Document:

exv4w1

 

EXHIBIT 4.1

SOLECTRON CORPORATION,

ISSUER

AND

U.S. BANK NATIONAL ASSOCIATION,

TRUSTEE

INDENTURE

Dated as of February __, 2005

0.50% CONVERTIBLE SENIOR NOTES, SERIES B DUE FEBRUARY 15, 2034

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page	 
	ARTICLE I DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
	 	 	1	 
	 
	 	 	 	 
	SECTION 1.1   Definitions
	 	 	1	 
	SECTION 1.2   Compliance Certificates and Opinions
	 	 	11	 
	SECTION 1.3   Form of Documents Delivered to the Trustee
	 	 	12	 
	SECTION 1.4   Acts of Holders of Securities
	 	 	12	 
	SECTION 1.5   Notices, Etc. to the Trustee and Company
	 	 	14	 
	SECTION 1.6   Notice to Holders of Securities; Waiver
	 	 	15	 
	SECTION 1.7   Effect of Headings and Table of Contents
	 	 	15	 
	SECTION 1.8   Successors and Assigns
	 	 	15	 
	SECTION 1.9   Separability Clause
	 	 	15	 
	SECTION 1.10 Benefits of Indenture
	 	 	16	 
	SECTION 1.11 Governing Law
	 	 	16	 
	SECTION 1.12 Legal Holidays
	 	 	16	 
	SECTION 1.13 Conflict With Trust Indenture Act
	 	 	17	 
	 
	 	 	 	 
	ARTICLE II SECURITY FORMS
	 	 	17	 
	 
	 	 	 	 
	SECTION 2.1   Form Generally
	 	 	17	 
	SECTION 2.2   Form of Security
	 	 	19	 
	SECTION 2.3   Form of Certificate of Authentication
	 	 	33	 
	SECTION 2.4   Form of Conversion Notice
	 	 	34	 
	SECTION 2.5   Form of Assignment
	 	 	35	 
	 
	 	 	 	 
	ARTICLE III THE SECURITIES
	 	 	37	 
	 
	 	 	 	 
	SECTION 3.1   Title and Terms
	 	 	37	 
	SECTION 3.2   Denominations
	 	 	37	 
	SECTION 3.3   Execution, Authentication, Delivery and Dating
	 	 	37	 
	SECTION 3.4   Global Securities; Non-Global Securities; Book-entry Provisions
	 	 	38	 
	SECTION 3.5   Registration; Registration of Transfer and Exchange; Restrictions on Transfer
	 	 	40	 
	SECTION 3.6   Mutilated, Destroyed, Lost or Stolen Securities
	 	 	42	 

 

 

TABLE OF CONTENTS

(continued)

	 	 	 	 	 
	 	 	Page	 
	SECTION 3.7   Payment of Interest; Interest Rights Preserved
	 	 	43	 
	SECTION 3.8   Persons Deemed Owners
	 	 	44	 
	SECTION 3.9   Cancellation
	 	 	44	 
	SECTION 3.10 Computation of Interest
	 	 	44	 
	SECTION 3.11 CUSIP Numbers
	 	 	44	 
	 
	 	 	 	 
	ARTICLE IV SATISFACTION AND DISCHARGE
	 	 	45	 
	 
	 	 	 	 
	SECTION 4.1   Satisfaction and Discharge of Indenture
	 	 	45	 
	SECTION 4.2   Application of Trust Money
	 	 	46	 
	 
	 	 	 	 
	ARTICLE V REMEDIES
	 	 	46	 
	 
	 	 	 	 
	SECTION 5.1   Events of Default
	 	 	46	 
	SECTION 5.2   Acceleration of Maturity; Rescission and Annulment
	 	 	48	 
	SECTION 5.3   Collection of Indebtedness and Suits for Enforcement by Trustee
	 	 	49	 
	SECTION 5.4   Trustee May File Proofs of Claim
	 	 	50	 
	SECTION 5.5   Trustee May Enforce Claims Without Possession of Securities
	 	 	51	 
	SECTION 5.6   Application of Money Collected
	 	 	51	 
	SECTION 5.7   Limitation on Suits
	 	 	51	 
	SECTION 5.8   Unconditional Right of Holders to Receive Principal, Premium and Interest and to Convert
	 	 	52	 
	SECTION 5.9   Restoration of Rights and Remedies
	 	 	52	 
	SECTION 5.10 Rights and Remedies Cumulative
	 	 	52	 
	SECTION 5.11 Delay or Omission Not Waiver
	 	 	53	 
	SECTION 5.12 Control by Holders of Securities
	 	 	53	 
	SECTION 5.13 Waiver of Past Defaults
	 	 	53	 
	SECTION 5.14 Undertaking for Costs
	 	 	54	 
	SECTION 5.15 Waiver of Stay, Usury or Extension Laws
	 	 	54	 
	 
	 	 	 	 
	ARTICLE VI THE TRUSTEE
	 	 	54	 
	 
	 	 	 	 
	SECTION 6.1   Certain Duties and Responsibilities
	 	 	55	 
	SECTION 6.2   Notice of Defaults
	 	 	56	 

-ii-

 

 

TABLE OF CONTENTS

(continued)

	 	 	 	 	 
	 	 	Page	 
	SECTION 6.3   Certain Rights of Trustee
	 	 	56	 
	SECTION 6.4   Not Responsible for Recitals or Issuance of Securities
	 	 	57	 
	SECTION 6.5   May Hold Securities, Act as Trustee under Other Indentures
	 	 	57	 
	SECTION 6.6   Money Held in Trust
	 	 	58	 
	SECTION 6.7   Compensation and Reimbursement
	 	 	58	 
	SECTION 6.8   Corporate Trustee Required; Eligibility
	 	 	59	 
	SECTION 6.9   Resignation and Removal; Appointment of Successor
	 	 	59	 
	SECTION 6.10 Acceptance of Appointment by Successor
	 	 	61	 
	SECTION 6.11 Merger, Conversion, Consolidation or Succession to Business
	 	 	61	 
	SECTION 6.12 Authenticating Agents
	 	 	61	 
	SECTION 6.13 Disqualification; Conflicting Interests
	 	 	63	 
	SECTION 6.14 Preferential Collection of Claims Against Company
	 	 	63	 
	 
	 	 	 	 
	ARTICLE VII CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
	 	 	63	 
	 
	 	 	 	 
	SECTION 7.1   Company May Consolidate, Etc. Only on Certain Terms
	 	 	63	 
	SECTION 7.2   Successor Substituted
	 	 	64	 
	 
	 	 	 	 
	ARTICLE VIII SUPPLEMENTAL INDENTURES
	 	 	64	 
	 
	 	 	 	 
	SECTION 8.1   Supplemental Indentures Without Consent of Holders of Securities
	 	 	64	 
	SECTION 8.2   Supplemental Indentures with Consent of Holders of Securities
	 	 	65	 
	SECTION 8.3   Execution of Supplemental Indentures
	 	 	66	 
	SECTION 8.4   Effect of Supplemental Indentures
	 	 	66	 
	SECTION 8.5   Reference in Securities to Supplemental Indentures
	 	 	67	 
	SECTION 8.6   Notice of Supplemental Indentures
	 	 	67	 
	 
	 	 	 	 
	ARTICLE IX MEETINGS OF HOLDERS OF SECURITIES
	 	 	67	 
	 
	 	 	 	 
	SECTION 9.1   Purposes for Which Meetings May Be Called
	 	 	67	 
	SECTION 9.2   Call, Notice and Place of Meetings
	 	 	67	 
	SECTION 9.3   Persons Entitled to Vote at Meetings
	 	 	68	 
	SECTION 9.4   Quorum; Action
	 	 	68	 
	SECTION 9.5   Determination of Voting Rights; Conduct and Adjournment of Meetings
	 	 	69	 

-iii-

 

 

TABLE OF CONTENTS

(continued)

	 	 	 	 	 
	 	 	Page	 
	SECTION 9.6   Counting Votes and Recording Action of Meetings
	 	 	70	 
	 
	 	 	 	 
	ARTICLE X COVENANTS
	 	 	70	 
	 
	 	 	 	 
	SECTION 10.1 Payment of Principal, Premium and Interest
	 	 	70	 
	SECTION 10.2 Maintenance of Offices or Agencies
	 	 	70	 
	SECTION 10.3 Money for Security Payments to Be Held in Trust
	 	 	71	 
	SECTION 10.4 Existence
	 	 	72	 
	SECTION 10.5 Maintenance of Properties
	 	 	72	 
	SECTION 10.6 Payment of Taxes and Other Claims
	 	 	73	 
	SECTION 10.7 Registration and Listing
	 	 	73	 
	SECTION 10.8 Statement by Officers as to Default
	 	 	73	 
	SECTION 10.9 Waiver of Certain Covenants
	 	 	74	 
	 
	 	 	 	 
	ARTICLE XI REDEMPTION OF SECURITIES
	 	 	74	 
	 
	 	 	 	 
	SECTION 11.1 Right of Redemption
	 	 	74	 
	SECTION 11.2 Applicability of Article
	 	 	74	 
	SECTION 11.3 Election to Redeem; Notice to Trustee
	 	 	74	 
	SECTION 11.4 Selection by Trustee of Securities to Be Redeemed
	 	 	75	 
	SECTION 11.5 Notice of Redemption
	 	 	75	 
	SECTION 11.6 Deposit of Redemption Price
	 	 	76	 
	SECTION 11.7 Securities Payable on Redemption Date
	 	 	77	 
	SECTION 11.8 Conversion Arrangement on Call for Redemption
	 	 	77	 
	 
	 	 	 	 
	ARTICLE XII CONVERSION OF SECURITIES
	 	 	78	 
	 
	 	 	 	 
	SECTION 12.1 Conversion Privilege and Conversion Rate
	 	 	78	 
	SECTION 12.2 Exercise of Conversion Privilege
	 	 	81	 
	SECTION 12.3 Fractions of Shares
	 	 	83	 
	SECTION 12.4 Adjustment of Conversion Rate
	 	 	83	 
	SECTION 12.5 Additional Shares
	 	 	89	 
	SECTION 12.6 Notice of Adjustments of Conversion Rate
	 	 	90	 

-iv-

 

 

TABLE OF CONTENTS

(continued)

	 	 	 	 	 
	 	 	Page	 
	SECTION 12.7   Notice of Certain Corporate Action
	 	 	91	 
	SECTION 12.8   Company to Reserve Common Stock
	 	 	92	 
	SECTION 12.9   Taxes on Conversions
	 	 	92	 
	SECTION 12.10 Covenant as to Common Stock
	 	 	92	 
	SECTION 12.11 Cancellation of Converted Securities
	 	 	92	 
	SECTION 12.12 Provision in Case of Consolidation, Merger or Sale of Assets
	 	 	93	 
	SECTION 12.13 Rights Issued in Respect of Common Stock
	 	 	94	 
	SECTION 12.14 Responsibility of Trustee for Conversion Provisions
	 	 	94	 
	 
	 	 	 	 
	ARTICLE XIII REPURCHASE OF SECURITIES AT THE OPTION OF THE HOLDER
	 	 	95	 
	 
	 	 	 	 
	SECTION 13.1   Right to Require Repurchase upon a Change in Control
	 	 	95	 
	SECTION 13.2   Notices; Method of Exercising Repurchase Right, Etc.
	 	 	96	 
	SECTION 13.3   Certain Definitions
	 	 	97	 
	SECTION 13.4   Consolidation, Merger, Etc.
	 	 	99	 
	SECTION 13.5   Repurchase at the Option of the Holder on the Purchase Date
	 	 	100	 
	 
	 	 	 	 
	ARTICLE XIV HOLDERS LISTS AND REPORTS BY TRUSTEE AND COMPANY; NON-RECOURSE
	 	 	102	 
	 
	 	 	 	 
	SECTION 14.1   Company to Furnish Trustee Names and Addresses of Holders
	 	 	102	 
	SECTION 14.2   Preservation of Information
	 	 	102	 
	SECTION 14.3   Reports by Trustee
	 	 	103	 
	SECTION 14.4   Reports by Company
	 	 	103	 
	 
	 	 	 	 
	ARTICLE XV IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS
	 	 	103	 
	 
	 	 	 	 
	SECTION 15.1   Indenture and Securities Solely Corporate Obligations
	 	 	103	 

-v-

 

 

CROSS-REFERENCE TABLE

TO TRUST INDENTURE ACT (“TIA”)

	 	 	 
	TIA	 	Indenture Section
	310(a)(1) & (a)(2)
	 	6.8
	(a)(3)
	 	N.A.
	(a)(4)
	 	N.A.
	(a)(5)
	 	6.8; 6.9
	(b)
	 	6.8; 6.9; 6.10; 6.13
	(c)
	 	N.A.
	311(a) & (b)
	 	6.14
	(c)
	 	N.A.
	312(a)
	 	14.1; 14.2(1)
	(b)
	 	14.2(2)
	(c)
	 	14.2(3)
	313(a), (b)(1) & (b)(2)
	 	14.3
	(c)
	 	1.6; 14.3(1)
	(d)
	 	14.3(2)
	314(a)
	 	10.8; 14.4
	(b)
	 	N.A.
	(c)(1) & (c)(2)
	 	1.2
	(c)(3)
	 	N.A.
	(d)
	 	N.A.
	(e)
	 	1.2
	(f)
	 	N.A.
	315(a)
	 	6.1(1)
	(b)
	 	1.6; 6.2
	(c)
	 	6.1(2)
	(d)
	 	6.1(3)
	(e)
	 	5.14
	316(a)(last sentence)
	 	1.1 (Definition of "Outstanding ")
	(a)(1)(A)
	 	5.12
	(a)(1)(B)
	 	5.13
	(a)(2)
	 	N.A.
	(b)
	 	5.8
	(c)
	 	1.4
	317(a)(1)
	 	5.3
	(a)(2)
	 	5.4
	(b)
	 	10.3
	318(a) & (c)
	 	1.13

N.A. means Not Applicable

NOTE: This Cross-Reference Table shall not, for any purposes, be deemed to be a part of the Indenture.

 

          INDENTURE, dated as of February ___, 2005, between SOLECTRON CORPORATION, a corporation duly
organized and existing under the laws of the State of Delaware, having its principal office at 777
Gibraltar Drive, Milpitas, California 95035 (herein called the “Company”), and U.S. BANK NATIONAL
ASSOCIATION, a national banking association organized under the laws of the United States, as
Trustee hereunder (herein called the “Trustee”).

RECITALS OF THE COMPANY

          The Company has duly authorized the creation of an issue of its 0.50% Convertible Senior
Notes, Series B due February 15, 2034 (herein called the “Securities”) of substantially the tenor
and amount hereinafter set forth, and to provide therefor the Company has duly authorized the
execution and delivery of this Indenture.

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

NOW, THEREFORE, THIS INDENTURE WITNESSETH:

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

ARTICLE I

DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

SECTION 1.1 Definitions.

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

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

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

 

 

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

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

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

          “Agent Member” means any member of, or participant in, the Depositary.

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

          “Applicable Conversion Rate” means the Conversion Rate in effect at the time the Conversion
Value is calculated.

          “Applicable Conversion Reference Period” means: (i) for Securities tendered for conversion
after the Company has specified a redemption date for those Securities, the five consecutive
Trading Days beginning on the third Trading Day following the redemption date or (ii) in all other
cases, the five consecutive Trading Days beginning on the third Trading Day following the date the
Securities are tendered for conversion.

          “Applicable Stock Price” is equal to the average of the closing sale prices of the Company’s
common stock during the Applicable Conversion Reference Period.

          “Authenticating Agent” means any Person authorized pursuant to Section 6.12 to act on behalf
of the Trustee to authenticate Securities.

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

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

          “Business Day”, when used with respect to any Place of Payment, Place of Conversion or any
other place, as the case may be, means each Monday, Tuesday, Wednesday, Thursday and

2

 

Friday which is not a day on which banking institutions in such Place of Payment, Place of
Conversion or other place, as the case may be, are authorized or obligated by law or executive
order to close.

          “Change in Control” has the meaning specified in Section 13.4(2).

          “Closing Sale Price” means, with respect to the Common Stock, for any day, (i) the last
reported sale price regular way on the New York Stock Exchange or (ii) if the Common Stock is not
listed on the New York Stock Exchange, the last reported sale price regular way per share or, in
case no such reported sale takes place on such day, the average of the reported closing bid and
asked prices regular way, in either case, on the principal national securities exchange on which
the Common Stock is listed or admitted to trading, or (iii) if the Common Stock is not quoted on
the New York Stock Exchange or listed or admitted to trading on any national securities exchange,
the average of the closing bid and asked prices in the over-the-counter market as furnished by any
New York Stock Exchange member firm selected from time to time by the Company for that purpose.

          “Code” has the meaning specified in Section 2.l.

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

          “Common Stock” means the Common Stock, par value $0.001 per share, of the Company authorized
at the date of this instrument as originally executed or as such stock may be constituted from time
to time (including upon a change in the par value of the securities). Subject to the provisions of
Section 12.11, shares issuable on conversion or repurchase of Securities shall include only shares
of Common Stock or shares of any class or classes of common stock resulting from any
reclassification or reclassifications thereof; provided, however, that if at any time there shall
be more than one such resulting class, the shares so issuable on conversion of Securities shall
include shares of all such classes, and the shares of each such class then so issuable shall be
substantially in the proportion which the total number of shares of such class issued as a part of
such reclassification or reclassifications bears to the total number of shares of all such classes
issued as a part of such reclassification or reclassifications and further provided that Common
Stock shall also include any associated rights under the Company’s certificate of incorporation,
bylaws and stockholder rights plan, if any, to the extent provided herein.

          “common stock” includes any stock of any class of capital stock which has no preference in
respect of dividends or of amounts payable in the event of any voluntary or involuntary
liquidation, dissolution or winding up of the issuer thereof, which has unrestricted voting rights
and which is not subject to redemption by the issuer thereof.

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

3

 

          “Company Notice” has the meaning specified in Section 13.2.

          “Company Request” or “Company Order” means a written request or order (i) signed in the name
of the Company by (A) one of its Chairman of the Board, its Vice Chairman of the Board, its Chief
Executive Officer, its President, an Executive Vice President or a Vice President, and by (B) one
of its principal financial officer, Treasurer, an Assistant Treasurer, its Secretary or an
Assistant Secretary, provided, however, that with respect to any Company Order delivered on the
date hereof, such Company Order need only contain the signature of one of the persons referenced in
(A) above, and (ii) delivered to the Trustee.

          “Constituent Person” has the meaning specified in Section 12.11.

          “Conversion Agent” means any Person authorized by the Company to convert Securities in
accordance with Article XII. The Company has initially appointed the Trustee as its Conversion
Agent pursuant to Section 10.2 hereof.

          “Conversion Date” means the date on which a Holder delivers its Securities and a duly signed
and completed conversion notice pursuant to this Indenture.

          “Conversion Price” has the meaning specified in Section 13.4(3).

          “Conversion Rate” has the meaning specified in Section 12.1(c).

          “Conversion Value” has the meaning specified in Section 12.1(b).

          “Corporate Trust Office” means the office of the Trustee at which at any particular time the
trust created by this Indenture shall be principally administered (which at the date of this
Indenture is located at 60 Livingston Avenue, St. Paul, MN 55107-2292, Attention: Corporate Trust
Services (Solectron Corporation, 0.50% Convertible Senior Notes, Series B due February 15, 2034)).

          “Current Market Price” shall have the meaning specified in Section 12.4(3).

          “Daily Cash Amount” means, for each Security on each Trading Day in the Applicable Conversion
Reference Period, the greater of: (i) zero or (ii) an amount of cash determined by the following
formula:

(Closing Sale Price on that Trading Day X Applicable Conversion Rate) — $1,000

5

          “Daily Share Amount” means, for each Security on each Trading Day in the Applicable Conversion
Reference Period, the greater of: (i) zero or (ii) a number of shares of the Company’s common stock
determined by the following formula:

4

 

(Closing Sale Price on that Trading Day C Applicable Conversion Rate) — $1,000

 

5 X Closing Sale Price on such Trading Day

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

          “Depositary” means, with respect to any Securities (including any Global Securities), a
clearing agency that is registered as such under the Exchange Act and is designated by the Company
to act as Depositary for such Securities (or any successor securities clearing agency so
registered).

          “Distribution Notice” has the meaning specified in Section 12.1(a).

          “Documents” has the meaning specified in Section 6.3(1).

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

          “DTC” means The Depository Trust Company, a New York corporation.

          “Effective Failure” has the meaning specified in Section 2.2.

          “Effectiveness Period” has the meaning specified in Section 2.2.

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

          “Exchange Act” means the United States Securities Exchange Act of 1934 (or any successor
statute), as amended from time to time.

          “Expiration Date” has the meaning specified in Section 12.4(1)(v).

          “Expiration Time” has the meaning specified in Section 12.4(1)(v).

          “Fall-Away Event” shall be any date following the date of the Indenture in which (a) the
Securities are rated Baa3 or above by Moody’s Investor Services, Inc. and BBB- or above by Standard
& Poor’s Ratings Group (or, if either such entity ceases to rate the Securities for reasons outside
of the control of the Company, the equivalent investment grade credit rating from any other
“nationally recognized statistical rating organization” within the meaning of Rule
15c3-1(c)(2)(vi)(F) under the Exchange Act selected by the Company as a replacement agency); and
(b) no Event of Default shall have occurred and be continuing.

          “Global Security” means a Security that is registered in the Security Register in the name of
a Depositary or a nominee thereof.

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

5

 

          “Indenture” means this instrument as originally executed or as it may from time to time be
supplemented or amended by one or more indentures supplemental hereto entered into pursuant to the
applicable provisions hereof, including, for all purposes of this instrument and any such
supplemental indenture, the provisions of the Trust Indenture Act that are deemed to be a part of
and govern this instrument and any such supplemental indenture, respectively.

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

          “Instrument” has the meaning specified in Section 5.1.

          “Issue Date” means February ___, 2005.

          “Maturity”, when used with respect to any Security, means the date on which the principal of
such Security becomes due and payable as therein or herein provided, whether at the Stated Maturity
or by declaration of acceleration, call for redemption, exercise of the purchase or repurchase
right set forth in Article XIII or otherwise.

          “Measurement Period” has the meaning specified in Section 12.4(1)(iv).

          “Merger Notice” has the meaning specified in Section 12.1.

          “Net Cash Amount” means a cash amount equal to the sum of the Daily Cash Amounts for each
Trading Day during the Applicable Conversion Reference Period.

          “Net Share Amount” means the number of shares of the Company’s Common Stock equal to the sum
of the Daily Share Amounts for each Trading Day during the Applicable Conversion Reference Period.

          “Net Shares” has the meaning specified in Section 12.2

          “Non-electing Share” has the meaning specified in Section 12.11.

          “Non-Global Security” means any Security issued under the conditions set forth in Section 3.4.

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

          “Notice of Optional Repurchase” has the meaning specified in Section 13.6(b).

          “Notice of Withdrawal” has the meaning specified in Section 13.6(c).

          “Officers’ Certificate” means a certificate (i) signed by (A) one of the Chairman of the
Board, a Vice Chairman of the Board, the Chief Executive Officer, the President, an Executive Vice
President, a Senior Vice President or a Vice President and by (B) one of the principal financial
officer, the Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary of the

6

 

Company, and (ii) delivered to the Trustee. One of the Officers signing any Officers’
Certificate required to be given pursuant to Section 10.8 shall be the principal executive,
financial or accounting officer of the Company.

          “Opinion of Counsel” means a written opinion of counsel, who may be counsel for the Company
and who shall be acceptable to the Trustee in its reasonable discretion.

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

	 	(i)  	Securities theretofore canceled by the Trustee or delivered to
the Trustee for cancellation;
	 
	 	(ii)  	Securities the payment or redemption of which money in the
necessary amount has been theretofore deposited with the Trustee or any Paying
Agent (other than the Company) in trust or set aside and segregated in trust by
the Company (if the Company shall act as its own Paying Agent) for the Holders
of such Securities, provided that if such Securities are to be redeemed, notice
of such redemption has been duly given pursuant to this Indenture or provision
therefor satisfactory to the Trustee has been made;
	 
	 	(iii)  	Securities which have been paid pursuant to Section 3.6 or in
exchange for or in lieu of which other Securities have been authenticated and
delivered pursuant to this Indenture, other than any such Securities in respect
of which there shall have been presented to the Trustee proof satisfactory to it
that such Securities are held by a bona fide purchaser in whose hands such
Securities are valid obligations of the Company; and
	 
	 	(iv)  	Securities converted into Common Stock pursuant to Article XII;

provided, however, that in determining whether the Holders of the requisite principal amount of
Outstanding Securities are present at a meeting of Holders of Securities for quorum purposes or
have given 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 determination as to
the presence of a quorum or upon any such request, demand, authorization, direction, notice,
consent or waiver, only Securities which a Responsible Officer of the Trustee has been notified in
writing to be so owned shall be so disregarded. Securities so owned which have been pledged in good
faith may be regarded as Outstanding if the pledgee is not the Company or any other obligor upon
the Securities or any Affiliate of the Company or such other obligor, and the Trustee shall be
protected in relying upon an Officer’s Certificate to such effect.

          “Paying Agent” means any Person authorized by the Company to pay the principal of or interest
on any Securities on behalf of the Company and, except as otherwise specifically set forth

7

 

herein, such term shall include the Company if it shall act as its own Paying Agent. The
Company has initially appointed the Trustee as its Paying Agent pursuant to Section 10.2 hereof.

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

          “Place of Conversion” has the meaning specified in Section 3.1.

          “Place of Payment” has the meaning specified in Section 3.1.

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

          “Press Release” means any press release issued by the Company and disseminated through any two
of the following News Services: Reuters Business News Services, Bloomberg News Services and Dow
Jones & Company Inc. (or any comparable news service if one or more of the foregoing are not then
available).

          “Principal Return” has the meaning specified in Section 12.2.

          “Purchase Date” has the meaning specified in Section 13.6(a).

          “Purchase Notice” has the meaning specified in Section 13.6(a).

          “Purchase Price” has the meaning specified in Section 13.6(a).

          “Purchased Shares” has the meaning specified in Section 12.4(1)(v).

          “Purchasers” has the meaning specified in Section 11.8.

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

          “Record Date Period” means the period 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.

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

          “Redemption Price”, when used with respect to any Security to be redeemed, means the price set
forth in Section 2.2.

8

 

          “Registration Default” has the meaning specified in Section 2.2.

          “Regular Record Date” for interest payable in respect of any Security on any Interest Payment
Date means the February 1 or August 1 (whether or not a Business Day), as the case may be, next
preceding such Interest Payment Date.

          “Repurchase Date” has the meaning specified in Section 13.1.

          “Repurchase Price” has the meaning specified in Section 13.1.

          “Responsible Officer”, when used with respect to the Trustee, means any officer within the
Corporate Trust Office of the Trustee with direct responsibility for the administration of this
Indenture and also means, with respect to a particular corporate trust matter, any other officer to
whom such matter is referred because of his knowledge and familiarity with the particular subject.

          “Rights” means any common stock or preferred stock purchase right, as the case may be, that
all shares of Common Stock are entitled to receive under a Rights Plan.

          “Rights Plan” shall mean a preferred shares rights plan or any similar plan adopted by the
Company.

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

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

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

          “Security Register” and “Security Registrar” have the respective meanings specified in Section
3.5(1)

          “Shelf Registration Statement” has the meaning specified in Section 2.2.

          “Significant Subsidiary” means, at any date of determination, any Subsidiary of the Company
that (i) for the most recent completed fiscal year of the Company, accounted for more than 10% of
the consolidated revenues of the Company or (ii) as of the end of such fiscal year, was the owner
of more than 10% of the consolidated assets of the Company, all as set forth on the most recently
available consolidated financial statements of the Company for such fiscal year.

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

          “Spin-off” has the meaning specified in Section 12.4(1)(iv).

9

 

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

          “Subsidiary” means a corporation, partnership, limited liability corporation or any similar
legal entity, more than 50% of the outstanding voting stock or voting interests of which is owned,
directly or indirectly, by the Company or by one or more other Subsidiaries, or by the Company and
one or more other Subsidiaries. For the purposes of this definition, “voting stock” means stock or
other similar interests in the corporation, partnership, limited liability corporation or other
entity which ordinarily has or have voting power for the election of directors, or persons
performing similar functions, whether at all times or only so long as no senior class of stock or
other interests has or have such voting power by reason of any contingency.

          “Subsidiary Closing Price” means, with respect to the securities of a Subsidiary distributed
in a Spin-off, for any day, (i) the last reported sale price regular way on the New York Stock
Exchange or, (ii) if such security is not listed on the New York Stock Exchange, the last reported
sale price regular way per share or, in case no such reported sale takes place on such day, the
average of the reported closing bid and asked prices regular way, in either case, on the principal
national securities exchange on which such security is listed or admitted to trading, or (iii) if
such security is not listed on the New York Stock Exchange or listed or admitted to trading on any
national securities exchange, the average of the closing bid prices in the over-the-counter market
as furnished by any New York Stock Exchange member firm selected from time to time by the Company
for that purpose.

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

          “Surrender Certificate” means a certificate substantially in the form set forth in Annex B.

          “Surrendered Securities” has the meaning given to such term in Annex B.

          “Trading Day” means (i) if the Common Stock is quoted on the Nasdaq National Market or any
other system of automated dissemination of quotations of securities prices, days on which trades
may be effected through such system, (ii) if the Common Stock is listed or admitted for trading on
any national or regional securities exchange, days on which such national or regional securities
exchange is open for business, or (iii) if the Common Stock is not listed on a national or regional
securities exchange or quoted on the Nasdaq National Market or any other system of automated
dissemination of quotation of securities prices, days on which the Common Stock is traded regular
way in the over-the-counter market and for which a closing bid and a closing asked price for the
Common Stock are available.

          “Trading Price” has the meaning specified in Section 12.1(b).

10

 

          “Trigger Event” has the meaning specified in Section 12.12.

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

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

          “United States” means the United States of America (including the 50 States and the District
of Columbia), its territories, its possessions and other areas subject to its jurisdiction (its
“possessions” including Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island and
the Northern Mariana Islands).

          “Unrestricted Securities Certificate” means a certificate substantially in the form set forth
in Annex A.

SECTION 1.2 Compliance Certificates and Opinions.

          Upon any application or request by the Company to the Trustee to take any action under any
provision of this Indenture, the Company shall furnish to the Trustee an Officers’ Certificate
stating that there has been compliance with all conditions precedent, if any, provided for in this
Indenture relating to the proposed action and an Opinion of Counsel stating that in the opinion of
such counsel there has been compliance with all such conditions precedent, if any, except that in
the case of any such application or request as to which the furnishing of such documents is
specifically required by any provision of this Indenture relating to such particular application or
request, no additional certificate or opinion need be furnished.

          Every certificate or opinion with respect to compliance with a condition or covenant provided
for in this Indenture (including certificates provided for in Section 10.8) shall include:

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

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

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

11

 

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

SECTION 1.3 Form of Documents Delivered to the Trustee.

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

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

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

SECTION 1.4 Acts of Holders of Securities.

          (1) Any request, demand, authorization, direction, notice, consent, waiver or other action
provided or permitted by this Indenture to be given or taken by Holders of Securities may be
embodied in and evidenced by (A) one or more instruments of substantially similar tenor signed by
such Holders in person or by an agent or proxy duly appointed in writing by such Holders or (B) the
record of Holders of Securities voting in favor thereof, either in person or by proxies duly
appointed in writing, at any meeting of Holders of Securities duly called and held in accordance
with the provisions of Article IX. Such action shall become effective when such instrument or
instruments or record is delivered to the Trustee and, where it is hereby expressly required, to
the Company. The Trustee shall promptly deliver to the Company copies of all such instruments and
records delivered to the Trustee. Such instrument or instruments and records (and the action
embodied therein and evidenced thereby) are herein sometimes referred to as the “Act” of the
Holders of Securities signing such instrument or instruments and so voting at such meeting. Proof
of execution of any such

12

 

instrument or of a writing appointing any such agent or proxy, or of the holding by any Person
of a Security, shall be sufficient for any purpose of this Indenture and (subject to Section 6.1)
conclusive in favor of the Trustee and the Company if made in the manner provided in this Section.
The record of any meeting of Holders of Securities shall be proved in the manner provided in
Section 9.6.

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

          (3) The principal amount and serial number of any Security held by any Person, and the date of
his holding the same, shall be proved by the Security Register.

          (4) The fact and date of execution of any such instrument or writing and the authority of the
Person executing the same may also be proved in any other manner which the Trustee deems
sufficient; and the Trustee may in any instance require further proof with respect to any of the
matters referred to in this Section 1.4.

          (5) The Company may set any day as the record date for the purpose of determining the Holders
entitled to give or take any request, demand, authorization, direction, notice, consent, waiver or
other action, or to vote on any action, authorized or permitted by this Indenture to be given or
taken by Holders. Promptly and in any case not later than 10 days after setting a record date, the
Company shall notify the Trustee and the Holders of such record date. If not set by the Company
prior to the first solicitation of a Holder made by any Person in respect of any such action, or,
in the case of any such vote, prior to such vote, the record date for any such action or vote shall
be the 30th day (or, if later, the date of the most recent list of Holders required to be provided
pursuant to Section 14.1) prior to such first solicitation or vote, as the case may be. With regard
to any record date, the Holders on such date (or their duly appointed agents or proxies), and only
such Persons, shall be entitled to give or take, or vote on, the relevant action, whether or not
such Holders remain Holders after such record date. Notwithstanding the foregoing, the Company
shall not set a record date for, and the provisions of this paragraph shall not apply with respect
to, any notice, declaration or direction referred to in the next paragraph.

          Upon receipt by the Trustee from any Holder of (i) any notice of default or breach referred to
in Section 5.1(6), if such default or breach has occurred and is continuing and the Trustee shall
not have given such a notice to the Company, (ii) any declaration of acceleration referred to in
Section 5.2, if an Event of Default has occurred and is continuing and the Trustee shall not have
given such a declaration to the Company, or (iii) any direction referred to in Section 5.12, if the
Trustee shall not have taken the action specified in such direction, then, with respect to clauses
(ii) and (iii), a record date shall automatically and without any action by the Company or the
Trustee be set for determining the Holders entitled to join in such declaration or direction, which
record date shall be the close of business on the tenth day (or, if such day is not a Business Day,
the first Business Day thereafter) following the day on which the Trustee receives such declaration
or

13

 

direction, and, with respect to clause (i), the Trustee may set any day as a record date for
the purpose of determining the Holders entitled to join in such notice of default. Promptly after
such receipt by the Trustee of any such declaration or direction referred to in clause (ii) or
(iii), and promptly after setting any record date with respect to clause (i), and as soon as
practicable thereafter, the Trustee shall notify the Company and the Holders of any such record
date so fixed. The Holders on such record date (or their duly appointed agents or proxies), and
only such Persons, shall be entitled to join in such notice, declaration or direction, whether or
not such Holders remain Holders after such record date; provided that, unless such notice,
declaration or direction shall have become effective by virtue of Holders of the requisite
principal amount of Securities on such record date (or their duly appointed agents or proxies)
having joined therein on or prior to the 90th day after such record date, such notice, declaration
or direction shall automatically and without any action by any Person be canceled and of no further
effect. Nothing in this paragraph shall be construed to prevent a Holder (or a duly appointed agent
or proxy thereof) from giving, before or after the expiration of such 90-day period, a notice,
declaration or direction contrary to or different from, or, after the expiration of such period,
identical to, the notice, declaration or direction to which such record date relates, in which
event a new record date in respect thereof shall be set pursuant to this paragraph. In addition,
nothing in this paragraph shall be construed to render ineffective any notice, declaration or
direction of the type referred to in this paragraph given at any time to the Trustee and the
Company by Holders (or their duly appointed agents or proxies) of the requisite principal amount of
Securities on the date such notice, declaration or direction is so given.

          (6) Except as provided in Sections 5.12 and 5.13, any request, demand, authorization,
direction, notice, consent, election, 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.

          (7) The provisions of this Section 1.4 are subject to the provisions of Section 9.5.

SECTION 1.5 Notices, Etc. to the Trustee and Company.

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

          (1) the Trustee by any Holder of Securities or by the Company shall be sufficient for every
purpose hereunder if made, given, furnished or filed in writing to or with a Responsible Officer of
the Trustee and received at its Corporate Trust Office.

          (2) the Company by the Trustee or by any Holder of Securities shall be sufficient for every
purpose hereunder (unless otherwise herein expressly provided) if in writing, mailed, first-class
postage prepaid, or telecopied and confirmed by mail, first-class postage prepaid, or delivered by

14

 

hand or overnight courier, addressed to the Company at 777 Gibraltar Drive, Milpitas,
California 95035 Attention: General Counsel, or at any other address previously furnished in
writing to the Trustee by the Company.

SECTION 1.6 Notice to Holders of Securities; Waiver.

          Except as otherwise expressly provided herein, where this Indenture provides for notice to
Holders of Securities of any event, such notice shall be sufficiently given to Holders if in
writing and mailed, first-class postage prepaid or delivered by an overnight delivery service, to
each Holder of a Security affected by such event, at the address of such Holder as it appears in
the Security Register, not earlier than the earliest date and not later than the latest date
prescribed for the giving of such notice.

          Neither the failure to mail such notice, nor any defect in any notice so mailed, to any
particular Holder of a Security shall affect the sufficiency of such notice with respect to other
Holders of Securities. In case by reason of the suspension of regular mail service or by reason of
any other cause it shall be impracticable to give such notice by mail, then such notification to
Holders of Securities as shall be made with the approval of the Trustee, which approval shall not
be unreasonably withheld, shall constitute a sufficient notification to such Holders for every
purpose hereunder.

          Such notice shall be deemed to have been given when such notice is mailed.

          Where this Indenture provides for notice in any manner, such notice may be waived in writing
by the Person entitled to receive such notice, either before or after the event, and such waiver
shall be the equivalent of such notice. Waivers of notice by Holders of Securities shall be filed
with the Trustee, but such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such waiver.

SECTION 1.7 Effect of Headings and Table of Contents.

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

SECTION 1.8 Successors and Assigns.

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

SECTION 1.9 Separability Clause

15

 

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

SECTION 1.10 Benefits of Indenture.

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

SECTION 1.11 Governing Law.

          THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
INTERNAL LAWS OF THE STATE OF NEW YORK, THE UNITED STATES OF AMERICA INCLUDING, WITHOUT LIMITATION,
SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW AND NEW YORK CIVIL PRACTICE LAWS
AND RULE 327(B).

SECTION 1.12 Legal Holidays.

          In any case where any Interest Payment Date, Redemption Date, Repurchase Date, Purchase Date
or Stated Maturity of any Security or the last day on which a Holder of a Security has a right to
convert his Security shall not be a Business Day at a Place of Payment or Place of Conversion, as
the case may be, then (notwithstanding any other provision of this Indenture or of the Securities)
payment of principal of, premium, if any, or interest on, or the payment of the Redemption Price,
Purchase Price or Repurchase Price (whether the same is payable in cash or in shares of Common
Stock, as the case may be) with respect to, or delivery for conversion of, such Security need not
be made at such Place of Payment or Place of Conversion, as the case may be, on or by such day, but
may be made on or by the next succeeding Business Day at such Place of Payment or Place of
Conversion, as the case may be, with the same force and effect as if made on the Interest Payment
Date, Redemption Date, Repurchase Date, Purchase Date or at the Stated Maturity or by such last day
for conversion; provided, however, that in the case that payment is made on such succeeding
Business Day, no interest shall accrue on the amount so payable for the period from and after such
Interest Payment Date, Redemption Date, Repurchase Date, Purchase Date, Stated Maturity or last day
for conversion, as the case may be.

16

 

SECTION 1.13 Conflict With Trust Indenture Act.

          If any provision hereof limits, qualifies or conflicts with a provision of the Trust Indenture
Act that is required under such Act to be a part of and govern this Indenture, the latter provision
shall control. If any provision of this Indenture modifies or excludes any provision of the Trust
Indenture Act that may be so modified or excluded, the latter provision shall be deemed to apply to
this Indenture as so modified or to be excluded, as the case may be. Until such time as this
Indenture shall be qualified under the Trust Indenture Act, this Indenture, the Company and the
Trustee shall be deemed for all purposes hereof to be subject to and governed by the Trust
Indenture Act to the same extent as would be the case if this Indenture were so qualified on the
date hereof.

ARTICLE II

SECURITY FORMS

SECTION 2.1 Form Generally.

          The Securities shall be in substantially the form set forth in this Article, with such
appropriate insertions, omissions, substitutions and other variations as are required or permitted
by this Indenture, and may have such letters, numbers or other marks of identification and such
legends or endorsements placed thereon as may be required to comply with the rules of any
securities exchange, the Internal Revenue Code of 1986, as amended, and regulations thereunder (the
“Code”), or as may, consistent herewith, be determined by the officers executing such Securities,
as evidenced by their execution thereof. All Securities shall be in fully registered form.

          The Trustee’s certificates of authentication shall be in substantially the form set forth in
Section 2.3.

          Conversion notices shall be in substantially the form set forth in Section 2.4.

          Repurchase notices shall be substantially in the form set forth in Section 2.2.

          The Securities shall be printed, lithographed, typewritten or engraved or produced by any
combination of these methods or may be produced in any other manner permitted by the rules of any
automated quotation system or securities exchange (including on steel engraved borders if so
required by any securities exchange upon which the Securities may be listed) on which the
Securities may be quoted or listed, as the case may be, all as determined by the officers executing
such Securities, as evidenced by their execution thereof.

          Upon their original issuance, Securities issued as contemplated by the Registration Statement
on Form S-4 (Registration No. 333-122032) shall be issued in the form of one or more Global

17

 

Securities in definitive, fully registered form without interest coupons. Such Global
Security shall be registered in the name of DTC, as Depositary, or its nominee and deposited with
the Trustee, as custodian for DTC, for credit by DTC to the respective accounts of beneficial
owners of the Securities represented thereby (or such other accounts as they may direct). Such
Global Security, together with its Successor Securities that are Global Securities, are
collectively herein called the “Global Security”.

18

 

SECTION 2.2 Form of Security.

[FORM OF FACE]

          [THE FOLLOWING LEGEND SHALL APPEAR ON THE FACE OF EACH GLOBAL SECURITY:

19

 

THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND
IS REGISTERED IN THE NAME OF THE DEPOSITARY OR A NOMINEE OF THE DEPOSITARY, WHICH MAY BE TREATED BY
THE COMPANY, THE TRUSTEE AND ANY AGENT THEREOF AS OWNER AND HOLDER OF THIS SECURITY FOR ALL
PURPOSES.

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

UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN DEFINITIVE REGISTERED FORM
IN THE LIMITED CIRCUMSTANCES REFERRED TO IN THE INDENTURE, THIS GLOBAL SECURITY MAY NOT BE
TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF
THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY
SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.

THE COMPANY AGREES, AND BY ACCEPTING A BENEFICIAL OWNERSHIP INTEREST IN THIS SECURITY EACH HOLDER
AND ANY BENEFICIAL OWNER OF THIS SECURITY WILL BE DEEMED TO HAVE AGREED, FOR UNITED STATES FEDERAL
INCOME TAX PURPOSES TO TREAT THE EXCHANGE FOR THE SECURITY OF THE 0.50% CONVERTIBLE SENIOR NOTE DUE
2034 ISSUED BY THE COMPANY ON ________ (“OUTSTANDING NOTE”) AS NOT CONSTITUTING A “SIGNIFICANT
MODIFICATION” OF THE SECURITY WITHIN THE MEANING OF TREASURY REGULATION SECTION 1.1001-3(e).]

