAL ACCREDITED
INVESTOR—IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE
REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH
TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH
THE FOLLOWING RESTRICTIONS.]

 

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.

 

THE HOLDER OF THIS
SECURITY, BY ITS ACCEPTANCE HEREOF, AGREES TO OFFER, SELL, OR OTHERWISE
TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE “RESALE RESTRICTION TERMINATION
DATE”), WHICH IS TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF
AND THE LAST DATE ON WHICH IDEC PHARMACEUTICALS CORPORATION (THE “COMPANY” OR
THE “ISSUER”) OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS SECURITY
(OR ANY PREDECESSOR OF SUCH SECURITY) ONLY (A) TO THE COMPANY OR ANY SUBSIDIARY
THEREOF, (B) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO
RULE 144A, TO A PERSON IT REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL
BUYER” AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS
OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHICH
NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (C)
TO AN INSTITUTIONAL “ACCREDITED INVESTOR” WITHIN THE MEANING OF SUBPARAGRAPH
(A)(1), (2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING
THE SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL
“ACCREDITED INVESTOR,” FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR
OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE
SECURITIES ACT, (D) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN
DECLARED EFFECTIVE UNDER THE SECURITIES ACT OR (E) PURSUANT TO ANOTHER
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 (C) OR (E) TO REQUIRE THE DELIVERY OF AN OPINION
OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF
THEM, AND IN EACH OF THE FOREGOING CASES, A CERTIFICATE OF TRANSFER IN THE FORM
APPEARING ON THE OTHER SIDE OF THIS SECURITY IS COMPLETED AND DELIVERED BY THE
TRANSFEROR TO THE TRUSTEE. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE
HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.

 

THE FOREGOING
LEGEND MAY BE REMOVED FROM THIS SECURITY ON SATISFACTION OF THE CONDITIONS
SPECIFIED IN THE INDENTURE. THE HOLDER OF THIS SECURITY WILL NOT, DIRECTLY OR
INDIRECTLY, ENGAGE IN ANY HEDGING TRANSACTION WITH REGARD TO THIS SECURITY
EXCEPT AS PERMITTED BY THE SECURITIES ACT.

 

2

 

IDEC PHARMACEUTICALS CORPORATION

Liquid Yield Option(TM) Note due 2032

(Zero Coupon-Senior)

 

	
  No. R-

  	
   

  	
  CUSIP:  [    
  ]

  	
   

  
	
  Issue Date: April
  29, 2002

  	
   

  	
  Original Issue
  Discount: $407.09

  	
   

  
	
  Issue
  Price:  592.91

  	
   

  	
  (for each $1,000
  Principal Amount at Maturity)

  	
   

  
	
  (for each $1,000
  Principal Amount at Maturity)

  	
   

  	
   

  	
   

  

 

IDEC
Pharmaceuticals Corporation, a Delaware corporation, promises to pay to [     ] or registered assigns, the Principal
Amount at Maturity of [      ] DOLLARS
($[      ]) on April 29, 2032.

 

This Security
shall not bear interest except as specified on the other side of this
Security.  Original Issue Discount will
accrue as specified on the other side of this Security.  This Security is exchangeable 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:  April 29, 2002

  	
  IDEC
  PHARMACEUTICALS CORPORATION

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

TRUSTEE’S CERTIFICATE OF

AUTHENTICATION

 

J.P. Morgan Trust Company,

National
Association

as Trustee, certifies that this

is one of the Securities referred

to in the within-mentioned
Indenture.

 

	
  By:

  	
   

  	
   

  
	
  Authorized Officer

  	
   

  

 

 

[FORM OF REVERSE SIDE OF LYON]

Liquid Yield Option(TM) Note due 2032

(Zero Coupon-Senior)

 

1.                                       Interest.

 

This Security shall not bear interest, except as specified in this
paragraph or in paragraph 5 hereof.  If
the Principal Amount at Maturity hereof or any portion of such Principal Amount
at Maturity is not paid when due (whether upon acceleration pursuant to Section
6.02 of the Indenture, upon the date set for payment of the Redemption Price
pursuant to paragraph 6 hereof, upon the date set for payment of the Purchase
Price or Change in Control Purchase Price pursuant to paragraph 7 hereof or
upon the Stated Maturity of this Security) or if interest (including semiannual
or contingent interest, if any) due hereon or any portion of such interest is not
paid when due in accordance with paragraph 5 hereof, then in each such case the
overdue amount shall, to the extent permitted by law, bear interest at the rate
of 1.75% per annum, compounded semiannually, which interest shall accrue from
the date such overdue amount was originally due to the date payment of such
amount, including interest thereon, has been made or duly provided for.  All such interest shall be payable on
demand.  The accrual of such interest on
overdue amounts shall be in lieu of, and not in addition to, the continued
accrual of Original Issue Discount.

 

Original Issue Discount (the difference between the Issue Price
and the Principal Amount at Maturity of the Security), in the period during
which a Security remains outstanding, shall accrue at 1.75% per annum, on a
semiannual bond equivalent basis using a 360-day year composed of twelve 30-day
months, from the Issue Date of this Security.

 

2.                                       Method of Payment.

 

Subject to the terms and conditions of the Indenture, the Company
will make payments in respect of Redemption Prices, Purchase Prices, Change in
Control Purchase Prices and at Stated Maturity to Holders who surrender
Securities to a Paying Agent to collect such payments in respect of the
Securities.  The Company will pay any
cash amounts in money of the United States that at the time of payment is legal
tender for payment of public and private debts.  However, the Company may make such cash payments by check payable
in such money.

