Document:

Exhibit 4.1

 

CEPHALON, INC.

 

2.00% CONVERTIBLE SENIOR SUBORDINATED NOTES
DUE JUNE 1, 2015

 

 

 

INDENTURE

DATED AS OF JUNE 7, 2005

 

 

 

U.S. BANK NATIONAL ASSOCIATION,

AS TRUSTEE

 

 

TABLE OF CONTENTS

 

	
   

  	
  ARTICLE 1

  DEFINITIONS AND INCORPORATION BY REFERENCE

  	
   

  
	
   

  	
   

  
	
  Section 1.01. Definitions.

  	
   

  
	
  Section 1.02. Other
  Definitions.

  	
   

  
	
  Section 1.03. Trust
  Indenture Act Provisions.

  	
   

  
	
  Section 1.04. Rules of
  Construction.

  	
   

  
	
   

  	
   

  
	
   

  	
  ARTICLE 2

  THE SECURITIES

  	
   

  
	
   

  	
   

  
	
  Section 2.01. Form and
  Dating.

  	
   

  
	
  Section 2.02. Execution
  and Authentication.

  	
   

  
	
  Section 2.03. Registrar,
  Paying Agent and Conversion Agent.

  	
   

  
	
  Section 2.04. Paying
  Agent to Hold Money in Trust.

  	
   

  
	
  Section 2.05. Securityholder
  Lists.

  	
   

  
	
  Section 2.06. Transfer
  and Exchange.

  	
   

  
	
  Section 2.07. Replacement
  Securities.

  	
   

  
	
  Section 2.08. Outstanding
  Securities.

  	
   

  
	
  Section 2.09. Treasury
  Securities.

  	
   

  
	
  Section 2.10. Temporary
  Securities.

  	
   

  
	
  Section 2.11. Cancellation.

  	
   

  
	
  Section 2.12. Additional
  Transfer Requirements.

  	
   

  
	
  Section 2.13. Cusip
  Numbers.

  	
   

  
	
   

  	
   

  
	
   

  	
  ARTICLE 3

  PURCHASES OF SECURITIES UPON FUNDAMENTAL CHANGE

  	
   

  
	
   

  	
   

  
	
  Section 3.01. Purchase
  of Securities at Option of the Holder Upon Fundamental Change.

  	
   

  
	
  Section 3.02. Effect of
  Fundamental Change Purchase Notice.

  	
   

  
	
  Section 3.03. Deposit of
  Fundamental Change Purchase Price.

  	
   

  
	
  Section 3.04. Securities
  Purchased in Part.

  	
   

  
	
  Section 3.05. Compliance
  with Securities Laws Upon Purchase of Securities.

  	
   

  
	
   

  	
   

  
	
   

  	
  ARTICLE 4

  PAYMENT OF INTEREST AND MAKE WHOLE PREMIUM

  	
   

  
	
   

  	
   

  
	
  Section 4.01Interest Payments

  	
   

  
	
  Section 4.02Make Whole
  Premium.

  	
   

  
	
  Section 4.03. Adjustments Relating to
  Make Whole Premium

  	
   

  

 

ii

 

	
   

  	
  ARTICLE 5

  CONVERSION

  	
   

  
	
   

  	
   

  
	
  Section 5.01. Conversion
  Privilege.

  	
   

  
	
  Section 5.02. Conversion
  Procedure.

  	
   

  
	
  Section 5.03. Fractional
  Shares.

  	
   

  
	
  Section 5.04. Taxes on
  Conversion.

  	
   

  
	
  Section 5.05. Payment
  Upon Conversion.

  	
   

  
	
  Section 5.06. Adjustment
  of Conversion Price.

  	
   

  
	
  Section 5.07. No
  Adjustment.

  	
   

  
	
  Section 5.08. Adjustment
  for Tax Purposes.

  	
   

  
	
  Section 5.09. Notice of
  Adjustment.

  	
   

  
	
  Section 5.10. Notice of
  Certain Transactions.

  	
   

  
	
  Section 5.11. Effect of
  Reclassification, Consolidation, Merger or Sale on Conversion Privilege.

  	
   

  
	
  Section 5.12. Trustee’s
  Disclaimer.

  	
   

  
	
  Section 5.13. Voluntary
  Reduction.

  	
   

  
	
   

  	
   

  
	
   

  	
  ARTICLE 6

  SUBORDINATION

  	
   

  
	
   

  	
   

  
	
  Section 6.01. Agreement
  of Subordination.

  	
   

  
	
  Section 6.02. Payments
  to Holders.

  	
   

  
	
  Section 6.03. Subrogation
  of Securities.

  	
   

  
	
  Section 6.04. Authorization
  to Effect Subordination.

  	
   

  
	
  Section 6.05. Notice to
  Trustee.

  	
   

  
	
  Section 6.06. Trustee’s
  Relation to Senior Indebtedness.

  	
   

  
	
  Section 6.07. No
  Impairment of Subordination.

  	
   

  
	
  Section 6.08. Certain
  Conversions Deemed Payment.

  	
   

  
	
  Section 6.09. Article Applicable
  to Paying Agents.

  	
   

  
	
  Section 6.10. Senior
  Indebtedness Entitled to Rely.

  	
   

  
	
   

  	
   

  
	
   

  	
  ARTICLE 7

  COVENANTS

  	
   

  
	
   

  	
   

  
	
  Section 7.01. Payment of
  Securities.

  	
   

  
	
  Section 7.02. SEC
  Reports.

  	
   

  
	
  Section 7.03. Compliance
  Certificates.

  	
   

  
	
  Section 7.04. Further
  Instruments and Acts.

  	
   

  
	
  Section 7.05. Maintenance
  of Corporate Existence.

  	
   

  
	
  Section 7.06. Stay,
  Extension and Usury Laws.

  	
   

  
	
   

  	
   

  
	
   

  	
  ARTICLE 8

  CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

  	
   

  
	
   

  	
   

  
	
  Section 8.01. Company
  May Consolidate, etc., only on Certain Terms.

  	
   

  
	
  Section 8.02. Successor
  Substituted.

  	
   

  

 

iii

 

	
   

  	
  ARTICLE 9

  DEFAULT AND REMEDIES

  	
   

  
	
   

  	
   

  
	
  Section 9.01. Events of
  Default.

  	
   

  
	
  Section 9.02. Acceleration.

  	
   

  
	
  Section 9.03. Other
  Remedies.

  	
   

  
	
  Section 9.04. Waiver of
  Defaults and Events of Default.

  	
   

  
	
  Section 9.05. Control by
  Majority.

  	
   

  
	
  Section 9.06. Limitations
  on Suits.

  	
   

  
	
  Section 9.07. Rights of
  Holders to Receive Payment and to Convert.

  	
   

  
	
  Section 9.08. Collection
  Suit by Trustee.

  	
   

  
	
  Section 9.09. Trustee
  May File Proofs of Claim.

  	
   

  
	
  Section 9.10. Priorities.

  	
   

  
	
  Section 9.11. Undertaking
  for Costs.

  	
   

  
	
   

  	
   

  
	
   

  	
  ARTICLE 10

  TRUSTEE

  	
   

  
	
   

  	
   

  
	
  Section 10.01. Duties of
  Trustee.

  	
   

  
	
  Section 10.02. Rights of
  Trustee.

  	
   

  
	
  Section 10.03. Individual
  Rights of Trustee.

  	
   

  
	
  Section 10.04. Trustee’s
  Disclaimer.

  	
   

  
	
  Section 10.05. Notice of
  Default or Events of Default.

  	
   

  
	
  Section 10.06. Reports by
  Trustee to Holders.

  	
   

  
	
  Section 10.07. Compensation
  and Indemnity.

  	
   

  
	
  Section 10.08. Replacement
  of Trustee.

  	
   

  
	
  Section 10.09. Successor
  Trustee by Merger, etc.

  	
   

  
	
  Section 10.10. Eligibility;
  Disqualification.

  	
   

  
	
  Section 10.11.
  Preferential Collection of Claims Against Company.

  	
   

  
	
   

  	
   

  
	
   

  	
  ARTICLE 11

  SATISFACTION AND DISCHARGE

  	
   

  
	
   

  	
   

  
	
  Section 11.01. Satisfaction
  and Discharge.

  	
   

  
	
  Section 11.02. Application
  of Trust Money.

  	
   

  
	
  Section 11.03. Repayment
  to Company.

  	
   

  
	
  Section 11.04. Reinstatement.

  	
   

  
	
   

  	
   

  
	
   

  	
  ARTICLE 12

  AMENDMENTS, SUPPLEMENTS AND WAIVERS

  	
   

  
	
   

  	
   

  
	
  Section 12.01. Without
  Consent of Holders.

  	
   

  
	
  Section 12.02. With
  Consent of Holders.

  	
   

  
	
  Section 12.03. Compliance
  with Trust Indenture Act.

  	
   

  
	
  Section 12.04. Revocation
  and Effect of Consents.

  	
   

  
	
  Section 12.05. Notation
  on or Exchange of Securities.

  	
   

  
	
  Section 12.06. Trustee to
  Sign Amendments, etc.

  	
   

  

 

iv

 

	
  Section 12.07. Effect of
  Supplemental Indentures.

  	
   

  
	
   

  	
   

  
	
   

  	
  ARTICLE 13

  MISCELLANEOUS

  	
   

  
	
   

  	
   

  
	
  Section 13.01. Trust
  Indenture Act Controls.

  	
   

  
	
  Section 13.02. Notices.

  	
   

  
	
  Section 13.03. Communications
  by Holders with Other Holders.

  	
   

  
	
  Section 13.04. Certificate
  and Opinion as to Conditions Precedent.

  	
   

  
	
  Section 13.05. Record
  Date for Vote or Consent of Securityholders.

  	
   

  
	
  Section 13.06. Rules by
  Trustee, Paying Agent, Registrar and Conversion Agent.

  	
   

  
	
  Section 13.07. Legal
  Holidays.

  	
   

  
	
  Section 13.08. Governing
  Law.

  	
   

  
	
  Section 13.09. No Adverse
  Interpretation of Other Agreements.

  	
   

  
	
  Section 13.10. No
  Recourse against Others.

  	
   

  
	
  Section 13.11. Successors.

  	
   

  
	
  Section 13.12. Multiple
  Counterparts.

  	
   

  
	
  Section 13.13. Separability.

  	
   

  
	
  Section 13.14. Table of
  Contents, Headings, etc.

  	
   

  
			

 

v

 

CROSS-REFERENCE
TABLE

 

	
  TIA

  SECTION

  	
   

  	
   

  	
   

  	
  INDENTURE

  SECTION

  
	
  Section

  	
   

  	
  310(a)(1)

  	
   

  	
  10.10

  
	
   

  	
   

  	
  (a)(2)

  	
   

  	
  10.10

  
	
   

  	
   

  	
  (a)(3)

  	
   

  	
  N.A.**

  
	
   

  	
   

  	
  (a)(4)

  	
   

  	
  N.A.

  
	
   

  	
   

  	
  (a)(5)

  	
   

  	
  10.10

  
	
   

  	
   

  	
  (b)

  	
   

  	
  10.08;
  10.10

  
	
   

  	
   

  	
  (c)

  	
   

  	
  N.A.

  
	
  Section

  	
   

  	
  311(a)

  	
   

  	
  10.11

  
	
   

  	
   

  	
  (b)

  	
   

  	
  10.11

  
	
   

  	
   

  	
  (c)

  	
   

  	
  N.A.

  
	
  Section

  	
   

  	
  312(a)

  	
   

  	
  2.05

  
	
   

  	
   

  	
  (b)

  	
   

  	
  13.03

  
	
   

  	
   

  	
  (c)

  	
   

  	
  13.03

  
	
  Section

  	
   

  	
  313(a)

  	
   

  	
  10.06

  
	
   

  	
   

  	
  (b)(1)

  	
   

  	
  N.A.

  
	
   

  	
   

  	
  (b)(2)

  	
   

  	
  10.06

  
	
   

  	
   

  	
  (c)

  	
   

  	
  10.06;
  13.02

  
	
   

  	
   

  	
  (d)

  	
   

  	
  10.06

  
	
  Section

  	
   

  	
  314(a)

  	
   

  	
  7.02;
  7.04; 13.02

  
	
   

  	
   

  	
  (b)

  	
   

  	
  N.A.

  
	
   

  	
   

  	
  (c)(1)

  	
   

  	
  13.04(a)

  
	
   

  	
   

  	
  (c)(2)

  	
   

  	
  13.04(a)

  
	
   

  	
   

  	
  (c)(3)

  	
   

  	
  N.A.

  
	
   

  	
   

  	
  (d)

  	
   

  	
  N.A.

  
	
   

  	
   

  	
  (e)

  	
   

  	
  13.04(b)

  
	
   

  	
   

  	
  (f)

  	
   

  	
  N.A.

  
	
  Section

  	
   

  	
  315(a)

  	
   

  	
  10.01(b)

  
	
   

  	
   

  	
  (b)

  	
   

  	
  10.05;
  13.02

  
	
   

  	
   

  	
  (c)

  	
   

  	
  10.01(a)

  
	
   

  	
   

  	
  (d)

  	
   

  	
  10.01(c)

  
	
   

  	
   

  	
  (e)

  	
   

  	
  9.11

  
	
  Section

  	
   

  	
  316(a)(last
  sentence)

  	
   

  	
  2.09

  
	
   

  	
   

  	
  (a)(1)(A)

  	
   

  	
  9.05

  
	
   

  	
   

  	
  (a)(1)(B)

  	
   

  	
  9.04

  
	
   

  	
   

  	
  (a)(2)

  	
   

  	
  N.A.

  
	
   

  	
   

  	
  (b)

  	
   

  	
  9.07

  
	
   

  	
   

  	
  (c)

  	
   

  	
  13.05

  
	
  Section

  	
   

  	
  317(a)(1)

  	
   

  	
  9.08

  
	
   

  	
   

  	
  (a)(2)

  	
   

  	
  9.09

  
	
   

  	
   

  	
  (b)

  	
   

  	
  2.04

  

 

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

**                                  N.A. means Not Applicable.

 

vi

 

THIS INDENTURE
dated as of June 7, 2005 is between Cephalon, Inc., a corporation
duly organized under the laws of the State of Delaware (the “Company”), and U.S. Bank National Association, a national
banking association organized and existing under the laws of the United States,
as Trustee (the “Trustee”).

 

In
consideration of the premises and the acquisition of the Securities by the
Holders thereof, both parties agree as follows for the benefit of the other and
for the equal and ratable benefit of the registered Holders of the Securities.

 

ARTICLE 1

DEFINITIONS AND INCORPORATION BY REFERENCE

 

Section 1.01.  Definitions.

 

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

 

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

 

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

 

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

 

“Business Day” means each day that is not a Legal Holiday.

 

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

 

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

 

“Certificated Security” means a Security that is in
substantially the form attached hereto as Exhibit A and that does
not include the information or the schedule called for by footnotes 1, 2
and 3 thereof.

 

“Closing  Sale Price” of
the Common Stock means, as of any date of determination, the closing per share
sale price (or, if no such closing sale price is reported on such day, the
average

 

7

 

of the bid and asked prices or, if more than one in either case, the
average of the average bid and the average asked prices) at 4:00 p.m., New
York time, as reported in composite transactions for the principal U.S.
securities exchange on which the Common Stock is traded or, if the Common Stock
is not listed on a U.S. national or regional securities exchange, as reported
on the Nasdaq System or by the National Quotation Bureau Incorporated.

 

“Common Stock” means the common stock of the Company, $0.01
par value, as it exists on the date of this Indenture and any shares of any
class or classes of capital stock of the Company resulting from any reclassification
or reclassifications thereof and which have no preference in respect of
dividends or of amounts payable in the event of any voluntary or involuntary
liquidation, dissolution or winding-up of the Company and which are not subject
to redemption by the Company; provided, however,
that, if at any time there shall be more than one such resulting class, the
shares of each such class then so issuable on conversion of Securities shall be
substantially in the proportion which the total number of shares of such class
resulting from all such reclassifications bears to the total number of shares
of all such classes resulting from all such reclassifications.

 

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

 

“Conversion Rate” means, as of any date, an amount equal to
$1,000 divided by the then applicable Conversion Price on such date.  As of the date hereof and subject to
adjustment pursuant to Section 5.06, the Conversion Rate with respect to
the Securities is 21.4133 shares of Common Stock for each $1,000 principal
amount of securities.

 

“Conversion Value” of a Security means, as of any date of
determination, the product of the last reported bid price of the Common Stock
on that date multiplied by the Conversion Rate of that Security on that date.

 

“Corporate Trust Office” means the office of the Trustee at
which at any time the trust created by this Indenture shall be administered,
which office at the date of the execution of this Indenture is located at 225
Asylum Street, 23rd Floor, Hartford, CT 
06103, Attention:  Corporate Trust
Services (Cephalon, Inc. 2.00% Coupon Convertible Senior Subordinated
Notes due June 1, 2015), or at any other time at such other address as the
Trustee may designate from time to time by notice to the Company.

 

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

 

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

 

8

 

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

 

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

 

“Final Maturity Date” means June 1, 2015.

 

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

 

“Global Security” means a permanent Global Security that is
in substantially the form attached hereto as Exhibit A and that
includes the information and schedule called for by footnotes 1, 2 and 3
thereof and which is deposited with the Depositary or its custodian and
registered in the name of the Depositary or its nominee.

 

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

 

“Indebtedness” means, with respect to any Person, without
duplication, (a) all indebtedness, obligations and other liabilities
(contingent or otherwise) of such Person (i) for borrowed money (including
obligations of such Person in respect of overdrafts, foreign exchange
contracts, currency exchange agreements, interest rate protection agreements
and any loans or advances from banks, whether or not evidenced by notes or
similar instruments) or (ii) evidenced by credit or loan agreements,
bonds, debentures, notes or similar instruments (whether or not the recourse of
the lender is to the whole of the assets of such Person or to only a portion
thereof) (other than any accounts payable or other accrued current liability or
obligation incurred in the ordinary course of business in connection with the
obtaining of materials or services), (b) all reimbursement obligations and
other liabilities (contingent or otherwise) of such Person with respect to
letters of credit, bank guarantees or bankers’ acceptances, (c) all
obligations and liabilities (contingent or otherwise) of such Person (i) in
respect of leases of such Person required, in conformity with GAAP, to be
accounted for as capitalized lease obligations on the balance sheet of such
Person (as determined by the Company), or (ii) under any lease or related
document (including a purchase agreement, conditional sale or other title
retention agreement) in connection with the lease of real property or
improvements thereon (or any personal property

 

9

 

included as part of any such lease) which provides that such Person is
contractually obligated to purchase or cause a third party to purchase the
leased property or pay an agreed upon residual value of the leased property to
the lessor (whether or not such lease transaction is characterized as an
operating lease or a capitalized lease in accordance with GAAP), (d) all
obligations (contingent or otherwise) of such Person with respect to any
interest rate or other swap, cap, floor or collar agreement, hedge agreement,
forward contract or other similar instrument or agreement or foreign currency
hedge, exchange, purchase or similar instrument or agreement; (e) all
direct or indirect guaranties, agreements to be jointly liable or similar
agreements by such Person in respect of, and obligations or liabilities of such
Person to purchase or otherwise acquire or otherwise assure a creditor against
loss in respect of, indebtedness, obligations or liabilities of another Person
of the kind described in clauses (a) through (d), and (f) any and all
deferrals, renewals, extensions, refinancings and refundings of, or amendments,
modifications or supplements to, any indebtedness, obligation or liability of
the kind described in clauses (a) through (e).

 

“Indenture” means this Indenture as amended or supplemented
from time to time pursuant to the terms of this Indenture.

 

“interest”, in respect of the Securities,
unless the context otherwise requires, refers to interest payable on the
Securities.

 

“Nasdaq” means The Nasdaq National Market.

 

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

 

“Officers’ Certificate” means a certificate signed by two
Officers; provided, however, that, for purposes of
Section 5.11 and 7.03, “Officers’ Certificate”
means a certificate signed by the principal executive officer, principal financial
officer or principal accounting officer of the Company and by one other
Officer.

 

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

 

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

 

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

 

 “Representative”
means the (a) indenture trustee or other trustee, agent or representative
for any Senior Indebtedness or (b) with respect to any Senior Indebtedness
that does not have any such trustee, agent or other representative, (i) in
the case of such Senior Indebtedness issued pursuant to an agreement providing
for voting arrangements as among the

 

10

 

holders or owners of such Senior Indebtedness, any holder or owner of
such Senior Indebtedness acting with the consent of the required persons
necessary to bind such holders or owners of such Senior Indebtedness and (ii) in
the case of all other such Senior Indebtedness, the holder or owner of such
Senior Indebtedness.

 

“SEC” means the Securities and Exchange Commission.

 

“Securities” means the 2.00% Convertible Senior Subordinated
Notes due June 1, 2015, or any of them (each, a “Security”).