20

 

SOLECTRON CORPORATION

0.50% CONVERTIBLE SENIOR NOTES, SERIES B DUE FEBRUARY 15, 2034

	 	 	 
	No.                                         

	 	$                                        

CUSIP NO. _____________

          SOLECTRON CORPORATION, a corporation duly organized and existing under the laws of the State
of Delaware (herein called the “Company”, which term includes any successor Person under the
Indenture referred to on the reverse hereof), for value received, hereby promises to pay to Cede &
Co., or registered assigns, the principal sum of ___United States Dollars (U.S.$___) [if
this Security is a Global Security, then insert — (which principal amount may from time to time be
increased or decreased to such other principal amounts (which, taken together with the principal
amounts of all other Outstanding Securities, shall not exceed $450,000,000 by adjustments made on
the records of the Trustee hereinafter referred to in accordance with the Indenture)) on February
15, 2034, and to pay interest thereon, from February 15, 2005, or from the most recent Interest
Payment Date (as defined below) to which interest has been paid or duly provided for, semi-annually
in arrears on February 15 and August 15 in each year (each, an “Interest Payment Date”), commencing
August 15, 2005, at the rate of 0.50% per annum, until the principal hereof is due, and at the
rate of 0.50% per annum on any overdue principal and premium, if any, and, to the extent permitted
by law, on any overdue interest.

          The interest so payable, and punctually paid or duly provided for, on any Interest Payment
Date will, as provided in the Indenture, be paid to the Person in whose name this Security (or one
or more Predecessor Securities) is registered at the close of business on the Regular Record Date
for such interest, which shall be the February 1 or August 1 (whether or not a Business Day), as
the case may be, next preceding such Interest Payment Date. Except as otherwise provided in the
Indenture, any such interest not so punctually paid or duly provided for will forthwith cease to be
payable to the Holder on such Regular Record Date and may either be paid to the Person in whose
name this Security (or one or more Predecessor Securities) is registered at the close of business
on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Company,
notice whereof shall be given to Holders of Securities not less than 10 days prior to the Special
Record Date, or be paid at any time in any other lawful manner not inconsistent with the
requirements of any automated quotation system or securities exchange on which the Securities may
be quoted or listed, and upon such notice as may be required by such exchange, all as more fully
provided in the Indenture.

          Payments of principal shall be made upon the surrender of this Security at the option of the
Holder at the Corporate Trust Office of the Trustee, or at such other office or agency of the
Company as may be designated by it for such purpose in the Borough of Manhattan, The City of New
York, in such lawful monies of the United States of America as at the time of payment shall be
legal tender for the payment of public and private debts, or at such other offices or agencies as
the Company may designate, by United States Dollar check drawn on, or wire transfer to, a United
States Dollar account (such a wire transfer to be made only to a Holder of an aggregate principal

21

 

amount of Securities in excess of U.S. $2,000,000 and only if such Holder shall have furnished
wire instructions in writing to the Trustee no later than 15 days prior to the relevant payment
date).

          Payment of interest on this Security may be made by United States Dollar check mailed to the
address of the Person entitled thereto as such address shall appear in the Security Register, or,
upon written application by the Holder to the Security Registrar setting forth wire instructions
not later than the relevant Record Date, by transfer to a United States Dollar account (such a wire
transfer to be made only to a Holder of an aggregate principal amount of Securities in excess of
U.S. $2,000,000 and only if such Holder shall have furnished wire instructions in writing to the
Trustee no later than 15 days prior to the relevant payment date).

          Except as specifically provided herein and in the Indenture, the Company shall not be required
to make any payment with respect to any tax, assessment or other governmental charge imposed by any
government or any political subdivision or taxing authority thereof or therein.

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

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

22

 

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

	 	 	 	 	 
	 	 	SOLECTRON CORPORATION
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	 
	

	 	Name:	 	 
	

	 	Title:	 	 

Attest:

	 	 	 	 	 
	By:
	 	 	 	 
	

	 	

	 	 
	Name:
	 	 	 	 
	Title:
	 	 	 	 

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

This is one of the Securities referred to in the

within-mentioned Indenture.

Dated:

U.S. BANK NATIONAL ASSOCIATION,

as Trustee

	 	 	 	 	 
	By:
	 	 	 	 
	

	 	

	 	 
	

	 	Authorized Signatory	 	 

23

 

[FORM OF REVERSE]

          This Security is one of a duly authorized issue of securities of the Company designated as its
“0.50% Convertible Senior Notes, Series B due February 15, 2034” (herein called the “Securities”),
limited in aggregate principal amount to U.S. $450,000,000, issued and to be issued under an
Indenture, dated as of February ___, 2005 (herein called the “Indenture”), between the Company and
U.S. Bank National Association, as Trustee (herein called the “Trustee”, which term includes any
successor trustee under the Indenture), to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights, limitations of rights, duties
and immunities thereunder of the Company, the Trustee and the Holders of the Securities and of the
terms upon which the Securities are, and are to be, authenticated and delivered. As provided in
the Indenture and subject to certain limitations therein set forth, Securities are exchangeable for
a like aggregate principal amount of Securities of any authorized denominations as requested by the
Holder surrendering the same upon surrender of the Security or Securities to be exchanged, at the
Corporate Trust Office of the Trustee. The Trustee upon such surrender by the Holder will issue
the new Securities in the requested denominations.

          In any case where the due date for the payment of the principal of, premium, if any, and
interest, on any Security or the last day on which a Holder of a Security has a right to convert
his Security shall be, at any Place of Payment or Place of Conversion as the case may be, a day on
which banking institutions at such Place of Payment or Place of Conversion are authorized or
obligated by law or executive order to close, then payment of principal, premium, if any, and
interest, or delivery for conversion of such Security need not be made on or by such date at such
place but may be made on or by the next succeeding day at such place which is not a day on which
banking institutions are authorized or obligated by law or executive order to close, with the same
force and effect as if made on the date for such payment or by such last day for conversion, and no
interest shall accrue on the amount so payable for the period after such date.

          No sinking fund is provided for the Securities.

          Subject to and in compliance with the Indenture, the Securities are subject to purchase at the
option of the Holder on each February 15, of each of 2011, 2014, 2019, 2024 and 2029, in whole or
in part, at 100% of the principal amount of such Securities to be repurchased, together with
accrued and unpaid interest, if any, to, but excluding, the Purchase Date; provided, however, that
installments of interest, if any, on Securities whose Stated Maturity is on or prior to such
Purchase Date will be payable to the Holders of such Securities, or one or more Predecessor
Securities, of record at the close of business on the relevant Record Dates, referred to on the
face hereof all as provided in the Indenture.

          Subject to and in compliance with the Indenture, the Securities will be redeemable at the
option of the Company at any time on or after February 20, 2011, in whole or in part, upon not less
than 30 nor more than 60 days’ notice to the Holders prior to the Redemption Date at a Redemption
Price payable in cash equal to 100% of the principal amount (the “Redemption Price”) together, in
each case, with accrued and unpaid interest, if any, to, but excluding, the Redemption Date;
provided, however, that installments of interest, if any, on Securities whose Stated Maturity is on
or

24

 

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

          In the event of a redemption of the Securities, the Company will not be required (a) to
register the transfer or exchange of Securities for a period of 15 days immediately preceding the
date notice is given identifying the serial numbers of the Securities called for such redemption or
(b) to register the transfer or exchange of any Security, or portion thereof, called for
redemption.

          Subject to and upon compliance with the provisions of the Indenture, the Holder of this
Security is entitled, at its option, to convert any Security that is an integral multiple of $1,000
principal amount into cash and, at the Company’s option, fully paid and nonassessable shares
(calculated as to each conversion to the nearest 1/100th of a share) of Common Stock of the Company
at the Conversion Rate, determined as hereinafter provided, in effect at the time of conversion and
subject to the adjustments described below, as follows:

          (1) if, on or prior to February 15, 2029, the Closing Sale Price of the Common Stock for at
least 20 Trading Days in the period of the 30 consecutive Trading Days ending on the eleventh
Trading Day of any fiscal quarter is more than 120% of the then current Conversion Price on the
Securities, then the Holder thereof will be entitled to convert such Security until and including
the eleventh Trading Day of the immediately following fiscal quarter;

          (2) if, on any date after February 15, 2029, and prior to the Stated Maturity, the Closing
Sale Price of the Common Stock is more than 120% of the then current Conversion Price on the
Securities, then the Holder thereof will be entitled to convert such Security at all times
thereafter;

          (3) if the Company elects to call the Securities for redemption on or after February 20, 2011
then the Holder thereof will be entitled to convert such Security (or the portion of the Security
called for redemption, if less than all) until the close of business on the Business Day prior to
the Redemption Date.

          (4) if the Company distributes to all or substantially all holders of Common Stock rights,
options or warrants (other than with respect to a Rights Plan) entitling them to purchase Common
Stock at less than the Closing Sale Price of the Common Stock on the last Trading Day preceding the
declaration for such distribution, then the Holder thereof will be entitled to convert such
Security in the period described below;

          (5) if the Company distributes to all or substantially all holders of Common Stock cash,
assets, debt securities or capital stock, which distribution has a per share value as determined by
the Board of Directors exceeding 5% of the Closing Sale Price of the Common Stock on the last
Trading Day preceding the declaration for such distribution, then the Holder thereof will be
entitled to convert such Security in the period described below; or

          (6) if the Company becomes a party to a consolidation, merger or sale of all or substantially
all of the Company’s assets where such consolidation, merger or sale of all or substantially all of
the

25

 

Company’s assets constitutes a Change in Control or such an event occurs that would have been
a Change in Control but for the occurrence of one or more of the exceptions (I) and (II) to the
definition of Change in Control contained in the proviso immediately following Section 13.4(2)(iii)
of the Indenture, then the Holder thereof will be entitled to convert such Security in the period
described below.

          In the case of a distribution contemplated in clauses (4) and (5) above, the Company will
notify Holders at least 20 days prior to the ex-dividend date for such distribution (the
“Distribution Notice”). Once the Company has given the Distribution Notice, Holders may surrender
their Securities for conversion at any time until the earlier of the close of business on the last
Business Day preceding the ex-dividend date or the Company’s announcement that such distribution
will not take place. If in the future the Company adopts a new Rights Plan, Holders will not have
any conversion right pursuant to clause (4) above or otherwise, solely as a result of the issuance
of Rights pursuant to a Rights Plan. Notwithstanding the foregoing, in the event of a distribution
contemplated in clauses (4) and (5) above, Holders may not convert the Securities if the Holders
may participate in such distribution without converting their Securities. In the event of a
consolidation, merger or sale of all or substantially all of the Company’s assets as contemplated
in clause (6) above, the Company will notify Holders at least 20 days prior to the anticipated
closing date of such transaction (the “Merger Notice”). Once the Company has given the Merger
Notice, the Holders may, in the event of such consolidation, merger or sale of all or substantially
all of the Company’s assets, as contemplated in clause (6) above, surrender Securities for
conversion at any time from and after the date which is 15 days prior to the anticipated effective
date of such transaction until the date which is 15 days after the actual effective date of such
transaction.

          Furthermore, subject to the provisions of the Indenture, the Holder of a Security is entitled,
at its option, to convert the principal amount of this Security (or any portion thereof equal to
$1,000 or any integral multiple of $1,000 in excess thereof) for the five Business Day period after
any five consecutive Trading Day period in which the average of the Trading Prices for the
Securities for such five Trading Day period was less than 95% of the average Conversion Value for
the Securities during such period; provided, however, if on the Conversion Date, the Closing Sale
Price of shares of Common Stock is greater than the then current Conversion Price of the Securities
and less than or equal to 120% of the then current Conversion Price of the Securities, a Holder
surrenders its Securities for conversion and the Securities are not otherwise convertible, then
such Holder will receive, at the Company’s option, cash with a value equal to the principal amount
of such Holder’s Securities on such Conversion Date. The Trustee will determine the average
Trading Prices after being requested by the Company to do so as more fully described in the
Indenture.

          A Holder may convert this Security, subject to the terms and conditions provided above and in
the Indenture, at any time on or before the close of business on the date of Maturity (or in case
the Holder hereof has exercised his right to require the Company to purchase or repurchase this
Security or the Company has called this Security for redemption or such portion hereof, until the
Business Day immediately preceding, but (unless the Company defaults in making the payment due upon
redemption, purchase or repurchase, as the case may be) not after, the close of business on the
Business Day immediately preceding the Redemption Date, Purchase Date or Repurchase Date as

26

 

the case may be) to convert this Security (or any portion of the principal amount hereof that
is an integral multiple of U.S. $1,000 into cash and, at the Company’s option, fully paid and
nonassessable shares of Common Stock, at an initial Conversion Rate of 103.4468 shares of Common
Stock for each U.S. $1,000 principal amount of Securities (or at the then current adjusted
Conversion Rate if an adjustment has been made as provided in the Indenture) by surrender of this
Security, duly endorsed or assigned to the Company or in blank.

          In order to convert this Security, the Holder shall deliver the conversion notice hereon duly
executed and completed, to the Company at the Corporate Trust Office of the Trustee, or at such
other office or agency of the Company, subject to any laws or regulations applicable thereto and
subject to the right of the Company to terminate the appointment of any Conversion Agent (as
defined below) as may be designated by it for such purpose in the Borough of Manhattan, The City of
New York, or at such other offices or agencies as the Company may designate (each a “Conversion
Agent”).

          In case such surrender shall be made during the period 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, the conversion notice shall be accompanied by payment in New York Clearing
House or other funds acceptable to the Company of an amount equal to the interest payable on such
Interest Payment Date on the principal amount of this Security then being converted.
Notwithstanding the foregoing, if this Security or portion hereof has been called for redemption on
a Redemption Date, is repurchasable on a Repurchase Date or purchasable on a Purchase Date
occurring, in any such case, during the period from the close of business on any Regular Record
Date next preceding any Interest Payment Date to the opening of business on such succeeding
Interest Payment Date, and as a result, the right to convert this Security would otherwise
terminate in such period if not exercised, or if the Company is in arrears on any previously due
interest payment as of the Conversion Date, and this Security is surrendered for conversion during
such period, then the Holder of this Security on such Regular Record Date will be entitled to
receive the amount of interest accruing hereon from the Interest Payment Date next preceding the
date of such conversion to such succeeding Interest Payment Date and the Holder of this Security
who converts this Security or a portion hereof during such period shall not be required to pay such
amount upon surrender of this Security for conversion.

          Subject to the provisions of the immediately preceding paragraph and, in the case of a
conversion after the close of business on the Regular Record Date next preceding any Interest
Payment Date and on or before the close of business on such Interest Payment Date, to the right of
the Holder of this Security (or any Predecessor Security of record as of such Regular Record Date)
to receive the related installment of interest to the extent and under the circumstances provided
in the Indenture, no cash payment or adjustment is to be made on conversion for interest, if any,
accrued hereon from the Interest Payment Date next preceding the date of conversion, or for
dividends on the Common Stock issued on conversion hereof. The Company shall thereafter deliver to
the Holder, in respect of each $1000 principal amount of Securities: (i) cash, in an amount equal
to the lessor of (A) the principal amount of each Security to be converted and (B) the Conversion
Value and (ii) if the Conversion Value is greater than the principal amount of each new note, at
the Company’s

27

 

election, a number of shares of Common Stock equal to the sum of the Daily Share Amounts,
calculated as described in the Indenture, or a cash amount equal to the sum of the Daily Cash
Amounts, calculated as described in the Indenture.

          The Conversion Rate is subject to adjustment as provided in the Indenture.

          In addition, the Indenture provides that in case of certain consolidations or mergers to which
the Company is a party or the conveyance, transfer, sale or lease of all or substantially all of
the property and assets of the Company, the Indenture shall be amended, without the consent of any
Holders of Securities, so that this Security, if then Outstanding, will be convertible thereafter,
during the period this Security shall be convertible as specified above, only into the kind and
amount of securities, cash and other property receivable upon such consolidation, merger,
conveyance, transfer, sale or lease by a holder of the number of shares of Common Stock of the
Company into which this Security could have been converted immediately prior to such consolidation,
merger, conveyance, transfer, sale or lease (assuming such holder of Common Stock is not a
Constituent Person or an Affiliate of a Constituent Person, failed to exercise any rights of
election and received per share the kind and amount received per share by a plurality of
Non-electing Shares).

          No adjustment in the Conversion Rate will be made until such adjustment would require an
increase or decrease of at least one percent of such rate, provided that, any adjustment that would
otherwise be made will be carried forward and taken into account in the computation of any
subsequent adjustment.

          If a Change in Control occurs, the Holder of this Security, at the Holder’s option, shall have
the right, in accordance with the provisions of the Indenture, to require the Company to repurchase
this Security (or any portion of the principal amount hereof that is at least U.S. $1,000 or an
integral multiple of U.S. $1,000 in excess thereof, provided that the portion of the principal
amount of this Security to be Outstanding after such repurchase is at least equal to U.S. $1,000)
for cash at a Repurchase Price equal to 100% of the principal amount thereof plus accrued interest,
if any, to but excluding the Repurchase Date.

          If a Change in Control occurs prior to February 15, 2011, the Company will increase the
conversion rate for the notes surrendered for conversion by a number of additional shares, subject
to certain exceptions, provided, however, that no increase will be made in the case of a change in
control if at least 90% of the consideration paid for the Company’s common stock (excluding cash
payments for fractional shares and cash payments made pursuant to dissenters’ appraisal rights) in
such change in control transaction consists of shares of capital stock traded on the New York Stock
Exchange or another U.S. national securities exchange or quoted on the Nasdaq Stock Market or a
successor automated over-the-counter trading market in the United States (or that will be so traded
or quoted immediately following the transaction).

          The number of additional shares will be determined based on the effective date of the change
in control and the price paid per share of the Company’s common stock in such change in control
transaction.

28

 

          Whenever in this Security there is a reference, in any context, to the principal of any
Security as of any time, such reference shall be deemed to include reference to the Repurchase
Price payable in respect of such Security to the extent that such Repurchase Price is, was or would
be so payable at such time, and express mention of the Repurchase Price in any provision of this
Security shall not be construed as excluding the Repurchase Price so payable in those provisions of
this Security when such express mention is not made.

          [The following paragraph shall appear in each Global Security:

          In the event of a deposit or withdrawal of an interest in this Security, including an
exchange, transfer, redemption, repurchase or conversion of this Security in part only, the
Trustee, as custodian of the Depositary, shall make an adjustment on its records to reflect such
deposit or withdrawal in accordance with the Applicable Procedures.]

          [The following paragraph shall appear in each Security that is not a Global Security:

          In the event of redemption, repurchase or conversion of this Security in part only, a new
Security or Securities for the unredeemed, unrepurchased or unconverted portion hereof will be
issued in the name of the Holder hereof.]

          If an Event of Default shall occur and be continuing, the principal of all the Securities,
together with interest to the date of declaration, may be declared due and payable in the manner
and with the effect provided in the Indenture. Upon payment (i) of the amount of principal so
declared due and payable, together with interest to the date of declaration, and (ii) interest on
any overdue principal and, to the extent permitted by applicable law, on overdue interest, all of
the Company’s obligations in respect of the payment of the principal of and interest on the
Securities shall terminate.

          The Indenture permits, with certain exceptions as therein provided, the amendment thereof and
the modification of the rights and obligations of the Company and the rights of the Holders of the
Securities under the Indenture at any time by the Company and the Trustee with either (a) the
written consent of the Holders of not less than a majority in principal amount of the Securities at
the time Outstanding, or (b) by the adoption of a resolution, at a meeting of Holders of the
Outstanding Securities at which a quorum is present, by the Holders of at least 66?% in aggregate
principal amount of the Outstanding Securities represented and entitled to vote at such meeting.
The Indenture also contains provisions permitting the Holders of specified percentages in principal
amount of the Securities at the time Outstanding, on behalf of the Holders of all the Securities,
to waive compliance by the Company with certain provisions of the Indenture and certain past
defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of
this Security shall be conclusive and binding upon such Holder and upon all future Holders of this
Security and of any Security issued in exchange therefore or in lieu hereof whether or not notation
of such consent or waiver is made upon this Security or such other Security. Certain modifications
or amendments to the Indenture require the consent of the Holders of each Outstanding Security
affected.

          As provided in and subject to the provisions of the Indenture, the Holder of this Security
shall not have the right to institute any proceeding with respect to the Indenture or for the

29

 

appointment of a receiver or trustee or for any other remedy thereunder, unless such Holder
shall have previously given the Trustee written notice of a continuing Event of Default, the
Holders of not less than 25% in principal amount of the Outstanding Securities shall have made
written request to the Trustee to institute proceedings in respect of such Event of Default as
Trustee and offered the Trustee reasonable indemnity and the Trustee shall not have received from
the Holders of a majority in principal amount of the Securities Outstanding a direction
inconsistent with such request, and shall have failed to institute any such proceeding, for 60 days
after receipt of such notice, request and offer of indemnity. The foregoing shall not apply to any
suit instituted by the Holder of this Security for the enforcement of any payment of principal
hereof, premium if any, or interest, hereon on or after the respective due dates expressed herein
or for the enforcement of the right to convert this Security as provided in the Indenture.

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

          As provided in the Indenture and subject to certain limitations therein set forth, the
transfer of this Security is registrable on the Security Register upon surrender of this Security
for registration of transfer at the Corporate Trust Office of the Trustee or at such other office
or agency of the Company as may be designated by it for such purpose in the Borough of Manhattan,
The City of New York (which shall initially be an office or agency of the Trustee), or at such
other offices or agencies as the Company may designate, duly endorsed by, or accompanied by a
written instrument of transfer in form satisfactory to the Company and the Security Registrar duly
executed by, the Holder thereof or his attorney duly authorized in writing, and thereupon one or
more new Securities, of authorized denominations and for the same aggregate principal amount, will
be issued to the designated transferee or transferees by the Registrar. No service charge shall be
made for any such registration of transfer or exchange, but the Company may require payment of a
sum sufficient to recover any tax or other governmental charge payable in connection therewith.

          Prior to due presentation of this Security for registration of transfer, the Company, the
Trustee and any agent of the Company or the Trustee may treat the Person in whose name such
Security is registered, as the owner thereof for all purposes, whether or not such Security be
overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the
contrary.

          No recourse for the payment of the principal, premium, if any or interest, on this Security
and no recourse under or upon any obligation, covenant or agreement of the Company in the Indenture
or any indenture supplemental thereto or in any Security, or because of the creation of any
indebtedness represented thereby, shall be had against any incorporator, stockholder, employee,
agent, officer or director or subsidiary, as such, past, present or future, of the Company or of
any successor corporation, either directly or through the Company or any successor corporation,
whether by virtue of any constitution, statute or rule of law or by the enforcement of any
assessment or penalty or otherwise, all such liability being, by the acceptance hereof and as part
of consideration for the issue hereof, expressly waived and released.

30

 

          THE INDENTURE AND THIS SECURITY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
INTERNAL LAWS OF THE STATE OF NEW YORK, THE UNITED STATES OF AMERICA INCLUDING, WITHOUT LIMITATION,
SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW AND NEW YORK CIVIL PRACTICE LAWS
AND RULE 327(B).

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

31

 

ABBREVIATIONS

          The following abbreviations, when used in the inscription of the face of this Security, shall
be construed as though they were written out in full according to applicable laws or regulations:

	 	 	 	 	 	 	 
	TEN COM

	 	as tenant in common
	 	UNIF GIFT MIN ACT
	 	___Custodian ___
	TEN ENT

	 	as tenants by the entireties (Cust)
	 	 	 	(Cust) (Minor)
	JT TEN

	 	as joint tenants with right of
	 	 	 	under Uniform Gifts to
	

	 	survivorship and not as tenants in
	 	 	 	Minors Act ___
	

	 	common	 	 	 	 
	

	 	 	 	 	 	(State)

Additional abbreviations may also be used though not in the above list.

32

 

ELECTION OF HOLDER TO REQUIRE REPURCHASE

          (1) Pursuant to Section 13.1 of the Indenture, the undersigned hereby elects to have this
Security repurchased by the Company.

          (2) The undersigned hereby directs the Trustee or the Company to pay it or ___an
amount in cash or, at the Company’s election, Common Stock valued as set forth in the Indenture,
equal to 100% of the principal amount to be repurchased (as set forth below), plus accrued and
unpaid interest to, but excluding, the Repurchase Date, as provided in the Indenture.

Dated:

	 	 	 
	

	 	 
	 
	 	 
	

	 	 
	Signature(s)
	 	 

Signature(s) must be guaranteed by an Eligible
Guarantor Institution with membership in an
approved signature guarantee program pursuant
to Rule 17Ad-15 under the Securities Exchange
Act of 1934, as amended.

Signature Guaranteed

Principal amount to be repurchased (at least

U.S. $1,000 or an integral multiple of U.S. $1,000

in excess thereof): ___

Remaining principal amount following such

repurchase (not less than U.S. $1,000):                                        

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

SECTION 2.3 Form of Certificate of Authentication.

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

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

33

 

Dated:                                        

	 	 	 	 	 	 	 
	 	 	 	 	 
	 	 	as Trustee	 	 
	 
	 	 	 	 	 	 
	

	 	By:	 	 	 	 
	

	 	 	 	

	 	 
	

	 	 	 	Authorized Signatory	 	 

SECTION 2.4 Form of Conversion Notice.

          A Holder’s conversion notice shall be substantially in the following form:

CONVERSION NOTICE

          The undersigned Holder of this Security hereby irrevocably exercises the option to convert
this Security, or any portion of the principal amount hereof (which is U.S. $1,000 or an integral
multiple of U.S. $1,000 in excess thereof, provided that the unconverted portion of such principal
amount is U.S. $1,000 or any integral multiple of U.S. $1,000 in excess thereof) below designated,
into cash and, at our option, shares of Common Stock in accordance with the terms of the Indenture
referred to in this Security, and directs that a check in payment for the shares, “principal
return” as defined in the Indenture, the “net shares,” and any Securities representing any
unconverted principal amount hereof, be delivered to and be registered in the name of the
undersigned unless a different name has been indicated below. If shares of Common Stock or
Securities are to be registered in the name of a Person other than the undersigned, (a) the
undersigned will pay all transfer taxes payable with respect thereto and (b) signature(s) must be
guaranteed by an Eligible Guarantor Institution with membership in an approved signature guarantee
program pursuant to Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended. Any amount
required to be paid by the undersigned on account of interest accompanies this Security.

	 	 	 	 	 
	Dated:
	 	 	 	 
	

	 	 
	 	 
	

	 	 	 	Signature(s)

If shares or Securities are to be registered in the
name of a Person other than the Holder, please
print such Person’s name and address:

(Name)
 

(Address)
 

34

 

Social Security or other Identification

Number, if any

Signature Guaranteed
 

If only a portion of the Securities is to be converted, please indicate:

	1.  	Principal amount to be converted: U.S. $ ___
	 
	2.  	Principal amount and denomination of Securities
	   	representing unconverted principal amount to be issued:
	 
	   	Amount: U.S. $                                              Denominations: U.S. $                                        

(U.S. $1,000 or any integral multiple of U.S. $1,000 in excess thereof, provided that the
unconverted portion of such principal amount is U.S. $1,000 or any integral multiple of U.S. $1,000
in excess thereof)

SECTION 2.5 Form of Assignment.

          A Holder’s assignment notice shall be substantially in the following form:

ASSIGNMENT

          For value received ___hereby sell(s), assign(s) and transfer(s) unto
___(Please insert social security or other identifying number of assignee) the within
Security, and hereby irrevocably constitutes and appoints ___as attorney to
transfer the said Security on the books of the Company, with full power of substitution in the
premises.

Dated: __________________________

	 	 	 
	

	 	 
	

	 	Signature(s)
	 
	 	 
	

	 	Signature(s) must be guaranteed by an Eligible
	

	 	Guarantor Institution with membership in an
	

	 	approved signature guarantee program pursuant
	

	 	to Rule 17Ad — 15 under the Securities
	

	 	Exchange Act of 1934, as amended.

35

 

	 	 	 
	

	 	 
	

	 	Signature Guaranteed

36

 

ARTICLE III

THE SECURITIES

SECTION 3.1 Title and Terms.

          The aggregate principal amount of Securities which may be authenticated and delivered under
this Indenture is limited to U.S. $450,000,000, except for Securities authenticated and delivered
pursuant to Section 3.4, 3.5, 3.6, 8.5, 12.2, 13.2(5) or 13.6 in exchange for, or in lieu of, other
Securities previously authenticated and delivered under this Indenture.

          The Securities shall be known and designated as the “0.50% Convertible Senior Notes, Series B
due February 15, 2034” of the Company. Their Stated Maturity shall be February 15, 2034 and they
shall bear interest on their principal amount from February 15, 2005, payable semi-annually in
arrears on February 15 and August 15 in each year, commencing August 15, 2005, at the rate of 0.50%
per annum until the principal thereof is due and at the rate of 0.50% per annum on any overdue
principal and, to the extent permitted by law, on any overdue interest; provided, however, that
payments shall only be made on a Business Day as provided in Section 1.12.

          The principal of, premium, if any, and interest on the Securities shall be payable as provided
in the form of Securities set forth in Section 2.2, and the Repurchase Price, whether payable in
cash or in shares of Common Stock, shall be payable at such places as are identified in the Company
Notice given pursuant to Section 13.2 (any city in which any Paying Agent is located being herein
called a “Place of Payment”).

          The Securities are redeemable at the option of the Company at any time on or after February
20, 2011, in whole or in part, subject to the conditions and as otherwise provided in Article XI
and in the form of Security set forth in Section 2.2.

          The Securities shall be convertible as provided in Article XII (any city in which any
Conversion Agent is located being herein called a “Place of Conversion”).

          The Securities shall be subject to repurchase by the Company at the option of the Holders on
each February 15, of each of 2011, 2014, 2019, 2024 and 2029, as provided in Article XIII.

SECTION 3.2 Denominations.

          The Securities shall be issuable only in registered form, without coupons, in denominations of
U.S. $1,000 and integral multiples of U.S. $1,000 in excess thereof.

SECTION 3.3 Execution, Authentication, Delivery and Dating

37

 

          The Securities shall be executed on behalf of the Company by its Chairman of the Board, its
Vice Chairman of the Board, its Chief Executive Officer, its President, its Chief Financial
Officer, one of its Executive Vice Presidents, one of its Senior Vice Presidents or one of its Vice
Presidents, and attested by its Chief Financial Officer, Secretary or one of its Assistant
Secretaries. Any such signature may be manual or facsimile.

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

          At any time and from time to time after the execution and delivery of this Indenture, the
Company may deliver Securities executed by the Company to the Trustee or to its order for
authentication, together with a Company Order for the authentication and delivery of such
Securities, and the Trustee in accordance with such Company Order shall authenticate and make
available for delivery such Securities as in this Indenture provided.

          Each Security shall be dated the date of its authentication.

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

SECTION 3.4 Global Securities; Non-Global Securities; Book-entry Provisions.

          (1) Global Securities.

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

               (ii) Except for exchanges of Global Securities for definitive, Non-global Securities
at the sole discretion of the Company, no Global Security may be exchanged in whole or in
part for Securities registered, and no transfer of a Global Security in whole or in part
may be registered, in the name of any Person other than the Depositary for such Global
Security or a nominee thereof unless (A) such Depositary (i) has notified the Company that
it is unwilling, unable or no longer qualified to continue as Depositary for such

38

 

Global Security or (ii) has ceased to be a clearing agency registered as such under
the Exchange Act or announces an intention permanently to cease business or does in fact do
so, (B) the Company, at its option, notifies the Trustee in writing that the Company elects
to cause the issuance of the Securities in certificated form, or (C) there shall have
occurred and be continuing an Event of Default with respect to such Global Security. In
such event, if a successor Depositary for such Global Security is not appointed by the
Company within 90 days after the Company receives such notice or becomes aware of such
ineligibility, the Company will execute, and the Trustee, upon receipt of an Officers’
Certificate directing the authentication and delivery of Securities, will authenticate and
deliver, Securities, in any authorized denominations in an aggregate principal amount equal
to the principal amount of such Global Security in exchange for such Global Security.

               (iii) If any Global Security is to be exchanged for other Securities or canceled in
whole, it shall be surrendered by or on behalf of the Depositary or its nominee to the
Trustee, as Security Registrar, for exchange or cancellation, as provided in this Article
III. If any Global Security is to be exchanged for other Securities or canceled in part, or
if another Security is to be exchanged in whole or in part for a beneficial interest in any
Global Security, in each case, as provided in Section 3.5, then either (A) such Global
Security shall be so surrendered for exchange or cancellation, as provided in this Article
III, or (B) the principal amount thereof shall be reduced or increased by an amount equal
to the portion thereof to be so exchanged or canceled, or equal to the principal amount of
such other Security to be so exchanged for a beneficial interest therein, as the case may
be, by means of an appropriate adjustment made on the records of the Trustee, as Security
Registrar, whereupon the Trustee, in accordance with the Applicable Procedures, shall
instruct the Depositary or its authorized representative to make a corresponding adjustment
to its records. Upon any such surrender or adjustment of a Global Security, the Trustee
shall, subject to Section 3.5(3) and as otherwise provided in this Article III,
authenticate and deliver any Securities issuable in exchange for such Global Security (or
any portion thereof) to or upon the order of, and registered in such names as may be
directed by, the Depositary or its authorized representative. Upon the request of the
Trustee in connection with the occurrence of any of the events specified in the preceding
paragraph, the Company shall promptly make available to the Trustee a reasonable supply of
Securities that are not in the form of Global Securities. The Trustee shall be entitled to
rely upon any order, direction or request of the Depositary or its authorized
representative which is given or made pursuant to this Article III if such order, direction
or request is given or made in accordance with the Applicable Procedures.

               (iv) Every Security authenticated and delivered upon registration of transfer of, or
in exchange for or in lieu of, a Global Security or any portion thereof, whether pursuant
to this Article III or otherwise, shall be authenticated and delivered in the form of, and
shall be, a registered Global Security, unless such Security is registered in the name of a
Person other than the Depositary for such Global Security or a nominee thereof, in which
case such Security shall be authenticated and delivered in definitive, fully registered
form, without interest coupons.

39

 

               (v) The Depositary or its nominee, as registered owner of a Global Security, shall be
the Holder of such Global Security for all purposes under the Indenture and the Securities,
and owners of beneficial interests in a Global Security shall hold such interests pursuant
to the Applicable Procedures. Accordingly, any such owner’s beneficial interest in a Global
Security will be shown only on, and the transfer of such interest shall be effected only
through, records maintained by the Depositary or its nominee or its Agent Members and such
owners of beneficial interests in a Global Security will not be considered the owners or
holders thereof.

          (2) Non-global Securities. Securities issued upon the events described in Section 3.4(l)(ii)
shall be in definitive, fully registered form, without interest coupons.

SECTION 3.5 Registration; Registration of Transfer and Exchange; Restrictions on Transfer.

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

          Upon surrender for registration of transfer of any Security at an office or agency of the
Company designated pursuant to Section 10.2 for such purpose, the Company shall execute, and the
Trustee shall authenticate and deliver, in the name of the designated transferee or transferees,
one or more new Securities of any authorized denominations and of a like aggregate principal amount
and bearing such restrictive legends as may be required by this Indenture.

          At the option of the Holder, and subject to the other provisions of this Section 3.5,
Securities may be exchanged for other Securities of any authorized denomination and of a like
aggregate principal amount, upon surrender of the Securities to be exchanged at any such office or
agency. Whenever any Securities are so surrendered for exchange, and subject to the other
provisions of this Section 3.5, the Company shall execute, and the Trustee shall authenticate and
deliver, the Securities that the Holder making the exchange is entitled to receive. Every Security
presented or surrendered for registration of transfer or for exchange shall (if so required by the
Company or the Security Registrar) be duly endorsed, or be accompanied by a written instrument of
transfer in form satisfactory to the Company, the Trustee and the Security Registrar duly executed,
by the Holder thereof or his attorney duly authorized in writing.

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

40

 

          No service charge shall be made to a Holder for any registration of transfer or exchange of
Securities except as provided in Section 3.6, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in connection with any
registration of transfer or exchange of Securities, other than exchanges pursuant to Section 3.4,
8.5, 12.2, 13.2(5) or 13.6 (other than where the shares of Common Stock are to be issued or
delivered in a name other than that of the Holder of the Security) not involving any transfer and
other than any stamp and other duties, if any, which may be imposed in connection with any such
transfer or exchange by the United States or any political subdivision thereof or therein, which
shall be paid by the Company.

          In the event of a redemption of the Securities, neither the Company nor the Securities
Registrar will be required (a) to register the transfer of or exchange Securities for a period of
15 days immediately preceding the date notice is given identifying the serial numbers of the
Securities called for such redemption or (b) to register the transfer of or exchange any Security,
or portion thereof, called for redemption.

          (2) Certain Transfers and Exchanges. Notwithstanding any other provision of this
Indenture or the Securities, transfers and exchanges of Securities and beneficial interests in a
Global Security of the kinds specified in this Section 3.5(2) shall be made only in accordance with
this Section 3.5(2).

               (i) Global Security to Non-Global Security. In the event that Non-global
Securities are to be issued pursuant to Section 3.4(1)(ii) in connection with any transfer
of Securities, such transfer may be effected only in accordance with the provisions of this
clause (2)(i) and subject to the Applicable Procedures. Upon receipt by the Trustee, as
Security Registrar, of (A) a Company Order from the Company directing the Trustee, as
Security Registrar, to (x) authenticate and deliver one or more Securities of the same
aggregate principal amount as the beneficial interest in the Global Security to be
transferred, such instructions to contain the name or names of the designated transferee or
transferees, the authorized denomination or denominations of the Securities to be so issued
and appropriate delivery instructions and (y) decrease the beneficial interest of a
specified Agent Member’s account in a Global Security by a specified principal amount not
greater than the principal amount of such Global Security, and (B) such other
certifications, legal opinions or other information as the Company or the Trustee may
reasonably require to confirm that such transfer is being made pursuant to an exemption
from, or in a transaction not subject to, the registration requirements of the Securities
Act, then the Trustee, as Security Registrar, shall decrease the principal amount of the
Global Security by the specified amount and authenticate and deliver Securities in
accordance with such instructions from the Company as provided in Section 3.4(1)(iii).

               (ii) Non-Global Security to Global Security. If the Holder of a Security
(other than a Global Security) wishes at any time to transfer all or any portion of such
Security to a Person who wishes to take delivery thereof in the form of a beneficial
interest in the Global Security, such transfer may be effected only in accordance with the

41

 

provisions of this clause (2)(ii) and subject to the Applicable Procedures. Upon
receipt by the Trustee, as Security Registrar, of such Security as provided in Section
3.5(1) and instructions from the Company directing that a beneficial interest in the Global
Security in a specified principal amount not greater than the principal amount of such
Security be credited to a specified Agent Member’s account, then the Trustee, as Security
Registrar, shall cancel such Security (and issue a new Security in respect of any
untransferred portion thereof) as provided in Section 3.5(1) and increase the principal
amount of the Global Security by the specified principal amount as provided in Section
3.4(1)(iii).

SECTION 3.6 Mutilated, Destroyed, Lost or Stolen Securities.

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

          If there be delivered to the Company and to the Trustee:

          (1) evidence to their satisfaction of the destruction, loss or theft of any Security, and

          (2) such security or indemnity as may be satisfactory to the Company and the Trustee to save
each of them and any agent of either of them harmless, then, in the absence of actual notice to the
Company or the Trustee that such Security has been acquired by a bona fide purchaser, the Company
shall execute and the Trustee shall authenticate and deliver, in lieu of any such destroyed, lost
or stolen Security, a new Security of like tenor and principal amount and bearing a number not
contemporaneously outstanding.

          In case any such mutilated, destroyed, lost or stolen Security has become or is about to
become due and payable, the Company in its discretion, but subject to any conversion rights, may,
instead of issuing a new Security, pay such Security, upon satisfaction of the conditions set forth
in the preceding paragraph.

          Upon the issuance of any new Security under this Section 3.6, 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 (other than any stamp and other duties, if any, which may be imposed in connection
therewith by the United States or any political subdivision thereof or therein, which shall be paid
by the Company) and any other expenses (including the fees and expenses of the Trustee) connected
therewith.

          Every new Security issued pursuant to this Section 3.6 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 such new Security shall be entitled to all the benefits of this
Indenture equally and proportionately with any and all other Securities duly issued hereunder.

42

 

          The provisions of this Section 3.6 are exclusive and shall preclude (to the extent lawful) all
other rights and remedies of any Holder with respect to the replacement or payment of mutilated,
destroyed, lost or stolen Securities.

SECTION 3.7 Payment of Interest; Interest Rights Preserved.

          Subject to the last paragraph of this Section 3.7, interest on any Security that is payable,
and is punctually paid or duly provided for, on any Interest Payment Date shall be paid to the
Person in whose name that Security (or one or more Predecessor Securities) is registered at the
close of business on the Regular Record Date for such interest.

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

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

          (2) The Company may make payment of any Defaulted Interest in any other lawful manner not
inconsistent with the requirements of any securities exchange on which the 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.

43

 

          Subject to the provisions of this Section 3.7 and Section 3.5, each Security delivered under
this Indenture upon registration of transfer of or in exchange for or in lieu of any other Security
shall carry the rights to interest accrued and unpaid, and to accrue, which were carried by such
other Security.

          Interest on any Security that is converted in accordance with Section 12.2 during a Record
Date Period shall be payable in accordance with the provisions of Section 12.2.

SECTION 3.8 Persons Deemed Owners.

          Prior to due presentment of a Security for registration of transfer, the Company, the Trustee,
any Paying Agent and any agent of the Company, the Trustee or any Paying Agent 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, premium, if any, interest (subject to Section 3.7) on such
Security and for all other purposes whatsoever, whether or not such Security be overdue, and
neither the Company, the Trustee, any Paying Agent nor any agent of the Company, the Trustee or any
Paying Agent shall be affected by notice to the contrary.

SECTION 3.9 Cancellation.

          All Securities surrendered for payment, purchase, repurchase, redemption registration of
transfer or exchange or conversion shall, if surrendered to any Person other than the Trustee, be
delivered to the Trustee. All Securities so delivered to the Trustee shall be canceled promptly by
the Trustee (or its agent). No Securities shall be authenticated in lieu of or in exchange for any
Securities canceled as provided in this Section 3.9. The Trustee shall dispose of all canceled
Securities in accordance with applicable law and its customary practices in effect from time to
time.

SECTION 3.10 Computation of Interest.

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

SECTION 3.11 CUSIP Numbers.

          The Company in issuing Securities may use “CUSIP” numbers (if then generally in use) in
addition to serial numbers; if so, the Trustee shall use such CUSIP numbers in addition to serial
numbers in any notice of redemption or repurchase as a convenience to Holders; provided that any
such notice may state that no representation is made as to the correctness of such CUSIP numbers

44

 

either as printed on the Securities or as contained in any notice of a redemption or
repurchase and that reliance may be placed only on the serial or other identification numbers
printed on the Securities, and any such redemption or repurchase shall not be affected by any
defect in or omission of such CUSIP numbers.