 

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

 

Initially, J.P. Morgan Trust Company, National Association, a
national banking association (the “Trustee”), will act as Paying Agent,
Conversion Agent, Registrar and Bid Solicitation Agent.  The Company may appoint and change any Paying
Agent, Conversion Agent, Registrar or co-registrar or Bid Solicitation Agent
without notice, other than notice to the Trustee.  The Company or any of its Subsidiaries or any of their Affiliates
may act as Paying Agent, Conversion Agent, Registrar or co-registrar.  None of the Company, any of its Subsidiaries
or any of their Affiliates shall act as Bid Solicitation Agent.

 

 

4.                                       Indenture.

 

The Company issued the Securities under an Indenture dated as of
April 29, 2002 (the “Indenture”), between the Company and the Trustee.  The terms of the Securities include those
stated in the Indenture and those made part of the Indenture by reference to
the Trust Indenture Act of 1939, as in effect from time to time (the “TIA”).  Capitalized terms used herein and not defined
herein have the meanings ascribed thereto in the Indenture.  The Securities are subject to all such
terms, and Securityholders are referred to the Indenture for a statement of
those terms.

 

The Securities are general unsecured and unsubordinated obligations
of the Company limited to $1,264,950,000 aggregate Principal Amount at Maturity
(subject to Section 2.07 of the Indenture). 
The Indenture does not limit other indebtedness of the Company, secured
or unsecured.

 

5.                                       Contingent Interest.

 

Subject to the accrual and record date provisions specified in
this paragraph 5, the Company shall pay contingent cash interest to the Holders
during any six–month period (a “Contingent Interest Period”) from April
30 to October 29 and from October 30 to April 29, commencing April 30, 2007, if
the average LYON Market Price for the Five-Day Period with respect to such
Contingent Interest Period equals 120% or more of the sum of the Issue Price of
a Security and Original Issue Discount accrued thereon to the day immediately
preceding the first day of the relevant Contingent Interest Period.

 

The amount of contingent interest payable per $1,000 Principal
Amount at Maturity hereof in respect of any Quarterly Period within a
Contingent Interest Period shall equal the greater of (x) Regular Cash
Dividends paid by the Company per share of Common Stock during that Quarterly
Period multiplied by the number of shares of Common Stock into which $1,000
Principal Amount at Maturity hereof is convertible pursuant to paragraph 9 hereof
as of the accrual date for such contingent interest or (y) 0.0625% of the
average LYON Market Price of a LYON for the Five-Day Period, provided that if
the Company does not pay cash dividends during a semiannual period, the Company
will pay contingent interest semiannually at a rate of 0.125% of the average
LYON Market Price for the Five-Day Period.

 

Contingent interest, if any, will accrue and be payable to Holders
as of the record date for the related Regular Cash Dividend or, if no Regular
Cash Dividend is paid by the Company during a Quarterly Period, to Holders as
of the 15th day (whether or not a Business Day) preceding the last
day of the relevant Contingent Interest Period.  Such payments shall be paid on the payment date of the related
Regular Cash Dividend or, if no Regular Cash Dividend is paid by the Company
during any Quarterly Period, on the last day of the relevant Contingent
Interest Period.  Original Issue
Discount will continue to accrue at 1.75% per annum whether or not
contingent interest is paid.

 

“Five-Day Period” means, with respect to any
Contingent Interest Period, the five Trading Days ending on the second Trading
Day immediately preceding the first day of such Contingent Interest Period; provided,
however, if the Company shall have declared a Regular Cash Dividend
on its Common Stock that is payable during such Contingent Interest Period but

 

2

 

for which the record date for
determining stockholders entitled thereto precedes the first day of such
Contingent Interest Period, then “Five-Day Period” shall mean, with respect to
such Contingent Interest Period, the five Trading Days ending on the second
Trading Day immediately preceding such record date.

 

“Regular Cash Dividends” means quarterly or other periodic
cash dividends on the Company’s Common Stock as declared by the Company’s Board
of Directors as part of its cash dividend payment practices and that are not
designated by them as extraordinary or special or other nonrecurring dividends.

 

“LYON Market Price” means, as of any date of
determination, the average of the secondary market bid quotations per $1,000
Principal Amount at Maturity obtained by the Bid Solicitation Agent for $10
million Principal Amount at Maturity of Securities at approximately
4:00 p.m., New York City time, on such determination date from three
recognized securities dealers in The City of New York (none of which shall be
an Affiliate of the Company) selected by the Company; provided, however, if (a) at
least three such bids are not obtained by the Bid Solicitation Agent or (b) in
the Company’s reasonable judgment, the bid quotations are not indicative of the
secondary market value of the Securities as of such determination date, then
the LYON Market Price for such determination date shall equal (i) the
Conversion Rate in effect as of such determination date multiplied by
(ii) the average Sale Price of the Common Stock for the five Trading Days
ending on such determination date, appropriately adjusted to take into account
the occurrence, during the period commencing on the first of such Trading Days
during such five Trading Day period and ending on such determination date, of
any event described in Section 10.6, 10.07 or 10.08 (subject to the conditions
set forth in Sections 10.09 and 10.10) of the Indenture.

 

The term “Quarterly Period” shall mean, with respect to any
Contingent Interest Period, any quarterly period within such Contingent
Interest Period extending from April 30 to July 29, from July 30 to October 29,
from October 30 to January 29 or from January 30 to April 29.

 

Upon determination that Holders will be entitled to receive
contingent interest which may become payable during a Contingent Interest
Period, on or prior to the first day of such Contingent Interest Period, the
Company shall promptly notify the Trustee of such determination and shall issue
a press release and publish such information on its web site on the World Wide
Web or through such other public medium as the Company may use at that time.  The Company shall also notify the Trustee of
the declaration of any Regular Cash Dividends and the related record and
payment dates.