 

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

 

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

 

“Senior Indebtedness” means the principal of, and premium, if
any, interest (including all interest accruing subsequent to the commencement
of any bankruptcy or similar proceeding, whether or not a claim for
post-petition interest is allowed as a claim in any such proceeding) and rent
payable on or in connection with, and all fees, costs, expenses and other
amounts accrued or due on or in connection with, Indebtedness of the Company,
whether secured or unsecured, absolute or contingent, due or to become due,
outstanding on the date of this Indenture or thereafter created, incurred,
assumed, guaranteed or in effect guaranteed by the Company (including all
deferrals, renewals, extensions or refundings of, or amendments, modifications
or supplements to, the foregoing) or unless in the case of any particular
Indebtedness the instrument creating or evidencing the same or the assumption
or guarantee thereof expressly provides that such Indebtedness shall not be
senior in right of payment to the Securities or expressly provides that such
Indebtedness is “pari passu” or “junior” to the Securities.  Notwithstanding the foregoing, the term
Senior Indebtedness shall not include (i) any Indebtedness of the Company
to any Subsidiary of the Company (other than Indebtedness of the Company to
such Subsidiary arising by reason of guarantees by the Company of Indebtedness
of such Subsidiary to a Person that is not a Subsidiary of the Company) or (ii) Indebtedness
for trade payables or the deferred purchase price of assets or services
incurred in the ordinary course of business. 
If any payment made to any holder of any Senior Indebtedness or its
Representative with respect to such Senior Indebtedness is rescinded or must otherwise
be returned by such holder or Representative upon the insolvency, bankruptcy or
reorganization of the Company or otherwise, the reinstated Indebtedness of the
Company arising as a result of such rescission or return shall constitute
Senior Indebtedness effective as of the date of such rescission or return.

 

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

 

“Subsidiary” means, in respect of any Person, any
corporation, association, partnership or other business entity of which more
than 50% of the total voting power of shares of Capital Stock or other
interests (including partnership interests) entitled (without regard to the
occurrence of any contingency) to vote in the election of directors, managers,
general partners or

 

11

 

trustees thereof is at the time owned or controlled, directly or
indirectly, by (i) such Person; (ii) such Person and one or more
Subsidiaries of such Person; or (iii) one or more Subsidiaries of such
Person.

 

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

 

“Trading Day” means any day during which trading in
securities generally occurs on Nasdaq or, if the Common Stock (or relevant
securities of a successor obligor) is not listed on Nasdaq, on the principal
other national or regional securities exchange on which the Common Stock (or
relevant securities of a successor obligor) is then listed or, if the Common
Stock (or relevant securities of a successor obligor) is not listed on a
national or regional securities exchange, on Nasdaq or, if the Common Stock (or
relevant securities of a successor obligor) is not quoted on Nasdaq, on the
principal other market on which the Common Stock (or relevant securities of a
successor obligor) is then traded.

 

“Trading Price” means, on any date of determination with
respect to any Security, the average of the secondary bid quotations per
Security obtained by the Conversion Agent for $5,000,000 principal amount of
Securities at approximately 3:30 p.m., New York City time, on such
determination date from three independent nationally recognized securities
dealers selected by the Company; provided that,
if at least three such bids cannot reasonably be obtained, but two such bids
can reasonably be obtained, then the average of these two bids shall be used; provided, further, that, if at least two such bids cannot
reasonably be obtained, but one such bid can reasonably be obtained, this one
bid shall be used.  If the Conversion
Agent cannot reasonably obtain at least one bid for $5,000,000 principal amount
of the Securities from an independent nationally recognized securities dealer
or, in the reasonable judgment of the Company, the bid quotations are not
indicative of the secondary market value of the Securities, then the Trading
Price of such Securities will equal (a) the applicable Conversion Rate of
such Securities multiplied by (b) the Closing Sale Price of the Common
Stock.

 

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

 

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

 

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

 

“Voting Stock” of a Person means all classes of Capital Stock
or other interests (including partnership interests) of such Person then
outstanding and normally entitled (without

 

12

 

regard to the occurrence of any contingency) to vote in the election of
directors, managers or trustees thereof.

 

Section 1.02.  Other Definitions.

 

	
  Term

  	
   

  	
  Defined in Section

  
	
  “Additional Premium”

  	
   

  	
  4.02(a)

  
	
  “Additional Premium Table”

  	
   

  	
  4.02(b)

  
	
  “Agent Members”

  	
   

  	
  2.01(b)

  
	
  “Bankruptcy Law”

  	
   

  	
  9.01

  
	
  “Change in Control”

  	
   

  	
  3.01(a)

  
	
  “Closing Sale Price Condition”

  	
   

  	
  5.01(a)

  
	
  “Company Order”

  	
   

  	
  2.02

  
	
  “Conversion Agent”

  	
   

  	
  2.03

  
	
  “Conversion Date”

  	
   

  	
  5.02

  
	
  “Conversion Notice”

  	
   

  	
  5.02

  
	
  “Conversion Obligation”

  	
   

  	
  5.05(a)

  
	
  “Conversion Period”

  	
   

  	
  5.05(a)

  
	
  “Conversion Price”

  	
   

  	
  5.06

  
	
  “Current Market Price”

  	
   

  	
  5.06(d)

  
	
  “Custodian”

  	
   

  	
  9.01

  
	
  “Daily Conversion Value”

  	
   

  	
  5.05(a)

  
	
  “Daily Net Share Settlement Value”

  	
   

  	
  5.05(a)

  
	
  “DTC”

  	
   

  	
  2.01

  
	
  “Depositary”

  	
   

  	
  2.01

  
	
  “Effective Date”

  	
   

  	
  4.02(b)

  
	
  “Event of Default”

  	
   

  	
  9.01

  
	
  “Expiration Date”

  	
   

  	
  5.06(c)

  
	
  “Expiration Time”

  	
   

  	
  5.06(c)

  
	
  “Fundamental Change”

  	
   

  	
  3.01(a)

  
	
  “Fundamental Change Purchase Date”

  	
   

  	
  3.01(a)

  
	
  “Fundamental Change Purchase Notice”

  	
   

  	
  3.01(c)

  
	
  “Fundamental Change Purchase Price”

  	
   

  	
  3.01(a)

  
	
  “Legal Holiday”

  	
   

  	
  13.07

  
	
  “Instrument”

  	
   

  	
  9.01

  
	
  “Interest Payment Date”

  	
   

  	
  4.01(a)

  
	
  “Make Whole Premium”

  	
   

  	
  4.02(b)

  
	
  “Paying Agent”

  	
   

  	
  2.03

  
	
  “Payment Blockage Notice”

  	
   

  	
  6.02

  
	
  “Primary Registrar”

  	
   

  	
  2.03

  
	
  “Purchase Agreement”

  	
   

  	
  2.01

  
	
  “Purchased Shares”

  	
   

  	
  5.06(c)

  
	
  “Registrar”

  	
   

  	
  2.03

  
	
  “Record Date”

  	
   

  	
  4.01(a)

  
	
  “Rights Plan”

  	
   

  	
  5.06(c)

  
	
  “Senior Subordinated Indebtedness”

  	
   

  	
  6.01

  

 

13

 

	
  “Stock Price”

  	
   

  	
  4.02(b)

  
	
  “Stock Price Cap”

  	
   

  	
  4.02(b)

  
	
  “Stock Price Threshold”

  	
   

  	
  4.02(b)

  
	
  “Subordinated Indebtedness”

  	
   

  	
  6.01

  
	
  “Termination of Trading”

  	
   

  	
  3.01(a)

  
	
  “Triggering Distribution”

  	
   

  	
  5.06(c)

  
	
  “Trigger Event”

  	
   

  	
  5.06(c)

  
	
  “Unissued Shares”

  	
   

  	
  3.01(a)

  
	
  “Volume Weighted Average Price”

  	
   

  	
  5.05(a)

  

 

Section 1.03.  Trust Indenture Act Provisions.

 

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

 

“indenture
securities” means the Securities;

 

“indenture
security holder” means a Securityholder;

 

“indenture to
be qualified” means this Indenture;

 

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

 

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

 

Section 1.04.  Rules of Construction.

 

Unless the
context otherwise requires:

 

(A)                              a
term has the meaning assigned to it herein;

 

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

 

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

 

(D)                               provisions
apply to successive events and transactions;

 

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

 

14

 

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

 

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

 

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

 

ARTICLE 2

THE SECURITIES

 

Section 2.01.  Form and Dating.

 

The Securities
and the corresponding Trustee’s certificate of authentication shall be
substantially in the respective forms set forth in Exhibit A, which
Exhibit is incorporated in and made part of this Indenture.  The Securities may have notations, legends or
endorsements required by law, stock exchange rule or usage.  The Company shall provide any such notations,
legends or endorsements to the Trustee in writing.  The Securities shall be dated the date of
their authentication.

 

(a)                                  Global Securities. 
Each Security shall be issued initially in the form of one or more
Global Securities, which shall be deposited on behalf of the acquirers of the
Securities represented thereby with the Trustee, at its Corporate Trust Office,
as custodian for the depositary, The Depository Trust Company (“DTC”) (such depositary, or any successor thereto, being
hereinafter referred to as the “Depositary”),
and registered in the name of its nominee, Cede & Co., duly executed
by the Company and authenticated by the Trustee as hereinafter provided.  The aggregate principal amount of the Global
Securities may from time to time be increased or decreased by adjustments made
on the records of the Securities Custodian as hereinafter provided, subject in
each case to compliance with the Applicable Procedures.

 

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

 

Members of, or
participants in, the Depositary (“Agent Members”)
shall have no rights under this Indenture with respect to any Global Security
held on their behalf by the Depositary or under the Global Security, and the
Depositary (including, for this purpose, its nominee) may be treated by the
Company, the Trustee and any agent of the Company or the Trustee as the
absolute owner and Holder of such Global Security for all purposes whatsoever.  Notwithstanding the

 

15

 

foregoing, nothing herein shall (A) prevent the Company, the
Trustee or any agent of the Company or the Trustee from giving effect to any
written certification, proxy or other authorization furnished by the Depositary
or (B) impair, as between the Depositary and its Agent Members, the
operation of customary practices governing the exercise of the rights of a
Holder of any Security.

 

(c)                                  Book Entry Provisions. 
The Company shall execute and the Trustee shall, in accordance with this
Section 2.01(c) and Section 2.02, authenticate and deliver
initially one or more Global Securities that (i) shall be registered in
the name of Cede & Co. or as otherwise instructed by the Depositary, (ii) shall
be delivered by the Trustee to the Depositary or pursuant to the Depositary’s
instructions and (iii) shall bear legends substantially to the following
effect:

 

“UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY TO CEPHALON, INC. (THE “COMPANY”) OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH
OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH
OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE &
CO., HAS AN INTEREST HEREIN.  TRANSFERS
OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS TO NOMINEES OF THE
DEPOSITORY TRUST COMPANY OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE,
AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS
MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN ARTICLE TWO OF THE
INDENTURE REFERRED TO ON THE REVERSE HEREOF.”

 

Section 2.02.  Execution and Authentication.

 

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

 

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

 

A Security
shall not be valid until an authorized signatory of the Trustee manually signs
the certificate of authentication on the Security.  The signature shall be conclusive evidence
that the Security has been authenticated under this Indenture.

 

The Trustee
shall authenticate and make available for delivery Securities for original
issue in the aggregate principal amount of up to $800,000,000 (or up to
$920,000,000 if the underwriters exercise their over-allotment option with
respect to the initial distribution of securities in full) upon receipt of a
written order or orders of the Company signed by two

 

16

 

Officers of the Company (a “Company Order”);
provided that additional Securities may
be issued in an unlimited aggregate principal amount so long as such Securities
are part of the same issue, within the meaning of Treasury Regulations Sections
1.1275-1(f) and 1.1275-2(k)(2), as the Securities initially issued
hereunder.  Each Company Order shall
specify the amount of Securities to be authenticated and the date on which each
original issue of Securities is to be authenticated.

 

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

 

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

 

Section 2.03.  Registrar, Paying Agent and Conversion Agent.

 

The Company
shall maintain one or more offices or agencies where Securities may be
presented for registration of transfer or for exchange (each, a “Registrar”), one or more offices or agencies where
Securities may be presented for payment (each, a “Paying Agent”),
one or more offices or agencies where Securities may be presented for
conversion (each, a “Conversion Agent”)
and one or more offices or agencies where notices and demands to or upon the
Company in respect of the Securities and this Indenture may be served.  The Company will at all times maintain a
Paying Agent, Conversion Agent, Registrar and an office or agency where notices
and demands to or upon the Company in respect of the Securities and this
Indenture may be served in the Borough of Manhattan, The City of New York.  One of the Registrars (the “Primary Registrar”) shall keep a register of the Securities
and of their transfer and exchange.

 

The Company
shall enter into an appropriate agency agreement with any Agent not a party to
this Indenture.  The agreement shall
implement the provisions of this Indenture that relate to such Agent.  The Company shall notify the Trustee of the
name and address of any Agent not a party to this Indenture.  If the Company fails to maintain a Registrar,
Paying Agent, Conversion Agent or agent for service of notices and demands in
any place required by this Indenture, or fails to give the foregoing notice,
the Trustee shall act as such.  The
Company or any Affiliate of the Company may act as Paying Agent (except for the
purposes of Section 7.01 and Article 11).

 

The Company
hereby initially designates the Trustee as Paying Agent, Registrar, Custodian
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 (which shall initially be U.S. Bank Trust National Association, an
Affiliate of the Trustee), to be such office or agency of the Company for each
of the aforesaid purposes.

 

17

 

Section 2.04.  Paying Agent to Hold Money in Trust.

 

Prior to 11:00 a.m.,
New York City time, on each due date of the principal of, interest or Make
Whole Premium, if any, on, any Securities, the Company shall deposit with a
Paying Agent a sum sufficient to pay such principal, interest and Make Whole
Premium, if any, so becoming due. 
Subject to Section 6.02, a Paying Agent shall hold in trust for the
benefit of Securityholders or the Trustee all money held by the Paying Agent
for the payment of principal of, or interest, or Make Whole Premium, if any,
on, the Securities and shall notify the Trustee of any default by the Company
(or any other obligor on the Securities) in making any such payment.  If the Company or an Affiliate of the Company
acts as Paying Agent, it shall, before 11:00 a.m., New York City time, on
each due date of the principal of, or interest, or Make Whole Premium, if any,
on, any Securities, segregate the money and hold it as a separate trust
fund.  The Company at any time may require
a Paying Agent to pay all money held by it to the Trustee, and the Trustee may
at any time during the continuance of any default, upon written request to a
Paying Agent, require such Paying Agent to pay forthwith to the Trustee all
sums so held in trust by such Paying Agent. 
Upon doing so, the Paying Agent (other than the Company) shall have no
further liability for the money.

 

Section 2.05.  Securityholder Lists.

 

The Trustee
shall preserve in as current a form as is reasonably practicable the most
recent list available to it of the names and addresses of Securityholders.  If the Trustee is not the Primary Registrar,
the Company shall furnish to the Trustee on or before each semiannual interest
payment date, and at such other times as the Trustee may request in writing, a
list in such form and as of such date as the Trustee may reasonably require of
the names and addresses of Securityholders.

 

Section 2.06.  Transfer and Exchange.

 

(a)                                  Subject
to compliance with any applicable additional requirements contained in Section 2.12
when a Security is presented to a Registrar with a request to register a
transfer thereof or to exchange such Security for an equal principal amount of
Securities of other authorized denominations, the Registrar shall register the
transfer or make the exchange as requested; provided, however,
that every Security presented or surrendered for registration of transfer or
exchange shall be duly endorsed or accompanied by an assignment form and, if
applicable, a transfer certificate, each in the form included in Exhibit A,
and in form satisfactory to the Registrar duly executed by the Holder thereof
or its attorney duly authorized in writing. 
To permit registration of transfers and exchanges, upon surrender of any
Security for transfer or exchange at an office or agency maintained pursuant to
Section 2.03, the Company shall execute and the Trustee shall authenticate
Securities of a like aggregate principal amount at the Registrar’s
request.  Any exchange or transfer shall
be without charge, except that the Company or the Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto; provided that
this sentence shall not apply to any exchange pursuant to Section 2.10, 3.04,
5.02 (last paragraph) or 12.05.

 

None of the
Company, any Registrar or the Trustee shall be required to exchange or register
a transfer of any Securities or portions thereof in respect of which a
Fundamental Change Purchase Notice has been delivered and not withdrawn by the
Holder thereof (except, in the case of the purchase of a Security in part, the
portion thereof not to be purchased).

 

18

 

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

 

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

 

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

 

The Trustee
shall have no obligation or duty to monitor, determine or inquire as to
compliance with any restrictions on transfer imposed under this Indenture or
under applicable law with respect to any transfer of any interest in any
Security (including any transfers between or among Agent Members or other
beneficial owners of interests in any Global Security) other than to require
delivery of such certificates and other documentation or evidence as are
expressly required by, and to do so if and when expressly required by the terms
of, this Indenture and to examine the same to determine substantial compliance
as to form with the express requirements hereof.

 

Section 2.07.  Replacement Securities.

 

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

 

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

 

Upon the
issuance of any new Securities under this Section 2.07, the Company may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other reasonable
expenses (including the reasonable fees and expenses of the Trustee or the
Registrar) in connection therewith.

 

Every new
Security issued pursuant to this Section 2.07 in lieu of any mutilated,
destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company, whether or not the mutilated, destroyed,
lost or stolen Security shall be at any time

 

19

 

enforceable by anyone, and shall be entitled to all benefits of this
Indenture equally and proportionately with any and all other Securities duly
issued hereunder.

 

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

 

Section 2.08.  Outstanding Securities.

 

Securities
outstanding at any time are all Securities authenticated by the Trustee, except
for those canceled by it, those converted pursuant to Article 5, those
delivered to it for cancellation or surrendered for transfer or exchange and
those described in this Section 2.08 as not outstanding.

 

If a Security
is replaced pursuant to Section 2.07, it ceases to be outstanding unless
the Company receives, subsequent to the new Security’s authentication, proof
satisfactory to the Company that the replaced Security is held by a bona fide
purchaser.

 

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

 

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

 

Section 2.09.  Treasury Securities.

 

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

 

Section 2.10.  Temporary Securities.

 

Until
definitive Securities are ready for delivery, the Company may prepare and
execute, and, upon receipt of a Company Order, the Trustee shall authenticate
and deliver, temporary Securities. 
Temporary Securities shall be substantially in the form of definitive
Securities but

 

20

 

may have variations that the Company with the consent of the Trustee
considers appropriate for temporary Securities. 
Without unreasonable delay, the Company shall prepare and the Trustee
shall authenticate and deliver definitive Securities in exchange for temporary
Securities.

 

Section 2.11.  Cancellation.

 

The Company at
any time may deliver Securities to the Trustee for cancellation.  The Registrar, the Paying Agent and the
Conversion Agent shall forward to the Trustee or its agent any Securities
surrendered to them for transfer, exchange, redemption, payment or conversion.  The Trustee and no one else shall cancel, in
accordance with its standard procedures, all Securities surrendered for
transfer, exchange, redemption, payment, conversion or cancellation and shall
deliver the canceled Securities to the Company. 
All Securities which are redeemed, purchased or otherwise acquired by
the Company or any of its Subsidiaries prior to the Final Maturity Date shall
be delivered to the Trustee for cancellation, and the Company may not hold or
resell such Securities or issue any new Securities to replace any such
Securities or any Securities that any Holder has converted pursuant to Article 5.

 

Section 2.12.  Additional Transfer Requirements.

 

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

 

(b)                                 The
provisions of clauses (i), (ii), (iii) and (iv) below shall apply
only to Global Securities:

 

(i)                  Notwithstanding
any other provisions of this Indenture or the Securities, a Global Security
shall not be exchanged in whole or in part for a Security registered in the
name of any Person other than the Depositary or one or more nominees thereof; provided that a Global Security may be exchanged for Securities
registered in the names of any person designated by the Depositary in the event
that (A) the Depositary has notified the Company that it is unwilling or
unable to continue as Depositary for such Global Security or such Depositary
has ceased to be a “clearing agency” registered under the Exchange Act, and a
successor Depositary is not appointed by the Company within 90 days, (B) the
Company has provided the Depositary with written notice that it has decided to
discontinue use of the system of book-entry transfer through the Depositary or
any successor Depositary or (C) an Event of Default has occurred and is
continuing with respect to the Securities. 
Any Global Security exchanged pursuant to clause (A) or (B) above
shall be so exchanged in whole and not in part, and any Global Security
exchanged pursuant to clause (C) above may be exchanged in whole or from
time to time in part as directed by the Depositary.  Any Security issued in exchange for a Global
Security or any portion thereof shall be a Global Security; provided that any such Security so issued that

 

21

 

is registered in the name of a Person other
than the Depositary or a nominee thereof shall not be a Global Security.

 

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

 

(iii)            The
registered Holder may grant proxies and otherwise authorize any Person,
including Agent Members and persons that may hold interests through Agent
Members, to take any action which a Holder is entitled to take under this
Indenture or the Securities.

 

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

 

Section 2.13.  Cusip Numbers.

 

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

 

ARTICLE 3

PURCHASES OF SECURITIES UPON FUNDAMENTAL CHANGE

 

Section 3.01.  Purchase of Securities at Option of the
Holder Upon Fundamental Change.