ARTICLE IV

SATISFACTION AND DISCHARGE

SECTION 4.1 Satisfaction and Discharge of Indenture.

          This Indenture shall upon Company Request cease to be of further effect, and the Trustee, at
the expense of the Company, shall execute proper instruments in form and substance satisfactory to
the Trustee acknowledging satisfaction and discharge of this Indenture, when

          (1) either

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

               (ii) all such Securities not theretofore delivered to the Trustee or its agent for
cancellation (other than Securities referred to in clauses (A) and (B) of clause (1)(i)
above)

               (a) have become due and payable, or

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

               (c) are to be called for redemption within one year under arrangements satisfactory to
the Trustee for the giving of notice of redemption by the Trustee in the name and at the
expense of the Company, and the Company, in the case of clause (i) or (ii) above, has
deposited or caused to be deposited with the Trustee as trust funds (immediately available
to the Holders in the case of clause (ii)(a) above) in trust for the purpose an amount in
cash sufficient to pay and discharge the entire indebtedness on such Securities not
theretofore delivered to the Trustee for cancellation, for principal, premium, if any,
interest to the date of such deposit (in the case of Securities which have become due and
payable) or to the Stated Maturity or Redemption Date, as the case may be;

45

 

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

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

          Notwithstanding the satisfaction and discharge of this Indenture, any surviving rights of
conversion, or registration of transfer or exchange, or replacement of Securities expressly
provided for herein or in the form of Securities set forth in Section 2.2, the obligations of the
Company to the Trustee under Section 6.7, the obligations of the Company to any Authenticating
Agent under Section 6.12, if money shall have been deposited with the Trustee pursuant to clause
(1)(ii) of this Section 4.1, the obligations of the Trustee under Section 4.2 and the last
paragraph of Section 10.3 and the obligations of the Company and the Trustee under Section 3.5 and
Article XII shall survive.

SECTION 4.2 Application of Trust Money.

          Subject to the provisions of the last paragraph of Section 10.3, all money deposited with the
Trustee pursuant to Section 4.1 and in accordance with the provisions of Article XIII shall be held
in trust for the sole benefit of the Holders and such monies shall be applied by the Trustee, in
accordance with the provisions of the Securities and this Indenture, to the payment, either
directly or through any Paying Agent, to the Persons entitled thereto, of the principal, premium,
if any and interest, for whose payment such money has been deposited with the Trustee.

          All money deposited with the Trustee pursuant to Section 4.1 (and held by it or any Paying
Agent) for the payment of Securities subsequently converted shall be returned to the Company upon
Company Request.

          The Company shall pay and indemnify the Trustee against any tax, fee or other charge imposed
or assessed against all money deposited with the Trustee pursuant to Section 4.1 (other than income
taxes and franchise taxes incurred or payable by the Trustee and such other taxes, fees or charges
incurred or payable by the Trustee that are not directly the result of the deposit of such money
with the Trustee).

ARTICLE V

REMEDIES

SECTION 5.1 Events of Default.

46

 

          “Event of Default”, wherever used herein, means any one of the following events (whatever the
reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by
operation of law or pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body):

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

          (2) default in the payment of the principal on any Security at its Maturity (including any
Redemption Price, Repurchase Price or Purchase Price); or

          (3) any indebtedness under any bonds, debentures, notes or other evidences of indebtedness for
money borrowed (or guarantee thereof) by the Company (an “Instrument”) in an aggregate principal
amount in excess of U.S. $50,000,000 (or following a Fall-Away Event, in excess of U.S.
$100,000,000), whether such indebtedness now exists or shall hereafter be created, is not paid at
final maturity under any Instrument (either at its stated maturity or upon acceleration thereof),
and such indebtedness is not discharged, or such acceleration is not rescinded or annulled, within
a period of 30 days after there shall have been given, by registered or certified mail, to the
Company by the Trustee or to the Company and the Trustee by the Holders of at least 25% in
principal amount of the Outstanding Securities a written notice specifying such default and
requiring the Company to cause such indebtedness to be discharged or cause such default to be cured
or waived or such acceleration to be rescinded or annulled and stating that such notice is a
“Notice of Default” hereunder; or

          (4) failure by the Company to give a Company Notice in accordance with Section 13.2; or

          (5) failure to deliver shares of Common Stock within 10 Business Days after such Common Stock
is required to be delivered following conversion of the Securities; or

          (6) default or breach in the performance of any covenant of the Company in this Indenture
(other than a covenant a default in the performance of which is specifically dealt with elsewhere
in this Section 5.1), and continuance of such default for a period of 60 days after there has been
given, by registered or certified mail, to the Company by the Trustee or to the Company and the
Trustee by the Holders of at least 25% in principal amount of the Outstanding Securities a written
notice specifying such default or breach and requiring it to be remedied and stating that such
notice is a “Notice of Default” hereunder; or

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

47

 

property of either, or ordering the winding up or liquidation of the affairs of either of
them, and the continuance of any such decree or order for relief or any such other decree or order
unstayed and in effect for a period of 60 consecutive days; or

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

SECTION 5.2 Acceleration of Maturity; Rescission and Annulment.

          If an Event of Default (other than an Event of Default specified in Section 5.1(7) or 5.1(8)
with respect to the Company) occurs and is continuing, then in every such case the Trustee or the
Holders of not less than 25% in principal amount of the Outstanding Securities may declare the
principal of, and any accrued interest on, all the Securities to be due and payable immediately, by
a notice in writing to the Company (and to the Trustee if given by the Holders), and upon any such
declaration such principal and accrued interest thereon shall become immediately due and payable.
If an Event of Default specified in Section 5.1(7) or 5.1(8) with respect to the Company occurs,
the principal and accrued interest on of all the Securities shall, ipso facto, become immediately
due and payable without any declaration or other Act of the Holders or any act on the part of the
Trustee.

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

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

               (i) all overdue interest on all Securities;

48

 

               (ii) the principal of and premium, if any, on any Securities that have become due
otherwise than by such declaration of acceleration and any interest thereon at the rate
borne by the Securities;

               (iii) to the extent permitted by applicable law, interest upon overdue interest at a
rate of 0.50% per annum; and

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

          (2) all Events of Default, other than the nonpayment of the principal of and any premium and
interest on Securities which have become due solely by such declaration of acceleration, have been
cured or waived as provided in Section 5.13; and

          (3) such rescission and annulment would not conflict with any judgment or decree issued in
appropriate judicial proceedings regarding the payment by the Trustee to the Holders of the amounts
referred to in 5.2(1).

          No rescission or annulment referred to above shall affect any subsequent default or impair any
right consequent thereon.

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

          The Company covenants that if:

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

          (2) default is made in the payment of the principal of or premium, if any, on any Security at
the Maturity thereof,

the Company will, upon demand of the Trustee pay to it, for the benefit of the Holders of such
Securities, the whole amount then due and payable on such Securities for principal and interest,
interest on any overdue principal and premium, and to the extent permitted by applicable law,
interest upon overdue interest at a rate of 0.50% per annum and such further amount as shall be
sufficient to cover the reasonable costs and expenses of collection, including the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents and counsel.

          If the Company fails to pay such amounts forthwith upon such demand, the Trustee, in its own
name and as trustee of an express trust, may institute a judicial proceeding for the collection of
the sums so due and unpaid, may prosecute such proceeding to judgment or final decree and may
enforce the same against the Company or any other obligor upon the Securities and collect the

49

 

moneys adjudged or decreed to be payable in the manner provided by law out of the property of
the Company or any other obligor upon the Securities, wherever situated.

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

SECTION 5.4 Trustee May File Proofs of Claim.

          In case of 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 the creditors of either, the Trustee (irrespective of whether the principal or interest
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 overdue principal or interest) shall be entitled and empowered, by intervention in such
proceeding or otherwise,

          (1) to file a proof of claim for the whole amount of principal, premium, if any, and interest
owing and unpaid in respect of the Securities and take such other actions, including participating
as a member, voting or otherwise, of any official committee of creditors appointed in such matter,
and to file such other papers or documents, in each of the foregoing cases, as may be necessary or
advisable in order to have the claims of the Trustee (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents and counsel) and of
the Holders of Securities allowed in such judicial proceeding, and

          (2) to collect and receive any moneys or other property payable or deliverable on any such
claim and to distribute the same; and any custodian, receiver, assignee, trustee, liquidator,
sequestrator or other similar official in any such judicial proceeding is hereby authorized by each
Holder of Securities 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 of Securities to pay to the Trustee
any amount due to it for the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel and any other amounts due the Trustee under Section 6.7.

          Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to
or accept or adopt on behalf of any Holder of a Security 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 of a Security in any such
proceeding; provided, however, that the Trustee may, on behalf of such Holders, vote for the
election of a trustee in bankruptcy or similar official.

50

 

SECTION 5.5 Trustee May Enforce Claims Without Possession of Securities.

          All rights of action and claims under this Indenture or the Securities may be prosecuted and
enforced by the Trustee without the possession of any of the Securities or the production thereof
in any proceeding relating thereto, and any such proceeding instituted by the Trustee shall be
brought in its own name as trustee of an express trust, and any recovery of judgment shall, after
provision for the payment of the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel, be for the ratable benefit of the Holders of the Securities in
respect of which judgment has been recovered.

SECTION 5.6 Application of Money Collected.

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

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

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

          THIRD: To such other Person or Persons, if any, to the extent entitled thereto; and

          FOURTH: Any remaining amounts shall be repaid to the Company.

SECTION 5.7 Limitation on Suits.

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

          (1) such Holder has previously given written notice to the Trustee of a continuing Event of
Default;

          (2) the Holders of not less than 25% in principal amount of the Outstanding Securities shall
have made written request to the Trustee to institute proceedings in respect of such Event of
Default in its own name as Trustee hereunder;

51

 

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

          (4) the Trustee for 60 days after its receipt of such notice, request and offer of indemnity
(or if requested, receipt of indemnity) has failed to institute any such proceeding; and

          (5) no direction inconsistent with such written request has been given to the Trustee during
such 60 day period by the Holders of a majority in principal amount of the Outstanding Securities,
it being understood and intended that no one or more of such Holders shall have any right in any
manner whatever by virtue of, or by availing of, any provision of this Indenture to affect, disturb
or prejudice the rights of any other of such Holders, or to obtain or seek to obtain priority or
preference over any other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all such Holders.

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

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

SECTION 5.9 Restoration of Rights and Remedies.

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

SECTION 5.10 Rights and Remedies Cumulative.

52

 

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

SECTION 5.11 Delay or Omission Not Waiver.

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

SECTION 5.12 Control by Holders of Securities.

          Subject to Section 6.3, the Holders of a majority in principal amount of the Outstanding
Securities shall have the right to direct the time, method and place of conducting any proceeding
for any remedy available to the Trustee or exercising any trust or power conferred on the Trustee,
provided that

          (1) such direction shall not be in conflict with any rule of law or with this Indenture, and

          (2) the Trustee may take any other action deemed proper by the Trustee which is not
inconsistent with such direction, and

          (3) the Trustee need not take any action that might involve it in personal liability or be
unjustly prejudicial to the Holders of Securities not consenting.

SECTION 5.13 Waiver of Past Defaults.

          The Holders, either (i) through the written consent of not less than a majority in principal
amount of the Outstanding Securities or (ii) by the adoption of a resolution, at a meeting of
Holders of the Outstanding Securities at which a quorum is present, by the Holders of at least 66?%
in principal amount of the Outstanding Securities represented at such meeting, may on behalf of the

53

 

Holders of all the Securities waive any past default hereunder and its consequences, except a
default (A) in the payment of the principal of, premium, if any, or interest, on any Security, or
(B) in respect of a covenant or provision hereof which under Article VIII cannot be modified or
amended without the consent of the Holder of each Outstanding Security affected.

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

SECTION 5.14 Undertaking for Costs.

          All parties to this Indenture agree, and each Holder of any Security by his acceptance thereof
shall be deemed to have agreed, that any court may in its discretion require, in any suit for the
enforcement of any right or remedy under this Indenture, or any suit against the Trustee for any
action taken, suffered or omitted by it as Trustee, the filing by any party litigant in such suit
of an undertaking to pay the costs of such suit, and that such court may in its discretion assess
reasonable costs, including reasonable attorneys’ fees, against any party litigant in such suit,
having due regard to the merits and good faith of the claims or defenses made by such party
litigant; but the provisions of this Section 5.14 shall not apply to any suit instituted by the
Company, to any suit instituted by the Trustee, to any suit instituted by any Holder, or group of
Holders, holding in the aggregate more than 10% in principal amount of the Outstanding Securities,
or to any suit instituted by any Holder of any Security for the enforcement of the payment of the
principal of, premium, if any, or interest on any Security on or after the respective Stated
Maturity or Maturities expressed in such Security (or, in the case of redemption or repurchase, on
or after the Redemption Date, Repurchase Date or Purchase Date, as the case may be) or for the
enforcement of the right to convert any Security in accordance with Article XII.

SECTION 5.15 Waiver of Stay, Usury or Extension Laws.

          The Company covenants (to the extent that it may lawfully do so) that it will not at any time
insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any
stay, usury or extension law wherever enacted, now or at any time hereafter in force, that 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 by reason of such law 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 VI

THE TRUSTEE

54

 

SECTION 6.1 Certain Duties and Responsibilities.

(1) Except during the continuance of an Event of Default,

               (i) the Trustee undertakes to perform such duties and only such duties as are
specifically set forth in this Indenture, and no implied covenants or obligations shall be
read into this Indenture against the Trustee; and

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

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

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

               (i) this paragraph (3) shall not be construed to limit the effect of paragraph (1) of
this Section;

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

               (iii) the Trustee shall not be liable with respect to any action taken or omitted to
be taken by it in good faith in accordance with the direction of the Holders of a majority
in principal amount of the Outstanding Securities relating to the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or exercising any trust
or power conferred upon the Trustee, under this Indenture; and

               (iv) no provision of this Indenture shall require the Trustee to expend or risk its
own funds or otherwise incur any financial liability in the performance of any of its
duties hereunder, or in the exercise of any of its rights or powers, if it shall have
reasonable grounds for believing that repayment of such funds or adequate indemnity against
such risk or liability is not reasonably assured to it.

55

 

          (4) Whether or not therein expressly so provided, every provision of this Indenture relating
to the conduct or affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section.

SECTION 6.2 Notice of Defaults.

          Within 90 days after the occurrence of any default hereunder as to which the Trustee has
received written notice, the Trustee shall give to all Holders of Securities, in the manner
provided in Section 1.6, notice of such default, unless such default shall have been cured or
waived; provided, however, that, except in the case of a default in the payment of the principal
of, premium, if any, or interest on any Security the Trustee shall be protected in withholding such
notice if and so long as the board of directors, the executive committee or a trust committee of
directors or Responsible Officers of the Trustee in good faith determines that the withholding of
such notice is in the interest of the Holders; and provided, further, that in the case of any
default of the character specified in Section 5.1(6), no such notice to Holders of Securities shall
be given until at least 60 days after the occurrence thereof or, if applicable, the expiration of
the cure period specified therein. For the purpose of this Section, the term “default” means any
event that is, or after notice or lapse of time or both would become, an Event of Default.

SECTION 6.3 Certain Rights of Trustee.

          Subject to the provisions of Section 6.1:

          (1) the Trustee may rely, and shall be protected in acting or refraining from acting, upon any
resolution, Officers’ Certificate, other certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture, note, coupon, other evidence of
indebtedness or other paper or document (collectively, the “Documents”) believed by it to be
genuine and to have been signed or presented by the proper party or parties, and the Trustee need
not investigate any fact or matter stated in such Documents;

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

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

56

 

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

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

          (6) the Trustee shall not be bound to make any investigation into the facts or matters stated
in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, coupon, other evidence of indebtedness or other paper or
document, but the Trustee 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;

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

          (8) Except with respect to Section 10.1 hereof, the Trustee shall have no duty to inquire as
to the performance of the Company’s covenants in Article X hereof. In addition, the Trustee shall
not be deemed to have knowledge of any default or Event of Default except (i) any Event of Default
occurring pursuant to Sections 5.1(1), 5.1(2) and 10.1 hereof or (ii) any default or Event of
Default of which the Trustee shall have received written notification in the manner set forth in
this Indenture or an officer in the corporate trust administration of the Trustee shall have
obtained actual knowledge.

SECTION 6.4 Not Responsible for Recitals or Issuance of Securities.

          The recitals contained herein and in the Securities (except the Trustee’s certificates of
authentication) shall be taken as the statements of the Company, and the Trustee assumes no
responsibility for their correctness. The Trustee makes no representations as to the validity or
sufficiency of this Indenture, of the Securities or of the Common Stock issuable upon the
conversion of the Securities. The Trustee shall not be accountable for the use or application by
the Company of Securities or the proceeds thereof.

SECTION 6.5 May Hold Securities, Act as Trustee under Other Indentures.

57

 

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

          The Trustee may become and act as trustee under other indentures under which other securities,
or certificates of interest or participation in other securities, of the Company are outstanding in
the same manner as if it were not Trustee hereunder.

SECTION 6.6 Money Held in Trust.

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

SECTION 6.7 Compensation and Reimbursement.

          The Company agrees:

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

          (2) except as otherwise expressly provided herein, to reimburse the Trustee upon its request
for all reasonable expenses, disbursements and advances incurred or made by the Trustee (including
costs and expenses of enforcing this Indenture and defending itself against any claim (whether
asserted by the Company, any Holder of Securities or any other Person) or liability in connection
with the exercise of any of its powers or duties hereunder) in accordance with any provision of
this Indenture (including the reasonable compensation and the expenses and disbursements of its
agents and counsel), except any such expense, disbursement or advance as may be attributable to its
negligence, willful misconduct or bad faith; and

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

58

 

          To secure the Company’s payment obligations to the Trustee in this Section 6.7, the Trustee
shall have a claim prior to the Securities on all money or property held or controlled by the
Trustee, other than money or property held in trust to pay principal and interest on the
Securities.

          When the Trustee incurs expenses or renders services in connection with an Event of Default
specified in Section 5.1(7) or Section 5.1(8), the expenses (including the reasonable charges of
its counsel) and the compensation for the services are intended to constitute expenses of the
administration under any applicable Federal or state bankruptcy, insolvency or other similar law.

          The provisions of this Section shall survive the termination of this Indenture or the earlier
resignation or removal of the Trustee.

SECTION 6.8 Corporate Trustee Required; Eligibility.

          There shall at all times be a Trustee hereunder which shall be a Person that is eligible
pursuant to the Trust Indenture Act to act as such, having (or be part of a holding company group
with) a combined capital and surplus of at least U.S. $50,000,000, subject to supervision or
examination by Federal or state authority, and in good standing. The Trustee or an Affiliate of the
Trustee shall maintain an established place of business in the Borough of Manhattan, The City of
New York. If such corporation publishes reports of condition at least annually, pursuant to law or
to the requirements of said supervising or examining authority, then for the purposes of this
Section, the combined capital and surplus of such corporation 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, it
shall resign immediately in the manner and with the effect hereinafter specified in this Article
and a successor shall be appointed pursuant to Section 6.9.

SECTION 6.9 Resignation and Removal; Appointment of Successor.

          (1) No resignation or removal of the Trustee and no appointment of a successor Trustee
pursuant to this Article shall become effective until the acceptance of appointment by the
successor Trustee in accordance with the applicable requirements of Section 6.10.

          (2) The Trustee may resign at any time by giving written notice thereof to the Company. If the
instrument of acceptance by a successor Trustee required by Section 6.10 shall not have been
delivered to the Trustee within 30 days after the giving of such notice of resignation, the
resigning Trustee may petition any court of competent jurisdiction for the appointment of a
successor Trustee.

          (3) The Trustee may be removed at any time by an Act of the Holders of a majority in principal
amount of the Outstanding Securities, delivered to the Trustee and the Company. If the instrument
of acceptance by a successor Trustee required by Section 6.10 shall not have been

59

 

delivered to the Trustee within 30 days after the giving of such notice of removal, the
removed Trustee may petition any court of competent jurisdiction for the appointment of a successor
Trustee.

          (4) The Trustee may be removed at any time by the Company and the Company may appoint a
successor Trustee pursuant to this Article, provided, that (i) there is not an Event of Default
that is continuing at the time of removal, (ii) the successor Trustee appointed by the Company
meets the eligibility requirements of Section 6.8, and (iii) such removal and resignation shall not
become effective until the acceptance of appointment by the successor Trustee in accordance with
the applicable requirements of Section 6.10.

          (5) If at any time:

               (i) the Trustee shall cease to be eligible under Section 6.8 and shall fail to resign
after written request therefor by the Company or by any Holder of a Security who has been a
bona fide Holder of a Security for at least six months, or

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

          then, in any such case (i) the Company by a Board Resolution may remove the Trustee, or (ii)
subject to Section 5.14, any Holder of a Security who has been a bona fide Holder of a Security for
at least six months may, on behalf of himself and all others similarly situated, petition any court
of competent jurisdiction for the removal of the Trustee and the appointment of a successor
Trustee.

          (6) If the Trustee shall resign, be removed or become incapable of acting, or if a vacancy
shall occur in the office of Trustee for any cause, the Company, by a Board Resolution, shall
promptly appoint a successor Trustee and shall comply with the applicable requirements of this
Section and Section 6.10. If, within one year after such resignation, removal or incapability, or
the occurrence of such vacancy, a successor Trustee shall be appointed by Act of the Holders of a
majority in principal amount of the Outstanding Securities delivered to the Company and the
retiring Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance of such
appointment in accordance with the applicable requirements of Section 6.10, become the successor
Trustee and supersede the successor Trustee appointed by the Company. If no successor Trustee shall
have been so appointed by the Company or the Holders of Securities and accepted appointment in the
manner required by this Section and Section 6.10, any Holder of a Security who has been a bona fide
Holder of a Security for at least six months may, on behalf of himself and all others similarly
situated, petition any court of competent jurisdiction for the appointment of a successor Trustee.

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

60

 

SECTION 6.10 Acceptance of Appointment by Successor.

          Every successor Trustee appointed hereunder shall execute, acknowledge and deliver to the
Company and to the retiring Trustee an instrument accepting such appointment, and thereupon the
resignation or removal of the retiring Trustee shall become effective and such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the rights, powers,
trusts and duties of the retiring Trustee; but, on the request of the Company or the successor
Trustee, such retiring Trustee shall, upon payment of its charges, execute and deliver an
instrument transferring to such successor Trustee all the rights, powers and trusts of the retiring
Trustee and shall duly assign, transfer and deliver to such successor Trustee all property and
money held by such retiring Trustee hereunder. Upon request of any such successor Trustee, the
Company shall execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all such rights, powers and trusts.

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

SECTION 6.11 Merger, Conversion, Consolidation or Succession to Business.

          Any corporation into which the Trustee may be merged or converted or with which it may be
consolidated, or any corporation resulting from any merger, conversion or consolidation to which
the Trustee shall be a party, or any corporation succeeding to all or substantially all of the
corporate trust business of the Trustee (including the trust created by this Indenture), shall be
the successor of the Trustee hereunder, provided such corporation shall be otherwise eligible under
this Article, without the execution or filing of any paper or any further act on the part of any of
the parties hereto. In case any Securities shall have been authenticated, but not delivered, by the
Trustee then in office, any successor by merger, conversion or consolidation to such authenticating
Trustee may adopt such authentication and deliver the Securities so authenticated with the same
effect as if such successor Trustee had itself authenticated such Securities.

SECTION 6.12 Authenticating Agents.

          The Trustee may, with the consent of the Company, appoint an Authenticating Agent or Agents
acceptable to the Company with respect to the Securities, which Authenticating Agent shall be
authorized to act on behalf of the Trustee to authenticate Securities issued upon exchange or
substitution pursuant to this Indenture.

          Securities authenticated by an Authenticating Agent shall be entitled to the benefits of this
Indenture and shall be valid and obligatory for all purposes as if authenticated by the Trustee

61

 

hereunder, and every reference in this Indenture to the authentication and delivery of
Securities by the Trustee or the Trustee’s certificate of authentication shall be deemed to include
authentication and delivery on behalf of the Trustee by an Authenticating Agent and a certificate
of authentication executed on behalf of the Trustee by an Authenticating Agent. Each Authenticating
Agent shall be subject to acceptance by the Company and shall at all times be a corporation
organized and doing business under the laws of the United States of America, any State thereof or
the District of Columbia, authorized under such laws to act as Authenticating Agent and subject to
supervision or examination by government or other fiscal authority. If at any time an
Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section
6.12, such Authenticating Agent shall resign immediately in the manner and with the effect
specified in this Section 6.12.

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

          An Authenticating Agent may resign at any time by giving written notice thereof to the Trustee
and to the Company. The Trustee may at any time terminate the agency of an Authenticating Agent by
giving written notice thereof to such Authenticating Agent and to the Company. Upon receiving such
a notice of resignation or upon such a termination, or in case at any time such Authenticating
Agent shall cease to be eligible in accordance with the provisions of this Section 6.12, the
Trustee may appoint a successor Authenticating Agent which shall be subject to acceptance by the
Company. Any successor Authenticating Agent upon acceptance of its appointment hereunder shall
become vested with all the rights, powers and duties of its predecessor hereunder, with like effect
as if originally named as an Authenticating Agent. No successor Authenticating Agent shall be
appointed unless eligible under the provisions of this Section 6.12.

          The Company agrees to pay to each Authenticating Agent from time to time reasonable
compensation for its services under this Section 6.12.

          If an Authenticating Agent is appointed with respect to the Securities pursuant to this
Section 6.12, the Securities may have endorsed thereon, in addition to or in lieu of the Trustee’s
certification of authentication, an alternative certificate of authentication in the following
form:

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

	 	 	 
	

	 	U.S. BANK NATIONAL ASSOCIATION

	

	 	as Trustee
	 
	 	 
	

	 	By:

62

 

	 	 	 
	

	 	 
	

	 	as Authenticating Agent
	 
	 	 
	

	 	By:
	 
	 	 
	

	 	 
	

	 	Authorized Signatory

SECTION 6.13 Disqualification; Conflicting Interests.

          If the Trustee has or shall acquire a conflicting interest within the meaning of the Trust
Indenture Act, the Trustee shall either eliminate such interest or resign, to the extent and in the
manner provided by, and subject to the provisions of, the Trust Indenture Act and this Indenture.

SECTION 6.14 Preferential Collection of Claims Against Company.

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

ARTICLE VII

CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

SECTION 7.1 Company May Consolidate, Etc. Only on Certain Terms.

          The Company shall not consolidate with or merge into any other Person or convey, transfer,
sell or lease its properties and assets substantially as an entirety to any Person, unless the
Company is the surviving corporation, or if the Company is not the surviving corporation, then only
if:

          (1) the Person formed by such consolidation or into or with which the Company is merged, or
the Person to which the properties and assets of the Company are so conveyed, transferred, sold or
leased shall be a corporation incorporated and validly existing under the laws of the United States
of America, any State thereof or the District of Columbia and shall expressly assume, by an
indenture supplemental hereto, executed and delivered to the Trustee, in form satisfactory to the
Trustee, the due and punctual payment of the principal of, premium, if any, and interest, on all of
the Securities as applicable, and the performance or observance of every covenant of this Indenture
on the part of the Company to be performed or observed and shall have provided for conversion
rights in accordance with Article XII;

63

 

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

          (3) the Company has delivered to the Trustee an Officers’ Certificate and an Opinion of
Counsel, each stating that such consolidation, merger, conveyance, transfer, sale or lease and, if
a supplemental indenture is required in connection with such transaction, such supplemental
indenture comply with this Article and that all conditions precedent herein provided for relating
to such transaction have been complied with, together with any documents required under Section
8.3.

SECTION 7.2 Successor Substituted.

          Upon any consolidation of the Company with, or merger of the Company into any other Person or
any conveyance, transfer, sale or lease of all or substantially all the properties and assets of
the Company in accordance with Section 7.1, the successor Person formed by such consolidation or
into or with which the Company is merged or to which such conveyance, transfer or lease is made
shall succeed to, and be substituted for, and may exercise every right and power of, the Company
under this Indenture with the same effect as if such successor Person had been named as the Company
herein, and thereafter, except in the case of a lease, the predecessor Person shall be relieved of
all obligations and covenants under this Indenture and the Securities.

ARTICLE VIII

SUPPLEMENTAL INDENTURES

SECTION 8.1 Supplemental Indentures Without Consent of Holders of Securities.

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

          (1) to evidence the succession of another Person to the Company and the assumption by any such
successor of the covenants and obligations of the Company herein and in the Securities as permitted
by Article VII of this Indenture; or

          (2) to add to the covenants of the Company for the benefit of the Holders of Securities or to
surrender any right or power herein conferred upon the Company; or

          (3) to secure the Securities; or

64

 

          (4) to make provision with respect to the conversion rights of Holders of Securities pursuant
to Section 12.11 or to make provision with respect to the repurchase rights of Holders of
Securities pursuant to Section 13.5; or

          (5) to comply with the requirements of the Trust Indenture Act or the rules and regulations of
the Commission thereunder in order to effect or maintain the qualification of this Indenture under
the Trust Indenture Act, as contemplated by this Indenture or otherwise; or

          (6) to evidence and provide for the acceptance of appointment hereunder by a successor
Trustee; or

          (7) to cure any ambiguity, to correct or supplement any provision herein that may be
inconsistent with any other provision herein or that is otherwise defective, or to make any other
provisions with respect to matters or questions arising under this Indenture as the Company and the
Trustee may deem necessary or desirable, provided such action pursuant to this clause (8) shall not
adversely affect the interests of the Holders of Securities in any material respect.

          Upon Company Request, accompanied by a Board Resolution authorizing the execution of any such
supplemental indenture, and subject to and upon receipt by the Trustee of the documents described
in Section 8.3 hereof, the Trustee shall join with the Company in the execution of any supplemental
indenture authorized or permitted by the terms of this Indenture and to make any further
appropriate agreements and stipulations that may be therein contained.

SECTION 8.2 Supplemental Indentures with Consent of Holders of Securities.

          With either (i) the written consent of the Holders of not less than a majority in aggregate
principal amount of the Outstanding Securities, by the Act of said Holders delivered to the Company
and the Trustee, or (ii) by the adoption of a resolution, at a meeting of Holders of the
Outstanding Securities at which a quorum is present, by the Holders of at least 66?% in aggregate
principal amount of the Outstanding Securities represented at such meeting, the Company, when
authorized by a Board Resolution, and the Trustee may enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Indenture or of modifying in any manner the rights of the
Holders of Securities under this Indenture; provided, however, that no such supplemental indenture
shall, without the consent or affirmative vote of the Holder of each Outstanding Security affected
thereby,

          (1) change the Stated Maturity of the principal of or any installment of interest on any
Security, or reduce the principal amount of, or the premium, if any, the rate of interest payable
thereon or reduce the amount payable upon a redemption, purchase or repurchase, or change the place
or currency of payment of the principal of, premium, if any, or interest on any Securities
(including the Redemption Price, Repurchase Price or Purchase Price in respect of such Security) or
impair the right to institute suit for the enforcement of any payment in respect of any Security on
or after the Stated Maturity thereof (or, in the case of redemption or any repurchase, on or after
the

65

 

Redemption Date, Repurchase Date or Purchase Date as the case may be) or, except as permitted
by Section 12.11, adversely affect the right of Holders to convert any Security as provided in
Article XII; or

          (2) reduce the requirements of Section 9.4 for quorum or voting, or reduce the percentage in
principal amount of the Outstanding Securities the consent of whose Holders is required for any
such supplemental indenture or the consent of whose Holders is required for any waiver of
compliance with certain provisions of this Indenture or certain defaults hereunder and their
consequences provided for in this Indenture; or

          (3) modify the obligation of the Company to maintain an office or agency in the Borough of
Manhattan, The City of New York, pursuant to Section 10.2; or

          (4) modify any of the provisions of this Section or Section 5.13 or 10.12, except to increase
any percentage contained herein or therein or to provide that certain other provisions of this
Indenture cannot be modified or waived without the consent of the Holder of each Outstanding
Security affected thereby; or

          (5) modify the provisions of Article XIII in a manner adverse to the Holders; or

          (6) modify the provisions of Article XI in a manner adverse to the Holders; or

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

SECTION 8.3 Execution of Supplemental Indentures.

          In executing, or accepting the additional trusts created by, any supplemental indenture
permitted by this Article or the modifications thereby of the trusts created by this Indenture, the
Trustee shall be entitled to receive, and (subject to Sections 6.1 and 6.3) shall be fully
protected in relying upon, an Opinion of Counsel stating that the execution of such supplemental
indenture is authorized or permitted by this Indenture, and that such supplemental indenture has
been duly authorized, executed and delivered by the Company and constitutes a valid and legally
binding obligation of the Company enforceable against the Company in accordance with its terms. The
Trustee may, but shall not be obligated to, enter into any such supplemental indenture which
affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise.

SECTION 8.4 Effect of Supplemental Indentures.

66

 

          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 appertaining thereto shall be bound thereby.

SECTION 8.5 Reference in Securities to Supplemental Indentures.

          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 Company
and the Trustee, 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 8.6 Notice of Supplemental Indentures.

          Promptly after the execution by the Company and the Trustee of any supplemental indenture
pursuant to the provisions of Section 8.2, the Company shall give notice to all Holders of
Securities of such fact, setting forth in general terms the substance of such supplemental
indenture, in the manner provided in Section 1.6. Any failure of the Company to give such notice,
or any defect therein, shall not in any way impair or affect the validity of any such supplemental
indenture.

ARTICLE IX

MEETINGS OF HOLDERS OF SECURITIES

SECTION 9.1 Purposes for Which Meetings May Be Called.

          A meeting of Holders of Securities may be called at any time and from time to time pursuant to
this Article to make, give or take any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be made, given or taken by Holders of
Securities.

SECTION 9.2 Call, Notice and Place of Meetings.

          (1) The Trustee may at any time call a meeting of Holders of Securities for any purpose
specified in Section 9.1, to be held at such time and at such place in the Borough of Manhattan,
The City of New York, as the Trustee shall determine. Notice of every meeting of Holders of
Securities,

67

 

setting forth the time and the place of such meeting and in general terms the action proposed
to be taken at such meeting, shall be given, in the manner provided in Section 1.6, not less than
21 nor more than 180 days prior to the date fixed for the meeting.

          (2) In case at any time the Company, pursuant to a Board Resolution, or the Holders of at
least 10% in principal amount of the Outstanding Securities shall have requested the Trustee to
call a meeting of the Holders of Securities for any purpose specified in Section 9.1, by written
request setting forth in reasonable detail the action proposed to be taken at the meeting, and the
Trustee shall not have mailed the notice of such meeting within 21 days after receipt of such
request or shall not thereafter proceed to cause the meeting to be held as provided herein, then
the Company or the Holders of Securities in the amount specified, as the case may be, may determine
the time and the place in the Borough of Manhattan, The City of New York, for such meeting and may
call such meeting for such purposes by giving notice thereof as provided in paragraph (1) of this
Section.

SECTION 9.3 Persons Entitled to Vote at Meetings.

          To be entitled to vote at any meeting of Holders of Securities, a Person shall be (i) a Holder
of one or more of the Outstanding Securities, or (ii) a Person appointed by an instrument in
writing as proxy for a Holder or Holders of one or more of the Outstanding Securities by such
Holder or Holders. The only Persons who shall be entitled to be present or to speak at any meeting
of Holders shall be the Persons entitled to vote at such meeting and their counsel, any
representatives of the Trustee and its counsel and any representatives of the Company and its
counsel.

SECTION 9.4 Quorum; Action.

          The Persons entitled to vote a majority in principal amount of the Outstanding Securities
shall constitute a quorum. In the absence of a quorum within 30 minutes of the time appointed for
any such meeting, the meeting shall, if convened at the request of Holders of Securities, be
dissolved. In any other case, the meeting may be adjourned for a period of not less than 10 days as
determined by the chairman of the meeting prior to the adjournment of such meeting. In the absence
of a quorum at any such adjourned meeting, such adjourned meeting may be further adjourned for a
period not less than 10 days as determined by the chairman of the meeting prior to the adjournment
of such adjourned meeting (subject to repeated applications of this sentence). Notice of the
reconvening of any adjourned meeting shall be given as provided in Section 9.2(1), except that such
notice need be given only once not less than five days prior to the date on which the meeting is
scheduled to be reconvened. Notice of the reconvening of an adjourned meeting shall state
expressly the percentage of the principal amount of the Outstanding Securities that shall
constitute a quorum.

          Subject to the foregoing, at the reconvening of any meeting adjourned for a lack of a quorum,
the Persons entitled to vote 25% in principal amount of the Outstanding Securities at the time
shall constitute a quorum for any subsequent adjournment of such meeting.

68

 

          At a meeting or an adjourned meeting duly reconvened and at which a quorum is present as
aforesaid, any resolution and all matters (except as limited by the proviso to Section 8.2 and
except to the extent Section 10.12 requires a different vote) shall be effectively passed and
decided if passed or decided by the lesser of (i) the Holders of not less than a majority in
principal amount of the Outstanding Securities and (ii) the Persons entitled to vote not less than
66 2/3% in principal amount of the Outstanding Securities represented and entitled to vote at such
meeting.

          Any resolution passed or decisions taken at any meeting of Holders of Securities duly held in
accordance with this Section shall be binding on all the Holders of Securities whether or not
present or represented at the meeting. The Trustee shall, in the name and at the expense of the
Company, notify all the Holders of Securities of any such resolutions or decisions pursuant to
Section 1.6.

SECTION 9.5 Determination of Voting Rights; Conduct and Adjournment of Meetings.

          (1) Notwithstanding any other provisions of this Indenture, the Trustee may make such
reasonable regulations as it may deem advisable for any meeting of Holders of Securities in regard
to proof of the holding of Securities and of the appointment of proxies and in regard to the
appointment and duties of inspectors of votes, the submission and examination of proxies,
certificates and other evidence of the right to vote, and such other matters concerning the conduct
of the meeting as it shall deem appropriate. Except as otherwise permitted or required by any such
regulations, the holding of Securities shall be proved in the manner specified in Section 1.4 and
the appointment of any proxy shall be proved in the manner specified in Section 1.4 or by having
the signature of the Person executing the proxy guaranteed by any bank, broker or other eligible
institution participating in a recognized medallion signature guarantee program.

          (2) The Trustee shall, by an instrument in writing, appoint a temporary chairman (which may be
the Trustee) of the meeting, unless the meeting shall have been called by the Company or by Holders
of Securities as provided in Section 9.2(1), in which case the Company or the Holders of Securities
calling the meeting, as the case may be, shall in like manner appoint a temporary chairman. A
permanent chairman and a permanent secretary of the meeting shall be elected by vote of the Persons
entitled to vote a majority in principal amount of the Outstanding Securities represented at the
meeting.

          (3) At any meeting, each Holder of a Security or proxy shall be entitled to one vote for each
U.S. $1,000 principal amount of Securities held or represented by him; provided, however, that no
vote shall be cast or counted at any meeting in respect of any Security challenged as not
Outstanding and ruled by the chairman of the meeting to be not Outstanding. The chairman of the
meeting shall have no right to vote, except as a Holder of a Security or proxy.

          (4) Any meeting of Holders of Securities duly called pursuant to Section 9.2 at which a quorum
is present may be adjourned from time to time by Persons entitled to vote a majority in principal
amount of the Outstanding Securities represented at the meeting, and the meeting may be held as so
adjourned without further notice.

69

 

SECTION 9.6 Counting Votes and Recording Action of Meetings.

          The vote upon any resolution submitted to any meeting of Holders of Securities shall be by
written ballots on which shall be subscribed the signatures of the Holders of Securities or of
their representatives by proxy and the principal amounts at Stated Maturity and serial numbers of
the Outstanding Securities held or represented by them. The permanent chairman of the meeting shall
appoint two inspectors of votes who shall count all votes cast at the meeting for or against any
resolution and who shall make and file with the secretary of the meeting their verified written
reports in duplicate of all votes cast at the meeting. A record, at least in duplicate, of the
proceedings of each meeting of Holders of Securities shall be prepared by the secretary of the
meeting and there shall be attached to said record the original reports of the inspectors of votes
on any vote by ballot taken thereat and affidavits by one or more Persons having knowledge of the
facts setting forth a copy of the notice of the meeting and showing that said notice was given as
provided in Section 9.2 and, if applicable, Section 9.4. Each copy shall be signed and verified by
the affidavits of the permanent chairman and secretary of the meeting and one such copy shall be
delivered to the Company and another to the Trustee to be preserved by the Trustee, the latter to
have attached thereto the ballots voted at the meeting. Any record so signed and verified shall be
conclusive evidence of the matters therein stated.

ARTICLE X

COVENANTS

SECTION 10.1 Payment of Principal, Premium and Interest.

          The Company covenants and agrees that it will duly and punctually pay the principal of and
premium, if any, and interest, on the Securities in accordance with the terms of the Securities and
this Indenture. The Company will deposit or cause to be deposited with the Trustee or its nominee,
no later than the opening of business on the date of the Stated Maturity of any Security or no
later than the opening of business on the due date for any installment of interest, all payments so
due, which payments shall be in immediately available funds on the date of such Stated Maturity or
due date as the case may be.

SECTION 10.2 Maintenance of Offices or Agencies.

          The Company will maintain in the Borough of Manhattan, The City of New York, an office or
agency (which may include the Trustee) where the Securities may be surrendered for registration of
transfer or exchange or for presentation for payment or for conversion, redemption or repurchase
and where notices and demands to or upon the Company in respect of the Securities and this

70

 

Indenture may be served. The Company will give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency not designated or appointed by
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 Corporate Trust Office or the office or agency of
the Trustee in the Borough of Manhattan, The City of New York.

          The Company may at any time and from time to time vary or terminate the appointment of any
such agent or appoint any additional agents for any or all of such purposes; provided, however,
that until all of the Securities have been delivered to the Trustee for cancellation, or moneys
sufficient to pay the principal of, premium, if any, and interest on the Securities have been made
available for payment and either paid or returned to the Company pursuant to the provisions of
Section 10.3, the Company will maintain in the Borough of Manhattan, The City of New York, an
office or agency where Securities may be presented or surrendered for payment and conversion, which
shall initially be the Corporate Trust Office of the Trustee, where Securities may be surrendered
for registration of transfer or exchange and where notices and demands to or upon the Company in
respect of the Securities and this Indenture may be served. The Company will give prompt written
notice to the Trustee, and notice to the Holders in accordance with Section 1.6, of the appointment
or termination of any such agents and of the location and any change in the location of any such
office or agency.

          The Company hereby initially designates the Trustee as Paying Agent, Security Registrar and
Conversion Agent, and each of the Corporate Trust Office of the Trustee and the office or agency of
the Trustee in the Borough of Manhattan, The City of New York, as one such office or agency of the
Company for each of the aforesaid purposes.

SECTION 10.3 Money for Security Payments to Be Held in Trust.

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

          Whenever the Company shall have one or more Paying Agents, it will, no later than the opening
of business on each due date of the principal of, premium, if any, or interest on any Securities,
deposit with the Trustee a sum in funds immediately payable on the payment date sufficient to pay
the principal, premium, if any, or interest, so becoming due, such sum to be held for the benefit
of the Persons entitled to such principal, premium, if any, or interest, and (unless such Paying
Agent is the Trustee) the Company will promptly notify the Trustee, in writing, of any failure so
to act.