 

6.                                       Redemption at the Option of the
Company.

 

No sinking fund is provided for the Securities.  The Securities are redeemable for cash as a
whole, at any time, or in part from time to time at the option of the Company
in accordance with the Indenture at the Redemption Prices set forth below,
provided that the Securities are not redeemable prior to April 29, 2007.

 

The table below shows Redemption Prices of a Security per $1,000
Principal Amount at Maturity on the dates shown below and at Stated Maturity,
which prices reflect accrued Original

 

3

 

Issue Discount calculated to each
such date.  The Redemption Price of a
Security redeemed between such dates shall include an additional amount
reflecting the additional Original Issue Discount accrued since the preceding
date in the table but not including the Redemption Date.

 

	
  Redemption Date

  	
   

  	
  (1)

  LYON

  Issue Price

  	
   

  	
  (2)

  Accrued

  Original

  Issue Discount

  	
   

  	
  (3)

  Redemption

  Price

  (1)+(2)

  	
   

  
	
  April 29, 2007

  	
   

  	
  $

  	
  592.91

  	
   

  	
  $

  	
  53.97

  	
   

  	
  $

  	
  646.88

  	
   

  
	
  April
  29, 2008

  	
   

  	
  $

  	
  592.91

  	
   

  	
  $

  	
  65.34

  	
   

  	
  $

  	
  658.25

  	
   

  
	
  April
  29, 2009

  	
   

  	
  $

  	
  592.91

  	
   

  	
  $

  	
  76.91

  	
   

  	
  $

  	
  669.82

  	
   

  
	
  April
  29, 2010

  	
   

  	
  $

  	
  592.91

  	
   

  	
  $

  	
  88.68

  	
   

  	
  $

  	
  681.59

  	
   

  
	
  April
  29, 2011

  	
   

  	
  $

  	
  592.91

  	
   

  	
  $

  	
  100.66

  	
   

  	
  $

  	
  693.57

  	
   

  
	
  April
  29, 2012

  	
   

  	
  $

  	
  592.91

  	
   

  	
  $

  	
  112.85

  	
   

  	
  $

  	
  705.76

  	
   

  
	
  April
  29, 2013

  	
   

  	
  $

  	
  592.91

  	
   

  	
  $

  	
  125.26

  	
   

  	
  $

  	
  718.17

  	
   

  
	
  April
  29, 2014

  	
   

  	
  $

  	
  592.91

  	
   

  	
  $

  	
  137.88

  	
   

  	
  $

  	
  730.79

  	
   

  
	
  April
  29, 2015

  	
   

  	
  $

  	
  592.91

  	
   

  	
  $

  	
  150.73

  	
   

  	
  $

  	
  743.64

  	
   

  
	
  April
  29, 2016

  	
   

  	
  $

  	
  592.91

  	
   

  	
  $

  	
  163.80

  	
   

  	
  $

  	
  756.71

  	
   

  
	
  April
  29, 2017

  	
   

  	
  $

  	
  592.91

  	
   

  	
  $

  	
  177.10

  	
   

  	
  $

  	
  770.01

  	
   

  
	
  April
  29, 2018

  	
   

  	
  $

  	
  592.91

  	
   

  	
  $

  	
  190.63

  	
   

  	
  $

  	
  783.54

  	
   

  
	
  April
  29, 2019

  	
   

  	
  $

  	
  592.91

  	
   

  	
  $

  	
  204.40

  	
   

  	
  $

  	
  797.31

  	
   

  
	
  April
  29, 2020

  	
   

  	
  $

  	
  592.91

  	
   

  	
  $

  	
  218.42

  	
   

  	
  $

  	
  811.33

  	
   

  
	
  April
  29, 2021

  	
   

  	
  $

  	
  592.91

  	
   

  	
  $

  	
  232.68

  	
   

  	
  $

  	
  825.99

  	
   

  
	
  April
  29, 2022

  	
   

  	
  $

  	
  592.91

  	
   

  	
  $

  	
  247.19

  	
   

  	
  $

  	
  840.10

  	
   

  
	
  April
  29, 2023

  	
   

  	
  $

  	
  592.91

  	
   

  	
  $

  	
  261.95

  	
   

  	
  $

  	
  854.86

  	
   

  
	
  April
  29, 2024

  	
   

  	
  $

  	
  592.91

  	
   

  	
  $

  	
  276.98

  	
   

  	
  $

  	
  869.89

  	
   

  
	
  April
  29, 2025

  	
   

  	
  $

  	
  592.91

  	
   

  	
  $

  	
  292.27

  	
   

  	
  $

  	
  885.18

  	
   

  
	
  April
  29, 2026

  	
   

  	
  $

  	
  592.91

  	
   

  	
  $

  	
  307.83

  	
   

  	
  $

  	
  900.74

  	
   

  
	
  April
  29, 2027

  	
   

  	
  $

  	
  592.91

  	
   

  	
  $

  	
  323.66

  	
   

  	
  $

  	
  916.57

  	
   

  
	
  April
  29, 2028

  	
   

  	
  $

  	
  592.91

  	
   

  	
  $

  	
  339.77

  	
   

  	
  $

  	
  932.68

  	
   

  
	
  April
  29, 2029

  	
   

  	
  $

  	
  592.91

  	
   

  	
  $

  	
  356.16

  	
   

  	
  $

  	
  949.07

  	
   

  
	
  April
  29, 2030

  	
   

  	
  $

  	
  592.91

  	
   

  	
  $

  	
  372.84

  	
   

  	
  $

  	
  965.75

  	
   

  
	
  April
  29, 2031

  	
   

  	
  $

  	
  592.91

  	
   

  	
  $

  	
  389.82

  	
   

  	
  $

  	
  982.73

  	
   

  
	
  At
  Stated Maturity

  	
   

  	
  $

  	
  592.91

  	
   

  	
  $

  	
  407.09

  	
   

  	
  $

  	
  1,000.00

  	
   

  

 

In addition to the Redemption Price payable with respect to all
Securities or portions thereof to be redeemed as of a Redemption Date, the
Holders of such Securities (or portions thereof) shall be entitled to receive
accrued and unpaid semiannual and contingent interest, if any, with respect
thereto, which interest shall be paid in cash on the Redemption Date.