 

(a)                                  If
at any time that Securities remain outstanding there shall occur a Fundamental
Change, Securities shall be purchased by the Company at the option of the
Holders, as of the

 

22

 

date that is 30 Business Days after the occurrence of the Fundamental
Change (the “Fundamental Change Purchase Date”)
at a purchase price equal to 100% of the principal amount of the Securities,
together with any accrued and unpaid interest to, but excluding, the
Fundamental Change Purchase Date (the “Fundamental Change
Purchase Price”), payable in cash, subject to satisfaction by or on
behalf of any Holder of the requirements set forth in subsection (c) of
this Section 3.01.  Notwithstanding
the foregoing, the Company may not repurchase the Securities upon the occurrence
of a Fundamental Change if the principal amount of the Securities has been
accelerated and such acceleration has not been rescinded on or prior to the
Fundamental Change Purchase Date.

 

A “Fundamental Change” shall mean the occurrence of a Change in
Control or a Termination of Trading.

 

A “Change in Control” shall be deemed to have occurred if any
of the following occurs after the date hereof:

 

(i)                  any
“person” or “group” (as such terms are defined below) is or becomes the “beneficial
owner” (as defined below), directly or indirectly, of shares of Voting Stock of
the Company representing 50% or more of the total voting power of all
outstanding classes of Voting Stock of the Company or has the power, directly
or indirectly, to elect a majority of the members of the board of directors of
the Company; or

 

(ii)               the
Company consolidates with, or merges with or into, another Person or the
Company sells, assigns, conveys, transfers, leases or otherwise disposes of all
or substantially all of the assets of the Company, or any Person consolidates
with, or merges with or into, the Company, in any such event other than
pursuant to a transaction in which the Persons that “beneficially owned” (as
defined below), directly or indirectly, shares of Voting Stock of the Company
immediately prior to such transaction “beneficially own” (as defined below),
directly or indirectly, shares of Voting Stock of the Company representing at
least a majority of the total voting power of all outstanding classes of Voting
Stock of the surviving or transferee Person; or

 

(iii)            the
holders of capital stock of the Company approve any plan or proposal for the
liquidation or dissolution of the Company (whether or not otherwise in
compliance with the terms hereof).

 

For the
purpose of the definition of “Change in Control”,
(i) “person” and “group” have the meanings given such terms under Section 13(d) and
14(d) of the Exchange Act or any successor provision to either of the
foregoing, and the term “group” includes any group acting for the purpose of
acquiring, holding or disposing of securities within the meaning of Rule 13d-5(b)(1) under
the Exchange Act (or any successor provision thereto), (ii) a “beneficial
owner” shall be determined in accordance with Rule 13d-3 under the
Exchange Act, as in effect on the date of this Indenture, except that the
number of shares of Voting Stock of the Company shall be deemed to include, in
addition to all outstanding shares of Voting Stock of the Company and Unissued
Shares deemed to be held by the “person” or “group” (as such terms are defined
above) or other Person with respect to which the Change in Control determination
is being made, all

 

23

 

Unissued Shares deemed to be held by all other Persons, and (iii) the
terms “beneficially owned” and “beneficially own” shall have meanings
correlative to that of “beneficial owner”. 
The term “Unissued Shares” means shares of
Voting Stock not outstanding that are subject to options, warrants, rights to
purchase or conversion privileges exercisable within 60 days of the date of
determination of a Change in Control.

 

Notwithstanding
anything to the contrary set forth in this Section 3.01, a Change in
Control will not be deemed to have occurred if, in the case of a merger or consolidation,
all of the consideration (excluding cash payments for fractional shares and
cash payments pursuant to dissenters’ appraisal rights) in the merger or
consolidation constituting the Change in Control consists of common stock
traded on a U.S. national securities exchange or quoted on Nasdaq (or which
will be so traded or quoted when issued or exchanged in connection with such
Change in Control) and as a result of such transaction or transactions the
Daily Net Share Settlement Value (if any) of any Securities surrendered for
conversion would be in the form of such common stock.

 

A “Termination of Trading” means that the Common Stock or other
securities into which the Securities are convertible are neither listed for
trading on a U.S. national securities exchange nor approved for listing on
Nasdaq or any similar U.S. system of automated dissemination of quotations of
securities prices.

 

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

 

(i)                  the
date of such Fundamental Change and, briefly, the events causing such
Fundamental Change;

 

(ii)               the
date by which the Fundamental Change Purchase Notice pursuant to this Section 3.01
must be given;

 

(iii)            the
Fundamental Change Purchase Date;

 

(iv)           the
Fundamental Change Purchase Price;

 

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

 

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

 

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

 

(viii)     the
Conversion Price and any adjustments thereto;

 

(ix)             that
Securities as to which a Fundamental Change Purchase Notice has been given may
be converted into Cash and Common Stock (if any) pursuant to Article 5 of
this Indenture only to the extent that the Fundamental Change Purchase Notice
has been withdrawn in accordance with the terms of this Indenture;

 

24

 

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

 

(xi)             the
procedures for withdrawing a Fundamental Change Purchase Notice, including a
form of notice of withdrawal; and

 

(xii)          that
the Holder must satisfy the requirements set forth in the Securities in order
to convert the Securities.

 

If any of the
Securities is in the form of a Global Security, then the Company shall modify
such notice to the extent necessary to accord with the procedures of the
Depositary applicable to the repurchase of Global Securities.

 

(c)                                  A
Holder may exercise its rights specified in subsection (a) of this Section 3.01
upon delivery of a written notice (which shall be in substantially the form
included in Exhibit A hereto and which may be delivered by letter,
overnight courier, hand delivery, facsimile transmission or in any other
written form and, in the case of Global Securities, may be delivered
electronically or by other means in accordance with the Depositary’s customary
procedures) of the exercise of such rights (a “Fundamental
Change Purchase Notice”) to any Paying Agent at any time prior to
the close of business on the second Trading Day next preceding the Fundamental
Change Purchase Date.

 

The delivery
of such Security to any Paying Agent (together with all necessary endorsements)
at the office of such Paying Agent shall be a condition to the receipt by the
Holder of the Fundamental Change Purchase Price therefor.

 

The Company
shall purchase from the Holder thereof, pursuant to this Section 3.01, a
portion of a Security if the principal amount of such portion is $1,000 or an
integral multiple of $1,000.  Provisions
of the Indenture that apply to the purchase of all of a Security pursuant to Section 3.01
through Section 3.04 also apply to the purchase of such portion of such
Security.

 

Notwithstanding
anything herein to the contrary, any Holder delivering to a Paying Agent the
Fundamental Change Purchase Notice contemplated by this subsection (c) shall
have the right to withdraw such Fundamental Change Purchase Notice in whole or
in a portion thereof that is a principal amount of $1,000 or in an integral
multiple thereof at any time prior to 5:00 p.m., New York City time, on
the second Trading Day next preceding the Fundamental Change Purchase Date by
delivery of a written notice of withdrawal to the Paying Agent in accordance
with Section 3.02.

 

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

 

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

 

25

 

Section 3.02.  Effect of Fundamental Change Purchase Notice.

 

Upon receipt
by any Paying Agent of the Fundamental Change Purchase Notice specified in Section 3.01(c),
the Holder of the Security in respect of which such Fundamental Change Purchase
Notice was given shall (unless such Fundamental Change Purchase Notice is
withdrawn as specified below) thereafter be entitled to receive the Fundamental
Change Purchase Price with respect to such Security.  Such Fundamental Change Purchase Price shall
be paid to such Holder promptly following the later of (a) the Fundamental
Change Purchase Date with respect to such Security (provided
the conditions in Section 3.01(c) have been satisfied) and (b) the
time of delivery of such Security to a Paying Agent by the Holder thereof in
the manner required by Section 3.01(c). 
Securities in respect of which a Fundamental Change Purchase Notice has
been given by the Holder thereof may not be converted into shares of Common
Stock pursuant to Article 5 on or after the date of the delivery of such
Fundamental Change Purchase Notice unless such Fundamental Change Purchase
Notice has first been validly withdrawn.

 

A Fundamental
Change Purchase Notice may be withdrawn by means of a written notice (which may
be delivered by mail, overnight courier, hand delivery, facsimile transmission
or in any other written form and, in the case of Global Securities, may be
delivered electronically or by other means in accordance with the Depositary’s
customary procedures) of withdrawal delivered by the Holder to a Paying Agent
at any time prior to 5:00 p.m., New York City time, on the second Trading
Day immediately preceding the Fundamental Change Purchase Date, specifying the
principal amount of the Security or portion thereof (which must be a principal
amount of $1,000 or an integral multiple of $1,000 in excess thereof) with
respect to which such notice of withdrawal is being submitted.

 

Section 3.03.  Deposit of Fundamental Change Purchase Price.

 

On or before
11:00 a.m., New York City time, on the Fundamental Change Purchase Date,
the Company shall deposit with the Trustee or with a Paying Agent (other than
the Company or an Affiliate of the Company) an amount of money (in immediately
available funds if deposited on such Fundamental Change Purchase Date)
sufficient to pay the aggregate Fundamental Change Purchase Price of all the
Securities or portions thereof that are to be purchased as of such Fundamental
Change Purchase Date.  The manner in
which the deposit required by this Section 3.03 is made by the Company
shall be at the option of the Company; provided that
such deposit shall be made in a manner such that the Trustee or a Paying Agent
shall have immediately available funds on the Fundamental Change Purchase Date.

 

If a Paying
Agent holds, in accordance with the terms hereof, money sufficient to pay the
Fundamental Change Purchase Price of any Security for which a Fundamental
Change Purchase Notice has been tendered and not withdrawn in accordance with
this Indenture, then, on the Fundamental Change Purchase Date, such Security
will cease to be outstanding and the rights of the Holder in respect thereof
shall terminate (other than the right to receive the Fundamental Change
Purchase Price as aforesaid).  The
Company shall publicly announce the principal amount of Securities purchased as
a result of such Fundamental Change on or as soon as practicable after the
Fundamental Change Purchase Date.

 

26

 

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

 

Section 3.04.  Securities Purchased in Part.

 

Any Security
that is to be purchased only in part shall be surrendered at the office of a
Paying Agent, and promptly after the Fundamental Change Purchase Date the
Company shall execute and the Trustee shall authenticate and deliver to the
Holder of such Security, without service charge, a new Security or Securities,
of such authorized denomination or denominations as may be requested by such
Holder, in aggregate principal amount equal to, and in exchange for, the
portion of the principal amount of the Security so surrendered that is not
purchased.

 

Section 3.05.  Compliance with Securities Laws Upon Purchase
of Securities.

 

In connection
with any offer to purchase or repurchase of Securities under Section 3.01,
the Company shall (a) comply with Rule 13e-4, Rule 14e-1 and any
other tender offer rules under the Exchange Act, (b) file the related
Schedule TO (or any successor or similar schedule, form or report), if
required, under the Exchange Act and (c) otherwise comply with all federal
and state securities laws in connection with such offer to purchase or
repurchase of Securities, all so as to permit the rights of the Holders and
obligations of the Company under Section 3.01 through Section 3.04 to
be exercised in the time and in the manner specified therein.

 

ARTICLE 4

PAYMENT OF INTEREST AND MAKE WHOLE PREMIUM

 

Section 4.01 Interest Payments

 

(a)                                  The
Company shall pay interest on the Securities at a rate of 2.00% per annum,
payable semi-annually in arrears on June 1 and December 1 of each
year (each, an “Interest Payment Date”), or if any
such day is not a Business Day, the immediately following Business Day,
commencing December 1, 2005.  Interest
on a Security shall be paid to the Holder of such Security at the close of
business on May 15 or November 15 (each, a “Record Date”),
as the case may be, next preceding the related Interest Payment Date, and shall
be computed on the basis of a 360-day year comprised of twelve 30-day
months.  In the event of the maturity,
conversion, or purchase of a Security by the Company at the option of the
Holder, interest shall cease to accrue on such Security.

 

(b)                                 Upon
conversion of a Security, (i) a Holder shall not receive any cash payment
of interest (unless such conversion occurs between a Record Date and the
Interest Payment Date to which it relates, in which case a Holder on the Record
Date will receive on the Interest Payment Date accrued and unpaid interest) and
the Conversion Rate shall not be adjusted to account for accrued and unpaid
interest and (ii) except as set forth in clause (c) below, the
Company’s delivery to a Holder of cash and shares, if any, of Common Stock into
which the Security is

 

27

 

convertible shall be deemed to
satisfy its obligation with respect to such Security, and any accrued but
unpaid interest shall be deemed to be paid in full upon conversion, rather than
cancelled, extinguished or forfeited.

 

(c)                                  Securities
surrendered for conversion by a Holder after the close of business on any Record
Date but prior to the next Interest Payment Date must be accompanied by payment
of an amount equal to the interest that the Holder is to receive on the
Securities; provided, however, that no such payment
need be made (1) if the Company has specified a Fundamental Change
Purchase Date that is after a Record Date and on or prior to the next Interest
Payment Date, (2) with respect to any Securities surrendered for
conversion following the Record Date for the payment of interest immediately
preceding the Final Maturity Date or (3) only to the extent of overdue
interest, if any overdue interest exists at the time of conversion with respect
to such Securities.

 

Section 4.02  Make Whole Premium.

 

(a)                                  If
a Fundamental Change occurs prior to June 1, 2015, the Company shall pay
the Make Whole Premium to Holders of the Securities who convert their
Securities in connection with a Fundamental Change pursuant to Section 5.01(b).  The Make Whole Premium shall be paid on the
Fundamental Change Purchase Date and shall be paid solely in shares of the
Common Stock (other than Cash paid in lieu of fractional shares) or in the same
form of consideration into which all or substantially all of the shares of
Common Stock have been converted or exchanged in connection with the
Fundamental Change, as described below. 
The Make Whole Premium shall be equal to a percentage (the “Additional Premium”) of the principal amount of the
Securities.  The Additional Premium will
be in addition to, and not in substitution for, any Cash, securities or other
assets otherwise due to Holders of Securities upon conversion as described in
this Indenture.

 

(b)                                 The
Make Whole Premium shall be determined as follows:

 

(i)                  “Effective Date” means the date that a Fundamental Change
becomes effective.

 

(ii)               “Stock Price” means the price paid (or deemed to be paid) per
share of Common Stock in the transaction constituting the Fundamental Change,
determined as follows:

 

(A)                      If
holders of the Common Stock receive only Cash in the Fundamental Change, the
Stock Price shall be the Cash amount paid per share of Common Stock; or

 

(B)                        Otherwise,
the Stock Price shall be the average Closing Sale Price of the Common Stock for
the 20 consecutive Trading Days immediately prior to but not including the
Effective Date.

 

(iii)            Additional
Premium means the percentage set forth on the relevant table below (the “Additional Premium Table”) for the Stock Price and the
Effective Date:

 

28

 

Additional Premium Applicable to the
Securities Upon Fundamental Change

(% of Face Value)

 

	
  Effective

  Date

  	
   

  	
  Stock
  Price

  	
   

  
	
   

  	
  $42.45

  	
   

  	
  $43.00

  	
   

  	
  $44.00

  	
   

  	
  $45.00

  	
   

  	
  $50.00

  	
   

  	
  $55.00

  	
   

  	
  $60.00

  	
   

  	
  $70.00

  	
   

  	
  $80.00

  	
   

  	
  $100.00

  	
   

  	
  $120.00

  	
   

  	
  $140.00

  	
   

  	
  $160.00

  	
   

  	
  $180.00

  	
   

  	
  $200.00

  	
   

  
	
  June 1, 2005

  	
   

  	
  9.09

  	
   

  	
  9.09

  	
   

  	
  9.09

  	
   

  	
  9.09

  	
   

  	
  9.09

  	
   

  	
  8.82

  	
   

  	
  8.10

  	
   

  	
  6.89

  	
   

  	
  5.88

  	
   

  	
  4.19

  	
   

  	
  2.83

  	
   

  	
  1.74

  	
   

  	
  0.93

  	
   

  	
  0.36

  	
   

  	
  0.00

  	
   

  
	
  June 1, 2006

  	
   

  	
  9.09

  	
   

  	
  9.09

  	
   

  	
  9.09

  	
   

  	
  9.09

  	
   

  	
  9.09

  	
   

  	
  8.53

  	
   

  	
  7.80

  	
   

  	
  6.62

  	
   

  	
  5.65

  	
   

  	
  4.06

  	
   

  	
  2.76

  	
   

  	
  1.72

  	
   

  	
  0.92

  	
   

  	
  0.36

  	
   

  	
  0.00

  	
   

  
	
  June 1, 2007

  	
   

  	
  9.09

  	
   

  	
  9.09

  	
   

  	
  9.09

  	
   

  	
  9.09

  	
   

  	
  9.04

  	
   

  	
  8.12

  	
   

  	
  7.38

  	
   

  	
  6.23

  	
   

  	
  5.31

  	
   

  	
  3.82

  	
   

  	
  2.61

  	
   

  	
  1.63

  	
   

  	
  0.88

  	
   

  	
  0.35

  	
   

  	
  0.00

  	
   

  
	
  June 1, 2008

  	
   

  	
  9.09

  	
   

  	
  9.09

  	
   

  	
  9.09

  	
   

  	
  9.09

  	
   

  	
  8.64

  	
   

  	
  7.67

  	
   

  	
  6.92

  	
   

  	
  5.80

  	
   

  	
  4.94

  	
   

  	
  3.58

  	
   

  	
  2.46

  	
   

  	
  1.55

  	
   

  	
  0.83

  	
   

  	
  0.33

  	
   

  	
  0.00

  	
   

  
	
  June 1, 2009

  	
   

  	
  9.09

  	
   

  	
  9.09

  	
   

  	
  9.09

  	
   

  	
  9.09

  	
   

  	
  8.14

  	
   

  	
  7.10

  	
   

  	
  6.33

  	
   

  	
  5.25

  	
   

  	
  4.47

  	
   

  	
  3.25

  	
   

  	
  2.25

  	
   

  	
  1.41

  	
   

  	
  0.76

  	
   

  	
  0.30

  	
   

  	
  0.00

  	
   

  
	
  June 1, 2010

  	
   

  	
  9.09

  	
   

  	
  9.09

  	
   

  	
  9.09

  	
   

  	
  9.09

  	
   

  	
  7.55

  	
   

  	
  6.43

  	
   

  	
  5.63

  	
   

  	
  4.59

  	
   

  	
  3.90

  	
   

  	
  2.87

  	
   

  	
  2.00

  	
   

  	
  1.27

  	
   

  	
  0.68

  	
   

  	
  0.27

  	
   

  	
  0.00

  	
   

  
	
  June 1, 2011

  	
   

  	
  9.09

  	
   

  	
  9.09

  	
   

  	
  9.09

  	
   

  	
  8.70

  	
   

  	
  6.82

  	
   

  	
  5.59

  	
   

  	
  4.78

  	
   

  	
  3.81

  	
   

  	
  3.23

  	
   

  	
  2.41

  	
   

  	
  1.71

  	
   

  	
  1.09

  	
   

  	
  0.58

  	
   

  	
  0.22

  	
   

  	
  0.00

  	
   

  
	
  June 1, 2012

  	
   

  	
  9.09

  	
   

  	
  9.09

  	
   

  	
  8.67

  	
   

  	
  8.10

  	
   

  	
  5.90

  	
   

  	
  4.55

  	
   

  	
  3.73

  	
   

  	
  2.88

  	
   

  	
  2.45

  	
   

  	
  1.87

  	
   

  	
  1.35

  	
   

  	
  0.87

  	
   

  	
  0.46

  	
   

  	
  0.16

  	
   

  	
  0.00

  	
   

  
	
  June 1, 2013

  	
   

  	
  9.09

  	
   

  	
  8.84

  	
   

  	
  8.05

  	
   

  	
  7.33

  	
   

  	
  4.69

  	
   

  	
  3.23

  	
   

  	
  2.45

  	
   

  	
  1.81

  	
   

  	
  1.56

  	
   

  	
  1.23

  	
   

  	
  0.91

  	
   

  	
  0.61

  	
   

  	
  0.33

  	
   

  	
  0.11

  	
   

  	
  0.00

  	
   

  
	
  June 1, 2014

  	
   

  	
  8.86

  	
   

  	
  8.22

  	
   

  	
  7.14

  	
   

  	
  6.17

  	
   

  	
  2.87

  	
   

  	
  1.40

  	
   

  	
  0.86

  	
   

  	
  0.62

  	
   

  	
  0.56

  	
   

  	
  0.46

  	
   

  	
  0.36

  	
   

  	
  0.26

  	
   

  	
  0.16

  	
   

  	
  0.05

  	
   

  	
  0.00

  	
   

  
	
  June 1, 2015

  	
   

  	
  0.00

  	
   

  	
  0.00

  	
   

  	
  0.00

  	
   

  	
  0.00

  	
   

  	
  0.00

  	
   

  	
  0.00

  	
   

  	
  0.00

  	
   

  	
  0.00

  	
   

  	
  0.00

  	
   

  	
  0.00

  	
   

  	
  0.00

  	
   

  	
  0.00

  	
   

  	
  0.00

  	
   

  	
  0.00

  	
   

  	
  0.00

  	
   

  

 

29

 

The exact
Stock Price and Effective Date may not be set forth on the relevant Additional
Premium Table, in which case, if the Stock Price is between two Stock Prices on
such Additional Premium Table or the Effective Date is between two Effective
Dates on such Additional Premium Table, the Additional Premium shall be
determined by straight-line interpolation between Additional Premium amounts
set forth for the higher and lower Stock Prices and the two Effective Dates, as
applicable, based on a 365-day year.  The
Stock Prices set forth in the column headers are subject to adjustment pursuant
to Section 5.06.