71

 

          The Company will cause each Paying Agent other than the Trustee to execute and deliver to the
Trustee an instrument in which such Paying Agent shall agree with the Trustee, subject to the
provisions of this Section, that such Paying Agent will:

          (1) hold all sums held by it for the payment of the principal of, premium, if any, or
interest, on Securities for the benefit of the Persons entitled thereto until such sums shall be
paid to such Persons or otherwise disposed of as herein provided;

          (2) give the Trustee written notice of any default by the Company (or any other obligor upon
the Securities) in the making of any payment of principal, premium, if any, or interest; and

          (3) at any time during the continuance of any such default, upon the written request of the
Trustee, forthwith pay to the Trustee all sums so held by such Paying Agent.

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

          Any money deposited with the Trustee or any Paying Agent, or then held by the Company, in
trust for the payment of the principal of, premium, if any, or interest, on any Security and
remaining unclaimed for two years after such principal, premium, if any, or interest has become due
and payable shall be paid to the Company on Company Request, or (if then held by the Company) shall
be discharged from such trust; and the Holder of such Security shall thereafter, as an unsecured
general creditor, look only to the Company for payment thereof, and all liability of the Trustee or
such Paying Agent with respect to such trust money, and all liability of the Company as trustee
thereof, shall thereupon cease.

SECTION 10.4 Existence.

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

SECTION 10.5 Maintenance of Properties.

          The Company will cause all properties used or useful in the conduct of its business and the
business of its Subsidiaries to be maintained and kept in good condition, repair and working order
and supplied with all necessary equipment and will cause to be made all necessary repairs,
renewals, replacements, betterments and improvements thereof, all as in the judgment of the Company
may be

72

 

necessary so that the business carried on in connection therewith may be properly and
advantageously conducted at all times; provided, however, that nothing in this Section shall
prevent the Company from discontinuing the operation or maintenance of any of such properties if
such discontinuance is, in the judgment of the Company, desirable in the conduct of its business
and not disadvantageous in any material respect to the Holders.

SECTION 10.6 Payment of Taxes and Other Claims.

          The Company will pay or discharge, or cause to be paid or discharged, before the same may
become delinquent, (i) all taxes, assessments and governmental charges levied or imposed upon the
Company or any subsidiary or upon the income, profits or property of the Company, or any subsidiary
(ii) all claims for labor, materials and supplies which, if unpaid, might by law become a lien or
charge upon the property of the Company, and (iii) subject to Section 12.8, all stamps and other
duties, if any, which may be imposed by the United States or any political subdivision thereof or
therein in connection with the issuance, transfer, exchange or conversion of any Securities or with
respect to this Indenture; provided, however, that, in the case of clauses (i) and (ii), the
Company shall not be required to pay or discharge or cause to be paid or discharged any such tax,
assessment, charge or claim (A) if the failure to do so will not, in the aggregate, have a material
adverse impact on the Company and its Subsidiaries, taken as a whole, or (B) if the amount,
applicability or validity is being contested in good faith by appropriate proceedings.

SECTION 10.7 Registration and Listing.

          The Company will list, subject to notice of issuance, any shares of Common Stock issuable upon
conversion of the Securities on the New York Stock Exchange.

SECTION 10.8 Statement by Officers as to Default.

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

          The Company will deliver to the Trustee, forthwith upon becoming aware of any default or any
Event of Default under the Indenture, an Officers’ Certificate specifying with particularity such
default or Event of Default and further stating what action the Company has taken, is taking or

73

 

proposes to take with respect thereto. For the purpose of this Section, the term “default”
means any event that is, or after notice or lapse of time or both would become, an Event of
Default.

          Any notice required to be given under this Section 10.8 shall be delivered to the Trustee at
its Corporate Trust Office.

SECTION 10.9 Waiver of Certain Covenants.

          The Company may omit in any particular instance to comply with any covenant or condition set
forth in Sections 10.4 (other than with respect to the existence of the Company (subject to Article
VII)), 10.5 and 10.6, inclusive (other than a covenant or condition which under Section 8.2 cannot
be modified or amended without the consent of the Holder of each Outstanding Security affected), if
before the time for such compliance the Holders shall, through (i) the written consent of not less
than a majority in principal amount of the Outstanding Securities or (ii) the adoption of a
resolution at a meeting of Holders of the Outstanding Securities at which a quorum is present by
the Holders of not less than 66?% in principal amount of the Outstanding Securities represented at
such meeting, either waive such compliance in such instance or generally waive compliance with such
covenant or condition, but no such waiver shall extend to or affect such covenant or condition
except to the extent so expressly waived, and, until such waiver shall become effective, the
obligations of the Company and the duties of the Trustee or any Paying or Conversion Agent in
respect of any such covenant or condition shall remain in full force and effect. Nothing in this
Section is intended to limit the application of Sections 5.13, 8.1 and 8.2.

ARTICLE XI

REDEMPTION OF SECURITIES

SECTION 11.1 Right of Redemption.

          The Securities may be redeemed in accordance with the provisions of the form of Securities set
forth in Section 2.2.

SECTION 11.2 Applicability of Article.

          Redemption of Securities at the election of the Company or otherwise, as permitted or required
by any provision of the Securities or this Indenture, shall be made in accordance with such
provision and this Article XI.

SECTION 11.3 Election to Redeem; Notice to Trustee

74

 

          The election of the Company to redeem any Securities shall be evidenced by a Board Resolution.
In case of any redemption at the election of the Company of any of the Securities, the Company
shall, at least 45 days prior to the Redemption Date fixed by the Company (unless a shorter notice
shall be satisfactory to the Trustee), notify the Trustee in writing of such Redemption Date.

SECTION 11.4 Selection by Trustee of Securities to Be Redeemed.

          If less than all the Securities are to be redeemed, the particular Securities to be redeemed
shall be selected by the Trustee within five Business Days after it receives the notice described
in 11.3, from the Outstanding Securities not previously called for redemption, by pro rata
selection, by lot or otherwise in accordance with the procedures of the Depositary.

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

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

SECTION 11.5 Notice of Redemption.

          Notice of redemption shall be given in the manner provided in Section 1.6 to the Holders of
Securities to be redeemed not less than 30 nor more than 60 days prior to the Redemption Date, and
such notice shall be irrevocable. The Company shall, concurrently with the giving of such notice,
publish a Press Release including the information required to be included in such notice of
redemption hereunder.

          All notices of redemption shall state:

          (1) the Redemption Date,

75

 

          (2) the Redemption Price and accrued interest thereon to, but excluding, the Redemption Date,

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

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

          (5) the Conversion Rate, the date on which the right to convert the Securities to be redeemed
will terminate and the places where such Securities may be surrendered for conversion, and

          (6) the place or places where such Securities are to be surrendered for payment of the
Redemption Price and accrued interest, to, but excluding, the Redemption Date.

          In case of a partial redemption, the notice shall specify the serial and CUSIP numbers (if
any) and the portions thereof called for redemption and that transfers and exchanges may occur on
or prior to the Redemption Date.

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

SECTION 11.6 Deposit of Redemption Price.

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

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

76

 

SECTION 11.7 Securities Payable on Redemption Date.

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

          If any Security called for redemption shall not be so paid upon surrender thereof for
redemption, the principal amount of, premium, if any and, to the extent permitted by applicable
law, accrued interest on such Security shall, until paid bear interest from the Redemption Date at
a rate of 0.50% per annum, and such Security shall remain convertible until the Redemption Price of
such Security (or portion thereof, as the case may be) shall have been paid or duly provided for.

          Any Security that is to be redeemed only in part shall be surrendered at the Corporate Trust
Office or an office or agency of the Company designated for that purpose pursuant to Section 10.2
(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 his attorney duly authorized in writing), and the Company shall execute, and the Trustee shall
authenticate and make available for delivery 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 equal to and in exchange for the unredeemed portion of the principal of
the Security so surrendered.

SECTION 11.8 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 by an agreement with one or more investment banks or other purchasers
(the “Purchasers”) to purchase such securities by paying to the Trustee in trust for the Holders,
on or before the Redemption Date, an amount not less than the applicable Redemption Price (together
with accrued interest to the Redemption Date of such Securities. Notwithstanding anything to the
contrary contained in this Article XI, the obligation of the Company to pay the Redemption Price
(together with accrued interest to the Redemption Date 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 (a copy of which shall be filed with the Trustee prior to the close of business on the
Business Day immediately prior to the Redemption Date), any Securities called for

77

 

redemption that are 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, and consistent with any
agreement or agreements with such Purchasers, to be acquired by such Purchasers from such Holders
and (notwithstanding anything to the contrary contained in Article XII) surrendered by such
Purchasers for conversion, all as of immediately prior to the close of business on the Redemption
Date (and the right to convert any such Securities shall be extended through such time), subject to
payment of the above amount as aforesaid. At the direction of the Company, the Trustee shall hold
and dispose of any such amount paid to it by the Purchasers to the Holders in the same manner as it
would monies 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,
including reasonable legal fees, 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.

ARTICLE XII

CONVERSION OF SECURITIES

SECTION 12.1 Conversion Privilege and Conversion Rate.

          (a) Subject to and upon compliance with the provisions of this Article, at the option of the
Holder thereof, any Security that is an integral multiple of $1,000 principal amount may be
converted into cash and, at the Company’s election as described below, fully paid and nonassessable
shares (calculated as to each conversion to the nearest 1/100th of a share) of Common Stock of the
Company at the Conversion Rate, determined as hereinafter provided, in effect at the time of
conversion and subject to the adjustments described below, as follows:

          (1) if, on or prior to February 15, 2029, the Closing Sale Price of the Common Stock for at
least 20 Trading Days in the period of the 30 consecutive Trading Days ending on the eleventh
Trading Day of any fiscal quarter is more than 120% of the then current Conversion Price on the
Securities, then the Holder thereof will be entitled to convert such Security until and including
the eleventh Trading Day of the immediately following fiscal quarter;

          (2) if, on any date after February 15, 2029, the Closing Sale Price of the Common Stock is
more than 120% of the then current Conversion Price on the Securities, then the Holder thereof will
be entitled to convert such Security at all times thereafter;

78

 

          (3) if the Company elects to call the Securities for redemption on or after February 20, 2011,
then the Holder thereof will be entitled to convert such Security (or the portion of the Security
called for redemption, if less than all), until the close of business on the Business Day prior to
the Redemption Date;

          (4) if the Company distributes to all or substantially all holders of Common Stock rights,
options or warrants (other than with respect to a Rights Plan) entitling them to purchase Common
Stock at less than the Closing Sale Price of the Common Stock on the last Trading Day preceding the
declaration for such distribution, then the Holder thereof will be entitled to convert such
Security in the period described below;

          (5) if the Company distributes to all or substantially all holders of Common Stock cash,
assets, debt securities or capital stock, which distribution has a per share value as determined by
the Board of Directors exceeding 5% of the Closing Sale Price of the Common Stock on the last
Trading Day preceding the declaration for such distribution, then the Holder thereof will be
entitled to convert such Security in the period described below; or

          (6) if the Company becomes a party to a consolidation, merger or sale of all or substantially
all of the Company’s assets where such consolidation, merger or sale of all or substantially all of
the Company’s assets constitutes a Change in Control or such an event occurs that would have been a
Change in Control but for the occurrence of one or more of the exceptions (I) and (II) to the
definition of a Change in Control contained in the proviso immediately following Section
13.4(2)(iii), then the Holder thereof will be entitled to convert such Security in the period
described below.

          In the case of a distribution contemplated in clauses (4) and (5) of this Section 12.1(a), the
Company will notify Holders at least 20 days prior to the ex-dividend date for such distribution
(the “Distribution Notice”). Once the Company has given the Distribution Notice, Holders may
surrender their Securities for conversion at any time until the earlier of the close of business on
the last Business Day preceding the ex-dividend date or the Company’s announcement that such
distribution will not take place. If in the future the Company adopts a new Rights Plan, Holders
will not have any conversion right pursuant to clause (4) above or otherwise, solely as a result of
the issuance of Rights pursuant to the Rights Plan. Notwithstanding the foregoing, in the event of
a distribution contemplated in clauses (4) and (5) of this Section 12.1(a), Holders may not convert
the Securities if the Holders may participate in such distribution without converting their
Securities.

          In the event of a consolidation, merger or sale of all or substantially all of the Company’s
assets as contemplated in clause (6) of this Section 12.1(a), the Company will notify Holders at
least 20 days prior to the anticipated closing date of such transaction (the “Merger Notice”).
Once the Company has given the Merger Notice, the Holders may, in the event of such consolidation,
merger or sale of all or substantially all of the Company’s assets, as contemplated in clause (6)
above, surrender Securities for conversion at any time from and after the date which is 15 days
prior to the anticipated effective date of such transaction until the date which is 15 days after
the actual effective date of such transaction.

79

 

          With respect to clause (1) of this Section 12.1(a), the Conversion Agent will determine, on
behalf of the Company, on the first Business Day succeeding the first day of the fiscal quarter on
which the Securities would be convertible, whether the Securities are convertible as set forth in
such clause (1) based upon the Closing Sale Price of the Common Stock and the then current
Conversion Price and, if so, will notify the Company. With respect to clause (2) of this section
12.1(a), the Conversion Agent will determine, on behalf of the Company, daily on any date after
February 15, 2029, whether the Securities are convertible as set forth in such clause (2) based
upon the Closing Sale Price of the Common Stock and the then current Conversion Price and, if so,
will notify the Company.

          (b) Subject to the further provisions of this Article XII, a Holder of a Security may also
convert the principal amount of such Security (or any portion thereof equal to $1,000 or any
integral multiple of $1,000 in excess thereof) for the five Business Day period after any five
consecutive Trading Day period in which the average of the Trading Prices for the Securities for
such five Trading Day period was less than 95% of the average Conversion Value for the Securities
during such period; provided, however, if on the Conversion Date, the Closing Sale Price of shares
of Common Stock is greater than the then current Conversion Price of the Securities and less than
or equal to 120% of the then current Conversion Price of the Securities, a Holder surrenders its
Securities for conversion and the Securities are not otherwise convertible, then such Holder will
receive cash with a value equal to the principal amount of such Holder’s Securities on such
Conversion Date.

          The “Conversion Value” for the Securities is equal to the product of (i) the Applicable
Conversion Rate and (ii) the Applicable Stock Price.

          The “Trading Price” of the Securities on any Trading Day means the average of the secondary
market bid quotations per Security obtained by the Conversion Agent for $5,000,000 principal amount
of the Securities at approximately 3:30 p.m., New York City time, on such Trading Day from an
independent nationally recognized securities dealer the Company selects; provided that if the
Conversion Agent cannot reasonably obtain a bid for $5,000,000 principal amount of the Securities
from a nationally recognized securities dealer or if in the Company’s reasonable judgment, the bid
quotations are not indicative of the secondary market value of the Securities, then the Trading
Price of the Securities will be deemed to be equal to the product of the then current Conversion
Rate and the Closing Sale Price of Common Stock on such Trading Day.

          The Conversion Agent shall have no obligation to determine the Trading Price of the Securities
unless the Company has requested such determination; and the Company shall have no obligation to
make such request unless a Holder provides the Company with reasonable evidence that the Trading
Price of the Securities is reasonably likely to be less than 95% of the Conversion Value; at which
time, the Company shall instruct the Conversion Agent to determine the Trading Price of the
Securities beginning on the next Trading Day and on each successive Trading Day until the Trading
Price is greater than or equal to 95% of the Conversion Value.

          (c) The conversion right, subject to the conditions described in clauses (a) and (b) of this
Section 12.1, shall commence on the initial issuance date of the Securities and expire at the close
of

80

 

business on the date of Maturity, subject, in the case of conversion of any Global Security,
to any Applicable Procedures. In case a Holder of a Security exercises his right to require the
Company to repurchase the Security, such conversion right in respect of the Security, or portion
thereof so called, shall expire at the close of business on the Business Day immediately preceding
the Repurchase Date unless the Company defaults in making the payment due upon repurchase (subject
as aforesaid to any Applicable Procedures with respect to any Global Security).

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

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

          The “Conversion Rate” shall be initially 103.4468 for each U.S. $1,000 principal amount of
Securities. The Conversion Rate shall be adjusted in certain instances as provided in this Article
XII.

SECTION 12.2 Exercise of Conversion Privilege.

          In order to exercise the conversion privilege, the Holder of any Security to be converted
shall surrender such Security, duly endorsed in blank, at the Corporate Trust Office of the Trustee
in the Borough of Manhattan, The City of New York, or at such other office or agency of the
Company, maintained for that purpose pursuant to Section 10.2, accompanied by a duly signed and
completed conversion notice substantially in the form set forth in Section 2.4 stating that the
Holder elects to convert such Security or, if less than the entire principal amount thereof is to
be converted, the portion thereof to be converted, and payments in respect of taxes, if any, as
described in Section 12.8 hereto.

          Each Security surrendered for conversion (in whole or in part) during the Record Date Period
shall (except in the case of any Security or portion thereof which has been called for redemption
on a Redemption Date, is repurchasable on a Repurchase Date or purchasable on a Purchase Date,
occurring, in any such case, within such Record Date Period and, as a result, the right to convert
such Security would otherwise terminate in such period if not exercised, or if the Company is in
arrears on any previously due interest payment as of the Conversion Date) be accompanied by payment
in New York Clearing House funds or other funds acceptable to the Company of an amount equal to the
interest, if any, payable on such Interest Payment Date on the principal amount of such Security
(or part thereof, as the case may be) being surrendered for conversion. The interest so payable on
such Interest Payment Date with respect to any Security (or portion thereof, if applicable) that is
surrendered for conversion during the Record Date Period shall be paid to the Holder of such
Security as of such Record Date in an amount equal to the interest that would have been payable on
such Security if such Security had been converted as of the close of business on such Interest
Payment Date. Interest payable on any Interest Payment Date in respect of any Security surrendered
for conversion on or after such Interest Payment Date shall be paid to the Holder of such Security
as

81

 

of the Record Date next preceding such Interest Payment Date, notwithstanding the exercise of
the right of conversion.

          Except as provided in the preceding paragraph and subject to the last paragraph of Section
3.7, no cash payment or adjustment shall be made upon any conversion on account of any interest
accrued from the Interest Payment Date next preceding the conversion date, in respect of any
Security (or part thereof, as the case may be) surrendered for conversion, or on account of any
dividends on the Common Stock issued upon conversion. Except as set forth in this paragraph, the
Company’s delivery to the Holder, in respect of each $1,000 principal amount of Securities
converted, of the amounts set forth in the next paragraph, will be deemed to:

          (i) satisfy the Company’s obligation to pay the principal amount of the Security being
converted pursuant to the provisions hereof; and

          (ii) satisfy the Company’s obligation to pay accrued but unpaid interest, if any,
attributable to the period from the most recent Interest Payment Date through the
Conversion Date.

          As a result, the principal amount and unpaid interest, if any, through the Conversion
Date are deemed to be paid in full rather than cancelled, extinguished or forfeited.

          If the Holder surrenders a Security for conversion, such Holder will receive, in
respect of each $1,000 principal amount of securities, together with a payment in respect
of any partial shares:

          (i) cash in an amount (the “Principal Return”) equal to the lesser of (1) the principal amount
of each Security to be converted and (2) the Conversion Value, and

          (ii) if the Conversion Value is greater than the principal amount of each Security, at the
Company’s election, a number of shares of the Company’s common stock (the “Net Shares”) equal to
the sum of the Daily Share Amounts or a cash amount equal to the sum of the Daily Cash Amounts.

          The cash payment for fractional shares will be based on the Applicable Stock Price.

          The Conversion Value, Principal Return, Net Cash Amount and Net Share Amount will be
determined by the Company promptly after the end of the applicable conversion reference period.
The Company will pay the Principal Return and cash for fractional shares and deliver Net Shares or
the Net Cash Amount, if any, no later than the third Business Day following the determination of
the Applicable Stock Price. The Company will not issue fractional shares upon conversion.

          Securities shall be deemed to have been converted immediately prior to the close of business
on the day of surrender of such Securities for conversion in accordance with the foregoing
provisions, and at such time the rights of the Holders of such Securities as Holders shall cease,
and the Person or Persons entitled to receive the Common Stock issuable upon conversion shall be
treated for all purposes as the record holder or holders of such Common Stock at such time. As

82

 

promptly as practicable on or after the Conversion Date, the Company shall issue and deliver
to the Trustee, for delivery to the Conversion Agent who will in turn deliver to the Holder (unless
a different Person is indicated on the Conversion Notice), a certificate or certificates for the
number of full shares of Common Stock issuable upon conversion, together with payment in lieu of
any fraction of a share, as provided in Section 12.3.

          In the case of any Security which is converted in part only, upon such conversion the Company
shall execute and the Trustee shall authenticate and deliver to the Holder thereof, at the expense
of the Company, a new Security or Securities of authorized denominations in an aggregate principal
amount equal to the unconverted portion of the principal amount of such Security. A Security may be
converted in part, but only if the principal amount of such Security to be converted is any
integral multiple of U.S. $1,000 and the principal amount of such security to remain Outstanding
after such conversion is equal to U.S. $1,000 or any integral multiple of $1,000 in excess thereof.

SECTION 12.3 Fractions of Shares.

          No fractional shares of Common Stock shall be issued upon conversion of any Security or
Securities. If more than one Security shall be surrendered for conversion at one time by the same
Holder, the number of full shares which shall be issuable upon conversion thereof shall be computed
on the basis of the aggregate principal amount of the Securities (or specified portions thereof) so
surrendered. Instead of any fractional share of Common Stock that would otherwise be issuable upon
conversion of any Security or Securities (or specified portions thereof), the Company shall
calculate and pay a cash adjustment in respect of such fraction (calculated to the nearest 1/100th
of a share) in an amount equal to the same fraction of the Closing Sale Price at the close of
business on the day of conversion.

     SECTION 12.4 Adjustment of Conversion Rate.

          (1) The Conversion Rate shall be subject to adjustments from time to time as follows:

               (i) In case the Company shall pay or make a dividend or other distribution on shares
of Common Stock payable in shares of Common Stock, the Conversion Rate in effect at the
opening of business on the day following the date fixed for the determination of
stockholders entitled to receive such dividend or other distribution shall be increased by
dividing such Conversion Rate by a fraction of which the numerator shall be the number of
shares of Common Stock outstanding at the close of business on the date fixed for such
determination and the denominator shall be the sum of such number of shares and the total
number of shares constituting such dividend or other distribution, such increase to become
effective immediately after the opening of business on the day following the date fixed for
such determination. If, after any such date fixed for determination, any dividend or

83

 

distribution is not in fact paid, the Conversion Rate shall be immediately readjusted,
effective as of the date the Board of Directors determines not to pay such dividend or
distribution, to the Conversion Rate that would have been in effect if such determination
date had not been fixed. For the purposes of this paragraph (i), the number of shares of
Common Stock at any time outstanding shall not include shares held in the treasury of the
Company but shall include shares issuable in respect of scrip certificates issued in lieu
of fractions of shares of Common Stock. The Company will not pay any dividend or make any
distribution on shares of Common Stock held in the treasury of the Company.

               (ii) In case the Company shall issue rights, options or warrants (in any case other
than in connection with a Rights Plan) to all holders of its Common Stock entitling them to
subscribe for or purchase shares of Common Stock at a price per share less than the Current
Market Price per share (determined as provided in paragraph (3) of this Section 12.4) of
the Common Stock on the date fixed for the determination of stockholders entitled to
receive such rights, options or warrants (other than any rights, options or warrants that
by their terms will also be issued to any Holder upon conversion of a Security into shares
of Common Stock without any action required by the Company or any other Person), the
Conversion Rate in effect at the opening of business on the day following the date fixed
for such determination shall be increased by dividing such Conversion Rate by a fraction of
which the numerator shall be the number of shares of Common Stock outstanding at the close
of business on the date fixed for such determination plus the number of shares of Common
Stock that the aggregate of the offering price of the total number of shares of Common
Stock so offered for subscription or purchase would purchase at such Current Market Price
and the denominator shall be the number of shares of Common Stock outstanding at the close
of business on the date fixed for such determination plus the number of shares of Common
Stock so offered for subscription or purchase, such increase to become effective
immediately after the opening of business on the day following the date fixed for such
determination. If, after any such date fixed for determination, any such rights, options or
warrants are not in fact issued, or are not exercised prior to the expiration thereof, the
Conversion Rate shall be immediately readjusted, effective as of the date such rights,
options or warrants expire, or the date the Board of Directors determines not to issue such
rights, options or warrants, to the Conversion Rate that would have been in effect if the
unexercised rights, options or warrants had never been granted or such determination date
had not been fixed, as the case may be. For the purposes of this paragraph (ii), the
number of shares of Common Stock at any time outstanding shall not include shares held in
the treasury of the Company but shall include shares issuable in respect of scrip
certificates issued in lieu of fractions of shares of Common Stock. The Company will not
issue any rights, options or warrants in respect of shares of Common Stock held in the
treasury of the Company.

               (iii) In case outstanding shares of Common Stock shall be subdivided into a greater
number of shares of Common Stock, the Conversion Rate in effect at the opening of business
on the day following the day upon which such subdivision becomes effective shall be
proportionately increased, and, conversely, in case outstanding shares of Common Stock
shall be combined into a smaller number of shares of Common

84

 

Stock, the Conversion Rate in effect at the opening of business on the day following
the day upon which such subdivision or combination becomes effective shall be
proportionately reduced, such increase or reduction, as the case may be, to become
effective immediately after the opening of business on the day following the day upon which
such subdivision or combination becomes effective.

               (iv) In case the Company shall, by dividend or otherwise, distribute to all holders of
its Common Stock evidences of its indebtedness, shares of any class of capital stock or
other property (including cash or assets or securities (other than rights pursuant to a
Rights Plan), but excluding (A) any rights, options or warrants referred to in paragraph
1(ii) of this Section, (B) any dividend or distribution paid exclusively in cash, (C) any
dividend or distribution referred to in paragraph 1(i) of this Section and (D) any
consideration distributed in any merger or consolidation to which Section 12.11 applies),
the Conversion Rate shall be adjusted so that the same shall equal the rate determined by
dividing the Conversion Rate in effect immediately prior to the close of business on the
date fixed for the determination of stockholders entitled to receive such distribution by a
fraction of which the numerator shall be the Current Market Price per share (determined as
provided in paragraph (3) of this Section 12.4) of the Common Stock on the date fixed for
such determination less the then fair market value of the portion of the assets, shares or
evidences of indebtedness so distributed applicable to one share of Common Stock and the
denominator shall be such Current Market Price per share of the Common Stock, such
adjustment to become effective immediately prior to the opening of business on the day
following the date fixed for the determination of stockholders entitled to receive such
distribution, or in the case of a Spin Off, immediately prior to the opening of business on
the day following the last Trading Day of the Measurement Period. If after any such date
fixed for determination, any such distribution is not in fact made, the Conversion Rate
shall be immediately readjusted, effective as of the date of the Board of Directors
determines not to make such distribution, to the Conversion Rate that would have been in
effect if such determination date had not been fixed.

          In the event the Company distributes shares of capital stock of a Subsidiary, the Conversion
Rate will be adjusted, if at all, based on the market value of the Subsidiary stock so distributed
relative to the market value of the Common Stock, as described below.

          The Board of Directors shall determine fair market values for the purposes of this Section
12.4(1)(iv), whose determination shall be conclusive and described in a Board Resolution filed with
the Trustee; provided, however, that in respect of a dividend or other distribution of shares of
capital stock of a class or series, or similar equity interest, of or relating to a Subsidiary or
other business unit of the Company which has a Subsidiary Closing Price (a “Spin-off”), the fair
market value of the securities to be distributed shall equal the average of the daily Subsidiary
Closing Price of such securities for the five consecutive Trading Days commencing on and including
the sixth Trading Day of such securities after the effectiveness of the Spin-off (the “Measurement
Period”); provided, further, that in the event that an underwritten initial public offering of the
securities in the Spin-off occurs simultaneously with the Spin-off, fair market value of the
securities distributed in the Spin-

85

 

off shall be the initial public offering price of such securities and the market price per
share of the Common Stock shall mean the Closing Sale Price for the Common Stock on the same
Trading Day.

               (v) In case the Company or any of its Subsidiaries shall make a tender or exchange
offer for Common Stock (for the avoidance of doubt, excluding options, warrants, purchase
rights and other securities convertible, exchangeable or exercisable for Common Stock), to
the extent that the cash and value of any other consideration included in the payment per
share of Common Stock in such offer exceeds the Closing Sale Price of our Common Stock on
the Trading Day next succeeding the last date on which tenders or exchanges may be made
pursuant to such tender or exchange offer, and such tender or exchange offer shall expire,
then, immediately prior to the opening of business on the day after the last date (the
“Expiration Date”) tenders could have been made pursuant to such tender offer (as such
offer may have been amended), the Conversion Rate shall be increased so that the Conversion
Rate shall equal the rate determined by multiplying the Conversion Rate in effect
immediately prior to close of business on the Expiration Date by a fraction of which the
numerator shall be the sum of (x) the aggregate consideration (determined as the sum of the
aggregate amount of cash consideration and the aggregate fair market value (as determined
by the Board of Directors, whose determination shall be conclusive evidence thereof and
which shall be evidenced by an Officers’ Certificate delivered to the Trustee thereof) of
any other consideration) payable to stockholders based on the acceptance (up to any maximum
specified in the terms of the tender offer) of all shares validly tendered and not
withdrawn as of the last time at which such tenders could have been made on the Expiration
Date (the “Expiration Time”) (the shares deemed so accepted, up to any such maximum, being
referred to as the “Purchased Shares”) and (y) the product of the number of shares of
Common Stock outstanding (less any Purchased Shares and excluding any shares held in the
treasury of the Company) at the Expiration Time and the Current Market Price per share of
Common Stock (as determined in accordance with subsection (3) of this Section 12.4) on the
Trading Day next succeeding the Expiration Date, and the denominator shall be the product
of the number of shares of Common Stock outstanding (including tendered shares but
excluding any shares held in the treasury of the Company) at the Expiration Time multiplied
by the Current Market Price per share of the Common Stock (as determined in accordance with
subsection (3) of this Section 12.4) on the Trading Day next succeeding the Expiration
Date, such increase to become effective immediately prior to the opening of business on the
day following the Expiration Date. In the event that the Company is obligated to purchase
shares pursuant to any such tender offer, but the Company is permanently prevented by
applicable law from effecting any or all such purchases or any or all such purchases are
rescinded, the Conversion Rate shall again be adjusted to be the Conversion Rate which
would have been in effect based upon the number of shares actually purchased. If the
application of this Section 12.4(1)(v) to any tender offer would result in a decrease in
the Conversion Rate, no adjustment shall be made for such tender offer under this Section
12.4(1)(v).

          For purposes of this Section 12.4(1)(v), the term “tender offer” shall mean and include both
tender offers and exchange offers, all references to “purchases” of shares in tender offers (and
all

86

 

similar references) shall mean and include both the purchase of shares in tender offers and
the acquisition of shares pursuant to exchange offers, and all references to “tendered shares” (and
all similar references) shall mean and include shares tendered in both tender offers and exchange
offers.

               (vi) In case the Company shall, by dividend or otherwise, distribute cash to all
holders of its outstanding Common Stock (excluding any cash that is distributed as part of
a distribution referred to in paragraph 1(iv) of this Section or cash distributed upon a
merger or consolidation to which Section 12.11 applies) then, and in each such case,
immediately after the close of business on such date for determination, the Conversion Rate
shall be adjusted to the rate determined by multiplying the Conversion Rate in effect
immediately prior to the close of business on the date fixed for determination of the
stockholders entitled to receive such distribution by a fraction (X) the numerator of which
shall be equal to the Current Market Price per share (determined as provided in paragraph
(3) of this Section) of the Common Stock on the date fixed for such determination plus the
amount per share of such dividend or distribution and (Y) the denominator of which shall be
equal to the Current Market Price per share (determined as provided in paragraph (3) of
this Section 12.4) of the Common Stock on such date fixed for determination.

          (2) The reclassification of Common Stock into securities other than Common Stock (other than
any reclassification upon a consolidation or merger to which Section 12.11 applies) shall be deemed
to involve (a) a distribution of such securities other than Common Stock to all holders of Common
Stock (and the effective date of such reclassification shall be deemed to be “the date fixed for
the determination of stockholders entitled to receive such distribution” and “the date fixed for
such determination” within the meaning of paragraph 1(iv) of this Section), and (b) a subdivision
or combination, as the case may be, of the number of shares of Common Stock outstanding immediately
prior to such reclassification into the number of shares of Common Stock outstanding immediately
thereafter (and the effective date of such reclassification shall be deemed to be “the day upon
which such subdivision becomes effective” or “the day upon which such combination becomes
effective”, as the case may be, and “the day upon which such subdivision or combination becomes
effective” within the meaning of paragraph 1(iii) of this Section 12.4).

          (3) For the purpose of (A) any computation under paragraphs 1(ii), (iv) or (v) of this Section
12.4, the “Current Market Price” per share of Common Stock on any date shall be calculated by the
Company and be the average of the daily Closing Sale Prices for the 10 consecutive Trading Days
selected by the Company commencing not more than 20 Trading Days before, and (I) in the case of
paragraphs (1)(ii) or (iv) of this Section 12.4, ending not later than, the earlier of the date
fixed for determination and the day before the “ex-date” with respect to the issuance or
distribution requiring such computation or (II) in the case of paragraph (1)(v) of this Section
12.4, ending not later than, the Expiration Date with respect to the tender offer requiring such
computation; and (B) any computation under paragraph (1)(vi) of this Section 12.4, the “Current
Market Price” per share of Common Stock on any date shall be calculated by the Company and be the
average of the daily Closing Sale Prices for the first 10 consecutive Trading Days from and
including the first “ex-date” with respect to the dividend or other distribution requiring such
computation. For purposes of this paragraph, the term “ex-date”, when used with respect to any
issuance or distribution, means the first

87

 

date on which the Common Stock trades regular way in the applicable securities market or on
the applicable securities exchange without the right to receive such issuance or distribution.

          (4) All calculations under this Article shall be made to the nearest U.S. $0.01 or to the
nearest one-ten-thousandth of a share, as the case may be.

          (5) The Company may make such increases in the Conversion Rate, for the remaining term of the
Securities or any shorter term, in addition to those required by paragraphs (1)(i), (ii), (iii),
(iv), (v) and (vi) of this Section 12.4, as it considers to be advisable in order to avoid or
diminish any income tax to any holders of shares of Common Stock resulting from any dividend or
distribution of stock or issuance of rights or warrants to purchase or subscribe for stock or from
any event treated as such for income tax purposes. The Company shall have the power to resolve any
ambiguity or correct any error in this paragraph (5) and its actions in so doing shall, absent
manifest error, be final and conclusive.

          (6) Notwithstanding the foregoing provisions of this Section, no adjustment of the Conversion
Rate shall be required to be made (a) upon the issuance of shares of Common Stock pursuant to any
present or future plan for the reinvestment of dividends or (b) because of a tender or exchange
offer of the character described in Rule 13e-4(h)(5) under the Exchange Act or any successor rule
thereto.

          (7) To the extent permitted by applicable law, the Company from time to time may increase the
Conversion Rate by any amount and for any amount of time if the Board of Directors shall have made
a determination that such increase would be in the best interests of the Company, which
determination shall be conclusive; provided, however, that no such increase shall be taken into
account for purposes of determining whether the Closing Sale Price of the Common Stock equals or
exceeds 105% of the Conversion Price in connection with an event which would otherwise be a Change
in Control pursuant to Section 13.4. Whenever the Conversion Rate is increased pursuant to the
preceding sentence, the Company shall give notice of the increase to the Holders in the manner
provided in Section 1.6, and such notice shall state the increased Conversion Rate and the period
during which it will be in effect. The Company will comply with the rules and regulations
promulgated under the Exchange Act and any securities exchange upon which the Company’s Common
Stock is then listed , or automated interdealer quotation system upon which the Company’s Common
Stock is then quoted, to the extent applicable in connection with such notice.

          (8) To the extent that the Company has a Rights Plan in effect upon conversion of the
Securities pursuant to this Article XII: (i) if such Rights have not separated from the Common
Stock prior to the conversion of the Securities, each share of Common Stock issued upon conversion
of the Securities pursuant to this Article XII shall be entitled to receive the appropriate number
of 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 any Rights Plan;
and (ii) if such Rights have separated from the Common Stock prior to the conversion of the
Securities, the Conversion Rate will be adjusted as though the Rights were being distributed to all
holders of Common Stock on the date of such separation. If such an adjustment is made and the
Rights are

88

 

later redeemed, invalidated or terminated, then a corresponding reversing adjustment will be
made to the Conversion Rate on an equitable basis.

          (9) Notwithstanding the foregoing provisions of this Section, no adjustment of the Conversion
Rate shall be required to be made until the cumulative adjustments amount to 1.0% or more of the
Conversion Rate; provided, however, that any adjustments which by reason of this
paragraph (10) are not required to be made shall be carried forward and taken into account in any
subsequent adjustment.

SECTION 12.5 Additional Shares.

          (1) If a Change in Control occurs prior to February 15, 2011, the Company will increase the
Conversion Rate for conversion by a number of additional shares, subject to certain exceptions,
provided, however, that no increase will be made in the case of a Change in Control if at least 90%
of the consideration paid for the Company’s Common Stock (excluding cash payments for fractional
shares and cash payments made pursuant to dissenters’ appraisal rights) in such Change in Control
transaction consists of shares of capital stock traded on the New York Stock Exchange or another
U.S. national securities exchange or quoted on The Nasdaq Stock Market or a successor automated
over-the-counter trading market in the United States (or that will be so traded or quoted
immediately following the transaction). The number of additional shares will be determined by
reference to the table below, based on the effective date of the Change in Control and the price
paid per share of the Company’s common stock in such Change in Control transaction. If holders of
the Company’s Common Stock receive only cash in such transaction, the stock price will be the cash
amount paid per share. Otherwise, the stock price will be the average of the last closing prices of
the Company’s Common Stock on each of the five consecutive Trading Days prior to but not including
the effective date of such Change in Control.

          (2) The stock prices set forth in the first row of the table below (i.e., column headers) will
be adjusted as of any date on which the Conversion Rate is adjusted pursuant to Section 12.4(1)
through (9). The adjusted stock prices will equal the stock prices applicable immediately prior to
such adjustment, multiplied by a fraction, the numerator of which is the Conversion Rate
immediately prior to the adjustment giving rise to the stock price adjustment, and the denominator
of which is the Conversion Rate as so adjusted. The number of additional shares will be adjusted in
the same manner as the Conversion Rate.

          The following table sets forth the hypothetical stock price and number of additional shares
issuable per $1,000 principal amount of Notes.

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Effective Date of	 	Stock Price ($)	 
	 	 	 	 
	Change of Control	 	5.07	 	 	7.0	 	 	8.0	 	 	9.0	 	 	10.0	 	 	12.5	 	 	15.0	 	 	17.5	 	 	20.0	 	 	25.0	 	 	30.0	 
	 	 	 
	15-Feb-05
	 	 	66.1	 	 	 	38.9	 	 	 	30.5	 	 	 	24.9	 	 	 	20.4	 	 	 	13.0	 	 	 	8.9	 	 	 	6.1	 	 	 	4.6	 	 	 	2.5	 	 	 	1.5	 
	 	 	 
	15-Feb-06
	 	 	68.5	 	 	 	39.4	 	 	 	30.6	 	 	 	24.5	 	 	 	20.0	 	 	 	12.3	 	 	 	8.3	 	 	 	5.6	 	 	 	4.0	 	 	 	2.1	 	 	 	1.2	 
	 	 	 
	15-Feb-07
	 	 	71.0	 	 	 	39.7	 	 	 	30.8	 	 	 	24.2	 	 	 	19.3	 	 	 	11.7	 	 	 	7.4	 	 	 	5.0	 	 	 	3.4	 	 	 	1.7	 	 	 	0.9	 
	 

89

 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Effective Date of	 	Stock Price ($)	 
	 	 	 	 
	Change of Control	 	5.07	 	 	7.0	 	 	8.0	 	 	9.0	 	 	10.0	 	 	12.5	 	 	15.0	 	 	17.5	 	 	20.0	 	 	25.0	 	 	30.0	 
	 	 
	15-Feb-08
	 	 	74.3	 	 	 	40.3	 	 	 	30.3	 	 	 	23.3	 	 	 	18.4	 	 	 	10.5	 	 	 	6.4	 	 	 	4.0	 	 	 	2.6	 	 	 	1.2	 	 	 	0.5	 
	 	 	 
	15-Feb-09
	 	 	78.0	 	 	 	40.3	 	 	 	29.0	 	 	 	21.8	 	 	 	16.7	 	 	 	8.4	 	 	 	4.8	 	 	 	2.5	 	 	 	1.6	 	 	 	0.5	 	 	 	0.2	 
	 	 	 
	15-Feb-10
	 	 	83.1	 	 	 	39.4	 	 	 	27.0	 	 	 	18.4	 	 	 	13.3	 	 	 	5.4	 	 	 	2.3	 	 	 	1.0	 	 	 	0.4	 	 	 	0.0	 	 	 	0.0	 
	 	 	 
	15-Feb-11
	 	 	0.0	 	 	 	0.0	 	 	 	0.0	 	 	 	0.0	 	 	 	0.0	 	 	 	0.0	 	 	 	0.0	 	 	 	0.0	 	 	 	0.0	 	 	 	0.0	 	 	 	0.0	 
	 

          The stock prices and additional share amounts set forth above are based upon a Common
Stock price of $5.07 and an initial conversion price of $9.67 per share.

          The exact stock price and repurchase dates may not be set forth in the table, in which case if
the stock price is:

          (i) between two stock price amounts on the table or the repurchase date is between two dates
on the table, the number of additional shares will be determined by straight-line interpolation
between the number of additional shares set forth for the higher and lower stock price amounts and
the two dates, as applicable, based on a 365/366 day year;

          (ii) more than $30 per share (subject to adjustment), the Conversion Rate will not be
adjusted; and

          (iii) less than $5.07 per share (subject to adjustment), the Conversion Rate will not be
adjusted.

          Notwithstanding the foregoing, in no event will the Conversion Rate (taking into account any
increases in the Conversion Rate for the additional shares described above) exceed 186.5458 per
$1,000 principal amount of notes, subject to adjustment in the same manner as the Conversion Rate
as set forth in Section 12.4.

SECTION 12.6 Notice of Adjustments of Conversion Rate.

          Whenever the Conversion Rate is adjusted as herein provided:

          (1) the Company shall compute the adjusted Conversion Rate in accordance with Section 12.4 and
shall prepare a certificate signed by the Chief Financial Officer of the Company setting forth the
adjusted Conversion Rate and showing in reasonable detail the facts upon which such adjustment is
based, and such certificate shall promptly be filed with the Trustee and with each Conversion
Agent; and

          (2) upon each such adjustment, a notice stating that the Conversion Rate has been adjusted and
setting forth the adjusted Conversion Rate shall be required, and as soon as practicable after it
is required, such notice shall be provided by the Company to all Holders in accordance with Section
1.6.

90

 

          Neither the Trustee nor any Conversion Agent shall be under any duty or responsibility with
respect to any such certificate or the information and calculations contained therein, except to
exhibit the same to any Holder of Securities desiring inspection thereof at its office during
normal business hours, and shall not be deemed to have knowledge of any adjustment in the
Conversion Rate unless and until a Responsible Officer of the Trustee shall have received such a
certificate. Until a Responsible Officer of the Trustee receives such a certificate, the Trustee
and each Conversion Agent may assume without inquiry that the last Conversion Rate of which the
Trustee has knowledge of remains in effect.