 

7.                                       Purchase by the Company at the
Option of the Holder.

 

Subject to the terms and conditions of the Indenture, the Company
shall become obligated to purchase, at the option of the Holder, the Securities
held by such Holder on the following Purchase Dates and at the following
Purchase Prices per $1,000 Principal Amount at Maturity, upon delivery of a
Purchase Notice containing the information set forth in the Indenture, at any
time from the opening of business on the date that is 20 Business Days prior to

 

4

 

such Purchase Date until the close
of business on such Purchase Date and upon delivery of the Securities to the
Paying Agent by the Holder as set forth in the Indenture.

 

	
  Purchase Date

  	
   

  	
  Purchase Price

  	
   

  
	
  April 29, 2005

  	
   

  	
  $

  	
  624.73

  	
   

  
	
  April 29, 2007

  	
   

  	
  $

  	
  646.88

  	
   

  
	
  April 29, 2012

  	
   

  	
  $

  	
  705.76

  	
   

  
	
  April 29, 2017

  	
   

  	
  $

  	
  770.01

  	
   

  

 

The Company may, from time to time, declare additional Purchase
Dates and corresponding Purchase Prices.

 

The Purchase Price (equal to the Issue Price plus accrued Original
Issue Discount to the Purchase Date) may be paid, at the option of the Company,
in cash or by the issuance and delivery of shares of Common Stock of the
Company, or in any combination thereof.

 

At the option of the Holder and subject to the terms and conditions
of the Indenture, the Company shall become obligated to purchase the Securities
held by such Holder no later than 35 Business Days after the occurrence of a
Change in Control of the Company, but in no event prior to the date on which
such Change in Control occurs, on or prior to April 29, 2007 for a Change in
Control Purchase Price equal to the Issue Price plus accrued Original Issue
Discount to the Change in Control Purchase Date, which Change in Control
Purchase Price shall be paid in cash.

 

A third party may make the offer and purchase of the Securities in
lieu of the Company in accordance with the Indenture.

 

In addition to the Purchase Price or Change in Control Purchase
Price, as the case may be, payable with respect to all Securities or portions
thereof to be purchased as of the Purchase Date or the Change in Control
Purchase Date, as the case may be, the Holders of such Securities (or portions
thereof) shall be entitled to receive accrued and unpaid semiannual and
contingent interest, if any, with respect thereto, which shall be paid in cash
promptly following the later of the Purchase Date or the Change in Control
Purchase Date, as the case may be and the time of delivery of such Securities
to the Paying Agent pursuant to the Indenture.

 

Holders have the right to withdraw any Purchase Notice or Change
in Control Purchase Notice, as the case may be, by delivering to the Paying
Agent a written notice of withdrawal in accordance with the provisions of the
Indenture.

 

If cash (and/or securities if permitted under the Indenture)
sufficient to pay the Purchase Price or Change in Control Purchase Price, as
the case may be, of, together with any accrued and unpaid semiannual and
contingent interest with respect to, all Securities or portions thereof to be
purchased as of the Purchase Date or the Change in Control Purchase Date, as
the case may be, is deposited with the Paying Agent on the Business Day
following the Purchase Date or the Change in Control Purchase Date, as the case
may be, Original Issue Discount and interest (including semiannual and
contingent interest), if any, shall cease to accrue on such Securities (or
portions thereof) immediately after such Purchase Date or Change in Control
Purchase Date, as the case may be, and the Holder thereof shall have no other
rights as such (other than the right to receive

 

5

 

the Purchase Price or Change in
Control Purchase Price, as the case may be, and accrued and unpaid semiannual
and contingent interest, if any, upon surrender of such Security).

 

8.                                       Notice of Redemption.

 

Notice of redemption will be mailed at least 30 days but not more
than 60 days before the Redemption Date to each Holder of Securities to be
redeemed at the Holder’s registered address. 
If money sufficient to pay the Redemption Price of, and accrued and
unpaid contingent interest, if any, with respect to, all Securities (or
portions thereof) to be redeemed on the Redemption Date is deposited with the
Paying Agent prior to or on the Redemption Date, on such Redemption Date,
Original Issue Discount and interest (including semiannual and contingent
interest), if any, shall cease to accrue on such Securities or portions
thereof.  Securities in denominations
larger than $1,000 of Principal Amount at Maturity may be redeemed in part but
only in integral multiples of $1,000 of Principal Amount at Maturity.

 

9.                                       Conversion.

 

Subject to the next two succeeding sentences, a Holder of a
Security may convert it into Common Stock of the Company at any time before the
close of business on April 29, 2032.  If
the Security is called for redemption, the Holder may convert it only until the
close of business on the second Business Day immediately preceding the
Redemption Date.  A Security in respect
of which a Holder has delivered a Purchase Notice or Change in Control Purchase
Notice exercising the option of such Holder to require the Company to purchase
such Security may be converted only if such notice of exercise is withdrawn in
accordance with the terms of the Indenture.

 

The initial Conversion Rate is 7.1881 shares of Common Stock per
$1,000 Principal Amount at Maturity, subject to adjustment in certain events
described in the Indenture.  The Company
will deliver cash or a check in lieu of any fractional share of Common Stock.