 

(iv)           “Make Whole Premium” means the amount per $1,000 principal
amount of Securities equal to:

 

(A)                      if
the Stock Price is less than or equal to $42.45 (subject to adjustment pursuant
to Section 5.06) (the “Stock Price Threshold”),
$0;

 

(B)                        if
the Stock Price is equal to or greater than $200.00 (subject to adjustment
pursuant to Section 5.06) (the “Stock Price Cap”),
$0; and

 

(C)                        otherwise,
the dollar amount equal to the Additional Premium times $1,000 divided by 100.

 

(c)                                  The
Company shall pay the Make Whole Premium solely in shares of Common Stock
(other than Cash paid in lieu of fractional shares) or in the same form of
consideration into which all or substantially all of the shares of Common Stock
have been converted or exchanged in connection with the Fundamental
Change.  If holders of the Common Stock
receive or have the right to receive more than one form of consideration in
connection with such Fundamental Change, then, for purposes of the foregoing,
the forms of consideration in which the Make Whole Premium shall be paid shall
be in proportion to the different forms of consideration paid to holders of
Common Stock in connection with such Fundamental Change.

 

(d)                                 The
value of the shares of Common Stock or other consideration for purposes of
determining the number of shares of Common Stock or other consideration to be
issued or delivered, as the case may be, in respect of the Make Whole Premium
shall be calculated as follows:

 

(i)                  in
the case of a Fundamental Change in which all or substantially all of the
shares of Common Stock have been, as of the Effective Date, converted into or
exchanged for the right to receive securities or other assets or property
(including Cash), then the consideration shall be valued as follows:

 

(A)                      securities
that are traded on a U.S. national securities exchange or approved for
quotation on Nasdaq or any similar system of automated dissemination of
quotations of securities prices shall be valued at 98% of the average Closing
Sale Price for the 20 consecutive Trading Days immediately prior to but
excluding the Fundamental Change Purchase Date,

 

(B)                        other
securities, assets or property (other than Cash) that holders will have the
right to receive shall be valued based on 98% of the average of the

 

30

 

fair market value of such securities, assets
or property (other than Cash) as determined on the Business Day immediately
prior to the Fundamental Change Purchase Date by two independent nationally
recognized investment banks selected by the Trustee, and

 

(C)                        100%
of any Cash.

 

(ii)               in
all other cases, the value of each share of Common Stock shall equal 98% of the
average Closing Sale Price of the Common Stock for the 20 consecutive Trading
Days prior to but excluding the Fundamental Change Purchase Date.

 

Notwithstanding
the foregoing, in no event shall the value of each share of Common Stock be
less than 50% of the Stock Price used to determine the amount of the Make Whole
Premium.  In addition, in no event shall
the amount of the Make Whole Premium exceed 2.1438 shares of Common Stock per
$1,000 aggregate principal amount of Securities or, if the Make Whole Premium
is not paid in Common Stock, a proportionate number of units of the per share
consideration paid to holders of Common Stock in connection with the applicable
Fundamental Change, in each case subject to adjustment pursuant to Section 5.06.

 

(e)                                  A
Calculation Agent appointed from time to time by the Company shall, on behalf
of and on request by the Company, calculate (A) the Stock Price and (B) the
Additional Premium and Make Whole Premium with respect to such Stock Price,
based on the Effective Date specified by the Company, and shall deliver its calculation
of the Stock Price, Additional Premium and Make Whole Premium to the Company
and the Trustee within three Business Days of the request by the Company or the
Trustee.  In addition, the Calculation
Agent shall, on behalf of and upon request by the Company or the Trustee, make
the determinations described in Section 4.02(d) above and deliver its
calculations to the Company or the Trustee by 9:00 p.m., New York City
time, on the day prior to the Fundamental Change Purchase Date.  The Company or, at the Company’s request, the
Trustee, in the name and at the expense of the Company, (X) shall notify the
Holders of the Stock Price and Make Whole Premium per $1,000 principal amount
of Securities with respect to a Fundamental Change as part of the Fundamental
Change Purchase Notice and (Y) shall notify the Holders, by registered
first-class mail, promptly upon the opening of business on the Fundamental
Change Purchase Date of the number of shares of Common Stock (or such other
securities, assets or property (including Cash) into which all or substantially
all of the shares of Common Stock have been converted as of the Effective Date
as described above) to be paid in respect of the Make Whole Premium in
connection with such Fundamental Change, in the manner provided in this
Indenture.  Any notice so given shall be
conclusively presumed to have been duly given, whether or not the Holder
receives such notice.  The Company shall
verify, in writing, all calculations made by the Calculation Agent pursuant to
this Section 4.02(e).

 

(f)                                    On
or prior to the Fundamental Change Purchase Date, the Company shall deposit
with the Trustee or with one or more Paying Agents (or, if the Company or an
Affiliate or Subsidiary of the Company is acting as the Paying Agent, set aside,
segregate and hold in trust) an amount of shares of Common Stock (or, in the
case of a Fundamental Change in which all or substantially all of the shares of
Common Stock have been, as of the Effective Date, converted into or exchanged
for the right to receive securities or other assets or property (including
Cash),

 

31

 

an amount of
such other securities or other assets or property (including Cash)) sufficient
to pay the Make Whole Premium with respect to all the Securities converted in
connection with such Fundamental Change; provided that,
if such payment is made on the Fundamental Change Purchase Date, it must be
received by the Trustee or Paying Agent, as the case may be, by 10:00 a.m.,
New York City time, on such date. 
Payment of the Make Whole Premium for Securities surrendered for
conversion within the period described in Section 5.01 shall be made
promptly on the Fundamental Change Purchase Date by mailing checks in respect
of Cash and otherwise delivering entitlements to securities, other assets or
property for the amount payable to the Holders of such Securities entitled
thereto as they shall appear in the register kept by the Registrar.

 

Section 4.03.  Adjustments Relating to Make Whole
Premium.   Whenever the Conversion Rate shall be adjusted
from time to time by the Company pursuant to Section 5.06, the Stock Price
Threshold and the Stock Price Cap shall be adjusted and each of the Stock
Prices set forth in each Additional Premium Table shall be adjusted.  The adjusted Stock Price Threshold, Stock
Price Cap and Stock Prices set forth in each Additional Premium Table shall
equal the Stock Price Threshold, Stock Price Cap and such Stock Prices, as the
case may be, 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 such adjustment and the denominator of which is the Conversion
Rate so adjusted.

 

ARTICLE 5

CONVERSION

 

Section 5.01.  Conversion Privilege.

 

(a)                                  Subject
to the further provisions of this Article 5 and paragraph 9 of the
Securities, a Holder of a Security may 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) into Cash and Common Stock at any time prior to the
close of business on December 1, 2014, at the Conversion Price then in
effect, if, as of such Conversion Date, the Closing Sale Price of the Common
Stock on the first Trading Day immediately prior to the date of surrender is
more than 120% of the Conversion Price of Common Stock on the first Trading Day
immediately prior to such date of surrender (the “Closing Sale
Price Condition”), subject to the exceptions provided in Section 5.01(b);
provided, however, that, if such
Security is submitted for purchase pursuant to Article 3, such conversion
right shall terminate at the close of business on the second Trading Day
immediately preceding the Fundamental Change Purchase Date for such Security or
such earlier date as the Holder presents such Security for purchase (unless the
Company shall default in making the Fundamental Change Purchase Price payment
when due, in which case the conversion right shall terminate at the close of
business on the date such default is cured and such Security is purchased).

 

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

 

32

 

A Security in
respect of which a Holder has delivered a Fundamental Change Purchase Notice
pursuant to Section 3.01(c) exercising the option of such Holder to
require the Company to purchase such Security may be converted only if such
Fundamental Change Purchase Notice is withdrawn by a written notice of
withdrawal delivered to a Paying Agent prior to 5:00 p.m., New York City
time, on the second Trading Day immediately preceding the Fundamental Change
Purchase Date in accordance with Section 3.02.

 

A Holder of
Securities is not entitled to any rights of a holder of Common Stock until such
Holder has converted its Securities to Common Stock and only to the extent such
Securities are deemed to have been converted into Common Stock pursuant to this
Article 5.

 

(b)                                 Even
if the Closing Sale Price Condition is not satisfied,

 

(i)                  if,
after any five consecutive Trading Day period, the average of the Trading
Prices for the Securities for that five-Trading Day period was less than 100%
of the average of the Conversion Values for the Securities during that period,
a holder may surrender Securities for conversion at any time during the
following 10 Trading Days;

 

(ii)               in
the event that the Company declares

 

(A)                      a
dividend or distribution of any rights or warrants to all holders of 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 (as defined in Section 5.06(d))
on the record date for such dividend or distribution (other than a distribution
of rights by the Company to its stockholders pursuant to the Company’s Amended
and Restated Rights Agreement, dated as of January 1, 1999, between the
Company and StockTrans, Inc., as Rights Agent, and any successor or
similar stockholders rights plan until the occurrence of a triggering event
under such plan), or

 

(B)                        a
dividend or distribution of cash, debt securities (or other evidences of
indebtedness) or other assets (excluding dividends or distributions for which
Conversion Price adjustment is required to be made under Section 5.06(a) or
5.06(b) of this Indenture) where the fair market value of such dividend or
distribution per share of Common Stock, as determined in this Indenture,
together with all other such dividends and distributions within the preceding twelve
months, exceeds 10% of the Current Market Price of the Common Stock as of the
Trading Day immediately prior to the date of declaration for such dividend or
distribution, then the Securities may be surrendered for conversion beginning
on the date the Company gives notice to the Holders of such right, which shall
not be less than 30 days prior to the ex-dividend time for such dividend or
distribution, until the earlier of the close of business on the Business Day
prior to the ex-dividend time or until the Company announces that such distribution
will not take place;

 

33

 

(iii)            upon
the occurrence of a Fundamental Change with respect to the Company, the
Securities may be surrendered for conversion at any time from or after the date
which is 40 days prior to the anticipated effective time of the Fundamental
Change as announced by the Company, which announcement must occur, to the
extent practicable, not earlier than 70 days nor later than 40 days prior to
such anticipated effective time, until the close of business on the second
Trading Day immediately preceding the Fundamental Change Purchase Date; and

 

(iv)           at
any time after December 1, 2014 and prior to the close of business on the Business
Day immediately preceding the Final Maturity Date, the Securities may be
surrendered for conversion regardless of whether any of the foregoing
conditions has been satisfied.

 

(c)                                  If
a Holder converts Securities at any time beginning 40 days before the scheduled
Effective Date of any Fundamental Change and ending at the close of business on
the second Trading Day immediately preceding the Fundamental Change Purchase
Date, such Holder shall receive:

 

(i)                  (A) if
such Securities are surrendered for conversion at any time beginning
twenty-five Trading Days before the date of payment of consideration in
connection with a Change in Control, Cash and, with respect to the portion of
the Conversion Obligation for any Trading Day during the Conversion Period in
excess of $50.00 (if any), the kind of securities and other assets or property
(including Cash) received by holders of the Common Stock in such Change in
Control; or

 

(B) in
all other events, Cash or a combination of Cash and Common Stock, in the same
manner as described in Section 5.05; plus

 

(ii)               the
Make Whole Premium, if any, which shall be in an amount and form determined as
set forth in Article 4, and shall be paid on the relevant Fundamental
Change Purchase Date.

 

(d)                                 If
holders of the Common Stock receive or have the right to receive more than one
form of consideration in connection with a Fundamental Change, then, for
purposes of the foregoing, the forms of consideration in which the Daily Net
Share Settlement Value shall be paid shall be in proportion to the different forms
of consideration paid to holders of Common Stock in connection with such
Fundamental Change.

 

Section 5.02.  Conversion Procedure.

 

The right to
convert any Security may be exercised, if such Security is represented by a
Global Security, by book-entry transfer to the Conversion Agent (which
initially shall be the Trustee) through the facilities of the Depositary in
accordance with the Applicable Procedures or, if such Security is represented
by a Certificated Security, by delivery of such Security at the specified
office of the Conversion Agent, accompanied, in either case, by (a) a
completed and duly signed conversion notice, in the form as set forth on the
reverse of Security attached hereto as Exhibit A (a “Conversion Notice”); (b) if the Security is represented
by a Certificated

 

34

 

Security and such Certificated
Security has been lost, stolen, destroyed or mutilated, a notice to the
Conversion Agent in accordance with Section 2.07 regarding the loss, theft,
destruction or mutilation of the Security; (c) appropriate endorsements
and transfer documents if required by the Conversion Agent; and (d) payment
of any tax or duty, in accordance with Section 5.04, which may be payable
in respect of any transfer involving the issue or delivery of the Common Stock
in the name of a Person other than the Holder of the Security.  The “Conversion Date”
shall be the Business Day on which the Holder satisfies all of the requirements
set forth in the immediately preceding sentence, if all such requirements shall
have been satisfied by 11:00 a.m., New York City time, on such day, and in
all other cases, the Conversion Date shall be the next succeeding Business Day;
however, if a Holder surrenders for conversion a Security at any time after the
twenty-fifth scheduled Trading Day prior to the Final Maturity Date, the
Conversion Date shall be deemed to be the Business Day immediately preceding
such Security s Final Maturity Date.  On
the third Business Day following the last day of the related Conversion Period,
subject to Section 5.05, the Company shall deliver to the Holder through a
Conversion Agent a certificate for the number of whole shares of Common Stock
issuable upon the conversion and cash (including cash in lieu of any fractional
shares pursuant to Section 5.03).

 

The person in
whose name the Common Stock certificate is registered shall be deemed to be a
stockholder of record on the Conversion Date; provided,
however, that no surrender of a Security on any date when the stock
transfer books of the Company shall be closed shall be effective to constitute
the person or persons entitled to receive the shares of Common Stock upon such
conversion as the record holder or holders of such shares of Common Stock on
such date, but such surrender shall be effective to constitute the person or
persons entitled to receive such shares of Common Stock as the record holder or
holders thereof for all purposes at the close of business on the next
succeeding day on which such stock transfer books are open; provided, further, that such conversion shall be at the
Conversion Price in effect for the 20 Trading Days immediately following the
Conversion Date as if the stock transfer books of the Company had not been
closed.  Upon conversion of a Security,
such person shall no longer be a Holder of such Security.  No payment or adjustment will be made for
dividends or distributions on shares of Common Stock issued upon conversion of
a Security.

 

Upon surrender
of a Security that is converted in part, the Company shall execute, and the
Trustee shall authenticate and deliver to the Holder, a new Security equal in
principal amount to the unconverted portion of the Security surrendered.

 

Section 5.03.  Fractional Shares.

 

The Company
will not issue fractional shares of Common Stock upon conversion of
Securities.  In lieu thereof, the Company
will deliver a number of shares of Common Stock equal to the aggregate of the
fractional shares otherwise deliverable for each Trading Day during the
Conversion Period (rounding down to the nearest whole number) and cash equal to
the remainder multiplied by the Volume Weighted Average Price of the Common Stock
on the last day of the Conversion Period.

 

35

 

Section 5.04.  Taxes on Conversion.

 

If a Holder
converts a Security, the Company shall pay any documentary, stamp or similar
issue or transfer tax due on the issue of shares of Common Stock upon such
conversion.  However, the Holder shall
pay any such tax which is due because the Holder requests the shares to be
issued in a name other than the Holder’s name. 
The Conversion Agent may refuse to deliver the certificate representing
the Common Stock being issued in a name other than the Holder’s name until the
Conversion Agent receives a sum sufficient to pay any tax which will be due
because the shares are to be issued in a name other than the Holder’s
name.  Nothing herein shall preclude any
tax withholding required by law or regulation.

 

Section 5.05.  Payment Upon Conversion.

 

(a)                                  In
the event that the Company receives a Holder’s Conversion Notice:

 

(i)                  For
each $1,000 aggregate principal amount of Securities surrendered for
conversion, the Company shall be required to pay to such Holder the aggregate
of the following (the “Conversion Obligation”)
for each of the twenty Trading Days beginning on the third Trading Day following
the Conversion Date (such twenty Trading Day period, a “Conversion
Period”):

 

(A)                      if
the Daily Conversion Value (as defined below) for such Trading Day for each
$1,000 aggregate principal amount of Securities exceeds $50.00, (1) a Cash
payment of $50.00 and (2) the remaining Daily Conversion Value (the “Daily Net Share Settlement Value”) in shares of Common
Stock; or

 

(B)                        if
the Daily Conversion Value for such Trading Day for each $1,000 aggregate
principal amount of Securities is less than or equal to $50.00, a Cash payment
equal to the Daily Conversion Value.

 

(C)                        Notwithstanding
the foregoing, if a Holder surrenders for conversion a Security at any time
after the twenty-fifth scheduled Trading Day immediately preceding the Final
Maturity Date, (i) the Conversion Date will be deemed to be the Business
Day immediately preceding the Final Maturity Date, (ii) the Conversion
Period for such conversion will be the twenty Trading Day period commencing on
the Trading Day immediately following the Final Maturity Date, (iii) in
lieu of receiving any Cash payments as set forth pursuant to clause (A) or
(B) above, a Cash payment of $1,000 per $1,000 aggregate principal amount
of Securities surrendered and (iv) on the third Business Day following the
last day of such Conversion Period, an amount of shares of Common Stock, if
any, equal to the aggregate of, for each Trading Day during the Conversion
Period, any Daily Conversion Value in excess of $50.00 pursuant to clause (ii) below.

 

(ii)               The
amount to be paid to a converting Holder shall be computed in accordance with
the following:

 

36

 

(A)                      The
“Daily Conversion Value” for each
Trading Day during the Conversion Period for each $1,000 aggregate principal
amount of Securities is equal to one-twentieth of the product of the then
applicable Conversion Rate multiplied by the Volume Weighted Average Price of
the Common Stock (or such other form of consideration into which the Common
Stock has been converted in connection with a Fundamental Change) on such
Trading Day.

 

(B)                        The
number of shares of Common Stock to be delivered under Section 5.05(a)(i)(A)(2) or
5.05(a)(i)(C) shall be determined by dividing the Daily Net Share
Settlement Value by the Volume Weighted Average Price of the Common Stock (or
such other form of consideration into which the Common Stock has been converted
in connection with a Fundamental Change) for such Trading Day.

 

(C)                        For
purposes of this Section 5.05, “Volume Weighted Average
Price” per share of Common Stock (or any security into which the
Common Stock has been converted in connection with a Fundamental Change) on any
Trading Day means the volume weighted average price on the principal exchange
or over-the-counter market on which the Common Stock (or such other security)
is then listed or traded, from 9:30 a.m. to 4:00 p.m. (New York City
time) on that Trading Day as displayed under the heading “Bloomberg VWAP” on
Bloomberg Page CEPH Equity AQR (or the Bloomberg Page for any
security into which the Common Stock has been converted in connection with a
Fundamental Change), or if such Volume Weighted Average Price is not available,
the Board of Directors’ reasonable, good faith estimate of the volume weighted
average price of the shares of Common Stock (or other security) on such Trading
Day.

 

(D)                       Solely
for purposes of valuing any non-cash consideration received by holders of
Common Stock in any Change in Control, to the extent any component of such
non-cash consideration is not listed on a U.S. national or regional securities
exchange or reported on Nasdaq, the value of such non-cash consideration will
be determined by two nationally recognized investment banks selected by the
Trustee and, to the extent any component of such non-cash consideration is
listed on a U.S. national or regional securities exchange or reported on
Nasdaq, the value of such non-cash consideration will be determined by
reference to its Volume Weighted Average Price.

 

(b)                                 The
Company shall, prior to the issuance of any Securities hereunder, and from time
to time as may be necessary, reserve at all times and keep available, free from
preemptive rights, out of its authorized but unissued Common Stock, a
sufficient number of shares of Common Stock deliverable upon conversion of all
of the Securities.

 

(c)                                  All
shares of Common Stock that may be issued upon conversion of the Securities
shall be newly issued shares, shall be duly authorized, validly issued, fully
paid and nonassessable and shall be free of any preemptive rights and free of
any lien or adverse claim.

 

37

 

(d)                                 The
Company shall endeavor to comply with all applicable securities laws regulating
the offer and delivery of any Common Stock upon conversion of Securities and
shall list or cause to have quoted such shares of Common Stock on each national
securities exchange or on Nasdaq or other over-the-counter market or such other
market on which the Common Stock is then listed or quoted; provided, however,
that, if the rules of such automated quotation system or exchange permit
the Company to defer the listing of such Common Stock until the first
conversion of the Securities into Common Stock in accordance with the
provisions of this Indenture, the Company covenants to list such Common Stock
issuable upon conversion of the Securities in accordance with the requirements
of such automated quotation system or exchange at such time. Any Common Stock
issued upon conversion of a Security hereunder which at the time of conversion
was a Restricted Security shall also be a Restricted Security.

 

(e)                                  Notwithstanding
anything herein to the contrary, nothing herein shall give to any Holder any
rights as a creditor in respect of its right to conversion.

 

Section 5.06.  Adjustment of Conversion Price.