SECTION 12.7 Notice of Certain Corporate Action.

          In case:

          (1) the Company shall declare a dividend (or any other distribution) on its Common Stock
payable (i) otherwise than exclusively in cash or (ii) exclusively in cash in an amount that would
require any adjustment pursuant to Section 12.4; or

          (2) the Company shall authorize the granting to all or substantially all of the holders of its
Common Stock of rights, options or warrants to subscribe for or purchase any shares of capital
stock of any class or of any other rights; or

          (3) of any reclassification of the Common Stock, or of any consolidation, merger or share
exchange to which the Company is a party and for which approval of any stockholders of the Company
is required, or of the conveyance, sale, transfer or lease of all or substantially all of the
assets of the Company; or

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

then the Company shall cause to be filed at each office or agency maintained for the purpose of
conversion of Securities pursuant to Section 10.2, and shall cause to be provided to all Holders in
accordance with Section 1.6, at least 20 days (or 10 days in any case specified in clause (1) or
(2) above) prior to the applicable record or effective date hereinafter specified, a notice stating
(x) the date on which a record is to be taken for the purpose of such dividend, distribution,
rights, options or warrants, or, if a record is not to be taken, the date as of which the holders
of Common Stock of record to be entitled to such dividend, distribution, rights, options or
warrants are to be determined or (y) the date on which such reclassification, consolidation,
merger, conveyance, transfer, sale, lease, dissolution, liquidation or winding up is expected to
become effective, and the date as of which it is expected that holders of Common Stock of record
shall be entitled to exchange their shares of Common Stock for securities, cash or other property
deliverable upon such reclassification, consolidation, merger, conveyance, transfer, sale, lease,
dissolution, liquidation or winding up. Neither the failure to give such notice or the notice
referred to in the following paragraph nor any defect therein shall affect the legality or validity
of the proceedings described in clauses (1) through

91

 

(4) of this Section 12.6. If at the time the Trustee shall not be the conversion agent, a copy of
such notice shall also forthwith be filed by the Company with the Trustee.

          The Company shall cause to be filed at the Corporate Trust Office and each office or agency
maintained for the purpose of conversion of Securities pursuant to Section 10.2, and shall cause to
be provided to all Holders in accordance with Section 1.6, notice of any tender offer by the
Company or any Subsidiary for all or any portion of the Common Stock at or about the time that such
notice of tender offer is provided to the public generally.

SECTION 12.8 Company to Reserve Common Stock.

          The Company shall at all times reserve and keep available, free from preemptive rights, out of
its authorized but unissued Common Stock, for the purpose of effecting the conversion of
Securities, the full number of shares of Common Stock then issuable upon the conversion of all
Outstanding Securities, assuming that the Company was to elect to issue Net Shares in lieu of cash.

SECTION 12.9 Taxes on Conversions.

          Except as provided in the next sentence, the Company will pay any and all taxes and duties
that may be payable in respect of the issue or delivery of shares of Common Stock on conversion of
Securities pursuant hereto. The Company shall not, however, be required to pay any tax or duty that
may be payable in respect of (i) income of the Holder (including cash received in lieu of
fractional shares of Common Stock), or (ii) any transfer involved in the issue and delivery of
shares of Common Stock in a name other than that of the Holder of the Security or Securities to be
converted, and no such issue or delivery shall be made unless and until the Person requesting such
issue has paid to the Company the amount of any such tax or duty, or has established to the
satisfaction of the Company that such tax or duty has been paid.

SECTION 12.10 Covenant as to Common Stock.

          The Company agrees that all shares of Common Stock that may be delivered upon conversion of
Securities, upon such delivery, will have been duly authorized and validly issued and will be fully
paid and nonassessable and will rank equally with the other shares of the Company’s Common Stock
and, except as provided in Section 12.8, the Company will pay all taxes, liens and charges with
respect to the issue thereof.

SECTION 12.11 Cancellation of Converted Securities.

92

 

          All Securities delivered for conversion shall be delivered to the Trustee or its agent to be
canceled by or at the direction of the Trustee, which shall dispose of the same as provided in
Section 3.9.

SECTION 12.12 Provision in Case of Consolidation, Merger or Sale of Assets.

          In case of any consolidation or merger of the Company with or into any other Person, any
merger of another Person with or into the Company (other than a consolidation or merger that does
not result in any reclassification, conversion, exchange or cancellation of outstanding shares of
Common Stock of the Company) or any conveyance, sale, transfer or lease of all or substantially all
of the assets of the Company (other than a conveyance, sale, transfer or lease of all or
substantially all of the assets of the Company that does not result in any reclassification,
conversion, exchange or cancellation of outstanding shares of Common Stock of the Company), the
Person formed by such consolidation or resulting from such merger or which acquires such assets, as
the case may be, shall execute and deliver to the Trustee a supplemental indenture providing that
the Holder of each Security then Outstanding shall have the right thereafter, during the period
such Security shall be convertible as specified in Section 12.1, to convert such Security only into
the kind and amount of securities, cash and other property receivable upon such consolidation,
merger, conveyance, sale, transfer or lease by a holder of the number of shares of Common Stock of
the Company into which such Security might have been converted immediately prior to such
consolidation, merger, conveyance, sale, transfer or lease, assuming such holder of Common Stock of
the Company (i) is not (A) a Person with which the Company consolidated or merged with or into or
which merged into or with the Company or to which such conveyance, sale, transfer or lease was
made, as the case may be (a “Constituent Person”), or (B) an Affiliate of a Constituent Person and
(ii) failed to exercise his rights of election, if any, as to the kind or amount of securities,
cash and other property receivable upon such consolidation, merger, conveyance, sale, transfer or
lease (provided that if the kind or amount of securities, cash and other property receivable upon
such consolidation, merger, conveyance, sale, transfer, or lease is not the same for each share of
Common Stock of the Company held immediately prior to such consolidation, merger, conveyance, sale,
transfer or lease by others than a Constituent Person or an Affiliate thereof and in respect of
which such rights of election shall not have been exercised (“Non-electing Share”), then for the
purpose of this Section 12.11 the kind and amount of securities, cash and other property receivable
upon such consolidation, merger, conveyance, sale, transfer or lease by the holders of each
Non-electing Share shall be deemed to be the kind and amount so receivable per share by a plurality
of the Non-electing Shares). Such supplemental indenture shall provide for adjustments that, for
events subsequent to the effective date of such supplemental indenture, shall be as nearly
equivalent as may be practicable to the adjustments provided for in this Article XII. The above
provisions of this Section 12.11 shall similarly apply to successive consolidations, mergers,
conveyances, sales, transfers or leases. Notice of the execution of such a supplemental indenture
shall be given by the Company to the Holder of each Security as provided in Section 1.6 promptly
upon such execution.

93

 

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

SECTION 12.13 Rights Issued in Respect of Common Stock.

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

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

               (ii) are not exercisable, and

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

shall not be deemed distributed for purposes of Section 12.4(1)(ii) until the occurrence of the
earliest Trigger Event. In addition, in the event of any distribution of rights or warrants, or
any Trigger Event with respect thereto, that shall have resulted in an adjustment to the Conversion
Rate under Section 12.4(1)(ii), (1) in the case of any such rights or warrants that shall all have
been redeemed or repurchased without exercise by any holders thereof, the Conversion Rate shall be
readjusted upon such final redemption or repurchase to give effect to such distribution or Trigger
Event, as the case may be, as though it were a cash distribution, equal to the per share redemption
or repurchase price received by a holder of Common Stock with respect to such rights or warrants
(assuming such holder had retained such rights or warrants), made to all holders of Common Stock as
of the date of such redemption or repurchase, and (2) in the case of any such rights or warrants
all of which shall have expired without exercise by any holder thereof, the Conversion Price shall
be readjusted as if such issuance had not occurred.

SECTION 12.14 Responsibility of Trustee for Conversion Provisions.

          The Trustee, subject to the provisions of Section 6.1, and any Conversion Agent shall not at
any time be under any duty or responsibility to any Holder of Securities to determine whether any
facts exist which may require any adjustment of the Conversion Rate, or with respect to the nature
or extent of any such adjustment when made, or with respect to the method employed, herein or in
any

94

 

supplemental indenture provided to be employed, in making the same, or whether a supplemental
indenture need be entered into. Neither the Trustee, subject to the provisions of Section 6.1, nor
any Conversion Agent shall be accountable with respect to the validity or value (or the kind or
amount) of any Common Stock, or of any other securities or property or cash, which may at any time
be issued or delivered upon the conversion of any Security; and it or they do not make any
representation with respect thereto. Neither the Trustee, subject to the provisions of Section 6.1,
nor any Conversion Agent shall be responsible for any failure of the Company to make or calculate
any cash payment or to issue, transfer or deliver any shares of Common Stock or share certificates
or other securities or property or cash upon the surrender of any Security for the purpose of
conversion; and the Trustee, subject to the provisions of Section 6.1, and any Conversion Agent
shall not be responsible for any failure of the Company to comply with any of the covenants of the
Company contained in this Article.

ARTICLE XIII

REPURCHASE OF SECURITIES AT THE OPTION OF THE HOLDER

SECTION 13.1 Right to Require Repurchase upon a Change in Control.

          In the event that a Change in Control (as hereinafter defined) shall occur, then each Holder
shall have the right, at the Holder’s option, but subject to the provisions of Section 13.2, to
require the Company to repurchase for cash, and upon the exercise of such right the Company shall
repurchase, all of such Holder’s Securities not theretofore called for redemption or repurchased by
the Company, or any portion of the principal amount thereof that is equal to U.S. $1,000 or any
integral multiple of U.S. $1,000 in excess thereof (provided that no single Security may be
repurchased in part unless the portion of the principal amount of such Security to be Outstanding
after such repurchase is equal to U.S. $1,000 or integral multiples of U.S. $1,000 in excess
thereof), on the date (the “Repurchase Date”) that is not more than 45 days after the date of the
Company Notice (as defined in Section 13.2) at a purchase price equal to 100% of the principal
amount of the Securities to be repurchased plus accrued and unpaid interest to, but excluding, the
Repurchase Date (the “Repurchase Price”); provided, however, that installments of interest, if any,
on Securities whose Stated Maturity is on or prior to the Repurchase Date shall be payable to the
Holders of such Securities, or one or more Predecessor Securities, registered as such on the
relevant Record Date according to their terms and the provisions of Section 3.7. Such right to
require the repurchase of the Securities shall not continue after a discharge of the Company from
its obligations with respect to the Securities in accordance with Article IV, unless a Change in
Control shall have occurred prior to such discharge. Whenever in this Indenture (including
Sections 2.2, 3.1, 5.1(1) and 5.8) there is a reference, in any context, to the principal of any
Security as of any time, such reference shall be deemed to include reference to the Repurchase
Price payable in respect of such Security to the extent that such Repurchase Price is, was or would
be so payable at such time, and express mention of the Repurchase Price in any provision of this
Indenture shall not be construed as excluding the Repurchase Price in those provisions of this
Indenture when such express mention is not made;

95

 

provided, however, that for the purposes of Article XIII such reference shall be deemed to
include reference to the Repurchase Price only to the extent the Repurchase Price is payable in
cash.

SECTION 13.2 Notices; Method of Exercising Repurchase Right, Etc..

          (1) Unless the Company shall have theretofore called for redemption all of the Outstanding
Securities, on or before the 30th day after the occurrence of a Change in Control, the Company or,
at the request and expense of the Company on or before the 15th day after such occurrence, the
Trustee, shall give to all Holders of Securities and to the Trustee, in the manner provided in
Section 1.6, notice (the “Company Notice”) of the occurrence of the Change in Control and of the
repurchase right set forth herein arising as a result thereof and the Company shall issue a Press
Release including the information required to be included in such Company Notice hereunder. The
Company shall also deliver a copy of such Company Notice to the Trustee.

          Each Company Notice shall state:

               (i) the Repurchase Date,

               (ii) the date by which the repurchase right must be exercised,

               (iii) the Repurchase Price,

               (iv) a description of the procedure that a Holder must follow to exercise a repurchase
right, and the place or places where such Securities are to be surrendered for payment of
the Repurchase Price and accrued interest,

               (v) that on the Repurchase Date the Repurchase Price will become due and payable in
cash upon each such Security designated by the Holder to be repurchased, and that interest
thereon will cease to accrue on and after such date,

               (vi) the Conversion Rate then in effect, whether the conversion rights are then
exercisable, the date on which the right to convert the principal amount of the Securities
to be repurchased will terminate and the place or places where such Securities may be
surrendered for conversion, and

               (vii) the place or places that the Security certificate with the Election of Holder to
Require Repurchase as specified in Section 2.2 shall be delivered.

          No failure of the Company to give the foregoing notices or defect therein shall limit any
Holder’s right to exercise a repurchase right or affect the validity of the proceedings for the
repurchase of Securities.

          If any of the foregoing provisions or other provisions of this Article XIV are inconsistent
with applicable law, such law shall govern.

96

 

          (2) To exercise a repurchase right, a Holder shall deliver to the Trustee on or before the
30th day after the date of the Company Notice (i) irrevocable written notice of the Holder’s
exercise of such right, which notice shall set forth the name of the Holder, the principal amount
of the Securities to be repurchased (and, if any Security is to repurchased in part, the serial
number thereof, the portion of the principal amount thereof to be repurchased and the name of the
Person in which the portion thereof to remain Outstanding after such repurchase is to be
registered) and a statement that an election to exercise the repurchase right is being made
thereby, and (ii) the Securities with respect to which the repurchase right is being exercised.
Such written notice shall be irrevocable, except that the right of the Holder to convert the
Securities with respect to which the repurchase right is being exercised shall continue until the
close of business on the Business Day immediately preceding the Repurchase Date.

          (3) In the event a repurchase right shall be exercised in accordance with the terms hereof,
the Company shall pay or cause to be paid to the Trustee the Repurchase Price in cash, as provided
above, for payment to the Holder on the Repurchase Date; provided, however, that installments of
interest that mature on or prior to the Repurchase Date shall be payable in cash to the Holders of
such Securities, or one or more Predecessor Securities, registered as such at the close of business
on the relevant Regular Record Date, on the date that is not more than 45 days after the date of
the Company Notice.

          (4) If any Security (or portion thereof) surrendered for repurchase shall not be so paid on
the Repurchase Date the principal amount of such Security (or portion thereof, as the case may be)
shall, until paid, bear interest to the extent permitted by applicable law from the Repurchase Date
at the rate of 0.50% per annum, and each such Security shall remain convertible into Common Stock
until the principal of such Security (or portion thereof, as the case may be) shall have been paid.

          (5) Any Security that is to be repurchased only in part shall be surrendered to the Trustee
(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 his attorney duly authorized in writing), and the Company shall execute, and the Trustee shall
authenticate and make available for delivery to the Holder of such Security without service charge,
a new Security or Securities, containing identical terms and conditions, each in an authorized
denomination in aggregate principal amount equal to and in exchange for the unrepurchased portion
of the principal of the Security so surrendered.

          (6) All Securities delivered for repurchase shall be delivered to the Trustee to be canceled
at the direction of the Trustee, which shall dispose of the same as provided in Section 3.9.

          (7) The Company will comply with the Exchange Act and the rules and regulations promulgated
under the Exchange Act, to the extent applicable, in connection with the Company Notice.

SECTION 13.3 Certain Definitions.

97

 

For purposes of the foregoing sections of this Article XIII,

     (1) the term “beneficial owner” shall be determined in accordance with Rule 13d-3, as in
effect on the date of the original execution of this Indenture, promulgated by the Commission
pursuant to the Exchange Act;

     (2) a “Change in Control” shall be deemed to have occurred at the time, after the original
issuance of the Securities, that any of the following occurs:

               (i) the acquisition by any Person of beneficial ownership, directly or indirectly,
through a purchase, merger or other acquisition transaction or series of transactions, of
shares of capital stock of the Company entitling such person to exercise 50% or more of the
total voting power of all shares of capital stock of the Company entitled to vote generally
in the elections of directors, other than any such acquisition by the Company, any
Subsidiary of the Company or any employee benefit plan of the Company; or

               (ii) any consolidation of the Company with, or merger of the Company into, any other
Person, any merger of another Person into the Company, or any conveyance, sale, transfer or
lease of all or substantially all of the assets of the Company to another Person, other
than:

                    (a) any such transaction that does not result in a reclassification, conversion,
exchange or cancellation of outstanding shares of capital stock and pursuant to which the
holders of 50% or more of the total voting power of all shares of the Company’s capital
stock entitled to vote generally in the election of directors immediately prior to such
transaction have the entitlement to exercise, directly or indirectly, 50% or more of the
total voting power of all shares of capital stock entitled to vote generally in the
election of directors of the continuing or surviving corporation immediately after such
transaction; or

                    (b) any such transaction which is effected solely to change the jurisdiction of
incorporation of the Company.

               (iii) any transaction or event (whether by means of an exchange offer, liquidation,
tender offer, consolidation, merger, binding share exchange, combination, reclassification,
recapitalization or otherwise) in connection with which all or substantially all of the
Common Stock is exchanged for, converted into, acquired for or constitutes solely the right
to receive, consideration which is not all or substantially all common stock that:

                    (a) is listed on, or immediately after the transaction or event will be listed on, a
United States national securities exchange, or

                    (b) is approved, or immediately after the transaction or event will be approved, for
quotation on the Nasdaq National Market or any similar United States system of automated
dissemination of quotations of securities prices.

98

 

          Provided, however, that a Change in Control shall not be deemed to have occurred if:
(I) the Closing Sale Price of the Common Stock for any five Trading Days within the period
of 10 consecutive Trading Days ending immediately after the later of the Change in Control
and the public announcement of the Change in Control (in the case of a Change in Control
under clause (i) above) or the period of 10 consecutive Trading Days ending immediately
before the Change in Control (in the case of a Change in Control under clause (ii) and
(iii) above) shall, in the case of each of such five Trading Days, equal or exceed 105% of
the Conversion Price of the Securities in effect on each of such five Trading Days; or (II)
all of the consideration (excluding cash payments for fractional shares and cash payments
made pursuant to dissenters’ appraisal rights) in a merger or consolidation otherwise
constituting a Change in Control under clause (ii) above, consists of shares of common
stock, depositary receipts or other certificates representing common equity interests
traded on a national securities exchange or quoted on the Nasdaq National Market (or will
be so traded or quoted immediately following such merger or consolidation) and as a result
of such merger or consolidation the notes become convertible solely into such common stock,
depositary receipts or other certificates representing common equity interests.

          (3) the term “Conversion Price” shall equal U.S. $1,000 divided by the Conversion Rate
(rounded to the nearest U.S. $0.01); and

          (4) for purposes of Section 13.4(2)(i), the term “Person” shall include any syndicate or group
which would be deemed to be a “person” under Section 13(d)(3) of the Exchange Act, as in effect on
the date of the original execution of this Indenture.

SECTION 13.4 Consolidation, Merger, Etc..

          In the case of any merger, consolidation, conveyance, sale, transfer or lease of all or
substantially all of the assets of the Company to which Section 12.11 applies, in which the Common
Stock of the Company is changed or exchanged as a result into the right to receive shares of stock
and other securities or property or assets (including cash) which includes shares of common stock
of another Person that are, or upon issuance will be, traded on a United States national securities
exchange or approved for trading on an established automated over-the-counter trading market in the
United States, the Person formed by such consolidation or resulting from such merger or combination
or which acquires the properties or assets (including cash) of the Company, as the case may be,
shall execute and deliver to the Trustee a supplemental indenture (which shall comply with the
Trust Indenture Act as in force at the date of execution of such supplemental indenture) modifying
the provisions of this Indenture relating to the right of Holders to cause the Company to
repurchase the Securities following a Change in Control, including without limitation the
applicable provisions of this Article XIII and the definitions of the Common Stock and Change in
Control, as appropriate, and such other related definitions set forth herein as determined in good
faith by the Company (which determination shall be conclusive and binding), to make such provisions
apply in the event of a subsequent Change in Control to the common stock and the issuer thereof if
different

99

 

from the Company and Common Stock of the Company (in lieu of the Company and the Common Stock
of the Company).

SECTION 13.5 Repurchase at the Option of the Holder on the Purchase Date.

          (a) General. At the option of the Holder, the Securities shall be purchased by the
Company on each February 15, of each of 2011, 2014, 2019, 2024 and 2029 (each a “Purchase Date”),
in whole or in part, at 100% of the principal amount in cash, on the Purchase Date, of such
Securities to be purchased, together with accrued and unpaid interest to, but excluding, the
Purchase Date (the “Purchase Price”) upon 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 the Purchase Date until the close of business on the Purchase Date.
The Purchase Notice shall include the following information:

          (1) if certificated Securities have been issued, the certificate number of the Securities that
the Holder will deliver to be purchased, or if no certificated Securities have been issued, such
information as may be required under the applicable procedures of the Depositary and the Indenture;

          (2) the portion of the principal amount of the Securities that the Holder will deliver to be
purchased, which portion must be $1,000 or an integral multiple thereof;

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

          (4) that 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 in the case of
certificated Securities or otherwise by book-entry transfer) is 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 13.6 only if the Security so delivered to the Paying Agent shall conform
in all respects to the description thereof in the related Purchase Notice.

          The Paying Agent shall promptly notify the Company of the receipt by it of a Purchase Notice.

          Any purchase by the Company contemplated pursuant to the provisions of this Section 13.6 shall
be consummated by the delivery of the consideration from the Company to the Paying Agent, to be
received by the Holder promptly following the later of the Purchase Date and the time of delivery
of the Security.

          If the Paying Agent holds money or securities sufficient to pay the Purchase Price of the
Securities on the Business Day following the Purchase Date in accordance with the terms of this
Indenture, then, immediately after the Purchase Date, the Securities will cease to be Outstanding
whether or not the Securities have been delivered to the Paying Agent. Thereafter, all other rights
of

100

 

the Holders shall terminate, other than the right to receive the Purchase Price upon delivery
of the Securities.

          Provisions of this Indenture that apply to the purchase of all of a Security also apply to the
purchase of a portion of a Security.

          (b) Notice of Optional Repurchase. The Company is required to give notice (the
“Notice of Optional Repurchase”) to the Holders on a date that is no less than 20 Business Days
prior to the Purchase Date. The Notice of Optional Repurchase shall be delivered to all Holders at
their respective addresses shown in the Register and to beneficial owners as required by law, and
shall include the following information:

          (1) the name and address of the Paying Agent;

          (2) that the Purchase Notice must be delivered by each Holder electing to have the Company
repurchase such Holder’s Securities (or a portion thereof) as of the Purchase Date, to the Paying
Agent the Notice of Optional Repurchase shall include a form of Purchase Notice;

          (3) that the Securities must be surrendered (by physical delivery at the office of the Paying
Agent in the case of certificated Securities, or otherwise by book-entry transfer) to the Paying
Agent to collect payment;

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

          (5) a brief summary of the conversion rights of the Securities;

          (6) the procedures for withdrawing a Purchase Notice and a sample form of Notice of
Withdrawal; and

          (7) the CUSIP number or numbers of the Securities being purchased.

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

          The Company will comply with the Exchange Act and the rules and regulations promulgated under
the Exchange Act, to the extent applicable, in connection with the Notice of Optional Repurchase.

          (c) Notice of Withdrawal. Notwithstanding anything herein to the contrary, any Holder
delivering to the Paying Agent the Purchase Notice contemplated by this Section 13.6 shall have the
right to withdraw such Purchase Notice at any time prior to the close of business on the Purchase

101

 

Date by delivery of a written notice of withdrawal (a “Notice of Withdrawal”) to the Paying
Agent. The Notice of Withdrawal shall indicate the following:

          (1) the principal amount of Securities being withdrawn;

          (2) if certificated Securities have been issued, the certificate numbers of the Securities
being withdrawn or if certificated Securities have not been issued, such information as may be
required under the applicable procedures of the Depositary and the Indenture; and

          (3) the principal amount, if any, that remains subject to the Purchase Notice.

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

ARTICLE XIV

HOLDERS LISTS AND REPORTS BY TRUSTEE AND COMPANY; NON-RECOURSE

SECTION 14.1 Company to Furnish Trustee Names and Addresses of Holders.

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

          (1) semi-annually, not more than 15 days after the Regular Record Date, a list, in such form
as the Trustee may reasonably require, of the names and addresses of the Holders of Securities as
of such date as the Trustee may reasonably request, and

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

provided, however, that no such list need be furnished so long as the Trustee is acting as Security
Registrar.

SECTION 14.2 Preservation of Information.

          (1) The Trustee shall preserve, in as current a form as is reasonably practicable, the names
and addresses of Holders contained in the most recent list furnished to the Trustee as provided in
Section 14.1 and the names and addresses of Holders received by the Trustee in its capacity as
Security Registrar. The Trustee may destroy any list, if any, furnished to it as provided in
Section 14.1 upon receipt of a new list so furnished.

102

 

          (2) After this Indenture has been qualified under the Trust Indenture Act, the rights of
Holders to communicate with other Holders with respect to their rights under this Indenture or
under the Securities, and the corresponding rights, and duties of the Trustee, shall be as provided
by the Trust Indenture Act.

          (3) Every Holder of Securities, by receiving and holding the same, agrees with the Company and
the Trustee that neither the Company nor the Trustee nor any agent of either of them shall be held
accountable by reason of any disclosure of information as to names and addresses of Holders made
pursuant to the Trust Indenture Act.

SECTION 14.3 Reports by Trustee.

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

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

SECTION 14.4 Reports by Company.

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

ARTICLE XV

IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS

SECTION 15.1 Indenture and Securities Solely Corporate Obligations.

          No recourse for the payment of the principal of or premium, if any, or interest, if any, on
any Security and no recourse under or upon any obligation, covenant or agreement of the Company in
this Indenture or in any supplemental indenture or in any Security, or because of the creation of
any

103

 

indebtedness represented thereby, shall be had against any incorporator, stockholder,
employee, agent, officer, or director or subsidiary, as such, past, present or future, of the
Company or of any successor corporation, whether by virtue of any constitution, statute or rule of
law, or by the enforcement of any assessment or penalty or otherwise; it being expressly understood
that all such liability is hereby waived and released as a condition of, and as a consideration
for, the execution of this Indenture and the issue of the Securities.

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

104

 

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

	 	 	 	 	 
	

	 	SOLECTRON
	 	CORPORATION
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	 
	

	 	Name:	 	 
	

	 	 	 	 
	

	 	Title:	 	 
	

	 	 	 	 
	 
	 	 	 	 
	

	 	U.S. BANK
	 	NATIONAL ASSOCIATION,
	

	 	as Trustee	 	 
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	 
	

	 	Name:	 	 
	

	 	 	 	 
	

	 	Title:	 	 
	

	 	 	 	 

 

 

ANNEX B — Form of Surrender Certificate

          In connection with the certification contemplated by Section 12.2 relating to compliance with
certain restrictions relating to transfers of Restricted Securities, such certification shall be
provided substantially in the form of the following certificate, with only such changes thereto as
shall be approved by the Company and Goldman, Sachs & Co.:

CERTIFICATE

SOLECTRON CORPORATION

0.50% CONVERTIBLE SENIOR NOTES DUE FEBRUARY 15, 2034

          This is to certify that as of the date hereof with respect to U.S. $___principal amount of
the above-captioned securities surrendered on the date hereof (the “Surrendered Securities”) for
registration of transfer, or for conversion or repurchase where the securities issuable upon such
conversion or repurchase are to be registered in a name other than that of the undersigned Holder
(each such transaction being a “transfer”), the undersigned Holder (as defined in the Indenture)
certifies that the transfer of Surrendered Securities associated with such transfer complies with
the restrictive legend set forth on the face of the Surrendered Securities for the reason checked
below:

	 	 	 
	                    

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

	 	The transfer of the Surrendered Securities complies with Rule
144 under the United States Securities Act of 1933, as amended
(the “Securities Act”); or
	 
	 	 
	                    

	 	The transfer of the Surrendered Securities has been made to an
institution that is an “accredited investor” within the meaning
of Rule 501(a)(1), (2), (3) or (7) under the Securities Act in a
transaction exempt from the registration requirements of the
Securities Act and a signed letter containing certain
representations and agreements relating to restrictions on
transfer of the Securities (and if such transfer is for an
aggregate principal amount less than $250,000 an opinion of
counsel acceptable to the Company if requested by the Company,
that such transfer is exempt from registration); or
	 
	 	 
	                    

	 	The transfer of the Surrendered Securities has been made
pursuant to an exemption from registration under the Securities
Act and an opinion of counsel has been delivered to the Company
with respect to such transfer.

[Name of Holder]

Dated:                                        

*To be dated the date of surrender<PAGE>

                                                                    EXHIBIT 10.2

                              DEBTOR IN POSSESSION
                           REVOLVING CREDIT AGREEMENT

                          dated as of January 25, 2005

                                      among

                       FIRST VIRTUAL COMMUNICATIONS, INC.
               as debtor and debtor in possession and as Borrower,

                                       and

                      MTVP (FIRST VIRTUAL INVESTMENTS), LLC
                                   as Lender.

<PAGE>

                         LIST OF EXHIBITS AND SCHEDULES

Exhibit A           Form of Note
Exhibit B           Form of Loan Request
Exhibit C           Form of Compliance Certificate
Exhibit D           Form of Borrowing Base Certificate

Schedule 8.5        Intellectual Properties
Schedule 8.6        Litigation
Schedule 8.17       Subsidiaries
Schedule 8.19       Bank Accounts
Schedule 9.22       Certain Subsidiaries
Schedule 10.1       Indebtedness
Schedule 10.2       Liens
Schedule 10.3       Investments

<PAGE>

                         DEBTOR IN POSSESSION REVOLVING
                                CREDIT AGREEMENT

      This DEBTOR IN POSSESSION REVOLVING CREDIT AGREEMENT is made as of JANUARY
__, 2005, by and among FIRST VIRTUAL COMMUNICATIONS, INC., a Delaware
corporation and a debtor and a debtor in possession (the "Borrower"), MTVP
(FIRST VIRTUAL INVESTMENTS), LLC, a Washington limited liability company (the
"Lender").

      WHEREAS, on January 20, 2005 (the "Filing Date"), the Borrower filed a
petition under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy
Court for the District of California, San Francisco Division;

      WHEREAS, the Borrower intends to continue to operate its business pursuant
to Sections 1107 and 1108 of the Bankruptcy Code;

      WHEREAS, the Borrower has requested that the Lender provide financing to
the Borrower consisting of advances in an amount up to $2,000,000.00 pursuant to
Sections 364(c)(1), (2) and (3) of the Bankruptcy Code in order to provide
working capital for the Borrower and for the Borrower to use for other corporate
purposes;

      WHEREAS, the Lender has indicated its willingness to agree to extend such
credit to the Borrower, all on the terms and conditions set forth herein and in
the other Loan Documents and in accordance with Sections 364(c)(1), (2) and (3)
of the Bankruptcy Code, so long as such postpetition credit obligations are (a)
secured by Liens on all of the property and interests, real and personal,
tangible and intangible, of the Borrower, whether now owned or hereafter
acquired, subject in priority only to certain Liens and the Carve Out as
hereinafter provided, and (b) given superpriority status subject only to the
Carve Out; and

      WHEREAS, the Borrower has agreed to provide such collateral security and
superpriority claims subject to the approval of the Bankruptcy Court;

      NOW, THEREFORE, in consideration of these premises and of the mutual
undertakings set forth herein, the parties hereto hereby agree as follows:

                   1. DEFINITIONS AND RULES OF INTERPRETATION

      1.1. DEFINITIONS. The following terms shall have the meanings set forth in
this Section 1 or elsewhere in the provisions of this Credit Agreement referred
to below:

      Account Debtor. A Person who is obligated on an Accounts Receivable.

      Accounts Receivable. All rights of the Borrower to payment for goods sold,
leased or otherwise marketed in the ordinary course of business and all rights
of the Borrower to payment for services rendered in the ordinary course of
business and all sums of money or other proceeds due thereon pursuant to
transactions with account debtors, except for that portion of the sum of money
or other proceeds due thereon that relate to sales, use or

<PAGE>

property taxes in conjunction with such transactions, recorded on books of
account in accordance with GAAP.

      Adjusted EBITDA. For any period, (i) net income or loss of the Borrower
for such period, determined in accordance with GAAP, after deduction of all
expenses, taxes, and other proper charges, minus (ii) to the extent included in
the calculation of net income for such period and without duplication, (A)
non-cash gains or other non-cash income for such period, and (B) any gains from
the sale or other disposition of assets outside of the ordinary course during
such period, and plus (iii) to the extent deducted in the calculation of net
income for such period and without duplication, (A) the interest expense of the
Borrower for such period, as determined in accordance with GAAP, (B) income tax
expense, (C) cash restructuring charges incurred in connection with the Case,
(D) depreciation, amortization and, if non-recurring, other non-cash charges to
income for such period, and (E) any losses from the sale or other disposition of
assets outside of the ordinary course during such period.

      Affiliate. Any Person that would be considered to be an affiliate of the
Borrower under Rule 144(a) of the Rules and Regulations of the Securities and
Exchange Commission, as in effect on the date hereof, if the Borrower were
issuing securities.

      Applicable Pension Legislation. At any time, any pension or retirement
benefits legislation (be it national, federal, provincial, territorial or
otherwise) then applicable to the Borrower or any of its Subsidiaries.

      Approved Fund. Any Fund that is administered or managed by (a) a Lender,
(b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that
administers or

      manages a Lender.

      Avoidance Actions. Avoidance actions of the Borrower under Chapter 5 or
Section 724(a) of the Bankruptcy Code and proceeds thereof. The term does not
include an action to avoid a transfer under Section 549 of the Bankruptcy Code
if the transfer was of an asset otherwise constituting Collateral.

      Balance Sheet Date. January 20, 2005.

      Bankruptcy Code. Title 11, United States Code.

      Bankruptcy Court. The United States Bankruptcy Court for the District of
California, San Francisco Division, or such other court having jurisdiction over
the Case.

      Base Rate. The higher of (a) the annual rate of interest announced from
time to time by Bank of America NA as its "prime rate" and (b) one-half of one
percent (1/2%) above the Federal Funds Effective Rate. For the purposes of this
definition, "Federal Funds Effective Rate" shall mean for any day, the rate per
annum equal to the weighted average of the rates on overnight federal funds
transactions with members of the Federal Reserve System arranged by federal
funds brokers, as published for such day (or, if such day is not a Business Day,
for the next preceding Business Day) by the Federal Reserve Bank of New York,
or, if such rate is not so published for any day that is a Business Day, the
average of the quotations for such day on such transactions received by the
Lender from three funds

                                      -2-
<PAGE>

brokers of recognized standing selected by the Lender. Changes in the Base Rate
resulting from any changes in the "prime rate" shall take place immediately
without notice or demand of any kind.

      Borrowing Base. At the relevant time of reference thereto, an amount
determined by the Lender by reference to the most recent Borrowing Base
Certificate and the most recent appraisal of the Eligible Fixed Assets delivered
to the Lender in accordance with the terms of this Credit Agreement, as adjusted
pursuant to the provisions below, which is equal to the sum of:

                  (a) 40% of Eligible Accounts Receivable for which invoices
            have been issued and are payable; plus

                  (b) 0% of the Net Book Value of Eligible Inventory; plus

                  (c) 0% of the Determined Value of Eligible Fixed Assets.

The Lender may, in its discretion, from time to time, upon five (5) days' prior
notice to the Borrower, (x) reduce the lending formula with respect to Eligible
Accounts Receivable to the extent that the Lender determines that: (i) the
dilution with respect of the Eligible Accounts Receivable for any period has
increased in any material respect or may be reasonably anticipated to increase
in any material respect above historical levels, or (ii) the general
creditworthiness of account debtors or other obligors of the Borrower has
declined or (y) reduce the lending formula(s) with respect to Eligible Inventory
to the extent that the Lender determines that: (i) the number of days of the
turnover of the inventory of the Borrower for any period has changed in any
material adverse respect, (ii) the liquidation value of the Eligible Inventory,
or any category thereof, has decreased, or (iii) the nature and quality of the
inventory of the Borrower has deteriorated in any material respect or the mix of
such inventory has changed materially, or (z) deem any Accounts Receivable not
to be reasonably collectable and therefore not to be an Eligible Accounts
Receivable for purposes of calculating the Borrowing Base. In determining
whether to reduce the lending formula(s), the Lender may consider events,
conditions, contingencies or risks which are also considered in determining
Eligible Accounts Receivable or Eligible Inventory.

      Borrowing Base Certificate. See Section 9.4(h).

      Borrower. As defined in the preamble hereto.

      Budget. See Section 8.4.3.

      Business Day. Any day on which banking institutions in California are open
for the transaction of banking business.

      Capital Assets. Fixed assets, both tangible (such as land, buildings,
fixtures, machinery and equipment) and intangible (such as patents, copyrights,
trademarks, franchises and good will). The term does not include any item
customarily charged directly to expense or depreciated over a useful life of
twelve (12) months or less in accordance with GAAP.

                                      -3-
<PAGE>

      Capital Expenditures. Amounts paid or Indebtedness incurred by the
Borrower in connection with the purchase, lease, improvement, maintenance, or
repair by Borrower of Capital Assets that would be required to be capitalized
and shown on the Borrower's balance sheet in accordance with GAAP.

      Capitalized Lease. With respect to the Borrower, any lease of any property
(whether real, personal or mixed) as lessee that, in accordance with GAAP,
either would be required to be classified and accounted for as a capital lease
on a balance sheet or otherwise be disclosed as such in a note to such balance
sheet, other than any such lease under which the Borrower is the lessor.

      Capital Stock. Any and all shares, interests, participations or other
equivalents (however designated) of capital stock of a corporation, any and all
equivalent ownership interests in a Person (other than a corporation) and any
and all warrants, rights or options to purchase any of the foregoing.

      Carve Out. At the time of reference thereto, the sum of (a) allowed
administrative expenses payable pursuant to 28 U.S.C. Section 1930(a)(6) and (b)
Priority Professional Expenses incurred on and after the Filing Date.

      Case. The Borrower's reorganization case under Chapter 11 of the
Bankruptcy Code pending in the Bankruptcy Court.

      Closing Date. The first date on which the conditions set forth in Section
12 have been satisfied and any Loan is to be made hereunder.

      Code. The Internal Revenue Code of 1986.

      Collateral. All of the property, rights and interests of the Borrower that
are or are intended to be subject to the Liens created by the Security Documents
or the Orders.

      Commitment. With respect to each Lender, the product of such Lender's
Commitment Percentage and the Total Commitment then in effect, as the same may
be reduced from time to time; or, if such commitment is terminated pursuant to
the provisions hereof, zero.

      Commitment Percentage. The Lender's Commitment Percentage shall be 100%.

      Compliance Certificate. See Section 9.4(d).

      Consolidated or consolidated. With reference to any term defined herein,
shall mean that term as applied to the accounts of the Borrower and its
Subsidiaries, consolidated in accordance with GAAP.

      Copyright Mortgage. The several Memorandums of Grants of Security Interest
in Copyrights, entered or to be entered into by the Borrower in favor of the
Lender and in form and substance satisfactory to the Lender.

                                      -4-
<PAGE>

      Credit Agreement. This Debtor In Possession Revolving Credit Agreement,
including the Schedules and Exhibits hereto.

      Creditors' Committee. The official unsecured creditors' committee, if any,
appointed in the Case.

      Cumulative Cash Flow. For any period commencing February 1, 2005 the
Adjusted EBITDA for such period, minus the Borrower's cash Capital Expenditures
during such period, plus (or minus) the Borrower's positive (or negative) change
in working capital during such period. There shall also be deducted from
Cumulative Cash Flow for such period the amount of any payments, other than
interest, required to be made pursuant to an order of the Bankruptcy Court in
the Case for adequate protection pursuant to the Bankruptcy Code on account of
Permitted Prior Liens and made during such period.

      Default. See Section 14.1.

      Derivative Transaction. Any of (a) a "swap agreement" as defined in
Section 101(53B) of the Bankruptcy Code (other than a spot foreign exchange
transaction), (b) any equity swap, floor, collar, cap or option transaction, (c)
any option to enter into any of the foregoing, and (d) any combination of the
foregoing.

      Determined Value. At the relevant time of reference thereto, the lesser of
(a) the net book value of Eligible Fixed Assets, determined in accordance with
GAAP, and (b) the appraised value of such assets on an orderly liquidation basis
determined by the most recent appraisal thereof conducted pursuant to Section
10.4(i); provided that, until the first appraisal has been completed pursuant to
Section 10.4(i), the Determined Value of Eligible Fixed Assets shall be the net
book value of such assets as of the Closing Date, determined in accordance with
GAAP. To the extent that any Eligible Fixed Asset is encumbered by a lien or
encumbrance which is a Permitted Lien not securing the Obligations, the amount
of the Indebtedness secured by such lien or encumbrance shall be deducted from
the value determined in accordance with the immediately preceding sentence of
this definition of the term "Determined Value".

      Distribution. The declaration or payment of any dividend on or in respect
of any shares of any class of Capital Stock of the Borrower, other than
dividends payable solely in shares of common stock of the Borrower; the
purchase, redemption, or other retirement of any shares of any class of Capital
Stock of the Borrower directly or indirectly through a Subsidiary of the
Borrower or otherwise (including the setting apart of assets for a sinking or
other analogous fund to be used for such purpose); the return of capital by the
Borrower to its shareholders as such; or any other distribution on or in respect
of any shares of any class of Capital Stock of the Borrower.

      Dollars or $. Dollars in lawful currency of the United States of America.

      Drawdown Date. The date on which any Loan is made or is to be made.

      Eligible Accounts Receivable. The aggregate of the unpaid portions of
Accounts Receivable (net of any credits, rebates, offsets, holdbacks or other
adjustments or commissions payable to third parties that are adjustments to such
Accounts Receivable) (a)

                                      -5-
<PAGE>

that the Borrower reasonably and in good faith determines to be collectible; (b)
that are with account debtors or other obligors that (i) are not Affiliates of
the Borrower, (ii) purchased the goods or services giving rise to the relevant
Accounts Receivable in an arm's length transaction, (iii) are not insolvent or
involved in any case or proceeding, whether voluntary or involuntary, under any
bankruptcy, reorganization, arrangement, insolvency, adjustment of debt,
dissolution, liquidation or similar law of any jurisdiction and (iv) are, in the
Lender's reasonable judgment, creditworthy; (c) that are in payment of
obligations that have been fully performed, do not consist of progress billings
or bill and hold invoices and are not subject to dispute or any other similar
claims that would reduce the cash amount payable therefor; (d) that are not
subject to any Lien other than those created by the Loan Documents; (e) in which
the Lender has a valid and perfected first priority security interest; (f) that
are not outstanding for more than ninety (90) days past the earlier to occur of
(i) the date of the respective invoices therefor and (ii) the date of shipment
thereof in the case of goods or the end of the calendar month following the
provision thereof in the case of services; (g) that are payable in the ordinary
course of Borrower's business; and (h) that are not secured by a letter of
credit unless the Lender has a prior security interest in such letter of credit
perfected by control.

      Eligible Assignee. Any of (a) a Lender, (b) an Affiliate of a Lender and
(c) an Approved Fund and (d) any other Person (other than a natural person)
approved by the Borrower (such approval not to be unreasonably withheld or
delayed), except that such approval is not required if a Default or an Event of
Default has occurred and is continuing.