 

Accrued and unpaid semiannual and contingent interest will not be
paid in cash on Securities that are converted but will be paid in the manner
provided in the following paragraph; provided, however that Securities
surrendered for conversion during the period, in the case of semiannual
interest, from the close of business on any Regular Record Date next preceding
any Interest Payment Date to the opening of business on such Interest Payment
Date or, in the case of contingent interest, from the close of business on any
date on which contingent interest accrues to the opening of business on the
date on which such contingent interest is payable, shall be entitled to receive
such semiannual or contingent interest, as the case may be, payable on such
Securities on the corresponding Interest Payment Date or the date on which such
contingent interest is payable and (except Securities with respect to which the
Company has mailed a notice of redemption) Securities surrendered for
conversion during such periods must be accompanied by payment of an amount
equal to the semiannual or contingent interest with respect thereto that the
registered Holder is to receive.

 

A Holder may convert a portion of a Security if the Principal
Amount at Maturity of such portion is $1,000 or an integral multiple of
$1,000.  No payment or adjustment will
be made for dividends on the Common Stock except as provided in the
Indenture.  On conversion of a

 

6

 

Security, the greater of that
portion of accrued Original Issue Discount or Tax Original Issue Discount
attributable to the period from the Issue Date through the Conversion Date and
(except as provided above) accrued contingent interest with respect to the
converted Security shall not be cancelled, extinguished or forfeited, but
rather shall be deemed to be paid in full to the Holder thereof through the
delivery of the Common Stock (together with the cash payment, if any, in lieu
of fractional shares) in exchange for the Security being converted pursuant to
the terms hereof; and the fair market value of such shares of Common Stock
(together with any such cash payment in lieu of fractional shares) shall be
treated as issued, to the extent thereof, first in exchange for the greater of
Original Issue Discount or Tax Original Issue Discount accrued through the
Conversion Date and accrued contingent interest, and the balance, if any, of
such cash and/or the fair market value of such Common Stock (and any such cash
payment in lieu of fractional shares) shall be treated as issued in exchange
for the Issue Price of the Security being converted pursuant to the provisions
hereof.

 

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

 

The Conversion Rate will be adjusted for dividends or
distributions on Common Stock payable in Common Stock or other Capital Stock;
subdivisions, combinations or certain reclassifications of Common Stock;
distributions to all holders of Common Stock of certain rights to purchase
Common Stock for a period expiring within 60 days of the record date for such
distribution at less than the Sale Price of the Common Stock at the Time of
Determination; and distributions to such holders of assets (including shares of
Capital Stock of a Subsidiary) or debt securities of the Company or certain
rights to purchase securities of the Company (excluding certain cash dividends
or distributions).  However, no
adjustment need be made if Securityholders may participate in the transaction
or in certain other cases.  The Company
from time to time may voluntarily increase the Conversion Rate.

 

If the Company is a party to a consolidation, merger or binding
share exchange or a transfer of all or substantially all of its assets, or upon
certain distributions described in the Indenture, the right to convert a
Security into Common Stock may be changed into a right to convert it into the
kind and amount of securities, cash or other assets of the Company or another
person which the Holder would have received if the Holder had converted its
Securities immediately prior to the transaction.

 

10.                                 Conversion Arrangement on Call for
Redemption.

 

Any Securities called for redemption, unless surrendered for
conversion before the close of business on the Redemption Date, may be deemed
to be purchased from the Holders of such Securities at an amount not less than
the Redemption Price, by one or more investment bankers or other purchasers who
may agree with the Company to purchase such Securities from the Holders, to
convert them into Common Stock of the Company and to make payment for such
Securities to the Trustee in trust for such Holders.

 

7

 

11.                                 Defaulted Interest.

 

Except as otherwise specified with respect to the Securities, any
Defaulted Interest on any Security shall forthwith cease to be payable to the
registered Holder thereof on the relevant Regular Record Date or accrual date,
as the case may be, by virtue of having been such Holder, and such Defaulted
Interest may be paid by the Company as provided for in Section 11.02 of the
Indenture.

 

12.                                 Denominations; Transfer; Exchange.

 

The Securities are in fully registered form, without coupons, in
denominations of $1,000 of Principal Amount at Maturity and integral multiples
of $1,000.  A Holder may transfer 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
and fees required by law or permitted by the Indenture.  The Registrar need not register the transfer
or exchange of any Securities selected for redemption (except, in the case of a
Security to be redeemed in part, the portion of the Security not to be
redeemed) or any Securities in respect of which a Purchase Notice or Change in
Control Purchase Notice has been given and not withdrawn (except, in the case
of a Security to be purchased in part, the portion of the Security not to be
purchased) or any Securities for a period of 15 days before the mailing of a
notice of redemption of Securities to be redeemed.

 

13.                                 Persons Deemed Owners.

 

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

 

14.                                 Unclaimed Money or Securities.

 

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

 

15.                                 Amendment; Waiver.

 

Subject to certain exceptions set forth in the Indenture, (i) the
Indenture or the Securities may be amended with the written consent of the
Holders of at least a majority in aggregate Principal Amount at Maturity of the
Securities at the time outstanding and (ii) certain Defaults may be waived with
the written consent of the Holders of a majority in aggregate Principal Amount
at Maturity of the Securities at the time outstanding.  Subject to certain exceptions set forth in
the Indenture, without the consent of any Securityholder, the Company and the
Trustee may amend the Indenture or the Securities to cure any ambiguity,
omission, defect or inconsistency, or to comply with Article 5 or Section 10.14
of the Indenture, to secure the Company’s obligations under this Security or to
add to the Company’s covenants for the benefit of the Securityholders or to
surrender any right or power conferred, or to comply with any

 

8

 

requirement of the SEC in
connection with the qualification of the Indenture under the Trust Indenture
Act of 1939 and any amendment thereof, or as necessary in connection with the
registration of the Securities under the Securities Act or to make any change
that does not adversely affect the rights of any Holders.