 

The conversion
price as stated in paragraph 9 of the Securities (the “Conversion
Price”) shall be adjusted from time to time by the Company as
follows:

 

(a)                                  In
case the Company shall (i) pay a dividend on its Common Stock in shares of
Common Stock, (ii) make a distribution on its Common Stock in shares of
Common Stock, (iii) subdivide its outstanding Common Stock into a greater
number of shares, or (iv) combine its outstanding Common Stock into a
smaller number of shares, the Conversion Price in effect immediately prior
thereto shall be adjusted so that the Holder of any Security thereafter
surrendered for conversion shall be entitled to receive that number of shares
of Common Stock which it would have owned had such Security been converted
immediately prior to the record date of such event or the happening of such
event (assuming such Security were convertible solely into shares of Common
Stock, based on the relevant Conversion Price, rather than Cash or Cash and
Common Stock as set forth in Section 5.05).  An adjustment made pursuant to this subsection (a) shall
become effective immediately after the record date in the case of a dividend or
distribution and shall become effective immediately after the effective date in
the case of subdivision or combination.

 

(b)                                 In
case the Company shall issue rights or warrants to all or substantially all
holders of its Common Stock entitling them (for a period commencing no earlier
than the record date described below and expiring not more than 60 days after
such record date) to subscribe for or purchase shares of Common Stock (or
securities convertible into Common Stock) at a price per share (or having a
conversion price per share) less than the Current Market Price per share of
Common Stock (as determined in accordance with subsection (d) of this
Section 5.06) on the record date for the determination of stockholders
entitled to receive such rights or warrants, the Conversion Price in effect
immediately prior thereto shall be adjusted so that the same shall equal the
price determined by multiplying the Conversion Price in effect immediately
prior to such record date by a fraction of which the numerator shall be the
number of shares of Common Stock outstanding on such record date plus the
number of shares which the aggregate offering price of the total number of
shares of Common Stock so offered (or the aggregate conversion price of the
convertible securities so offered, which shall be determined by multiplying the

 

38

 

number of shares of Common
Stock issuable upon conversion of such convertible securities by the conversion
price per share of Common Stock pursuant to the terms of such convertible
securities) would purchase at the Current Market Price per share (as defined in
subsection (d) of this Section 5.06) of Common Stock on such
record date, and of which the denominator shall be the number of shares of
Common Stock outstanding on such record date plus the number of additional
shares of Common Stock offered (or into which the convertible securities so
offered are convertible).  Such
adjustment shall be made successively whenever any such rights or warrants are
issued and shall become effective immediately after such record date.  If at the end of the period during which such
rights or warrants are exercisable not all rights or warrants shall have been
exercised, the adjusted Conversion Price shall be immediately readjusted to what
it would have been based upon the number of additional shares of Common Stock
actually issued (or the number of shares of Common Stock issuable upon
conversion of convertible securities actually issued).

 

(c)                                  In
case the Company shall distribute to all or substantially all holders of its
Common Stock any shares of capital stock of the Company (other than Common
Stock), evidences of indebtedness or other non-cash assets (including
securities of any person other than the Company but excluding (1) dividends
or distributions paid exclusively in cash or (2) dividends or
distributions referred to in subsection (a) of this Section 5.06),
or shall distribute to all or substantially all holders of its Common Stock
rights or warrants to subscribe for or purchase any of its securities
(excluding those rights and warrants referred to in subsection (b) of
this Section 5.06 and also excluding the distribution of rights to all
holders of Common Stock pursuant to the adoption of a stockholders rights plan
or the detachment of such rights under the terms of such stockholder rights
plan), then in each such case the Conversion Price shall be adjusted so that
the same shall equal the price determined by multiplying the current Conversion
Price by a fraction of which the numerator shall be the Current Market Price
per share (as defined in subsection (d) of this Section 5.06) of
the Common Stock on the record date mentioned below less the fair market value
on such record date (as determined by the Board of Directors, whose determination
shall be conclusive evidence of such fair market value and which shall be
evidenced by an Officers’ Certificate delivered to the Trustee) of the portion
of the capital stock, evidences of indebtedness or other non-cash assets so
distributed or of such rights or warrants applicable to one share of Common
Stock (determined on the basis of the number of shares of Common Stock
outstanding on the record date), and of which the denominator shall be the
Current Market Price per share (as defined in subsection (d) of this Section 5.06)
of the Common Stock on such record date. 
Such adjustment shall be made successively whenever any such
distribution is made and shall become effective immediately after the record
date for the determination of shareholders entitled to receive such
distribution.

 

In the event
the then fair market value (as so determined) of the portion of the capital
stock, evidences of indebtedness or other non-cash assets so distributed or of
such rights or warrants applicable to one share of Common Stock is equal to or
greater than the Current Market Price per share of the Common Stock on such
record date, in lieu of the foregoing adjustment, adequate provision shall be
made so that each holder of a Security shall have the right to receive upon
conversion the amount of capital stock, evidences of indebtedness or other
non-cash assets so distributed or of such rights or warrants such holder would
have received had such holder converted each Security on such record date.  In the event that such dividend or distribution
is

 

39

 

not so paid or made, the
Conversion Price shall again be adjusted to be the Conversion Price which would
then be in effect if such dividend or distribution had not been declared.  If the Board of Directors determines the fair
market value of any distribution for purposes of this Section 5.06(c) by
reference to the actual or when issued trading market for any securities, it
must in doing so consider the prices in such market over the same period used
in computing the Current Market Price of the Common Stock.

 

In the event
that the Company implements a preferred shares rights plan (“Rights Plan”), upon conversion of the Securities into Common
Stock, to the extent that the Rights Plan has been implemented and is still in
effect upon such conversion, the holders of Securities will receive, in
addition to the Common Stock, the rights described therein (whether or not the
rights have separated from the Common Stock at the time of conversion), subject
to the limitations set forth in the Rights Plan.  Any distribution of rights or warrants
pursuant to a Rights Plan complying with the requirements set forth in the
immediately preceding sentence of this paragraph shall not constitute a distribution
of rights or warrants pursuant to this Section 5.06(c).

 

Rights or
warrants distributed by the Company to all holders of Common Stock entitling
the holders thereof to subscribe for or purchase shares of the Company’s
Capital Stock (either initially or under certain circumstances), which rights
or warrants, until the occurrence of a specified event or events (“Trigger Event”):  (i) are
deemed to be transferred with such shares of Common Stock; (ii) are not
exercisable; and (iii) are also issued in respect of future issuances of
Common Stock, shall be deemed not to have been distributed for purposes of this
Section 5.06 (and no adjustment to the Conversion Price under this Section 5.06
will be required) until the occurrence of the earliest Trigger Event, whereupon
such rights and warrants shall be deemed to have been distributed and an
appropriate adjustment (if any is required) to the Conversion Price shall be
made under this Section 5.06(c).  If
any such right or warrant, including any such existing rights or warrants
distributed prior to the date of this Indenture, are subject to events, upon
the occurrence of which such rights or warrants become exercisable to purchase
different securities, evidences of indebtedness or other assets, then the date
of the occurrence of any and each such event shall be deemed to be the date of
distribution and record date with respect to new rights or warrants with such
rights (and a termination or expiration of the existing rights or warrants
without exercise by any of the holders thereof).  In addition, in the event of any distribution
(or deemed distribution) of rights or warrants, or any Trigger Event or other
event (of the type described in the preceding sentence) with respect thereto
that was counted for purposes of calculating a distribution amount for which an
adjustment to the Conversion Price under this Section 5.06 was made, (1) in
the case of any such rights or warrants which shall all have been redeemed or
repurchased without exercise by any holders thereof, the Conversion Price shall
be readjusted upon such final redemption or repurchase to give effect to such
distribution or Trigger Event, as the case may be, as though it were a cash
distribution, equal to the per share redemption or repurchase price received by
a holder or holders 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 such rights or warrants which shall have expired or been terminated
without exercise by any holders thereof, the Conversion Price shall be
readjusted as if such rights and warrants had not been issued.

 

40

 

(1)                                  In
case the Company shall, by dividend or otherwise, at any time distribute (a “Triggering Distribution”) to all or substantially all
holders of its Common Stock Cash dividends and distributions, the Conversion
Price shall be reduced so that the same shall equal the price determined by
dividing such Conversion Price in effect on the record date with respect to
such Cash dividend or distribution by a fraction of which the numerator shall
be the Current Market Price per share of the Common Stock (as determined in accordance
with subsection (d) of this Section 5.06) as of the day before
the “ex” date with respect to the dividend or distribution, and the denominator
shall be such Current Market Price per share of the Common Stock (as determined
in accordance with subsection (d) of this Section 5.06) as of
the day before the “ex” date with respect to the dividend or distribution less
the amount per share of the Cash dividend or distribution, such decrease to
become effective immediately prior to the opening of business on the day
following the date on which the Triggering Distribution is paid; provided, however, that, in the event the portion of the
Triggering Distribution applicable to one share of Common Stock is equal to or
greater than the Current Market Price on such record date, in lieu of the
foregoing adjustment, adequate provision shall be made so that each Holder
shall have the right to receive upon conversion the amount of Cash such Holder
would have received had such Holder converted each Security on such record
date.  In the event that such dividend or
distribution is not so paid or made, the Conversion Rate shall again be
adjusted to be the Conversion Rate that would then be effect if such dividend
or distribution had not been declared.

 

(2)                                  In
case any tender offer made by the Company or any of its Subsidiaries for Common
Stock shall expire and such tender offer (as amended upon the expiration
thereof) shall involve the payment of aggregate consideration in an amount
(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) that exceeds an amount equal to the Current Market Price per
share of Common Stock (as determined in accordance with subsection (d) of
this Section 5.06) as of the last date (the “Expiration
Date”) tenders could have been made pursuant to such tender offer
(as it may be amended) (the last time at which such tenders could have been
made on the Expiration Date is hereinafter sometimes called the “Expiration Time”), then, immediately prior to the opening of
business on the day after the Expiration Date, the Conversion Price shall be
reduced so that the same shall equal the price determined by multiplying the
Conversion Price in effect immediately prior to the close of business on the
Expiration Date by a fraction of which the numerator shall be the

 

41

 

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 (d) of this Section 5.06) on the Trading Day next
succeeding the Expiration Date and the denominator shall be the sum of (x) the
aggregate consideration (determined as aforesaid) 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 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 (d) of this Section 5.06) on the
Trading Day next succeeding the Expiration Date, such reduction 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
Price shall again be adjusted to be the Conversion Price which would have been
in effect based upon the number of shares actually purchased.  If the application of this Section 5.06(c)(2) to
any tender offer would result in an increase in the Conversion Price, no
adjustment shall be made for such tender offer under this Section 5.06(c)(2).

 

(3)                                  For
purposes of this Section 5.06(c), the term “tender offer” shall mean and
include both tender offers and exchange offers, all references to “purchases”
of shares in tender offers (and all similar references) shall mean and include
both the purchase of shares in tender offers and the acquisition of shares
pursuant to exchange offers, and all references to “tendered shares” (and all
similar references) shall mean and include shares tendered in both tender
offers and exchange offers.

 

(d)                                 For
the purpose of any computation under subsections (b) and (c) of this Section 5.06,
the current market price (the “Current Market Price”)
shall mean, with respect to any date of determination, the average of the Closing
Sale Prices per share of Common Stock for the three consecutive Trading Days
ending on the date of determination.  For
purposes hereof, the term “ex” date, when used with respect to any dividend or
distribution, means the first date on which the Common Stock trades, regular
way, on the relevant exchange or in the relevant market from which the Closing
Sale Price was obtained without the right to receive such dividend or
distribution.

 

(e)                                  In
any case in which this Section 5.06 shall require that an adjustment be
made following a record date or Expiration Date, as the case may be,
established for purposes of this

 

42

 

Section 5.06, the Company
may elect to defer (but only until five Business Days following the filing by
the Company with the Trustee of the certificate described in Section 5.09)
issuing to the Holder of any Security converted after such record date or
Expiration Date the shares of Common Stock and other capital stock of the
Company issuable upon such conversion over and above the shares of Common Stock
and other capital stock of the Company issuable, or Cash payable, upon such
conversion only on the basis of the Conversion Price prior to adjustment; and,
in lieu of the shares the issuance of which, or Cash the payment of which, is
so deferred, the Company shall issue or cause its transfer agents to issue due
bills or other appropriate evidence prepared by the Company of the right to receive
such shares or Cash, as the case may be. 
If any distribution in respect of which an adjustment to the Conversion
Price is required to be made as of the record date or Expiration Date therefor
is not thereafter made or paid by the Company for any reason, the Conversion
Price shall be readjusted to the Conversion Price which would then be in effect
if such record date had not been fixed or such effective date or Expiration
Date had not occurred.

 

Section 5.07.  No Adjustment.

 

No adjustment
in the Conversion Price shall be required unless the adjustment would require
an increase or decrease of at least 1% in the Conversion Price as last
adjusted; provided, however, that any adjustments
which by reason of this Section 5.07 are not required to be made shall be
carried forward and taken into account in any subsequent adjustment.  All calculations under this Article 5
shall be made to the nearest cent or to the nearest one-hundredth of a share,
as the case may be.

 

Except as
otherwise provided herein, no adjustment need be made for issuances of Common
Stock pursuant to a Company plan for reinvestment of dividends or interest or
for a change in the par value or a change to no par value of the Common Stock.

 

To the extent
that the Securities become convertible into the right to receive cash, no
adjustment need be made thereafter as to the cash.  Interest will not accrue on the cash.

 

Section 5.08.  Adjustment for Tax Purposes.

 

The Company
shall be entitled to make such reductions in the Conversion Price, in addition
to those required by Section 5.06, as it in its discretion shall determine
to be advisable in order to avoid or diminish any tax to stockholders in
connection with any stock dividends, subdivisions of shares, distributions of
rights to purchase stock or securities or distributions of securities
convertible into or exchangeable for stock hereafter made by the Company to its
stockholders.

 

Section 5.09.  Notice of Adjustment.

 

Whenever the
Conversion Price or conversion privilege is adjusted, the Company shall
promptly mail to Securityholders a notice of the adjustment and file with the
Trustee an Officers’ Certificate briefly stating the facts requiring the
adjustment and the manner of computing it. 
Unless and until the Trustee shall receive an Officers’ Certificate
setting forth an adjustment of

 

43

 

the Conversion Price, the
Trustee may assume without inquiry that the Conversion Price has not been
adjusted and that the last Conversion Price of which it has knowledge remains
in effect.

 

Section 5.10.  Notice of Certain Transactions.

 

In the event
that:

 

(1)                                  the
Company takes any action which would require an adjustment in the Conversion
Price;

 

(2)                                  the
Company consolidates or merges with, or transfers all or substantially all of
its property and assets to, another corporation and shareholders of the Company
must approve the transaction; or

 

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

 

the Company
shall mail to Holders and file with the Trustee a notice stating the proposed
record or effective date, as the case may be. 
The Company shall mail the notice at least [ten] days before such
date.  Failure to mail such notice or any
defect therein shall not affect the validity of any transaction referred to in
clause (1), (2) or (3) of this Section 5.10.

 

Section 5.11.  Effect of Reclassification, Consolidation,
Merger or Sale on Conversion Privilege.

 

If any of the
following shall occur, namely:  (a) any
reclassification or change of shares of Common Stock issuable upon conversion
of the Securities (other than a change in par value, or from par value to no
par value, or from no par value to par value, or as a result of a subdivision
or combination, or any other change for which an adjustment is provided in Section 5.06);
(b) any consolidation or merger or combination to which the Company is a
party other than a merger in which the Company is the continuing corporation
and which does not result in any reclassification of, or change (other than in
par value, or from par value to no par value, or from no par value to par
value, or as a result of a subdivision or combination) in, outstanding shares
of Common Stock; or (c) any sale or conveyance as an entirety or
substantially as an entirety of the property and assets of the Company,
directly or indirectly, to any person, then the Company, or such successor,
purchasing or transferee corporation, as the case may be, shall, as a condition
precedent to such reclassification, change, combination, consolidation, merger,
sale or conveyance, execute and deliver to the Trustee a supplemental indenture
providing that the Holder of each Security then outstanding shall have the
right to convert such Security into cash and, with respect to the portion of
the Conversion Obligation in excess (if any) of the principal amount of
Securities being converted, the kind and amount of shares of stock and other
securities and property (including cash) receivable upon such reclassification,
change, combination, consolidation, merger, sale or conveyance by a holder of
the number of shares of Common Stock deliverable upon conversion of such
Security immediately prior to such reclassification, change, combination,
consolidation, merger, sale or conveyance. 
Such supplemental indenture shall provide for adjustments of the
Conversion Price which shall be as nearly equivalent as may be practicable to
the adjustments of the Conversion Price provided for in this Article 5.  If, in the case of any such consolidation,
merger, combination, sale or conveyance, the stock or other

 

44

 

securities and property
(including cash) receivable thereupon by a holder of Common Stock include
shares of stock or other securities and property of a person other than the
successor, purchasing or transferee corporation, as the case may be, in such
consolidation, merger, combination, sale or conveyance, then such supplemental
indenture shall also be executed by such other person and shall contain such
additional provisions to protect the interests of the Holders of the Securities
as the Board of Directors shall reasonably consider necessary by reason of the
foregoing.  The provisions of this Section 5.11
shall similarly apply to successive reclassifications, changes, combinations,
consolidations, mergers, sales or conveyances.

 

In the event
the Company shall execute a supplemental indenture pursuant to this Section 5.11,
the Company shall promptly file with the Trustee (x) an Officers’ Certificate
briefly stating the reasons therefor, the kind or amount of shares of stock or
other securities or property (including cash) receivable by Holders of the
Securities upon the conversion of their Securities after any such
reclassification, change, combination, consolidation, merger, sale or
conveyance, any adjustment to be made with respect thereto and that all
conditions precedent have been complied with and (y) an Opinion of Counsel that
all conditions precedent have been complied with, and shall promptly mail
notice thereof to all Holders.

 

Section 5.12.  Trustee’s Disclaimer.

 

The Trustee
shall have no duty to determine when an adjustment under this Article 5
should be made, how it should be made or what such adjustment should be, but
may accept as conclusive evidence of that fact or the correctness of any such
adjustment, and shall be protected in relying upon, an Officers’ Certificate,
including the Officers’ Certificate with respect thereto which the Company is
obligated to file with the Trustee pursuant to Section 5.09.  The Trustee makes no representation as to the
validity or value of any securities or assets issued upon conversion of
Securities, and the Trustee shall not be responsible for the Company’s failure
to comply with any provisions of this Article 5.

 

The Trustee
shall not be under any responsibility to determine the correctness of any
provisions contained in any supplemental indenture executed pursuant to Section 5.11,
but may accept as conclusive evidence of the correctness thereof, and shall be
fully protected in relying upon, the Officers’ Certificate with respect thereto
which the Company is obligated to file with the Trustee pursuant to Section 5.11.

 

Section 5.13.  Voluntary Reduction.

 

The Company
from time to time may reduce the Conversion Price by any amount for any period
of time if the period is at least 20 days and if the reduction is irrevocable
during the period if our Board of Directors determines that such reduction
would be in the best interest of the Company or to avoid or diminish income tax
to holders of shares of our Common Stock in connection with a dividend or
distribution of stock or similar event, and the Company provides 15 days prior
notice of any reduction in the Conversion Price; provided,
however, that in no event may the Company reduce the Conversion
Price to be less than the par value of a share of Common Stock.

 

45

 

ARTICLE 6

SUBORDINATION

 

Section 6.01.  Agreement of Subordination.

 

The Company
covenants and agrees, and each Holder of Securities issued hereunder by its
acceptance thereof likewise covenants and agrees, that all Securities shall be
issued subject to the provisions of this Article 6; and each Person
holding any Security, whether upon original issue or upon transfer, assignment or
exchange thereof, accepts and agrees to be bound by such provisions.

 

The payment of
the principal of, and premium, if any, the cash portion of the Conversion
Obligation, if any, and interest on, all Securities (including, but not limited
to, the Fundamental Change Purchase Price with respect to the Securities
subject to purchase in accordance with Article 3 as provided in this
Indenture) issued hereunder shall, to the extent and in the manner hereinafter
set forth, be subordinated and subject in right of payment to the prior payment
in full, in cash or other payment satisfactory to the holders of Senior
Indebtedness, of all Senior Indebtedness, whether outstanding at the date of
this Indenture or thereafter incurred. The Securities shall rank senior to all
Subordinated Indebtedness and equal in right of payment to all Senior
Subordinated Indebtedness.  ‘‘Senior Subordinated Indebtedness’’ means, with respect to
the Company, the Securities and any other Indebtedness that specifically
provides that such Indebtedness is to have the same rank as the Securities in
right of payment and is not subordinated by its terms in right of payment to
any Indebtedness of other obligations of the Company that is not Senior
Indebtedness.  “Subordinated
Indebtedness’’ means, with respect to the Company, any Indebtedness
that provides pursuant to the terms of the instruments creating such
Indebtedness that such Indebtedness is subordinated to the Securities,
including, but not limited to, the Company’s 2 1⁄2% Convertible Subordinated
Notes due December 2006, the Company’s Zero Coupon Convertible
Subordinated Notes due 2033, first putable 2008, and the Company’s Zero Coupon
Convertible Subordinated Notes due 2033, first putable 2010.

 

No provision
of this Article 6 shall prevent the occurrence of any default or Event of
Default hereunder.

 

Section 6.02.  Payments to Holders.