      Eligible Fixed Assets. Those fixed assets (excluding all leaseholds) owned
by the Borrower at the relevant time of reference thereto.

      Eligible Inventory. With respect to the Borrower, finished goods, work in
progress and raw materials and component parts inventory owned by the Borrower;
provided that Eligible Inventory shall not include any inventory (a) held on
consignment, or not otherwise owned by the Borrower, or of a type no longer sold
by the Borrower; (b) which has been returned by a customer or is damaged or
subject to any legal encumbrance other than Permitted Liens; (c) which is not in
the possession of the Borrower unless the Lender has received a waiver from the
party in possession of such inventory in form and substance satisfactory to the
Lender; (d) which is held by the Borrower on property leased by the Borrower,
unless the Lender has received a waiver from the lessor of such leased property
and, if any, sublessor thereof in form and substance satisfactory to the Lender;
(e) as to which appropriate Uniform Commercial Code financing statements showing
the Borrower as debtor and the Lender as secured party have not been filed in
the proper filing office or offices in order to perfect the Lender's security
interest therein; (f) which has been shipped to a customer of the Borrower
regardless of whether such shipment is on a consignment basis; (g) which is not
located within the United States of America; or (h) which the Lender reasonably
deems to be obsolete or not marketable.

      Employee Benefit Plan. Any employee benefit plan within the meaning of
Section 3(3) of ERISA maintained or contributed to by the Borrower or any ERISA
Affiliate, other than a Guaranteed Pension Plan or a Multiemployer Plan.

      Environmental Laws. See Section 8.16.

                                      -6-
<PAGE>

      ERISA. The Employee Retirement Income Security Act of 1974.

      ERISA Affiliate. Any Person which is treated as a single employer with the
Borrower under Section 414 of the Code.

      ERISA Reportable Event. A reportable event with respect to a Guaranteed
Pension Plan within the meaning of Section 4043 of ERISA and the regulations
promulgated thereunder.

      Event of Default. See Section 14.1.

      Filing Date. As defined in the recitals hereto.

      Final Order. A final order of the Bankruptcy Court in the Case authorizing
and approving this Credit Agreement and the other Loan Documents under Section
364(c) of the Bankruptcy Code and entered at or after a final hearing, in form
and substance satisfactory to the Lender and its counsel and the Borrower and
its counsel. The Final Order shall, among other things, have:

            (a) authorized the transactions contemplated by this Credit
      Agreement and the extensions of credit under this Credit Agreement in an
      amount not greater than the Total Commitment provided for herein after
      entry of the Final Order;

            (b) granted the claim status and Liens described in Section 7.1, and
      prohibited the granting of additional Liens on the assets of the Borrower
      other than Permitted Liens;

            (c) provided that such Liens are automatically perfected by the
      entry of the Final Order and also granted to the Lender relief from the
      automatic stay of Section 362(a) of the Bankruptcy Code to enable the
      Lender, if the Lender elects to do so in its discretion, to make all
      filings and recordings and to take all other actions considered necessary
      or advisable by the Lender to perfect, protect and insure the priority of
      its Liens upon the Collateral as a matter of non-bankruptcy law; and

            (d) declared that the credit extended hereunder and the negotiation
      of the Credit Agreement and the other Loan Documents have been made or
      done in good faith and therefore the Obligations incurred and the
      granting, perfection and priority of the Liens hereunder and thereunder
      are entitled to the protections in Section 364(e) of the Bankruptcy Code.

      Fund. Any Person (other than a natural person) that is (or will be)
engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its business.

      GAAP or generally accepted accounting principles. (a) When used in Section
11, whether directly or indirectly through reference to a capitalized term used
therein, means (i) principles that are consistent with the principles
promulgated or adopted by the Financial Accounting Standards Board and its
predecessors, in effect for the fiscal year ended on the Balance Sheet Date, and
(ii) to the extent consistent with such principles, the accounting practice of
the Borrower reflected in its financial statements for the year ended on the

                                      -7-
<PAGE>

Balance Sheet Date, and (b) when used in general, other than as provided above,
means principles that are (i) consistent with the principles promulgated or
adopted by the Financial Accounting Standards Board and its predecessors, as in
effect from time to time, and (ii) consistently applied with past financial
statements of the Borrower adopting the same principles, provided that in each
case referred to in this definition of "GAAP" a certified public accountant
would, insofar as the use of such accounting principles is pertinent, be in a
position to deliver an unqualified opinion (other than a qualification regarding
changes in GAAP) as to financial statements in which such principles have been
properly applied.

      Governing Documents. With respect to any Person, its certificate or
articles of incorporation, certificate of formation, or, as the case may be,
certificate of limited partnership, its by-laws, operating agreement or, as the
case may be, partnership agreement or other constitutive documents and all
shareholder agreements, voting trusts and similar arrangements applicable to any
of its Capital Stock.

      Governmental Authority. Any foreign, federal, state, regional, local,
municipal or other government, or any department, commission, board, bureau,
agency, public authority or instrumentality thereof, or any court or arbitrator.

      Guaranteed Pension Plan. Any employee pension benefit plan within the
meaning of Section 3(2) of ERISA maintained or contributed to by the Borrower or
any ERISA Affiliate the benefits of which are guaranteed on termination in full
or in part by the PBGC pursuant to Title IV of ERISA, other than a Multiemployer
Plan.

      Hazardous Substances. See Section 8.16.

      Indebtedness. As to any Person and whether recourse is secured by or is
otherwise available against all or only a portion of the assets of such Person
and whether or not contingent, but without duplication:

            (a) every obligation of such Person for money borrowed,

            (b) every obligation of such Person evidenced by bonds, debentures,
      notes or other similar instruments, including obligations incurred in
      connection with the acquisition of property, assets or businesses,

            (c) every reimbursement obligation of such Person with respect to
      letters of credit, bankers' acceptances or similar facilities issued for
      the account of such Person,

            (d) every obligation of such Person issued or assumed as the
      deferred purchase price of property or services (including securities
      repurchase agreements but excluding trade accounts payable or accrued
      liabilities arising in the ordinary course of business which are not
      overdue or which are being contested in good faith),

            (e) every obligation of such Person under any Capitalized Lease,

            (f) every obligation of such Person under any Synthetic Lease,

                                      -8-
<PAGE>

            (g) all sales by such Person of (i) accounts or general intangibles
      for money due or to become due, (ii) chattel paper, instruments or
      documents creating or evidencing a right to payment of money or (iii)
      other receivables (collectively "receivables"), whether pursuant to a
      purchase facility or otherwise, other than in connection with the
      disposition of the business operations of such Person relating thereto or
      a disposition of defaulted receivables for collection and not as a
      financing arrangement, and together with any obligation of such Person to
      pay any discount, interest, fees, indemnities, penalties, recourse,
      expenses or other amounts in connection therewith,

            (h) every obligation of such Person (an "equity related purchase
      obligation") to purchase, redeem, retire or otherwise acquire for value
      any shares of Capital Stock issued by such Person or any rights measured
      by the value of such Capital Stock,

            (i) every obligation of such Person under or in respect of a
      Derivative Transaction,

            (j) every obligation in respect of Indebtedness of any other entity
      (including any partnership in which such Person is a general partner) to
      the extent that such Person is liable therefor as a result of such
      Person's ownership interest in or other relationship with such entity,
      except to the extent that the terms of such Indebtedness provide that such
      Person is not liable therefor and such terms are enforceable under
      applicable law,

            (k) every obligation, contingent or otherwise, of such Person
      guaranteeing, or having the economic effect of guarantying or otherwise
      acting as surety for, any obligation of a type described in any of clauses
      (a) through (j) (the "primary obligation") of another Person (the "primary
      obligor"), in any manner, whether directly or indirectly, and including,
      without limitation, any obligation of such Person (i) to purchase or pay
      (or advance or supply funds for the purchase of) any security for the
      payment of such primary obligation, (ii) to purchase property, securities
      or services for the purpose of assuring the payment of such primary
      obligation, or (iii) to maintain working capital, equity capital or other
      financial statement condition or liquidity of the primary obligor so as to
      enable the primary obligor to pay such primary obligation.

      The "amount" or "principal amount" of any Indebtedness at any time of
determination represented by (t) any Indebtedness, issued at a price that is
less than the principal amount at maturity thereof, shall be the amount of the
liability in respect thereof determined in accordance with GAAP, (u) any
Capitalized Lease shall be the principal component of the aggregate of the
rentals obligation under such Capitalized Lease payable over the term thereof
that is not subject to termination by the lessee, (v) any sale of receivables
shall be the amount of unrecovered capital or principal investment of the
purchaser thereof, excluding amounts representative of yield or interest earned
on such investment, (w) any Synthetic Lease shall be the stipulated loss value,
termination value or other equivalent amount, (x) any Derivative Transaction
shall be the maximum amount of any termination or loss payment required to be
paid by such Person if such Derivative

                                      -9-
<PAGE>

Transaction were, at the time of determination, to be terminated by reason of
any event of default or early termination event thereunder, whether or not such
event of default or early termination event has in fact occurred, (y) any equity
related purchase obligation shall be the maximum fixed redemption or purchase
price thereof inclusive of any accrued and unpaid dividends to be comprised in
such redemption or purchase price and (z) any guaranty or other contingent
liability referred to in clause (k) shall be an amount equal to the stated or
determinable amount of the primary obligation in respect of which such guaranty
or other contingent obligation is made or, if not stated or determinable, the
maximum reasonably anticipated liability in respect thereof (assuming such
Person is required to perform thereunder) as determined by such Person in good
faith.

      Ineligible Professional Expenses. Fees or expenses incurred by any Person,
including the Creditors' Committee, in (a) preventing, hindering or delaying the
Lender's enforcement or realization upon any of the Collateral once the
Termination Declaration Date has occurred, (b) using cash collateral or selling
any other Collateral without the Lender's consent (except to the extent
permitted by this Credit Agreement), (c) incurring Indebtedness without the
Lender's consent (except to the extent permitted by this Credit Agreement) and
(d) objecting to or contesting in any manner, or in raising any defenses to, the
validity, extent, perfection, priority or enforceability of the Obligations or
any mortgages, liens or security interests with respect thereto or any other
rights or interests of the Lender, or in asserting any claims or causes of
action, including, without limitation, Avoidance Actions or equitable
subordination claims against the Lender.

      Interest Payment Date. As to each Revolving Credit Loan, the first
Business Day of each calendar month following the Drawdown Date of such
Revolving Credit Loan.

      Interim Order. An order of the Bankruptcy Court in the Case authorizing
and approving this Credit Agreement on an interim basis under Section 364(c) of
the Bankruptcy Code and entered at a preliminary hearing under Bankruptcy Rule
4001, in form and substance satisfactory to the Lender and its counsel, and the
Borrower and its counsel. The Interim Order shall, among other things, have:

            (a) authorized the loan transactions contemplated by this Credit
      Agreement in an amount not greater than the Total Commitment prior to the
      entry of the Final Order;

            (b) granted the claim status and Liens described in Section 7.1, and
      prohibited the granting of additional Liens on the assets of the Borrower
      other than Permitted Liens;

            (c) provided that such Liens are automatically perfected by the
      entry of the Interim Order and also granted to the Lender relief from the
      automatic stay of Section 362(a) of the Bankruptcy Code to enable the
      Lender, if the Lender elects to do so in its discretion, to make all
      filings and recordings and to take all other actions considered necessary
      or advisable by the Lender to perfect, protect and insure the priority of
      its Liens upon the Collateral as a matter of nonbankruptcy law; and

                                      -10-
<PAGE>

            (d) declared that the credit extended hereunder and the negotiation
      of the Credit Agreement and the other Loan Documents have been made or
      done in good faith and therefore the Obligations incurred and the
      granting, perfection and priority of the Liens hereunder and thereunder
      are entitled to the protections in Section 364(e) of the Bankruptcy Code.

      Inventory. All "inventory", as such term is defined in Section 9-102(a) of
the UCC, leased by the Borrower or held by the Borrower for sale or lease. The
term includes used goods as well as new goods.

      Investments. All expenditures made and all liabilities incurred
(contingently or otherwise) for the acquisition of stock or Indebtedness of, or
for loans, advances, capital contributions or transfers of property to, or in
respect of any guaranties (or other commitments as described under
Indebtedness), or obligations of, any Person. In determining the aggregate
amount of Investments outstanding at any particular time: (a) the amount of any
Investment represented by a guaranty shall be taken at not less than the
principal amount of the obligations guaranteed and still outstanding; (b) there
shall be included as an Investment all interest accrued with respect to
Indebtedness constituting an Investment unless and until such interest is paid;
(c) there shall be deducted in respect of each such Investment any amount
received as a return of capital (but only by repurchase, redemption, retirement,
repayment, liquidating dividend or liquidating distribution); (d) there shall
not be deducted in respect of any Investment any amounts received as earnings on
such Investment, whether as dividends, interest or otherwise, except that
accrued interest included as provided in the foregoing clause (b) may be
deducted when paid; and (e) there shall not be deducted from the aggregate
amount of Investments any decrease in the value thereof.

      Lender Affiliate. With respect to any Lender, (a) an Affiliate of such
Lender or (b) any Approved Fund.

      Lender. As defined in the preamble hereto.

      Liens. Any mortgage, deed of trust, security interest, pledge,
hypothecation, assignment, attachment, deposit arrangement, encumbrance, lien
(statutory, judgment or otherwise), or other security agreement or preferential
arrangement of any kind or nature whatsoever (including any conditional sale or
other title retention agreement, any Capitalized Lease, any Synthetic Lease, any
financing lease involving substantially the same economic effect as any of the
foregoing and the filing of any financing statement under the UCC or comparable
law of any jurisdiction).

      Loan Documents. This Credit Agreement, the Notes and the Security
Documents.

      Loan Request. See Section 2.6.

      Loans. The Revolving Credit Loans.

      Material Adverse Effect. With respect to any event or occurrence of
whatever nature (including any adverse determination in any litigation,
arbitration or governmental investigation or proceeding):

                                      -11-
<PAGE>

      (a) a material adverse effect on the business, properties, prospects,
condition (financial or otherwise), assets, operations or income of the
Borrower;

      (b) an adverse effect on the ability of the Borrower to perform any of its
Obligations under any of the Loan Documents; or

      (c) any impairment of the validity, binding effect or enforceability of
this Credit Agreement or any of the other Loan Documents, any impairment of the
rights, remedies or benefits available to any Lender under any Loan Document or
any impairment of the attachment, perfection or priority of any Lien of the
Lender under the Security Documents.

      In determining whether any individual event could reasonably be expected
to result in a Material Adverse Effect, notwithstanding that such event does not
of itself have such effect, a Material Adverse Effect shall be deemed to have
occurred if the cumulative effect of such event and all other then existing
events could reasonably be expected to result in a Material Adverse Effect.

      Moody's. Moody's Investors Service, Inc.

      Mortgaged Properties. Any Real Estate which is subject to any Mortgage.

      Mortgages. The several mortgages and/or deeds of trust from time to time
granted by the Borrower to the Lender with respect to the fee and/or leasehold
interests of the Borrower in any Real Estate at any time owned or leased (as
lessee) by the Borrower. The Mortgages shall be in form and substance
satisfactory to the Lender.

      Multiemployer Plan. Any multiemployer plan within the meaning of Section
3(37) of ERISA maintained or contributed to by the Borrower or any ERISA
Affiliate.

      Net Book Value. At the relevant time of reference thereto, the net book
value of Eligible Inventory determined on a first-in first-out basis and at
lower of cost or market.

      Net Cash Proceeds. With respect to (a) any sale or other disposition of
assets of any Person, the cash proceeds received by such Person from such sale
or other disposition, less all reasonable out-of-pocket fees, commissions and
other reasonable and customary direct expenses actually incurred in connection
with such sale or other disposition, including the amount of any transfer or
documentary taxes required to be paid as a result thereof by such Person, and
(b) the incurrence of any Indebtedness, the cash proceeds received from such
incurrence, net of all reasonable costs thereof and reasonable fees and all
expenses payable in connection therewith by such Person.

      Notes. See Section 2.4.

      Note Record. A Record with respect to a Note.

      Obligations. All indebtedness, obligations and liabilities of the Borrower
to the Lender, individually or collectively, existing on the date of this Credit
Agreement or arising thereafter, direct or indirect, joint or several, absolute
or contingent, matured or unmatured, liquidated or unliquidated, secured or
unsecured, arising by contract, operation

                                      -12-
<PAGE>

of law or otherwise, arising or incurred under this Credit Agreement or any of
the other Loan Documents or in respect of any of the Loans made or any of the
Notes or other instruments at any time evidencing any thereof or any of the
Orders.

      Orders. The Final Order and, if any, the Interim Order.

      outstanding. With respect to the Loans, the aggregate unpaid principal
thereof as of any date of determination.

      Patent Assignments. The several Patent Collateral Assignment and Security
Agreements, entered or to be entered into by the Borrower in favor of the Lender
and in form and substance satisfactory to the Lender.

      PBGC. The Pension Benefit Guaranty Corporation created by Section 4002 of
ERISA and any successor entity or entities having similar responsibilities.

      Permitted Liens. Liens permitted by Section 10.2.

      Permitted Prior Liens. Valid, perfected and otherwise unavoidable Liens
existing as of the Filing Date, and Liens otherwise approved in writing by the
Lender. The term includes a Lien on proceeds or products of, or accessions to,
assets subject to a Permitted Prior Lien and arising or created after the Filing
Date to the extent that such Lien in the proceeds, products or accessions would
have been valid, perfected and not subject to avoidance if the proceeds,
products or accessions had arisen or been created immediately prior to the
commencement of the Case.

      Person. Any individual, corporation, limited liability company,
partnership, limited liability partnership, trust, unincorporated association,
business, or other legal entity, and any Governmental Authority.

      Pledge Agreements. The several Pledge Agreements entered or to be entered
into by the Borrower in favor of the Lender with respect to the Capital Stock of
the Borrower. The Pledge Agreements shall be in form and substance satisfactory
to the Lender.

      Priority Professional Expenses. At the time of reference thereto, allowed
and unpaid fees, costs and reasonable expenses of professionals retained in the
Case pursuant to Sections 327 and 1103 of the Bankruptcy Code consisting of
attorneys, accountants, financial advisors, and consultants retained by the
Borrower or the Creditors' Committee; provided, however, that the amount of
Priority Professional Expenses shall not exceed the applicable Professional
Expense Cap if in effect at the time of reference thereto. The term does not
include any Ineligible Professional Expenses or the expenses of any
professionals engaged by individual members of the Creditors' Committee.

      Professional Expense Cap. The Professional Expense Cap shall be determined
by reference to the relevant professional fee line items contained in the
Budget.

      Real Estate. All real property at any time owned or leased (as lessee or
sublessee) by the Borrower.

                                      -13-
<PAGE>

      Record. The grid attached to a Note, or the continuation of such grid, or
any other similar record, including computer records, maintained by any Lender
with respect to any Loan referred to in such Note.

      Related Parties. With respect to any specified Person, such Person's
Affiliates and the respective directors, officers, employees, agents and
advisors of such Person and such Person's Affiliates.

      Reorganization Plan. A plan or plans of reorganization in the Case.

      Restricted Payment. In relation to the Borrower, any (a) Distribution, (b)
any payment or prepayment by the Borrower to any Affiliate of a Borrower, (c)
derivatives or other transactions with any financial institution, commodities or
stock exchange or clearinghouse (a "Derivatives Counterparty") obligating the
Borrower to make payments to such Derivatives Counterparty as a result of any
change in market value of any Capital Stock of the Borrower or (d) any payment
in respect of any Indebtedness which is subordinated in right of payment by its
terms to the repayment of the applicable Obligations.

      Revolving Credit Loans. Revolving credit loans made or to be made by the
Lender to the Borrower pursuant to Section 2.

      Security Agreement. The Security Agreement entered or to be entered into
among the Lender and the Borrower. The Security Agreement shall be in form and
substance satisfactory to the Lender.

      Security Documents. Collectively, the Security Agreement, the Mortgages,
the Patent Assignments, the Trademark Assignments, the Copyright Mortgages, the
Pledge Agreements and all other instruments and documents, including, without
limitation, Uniform Commercial Code financing statements, required to be
executed or delivered pursuant to any Security Document.

      Senior Executive Officer. The chief financial officer or other senior
executive officer of the Borrower.

      Subordinated Debt. Unsecured Indebtedness of the Borrower that is
expressly subordinated and made junior to the payment and performance in full of
the Obligations.

      Subsidiary. Any corporation, association, trust, or other business entity
of which the Borrower shall at any time own directly or indirectly through a
Subsidiary or Subsidiaries at least a majority (by number of votes) of the
outstanding Voting Stock.

      Superpriority Claim. A claim against the Borrower or its estate in its
Case which is an administrative expense claim having priority over (a) any and
all allowed administrative expenses and (b) unsecured claims now existing or
hereafter arising, including, without limitation, administrative expenses of the
kind specified in Section 503(b), 506(c) or 507(b) of the Bankruptcy Code.

                                      -14-
<PAGE>

      Synthetic Lease. Any lease of goods or other property, whether real or
personal, which is treated as an operating lease under GAAP and as a loan or
financing for U.S. income tax purposes.

      Termination Date. The earlier to occur of (a) March 18, 2005, (b) the
effective date of a Reorganization Plan that has been confirmed by an order of
the Bankruptcy Court, (c) the date which is 20 days after the date of the
Interim Order in the event that the Final Order shall not have been entered on
or before such date, or (d) the date which is 30 days after the date of a or
Final Order, whichever is earlier, in the event that the Borrower has not filed
with the Bankruptcy Court a motion requesting entry of an order approved by the
Lender approving procedures for the sale of substantially all of the Borrower's
assets pursuant to section 363 of the Bankruptcy Code, or (e) the date on which
a sale of substantially all of the Borrower's assets pursuant to section 363 of
the Bankruptcy Code closes.

      Termination Declaration Date. The earliest to occur of (a) the date on
which the Lender declares all Obligations to be due and payable on account of an
Event of Default, (b) the date on which the Lender declares a termination of the
Commitments on account of an Event of Default, and (c) the Termination Date.

      Total Commitment. An aggregate outstanding amount not to exceed the sum of
$2,000,000, provided however that it shall not exceed $750,000 until such time
that Borrower receives $1,000,000 in payment of the DISA Account Receivable of
same amount The Total Commitment may be reduced from time to time pursuant to
the provisions of this Credit Agreement. If the Commitments are terminated
pursuant to the provisions of this Credit Agreement, the Total Commitment shall
be zero.

      Trademark Assignments. The several Trademark Collateral Security and
Pledge Agreements, entered or to be entered into by the Borrower in favor of the
Lender and the Assignments of Trademarks and Service Marks executed in
connection therewith, all in form and substance satisfactory to the Lender.

      Voting Stock. Stock or similar interests, of any class or classes (however
designated), the holders of which are at the time entitled, as such holders, to
vote for the election of a majority of the directors (or persons performing
similar functions) of the corporation, association, trust or other business
entity involved, whether or not the right so to vote exists by reason of the
happening of a contingency.

      1.2. RULES OF INTERPRETATION.

            (a) A reference to any document or agreement shall include such
      document or agreement as amended, restated, modified or supplemented from
      time to time in accordance with its terms and the terms of this Credit
      Agreement.

            (b) The singular includes the plural and the plural includes the
      singular.

            (c) A reference to any law includes any amendment or modification to
      such law.

                                      -15-
<PAGE>

            (d) A reference to any Person includes its permitted successors and
      permitted assigns.

            (e) Accounting terms not otherwise defined herein have the meanings
      assigned to them by GAAP applied on a consistent basis by the accounting
      entity to which they refer.

            (f) The words "include", "includes" and "including" are not
      limiting.

            (g) All terms not specifically defined herein or by GAAP, which
      terms are defined in the Uniform Commercial Code as in effect in the State
      of California, have the meanings assigned to them therein, with the term
      "instrument" being that defined under Article 9 of the Uniform Commercial
      Code.

            (h) Reference to a particular "Section" refers to that section of
      this Credit Agreement unless otherwise indicated.

            (i) The words "herein", "hereof", "hereunder" and words of like
      import shall refer to this Credit Agreement as a whole and not to any
      particular section or subdivision of this Credit Agreement.

            (j) Unless otherwise expressly indicated, in the computation of
      periods of time from a specified date to a later specified date, the word
      "from" means "from and including", the words "to" and "until" each mean
      "to but excluding", and the word "through" means "to and including".

            (k) This Credit Agreement and the other Loan Documents may use
      several different limitations, tests or measurements to regulate the same
      or similar matters. All such limitations, tests and measurements are,
      however, cumulative and are to be performed in accordance with the terms
      thereof.

            (l) This Credit Agreement and the other Loan Documents are the
      result of negotiation among, and have been reviewed by counsel to the
      Lender and the Borrower and are the product of discussions and
      negotiations among all parties. Accordingly, this Credit Agreement and the
      other Loan Documents are not intended to be construed against the Lender
      merely on account of the Lender's involvement in the preparation of such
      documents.

                        2. THE REVOLVING CREDIT FACILITY

      2.1. COMMITMENT TO LEND. Subject to the terms and conditions set forth in
this Credit Agreement, the Lender agrees to lend to the Borrower, and the
Borrower may borrow, repay and reborrow, from time to time from the Closing Date
up to but not including the Termination Date upon notice by the Borrower to the
Lender given in accordance with Section 2.6, such sums as are requested by the
Borrower up to a maximum aggregate amount outstanding (after giving effect to
all amounts requested) at any one time equal to such Lender's Commitment,
provided that the sum of the outstanding amount of the Revolving Credit Loans
(after

                                      -16-
<PAGE>

giving effect to all amounts requested) shall not at any time exceed the least
of (a) the Total Commitment in effect at such time (b) the Borrowing Base and
(c) the amount approved to be borrowed by way of Loans in the Interim Order or
the Final Order, whichever is then in effect. Each request for a Revolving
Credit Loan hereunder shall constitute a representation and warranty by the
Borrower that the conditions set forth in Section 12 and Section 13, in the case
of the initial Revolving Credit Loans to be made on the Closing Date, and
Section 13, in the case of all other Revolving Credit Loans, have been satisfied
on the date of such request.

      2.2. COMMITMENT FEE.

      The Borrower agrees to pay to the Lender a commitment fee equal to one
half of one percent (0.5%) per annum on the average daily amount during each
calendar month or portion thereof from the Closing Date to the Termination Date
by which the Total Commitment exceeds the outstanding amount of Revolving Credit
Loans during such calendar month. The commitment fee shall be payable monthly in
arrears on the first Business Day of each calendar month for the immediately
preceding calendar month, commencing on the first such date following the
Closing Date, with a final payment on the Termination Date or any earlier date
on which the Commitments shall terminate.

      2.3. REDUCTION OF TOTAL COMMITMENT.

            2.3.1. OPTIONAL.

            The Borrower shall have the right at any time and from time to time
      upon five (5) Business Days prior written notice to the Lender to reduce
      by $250,000 or an integral multiple thereof, or terminate entirely, the
      Total Commitment.

            2.3.2. MANDATORY.

            The Total Commitment shall also be reduced (a) concurrently with the
      application of Net Cash Proceeds of Collateral pursuant to Section
      2.9.2(b)(i) or (ii), by the amount of such Net Cash Proceeds and (b) as
      provided in Section 15.4(a)(v).

            2.3.3. GENERAL.

            Contemporaneously with any such reduction, the Commitment of the
      Lender shall be reduced. Upon the effective date of any such reduction or
      upon the termination of the Total Commitment, the Borrower shall pay to
      the Lender, the full amount of any commitment fee then accrued on the
      amount of the reduction or, as the case may be, termination. No reduction
      or termination of the Commitments may be reinstated, without the consent
      of the Lender.

      2.4. THE NOTES.

      The Revolving Credit Loans shall be evidenced by separate promissory notes
of the Borrower in substantially the form of Exhibit A hereto (each a "Note"),
dated as of the Closing Date and completed with appropriate insertions. One Note
shall be payable to the order of each Lender in a principal amount equal to such
Lender's Commitment or, if less,

                                      -17-
<PAGE>

the outstanding amount of all Revolving Credit Loans made by such Lender, plus
interest accrued thereon, as set forth below. The Borrower irrevocably authorize
each Lender to make or cause to be made, at or about the time of the Drawdown
Date of any Revolving Credit Loan or at the time of receipt of any payment of
principal on such Lender's Note, an appropriate notation on such Lender's Note
Record reflecting the making of such Revolving Credit Loan or (as the case may
be) the receipt of such payment. The outstanding amount of the Revolving Credit
Loans set forth on such Lender's Note Record shall be prima facie evidence of
the principal amount thereof owing and unpaid to such Lender, but the failure to
record, or any error in so recording, any such amount on such Lender's Note
Record shall not limit or otherwise affect the obligations of the Borrower
hereunder or under any Note to make payments of principal of or interest on any
Note when due.

      2.5. INTEREST ON REVOLVING CREDIT LOANS.

      Except as otherwise provided in Section 6.3, each Revolving Credit Loan
shall bear interest commencing with the Drawdown Date thereof and ending on the
date such Loan is repaid, at the rate per annum equal to the Base Rate plus 2%,
which shall be payable monthly, in cash, on each Interest Payment Date and on
the Termination Date.

      2.6. REQUESTS FOR REVOLVING CREDIT LOANS.

      The Borrower shall give to the Lender written notice in the form of
Exhibit B hereto (or telephonic notice confirmed in a writing in the form of
Exhibit B hereto) of each Revolving Credit Loan requested hereunder (a "Loan
Request") not later than two (2) Business Days prior to the proposed Drawdown
Date of any Revolving Credit Loan (which must be a Business Day). Each such
notice shall be signed by a Senior Executive Officer and shall specify (a) the
principal amount of the Revolving Credit Loan requested and (b) the proposed
Drawdown Date of such Revolving Credit Loan. Each Revolving Credit Loan Request
shall be irrevocable and binding on the Borrower and shall obligate the Borrower
to accept the Revolving Credit Loan requested from the Lender on the proposed
Drawdown Date. Each Loan Request shall be in a minimum aggregate amount of
$100,000 or an integral multiple thereof.

      2.7. FUNDS FOR REVOLVING CREDIT LOANS. Not later than 11:00 a.m. (Pacific
Standard time) on the proposed Drawdown Date of any Revolving Credit Loans, and
upon receipt of the documents required by Sections. 12 and 13 and the
satisfaction of the other conditions set forth therein, to the extent
applicable, the Lender will make available to the Borrower, in immediately
available funds, the amount of the requested Revolving Credit Loan.

      2.8. REPAYMENTS OF LOANS PRIOR TO TERMINATION DECLARATION DATE.

            2.8.1. CREDIT FOR FUNDS RECEIVED BY LENDER.

            Prior to the occurrence of the Termination Declaration Date, (a) all
      funds and cash proceeds in the form of money, checks and like items
      received by Lender shall be credited, on the same Business Day on which
      the Lender determines that immediately available funds have been received
      and applied as contemplated by

                                      -18-
<PAGE>

      Section 2.8.2, (b) all funds and cash proceeds in the form of a wire
      transfer received by the Lender shall be credited on the same Business Day
      as the Lender's receipt of such amounts (or up to such later date as the
      Lender determines that funds have been received and are immediately
      available), and applied as contemplated by Section 2.8.2, and (c) all
      funds and cash proceeds in the form of an automated clearing house
      transfer received by the Lender shall be credited, on the next Business
      Day following the Lender's receipt of such amounts (or up to such later
      date as the Lender determines that collected funds have been received and
      are immediately available), and applied as contemplated by Section 2.8.2.
      For purposes of the foregoing provisions of this Section 2.8.1, the Lender
      shall not be deemed to have received any such funds or cash proceeds on
      any day unless received by the Lender before 2:30 p.m. (Pacific Standard
      time) on such day.

            2.8.2. APPLICATION OF PAYMENTS PRIOR TO TERMINATION DECLARATION
      DATE.

            (a) Prior to the occurrence of the Termination Declaration Date, and
      except as otherwise provided in Section 2.8.2(b), all funds transferred to
      a Lender and for which the Borrower has received credits shall be applied
      to the Obligations as follows:

                  (i) first, to pay interest on the Revolving Credit Loans then
            due and payable and any other Obligations then due and payable;

                  (ii) second, to reduce the principal of Revolving Credit
            Loans; and

                  (iii) third, to the account of the Lender.

            (b) Prior to the occurrence of the Termination Declaration Date, any
      funds received by the Lender constituting the Net Cash Proceeds of
      Collateral shall be applied as follows:

                  (i) first, to reduce the principal of the Revolving Credit
            Loans in an amount equal to the amount by which the aggregate amount
            of the principal of the Revolving Credit Loans exceeds the Borrowing
            Base;

                  (ii) second, to reduce the principal of the Revolving Credit
            Loans; and

                  (iii) third, as provided in Section 2.8.2(a).

      2.9. REPAYMENTS OF LOANS AFTER TERMINATION DECLARATION DATE.

      Following the occurrence of the Termination Declaration Date, all funds
transferred to the Lender and for which the Borrower has received credits, other
collections and Net Cash Proceeds of Collateral shall be applied to the
Obligations in accordance with Section 14.4.

                            3. REPAYMENT OF THE LOANS

                                      -19-
<PAGE>

      3.1. MATURITY.

      The Borrower promises to pay on the Termination Date, and there shall
become absolutely due and payable on the Termination Date, all of the Loans
outstanding on such date, together with any and all accrued and unpaid interest
thereon.

      3.2. MANDATORY REPAYMENTS OF LOANS.

            3.2.1. TOTAL COMMITMENT EXCEEDED.

            If at any time the sum of the aggregate outstanding amount of the
      Revolving Credit Loans exceeds the least of (a) the Total Commitment in
      effect at such time, (b) the Borrowing Base or (c) the amount approved to
      be borrowed by way of Loans in the Interim Order or the Final Order,
      whichever is then in effect, then the Borrower shall immediately pay the
      amount of such excess to the Lender for application to pay the principal
      of Revolving Credit Loans.

            3.2.2. ASSET DISPOSITIONS.

            In accordance with the terms of, and to the extent provided for in,
      Section 2.8.2 and Section 2.9, the Borrower shall, immediately upon the
      receipt thereof, prepay the outstanding Loans in an amount equal to the
      Net Cash Proceeds received from the sale or other disposition of assets.
      In the event of a prepayment of the Loans applied as provided in Section
      2.8.2(b)(i) or (ii), such prepayment shall be accompanied by a permanent
      reduction in the Total Commitment in the amount of such prepayment.

            3.3. OPTIONAL REPAYMENTS OF REVOLVING CREDIT LOANS.

      The Borrower shall have the right, at its election, to repay the
outstanding amount of the Revolving Credit Loans, as a whole or in part, at any
time without penalty or premium. The Borrower shall give the Lender notice of
any proposed prepayment pursuant to this Section 3.3 not later than 1:00 p.m.
Pacific Standard time three (3) Business Days prior to the date of such
prepayment, specifying the proposed date of prepayment of Revolving Credit Loans
and the principal amount to be prepaid. Each such partial prepayment of the
Revolving Credit Loans shall be in a minimum amount of $100,000 or an integral
multiple thereof and shall be accompanied by the payment of accrued interest on
the principal prepaid to the date of prepayment.

                   4. LIABILITY; WAIVER OF SURETYSHIP DEFENSES

      4.1. LIABILITY.

            The Borrower is and shall be liable for each and every Obligation or
any of the other instruments at any time evidencing any Obligations, which
obligations shall constitute full recourse obligations of the Borrower,
enforceable against it to the full extent of its properties and assets.

      4.2. WAIVER OF SURETYSHIP DEFENSES.

                                      -20-
<PAGE>

                  The Borrower waives promptness, diligence, presentment,
demand, protest, notice of acceptance, notice of any Obligations incurred and
all other notices of any kind, all defenses which may be available by virtue of
any valuation, stay, moratorium law or other similar law now or hereafter in
effect, any right to require the marshalling of assets of any other entity or
other Person primarily or secondarily liable with respect to any of the
Obligations, and all suretyship defenses generally. To the fullest extent
permitted by law, the Borrower hereby expressly waives any and all rights or
defenses arising by reason of (i) any "one action" or "anti-deficiency" law
which would otherwise prevent any Lender from bringing any action, including any
claim for a deficiency, or exercising any other right or remedy (including any
right of set-off), against such Borrower before or after any Lender's
commencement or completion of any foreclosure action, whether judicially, by
exercise of power of sale or otherwise, or (ii) any other law which in any other
way would otherwise require any election of remedies by any Lender.

                              5. CLOSING DATE FEES

      5.1. ADMINISTRATIVE FEE.

      The Borrower agree to pay to the Lender the following fees for their
administrative services under this Credit Agreement: $10,000 per month which
fees shall be due and payable Monthly in advance.

      5.2. NATURE OF FEES.

      All fees will be fully-earned for each calendar month or portion thereof
for which the fee is calculated. All fees will be non-refundable when paid.

                          6. CERTAIN GENERAL PROVISIONS

           6.1.  FUNDS FOR PAYMENTS.

            6.1.1. PAYMENTS.

            All payments of principal, interest, commitment fees and any other
      amounts due hereunder or under any of the other Loan Documents shall be
      made to the Lender at such location that the Lender may from time to time
      designate, in each case in Dollars and in immediately available funds.

            6.1.2. NO OFFSET, ETC.

            All payments by the Borrower hereunder and under any of the other
      Loan Documents shall be made without setoff or counterclaim and free and
      clear of and without deduction for any taxes, levies, imposts, duties,
      charges, fees, deductions, withholdings, compulsory loans, restrictions or
      conditions of any nature now or hereafter imposed or levied by any
      jurisdiction or any political subdivision thereof or taxing or other
      authority therein unless the Borrower is compelled by law to make such
      deduction or withholding. If any such obligation is imposed upon the
      Borrower with respect to any amount payable by it hereunder or under any
      of the other Loan Documents, the Borrower will pay to the Lender on the
      date on which such amount

                                      -21-
<PAGE>

      is due and payable hereunder or under such other Loan Document such
      additional amount in Dollars as shall be necessary to enable the Lender to
      receive the same net amount which the Lender would have received on such
      due date had no such obligation been imposed upon the Borrower. The
      Borrower will deliver promptly to the Lender certificates or other valid
      vouchers for all taxes or other charges deducted from or paid with respect
      to payments made by the Borrower hereunder or under such other Loan
      Document.

            6.1.3. RECEIPT OF FUNDS.

            The Borrower agrees that, on each day on which a payment is due
      hereunder with respect to any Loan or fee or under any Note, it will
      deliver to the Lender, not later than 11:00 a.m. (Pacific Standard time),
      the amount so due on such day.

      6.2. COMPUTATIONS.

      All computations of interest on the Loans and of commitment fees and other
fees hereunder shall be based on a 360-day year and paid for the actual number
of days elapsed. Whenever a payment hereunder or under any of the other Loan
Documents becomes due on a day that is not a Business Day, the due date for such
payment shall be extended to the next succeeding Business Day, and interest
shall accrue during such extension. The outstanding amount of the Loans as
reflected on the Note Records from time to time shall, with respect to the
Borrower, be considered correct and binding unless within five (5) Business Days
after receipt of any notice from the Lender of such outstanding amount, the
Borrower shall notify the Lender to the contrary or the Lender shall notify the
Borrower to the contrary.

      6.3. INTEREST AFTER DEFAULT.

      During the continuance of an Event of Default, the principal of the Loans
shall, until such Event of Default has been cured or remedied or such Event of
Default has been waived by the Lender pursuant to Section 16.12, bear interest
at a rate per annum equal to five percent (5%) above the rate of interest
otherwise applicable to such Loans pursuant to Section 2.5.

      6.4. INTEREST LIMITATION.

      Notwithstanding any other term of this Credit Agreement, any Note or any
other Loan Document, the maximum amount of interest which may be charged to or
collected from any Person liable hereunder, under any Note or under any other
Loan Document by any Lender, shall be absolutely limited to, and shall in no
event exceed, the maximum amount of interest (the "Maximum Rate") which could
lawfully be charged or collected under applicable law, so that the maximum of
all amounts constituting interest under applicable law, howsoever computed,
shall never exceed, as to any Person liable therefor, the Maximum Rate, and any
term of this Credit Agreement, any Note or any other Loan Document which could
be construed as providing for interest in excess of such lawful maximum shall be
and hereby is made expressly subject to and modified by the provisions of this
Section 6.4. If, in respect of any applicable period, the effective interest
rate on any amounts owing pursuant to this Credit Agreement, the Notes or any of
the other Loan

                                      -22-
<PAGE>

Documents, absent the Maximum Rate limitation contained herein, would have
exceeded the Maximum Rate, and if in any applicable period, such effective
interest rate would otherwise be less than the Maximum Rate, then the effective
interest rate for such future applicable period shall be increased to the
Maximum Rate until such time as the amount of interest paid hereunder equals the
amount of interest which would have been paid if the same had not been limited
by the Maximum Rate. In the event that a court of competent jurisdiction shall,
notwithstanding the provisions of this Section 6.4, determine that any Lender
has received interest hereunder or under any of the other Loan Documents in
excess of the Maximum Rate, such excess shall, to the extent permitted by
applicable law, be applied first to any interest not in excess of the Maximum
Rate then due and not yet paid, then to the outstanding principal of the Loans,
then to fees and any other unpaid Obligations, and thereafter shall be refunded
to the Borrower or as a court of competent jurisdiction may otherwise order. In
the event that, upon payment in full of the Obligations, the total amount of
interest paid or accrued under the terms of this Credit Agreement is less than
the total amount of interest which would have been paid or accrued had the
interest not been limited hereby to the Maximum Rate, then the Borrower shall,
to the extent permitted by applicable law, pay to the Lender hereunder or under
the Notes an amount equal to the excess, if any, of (a) the lesser of (i) the
amount of interest which would have been charged if the Maximum Rate had, at all
times, been in effect with respect to the Obligations hereunder or under the
Notes and (ii) the amount of interest which would have accrued had the
applicable effective interest rate not been limited hereunder by the Maximum
Rate over (b) the amount of interest actually paid or accrued under this Credit
Agreement. In determining whether or not the interest paid or payable under any
specific contingency exceeds the Maximum Rate, the Borrower and any Lender
shall, to the maximum extent permitted under applicable law, (A) characterize
any non-principal payment as an expense, fee, or premium, rather than as
interest, (B) exclude any voluntary prepayments and the effects thereof, and (C)
spread the total amount of interest throughout the entire contemplated term of
the Obligations so that the interest rate is uniform throughout the entire term
of the Obligations. The term "applicable law" as used in this Section 6.4 means
the law chosen pursuant to Section 16.7 hereof or, if (despite the parties'
intentions otherwise) the forum court does not enforce such contractual choice
of law, the applicable law after the forum court applies the choice of law rules
of the forum, including any federally mandated choice of law. The term includes
applicable federal law, such as the provisions of Section 5197 of the Revised
Statutes of the United States of America, as amended, 12 U.S.C. Section 85, as
amended.