 

16.                                 Defaults and Remedies.

 

Under the Indenture, Events of Default include (i) default in
the payment of contingent interest when the same becomes due and payable or
which default continues for 30 days; (ii) default in payment of the Principal
Amount at Maturity, Issue Price plus accrued Original Issue Discount,
Redemption Price, Purchase Price or Change in Control Purchase Price, as the
case may be, in respect of the Securities when the same becomes due and
payable; (iii) failure by the Company to comply with other agreements in the
Indenture or the Securities, subject to notice and lapse of time; (iv) failure
of the Company to make any payment by the end of any applicable grace period
after maturity of Debt having an aggregate outstanding principal amount in
excess of the greater of (a) $10,000,000 or (b) 5% of Consolidated
Net Assets, which default shall have resulted in at least that amount of such
Debt being accelerated, without such Debt having been discharged or such
acceleration having been rescinded or annulled, subject to notice and lapse of
time; (v) failure by the Company to deliver shares of Common Stock or cash
in lieu thereof (together with cash in lieu of fractional shares) when such
Common Stock or cash in lieu of (or cash in lieu of fractional shares) is
required to be delivered following conversion of a Security and continuance of
such default for 10 days; and (vi) certain events of bankruptcy or insolvency.  If an Event of Default occurs and is
continuing, the Trustee, or the Holders of at least 25% in aggregate Principal
Amount at Maturity of the Securities at the time outstanding, may declare the
Issue Price plus the Original Issue Discount through the date of such
declaration, and any accrued and unpaid interest (including semiannual interest
and contingent interest) if any, through the date of such declaration, on all
the Securities to be due and payable immediately.  Certain events of bankruptcy or insolvency are Events of Default
which will result in the Issue Price plus the Original Issue Discount on the
Securities, and any accrued and unpaid interest (including semiannual interest
and contingent interest) if any, through the occurrence of such event, becoming
due and payable immediately upon the occurrence of such Events of Default.

 

Securityholders may not enforce the Indenture or the Securities
except as provided in the Indenture. 
The Trustee may refuse to enforce the Indenture or the Securities unless
it receives indemnity or security reasonably satisfactory to it.  Subject to certain limitations, Holders of a
majority in aggregate Principal Amount at Maturity of the Securities at the
time outstanding may direct the Trustee in its exercise of any trust or
power.  The Trustee may withhold from
Securityholders notice of any continuing Default (except a Default in payment
of amounts specified in clause (i) or (ii) above) if it determines that
withholding notice is in their interests.

 

17.                                 Trustee Dealings with the Company.

 

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

 

9

 

18.                                 No Recourse Against Others.

 

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

 

19.                                 Authentication.

 

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

 

20.                                 Abbreviations.

 

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

 

21.                                 Original Issue Discount Information
Reporting Requirements.

 

In accordance with the United States Treasury Regulation Section
1.1275-3, a Holder may obtain the projected payment schedule by submitting a
written request for such information to the following representative of the
Company: Corporate Secretary, IDEC Pharmaceuticals Corporation, 3030 Callan
Road, San Diego, CA  92121

 

22.                                 GOVERNING LAW.

 

THE LAW OF THE STATE OF NEW YORK SHALL GOVERN THE INDENTURE AND
THIS SECURITY.

 

 

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

 

IDEC Pharmaceuticals Corporation

3030 Callan Road

San Diego, CA  92121

Telephone No:  (858) 431-8800

Facsimile No:  (858) 431-8892

Attention:  Treasurer

 

10

 

	
  ASSIGNMENT FORM

  	
   

  	
  CONVERSION
  NOTICE

  
	
   

  	
   

  	
   

  
	
  To assign this Security, fill in the form below:

  	
   

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

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  I or we assign and transfer this Security to

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  To convert only part of this Security, state the Principal
  Amount at Maturity to be converted (which must be $1,000 or an integral
  multiple of $1,000):

  
	
   

  	
   

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

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

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

  
	
   

  	
   

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

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  and irrevocably appoint

  	
   

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

  
	
   

  	
   

  	
   

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

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

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

  
	
   

  
	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
  Your Signature:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

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

  
	
   

  
									

 

 

EXHIBIT B–1

Transfer Certificate

 

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

 

•                                          A transfer of the Surrendered
Securities is made to the Company or any subsidiaries; or

 

•                                          The transfer of the Surrendered
Securities complies with Rule 144A under the U.S. Securities Act of 1933,
as amended (the “Securities Act”); or

 

•                                          The transfer of the Surrendered
Securities is to an institutional accredited investor, as described in
Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities
Act; or

 

•                                          The transfer of the Surrendered
Securities is pursuant to an effective registration statement under the
Securities Act; or

 

•                                          The transfer of the Surrendered Securities
is pursuant to an offshore transaction in accordance with Rule 904 of
Regulation S under the Securities Act; or

 

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

 

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

 

•                                          The transferee is an Affiliate of
the Company.

 

	
  DATE:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Signature(s)

  

 

(If the registered owner is a corporation, partnership or

fiduciary, the title of the Person signing on behalf of

such registered owner must be stated.)

 

 

EXHIBIT B–2

 

Form of Letter to be
Delivered by Accredited Investors

 

 

IDEC Pharmaceuticals Corporation

3030 Callan Road

San Diego, CA  92121

Telephone No.:  (858) 431-8800

Facsimile No.:  (858) 431-8755

Attention:  General Counsel

 

 

[                                            ]

[                                            ]

[                                            ]

Telephone No.: 
[                        ]

Facsimile No.: 
[                        ]

Attention: 
[                                   ]

 

Ladies and Gentlemen:

 

We are delivering this letter in connection with the proposed
transfer of
$                
Principal Amount at Maturity of the Liquid Yield Option Notes due 2032 (“LYONs”)
of IDEC Pharmaceuticals Corporation (the “Company”), which are convertible into shares
of the Common Stock, $0.0005 par value per share (the “Common Stock”), of IDEC Pharmaceuticals
Corporation, a Delaware corporation.