 

No payment
shall be made with respect to the principal of, or premium, if any, the cash
portion of the Conversion Obligation, if any, or interest on, the Securities
(including, but not limited to, the Fundamental Change Purchase Price with
respect to the Securities subject to purchase in accordance with Article 3
as provided in this Indenture), except payments and distributions made by the
Trustee as permitted by the first or second paragraph of Section 6.05, if:

 

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

 

46

 

evidencing such Senior Indebtedness), unless
and until such default shall have been cured or waived or shall have ceased to
exist; or

 

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

 

Subject to the
provisions of Section 6.05, if the Trustee receives any Payment Blockage
Notice pursuant to clause (ii) above, no subsequent Payment Blockage
Notice shall be effective for purposes of this Section unless and until at
least 365 days shall have elapsed since the initial effectiveness of the
immediately prior Payment Blockage Notice and all scheduled payments on the
Securities that have come due have been paid in full in cash.  No nonpayment default that existed or was
continuing on the date of delivery of any Payment Blockage Notice to the
Trustee (unless such default was waived, cured or otherwise ceased to exist and
thereafter subsequently reoccurred) shall be, or be made, the basis for a
subsequent Payment Blockage Notice.

 

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

 

(a)                                  in
the case of a default referred to in clause (i) above, the date upon which
the default is cured or waived or ceases to exist, or

 

(b)                                 in
the case of a default referred to in clause (ii) above, the earlier of the
date on which such default is cured or waived or ceases to exist or 179 days
pass after the date on which the applicable Payment Blockage Notice is
received, if the maturity of such Designated Senior Indebtedness has not been
accelerated, unless this Article 6 otherwise prohibits the payment or
distribution at the time of such payment or distribution.

 

Upon any
payment by the Company, or distribution of assets of the Company of any kind or
character, whether in cash, property or securities, to creditors upon any
dissolution or winding-up or liquidation or reorganization of the Company
(whether voluntary or involuntary) or in bankruptcy, insolvency, receivership
or similar proceedings, all amounts due or to become due upon all Senior
Indebtedness shall first be paid in full, in cash or other payment satisfactory
to the holders of Senior Indebtedness, before any payment is made on account of
the principal of, and premium, if any, the cash portion of the Conversion
Obligation, if any, or interest on, the Securities (except payments made
pursuant to Article 11 from monies deposited with the Trustee pursuant
thereto prior to commencement of proceedings for such dissolution, winding-up,
liquidation or reorganization); and upon any such dissolution or winding-up or
liquidation or reorganization of the Company or bankruptcy, insolvency,
receivership or other proceeding, any payment by the Company, or distribution
of assets of the Company of any kind or character, whether in cash, property or
securities, to which the Holders of the Securities or the Trustee would be
entitled, except for the provision of this Article 6, shall (except as
aforesaid) be paid by the Company or by any receiver, trustee in bankruptcy,
liquidating trustee, agent or other Person making such payment or distribution,
or by the Holders of the Securities or by the Trustee under this Indenture, if
received by them or it, directly to the holders of Senior Indebtedness (pro
rata

 

47

 

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

 

For purposes
of this Article 6, the words, “cash, property or securities” shall not be
deemed to include shares of stock of the Company, as reorganized or readjusted,
or securities of the Company or any other corporation provided for by a plan of
reorganization or readjustment, the payment of which is subordinated at least
to the extent provided in this Article 6 with respect to the Securities to
the payment of all Senior Indebtedness which may at the time be outstanding; provided that (i) the Senior Indebtedness is assumed by
the new corporation, if any, resulting from any reorganization or readjustment
and (ii) the rights of the holders of Senior Indebtedness (other than
leases which are not assumed by the Company or the new corporation, as the case
may be) are not, without the consent of such holders, altered by such
reorganization or readjustment.  The
consolidation of the Company with, or the merger of the Company into, another
corporation or the liquidation or dissolution of the Company following the
conveyance, transfer or lease of its property as an entirety, or substantially
as an entirety, to another corporation upon the terms and conditions provided
for in Article 8 shall not be deemed a dissolution, winding-up,
liquidation or reorganization for the purposes of this Section 6.02 if
such other corporation shall, as a part of such consolidation, merger,
conveyance, transfer or lease, comply with the conditions stated in Article 8.

 

In the event
of the acceleration of the Securities because of an Event of Default, no
payment or distribution shall be made to the Trustee or any Holder of
Securities in respect of the principal of, and premium, if any, the cash
portion of the Conversion Obligation, if any, or interest on, the Securities by
the Company (including, but not limited to, the Fundamental Change Purchase
Price with respect to the Securities subject to purchase in accordance with Article 3
as provided in this Indenture), except payments and distributions made by the
Trustee as permitted by Section 6.05, until all Senior Indebtedness has
been paid in full in cash or other payment satisfactory to the holders of
Senior Indebtedness or such acceleration is rescinded in accordance with the
terms of this Indenture.  If payment of
Securities is accelerated because of an Event of Default, the Company shall
promptly notify holders of Senior Indebtedness of such acceleration.

 

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

 

48

 

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

 

Nothing in
this Section 6.02 shall apply to claims of, or payments to, the Trustee
under or pursuant to Section 10.07. 
This Section 6.02 shall be subject to the further provisions of Section 6.05.

 

Section 6.03.  Subrogation of Securities.

 

Subject to the
payment in full, in cash or other payment satisfactory to the holders of Senior
Indebtedness, of all Senior Indebtedness, the rights of the Holders of the
Securities shall be subrogated to the extent of the payments or distributions
made to the holders of such Senior Indebtedness pursuant to the provisions of
this Article 6 (equally and ratably with the holders of all indebtedness
of the Company which by its express terms is subordinated to other indebtedness
of the Company to substantially the same extent as the Securities are
subordinated and is entitled to like rights of subrogation) to the rights of
the holders of Senior Indebtedness to receive payments or distributions of
cash, property or securities of the Company applicable to the Senior
Indebtedness until the principal of, and premium, if any, the cash portion of
the Conversion Obligation, if any, and interest on, the Securities  shall be paid in full, in cash or other
payment satisfactory to the holders of Senior Indebtedness; and, for the
purposes of such subrogation, no payments or distributions to the holders of
the Senior Indebtedness of any cash, property or securities to which the
Holders of the Securities  or the Trustee
would be entitled except for the provisions of this Article 6, and no
payment over, pursuant to the provisions of this Article 6, to or for the
benefit of the holders of Senior Indebtedness by Holders of the Securities  or the Trustee shall, as between the Company,
its creditors other than holders of Senior Indebtedness and the Holders of the
Securities, be deemed to be a payment by the Company to or on account of the
Senior Indebtedness; and no payments or distributions of cash, property or
securities to or for the benefit of the Holders of the Securities  pursuant to the subrogation provisions of
this Article 6, which would otherwise have been paid to the holders of
Senior Indebtedness, shall be deemed to be a payment by the Company to or for
the account of the Securities.  It is
understood that the provisions of this Article 6 are and are intended
solely for the purposes of defining the relative rights of the Holders of the
Securities, on the one hand, and the holders of the Senior Indebtedness, on the
other hand.

 

Nothing
contained in this Article 6 or elsewhere in this Indenture or in the
Securities is intended to or shall impair, as among the Company, its creditors
other than the holders of Senior Indebtedness and the Holders of the
Securities, the obligation of the Company, which is absolute and unconditional,
to pay to the Holders of the Securities the principal of, and premium, if any,
the cash portion of the Conversion Obligation, if any, and any interest on the
Securities as and when the same shall become due and payable in accordance with
their terms, or is intended to or shall affect the relative rights of the
Holders of the Securities and creditors of the Company other than the holders
of the Senior Indebtedness, nor shall anything herein or therein prevent the
Trustee or the Holder of any Security from exercising all remedies otherwise
permitted by

 

49

 

applicable law upon default
under this Indenture, subject to the rights, if any, under this Article 6
of the holders of Senior Indebtedness in respect of cash, property or
securities of the Company received upon the exercise of any such remedy.

 

Upon any
payment or distribution of assets of the Company referred to in this Article 6,
the Trustee, subject to the provisions of Section 10.01, and the Holders
of the Securities shall be entitled to rely upon any order or decree made by
any court of competent jurisdiction in which such bankruptcy, dissolution,
winding-up, liquidation or reorganization proceedings are pending, or a
certificate of the receiver, trustee in bankruptcy, liquidating trustee, agent
or other person making such payment or distribution, delivered to the Trustee
or to the Holders of the Securities, for the purpose of ascertaining the
persons entitled to participate in such distribution, the holders of the Senior
Indebtedness and other indebtedness of the Company, the amount thereof or
payable thereon and all other facts pertinent thereto or to this Article 6.

 

Section 6.04.  Authorization to Effect Subordination.

 

Each Holder of
a Security by the Holder’s acceptance thereof authorizes and directs the
Trustee on the Holder’s behalf to take such action as may be necessary or
appropriate to effectuate the subordination as provided in this Article 6
and appoints the Trustee to act as the Holder’s attorney-in-fact for any and
all such purposes.  If the Trustee does
not file a proper proof of claim or proof of debt in the form required in any
proceeding referred to in Section 6.03 hereof at least 30 days before the
expiration of the time to file such claim, the holders of any Senior
Indebtedness or their representatives are hereby authorized to file an
appropriate claim for and on behalf of the Holders of the Securities.

 

Section 6.05.  Notice to Trustee.

 

The Company
shall give prompt written notice in the form of an Officers’ Certificate to a
Trust Officer of the Trustee and to any Paying Agent of any fact known to the
Company which would prohibit the making of any payment of monies to or by the
Trustee or any Paying Agent in respect of the Securities pursuant to the
provisions of this Article 6. 
Notwithstanding the provisions of this Article 6 or any other
provision of this Indenture, the Trustee shall not be charged with knowledge of
the existence of any facts which would prohibit the making of any payment of
monies to or by the Trustee in respect of the Securities pursuant to the
provisions of this Article 6, unless and until a Trust Officer of the
Trustee shall have received written notice thereof at the Corporate Trust
Office from the Company (in the form of an Officers’ Certificate) or a
Representative or a holder or holders of Senior Indebtedness or from any trustee
thereof; and before the receipt of any such written notice, the Trustee,
subject to the provisions of Section 10.01, shall be entitled in all
respects to assume that no such facts exist; provided
that, if on a date not less than one Business Day prior to the date upon which
by the terms hereof any such monies may become payable for any purpose
(including, without limitation, the payment of the principal of, or premium, if
any, or interest on, any Security) the Trustee shall not have received, with
respect to such monies, the notice provided for in this Section 6.05,
then, anything herein contained to the contrary notwithstanding, the Trustee
shall have full power and authority to receive such monies and to apply the
same to the purpose for which they were received and shall not be affected by
any notice to the contrary which may be received by it on or after such prior
date.  Notwithstanding anything in this Article 6
to the contrary, nothing shall prevent any

 

50

 

payment by the Trustee to the
Holders of monies deposited with it pursuant to Article 11, and any such
payment shall not be subject to the provisions of Article 6.

 

The Trustee,
subject to the provisions of Section 10.01, shall be entitled to rely on
the delivery to it of a written notice by a Representative or a person
representing himself to be a holder of Senior Indebtedness (or a trustee on
behalf of such holder) to establish that such notice has been given by a
Representative or a holder of Senior Indebtedness or a trustee on behalf of any
such holder or holders.  In the event
that the Trustee determines in good faith that further evidence is required
with respect to the right of any person as a holder of Senior Indebtedness to
participate in any payment or distribution pursuant to this Article 6, the
Trustee may request such Person to furnish evidence to the reasonable
satisfaction of the Trustee as to the amount of Senior Indebtedness held by
such Person, the extent to which such Person is entitled to participate in such
payment or distribution and any other facts pertinent to the rights of such
Person under this Article 6, and if such evidence is not furnished the
Trustee may defer any payment to such Person pending judicial determination as to
the right of such Person to receive such payment.

 

Section 6.06.  Trustee’s Relation to Senior Indebtedness.

 

The Trustee in
its individual capacity shall be entitled to all the rights set forth in this Article 6
in respect of any Senior Indebtedness at any time held by it, to the same
extent as any other holder of Senior Indebtedness, and nothing in Section 10.11
or elsewhere in this Indenture shall deprive the Trustee of any of its rights
as such holder.

 

With respect
to the holders of Senior Indebtedness, the Trustee undertakes to perform or to
observe only such of its covenants and obligations as are specifically set
forth in this Article 6, and no implied covenants or obligations with
respect to the holders of Senior Indebtedness shall be read into this Indenture
against the Trustee.  The Trustee shall
not be deemed to owe any fiduciary duty to the holders of Senior Indebtedness,
and, subject to the provisions of Section 10.01, the Trustee shall not be
liable to any holder of Senior Indebtedness if it shall pay over or deliver to
Holders of Securities, the Company or any other person money or assets to which
any holder of Senior Indebtedness shall be entitled by virtue of this Article 6
or otherwise.

 

Section 6.07.  No Impairment of Subordination.

 

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

 

Section 6.08.  Certain Conversions Deemed Payment.

 

For the
purposes of this Article 6 only, (1) the issuance and delivery of
junior securities upon conversion of Securities in accordance with Article 5
shall not be deemed to constitute a payment or distribution on account of the
principal of, or premium, if any, the cash portion of the

 

51

 

Conversion Obligation, if any,
or interest on, Securities or on account of the purchase or other acquisition
of Securities, and (2) the payment, issuance or delivery of cash (except
in satisfaction of fractional shares pursuant to Section 5.03), property
or securities (other than junior securities) upon conversion of a Security
shall be deemed to constitute payment on account of the principal of such Security.  For the purposes of this Section 6.08,
the term “junior securities” means (a) shares of any stock of any class of
the Company or (b) securities of the Company which are subordinated in
right of payment to all Senior Indebtedness which may be outstanding at the
time of issuance or delivery of such securities to substantially the same
extent as, or to a greater extent than, the Securities are so subordinated as
provided in this Article.  Nothing
contained in this Article 6 or elsewhere in this Indenture or in the
Securities is intended to or shall impair, as among the Company, its creditors
other than holders of Senior Indebtedness and the Holders, the right, which is
absolute and unconditional, of the Holder of any Security to convert such
Security in accordance with Article 5.

 

Section 6.09.  Article Applicable to Paying Agents.

 

If at any time
any Paying Agent other than the Trustee shall have been appointed by the
Company and be then acting hereunder, the term “Trustee”
as used in this Article shall (unless the context otherwise requires) be
construed as extending to and including such Paying Agent within its meaning as
fully for all intents and purposes as if such Paying Agent were named in this Article in
addition to or in place of the Trustee; provided, however,
that the first paragraph of Section 6.05 shall not apply to the Company or
any Affiliate of the Company if it or such Affiliate acts as Paying Agent.

 

Section 6.10.  Senior Indebtedness Entitled to Rely.

 

The holders of
Senior Indebtedness (including, without limitation, Designated Senior
Indebtedness) shall have the right to rely upon this Article 6, and no
amendment or modification of the provisions contained herein shall diminish the
rights of such holders unless such holders shall have agreed in writing
thereto.

 

ARTICLE 7

COVENANTS

 

Section 7.01.  Payment of Securities.

 

The Company
shall promptly make all payments in respect of the Securities on the dates and
in the manner provided in the Securities and this Indenture.  The Make Whole Premium, if any, and an
installment of principal or interest shall be considered paid on the date it is
due if the Paying Agent (other than the Company) holds by 11:00 a.m., New
York City time, on that date money, deposited by the Company or an Affiliate
thereof, sufficient to pay the Make Whole Premium, if any, or such
installment.  The Company shall (in
immediately available funds), to the fullest extent permitted by law, pay
interest on overdue principal (including premium, if any, and the value of the
Make Whole Premium, if any) and overdue installments of interest at the rate
borne by the Securities per annum.

 

52

 

Payment of the
principal of (and premium, if any) and interest on the Securities shall be made
at the office or agency of the Company maintained for that purpose in the
Borough of Manhattan, The City of New York (which shall initially be U.S. Bank
Trust National Association, an Affiliate of the Trustee), or at the Corporate
Trust Office of the Trustee in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts; provided, however, that at the
option of the Company payment of interest may be made by check mailed to the
address of the Person entitled thereto as such address appears in the Register;
provided, further, that a Holder with an
aggregate principal amount in excess of $2,000,000 will be paid by wire
transfer in immediately available funds at the election of such Holder if such
Holder has provided wire transfer instructions to the Company at least 10
Business Days prior to the payment date.

 

Section 7.02.  SEC Reports.

 

The Company
shall file all reports and other information and documents which it is required
to file with the SEC pursuant to Section 13 or 15(d) of the Exchange
Act, and within 15 days after it files them with the SEC, the Company shall
file copies of all such reports, information and other documents with the
Trustee.

 

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

 

Section 7.03.  Compliance Certificates.

 

The Company
shall deliver to the Trustee, within 90 days after the end of each fiscal year
of the Company (beginning with the fiscal year ending December 31, 2005),
an Officers’ Certificate as to the signer’s knowledge of the Company’s compliance
with all conditions and covenants on its part contained in this Indenture and
stating whether or not the signer knows of any default or Event of
Default.  If such signer knows of such a
default or Event of Default, the Officers’ Certificate shall describe the
default or Event of Default and the efforts to remedy the same.  For the purposes of this Section 7.03,
compliance shall be determined without regard to any grace period or
requirement of notice provided pursuant to the terms of this Indenture.

 

Section 7.04.  Further Instruments and Acts.

 

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

 

Section 7.05.  Maintenance of Corporate Existence.

 

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

 

53

 

Section 7.06.  Stay, Extension and Usury Laws.

 

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

 

ARTICLE 8

CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

 

Section 8.01.  Company May Consolidate, etc., only on
Certain Terms.

 

The Company
shall not consolidate with or merge into any other Person (in a transaction in
which the Company is not the surviving corporation) or convey, transfer or
lease its properties and assets substantially as an entirety to any Person,
unless:

 

(1)                                  in
case the Company shall consolidate with or merge into another Person (in a
transaction in which the Company is not the surviving corporation) or convey,
transfer or lease its properties and assets substantially as an entirety to any
Person, the Person formed by such consolidation or into which the Company is
merged or the Person which acquires by conveyance or transfer, or which leases,
the properties and assets of the Company substantially as an entirety shall be
a corporation organized and validly existing under the laws of the United
States of America, any State thereof or the District of Columbia and shall
expressly assume, by an indenture supplemental hereto, executed and delivered
to the Trustee, in form satisfactory to the Trustee, the due and punctual
payment of the principal of, and any premium and interest on, and the Make
Whole Premium, if any, on all the Securities and the performance or observance
of every covenant of this Indenture on the part of the Company to be performed
or observed, and the conversion rights shall be provided for in accordance with
Article 5, by supplemental indenture satisfactory in form to the Trustee,
executed and delivered to the Trustee, by the Person (if other than the
Company) formed by such consolidation or into which the Company shall have been
merged or by the Person which shall have acquired the Company’s assets;

 

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

 

(3)                                  the
Company has delivered to the Trustee an Officers’ Certificate and an Opinion of
Counsel, each stating that such consolidation, merger, conveyance, transfer or
lease and, if a supplemental indenture is required in connection with such transaction,
such

 

54

 

supplemental indenture comply with this Article and that all
conditions precedent herein provided for relating to such transaction have been
complied with.

 

Section 8.02.  Successor Substituted.

 

Upon any
consolidation of the Company with, or merger of the Company into, any other
Person or any conveyance, transfer or lease of the properties and assets of the
Company substantially as an entirety in accordance with Section 8.01, the
successor Person formed by such consolidation or into which the Company is
merged or to which such conveyance, transfer or lease is made shall succeed to,
and be substituted for, and may exercise every right and power of, the Company
under this Indenture with the same effect as if such successor Person had been
named as the Company herein, and thereafter, except in the case of a lease, the
predecessor Person shall be relieved of all obligations and covenants under
this Indenture and the Securities.

 

ARTICLE 9

DEFAULT AND REMEDIES

 

Section 9.01.  Events of Default.