                       7. PRIORITY AND COLLATERAL SECURITY

      7.1. SUPERPRIORITY CLAIMS AND COLLATERAL SECURITY.

      Subject to the Interim Order or the Final Order, whichever is then in
effect, the Borrower hereby represents, warrants and covenants that, except as
otherwise expressly provided in this paragraph, the Obligations, upon the entry
of the Interim Order, and all of the Obligations upon the entry of the Final
Order:

            (a) shall at all times constitute a Superpriority Claim having
      priority, pursuant to Sections 364(c)(1) of the Bankruptcy Code, over any
      claims of any entity,

                                      -23-
<PAGE>

      including, without limitation, any claims under Sections 503, 506(c), 507,
      1113, and 1114 of the Bankruptcy Code, and

            (b) pursuant to Sections 364(c)(2) and (3) of the Bankruptcy Code
      and the Security Documents, shall at all times be secured by a first
      priority perfected Lien in all of the assets, whether now owned or
      hereafter acquired of the Borrower and its estates, pursuant to the terms
      of the Security Documents.

Such Superpriority Claim shall not include Avoidance Actions but shall be
subject to the Carve Out. Such Lien shall not extend to Avoidance Actions and
shall be subject to the Carve Out, but otherwise such Lien shall be senior in
priority to all other Liens. The Liens securing the Obligations shall not be
subject to Section 551 of the Bankruptcy Code.

      7.2. COLLATERAL SECURITY PERFECTION.

      Subject to the Interim Order or the Final Order, whichever is then in
effect, the Borrower agrees to take all action that any Lender may reasonably
request as a matter of nonbankruptcy law to perfect and protect the Lender's
Liens upon the Collateral and for such Liens to obtain the priority therefor
contemplated hereby, including, without limitation, executing and delivering
such documents and instruments, financing statements, providing such notices and
assents of third parties, obtaining such governmental approvals and providing
such other instruments and documents in recordable form as the Lender may
reasonably request. The Borrower hereby irrevocably authorizes the Lender at any
time and from time to time to file in any filing office in any Uniform
Commercial Code jurisdiction any initial financing statements and amendments
thereto that (a) indicate the Collateral (i) as "all assets of such Borrower" or
words of similar effect, regardless of whether any particular asset comprised in
the Collateral falls within the scope of Article 9 of the Uniform Commercial
Code of the State of California or such jurisdiction, or (ii) as being of an
equal or lesser scope or with greater detail, and (b) provide any other
information required by part 5 of Article 9 of the Uniform Commercial Code of
any jurisdiction for the sufficiency or filing office acceptance of any
financing statement or amendment, including (i) whether the Borrower is an
organization, the type of organization and any organization identification
number issued to the Borrower and, (ii) in the case of a financing statement
filed as a fixture filing, a sufficient description of real property to which
the Collateral relates. The Borrower agrees to furnish any such information to
the Lender promptly upon request.

      7.3. NO DISCHARGE; SURVIVAL OF CLAIMS.

      The Borrower agrees that (a) the Obligations shall not be discharged by
the entry of an order confirming a Reorganization Plan (and the Borrower
pursuant to Section 1141(d)(4) of the Bankruptcy Code, hereby waives any such
discharge), and (b) the Superpriority Claim granted to the Lender pursuant to
the Orders and the Liens granted to the Lender pursuant to the Orders and the
Security Documents, shall not be affected in any manner by the entry of an order
confirming a Reorganization Plan.

                        8. REPRESENTATIONS AND WARRANTIES

                                      -24-
<PAGE>

      The Borrower represents and warrants to the Lender as follows:

      8.1. CORPORATE AUTHORITY.

            8.1.1. ORGANIZATION; GOOD STANDING.

            The Borrower and each of its Subsidiaries (a) is a corporation duly
      organized, validly existing and in good standing under the laws of its
      state of incorporation, organization or formation, (b) has all requisite
      corporate power to own its property and conduct its business as now
      conducted and as presently contemplated, and (c) is in good standing as a
      foreign entity and is duly authorized to do business in each jurisdiction
      where such qualification is necessary except where a failure to be so
      qualified would not have a Material Adverse Effect.

            8.1.2. AUTHORIZATION.

            The execution, delivery and performance of this Credit Agreement and
      the other Loan Documents to which the Borrower is a party and the
      transactions contemplated hereby and thereby (a) are within the requisite
      corporate authority of the Borrower, (b) have been duly authorized by all
      necessary corporate proceedings, (c) do not conflict with or result in any
      breach or contravention of any provision of law, statute, rule or
      regulation to which the Borrower is subject or any judgment, order, writ,
      injunction, license or permit applicable to the Borrower and (d) do not
      conflict with any provision of the Governing Documents of, or any
      agreement or other instrument binding upon, the Borrower.

            8.1.3. ENFORCEABILITY.

            The execution and delivery of this Credit Agreement and the other
      Loan Documents to which the Borrower is a party will, upon entry of the
      Interim Order or the Final Order, whichever occurs first, result in valid
      and legally binding obligations of the Borrower enforceable against it in
      accordance with the respective terms and provisions hereof and thereof,
      except as enforceability is limited by bankruptcy, insolvency,
      reorganization, moratorium or other laws relating to or affecting
      generally the enforcement of creditors' rights and except to the extent
      that availability of the remedy of specific performance or injunctive
      relief is subject to the discretion of the court before which any
      proceeding therefor may be brought.

      8.2. GOVERNMENTAL APPROVALS.

      Except for the entry of the Interim Order or the Final Order, whichever
occurs first, the execution, delivery and performance by the Borrower of this
Credit Agreement and the other Loan Documents and the transactions contemplated
hereby and thereby do not require the approval or consent of, or filing with,
any governmental agency or authority other than those already obtained.

      8.3. TITLE TO PROPERTIES; LEASES.

                                      -25-
<PAGE>

      The Borrower owns all of the assets reflected in the balance sheet of the
Borrower as at the Balance Sheet Date or acquired since that date (except
property and assets sold or otherwise disposed of in the ordinary course of
business since that date), subject to no Liens or other rights of others, except
Permitted Liens.

      8.4. FISCAL YEAR; FINANCIAL STATEMENTS; PROJECTIONS.

            8.4.1. FISCAL YEAR, FISCAL QUARTERS.

            The Borrower has a fiscal year which is the twelve months ending on
      December 31 of each calendar year. The Borrower has fiscal quarters ending
      on the last day of a calendar quarter.

            8.4.2. FINANCIAL STATEMENTS.

            There has been furnished to the Lender a balance sheet of the
      Borrower as at the Balance Sheet Date, and a statement of income of the
      Borrower for the fiscal year then ended. Such balance sheet and statement
      of income have been prepared in accordance with GAAP and fairly present
      the financial condition of the Borrower as at the close of business on the
      date thereof and the results of operations for the fiscal year then ended.
      There are no contingent liabilities of the Borrower as of such date
      involving material amounts, known to the officers of the Borrower, which
      were not disclosed in such balance sheet and the notes related thereto,
      other than cure payments in connection with executory contracts to be
      assumed and other claims arising in the Case that are reasonably
      anticipated to be classified as general unsecured claims.

            8.4.3. CASH BUDGET.

            The Borrower has delivered to the Lender a projected cash revenue
      and expense budget dated January 26, 2005 (as the same may be updated from
      time to time with the Lender's consent, the "Budget"). The budget has been
      prepared in good faith based upon assumptions which the Borrower believes
      to be reasonable assumptions. To the knowledge of the Borrower, no facts
      exist that (individually or in the aggregate) would result in any material
      change in the budget.

                  8.4.3.1. NO MATERIAL CHANGES. Since the Balance Sheet Date
            there has been no event or occurrence which has had a Material
            Adverse Effect and the Borrower has not made any Distribution.

      8.5. FRANCHISES, PATENTS, COPYRIGHTS, ETC.

      Schedule 8.5 attached hereto contains a true, complete and current listing
of all copyrights, copyright applications, trademarks, trademark rights, trade
names, patents, patent rights or licenses, patent applications and other
intellectual property rights of the Borrower as of the Closing Date. The
Borrower owns or possesses rights to use all franchises, licenses, copyrights,
copyright applications, patents, patent rights or licenses, patent applications,
trademarks, trademark rights, trade names, trade name rights, copyrights and
rights with respect to the foregoing which are used to conduct its business.

                                      -26-
<PAGE>

No event has occurred which permits, or after notice or lapse of time or both
would permit, the revocation or termination of any such rights, and the Borrower
is not liable to any Person for infringement under applicable law with respect
to any such rights as a result of its business operations.

      8.6. LITIGATION.

      Except for the Case and as set forth in Schedule 8.6 hereto, there are no
actions, suits, proceedings or investigations of any kind pending or threatened
against the Borrower or any of its Subsidiaries before any court, tribunal or
administrative agency or board that, (a) if adversely determined, might, either
in any case or in the aggregate, (i) have a Material Adverse Effect or (ii)
materially impair the right of the Borrower to carry on business substantially
as now conducted by them, or result in any substantial liability not adequately
covered by insurance, or for which adequate reserves are not maintained on the
balance sheet of the Borrower, or (b) which question the validity of this Credit
Agreement or any of the other Loan Documents, or any action taken or to be taken
pursuant hereto or thereto.

      8.7. NO MATERIALLY ADVERSE CONTRACTS, ETC.

      The Borrower is not subject to any charter, corporate or other legal
restriction, or any judgment, decree, order, rule or regulation that has or is
expected in the future to have a Material Adverse Effect. Other than contracts
which the Borrower may reject as executory contracts in the Case and for which
they are under no material economic compulsion to fail to reject, the Borrower
is not a party to any contract or agreement that has or is expected, in the
judgment of the Borrower's officers, to have any Material Adverse Effect.

      8.8. COMPLIANCE WITH OTHER INSTRUMENTS, LAWS, ETC.

      The Borrower is not in violation of any provision of its Governing
Documents, or any agreement or instrument to which it may be subject or by which
it or any of its properties may be bound or any decree, order, judgment,
statute, license, rule or regulation, in any of the foregoing cases in a manner
that could result in the imposition of substantial penalties or have a Material
Adverse Effect.

      8.9. TAX STATUS.

      The Borrower and each of its Subsidiaries (a) have made or filed all
federal, state and foreign income and all other tax returns, reports and
declarations required by any jurisdiction to which any of them is subject, (b)
have paid all taxes and other governmental assessments and charges shown or
determined to be due on such returns, reports and declarations, except those
being contested in good faith and by appropriate proceedings and (c) have set
aside on their books provisions reasonably adequate for the payment of all taxes
for periods subsequent to the periods to which such returns, reports or
declarations apply. There are no unpaid taxes in any material amount claimed to
be due by the taxing authority of any jurisdiction, and the officers of the
Borrower know of no basis for any such claim.

                                      -27-
<PAGE>

      8.10. NO EVENT OF DEFAULT.

      No Default or Event of Default has occurred and is continuing.

      8.11. ABSENCE OF FINANCING STATEMENTS, ETC.

      Except with respect to Permitted Liens, there is no financing statement,
security agreement, chattel mortgage, real estate mortgage, or other document
filed or recorded with any filing records, registry or other public office, that
purports to cover, affect or give notice of any present or possible future Lien
on, or security interest in, any assets or property of the Borrower or any
rights relating thereto.

      8.12. PERFECTION OF SECURITY INTEREST.

      Upon the entry of the Interim Order or the Final Order, whichever occurs
first, all filings, assignments, pledges and deposits of documents or
instruments will have been made and all other actions will have been taken that
are necessary or advisable, under applicable law, to establish and perfect the
Lender's security interest in the Collateral. The Collateral and the Lender's
rights with respect to the Collateral are not subject to any setoff, claims,
withholdings, or other defenses. The Borrower owns the Collateral.

      8.13. CERTAIN TRANSACTIONS.

      Except for arm's-length transactions pursuant to which the Borrower makes
payments in the ordinary course of business upon terms no less favorable than it
could obtain from third parties, none of the officers, directors, or employees
of the Borrower is presently a party to any transaction with the Borrower or any
of its Subsidiaries (other than for services as employees, officers and
directors), including any contract, agreement or other arrangement providing for
the furnishing of services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from, any officer,
director or such employee or, to the knowledge of the Borrower, any corporation,
partnership, trust or other entity in which any officer, director, or any such
employee has a substantial interest or is an officer, director, trustee or
partner.

      8.14. EMPLOYEE BENEFIT PLANS.

            8.14.1. IN GENERAL.

            Each Employee Benefit Plan and each Guaranteed Pension Plan has been
      maintained and operated in compliance in all material respects with the
      provisions of ERISA and all Applicable Pension Legislation and to the
      extent applicable, the Code, including but not limited to the provisions
      thereunder respecting prohibited transactions and the bonding of
      fiduciaries and other Persons handling plan funds as required by Section
      412 of ERISA. The Borrower has heretofore delivered to the Lender the most
      recently completed annual report, Form 5500, with all required
      attachments, and actuarial statement required to be submitted under
      Section 103(d) of ERISA, with respect to each Guaranteed Pension Plan.

            8.14.2. TERMINABILITY OF WELFARE PLANS.

                                      -28-
<PAGE>

            No Employee Benefit Plan, which is an employee welfare benefit plan
      within the meaning of Section 3(1) or Section 3(2)(B) of ERISA, provides
      benefit coverage subsequent to termination of employment, except as
      required by Title I, Part 6 of ERISA or the applicable state insurance
      laws or to the extent taken into account in the latest actuarial valuation
      of post-employment benefit obligations (FASB No. 10Bb report). By their
      respective terms, and except as limited as a result of the filing of the
      Case, the Borrower may terminate each such Plan at any time (or at any
      time subsequent to the expiration of any applicable bargaining agreement)
      in the discretion of the Borrower without liability to any Person.

            8.14.3. GUARANTEED PENSION PLANS.

            Each contribution required to be made to a Guaranteed Pension Plan,
      whether required to be made to avoid the incurrence of an accumulated
      funding deficiency, the notice or lien provisions of Section 302(f) of
      ERISA, or otherwise, has been timely made. No waiver of an accumulated
      funding deficiency or extension of amortization periods has been received
      and remains in effect with respect to any Guaranteed Pension Plan, and the
      Borrower or any ERISA Affiliate is not obligated to or has posted security
      in connection with an amendment to a Guaranteed Pension Plan pursuant to
      Section 307 of ERISA or Section 401(a)(29) of the Code. No liability to
      the PBGC (other than required insurance premiums, all of which have been
      paid) has been incurred by the Borrower or any ERISA Affiliate with
      respect to any Guaranteed Pension Plan and there has not been any ERISA
      Reportable Event (other than an ERISA Reportable Event as to which the
      requirement of 30 days notice has been waived or attributable to the
      filing of the Case), or any other event or condition which presents a
      material risk of termination of any Guaranteed Pension Plan by the PBGC.
      Based on the latest valuation of each Guaranteed Pension Plan (which in
      each case occurred within twelve months of the date of this
      representation), and on the actuarial methods and assumptions employed for
      that valuation, the aggregate benefit liabilities of all such Guaranteed
      Pension Plans within the meaning of Section 4001 of ERISA did not exceed
      the aggregate value of the assets of all such Guaranteed Pension Plans,
      disregarding for this purpose the benefit liabilities and assets of any
      Guaranteed Pension Plan with assets in excess of benefit liabilities.

            8.14.4. MULTIEMPLOYER PLANS.

            None of the Borrower nor any ERISA Affiliate has incurred any
      material liability (including secondary liability) to any Multiemployer
      Plan as a result of a complete or partial withdrawal from such
      Multiemployer Plan under Section 4201 of ERISA or as a result of a sale of
      assets described in Section 4204 of ERISA. None of the Borrower nor any
      ERISA Affiliate has been notified that any Multiemployer Plan is in
      reorganization or insolvent under and within the meaning of Section 4241
      or Section 4245 of ERISA or is at risk of entering reorganization or
      becoming insolvent, or that any Multiemployer Plan intends to terminate or
      has been terminated under Section 4041A of ERISA.

      8.15. USE OF PROCEEDS.

                                      -29-
<PAGE>

      8.15.1. GENERAL.

      The proceeds of the Loans shall be used solely for working capital and
general corporate purposes as set forth in the Budget.

      8.15.2. REGULATIONS U AND X.

      No portion of any Loan is to be used for the purpose of purchasing or
carrying any "margin security" or "margin stock" as such terms are used in
Regulations U and X of the Board of Governors of the Federal Reserve System, 12
C.F.R. Parts 221 and 224.

      8.16. ENVIRONMENTAL COMPLIANCE.

      The Borrower has taken all necessary steps to investigate the past and
present condition and usage of the Real Estate and the operations conducted
thereon and, based upon such diligent investigation, has determined that:

            (a) none of the Borrower, its Subsidiaries or any operator of the
      Real Estate or any operations thereon is in violation, or alleged
      violation, of any judgment, decree, order, law, license, rule or
      regulation pertaining to environmental matters, including without
      limitation, those arising under the Resource Conservation and Recovery Act
      ("RCRA"), the Comprehensive Environmental Response, Compensation and
      Liability Act of 1980 as amended ("CERCLA"), the Superfund Amendments and
      Reauthorization Act of 1986 ("SARA"), the Federal Clean Water Act, the
      Federal Clean Air Act, the Toxic Substances Control Act, or any state or
      local statute, regulation, ordinance, order or decree relating to health,
      safety or the environment (hereinafter "Environmental Laws"), which
      violation would have a material adverse effect on the environment or a
      Material Adverse Effect;

            (b) none of the Borrower or any of its Subsidiaries has received
      notice from any third party including, without limitation, any
      Governmental Authority, (i) that any one of them has been identified by
      the United States Environmental Protection Agency ("EPA") as a potentially
      responsible party under CERCLA with respect to a site listed on the
      National Priorities List, 40 C.F.R. Part 300 Appendix B; (ii) that any
      hazardous waste, as defined by 42 U.S.C. Section 6903(5), any hazardous
      substances as defined by 42 U.S.C. Section 9601(14), any pollutant or
      contaminant as defined by 42 U.S.C. Section 9601(33) and any toxic
      substances, oil or hazardous materials or other chemicals or substances
      regulated by any Environmental Laws ("Hazardous Substances") which any one
      of them has generated, transported or disposed of has been found at any
      site at which a Governmental Authority or other third party has conducted
      or has ordered that the Borrower or any of its Subsidiaries conduct a
      remedial investigation, removal or other response action pursuant to any
      Environmental Law; or (iii) that it is or shall be a named party to any
      claim, action, cause of action, complaint, or legal or administrative
      proceeding (in each case, contingent or otherwise) arising out of any
      third party's incurrence of costs,

                                      -30-
<PAGE>

      expenses, losses or damages of any kind whatsoever in connection with the
      release of Hazardous Substances;

            (c) (i) no portion of the Real Estate has been used for the
      handling, processing, storage or disposal of Hazardous Substances except
      in accordance with applicable Environmental Laws; and no underground tank
      or other underground storage receptacle for Hazardous Substances is
      located on any portion of the Real Estate; (ii) in the course of any
      activities conducted by the Borrower, any of its Subsidiaries or operators
      of their properties, no Hazardous Substances have been generated or are
      being used on the Real Estate except in accordance with applicable
      Environmental Laws; (iii) there have been no releases (i.e. any past or
      present releasing, spilling, leaking, pumping, pouring, emitting,
      emptying, discharging, injecting, escaping, disposing or dumping) or
      threatened releases of Hazardous Substances on, upon, into or from the
      properties of the Borrower or any of its Subsidiaries, which releases
      would have a material adverse effect on the value of any of the Real
      Estate or adjacent properties or the environment; (iv) to the best of the
      Borrower's knowledge, there have been no releases on, upon, from or into
      any real property in the vicinity of any of the Real Estate which, through
      soil or groundwater contamination, may have come to be located on, and
      which would have a material adverse effect on the value of, the Real
      Estate; and (v) in addition, any Hazardous Substances that have been
      generated on any of the Real Estate have been transported offsite only by
      carriers having an identification number issued by the EPA (or the
      equivalent thereof in any foreign jurisdiction), treated or disposed of
      only by treatment or disposal facilities maintaining valid permits as
      required under applicable Environmental Laws, which transporters and
      facilities have been and are, to the best of the Borrower's knowledge,
      operating in compliance with such permits and applicable Environmental
      Laws; and

            (d) none of the Borrower, its Subsidiaries, any Mortgaged Property
      or any of the other Real Estate is subject to any applicable Environmental
      Law requiring the performance of Hazardous Substances site assessments, or
      the removal or remediation of Hazardous Substances, or the giving of
      notice to any Governmental Authority or the recording or delivery to other
      Persons of an environmental disclosure document or statement by virtue of
      the transactions set forth herein and contemplated hereby, or as a
      condition to the recording of any Mortgage or to the effectiveness of any
      other transactions contemplated hereby.

      8.17. SUBSIDIARIES, CAPITALIZATION, ETC.

      All Subsidiaries, direct and indirect, of the Borrower are listed on
Schedule 8.17 hereto. Neither the Borrower nor any Subsidiary of the Borrower is
engaged in any joint venture or partnership with any other Person. All
outstanding shares of the Borrower have been duly authorized and validly issued
and are fully paid and nonassessable.

      8.18. DISCLOSURE.

      None of this Credit Agreement or any of the other Loan Documents contains
any untrue statement of a material fact or omits to state a material fact (known
to the Borrower in the case of any document or information not furnished by it)
necessary in order to make

                                      -31-
<PAGE>

the statements herein or therein not misleading. Except for the Case, there is
no fact known to the Borrower which has a Material Adverse Effect, or which is
reasonably likely in the future to have a Material Adverse Effect exclusive of
effects resulting from changes in general economic conditions, legal standards
or regulatory conditions.

      8.19. BANK ACCOUNTS.

      Schedule 8.19 hereto sets forth the account numbers and location of all
bank accounts of the Borrower.

      8.20. ELIGIBILITY CRITERIA.

      Each Account Receivable reflected on the computations included in any
Borrowing Base Certificate meets the criteria enumerated in the definition of
Eligible Accounts Receivable. All Inventory reflected on the computations
included in any Borrowing Base Certificate meets the criteria enumerated in the
definition of Eligible Inventory. All of the fixed assets reflected on the
computations included in the Borrowing Base Certificate meets the criteria
enumerated in the definition of Eligible Fixed Assets.

                    9. AFFIRMATIVE COVENANTS OF THE BORROWER

           The Borrower covenants and agrees that, so long as any Loan or Note
is outstanding or any Lender has any obligation to make any Loans:

      9.1. PUNCTUAL PAYMENT. The Borrower will duly and punctually pay or cause
to be paid the principal and interest on the Loans, the commitment fees and all
other amounts provided for in this Credit Agreement and the other Loan
Documents, all in accordance with the terms of this Credit Agreement and such
other Loan Documents.

      9.2. MAINTENANCE OF OFFICE.

      The Borrower will maintain its chief executive office in Redwood City,
California, or at such other place in the United States of America as the
Borrower shall designate upon written notice to the Lender, where notices,
presentations and demands to or upon the Borrower in respect of the Loan
Documents to which the Borrower is a party may be given or made.

      9.3. RECORDS AND ACCOUNTS.

      The Borrower will (a) keep true and accurate records and books of account
in which full, true and correct entries will be made in accordance with GAAP,
and (b) maintain adequate accounts and reserves for all taxes (including income
taxes), depreciation, depletion, obsolescence and amortization of its
properties, contingencies, and other reserves.

      9.4. FINANCIAL STATEMENTS, CERTIFICATES AND INFORMATION.

                                      -32-
<PAGE>

      The Borrower will deliver to the Lender:

            (a) as soon as practicable, but in any event not later than ninety
      (90) days after the end of each fiscal year of the Borrower, the balance
      sheet of the Borrower as at the end of such year, and the related
      statement of income and statement of cash flow for such year, each setting
      forth in comparative form the figures for the previous fiscal year and all
      such statements to be in reasonable detail, prepared in accordance with
      GAAP, together with a certification by the principal financial or
      accounting officer of the Borrower that the information contained in such
      financial statements fairly presents the financial position of the
      Borrower on the date thereof;

            (b) as soon as practicable, but in any event not later than
      forty-five (45) days after the end of each of the fiscal quarters of the
      Borrower, copies of the unaudited balance sheet of the Borrower as at the
      end of such quarter, and the related statement of income and statement of
      cash flow for the portion of the Borrower's fiscal year then elapsed, all
      in reasonable detail and prepared in accordance with GAAP, together with a
      certification by the principal financial or accounting officer of the
      Borrower that the information contained in such financial statements
      fairly presents the financial position of the Borrower on the date thereof
      (subject to year-end adjustments);

            (c) as soon as practicable, but in any event within thirty (30) days
      after the end of each month, unaudited monthly financial statements of the
      Borrower for such month, each prepared in accordance with GAAP;

            (d) simultaneously with the delivery of the financial statements
      referred to in subsections (a) and (b) above, a statement certified by the
      principal financial or accounting officer of the Borrower in substantially
      the form of Exhibit C hereto (a "Compliance Certificate") and setting
      forth in reasonable detail computations evidencing compliance with the
      covenants contained in Section 11 and (if applicable) reconciliations to
      reflect changes in GAAP since the Balance Sheet Date;

            (e) promptly, copies of all pleadings, papers, notices, orders and
      other papers filed in or issued from the Bankruptcy Court or any appellate
      court in the Case and copies of all reports filed with the Office of the
      United States Trustee relating to the Case;

            (f) not less frequently than weekly, a rolling thirteen (13) week
      cash flow projection of the Borrower in a form and in such details as is
      reasonably satisfactory to the Lender, updating the prior cash flow
      projection and, for prior periods ending up to one week prior to the date
      of the report, showing actual performance and any variances of actual
      performance from projected performance;

            (g) not less frequently than weekly, a summary of accounts
      receivable and accounts payable of the Borrower;

                                      -33-
<PAGE>

            (h) not less frequently than weekly, and from time to time upon the
      Lender's request, a Borrowing Base Certificate in the form of Exhibit D
      attached hereto (the "Borrowing Base Certificate");

            (i) from time to time upon request, a written or oral report, in
      detail satisfactory to the Lender, as to the status of any sale of assets
      of the Borrower under Section 363 of the Bankruptcy Code or of the
      Reorganization Plan; and

            (k) from time to time such other financial data and information as
      any Lender may reasonably request.

      9.5. NOTICES.

            9.5.1. DEFAULTS.

            The Borrower will promptly notify the Lender in writing of the
      occurrence of any Default or Event of Default, together with a reasonably
      detailed description thereof, and the actions the Borrower proposes to
      take with respect thereto.

            9.5.2. ENVIRONMENTAL EVENTS.

            The Borrower will promptly give notice to the Lender (a) of any
      violation of any Environmental Law that the Borrower or any of its
      Subsidiaries reports in writing or is reportable by such Person in writing
      (or for which any written report supplemental to any oral report is made)
      to any Governmental Authority and (b) upon becoming aware thereof, of any
      inquiry, proceeding, investigation, or other action, including a notice
      from any agency of potential environmental liability, of any Governmental
      Authority that could have a Material Adverse Effect.

            9.5.3. NOTICE OF LITIGATION AND JUDGMENTS.

            The Borrower will give notice to the Lender in writing within ten
      (10) days of becoming aware of any litigation or proceedings threatened in
      writing or any pending litigation and proceedings affecting the Borrower
      or any of its Subsidiaries or to which the Borrower or any of its
      Subsidiaries is or becomes a party involving an uninsured claim against
      the Borrower or any of its Subsidiaries, that could reasonably be expected
      to have a Material Adverse Effect on the Borrower or any of its
      Subsidiaries and stating the nature and status of such litigation or
      proceedings. The Borrower will give notice to the Lender, in writing, in
      form and detail satisfactory to the Lender, within five (5) days of any
      judgment not covered by insurance, final or otherwise, against the
      Borrower or any of its Subsidiaries in an amount in excess of $100,000.

            9.5.4. NOTIFICATION OF CLAIM AGAINST COLLATERAL.

            The Borrower will, immediately upon becoming aware thereof, notify
      the Lender in writing of any setoff, claims (including with respect to the
      Real Estate, environmental claims), withholdings or other defenses to
      which any of the Collateral, or the Lender's rights with respect to the
      Collateral, are subject.

                                      -34-
<PAGE>

            9.5.5. NOTICE REGARDING EXECUTORY CONTRACTS.

            The Borrower shall notify the Lender prior to the Borrower rejecting
      any contract or making any motion to reject any contract, setting forth in
      such notice the Borrower's reasons why such rejection (a) will be in the
      best interests of the Borrower and (b) will not have a Material Adverse
      Effect, and avoid proceeding with such rejection if such rejection will
      have a Material Adverse Effect.

      9.6. CORPORATE EXISTENCE; MAINTENANCE OF PROPERTIES; ETC.

            9.6.1. CORPORATE EXISTENCE.

            The Borrower will do or cause to be done all things necessary to
      preserve and keep in full force and effect its legal existence, rights and
      franchises.

            9.6.2. MAINTENANCE OF PROPERTIES; ETC.

            The Borrower (a) will cause all of its properties used or useful in
      the conduct of its business to be maintained and kept in good condition,
      repair and working order and supplied with all necessary equipment, (b)
      will cause to be made all necessary repairs, renewals, replacements,
      betterments and improvements thereof, all as in the judgment of the
      Borrower may be necessary so that the business carried on in connection
      therewith may be properly and advantageously conducted at all times, and
      (c) will continue to engage primarily in the businesses now conducted by
      it and in related businesses; provided that nothing in this Section 9.6
      shall prevent the Borrower from discontinuing the operation and
      maintenance of any of its properties if such discontinuance is, in the
      judgment of the Borrower, desirable in the conduct of its business and
      that do not in the aggregate have a Material Adverse Effect.

      9.7. INSPECTION OF PROPERTIES AND BOOKS; ETC.

            9.7.1. GENERAL.

            The Borrower shall permit the Lender, through any of the Lender's
      designated representatives, to visit and inspect any of the properties of
      the Borrower, to examine the books of account of the Borrower and its
      Subsidiaries (and to make copies thereof and extracts therefrom), and to
      discuss the affairs, finances and accounts of the Borrower and its
      Subsidiaries with, and to be advised as to the same by, their officers,
      and to conduct examinations and verifications (whether by internal
      commercial finance examiners or independent auditors) of all components
      included in the Borrowing Base, all at such reasonable times and intervals
      as any Lender may reasonably request.

            9.7.2. INFORMATION.

            The Borrower shall continue to cooperate fully with the Lender and
      their counsel and representatives, and use their best efforts to provide
      such information, documentation and records as any of them may reasonably
      request concerning the operations of the Borrower and its Subsidiaries,
      payables related thereto and other

                                      -35-
<PAGE>

      matters, such that all such information will be presented to the Lender as
      promptly as practicable after any reasonable request therefor.

            9.7.3. COLLATERAL AUDIT.

            Upon the reasonable request of the Lender, the Borrower will obtain
      and deliver to the Lender, or, if the Lender so elects, will cooperate
      with the Lender in the Lender's obtaining, a report of an independent
      collateral auditor satisfactory to the Lender (which may be affiliated
      with the Lender) with respect to the components included in the Borrowing
      Base, which report shall indicate whether or not the information set forth
      in the Borrowing Base Certificate most recently delivered at the time of
      reference thereto is accurate and complete in all material respects based
      upon a review by such auditors of the Accounts Receivable (including
      verification with respect to the amount, aging, identity and credit of the
      respective Account Debtors and the billing practices of the Borrower) and
      Inventory (including verification as to the value, location and respective
      types). All such collateral value reports shall be conducted and made at
      the expense of the Borrower.

            9.7.4. APPRAISER.

            Upon the reasonable request of the Lender, the Borrower will obtain
      and deliver to the Lender, or, if the Lender so elects, will cooperate
      with the Lender in the Lender's obtaining, a report of an appraiser or
      appraisers satisfactory to the Lender (which may be affiliated with the
      Lender) with respect to the other assets of the Borrower. All such
      appraisals shall be conducted and made at the expense of the Borrower.

      9.8. COMPLIANCE WITH LAWS, CONTRACTS, LICENSES, AND PERMITS.

      Subject to the provisions of the Bankruptcy Code, the Borrower will, and
will cause each of its Subsidiaries to, comply with (a) the applicable laws and
regulations wherever its business is conducted, including all Environmental
Laws, (b) the provisions of its Governing Documents, (c) except for temporary
delays from the Filing Date as permitted by the Bankruptcy Code and for
executory contracts rejected by such Borrower in compliance with the
requirements of Section 9.5.5, all contracts, agreements and instruments by
which it or any of its properties may be bound and (d) all applicable decrees,
orders, and judgments. If any authorization, consent, approval, permit or
license from the Bankruptcy Court or any officer, agency or instrumentality of
any government shall become necessary or required in order that the Borrower may
fulfill any of its obligations hereunder or any of the other Loan Documents, the
Borrower will immediately take or cause to be taken all reasonable steps within
its power to obtain such authorization, consent, approval, permit or license and
furnish the Lender with evidence thereof.

      9.9. EMPLOYEE BENEFIT PLANS.

      The Borrower will (a) promptly upon filing the same with the Department of
Labor or Internal Revenue Service, furnish to the Lender a copy of the most
recent actuarial statement required to be submitted under Section 103(d) of
ERISA and Annual Report, Form

                                      -36-
<PAGE>

5500, with all required attachments, in respect of each Guaranteed Pension Plan,
and (b) promptly upon receipt or dispatch, furnish to the Lender any notice,
report or demand sent or received in respect of a Guaranteed Pension Plan under
Sections. 302, 4041, 4042, 4043, 4063, 4065, 4066 and 4068 of ERISA (and any
other substantive correspondence from or with the PGBC regarding the Guaranteed
Pension Plans), or in respect of a Multiemployer Plan, under Sections.4041A,
4202, 4219, 4242, or 4245 of ERISA.

      9.10. USE OF PROCEEDS.

      The Borrower will use the proceeds of the Loans solely for the purposes
set forth in Section 8.15.

      9.11. CASH MANAGEMENT ARRANGEMENTS; DEPOSITORY ARRANGEMENTS.

      The Borrower shall implement and maintain in place cash management
arrangements as shall be in form and substance satisfactory to the Lender.

      9.12. COLLATERAL PRESERVATION.

      The Borrower shall take all such further actions as any Lender may from
time to time reasonably request to preserve, protect, perfect and ensure the
priority of the Collateral, subject to Permitted Liens entitled to priority
under applicable law.

      9.13. REAL ESTATE MATTERS.

      At the request of any Lender, the Borrower shall execute such instruments,
documents and agreements, and take such other action as shall be necessary, to
convey to the Lender a first priority mortgage in any or all Real Estate owned
or leased by the Borrower, and in connection therewith, deliver such appraisals,
environmental assessments, surveys, reports and information as the Lender shall
require.

      9.14. LANDLORDS, WAREHOUSEMEN, CONSIGNEES, BAILEES AND PROCESSORS.

      Pursuant to the Final Order and to the extent permitted by the Bankruptcy
Code, the Lender shall be deemed to possess Liens on the Collateral senior to
the interest of any landlords, warehousement, consignees, bailees and processors
in Inventory held or maintained by each such person or other third party in
possession of any of the Collateral consisting of Inventory, including without
limitation, consignees, bailees or processors.

      9.15. FURTHER ASSURANCES.

      The Borrower will cooperate with the Lender and execute such further
instruments and documents as the Lender shall reasonably request to carry out to
their satisfaction the transactions contemplated by this Credit Agreement and
the other Loan Documents.

         10. CERTAIN NEGATIVE COVENANTS OF THE BORROWER

      The Borrower covenants and agrees that, so long as any Loan or Note is
outstanding or any Lender has any obligation to make any Loans:

                                      -37-
<PAGE>

      10.1. RESTRICTIONS ON INDEBTEDNESS.

      The Borrower will not create, incur, assume, guarantee or be or remain
liable, contingently or otherwise, with respect to any Indebtedness other than:

            (a) Indebtedness to the Lender arising under any of the Loan
      Documents;

            (b) endorsements for collection, deposit or negotiation and
      warranties of products or services, in each case incurred in the ordinary
      course of business;

            (c) Indebtedness existing on the date hereof and listed and
      described on Schedule 10.1 hereto; and

            (d) purchase money Indebtedness incurred by the Borrower in
      connection with the acquisition after the date hereof of any real or
      personal property or under any Capitalized Lease in the ordinary course of
      business consistent with past practices in an aggregate amount not to
      exceed $10,000 at any time.

      10.2. RESTRICTIONS ON LIENS AND NEGATIVE PLEDGES.

            10.2.1. PERMITTED LIENS.

            The Borrower will not (a) create or incur or suffer to be created or
      incurred or to exist any lien, encumbrance, mortgage, pledge, charge,
      restriction or other security interest of any kind upon any of its
      property or assets of any character whether now owned or hereafter
      acquired, or upon the income or profits therefrom; (b) transfer any of
      such property or assets or the income or profits therefrom for the purpose
      of subjecting the same to the payment of Indebtedness or performance of
      any other obligation in priority to payment of its general creditors; (c)
      acquire, or agree or have an option to acquire, any property or assets
      upon conditional sale or other title retention or purchase money security
      agreement, device or arrangement; (d) suffer to exist for a period of more
      than thirty (30) days after the same shall have been incurred any
      Indebtedness or claim or demand against it that if unpaid might by law or
      upon bankruptcy or insolvency, or otherwise, be given any priority
      whatsoever over its general creditors; or (e) sell, assign, pledge or
      otherwise transfer any "receivables" as defined in clause (g) of the
      definition of the term "Indebtedness", with or without recourse; provided
      that the Borrower may create or incur or suffer to be created or incurred
      or to exist:

            (i) Liens to secure taxes, assessments and other government charges
      in respect of obligations not overdue or Liens on properties other than
      Mortgaged Properties to secure claims for labor, material or supplies in
      respect of obligations not overdue;

            (ii) deposits or pledges made in connection with, or to secure
      payment of, workmen's compensation, unemployment insurance, old age
      pensions or other social security obligations;

                                      -38-
<PAGE>

            (iii) Liens on properties other than Mortgaged Properties in respect
      of judgments or awards that have been in force for less than the
      applicable period for taking an appeal so long as execution is not levied
      thereunder or in respect of which the Borrower shall at the time in good
      faith be prosecuting an appeal or proceedings for review and in respect of
      which a stay of execution shall have been obtained pending such appeal or
      review;

            (iv) Liens of carriers, warehousemen, mechanics, and materialmen,
      and other like Liens on properties other than Mortgaged Properties, in
      existence less than 120 days from the date of creation thereof in respect
      of obligations which are not overdue;

            (v) encumbrances on Real Estate other than the Mortgaged Properties
      consisting of easements, rights of way, zoning restrictions, restrictions
      on the use of real property and defects and irregularities in the title
      thereto, landlord's or lessor's liens under leases to which the Borrower
      is a party, and other minor Liens provided that none of such Liens (A)
      interferes materially with the use of the property affected in the
      ordinary conduct of the business of the Borrower, and (B) individually or
      in the aggregate have a Material Adverse Effect;

            (vi) Liens existing on the date hereof and listed on Schedule 10.2
      hereto;

            (viii) Liens in favor of the Lender under the Loan Documents;

            (ix) adequate protection Liens in favor of holders of Prior
      Permitted Liens to the extent approved in writing by the Lender;

            (x) purchase money security interests in or purchase money mortgages
      on real or personal property other than Mortgaged Properties acquired
      after the date hereof to secure purchase money Indebtedness of the type
      permitted by Section 10.1(d) incurred in connection with the acquisition
      of such property which security interests or mortgages cover only the real
      or personal property so acquired; and

            (xi) Liens on each Mortgaged Property as and to the extent permitted
      by the Mortgage applicable thereto.

Nothing contained in this Section 10.2.1 subordinates the Liens in favor of the
Lender under the Security Documents or the Orders to any Permitted Lien that is
not valid, perfected and entitled to priority over the Lender's Liens under
applicable law or that is avoidable under the Bankruptcy Code.

      10.2.2. RESTRICTIONS ON NEGATIVE PLEDGES AND UPSTREAM LIMITATIONS.

      The Borrower will not, nor will permit any of its Subsidiaries to, (a)
enter into or permit to exist any arrangement or agreement (excluding the Credit
Agreement and the other Loan Documents) which directly or indirectly prohibits
the Borrower from creating, assuming or incurring any Lien upon its properties,
revenues or assets whether now owned or hereafter acquired, or (b) enter into
any agreement, contract or arrangement (excluding the Credit Agreement and the
other Loan Documents) restricting the ability of any

                                      -39-
<PAGE>

Subsidiary of any Borrower to pay or make dividends or distributions in cash or
kind to the Borrower, to make loans, advances or other payments of whatsoever
nature to the Borrower, or to make transfers or distributions of all or any part
of its assets to the Borrower; in each case other than (i) restrictions on
specific assets which assets are the subject of purchase money security
interests to the extent permitted under Section 10.2.1(x), and (ii) customary
anti-assignment provisions contained in leases and licensing agreements entered
into by such Borrower or such Subsidiary in the ordinary course of its business.

      10.3. RESTRICTIONS ON INVESTMENTS.

      The Borrower will not make or permit to exist or to remain outstanding any
Investment except Investments in:

            (a) marketable direct or guaranteed obligations of the United States
      of America that mature within one (1) year from the date of purchase by
      the Borrower;

            (b) demand deposits, certificates of deposit, bankers acceptances
      and time deposits of any Lender or any United States banks having total
      assets in excess of $1,000,000,000;

            (c) securities commonly known as "commercial paper" issued by a
      corporation organized and existing under the laws of the United States of
      America or any state thereof that at the time of purchase have been rated
      and the ratings for which are not less than "P 1" if rated by Moody's and
      not less than "A 1" if rated by S&P; provided that such Investment in such
      commercial paper otherwise permitted hereunder shall be permitted if such
      commercial paper is rated either (i) not less than "P 2" by Moody's and "A
      1" by S&P or (ii) not less than "A 2" by S&P and "P 1" by Moody's;

            (d) Investments existing on the date hereof and listed on Schedule
      10.3 hereto; and

            (e) Investments consisting of loans and advances to employees for
      moving, entertainment, travel and other similar expenses in the ordinary
      course of business not to exceed $1,000 in the aggregate at any time
      outstanding.

      10.4. RESTRICTED PAYMENTS.

      The Borrower will not make any Restricted Payments other than payments
permitted by Section 10.7 hereof.

      10.5. MERGER, CONSOLIDATION AND DISPOSITION OF ASSETS.

            10.5.1. MERGERS AND ACQUISITIONS.

            The Borrower will not, nor will it permit any of its Subsidiaries
      to, become a party to any merger or consolidation except the merger or
      consolidation of one or more of the Subsidiaries of any Borrower with and
      into such Borrower, with such Borrower being the surviving corporation of
      such merger or consolidation; provided

                                      -40-
<PAGE>

      that, in each case, no Default or Event of Default shall have occurred and
      be continuing, or would result from such merger or consolidation. The
      Borrower will not, nor will it permit any of its Subsidiaries to, effect
      any asset acquisition or stock acquisition, other than the acquisition of
      assets in the ordinary course of business consistent with past practices.

            10.5.2. DISPOSITION OF ASSETS.

            Except with the prior written consent of the Lender, the Borrower
      will not become a party to or agree to or effect any disposition of
      assets, other than, so long as no Default or Event of Default has occurred
      and is continuing, (a) the sale of Inventory, (b) the disposition of
      obsolete assets, in each case in the ordinary course of business
      consistent with past practices and for reasonably equivalent value.