 

We hereby confirm that:

 

(i)            we are an
“accredited investor” within the meaning of Rule 501(a)(1), (2) or (3)
under the Securities Act of 1933, as amended (the “Securities Act”), or an entity in which all of the
equity owners are accredited investors within the meaning of
Rule 501(a)(1), (2) or (3) under the Securities Act (an “Institutional
Accredited Investor”);

 

(ii)           the purchase
of LYONs by us is for our own account or for the account of one or more other
Institutional Accredited Investors or as fiduciary for the account of one or
more trusts, each of which is an “accredited investor” within the meaning of
Rule 501(a)(7) under the Securities Act and for each of which we exercise
sole investment discretion or (B) we are a “bank,” within the meaning of
Section 3(a)(2) of the Securities Act, or a “savings and loan association”
or other institution described in Section 3(a)(5)(A) of the Securities Act
that is acquiring LYONs as fiduciary for the account of one or more
institutions for which we exercise sole investment discretion;

 

 

(iii)          we will
acquire LYONs having a minimum principal amount at maturity of not less than $[250,000]
for our own account or for any separate account for which we are acting;

 

(iv)          we have such
knowledge and experience in financial and business matters that we are capable
of evaluating the merits and risks of purchasing LYONs;

 

(v)           on each day from
the date on which we acquire the LYONs through and including the date on which
we dispose of our interests in such LYONs or the LYONs are exchanged for Common
Stock of IDEC Pharmaceuticals Corporation, either:  (i) we are not (A) an “employee benefit plan” subject to the
fiduciary responsibility provisions of the Employee Retirement Income Security
Act of 1974, as amended (“ERISA”), (B) a “plan” subject to Section 4975 of the Internal Revenue
Code of 1986, as amended (the “Code”), (C) an entity whose underlying assets include the assets of any
such employee benefit plan or plan by reason of Department of Labor Regulation
Section 2510.3-101 or otherwise, or (D) a governmental plan that is subject to
any federal, state or local law which is substantially similar to the
provisions of Section 406 of ERISA or Section 4975 of the Code, or (ii) our
acquisition, holding and subsequent disposition of LYONs or interest therein
will not result in a prohibited transaction under Section 406 of ERISA or
Section 4975 of the Code (or, in the case of a governmental plan, any
substantially similar federal, state or local law) for which an exemption is
not available, all the conditions of which are satisfied; and

 

(vi)          we are not
acquiring LYONs with a view to distribution thereof or with any present
intention of offering or selling LYONs or the Common Stock deliverable upon
exchange thereof, except as permitted below; provided that the disposition of
our property and property of any accounts for which we are acting as fiduciary
shall remain at all times within our control.

 

We understand that the LYONs were originally offered and sold in a
transaction not involving any public offering within the United States within
the meaning of the Securities Act and that the LYONs and the shares of Common
Stock (the “Securities”) deliverable upon exchange thereof have not been registered under
the Securities Act, and we agree, on our own behalf and on behalf of each
account for which we acquire any LYONs, that if in the future we decide to
resell or otherwise transfer such Securities prior to the Resale Restriction
Termination Date (as defined below), such Securities may be resold or otherwise
transferred only (i) to IDEC Pharmaceuticals Corporation or any Subsidiary
thereof, or (ii) for as long as the LYONs are eligible for resale pursuant
to Rule 144A, to a person it reasonably believes is a “qualified
institutional buyer” (as defined in Rule 144A under the Securities Act)
that purchases for its own account or for the account of a qualified
institutional buyer to which notice is given that the transfer is being made in
reliance on Rule 144A, or (iii) to an Institutional Accredited
Investor that is acquiring the Security for its own account, or for the account
of such Institutional Accredited Investor for investment purposes and not with
a view to, or for offer or sale in connection with, any distribution in
violation of the Securities Act, or (iv) pursuant to another available
exemption from registration under the Securities Act (if applicable), or
(v) pursuant to a registration statement which has been declared effective
under the Securities Act and, in each case, in accordance with any applicable
securities laws of any State of the United States or any

 

2

 

other applicable jurisdiction and
in accordance with the legends set forth on the Securities.  We further agree to provide any person
purchasing any of the Securities other than pursuant to clause (v) above from
us a notice advising such purchaser that resales of such securities are
restricted as stated herein. We understand that the trustee or the transfer
agent, as the case may be, for the Securities will not be required to accept
for registration of transfer any Securities pursuant to (iii) or (iv) above
except upon presentation of evidence satisfactory to the Company that the
foregoing restrictions on transfer have been complied with.  We further understand that any Securities
will be in the form of definitive physical certificates and that such
certificates will bear a legend reflecting the substance of this paragraph
other than certificates representing Securities transferred pursuant to clause
(v) above.  As used herein, “Resale
Restriction Termination Date” means (a) with respect to any LYONs, the date that is two
years after the later of the date of the original issuance of the LYONs and the
last date on which the Company or any affiliate of the Company was the owner of
such LYONs and (b) with respect to Common Stock delivered upon exchange of
a LYON, the date that is two years after the later of the date on which such
shares were so delivered upon exchange and the last date on which the Company
or any affiliate of the Company was the owner of such shares of Common Stock.  We understand that we may not, directly or
indirectly, engage in any hedging transaction with regard to the LYONs except
as permitted by the Securities Act.