 

An “Event of Default” with respect to Securities shall occur if:

 

(a)                                  the
Company defaults in the payment of interest when the same becomes due and
payable and the default continues for a period of 30 days, whether or not such
payment shall be prohibited by the provisions of Article 6 hereof;

 

(b)                                 the
Company defaults in the payment of any principal of (including, without
limitation, any premium, if any, on), or any Make Whole Premium, if any, on,
any Security when the same becomes due and payable (whether at maturity, on a
Fundamental Change Purchase Date or otherwise), whether or not such payment
shall be prohibited by the provisions of Article 6 hereof;

 

(c)                                  the
Company defaults in the payment of Cash or shares of Common Stock (if any) upon
conversion, when the same becomes due and payable;

 

(d)                                 the
Company fails to comply with any of its other agreements contained in the
Securities or in this Indenture and the default continues for the period and
after the notice specified below;

 

(e)                                  the
Company defaults in the payment of the purchase price of any Security when the
same becomes due and payable, whether or not such payment shall be prohibited
by the provisions of Article 6 hereof;

 

(f)                                    the
Company fails to provide a Fundamental Change Purchase Notice when required by Section 3.01;

 

55

 

(g)                                 any
indebtedness under any bond, debenture, note or other evidence of indebtedness
for money borrowed by the Company or any Significant Subsidiary (all or
substantially all of the outstanding voting securities of which are owned,
directly or indirectly, by the Company) or under any mortgage, indenture or
instrument under which there may be issued or by which there may be secured or
evidenced any indebtedness for money borrowed by the Company or any Significant
Subsidiary (all or substantially all of the outstanding voting securities of
which are owned, directly or indirectly, by the Company) (an “Instrument”) with a principal amount then outstanding in
excess of U.S.$10,000,000, whether such indebtedness now exists or shall
hereafter be created, is not paid at final maturity of the Instrument (either
at its stated maturity or upon acceleration thereof), and such indebtedness is
not discharged, or such default in payment or acceleration is not cured or
rescinded, 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 aggregate 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

 

(h)                                 the
Company or any Significant Subsidiary of the Company, pursuant to or within the
meaning of any Bankruptcy Law:

 

(i)                  commences a
voluntary case or proceeding;

 

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

 

(iii)            consents to the
appointment of a Custodian of it or for all or substantially all of its
property; or

 

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

 

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

 

(i)                  is for relief
against the Company or any Significant Subsidiary of the Company in an
involuntary case or proceeding;

 

(ii)               appoints a
Custodian of the Company or any Significant Subsidiary of the Company for all
or substantially all of the property of the Company or any such Significant
Subsidiary; or

 

(iii)            orders the liquidation
of the Company or any Significant Subsidiary of the Company;

 

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

 

The term “Bankruptcy Law” means Title 11 of the United States Code (or
any successor thereto) or any similar federal or state law for the relief of
debtors.  The term “Custodian”

 

56

 

means any receiver, trustee, assignee, liquidator, sequestrator or
similar official under any Bankruptcy Law.

 

A default
under clause (c) above is not an Event of Default until the Trustee
notifies the Company, or the Holders of at least 25% in aggregate principal
amount of the Securities then outstanding notify the Company and the Trustee,
in writing of the default, and the Company does not cure the default within 60
days after receipt of such notice. The notice given pursuant to this Section 9.01
must specify the default, demand that it be remedied and state that the notice
is a “Notice of Default.”  When any
default under this Section 9.01 is cured, it ceases.

 

The Trustee
shall not be charged with knowledge of any Event of Default unless written
notice thereof shall have been given to a Trust Officer at the Corporate Trust
Office of the Trustee by the Company, a Paying Agent, any Holder or any agent
of any Holder.

 

Section 9.02.  Acceleration.

 

If an Event of
Default (other than an Event of Default specified in clause (g) or (h) of
Section 9.01) occurs and is continuing with respect to any Securities, the
Trustee may, by notice to the Company, or the Holders of at least 25% in
aggregate principal amount of the Securities 
then outstanding may, by notice to the Company and the Trustee, declare
all unpaid principal to the date of acceleration on the Securities  then outstanding (if not then due and
payable) to be due and payable upon any such declaration, and the same shall
become and be immediately due and payable. 
If an Event of Default specified in clause (g) or (h) of Section 9.01
occurs, all unpaid principal of the Securities then outstanding shall ipso
facto become and be immediately due and payable without any declaration or
other act on the part of the Trustee or any Holder.  The Holders of a majority in aggregate
principal amount of the Securities  then
outstanding by notice to the Trustee may rescind an acceleration of Securities  and its consequences if (a) all existing
Events of Default, other than the nonpayment of the principal of the
Securities  which has become due solely
by such declaration of acceleration, have been cured or waived; (b) to the
extent the payment of such interest is lawful, interest (calculated at the rate
of 21⁄2% per annum) on overdue installments of interest and overdue principal,
which has become due otherwise than by such declaration of acceleration, has
been paid; (c) the rescission would not conflict with any judgment or
decree of a court of competent jurisdiction; and (d) all payments due to
the Trustee and any predecessor Trustee under Section 10.07 have been
made.  No such rescission shall affect
any subsequent default or impair any right consequent thereto.

 

Section 9.03.  Other Remedies.

 

If an Event of
Default with respect to Securities occurs and is continuing, the Trustee may,
but shall not be obligated to, pursue any available remedy by proceeding at law
or in equity to collect the payment of the principal of, or any interest on, or
any Make Whole Premium on, the Securities or to enforce the performance of any
provision of the Securities or this Indenture.

 

The Trustee
may maintain a proceeding even if it does not possess any of the Securities or
does not produce any of them in the proceeding. 
A delay or omission by the Trustee or any Securityholder in exercising
any right or remedy accruing upon an Event of Default shall not impair the
right or remedy or constitute a waiver of or acquiescence in the Event of
Default.  No

 

57

 

remedy is exclusive of any other remedy.  All available remedies are cumulative to the
extent permitted by law.

 

Section 9.04.  Waiver of Defaults and Events of Default.

 

Subject to Section 9.07
and 12.02, the Holders of a majority in aggregate principal amount of the
Securities  then outstanding by notice to
the Trustee may waive an existing default or Event of Default and its
consequence, except a default or Event of Default in the payment of the
principal of, or premium, if any, or interest on, or the Make Whole Premium, if
any, on, any Security, a failure by the Company to convert any Securities into
Common Stock or any default or Event of Default in respect of any provision of
this Indenture or the Securities which, under Section 12.02, cannot be
modified or amended without the consent of the Holder of each Security
affected.  When a default or Event of
Default is waived, it is cured and ceases.

 

Section 9.05.  Control by Majority.

 

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

 

Section 9.06.  Limitations on Suits.

 

A Holder of a
Security may not pursue any remedy with respect to this Indenture or the
Securities (except actions for payment of overdue principal, interest or Make
Whole Premium or for the conversion of the Securities pursuant to Article 5)
unless:

 

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

 

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

 

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

 

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

 

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

 

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

 

58

 

Section 9.07.  Rights of Holders to Receive Payment and to
Convert.

 

Notwithstanding
any other provision of this Indenture, the right of any Holder of a Security to
receive payment of the principal of, and interest on, and the Make Whole
Premium, if any, on, the Security, on or after the respective due dates
expressed in the Security and this Indenture, to convert such Security in
accordance with Article 5 and to bring suit for the enforcement of any
such payment on or after such respective dates or the right to convert, is
absolute and unconditional and shall not be impaired or affected without the
consent of the Holder.

 

Section 9.08.  Collection Suit by Trustee.

 

If an Event of
Default in the payment of principal, premium, interest or the Make Whole
Premium, if any, specified in clause (a) or (b) of Section 9.01
occurs and is continuing, the Trustee may recover judgment in its own name and
as trustee of an express trust against the Company or another obligor on the Securities  for the whole amount of principal, premium
and accrued interest remaining unpaid and the Make Whole Premium, if any,
together with, to the extent that payment of such interest is lawful, interest
on overdue principal, on overdue premium, on overdue installments of interest
and on overdue Make Whole Premium, if any, in each case at the rate of 21⁄2% per
annum, and such further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.

 

Section 9.09.  Trustee May File Proofs of Claim.

 

The Trustee
may file such proofs of claim and other papers or documents as may be necessary
or advisable in order to have the claims of the Trustee (including any claim
for the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel) and the Holders allowed in any judicial
proceedings relative to the Company (or any other obligor on the Securities),
its creditors or its property and shall be entitled and empowered to collect
and receive any money or other property payable or deliverable on any such
claims and to distribute the same, and any Custodian in any such judicial
proceeding is hereby authorized by each Holder to make such payments to the
Trustee and, in the event that the Trustee shall consent to the making of such
payments directly to the Holders, to pay to the Trustee any amount due to it
for the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel and any other amounts due the Trustee under Section 10.07,
and to the extent that such payment of the reasonable compensation, expenses,
disbursements and advances in any such proceedings shall be denied for any
reason, payment of the same shall be secured by a lien on, and shall be paid
out of, any and all distributions, dividends, money, securities and other
property which the Holders may be entitled to receive in such proceedings,
whether in liquidation or under any plan of reorganization or arrangement or
otherwise.  Nothing herein contained
shall be deemed to authorize the Trustee to authorize or consent to, or, on
behalf of any Holder, to authorize, accept or adopt, any plan of reorganization,
arrangement, adjustment or composition affecting the Securities or the rights
of any Holder thereof or to authorize the Trustee to vote in respect of the
claim of any Holder in any such proceeding.

 

59

 

Section 9.10.  Priorities.

 

If the Trustee
collects any money pursuant to this Article 9, it shall pay out the money
in the following order:

 

First,
to the Trustee for amounts due under Section 10.07;

 

Second,
to the holders of Senior Indebtedness to the extent required by Article 6;

 

Third,
to Holders for amounts due and unpaid on the Securities for principal, premium,
if any, interest, and Make Whole Premium, if any, ratably, without preference
or priority of any kind, according to the amounts due and payable on the
Securities for principal, premium, if any, interest, and Make Whole Premium, if
any, respectively; and

 

Fourth,
the balance, if any, to the Company.

 

The Trustee
may fix a record date and payment date for any payment to Holders pursuant to
this Section 9.10.

 

Section 9.11.  Undertaking for Costs.

 

In any suit
for the enforcement of any right or remedy under this Indenture or in any suit
against the Trustee for any action taken or omitted by it as Trustee, a court
in its discretion may require the filing by any party litigant in the suit of
an undertaking to pay the costs of the suit, and the court in its discretion
may assess reasonable costs, including reasonable attorneys’ fees and expenses,
against any party litigant in the suit, having due regard to the merits and
good faith of the claims or defenses made by the party litigant.  This Section 9.11 does not apply to a
suit made by the Trustee, a suit by a Holder pursuant to Section 9.07 or a
suit by Holders of more than 10% in aggregate principal amount of the
Securities then outstanding.

 

ARTICLE 10

TRUSTEE

 

Section 10.01.  Duties of Trustee.

 

(a)                                  If
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 its exercise as a prudent person would exercise or
use under the circumstances in the conduct of his or her own affairs.

 

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

 

(i)                  the Trustee need
perform only those duties as are specifically set forth in this Indenture and
no others; 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.  The
Trustee, however, shall examine any certificates and opinions

 

60

 

which by any
provision hereof are specifically required to be delivered to the Trustee to
determine whether or not they conform to the requirements of this Indenture.

 

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

 

(i)                  this paragraph
does not limit the effect of subsection (b) of this Section 10.01;

 

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

 

(iii)            the Trustee shall not
be liable with respect to any action it takes or omits to take in good faith in
accordance with a direction received by it pursuant to Section 9.05.

 

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

 

(e)                                  Every
provision of this Indenture that in any way relates to the Trustee is subject
to subsections (a), (b), (c) and (d) of this Section 10.01.

 

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

 

(g)                                 At
5:00 p.m., New York City time, on each Trading Day, the Trustee shall
print and retain, for a period of 30 Business Days, the Volume Weighted Average
Price for such Trading Day, to the extent such Volume Weighted Average Price is
available on Bloomberg.

 

Section 10.02.  Rights of Trustee.

 

Subject to Section 10.01:

 

(a)                                  The
Trustee may rely conclusively on any document believed by it to be genuine and
to have been signed or presented by the proper person.  The Trustee need not investigate any fact or
matter stated in the document.

 

(b)                                 Before
the Trustee acts or refrains from acting, it may require an Officers’
Certificate or an Opinion of Counsel, which shall conform to Section 13.04(b).  The Trustee shall not be liable for any
action it takes or omits to take in good faith in reliance on such Officers’
Certificate or Opinion of Counsel.

 

(c)                                  The
Trustee may act through its agents and shall not be responsible for the
misconduct or negligence of any agent appointed with due care.

 

61

 

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

 

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

 

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

 

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

 

(h)                                 The
Trustee shall not be deemed to have notice of any Default or Event of Default
unless a Trust Officer of the Trustee has actual knowledge thereof or unless
written notice of any event which is in fact such a default is received by the
Trustee at the Corporate Trust Office, and such notice references the
Securities and this Indenture.

 

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

 

Section 10.03.  Individual Rights of Trustee.

 

The Trustee in
its individual or any other capacity may become the owner or pledgee of
Securities and may otherwise deal with the Company or an Affiliate of the
Company with the same rights it would have if it were not Trustee.  Any Agent may do the same with like
rights.  However, the Trustee is subject
to Section 10.10 and 10.11.

 

Section 10.04.  Trustee’s Disclaimer.

 

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

 

62

 

Section 10.05.  Notice of Default or Events of Default.

 

If a default
or an Event of Default occurs and is continuing and if it is known to the
Trustee, the Trustee shall mail to each Securityholder notice of the default or
Event of Default within 90 days after it occurs.  However, the Trustee may withhold the notice
if and so long as a committee of its Trust Officers in good faith determines
that withholding notice is in the interests of Securityholders, except in the
case of a default or an Event of Default in payment of the principal of, or
interest or premium on, or the Make Whole Premium on, any Security.

 

Section 10.06.  Reports by Trustee to Holders.

 

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

 

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

 

Section 10.07.  Compensation and Indemnity.

 

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

 

The Company
shall indemnify the Trustee or any predecessor Trustee (which for purposes of
this Section 10.07 shall include its officers, directors, employees and
agents) for, and hold it harmless against, any and all loss, liability or
expense, including taxes (other than taxes based upon, measured by or
determined by the income of the Trustee), including reasonable legal fees and
expenses, incurred by it in connection with the acceptance or administration of
its duties under this Indenture or any action or failure to act as authorized
or within the discretion or rights or powers conferred upon the Trustee
hereunder, including the reasonable costs and expenses of the Trustee and its
counsel in defending itself against any claim or liability in connection with
the exercise or performance of any of its powers or duties hereunder.  The Trustee shall notify the Company promptly
of any claim asserted against the Trustee for which it may seek indemnity.  The Company need not pay for any settlement
without its written consent, which shall not be unreasonably withheld.

 

63

 

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

 

To secure the
Company’s payment obligations in this Section 10.07, the Trustee shall
have a senior claim to which the Securities are hereby made subordinate on all
money or property held or collected by the Trustee, except such money or
property held in trust to pay the principal of, and interest, and premium, if
any, on, and the Make Whole Premium, if any, on, the Securities.  The obligations of the Company under this Section 10.07
shall survive the satisfaction and discharge of this Indenture or the
resignation or removal of the Trustee.

 

When the
Trustee incurs expenses or renders services after an Event of Default specified
in clause (7) or (8) of Section 9.01 occurs, the expenses and
the compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law. 
The provisions of this Section shall survive the termination of
this Indenture.

 

Section 10.08.  Replacement of Trustee.

 

The Trustee
may resign by so notifying the Company. 
The Holders of a majority in aggregate principal amount of the
Securities then outstanding may remove the Trustee by so notifying the Trustee
and may, with the Company’s written consent, appoint a successor Trustee.  The Company may remove the Trustee if:

 

(a)                                  the
Trustee fails to comply with Section 10.10;

 

(b)                                 the
Trustee is adjudged a bankrupt or an insolvent;

 

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

 

(d)                                 the
Trustee becomes incapable of acting.

 

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

 

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

 

If the Trustee
fails to comply with Section 10.10, any Holder may petition any court of
competent jurisdiction for the removal of the Trustee and the appointment of a
successor Trustee.

 

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

 

64

 

successor Trustee shall have all the rights, powers and duties of the
Trustee under this Indenture.  A
successor Trustee shall mail notice of its succession to each Holder.

 

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

 

Notwithstanding
replacement of the Trustee pursuant to this Section 10.08, the Company’s
obligations under Section 10.07 shall continue for the benefit of the
retiring Trustee.

 

Section 10.09.  Successor Trustee by Merger, etc.

 

If the Trustee
consolidates with, merges or converts into, or transfers all or substantially
all of its corporate trust assets (including the administration of this
Indenture) to, another corporation, the resulting, surviving or transferee
corporation, without any further act, shall be the successor Trustee, provided
such transferee corporation shall qualify and be eligible under Section 10.10.  Such successor Trustee shall promptly mail
notice of its succession to the Company and each Holder.

 

Section 10.10.  Eligibility; Disqualification.

 

The Trustee
shall always satisfy the requirements of paragraphs (1), (2) and (5) of
TIA Section 310(a).  The Trustee (or
its parent holding company) shall have a combined capital and surplus of at
least $50,000,000.  If at any time the
Trustee shall cease to satisfy any such requirements, it shall resign
immediately in the manner and with the effect specified in this Article 10.  The Trustee shall be subject to the
provisions of TIA Section 310(b). 
Nothing herein shall prevent the Trustee from filing with the SEC the
application referred to in the penultimate paragraph of TIA Section 310(b).

 

Section 10.11.  Preferential Collection of Claims Against
Company.

 

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

 

ARTICLE 11

SATISFACTION AND DISCHARGE

 

Section 11.01.  Satisfaction and Discharge.

 

(a)                                  This
Indenture shall cease to be of further effect, and the Trustee, on demand of
and at the expense of the Company, shall execute proper instruments
acknowledging satisfaction and discharge of this Indenture, when

 

(i)                  all
Securities  theretofore authenticated and
delivered (other than (i) Securities 
which have been destroyed, lost or stolen and which have been replaced
or paid as provided in Section 2.07 and (ii) Securities  for whose payment money has

 

65

 

theretofore
been deposited in trust and thereafter repaid to the Company as provided in Section 11.03)
have been delivered to the Trustee for cancellation;

 

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

 

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

 

Notwithstanding
the satisfaction and discharge of this Indenture, the obligations of the
Company to the Trustee under Section 10.07 shall survive.

 

(b)                                 The
Company may discharge its obligations to pay principal of, and interest, and
premium, if any, on, and the Make Whole Premium, if any, on, the
Securities  when all Securities  not theretofore delivered to the Trustee for
cancellation

 

(i)                  have become due
and payable, or

 

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

 

and the
Company, in the case of clause (i) or (ii) above, has irrevocably,
subject to the limitations set forth in the following sentence, deposited or
caused to be irrevocably, subject to the limitations set forth in the following
sentence, deposited with the Trustee or a Paying Agent (other than the Company
or any of its Affiliates) as trust funds in trust for the purpose cash in an
amount 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 Final Maturity
Date.  In the event that the Company
exercises its right to redeem the Securities 
as provided for in Article 3 herein, the Company shall have the
right to withdraw its funds previously deposited with the Trustee or Paying
Agent pursuant to the immediately preceding sentence.

 

Section 11.02.  Application of Trust Money.

 

Subject to the
provisions of Section 11.03, the Trustee or a Paying Agent shall hold in
trust, for the benefit of the Holders of Securities, all money deposited with
it pursuant to Section 11.01(b) with respect to Securities  and shall apply the deposited money in
accordance with this Indenture and the Securities  to the payment of the principal of, and any interest
and premium on, the Securities.  Money so
held in trust shall not be subject to the subordination provisions of Article 6.

 

Section 11.03.  Repayment to Company.

 

The Trustee
and each Paying Agent shall promptly pay to the Company upon request any excess
money (i) deposited with them pursuant to Section 11.01(b) and (ii) held
by them at any time.

 

66

 

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

 

Section 11.04.  Reinstatement.

 

If the Trustee
or any Paying Agent is unable to apply any money in accordance with Section 11.02
by reason of any legal proceeding or by reason of any order or judgment of any
court or governmental authority enjoining, restraining or otherwise prohibiting
such application, then the Company’s obligations under this Indenture and the
Securities shall be revived and reinstated as though no deposit had occurred
pursuant to Section 11.01(b) until such time as the Trustee or such
Paying Agent is permitted to apply all such money in accordance with Section 11.02;
provided, however, that, if the Company has made any payment of the principal
of, or interest or premium on, any Securities because of the reinstatement of
its obligations, the Company shall be subrogated to the rights of the Holders
of such Securities to receive any such payment from the money held by the
Trustee or such Paying Agent.

 

ARTICLE 12

AMENDMENTS, SUPPLEMENTS AND WAIVERS

 

Section 12.01.  Without Consent of Holders.

 

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

 

(a)                                  to
comply with Section 5.11 and 8.01;

 

(b)                                 to
cure any ambiguity, defect or inconsistency;

 

(c)                                  to
make any other change that does not adversely affect the rights of any
Securityholder;

 

(d)                                 to
comply with the provisions of the TIA;

 

(e)                                  to
add to the covenants of the Company for the equal and ratable benefit of the
Securityholders or to surrender any right, power or option conferred upon the
Company; or

 

(f)                                    to
appoint a successor Trustee.

 

67

 

Section 12.02.  With Consent of Holders.