      10.6. COMPLIANCE WITH ENVIRONMENTAL LAWS.

      The Borrower will not, nor will it permit any of its Subsidiaries to, (a)
use any of the Real Estate or any portion thereof for the handling, processing,
storage or disposal of Hazardous Substances, other than in compliance with all
Environmental Laws and other applicable laws, (b) cause or permit to be located
on any of the Real Estate any underground tank or other underground storage
receptacle for Hazardous Substances, (c) generate any Hazardous Substances on
any of the Real Estate, (d) conduct any activity at any Real Estate or use any
Real Estate in any manner so as to cause a release (i.e., releasing, spilling,
leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping,
leaching, disposing or dumping) or threatened release of Hazardous Substances
on, upon or into the Real Estate or (e) otherwise conduct any activity at any
Real Estate or use any Real Estate in any manner that would violate any
Environmental Law or bring such Real Estate in violation of any Environmental
Law.

      10.7. SUBORDINATED DEBT.

      Except pursuant to a Reorganization Plan that has been confirmed by an
order of the Bankruptcy Court with the consent of the Lender, the Borrower will
not prepay, redeem, repurchase or defease any of the Subordinated Debt. The
Borrower will not, without the prior written consent of the Lender, amend,
supplement or otherwise modify any of the terms of the Subordinated Debt or take
any action that would cause or permit the Obligations to fail to constitute
senior indebtedness to which the payment of the Subordinated Debt are
subordinated.

      10.8. EMPLOYEE BENEFIT PLANS.

      Except in accordance with the Reorganization Plan that has been confirmed
by an order of the Bankruptcy Court with consent of the Lender, none of the
Borrower or any ERISA Affiliate will

            (a) engage in any "prohibited transaction" within the meaning of
      Section 406 of ERISA or Section 4975 of the Code which could result in a
      material liability for the Borrower or any of its Subsidiaries; or

                                      -41-
<PAGE>

            (b) permit any Guaranteed Pension Plan to incur an "accumulated
      funding deficiency", as such term is defined in Section 302 of ERISA,
      whether or not such deficiency is or may be waived; or

            (c) fail to contribute to any Guaranteed Pension Plan to an extent
      which, or terminate any Guaranteed Pension Plan in a manner which, could
      result in the imposition of a lien or encumbrance on the assets of the
      Borrower or any of its Subsidiaries pursuant to Section 302(f) or Section
      4068 of ERISA; or

            (d) amend any Guaranteed Pension Plan in circumstances requiring the
      posting of security pursuant to Section 307 of ERISA or Section 401(a)(29)
      of the Code; or

            (e) permit or take any action which would result in the aggregate
      benefit liabilities (within the meaning of Section 4001 of ERISA) of all
      Guaranteed Pension Plans exceeding the value of the aggregate assets of
      such Plans, disregarding for this purpose the benefit liabilities and
      assets of any such Plan with assets in excess of benefit liabilities.

      10.9. BUSINESS ACTIVITIES.

      The Borrower will not, nor will permit any of its Subsidiaries to, engage
directly or indirectly (whether through Subsidiaries or otherwise) in any type
of business other than the businesses conducted by it on the date hereof.

      10.10. BANKRUPTCY CASE.

      The Borrower will not seek, consent or suffer to exist (a) any
modification, stay, vacation or amendment to the Orders, unless the Lender has
consented to such modification, stay, vacation or amendment in writing, (b) a
priority claim for any administrative expense or unsecured claim against the
Borrower (now existing or hereafter arising of any kind or nature whatsoever,
including without limitation any administrative expense of the kind specified in
Section 503(b), 506(c) or 507(b) of the Bankruptcy Code) equal or superior to
the priority claim of the Lender in respect of the Obligations, except for the
Carve Out; or (c) any Lien on any Collateral, having a priority equal or
superior to the Lien in favor of the Lender in respect of the Obligations,
except for purchase money Liens entitled to priority under applicable law.

      10.11. PREPETITION INDEBTEDNESS.

      The Borrower shall not pay or discharge, or cause to be paid or
discharged, any Indebtedness of the Borrower incurred before the Filing Date
other than payments:

            (a) approved by the Bankruptcy Court and satisfactory to the Lender
      on or about the Filing Date in connection with the Borrower's "first day
      orders";

            (c) as required in any Reorganization Plan that provides for payment
      in full in cash of all of the Obligations, on or about the effective date
      of the Reorganization Plan;

                                      -42-
<PAGE>

            (d) required to be made pursuant to an order of the Bankruptcy Court
      in the Case for adequate protection pursuant to the Bankruptcy Code on
      account of Permitted Prior Liens approved in writing by the Lender; or

            (e) of severance and other employee related payments approved by the
      Bankruptcy Court and satisfactory to the Lender.

The Borrower shall not seek or file any motion with the Bankruptcy Court in
accordance with Section 546(g) of the Bankruptcy Code seeking, to return any
goods shipped to the Borrower prior to the Filing Date, without the Lender's
consent in writing.

                     11. FINANCIAL COVENANTS OF THE BORROWER

      The Borrower covenants and agrees that, so long as any Loan or Note is
outstanding or any Lender has any obligation to make any Loans:

      11.1. MINIMUM ADJUSTED EBITDA.

      The Borrower will not cause or permit Adjusted EBITDA:

            (a) for the month of February 2005 to be less than $0

            (b) for the two-month period of February and March 2005 to be less
      than $0 and

      11.2. CUMULATIVE CASH FLOW.

      The Borrower will not cause or permit Cumulative Cash Flow for any period
ending at the end of the month indicated in the table below to be less than the
amount set forth in the table opposite such month.

<TABLE>
<CAPTION>
Month Ending                                         Amount
------------                                         ------
<S>                                                  <C>
February 2005                                        $    0
March 2005                                           $    0
</TABLE>

      11.3. CAPITAL EXPENDITURES.

      The Borrower will not cause or permit the aggregate amount of Capital
Expenditures of the Borrower made for any period commencing with the Filing Date
and ending at the end of any month indicated in the table below to be greater
than the amount set forth in the table opposite such month.

<TABLE>
<CAPTION>
Month Ending                                         Amount
------------                                         ------
<S>                                                  <C>
January 2005                                         $10,000
February 2005                                        $10,000
</TABLE>

                                      -43-
<PAGE>

<TABLE>
<S>                                                  <C>
March 2005                                           $10,000
April 2005                                           $10,000
</TABLE>

                             12. CLOSING CONDITIONS

      The obligations of the Lender to make the initial Revolving Credit Loans
on the Closing Date shall be subject to the satisfaction of the following
conditions precedent on or prior to FEBRUARY 18, 2005 unless such date is
extended by the Lender in writing:

      12.1. LOAN DOCUMENTS.

      Each of the Loan Documents shall have been duly executed and delivered by
the respective parties thereto, shall be in full force and effect and shall be
in form and substance satisfactory to the Lender. The Lender shall have received
a fully executed copy of each such document.

      12.2. CERTIFIED COPIES OF GOVERNING DOCUMENTS.

      The Lender shall have received from the Borrower a copy, certified by a
duly authorized officer to be true and complete on the Closing Date, of each of
its Governing Documents as in effect on such date of certification.

      12.3. CORPORATE OR OTHER ACTION.

      All corporate (or other) action necessary for the valid execution,
delivery and performance by the Borrower of this Credit Agreement and the other
Loan Documents to which it is or is to become a party shall have been duly and
effectively taken, and evidence thereof satisfactory to the Lender shall have
been provided to the Lender.

      12.4. INCUMBENCY CERTIFICATE.

      The Lender shall have received from the Borrower an incumbency
certificate, dated as of the Closing Date, signed by a duly authorized officer
of the Borrower, and giving the name and bearing a specimen signature of each
individual who shall be authorized: (a) to sign, in the name and on behalf of
the Borrower, each of the Loan Documents; (b) to make Loan Requests; and (c) to
give notices and to take other action on its behalf under the Loan Documents.

      12.5. CERTIFICATES OF INSURANCE.

      The Lender shall have received (a) a certificate of insurance from an
independent insurance broker dated as of the Closing Date, identifying insurers,
types of insurance, insurance limits, and policy terms, and otherwise describing
the insurance obtained in accordance with the provisions hereof and the Security
Documents and (b) certified copies of all policies evidencing such insurance (or
certificates therefor signed by the insurer or an agent authorized to bind the
insurer).

                                      -44-
<PAGE>

      12.6. PAYMENT OF FEES.

      The Borrower shall have paid, or be concurrently tendering, to the Lender
the fees to be paid on the Closing Date. The Borrower shall also have paid to
the Lender the amount of any fees or expenses for which the Borrower are
responsible under Section 16.2.

      12.7. PERFECTION CERTIFICATES AND SEARCH RESULTS.

      Lender shall have received from the Borrower a Perfection Certificate (as
defined in the Security Agreement) and the results of Uniform Commercial Code
searches with respect to the Collateral and the other assets of the Borrower,
indicating no Liens other than Permitted Liens and otherwise in form and
substance satisfactory to the Lender.

      12.8. VALIDITY OF LIENS.

      The Security Documents shall, upon entry of the Interim Order or the Final
Order, whichever occurs first, be effective to create in favor of the Lender a
legal, valid and enforceable first priority (except for Permitted Liens entitled
to priority under applicable law) Lien upon the Collateral. All filings,
recordings, deliveries of instruments and other actions necessary or desirable
in the opinion of the Lender to protect and preserve such Liens shall have been
duly effected. The Lender shall have received evidence thereof in form and
substance satisfactory to the Lender.

      12.9. BUDGET.

      The Lender shall have received the Budget in form and substance
satisfactory to the Lender.

      12.10. FIRST DAY ORDERS.

      All cash management and other "first day orders" submitted for entry on or
about the date of the commencement of the Case shall be in form and substance
satisfactory to the Lender and, as entered, shall not deviate from the form
thereof approved by the Lender in any material respect which is adverse to the
interests of the Lender.

                        13. CONDITIONS TO ALL BORROWINGS

      The obligations of the Lender to make any Loan, whether on or after the
Closing Date, shall also be subject to the satisfaction of the following
conditions precedent:

      13.1. INTERIM ORDER OR FINAL ORDER.

      The Bankruptcy Court shall have entered the Interim Order or the Final
Order and such Order shall be in full force and effect and shall not have been
amended, modified, stayed, or reversed. If either the Interim Order or the Final
Order is the subject of a pending appeal in any respect, none of such Orders,
the making of the Loans or the performance by the Borrower of any of the
Obligations shall be the subject of a presently effective stay pending appeal.
The Borrower and the Lender shall be entitled to rely in good faith upon each of
the Orders notwithstanding objection thereto or appeal therefrom

                                      -45-
<PAGE>

by any interested party. The Borrower and the Lender shall be permitted and, at
the election of the Lender, required to perform their respective obligations in
compliance with this Credit Agreement, notwithstanding any such objection or
appeal unless the relevant Order has been stayed by a court of competent
jurisdiction. The Lender may, however, defer any its obligations to make any
Loans until such time as no objection to or appeal from the Interim Order or, as
the case may be, the Final Order is pending and the period for lodging any
objection or appeal has expired.

      13.2. REPRESENTATIONS TRUE; NO EVENT OF DEFAULT.

      Each of the representations and warranties of the Borrower contained in
this Credit Agreement, the other Loan Documents or in any document or instrument
delivered pursuant to or in connection with this Credit Agreement shall be true
as of the date as of which they were made and shall also be true at and as of
the time of the making of such Loan, with the same effect as if made at and as
of that time (except to the extent of changes resulting from transactions
contemplated or permitted by this Credit Agreement and the other Loan Documents
and to the extent that such representations and warranties relate expressly to
an earlier date) and no Default or Event of Default shall have occurred and be
continuing or would result from the making of such Loan.

      13.3. NO LEGAL IMPEDIMENT.

      No change shall have occurred in any law or regulations thereunder or
interpretations thereof that in the reasonable opinion of any Lender would make
it illegal for such Lender to make a Loan.

      13.4. PROCEEDINGS AND DOCUMENTS.

      All proceedings in connection with the transactions contemplated by this
Credit Agreement, the other Loan Documents and all other documents incident
thereto shall be satisfactory in substance and in form to the Lender and to its
counsel, and the Lender and such counsel shall have received all information and
such counterpart originals or certified or other copies of such documents as the
Lender or such counsel may reasonably request.

      13.5. PAYMENT OF FEES.

      The Borrower shall have paid all fees, expenses and other amounts then due
and owing on the Drawdown Date of such Loan.

      13.6. BORROWING BASE CERTIFICATE.

      The Lender shall have received the most recent Borrowing Base Certificate
required to be delivered to the Lender in accordance with Section 9.4(h) and, if
requested by the Lender, a Borrowing Base Certificate dated within five (5) days
of the Drawdown Date of such Loan.

                                      -46-
<PAGE>

                  14. EVENTS OF DEFAULT; ACCELERATION; ETC

      14.1. EVENTS OF DEFAULT AND ACCELERATION.

      If any of the following events ("Events of Default" or, if the giving of
notice or the lapse of time or both is required, then, prior to such notice or
lapse of time, "Defaults") shall occur:

            (a) the Borrower shall fail to pay any principal of, or interest on
      the Loans or any commitment fee, or other fee or expense hereunder when
      the same shall become due and payable, whether at the stated date of
      maturity or any accelerated date of maturity or at any other date fixed
      for payment;

            (b) the Borrower shall fail to comply with any of its covenants
      contained inSection 9, 10 or 11 or any of the covenants contained in any
      of the Mortgages;

            (c) the Borrower shall fail to perform any term, covenant or
      agreement contained herein or in any of the other Loan Documents (other
      than those specified elsewhere in this Section 14.1) and such default
      shall continue for a period of ten (10) days after the occurrence thereof;

            (d) any representation or warranty of the Borrower in this Credit
      Agreement or any of the other Loan Documents or in any other document or
      instrument delivered pursuant to or in connection with this Credit
      Agreement shall prove to have been false in any material respect upon the
      date when made or deemed to have been made or repeated;

            (e) the Borrower shall default in the payment when due of any
      principal of or interest on any postpetition Indebtedness, or any
      pre-petition Indebtedness if, by order of the Bankruptcy Court issued with
      respect to such pre-petition Indebtedness, the default thereunder entitles
      the holder thereof to relief from the automatic stay of Section 362 of the
      Bankruptcy Code, in excess of $10,000 in the aggregate of such
      postpetition or pre-petition Indebtedness, or any event specified in any
      note, agreement, indenture or other document evidencing or securing any
      such postpetition Indebtedness shall occur if the effect of such event is
      to cause, or (with the giving of notice or the lapse of time or both) to
      permit the holder or holders of such Indebtedness (or a trustee or agent
      on behalf of such holder or holders) to cause such Indebtedness to become
      due, or to be prepaid in full prior to its stated maturity; or the
      Borrower shall default in the payment when due of any amount in excess of
      $10,000 in the aggregate under any postpetition Derivative Transaction, or
      any event specified in any postpetition Derivative Transaction to which
      the Borrower is a party shall occur if the effect of such event is to
      cause, or (with the giving of notice or the lapse of time or both) to
      permit, termination or liquidation payments in respect of such
      postpetition Derivative Transaction in excess of $10,000 to become due;

            (f) if any of the Loan Documents shall be cancelled, terminated,
      revoked or rescinded; or the Lender's Lien on any of the Collateral shall
      cease to be perfected

                                      -47-
<PAGE>

      or have the priority contemplated by this Credit Agreement or the Orders,
      as the case may be, or any action at law, suit or in equity or other legal
      proceeding to cancel, revoke, rescind or otherwise challenge any of the
      Loan Documents or the Liens securing the Obligations shall be commenced by
      the Borrower or any of its Subsidiaries; or any court or any other
      governmental or regulatory authority or agency of competent jurisdiction
      shall make a determination that, or issue a judgment, order, decree or
      ruling to the effect that, any one or more of the Loan Documents is
      illegal, invalid or unenforceable in accordance with the terms thereof;

            (g) the Borrower or any ERISA Affiliate incurs any liability to the
      PBGC or a Guaranteed Pension Plan pursuant to Title IV of ERISA in an
      amount in excess of $10,000 or the Borrower or any ERISA Affiliate is
      assessed withdrawal liability pursuant to Title IV of ERISA by a
      Multiemployer Plan in an amount in excess of $10,000 or any of the
      following occurs with respect to a Guaranteed Pension Plan (i) an ERISA
      Reportable Event, or a failure to make a required installment or other
      payment (within the meaning of Section 302(f)(1) of ERISA provided that
      the Lender determine in their reasonable discretion that such event (A)
      could be expected to result in liability of the Borrower to the PBGC or
      such Guaranteed Pension Plan in an aggregate amount exceeding $10,000 and
      (B) could constitute grounds for the termination of such Guaranteed
      Pension Plan by the PBGC, for the appointment by the appropriate United
      States District Court of a trustee to administer such Guaranteed Pension
      Plan or for the imposition of a lien in favor of such Guaranteed Pension
      Plan; (ii) the appointment by a United States District Court of a trustee
      to administer such Guaranteed Pension Plan; or (iii) the institution by
      the PBGC of proceedings to terminate such Guaranteed Pension Plan;

            (h) there shall occur any material damage to, or loss, theft or
      destruction of any material item of Collateral which is not insured or
      which is insured but as to which loss, theft or destruction, the insurance
      proceeds relating thereto have not been paid to the Lender in accordance
      with the terms of the Security Documents;

            (i) the Bankruptcy Court shall enter any order (i) amending,
      supplementing, altering, staying, vacating, rescinding or otherwise
      modifying any Order or any other order with respect to any of the Case
      affecting in any material respect this Credit Agreement, (ii) appointing a
      Chapter 11 trustee or an examiner with enlarged powers relating to the
      operation of the business (powers beyond those set forth in Section
      1106(a)(3) and (4) of the Bankruptcy Code) under Section 1106(b) of the
      Bankruptcy Code in any of the Case, (iii) dismissing any of the Case or
      converting any of the Case to a Chapter 7 case, or (iv) granting relief
      from the automatic stay to any creditor holding or asserting a Lien or
      reclamation claim on a material portion of the assets of the Borrower or
      where the deprivation of the Borrower of such assets would reasonably be
      expected to have a Material Adverse Effect;

            (j) the Bankruptcy Court shall fail to enter the Final Order by
      March 5, 2005;

                                      -48-
<PAGE>

            (k) an application shall be filed by the Borrower or any of its
      Subsidiaries for the approval of any other Superpriority Claim in the Case
      which is pari passu with or senior to the claims of the Lender against the
      Borrower or any of its Subsidiaries unless after giving effect to the
      transactions contemplated by such application, all Obligations (whether
      contingent or otherwise) shall be paid in full in cash and the Commitments
      shall be terminated), or there shall arise any such Superpriority Claim;

            (l) the Borrower shall be unable to pay its postpetition debts as
      they mature, shall fail to comply with any order of the Bankruptcy Court
      in any material respect, or shall fail to make payments hereunder, as and
      when such payments become due or otherwise;

            (m) there shall remain undischarged for more than thirty (30) days
      any final postpetition judgment or execution action against the Borrower,
      or relief from the automatic stay of Section 362(a) of the Bankruptcy Code
      shall be granted to any creditor or creditors of the Borrower with respect
      to assets having an aggregate value in excess of $10,000 or where the
      deprivation of the Borrower of such assets would reasonably be expected to
      have a Material Adverse Effect;

            (n) the Borrower or any of its Subsidiaries shall file a motion in
      the Case (i) to use cash collateral of the Lender under Section 363(c) of
      the Bankruptcy Code without the Lender's consent, (ii) to recover from any
      portions of the Collateral any costs or expenses of preserving or
      disposing of such Collateral under Section 506(c) of the Bankruptcy Code,
      to cut off rights in the Collateral under Section 552(b) of the Bankruptcy
      Code, or (iii) to take any other action or actions adverse to the Lender
      or their rights and remedies hereunder or under any of the other Loan
      Documents or the Lender's interest in any of the Collateral;

            (o) a suit or action against any of the Lender shall be commenced by
      the Borrower or any of its Subsidiaries, any federal, state environmental
      protection or health and safety agency or any official committee in the
      Case, which suit or action asserts any claim or legal or equitable remedy
      contemplating subordination of any claim or Lien of the Lender, and shall
      remain undismissed or unstayed for thirty (30) days after its commencement
      without any preliminary relief of the nature sought having been granted;
      and, with respect to any suit or action by any such federal or state
      agency or official committee, a preliminary order for relief or judgment
      or decree shall have been entered in such suit or action against the
      Lender, and, in the case of a preliminary order, such preliminary order
      has not been stayed within ten (10) days after its entry;

            (p) the subordination terms of the Subordinated Debt or any other
      prepetition subordination agreements in favor of the Lender shall not be
      enforceable by the Lender; or

            (q) the occurrence of an event of default or contempt under either
      of the Orders;

                                      -49-
<PAGE>

then, and in any such event, so long as the same may be continuing, the Lender
may by notice in writing to the Borrower declare all amounts owing with respect
to this Credit Agreement, the Notes and the other Loan Documents to be, and they
shall thereupon forthwith become, immediately due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby expressly waived by the Borrower.

      14.2. TERMINATION OF COMMITMENTS.

      If any Event of Default shall have occurred and be continuing, the Lender
may, by notice to the Borrower, terminate the unused portion of the credit
hereunder, and upon such notice being given such unused portion of the credit
hereunder shall terminate immediately and the Lender shall be relieved of all
further obligations to make Loans. No termination of the credit hereunder shall
relieve the Borrower of any of the Obligations.

      14.3. REMEDIES.

      (a) Upon the occurrence of an Event of Default, the Lender shall provide
the Borrower, the holder of any Lien or the lessor of any goods which has served
upon the Lender a request that such holder or such lessor receive such notice,
the United States Trustee and the Creditors' Committee with five Business Days
prior notice before the exercise of remedies under this Section 14.3 and under
the Security Documents, which such notice will specify the Event of Default and
the basis therefor and will be given by the Lender via facsimile to counsel to
the Borrower, the holder of any Lien or lessor which has provided its facsimile
number to the Lender in the request described above, the United States Trustee
and counsel to the Creditors' Committee. During such five Business Day notice
period, the Borrower has the right to seek an emergency hearing before the
Bankruptcy Court for the sole purpose of determining whether an Event of Default
has occurred; provided that the Borrower shall have no right to use or seek to
use the Collateral during such five Business Day notice period. Unless during
such five Business Day notice period the Bankruptcy Court determines that an
Event of Default has not occurred, upon the expiration of such five Business Day
notice period (i) the Lender shall have relief from the automatic stay without
further notice or order and may foreclose on all or any portion of the
Collateral or otherwise exercise remedies against the Collateral permitted by
the Security Documents and other nonbankruptcy law, including, without
limitation, the exercise of rights of setoff and the maintenance of cash
collateral, and (ii) any right of the Borrower to use cash collateral shall
cease.

      (b) In addition, at the expiration of any five Business Day notice period
referred to above, in case any one or more of the Events of Default shall have
occurred and be continuing, and whether or not the Lender shall have accelerated
the maturity of the Loans pursuant to Section 14.1, each Lender, if owed any
amount with respect to the Loans or other Obligations, may proceed to protect
and enforce its rights by suit in equity, action at law or other appropriate
proceeding, whether for the specific performance of any covenant or agreement
contained in this Credit Agreement and the other Loan Documents or any
instrument pursuant to which the Obligations to such Lender are evidenced,
including as permitted by applicable law the obtaining of the ex parte
appointment of a receiver, and, if such amount shall have become due, by
declaration or otherwise, proceed to enforce the payment thereof or any other
legal or equitable right of such Lender. No remedy herein

                                      -50-
<PAGE>

conferred upon any Lender or the holder of any Note is intended to be exclusive
of any other remedy and each and every remedy shall be cumulative and shall be
in addition to every other remedy given hereunder or now or hereafter existing
at law or in equity or by statute or any other provision of law.

      (c) The rights and remedies of the Lender under this Section 14.3 as to
any Collateral shall be subject to the rights of any other holder of a Lien in
such Collateral to the extent that the Lien of such other holder is entitled to
priority over the Lien of the Lender in such Collateral.

      14.4. DISTRIBUTION OF COLLATERAL PROCEEDS.

      (a) In the event that, following the Termination Declaration Date, any
Lender receives any monies in connection with the enforcement of any of the
Security Documents, or otherwise with respect to the realization upon any of the
Collateral, such monies shall be applied to the Obligations as follows:

            (i) first, to the payment of, or (as the case may be) the
      reimbursement of the Lender for or in respect of all reasonable costs,
      expenses, disbursements and losses which shall have been incurred or
      sustained by the Lender in connection with the collection of such monies
      by the Lender, for the exercise, protection or enforcement by the Lender
      of all or any of the rights, remedies, powers and privileges of the Lender
      under this Credit Agreement or any of the other Loan Documents or in
      respect of the Collateral or in support of any provision of adequate
      indemnity to the Lender against any taxes or liens which by law shall
      have, or may have, priority over the rights of the Lender to such monies;

            (ii) second, to pay interest on the Revolving Credit Loans then due
      and payable;

            (iii) third, if all of the Obligations have not then been declared
      due and payable, to any other Obligations then due and payable;

            (iv) fourth, to pay the principal of Revolving Credit Loans (it
      being understood that such repayment shall be accompanied by a permanent
      reduction in the Total Commitment (if then in effect) in the amount of
      such repayment);

            (v) fifth, to any other Obligations then due and payable;

            (vi) sixth, upon payment and satisfaction in full or other
      provisions for payment in full satisfactory to the Lender of all of the
      Obligations, to the payment of any obligations required to be paid
      pursuant to Section 9-608(a)(1)(c) or 9-615(a)(3) of the Uniform
      Commercial Code; and

            (vii) seventh, the excess, if any, shall be returned to the Borrower
      or to such other Persons as are entitled thereto.

      (b) With respect to each type of Obligation owing to the Lender, such as
interest, principal, fees and expenses, all payments shall be made to the
Lender.

                                      -51-
<PAGE>

      (c) The Lender shall not be subject to marshalling.

                           15. SUCCESSORS AND ASSIGNS.

            15.1. GENERAL CONDITIONS.

      The provisions of this Credit Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns
permitted hereby, except that the Borrower may not assign or otherwise transfer
any of their rights or obligations hereunder without the prior written consent
of each Lender and no Lender may assign or otherwise transfer any of its rights
or obligations hereunder except (a) to an Eligible Assignee in accordance with
the provisions of Section 15.2, or (b) by way of pledge or assignment of a
security interest subject to the restrictions of Section 15.3 (and any other
attempted assignment or transfer by any party hereto shall be null and void).
Nothing in this Credit Agreement, expressed or implied, shall be construed to
confer upon any Person (other than the parties hereto, their respective
successors and assigns permitted hereby, and, to the extent expressly
contemplated hereby, the Related Parties of the Lender) any legal or equitable
right, remedy or claim under or by reason of this Credit Agreement or any of the
other Loan Documents.

            15.2. ASSIGNMENTS.

      Any Lender may at any time assign or grant a security interest to one or
more Eligible Assignees all or a portion of its rights and obligations under
this Credit Agreement (including all or a portion of its Commitment and the
Loans at the time owing to it); provided that:

            (a) except in the Case of an assignment of the entire remaining
      amount of the assigning Lender's Commitment and the Loans at the time
      owing to it or an assignment to a Lender or a Lender Affiliate, the
      aggregate amount of the Commitment (which for this purpose includes Loans
      outstanding thereunder) or, if the applicable Commitment is not then in
      effect, the principal outstanding balance of the Loans of the assigning
      Lender subject to each such assignment shall not be less than $100,000
      unless, so long as no Default or Event of Default has occurred and is
      continuing, the Borrower otherwise consents (such consent not to be
      unreasonably withheld or delayed); and

            (b) each partial assignment shall be made as an assignment of a
      proportionate part of all the assigning Lender's rights and obligations
      under this Credit Agreement with respect to the Loan or the Commitment
      assigned; and

            (c) no grant of a security interest shall release the Lender from
      any of its obligations hereunder, provide any voting rights hereunder to
      the secured party thereof, substitute any such secured party for such
      Lender as a party hereto or affect any rights or obligations of the
      Borrower hereunder.

The Eligible Assignee thereafter shall be a party to this Credit Agreement and,
to the extent of the interest assigned have the rights and obligations of a
Lender

                                      -52-
<PAGE>

under this Credit Agreement, and the assigning Lender thereunder shall, to the
extent of the interest assigned, be released from its obligations under this
Credit Agreement but shall continue to be entitled to the benefits of (i)
Section 6.1.2 with respect to facts and circumstances occurring prior to the
effective date of such assignment and (ii) Section 16.3 notwithstanding such
assignment.

                    16. PROVISIONS OF GENERAL APPLICATIONS.

      16.1. SHARING OF SET-OFFS, ETC.

                            [Intentionally deleted.]

      16.2. EXPENSES.

      The Borrower agrees to pay (a) the reasonable costs of producing and
reproducing this Credit Agreement, the other Loan Documents and the other
agreements and instruments mentioned herein, (b) any taxes (including any
interest and penalties in respect thereto) payable by the Lender (other than
taxes based upon the Lender's net income) on or with respect to the transactions
contemplated by this Credit Agreement (the Borrower hereby agreeing to indemnify
the Lender with respect thereto), (c) the reasonable fees, expenses and
disbursements of the Lender's counsel incurred in connection with the
preparation, execution, delivery, syndication, administration or interpretation
of the Loan Documents and other instruments mentioned herein, any cash
management documentation and related matters, each closing hereunder, any
amendments, modifications, approvals, consents or waivers hereto or hereunder,
the cancellation of any Loan Document upon payment in full in cash of all of the
Obligations and the termination of the Commitments or pursuant to any terms of
such Loan Document providing for such cancellation, or services rendered in
connection with representing the Lender in the Case, (d) any fees, costs and
expenses and bank charges, including bank charges for returned checks, incurred
by any Lender in establishing, maintaining or handling accounts, cash management
arrangements and/or any other accounts, agreements or arrangements for the
collection of any of the Collateral, (e) all reasonable out-of-pocket expenses
(including without limitation reasonable attorneys' fees and costs, which
attorneys may be employees of any Lender, and reasonable consulting, accounting,
appraisal, investment banking and similar professional fees and charges)
incurred by any Lender in connection with (i) the enforcement of or preservation
of rights under any of the Loan Documents against the Borrower or any of its
Subsidiaries or the administration thereof after the occurrence of a Default or
an Event of Default and (ii) any litigation, proceeding or dispute whether
arising hereunder or otherwise, in any way related to any Lender's relationship
with the Borrower, (f) all reasonable fees, expenses and disbursements of any
Lender and its counsel incurred in connection with the filing and recordation of
the Lender's liens and security interests pursuant to the Security Documents and
with UCC searches and intellectual property searches, and (g) the reasonable
fees and expenses of the advisor(s), if any, retained by any Lender, including
those retained in connection with the Case. The covenants contained in this
Section 16.2 shall survive payment or satisfaction in full of all other
Obligations and the termination of the Commitments.

                                      -53-
<PAGE>

      16.3. INDEMNIFICATION.

            The Borrower agrees to indemnify and hold harmless the Lender and
its Related Parties from and against any and all claims, actions and suits
whether groundless or otherwise, and from and against any and all liabilities,
losses, damages and expenses of every nature and character arising out of this
Credit Agreement or any of the other Loan Documents or the transactions
contemplated hereby including, without limitation, (a) any actual or proposed
use by the Borrower of the proceeds of any of the Loans, (b) any actual or
alleged infringement of any patent, copyright, trademark, service mark or
similar right of the Borrower comprised in the Collateral, (c) the Borrower
entering into or performing this Credit Agreement or any of the other Loan
Documents, or (d) with respect to the Borrower and its Subsidiaries and their
respective properties and assets, the violation of any Environmental Law, the
presence, disposal, escape, seepage, leakage, spillage, discharge, emission,
release or threatened release of any Hazardous Substances or any action, suit,
proceeding or investigation brought or threatened with respect to any Hazardous
Substances (including, but not limited to, claims with respect to wrongful
death, personal injury or damage to property), in each case including, without
limitation, the reasonable out-of-pocket fees and disbursements of counsel and
allocated costs of internal counsel incurred in connection with any such
investigation, litigation or other proceeding. In litigation, or the preparation
therefor, the Lender and its Related Parties shall be entitled to select their
own counsel and, in addition to the foregoing indemnity, the Borrower agrees to
pay promptly the reasonable fees and expenses of such counsel. If and to the
extent that the obligations of the Borrower under this Section 16.3 are
unenforceable for any reason, the Borrower hereby agrees to make the maximum
contribution to the payment in satisfaction of such obligations which is
permissible under applicable law. The covenants contained in this Section 16.3
shall survive payment or satisfaction in full of all other Obligations and the
termination of the Commitments.

      16.4. TREATMENT OF CERTAIN CONFIDENTIAL INFORMATION.

            16.4.1. CONFIDENTIALITY.

            The Lender agrees, on behalf of itself and each of its Related
      Parties, to use reasonable precautions to keep confidential, in accordance
      with their customary procedures for handling confidential information of
      the same nature and in accordance with safe and sound banking practices,
      any non-public information supplied to it by the Borrower pursuant to this
      Credit Agreement that is identified by the Borrower as being confidential
      at the time the same is delivered to the Lender, provided that nothing
      herein shall limit the disclosure of any such information (a) after such
      information shall have become public other than through a violation of
      this Section 16.4, or becomes available to the Lender or its Related
      Parties on a nonconfidential basis from a source other than the Borrower,
      (b) to the extent required by statute, rule, regulation or judicial
      process, (c) to counsel or advisors for the Lender, (d) to any regulatory
      authority having jurisdiction over the Lender, or to auditors or
      accountants, (e) to the Lender or Lender Affiliate, (f) in connection with
      any litigation to which the Lender is a party, or in connection with the
      enforcement of rights or remedies hereunder or under any other Loan
      Document, (g) to any actual or prospective assignee under this Credit
      Agreement or any other Loan Document so

                                      -54-
<PAGE>

      long as such assignee agrees to be bound by the provisions of Section 16.4
      or (h) with the consent of the Borrower. Moreover, the Lender is hereby
      expressly permitted by the Borrower to refer to the Borrower in connection
      with any advertising, promotion or marketing undertaken by the Lender and,
      for such purpose, the Lender may utilize any trade name, trademark, logo
      or other distinctive symbol associated with the Borrower or any of their
      businesses.

            16.4.2. PRIOR NOTIFICATION.

            Unless specifically prohibited by applicable law or court order, the
      Lender shall, prior to disclosure thereof, notify the Borrower of any
      request for disclosure of any such non-public information by any
      governmental agency or representative thereof (other than any such request
      in connection with an examination of the financial condition of the Lender
      by such governmental agency) or pursuant to legal process.

            16.4.3. OTHER.

            In no event shall any Lender be obligated or required to return any
      materials furnished to it by the Borrower. The obligations of each Lender
      under this Section 16.4 shall supersede and replace the obligations of
      such Lender under any confidentiality letter in respect of this financing
      signed and delivered by such Lender to the Borrower prior to the date
      hereof and shall be binding upon any assignee of any interest in any of
      the Loans from any Lender.

      16.5. SURVIVAL OF COVENANTS, ETC.

      All covenants, agreements, representations and warranties made herein, in
the Notes, in any of the other Loan Documents or in any documents or other
papers delivered by or on behalf of the Borrower or any of its Subsidiaries
pursuant hereto shall be deemed to have been relied upon by the Lender
notwithstanding any investigation heretofore or hereafter made by it, and shall
survive the making by the Lender of any of the Loans and shall continue in full
force and effect so long as any amount due under this Credit Agreement or the
Notes or any of the other Loan Documents remains outstanding or any Lender has
any obligation to make any Loans, and for such further time as may be otherwise
expressly specified in this Credit Agreement. All statements contained in any
certificate, document, instrument or other paper delivered by the Borrower to
the Lender pursuant to or in connection with this Credit Agreement or any of the
other Loan Documents shall constitute representations and warranties by the
Borrower.

      16.6. NOTICES, ETC.

      Except as otherwise expressly provided in this Credit Agreement, all
notices and other communications made or required to be given pursuant to this
Credit Agreement or the Notes shall be in writing and shall be delivered by
hand, mailed by United States registered or certified first class mail, postage
prepaid, sent by overnight courier, postage prepaid, or sent by confirmed
facsimile with copy by delivery via courier or postal service, addressed as
follows:

                                      -55-
<PAGE>

      (a) if to the Borrower, at [_________________], Attention:
[_________________], or at such other address for notice as the Borrower shall
last have furnished in writing to the Person giving the notice; and

      (b) if to Lender, at [_________________], Attention: [_________________],
or such other address for notice as Lender shall have last furnished in writing
to the Person giving the notice;

      Any such notice or demand shall be deemed to have been duly given or made
and to have become effective (i) if delivered by hand, overnight courier or
confirmed facsimile to a responsible officer of the party to which it is
directed, at the time of the receipt thereof by such officer or the sending of
such facsimile and (ii) if sent by registered or certified first-class mail,
postage prepaid, on the third Business Day following the mailing thereof.

      16.7. GOVERNING LAW.

      This Credit Agreement and, except as otherwise specifically provided
therein, each of the other Loan Documents are contracts under the laws of the
State of California and shall for all purposes be construed in accordance with
and governed by the laws of the State of California (excluding the laws
applicable to conflicts or choice of law). The Borrower agrees that any suit for
the enforcement of this Credit Agreement or any of the other Loan Documents may
be brought in the Bankruptcy Court and/or the courts of the San Francisco County
or any Federal Court sitting therein and consents to the nonexclusive
jurisdiction of such courts and service of process in any such suit being made
upon the Borrower by mail at the address specified in Section 16.6. The Borrower
hereby waives any objection that it may now or hereafter have to the venue of
any such suit or any such court or that such suit is brought in an inconvenient
court.

      16.8. HEADINGS.

      The captions in this Credit Agreement are for convenience of reference
only and shall not define or limit the provisions hereof.

            16.8.1. COUNTERPARTS.

      This Credit Agreement and any amendment hereof may be executed in several
counterparts and by each party on a separate counterpart, each of which when
executed and delivered shall be an original, and all of which together shall
constitute one instrument. In proving this Credit Agreement it shall not be
necessary to produce or account for more than one such counterpart signed by the
party against whom enforcement is sought. Delivery by facsimile by any of the
parties hereto of an executed counterpart hereof or of any amendment or waiver
hereto shall be as effective as an original executed counterpart hereof or of
such amendment or waiver and shall be considered a representation that an
original executed counterpart hereof or such amendment or waiver, as the case
may be, will be delivered.

      16.9. ENTIRE AGREEMENT, ETC.

                                      -56-
<PAGE>

      The Loan Documents and any other documents executed in connection herewith
or therewith express the entire understanding of the parties with respect to the
transactions contemplated hereby. Neither this Credit Agreement nor any term
hereof may be changed, waived, discharged or terminated, except as provided in
Section 16.12.

      16.10. WAIVER OF JURY TRIAL.

      THE BORROWER HEREBY WAIVES ITS RIGHT TO A JURY TRIAL WITH RESPECT TO ANY
ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS CREDIT
AGREEMENT, THE NOTES OR ANY OF THE OTHER LOAN DOCUMENTS, ANY RIGHTS OR
OBLIGATIONS HEREUNDER OR THEREUNDER OR THE PERFORMANCE OF SUCH RIGHTS AND
OBLIGATIONS OR ANY COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS (WHETHER
VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY, INCLUDING ANY COURSE OF CONDUCT,
COURSE OF DEALINGS, STATEMENTS OR ACTIONS OF ANY LENDER RELATING TO THE
ADMINISTRATION OF THE LOANS OR ENFORCEMENT OF THE LOAN DOCUMENTS AND AGREES THAT
IT WILL NOT SEEK TO CONSOLIDATE ANY SUCH ACTION WITH ANY OTHER ACTION IN WHICH A
JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. Except as prohibited by law, the
Borrower hereby waives any right it may have to claim or recover in any
litigation referred to in the preceding sentence any special, exemplary,
punitive or consequential damages or any damages other than, or in addition to,
actual damages. The Borrower (a) certifies that no representative, agent or
attorney of any Lender has represented, expressly or otherwise, that such Lender
would not, in the event of litigation, seek to enforce the foregoing waivers and
(b) acknowledges that the Lender has been induced to enter into this Credit
Agreement and the other Loan Documents to which it is a party by, among other
things, the waivers and certifications contained herein.

      16.11. CONSENTS, AMENDMENTS, WAIVERS, ETC.

      Except as otherwise expressly provided in this Credit Agreement, any
consent or approval required or permitted by this Credit Agreement to be given
by the Lender may be given, and any term of this Credit Agreement or of any
other instrument related hereto or mentioned herein may be amended, and the
performance or observance by the Borrower of any terms of this Credit Agreement
or such other instrument or the continuance of any Default or Event of Default
may be waived (either generally or in a particular instance and either
retroactively or prospectively) with, but only with, the written consent of the
Borrower and the written consent of the Lender (it being understood that (A) a
waiver of the application of the rate of interest pursuant to Section 2.5 or
6.4, (B) any vote to rescind any acceleration made pursuant to Section 14.1 of
amounts owing with respect to the Loans and other Obligations and (C) any
modifications of the provisions relating to amounts, timing or application of
prepayments of Loans and other Obligations, including under Section 3.2.2 shall
require only the approval of the Lender). No waiver shall extend to or affect
any obligation not expressly waived or impair any right consequent thereon. No
course of dealing or delay or omission on the part of any Lender in exercising
any right shall operate as a waiver thereof or otherwise be prejudicial thereto.
No notice to or demand upon the Borrower shall entitle the Borrower to other or
further notice or demand in similar or other circumstances.

                                      -57-
<PAGE>

      16.12. SEVERABILITY.

            The provisions of this Credit Agreement are severable and if any one
clause or provision hereof shall be held invalid or unenforceable in whole or in
part in any jurisdiction, then such invalidity or unenforceability shall affect
only such clause or provision, or part thereof, in such jurisdiction, and shall
not in any manner affect such clause or provision in any other jurisdiction, or
any other clause or provision of this Credit Agreement in any jurisdiction.

      16.13. USA PATRIOT ACT.

      Each Lender hereby notifies the Borrower that pursuant to the requirements
of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26,
2001)) (the "Act"), it is required to obtain, verify and record information that
identifies the Borrower, which information includes the name and address of the
Borrower and other information that will allow such Lender to identify the
Borrower in accordance with the Act.

      16.14. CONFLICTS.

      In the event of any conflict between any provision of this Credit
Agreement and any other loan document executed in connection herewith, excluding
the Interim Order and the Final Order, this document shall control.

                            [Signature page follows.]

                                      -58-
<PAGE>

      IN WITNESS WHEREOF, the undersigned have duly executed this Credit
Agreement as of the date first set forth above.

                                       BORROWER:

                                       FIRST VIRTUAL COMMUNICATIONS, INC.
                                       as a debtor and a debtor in possession

                                       By:  /s/ Jonathan G. Morgan
                                            -----------------------------------
                                       Name: Jonathan G. Morgan
                                       Title: President and CEO

                                       LENDER:

                                       MTVP (FIRST VIRTUAL INVESTMENTS), LLC

                                       By:  /s/ Thomas Todaro
                                            -----------------------------------
                                       Name: Thomas Todaro
                                       Title: Managing Partner

                                      -59-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00077-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00077-of-00352.parquet"}]]