 

We acknowledge that the Company, others and you will rely upon our
confirmations, acknowledgments and agreements set forth herein, and we agree to
notify you promptly in writing if any of our representations or warranties
herein ceases to be accurate and complete.

 

THIS LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK.

 

	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (Name of
  Purchaser)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  	
  Address:

  
					

 

3

 

ANNEX C

 

Projected Payment Schedule* per $1,000 Principal
Amount at Maturity of the Securities

 

	
  Date

  	
   

  	
  Projected
  Payment

  	
   

  
	
  April 29, 2002

  	
   

  	
  —

  	
   

  
	
  October 29, 2002

  	
   

  	
  —

  	
   

  
	
  April 29, 2003

  	
   

  	
  —

  	
   

  
	
  October 29, 2003

  	
   

  	
  —

  	
   

  
	
  April 29, 2004

  	
   

  	
  —

  	
   

  
	
  October 29, 2004

  	
   

  	
  —

  	
   

  
	
  April 29, 2005

  	
   

  	
  —

  	
   

  
	
  October 29, 2005

  	
   

  	
  —

  	
   

  
	
  April 29, 2006

  	
   

  	
  —

  	
   

  
	
  October 29, 2006

  	
   

  	
  —

  	
   

  
	
  April 29, 2007

  	
   

  	
  —

  	
   

  
	
  October 29, 2007

  	
   

  	
  —

  	
   

  
	
  April 29, 2008

  	
   

  	
  —

  	
   

  
	
  October 29, 2008

  	
   

  	
  —

  	
   

  
	
  April 29, 2009

  	
   

  	
  1.00

  	
   

  
	
  October 29, 2009

  	
   

  	
  1.04

  	
   

  
	
  April 29, 2010

  	
   

  	
  1.09

  	
   

  
	
  October 29, 2010

  	
   

  	
  1.14

  	
   

  
	
  April 29, 2011

  	
   

  	
  1.20

  	
   

  
	
  October 29, 2011

  	
   

  	
  1.25

  	
   

  
	
  April 29, 2012

  	
   

  	
  1.31

  	
   

  
	
  October 29, 2012

  	
   

  	
  1.37

  	
   

  
	
  April 29, 2013

  	
   

  	
  1.44

  	
   

  
	
  October 29, 2013

  	
   

  	
  1.51

  	
   

  
	
  April 29, 2014

  	
   

  	
  1.58

  	
   

  
	
  October 29, 2014

  	
   

  	
  1.65

  	
   

  
	
  April 29, 2015

  	
   

  	
  1.73

  	
   

  
	
  October 29, 2015

  	
   

  	
  1.81

  	
   

  
	
  April 29, 2016

  	
   

  	
  1.89

  	
   

  
	
  October 29, 2016

  	
   

  	
  1.98

  	
   

  
	
  April 29, 2017

  	
   

  	
  2.07

  	
   

  
	
  October 29, 2017

  	
   

  	
  2.17

  	
   

  
	
  April 29, 2018

  	
   

  	
  2.27

  	
   

  
	
  October 29, 2018

  	
   

  	
  2.38

  	
   

  
	
  April 29, 2019

  	
   

  	
  2.49

  	
   

  
	
  October 29, 2019

  	
   

  	
  2.61

  	
   

  
	
  April 29, 2020

  	
   

  	
  2.73

  	
   

  
	
  October 29, 2020

  	
   

  	
  2.86

  	
   

  
	
  April 29, 2021

  	
   

  	
  2.99

  	
   

  
	
  October 29, 2021

  	
   

  	
  3.13

  	
   

  
	
  April 29, 2022

  	
   

  	
  3.28

  	
   

  
	
  October 29, 2022

  	
   

  	
  3.44

  	
   

  
	
  April 29, 2023

  	
   

  	
  3.60

  	
   

  
	
  October 29, 2023

  	
   

  	
  3.76

  	
   

  
	
  April 29, 2024

  	
   

  	
  3.94

  	
   

  
	
  October 29, 2024

  	
   

  	
  4.13

  	
   

  
	
  April 29, 2025

  	
   

  	
  4.32

  	
   

  
	
  October 29, 2025

  	
   

  	
  4.52

  	
   

  
	
  April 29, 2026

  	
   

  	
  4.73

  	
   

  
	
  October 29, 2026

  	
   

  	
  4.96

  	
   

  
	
  April 29, 2027

  	
   

  	
  5.19

  	
   

  
	
  October 29, 2027

  	
   

  	
  5.43

  	
   

  
	
  April 29, 2028

  	
   

  	
  5.69

  	
   

  
	
  October 29, 2028

  	
   

  	
  5.95

  	
   

  
	
  April 29, 2029

  	
   

  	
  6.23

  	
   

  
	
  October 29, 2029

  	
   

  	
  6.53

  	
   

  
	
  April 29, 2030

  	
   

  	
  6.83

  	
   

  
	
  October 29, 2030

  	
   

  	
  7.15

  	
   

  
	
  April 29, 2031

  	
   

  	
  7.49

  	
   

  
	
  October 29, 2031

  	
   

  	
  7.84

  	
   

  
	
  April 29, 2032

  	
   

  	
  6,882.21

  	
   

  

 

*   
The comparable yield means the annual yield the Company would pay, as of
the Issue Date, on a fixed rate, nonconvertible debt security with no
contingent payments, but with terms and conditions otherwise comparable to
those of the Securities. The schedule of projected payments has been determined
on the basis of an assumption of linear growth of the stock price and a
constant dividend yield and has not been determined for any purpose other than
for the determination of interest accruals and adjustments thereof in respect
of the Securities for United States federal income tax purposes.  The comparable yield and the schedule of
projected payments do not constitute a projection or representation regarding
the amounts payable on the Securities.

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