 

The Company
and the Trustee may amend or supplement the Securities  or this Indenture with the written consent of
the Holders of at least a majority in aggregate principal amount of the
Securities  then outstanding.  The Holders of at least a majority in
aggregate principal amount of the Securities 
then outstanding may waive compliance in a particular instance by the
Company with any provision of the Securities 
or this Indenture without notice to any Securityholder.  However, notwithstanding the foregoing but
subject to Section 12.04, without the written consent of each
Securityholder affected, an amendment, supplement or waiver, including a waiver
pursuant to Section 9.04, may not:

 

(a)                                  change
the stated maturity of the principal of, or the date the Make Whole Premium or
any installment of interest is due on, any Security;

 

(b)                                 reduce
the principal amount of, or any premium or interest on, any Security;

 

(c)                                  reduce
the amount of principal payable upon acceleration of the maturity of any
Security;

 

(d)                                 reduce
the Make Whole Premium payable, if any, on any Security;

 

(e)                                  change
the place or currency of payment of principal of, or any premium, Make Whole
Premium (to the extent that such Make Whole Premium is payable in Cash) or interest
on, any Security;

 

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

 

(g)                                 modify
the provisions with respect to the purchase right of Holders pursuant to Article 3
upon a Fundamental Change;

 

(h)                                 modify
the subordination provisions of Article 6 in a manner materially adverse
to the Holders of Securities;

 

(i)                                     adversely
affect the right of Holders to convert Securities other than as provided in or
under Article 5 of this Indenture;

 

(j)                                     reduce
the percentage of the aggregate principal amount of the outstanding Securities
whose Holders must consent to a modification or amendment;

 

(k)                                  reduce
the percentage of the aggregate principal amount of the outstanding Securities
necessary for the waiver of compliance with certain provisions of this
Indenture or the waiver of certain defaults under this Indenture; and

 

(l)                                     modify
any of the provisions of this Section or Section 9.04, except to
increase any such percentage or to provide that certain provisions of this
Indenture cannot be modified or waived without the consent of the Holder of
each outstanding Security affected thereby.

 

68

 

It shall not
be necessary for the consent of the Holders under this Section 12.02 to
approve the particular form of any proposed amendment, supplement or waiver,
but it shall be sufficient if such consent approves the substance thereof.

 

After an
amendment, supplement or waiver under this Section 12.02 becomes
effective, the Company shall mail to the Holders affected thereby a notice
briefly describing the amendment, supplement or waiver.  Any failure of the Company to mail such
notice, or any defect therein, shall not, however, in any way impair or affect
the validity of any such amendment, supplement or waiver.  An amendment or supplement under this Section 12.02
or under Section 12.01 may not make any change that adversely affects the
rights under Article 6 of any holder of an issue of Senior Indebtedness
unless the holders of that issue, pursuant to its terms, consent to the change.

 

Section 12.03.  Compliance with Trust Indenture Act.

 

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

 

Section 12.04.  Revocation and Effect of Consents.

 

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

 

After an
amendment, supplement or waiver becomes effective, it shall bind every
applicable Securityholder, unless it makes a change described in any of clauses
(a) through (l) of Section 12.02. 
In that case the amendment, supplement or waiver shall bind each Holder
of a Security who has consented to it and every subsequent Holder of a Security
or portion of a Security that evidences the same debt as the consenting Holder’s
Security.

 

Section 12.05.  Notation on or Exchange of Securities.

 

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

 

Section 12.06.  Trustee to Sign Amendments, etc.

 

The Trustee
shall sign any amendment or supplemental indenture authorized pursuant to this Article 12
if the amendment or supplemental indenture does not adversely affect the
rights, duties, liabilities or immunities of the Trustee.  If it does, the Trustee may, in its sole
discretion,

 

69

 

but need not sign it.  In signing
or refusing to sign such amendment or supplemental indenture, the Trustee shall
be entitled to receive, and, subject to Section 10.01, shall be fully
protected in relying upon, an Opinion of Counsel stating that such amendment or
supplemental indenture is authorized or permitted by this Indenture.  The Company may not sign an amendment or
supplement indenture until the Board of Directors approves it.

 

Section 12.07.  Effect of Supplemental Indentures.

 

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

 

ARTICLE 13

MISCELLANEOUS

 

Section 13.01.  Trust Indenture Act Controls.

 

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

 

Section 13.02.  Notices.

 

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

 

If to the Company, to:

Cephalon, Inc.

41 Moores Road,

Frazer, PA 19355

Attention: 
Chief Financial Officer

Facsimile No.:  (610) 738-6258

 

if to the Trustee, to:

 

U.S. Bank National Association

225 Asylum Street, 23rd Floor

Hartford, Connecticut  06103

Attention: 
Corporate Trust Services (Cephalon, Inc.

2.00% Convertible Senior Subordinated Notes
due

June 1, 2015)

Facsimile No.:  (860) 241-6881

 

70

 

Such notices
or communications shall be effective when received.

 

The Company or
the Trustee by notice to the other may designate additional or different
addresses for subsequent notices or communications.

 

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

 

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

 

Section 13.03.  Communications by Holders with Other Holders.

 

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

 

Section 13.04.  Certificate and Opinion as to Conditions
Precedent.

 

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

 

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

 

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

 

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

 

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

 

(ii)               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;

 

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

 

71

 

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

 

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

 

Section 13.05.  Record Date for Vote or Consent of
Securityholders.

 

The Company
(or, in the event deposits have been made pursuant to Section 11.01, the
Trustee) may set a record date for purposes of determining the identity of
Holders entitled to vote or consent to any action by vote or consent authorized
or permitted under this Indenture, which record date shall not be more than 30
days prior to the date of the commencement of solicitation of such action.  Notwithstanding the provisions of Section 12.04,
if a record date is fixed, those persons who were Holders of Securities at the
close of business on such record date (or their duly designated proxies), and
only those persons, shall be entitled to take such action by vote or consent or
to revoke any vote or consent previously given, whether or not such persons
continue to be Holders after such record date.

 

Section 13.06.  Rules by Trustee, Paying Agent,
Registrar and Conversion Agent.

 

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

 

Section 13.07.  Legal Holidays.

 

A “Legal Holiday” is a Saturday, Sunday or a day on which state
or federally chartered banking institutions in New York, New York and the state
in which the Corporate Trust Office is located are not required to be
open.  If a payment date is a Legal
Holiday, payment shall be made on the next succeeding day that is not a Legal
Holiday, and no interest shall accrue for the intervening period.  If a regular record date is a Legal Holiday,
the record date shall not be affected.

 

Section 13.08.  Governing Law.

 

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

 

Section 13.09.  No Adverse Interpretation of Other
Agreements.

 

This Indenture
may not be used to interpret another indenture, loan or debt agreement of the
Company or a Subsidiary of the Company. 
Any such indenture, loan or debt agreement may not be used to interpret
this Indenture.

 

Section 13.10.  No Recourse against Others.

 

All liability
described in paragraph 18 of the Securities of any director, officer, employee
or shareholder, as such, of the Company is waived and released.

 

72

 

Section 13.11.  Successors.

 

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

 

Section 13.12.  Multiple Counterparts.

 

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

 

Section 13.13.  Separability.

 

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

 

Section 13.14.  Table of Contents, Headings, etc.

 

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

 

[SIGNATURE PAGE FOLLOWS]

 

73

 

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

 

	
   

  	
  CEPHALON, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John E. Osborn

  	
   

  
	
   

  	
   

  	
  Name:

  	
  John E. Osborn

  
	
   

  	
   

  	
  Title:

  	
  Senior Vice President,

  General Counsel and

  Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
  CEPHALON, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ J. Kevin Buchi

  	
   

  
	
   

  	
   

  	
  Name:

  	
  J. Kevin Buchi

  
	
   

  	
   

  	
  Title:

  	
  Senior Vice President &

  Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  U.S. BANK
  NATIONAL

  ASSOCIATION,

  as Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Arthur L. Blakeslee

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Arthur L. Blakeslee

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
					

 

D-1Exhibit 4.2

 

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

 

 

CEPHALON, INC.

 

	
  CUSIP: 156708AP4

  	
  No.      

  

 

2.00% CONVERTIBLE SENIOR SUBORDINATED NOTES DUE JUNE 1, 2015

 

Cephalon, Inc.,
a Delaware corporation (the “Company”, which term shall include any successor
corporation under the Indenture referred to on the reverse hereof), promises to
pay to Cede & Co., or registered assigns, the principal sum of          
hundred million dollars ($                  )
on June 1, 2015 or such greater or lesser amount as is indicated on the Schedule of
Exchanges of Notes on the other side of this Note.

 

This
Note is convertible as specified on the other side of this Note. Additional
provisions of this Note are set forth on the other side of this Note.

 

SIGNATURE PAGE FOLLOWS

 

 

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

 

	
   

  	
  CEPHALON,
  INC.

  
	
   

  	
   

  
	
   

  	
  By:

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
  Trustee’s Certificate of
  Authentication: This is one of the Securities referred to in the
  within-mentioned Indenture.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  U.S. BANK
  NATIONAL ASSOCIATION,

      as
  Trustee

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
                  Authorized
  Signatory

  	
   

  
				

 

 

CEPHALON, INC.

 

2.00% CONVERTIBLE SENIOR SUBORDINATED NOTES DUE JUNE 1,
2015

 

1.             INTEREST AMOUNTS

 

Cephalon, Inc.,
a Delaware corporation (the “Company”, which term shall include any successor
corporation under the Indenture hereinafter referred to), will pay interest at
a rate of 2.00% per annum, on the principal amount of this Note payable as
provided in the Indenture.

 

2.             METHOD OF PAYMENT

 

The
Company shall pay any interest on this Note to the person who is the Holder of
this Note at the close of business on May 15 or November 15, as the
case may be, next preceding the related interest payment date. The Holder must
surrender this Note to a Paying Agent to collect payment of principal and
premium, if any.  Interest on the Note
will be paid at a rate of 2.00% per annum, payable semi-annually in arrears on June 1
and December 1 of each year, or if any such day is not a Business Day, the
immediately following Business Day, commencing December 1, 2005.  Interest is computed on the basis of a 360-day
year comprised of twelve 30-day months. 
In the event of the maturity, conversion or purchase of the Note by the
Company at the option of the Holder, interest shall cease to accrue on the
Note.  However, the Company will pay
interest on the maturity date to a Holder of record of the Note on the record
date immediately preceding the stated maturity date regardless of whether such
Holder converts the Note.

 

The
Company will pay principal, premium, if any, and interest in money of the
United States that at the time of payment is legal tender for payment of public
and private debts. The Company may, however, pay principal, premium, if any,
and interest in respect of any Certificated Security by check or wire transfer
payable in such money; provided, however,
that a Holder with an aggregate principal amount in excess of $2,000,000 will
be paid by wire transfer in immediately available funds at the election of such
Holder if such Holder has provided wire transfer instructions to the Company.
The Company may mail a check for interest to the Holder’s registered address.
Notwithstanding the foregoing, so long as this Note is registered in the name
of a Depositary or its nominee, all payments hereon shall be made by wire
transfer of immediately available funds to the account of the Depositary or its
nominee.

 

3.             PAYING AGENT, REGISTRAR AND CONVERSION AGENT

 

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

 

4.             INDENTURE, LIMITATIONS

 

This
Note is one of a duly authorized issue of Securities of the Company designated
as its 2.00% Convertible Senior Subordinated Notes due June 1, 2015 (the “Notes”),
issued under an Indenture, dated as of June 7, 2005 (together with any
supplemental indentures thereto, the “Indenture”), between the Company and the
Trustee. The terms of this Note include those stated in the Indenture and those
required by or made part of the Indenture by reference to the Trust Indenture
Act of 1939, as amended, as in effect on the date of the Indenture. This Note
is subject to all such terms, and the Holder of this Note is referred to the
Indenture and said Act for a statement of them.

 

The
Notes are senior subordinated unsecured obligations of the Company limited,
except as set forth in the Indenture, to up to $800,000,000 aggregate principal
amount (or up to $920,000,000 if the underwriters exercise their over-allotment
option with respect to the initial

 

 

distribution of Notes in
full). The Indenture does not limit other debt of the Company, secured or
unsecured, including Senior Indebtedness.

 

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

 

At
the option of the Holder and subject to the terms and conditions of the
Indenture, the Company shall become obligated to purchase all or any part
specified by the Holder (so long as the principal amount of such part is $1,000
or an integral multiple of $1,000 in excess thereof) of the Notes held by such
Holder on the date that is 30 Business Days after the occurrence of a
Fundamental Change, at a purchase price equal to 100% of the principal amount
thereof, together with any accrued interest up to, but excluding, the
Fundamental Change Purchase Date, payable in cash. The Holder shall have the
right to withdraw any Fundamental Change Purchase Notice (in whole or in a
portion thereof that is $1,000 or an integral multiple of $1,000 in excess
thereof) at any time prior to 5:00 p.m., New York City time, on the second
Trading Day next preceding the Fundamental Change Purchase Date by delivering a
written notice of withdrawal to the Paying Agent in accordance with the terms
of the Indenture.

 

6.             CONVERSION

 

A
Holder of a Note may convert the principal amount of such Note (or any portion
thereof equal to $1,000 or any integral multiple of $1,000 in excess thereof)
into cash and shares of Common Stock at any time prior to the close of business
on June 1, 2015, subject to the conditions, if any, set forth in Section 5.1
of the Indenture; provided, however,
that, if the Note is subject to purchase upon a Fundamental Change, the
conversion right will terminate at the close of business on the second Trading
Day immediately preceding the Fundamental Change Purchase Date for such Note or
such earlier date as the Holder presents such Note for purchase (unless the
Company shall default in making the Fundamental Change Purchase Price when due,
in which case the conversion right shall terminate at the close of business on
the date such default is cured and such Note is purchased).

 

The
initial Conversion Price is $46.70 per share, and the initial Conversion Rate
is 21.4133 shares of Common Stock, in each case subject to adjustment under
certain circumstances as provided in the Indenture. No fractional shares will
be issued upon conversion; in lieu thereof, the Company shall deliver a number
of shares of Common Stock equal to the aggregate of the fractional shares
otherwise deliverable for each of the twenty Trading Days following the
Conversion Date (rounding down to the nearest whole number) and shall pay an
amount in cash for the remainder based upon the Volume Weighted Average Price
of the Common Stock on the twentieth Trading Day following the Conversion Date.

 

To
convert a Note, a Holder must (a) complete and manually sign the
conversion notice set forth below and deliver such notice to a Conversion
Agent, (b) surrender the Note to a Conversion Agent, (c) furnish
appropriate endorsements and transfer documents if required by a Registrar or a
Conversion Agent and (d) pay any transfer or similar tax, if required. A
Holder may convert a portion of a Note equal to $1,000 or any integral multiple
thereof.

 

A
Note in respect of which a Holder had delivered a Fundamental Change Purchase
Notice exercising the option of such Holder to require the Company to purchase
such Note may be converted only if the Fundamental Change Purchase Notice is
withdrawn in accordance with the terms of the Indenture.

 

 

7.             SUBORDINATION

 

The
indebtedness evidenced by the Notes is, to the extent and in the manner
provided in the Indenture, subordinate and junior in right of payment to the
prior payment in full of all Senior Indebtedness of the Company. Any Holder by
accepting this Note agrees to and shall be bound by such subordination
provisions and authorizes the Trustee to give them effect. In addition to all
other rights of Senior Indebtedness described in the Indenture, the Senior
Indebtedness shall continue to be Senior Indebtedness and entitled to the
benefits of the subordination provisions irrespective of any amendment,
modification or waiver of any terms of any instrument relating to the Senior
Indebtedness or any extension or renewal of the Senior Indebtedness.

 

8.             DENOMINATIONS, TRANSFER, EXCHANGE

 

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

 

9.             PERSONS DEEMED OWNERS

 

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

 

10.           UNCLAIMED MONEY

 

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

 

11.           AMENDMENT, SUPPLEMENT AND WAIVER

 

Subject
to certain exceptions set forth in the Indenture, the Notes and the Indenture
may be amended or supplemented with the consent of the Holders of at least a
majority in aggregate principal amount of the Notes then outstanding, and an
existing default or Event of Default with respect to the Notes and its
consequence or compliance with any provision of the Notes or the Indenture may
be waived in a particular instance with the consent of the Holders of a
majority in aggregate principal amount of the Notes then outstanding. Without
the consent of or notice to any Holder, the Company and the Trustee may amend
or supplement the Indenture or the Notes to, among other things, cure any
ambiguity, defect or inconsistency or make any other change that does not
adversely affect the rights of any Holder.

 

12.           SUCCESSOR ENTITY

 

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

 

13.           DEFAULTS AND REMEDIES

 

Under
the Indenture, an Event of Default with respect to the Notes includes: (i) default
for 30 days in payment of any interest on any Notes; (ii) default in
payment of any principal (including, without limitation, any premium, if any)
on, or any Make Whole Premium, if any, on, the Notes

 

 

when due; (iii) failure
by the Company for 60 days after notice to it to comply with any of its other
agreements contained in the Notes or in the Indenture with respect to the
Notes; (iv) default in the payment of certain indebtedness of the Company
or a Significant Subsidiary and (v) certain events of bankruptcy,
insolvency or reorganization of the Company or any Significant Subsidiary. If
an Event of Default with respect to the Notes (other than as a result of
certain events of bankruptcy, insolvency or reorganization specified in the
Indenture) occurs and is continuing, the Trustee or the Holders of at least 25%
in aggregate principal amount of the Notes then outstanding may declare all
unpaid principal to the date of acceleration on the Notes then outstanding to
be due and payable immediately, all as and to the extent provided in the
Indenture. If an Event of Default occurs as a result of certain events of bankruptcy,
insolvency or reorganization specified in the Indenture, unpaid principal of
the Notes then
outstanding shall become due and payable immediately without any declaration or
other act on the part of the Trustee or any Holder, all as and to the extent
provided in the Indenture. Holders may not enforce the Indenture or the Notes
except as provided in the Indenture. The Trustee may require indemnity
satisfactory to it before it enforces the Indenture or the Notes. Subject to
certain limitations, Holders of a majority in aggregate principal amount of the
Notes then outstanding may direct the Trustee in its exercise of any trust or
power. The Trustee may withhold from Holders notice of any continuing default
(except a default in payment of principal or any premium, interest or Make
Whole Premium) if it determines that withholding notice is in their interests.
The Company is required to file periodic reports with the Trustee as to the
absence of default.

 

14.           TRUSTEE DEALINGS WITH THE COMPANY

 

U.S.
Bank National Association, the Trustee under the Indenture, in its individual
or any other capacity, may make loans to, accept deposits from and perform
services for the Company or an Affiliate of the Company and may otherwise deal
with the Company or an Affiliate of the Company, as if it were not the Trustee.

 

15.           NO RECOURSE AGAINST OTHERS

 

A
director, officer, employee or shareholder, as such, of the Company shall not
have any liability for any obligations of the Company under the Notes or the
Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. The Holder of this Note by accepting this Note
waives and releases all such liability. The waiver and release are part of the
consideration for the issuance of this Note.

 

16.           AUTHENTICATION

 

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

 

17.           ABBREVIATIONS AND DEFINITIONS

 

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

 

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

 

18.           INDENTURE TO CONTROL; GOVERNING LAW

 

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

 

 

The
Company will furnish to any Holder, upon written request and without charge, a
copy of the Indenture. Requests may be made to: Cephalon, Inc., 41 Moores
Road, Frazer, PA 19355, (610) 344-0200, Attention: General Counsel.

 

 

ASSIGNMENT FORM

 

To
assign this Note, fill in the form below:

 

I
or we assign and transfer this Note to

 

	
   

  	
   

  
	
   

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

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

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

  
	
   

  	
   

  
	
   

  	
  and irrevocably appoint

  
	
   

  	
   

  
	
   

  	
   

  
	
   

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

  
	
   

  	
   

  
	
   

  	
   

  	
  Your Signature:

  
	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
   

  
	
   

  	
   

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

  
	
   

  	
   

  	
   

  
	
   

  	
  *Signature guaranteed by:

  
	
   

  	
   

  
	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  
  

  

  

  
	
   

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

  
				

 

 

CONVERSION NOTICE

 

	
   

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

  
	
   

  	
   

  
	
   

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

  
	
   

  	
   

  
	
   

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

  
	
   

  	
   

  
	
   

  	
   

  
	
   

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

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

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

  
	
   

  	
   

  
	
   

  	
   

  	
  Your Signature:

  
	
  Date:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

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

  
	
   

  	
   

  	
   

  
	
   

  	
  *Signature guaranteed by:

  
	
   

  	
   

  
	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  
  

  

  

  
	
   

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

  
				

 

 

OPTION TO ELECT REPURCHASE

UPON A FUNDAMENTAL CHANGE

 

To: Cephalon, Inc.

 

The
undersigned registered owner of this Security hereby irrevocably acknowledges
receipt of a notice from Cephalon, Inc. (the “Company”) as to the
occurrence of a Fundamental Change with respect to the Company and requests and
instructs the Company to redeem the entire principal amount of this Security,
or the portion thereof (which is $1,000 or an integral multiple thereof) below
designated, in accordance with the terms of the Indenture referred to in this
Security at a purchase price equal to the Fundamental Change Purchase Price,
payable in Cash.

 

 

	
  Dated:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Signature(s) must be
  guaranteed by a qualified guarantor institution with membership in an
  approved signature guarantee program pursuant to Rule 17Ad-15 under the
  Securities Exchange Act of 1934.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Signature Guaranty

  
	
   

  	
   

  
	
  Principal amount to be
  redeemed

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

  	
   

  

 

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

 

 

SCHEDULE OF EXCHANGES OF NOTES

 

The
following exchanges, redemptions, repurchases or conversions of a part of this
global Note have been made:

 

	
  Principal Amount

  of this Global Note

  Following Such

  Decrease Date

  of Exchange (or Increase)

  	
   

  	
  Authorized

  Signatory of

  Securities

  Custodian

  	
   

  	
  Amount of Decrease in

  Principal Amount

  of this Global Note

  	
   

  	
  Amount of

  Increase in

  Principal Amount

  of this Global Note

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