Document:

CHMS EX10.11

    Exhibit
      10.11

     

    

     

    CONVERSION/SETTLEMENT
      AGREEMENT

     

    This
      Conversion/Settlement Agreement (this “Agreement”) is made effective as of
      February 12, 2007 (the “Effective Date”), by and among the Debentureholders (as
      defined below) listed on Schedule “A”, attached hereto and made a part hereof
      (collectively, referred to as the “Debentureholders”), and China Mobility
      Solutions, Inc., a Florida corporation (the “Company”).

     

     

    RECITALS

     

    WHEREAS,
      Company and the Debentureholders entered into certain Debenture Purchase and
      Warrant Agreements, dated June 30, 2005 (the “Purchase Agreement”), whereby
      Company issued and delivered to Debentureholders that certain Senior Convertible
      Debenture, dated August 15, 2005, in the aggregate original principal amount
      of
      $3,350,000 (“Debenture”). Contemporaneously therewith Company and
      Debentureholders entered into that certain Registration Rights Agreement (the
      “Registration Agreement”), whereby Company agreed to file a registration
      statement with the Securities and Exchange Commission (“SEC”), to register the
      shares of Company’s common stock issuable upon conversion of the
      Debenture;

     

    WHEREAS,
      the Purchase Agreement, the Debenture, the Registration Agreement and all other
      related agreements or instruments evidencing or securing the foregoing are
      hereinafter sometimes collectively referred to as the “Debenture
      Documents”;

     

    WHEREAS,
      the parties hereto desire to reduce the conversion price of the Debentures
      in
      accordance with the terms and conditions of this Agreement; 

     

    WHEREAS,
      in consideration for the Company reducing the conversion price of the
      Debentures, the Debentureholders have agreed to enter into this Agreement in
      settlement of any current or potential litigation between the parties.

     

    NOW
      THEREFORE, in exchange for good and valuable consideration, the receipt and
      sufficiency of which are hereby acknowledged, and intending to be legally bound,
      the Debentureholders and the Company agree as follows:

     

     

    AGREEMENT

     

    1.
      Adjustment to Conversion Price. The conversion price of the Debentures, as
      set
      forth in Section 7(d) of the Debentures, is currently $.30 per share (“Current
      Conversion Price”), pursuant to a reduction under that certain Waiver/Settlement
      Agreement, dated May 4, 2006. Upon meeting the Closing Conditions in Section
      5
      below, the Current Conversion Price shall be further reduced to $.05 per share
      (the “Reduced Conversion Price”). 

     

    2.
      Conversion. Upon satisfaction of the Closing Conditions required by Section
      5
      herein:

     

    (a)
      The
      undersigned Debentureholder has previously converted $150,000 principal amount
      of Debentures (the “Prior Conversion”) held by the Debentureholders into 500,000
      shares of common stock, $.001 par value of the Company (the "Common Stock")
      at
      the Current Conversion Price. The Debentureholder shall receive an additional
      2,500,000 shares of Common Stock for such Prior Conversion, as determined under
      the Debenture using the Reduced Conversion Price, subject to the provisions
      of
      Section 11, below. 

     

    (b)
      The
      Company shall elect to convert all accrued but unpaid penalties and interest
      owed by the Company relating to all Debentures held by the Debentureholder
      into
      1,420,000 shares of Common Stock (“Interest Shares”) at the Reduced Conversion
      Price, as evidenced by their execution of this Agreement (collectively, the
      “Conversion/Settlement Agreements”), of which 380,000 Interest Shares shall be
      issuable upon Closing and the remaining 1,040,000 Interest Shares shall remain
      unissued following the Closing and shall only be issued, in full or in part,
      upon sixty-one (61) days prior written notice by the Debentureholder to the
      Company. With respect to the Interest Shares, the holding period under Rule
      144
      commenced on August 15, 2005, date upon which the Debentures where acquired
      from
      the Company with the full purchase price paid by Debentureholder. 

     

    (c)
      No
      further penalties and interest shall be owed by the Company to the
      Debentureholder for any defaults prior to the Effective Date of this Agreement.
      The undersigned Debentureholder shall have the right to make subsequent
      conversions at any time of the remaining principal amount of the Debentures
      not
      previously converted (“Supplemental Conversion Amount”), into that certain
      number of shares of Common Stock, as determined under the Debenture using the
      Reduced Conversion Price.

     

    (d)
      On or
      after the Closing Date, subject to the terms and conditions of this Agreement,
      the Company will issue, convey, transfer and assign to the Debentureholder
      and
      Debentureholder shall accept from the Company all right, title and interest
      in
      and to that certain number of Common Stock shares issuable upon the conversion
      of the Supplemental Conversion Amount, or any unconverted portions thereof
      at
      such time, or from time to time, as the Debentureholder elects to convert that
      specific Supplement Conversion Amount detailed in the Notice(s) of Conversion
      submitted to the Company’s transfer agent. The Debentureholder shall not be
      required to convey, transfer and assign to the Company all right, title and
      interest in and to the Debentures and any Debenture Documents held by
      Debentureholder unless and until it elects to convert one hundred percent (100%)
      of the principal amount of the Debentures under the Supplemental Conversion
      Amount, in which case the Debentureholder shall exchange the Debentures and
      any
      Debenture Document to the Company (without the need to submit the Notice(s)
      of
      Conversion).

     

    3.
      Indemnification. The Company shall indemnify and hold harmless the
      Debentureholder (and its respective officers, directors, members, managers,
      partners, employees, agents, and representatives (the “Representatives”))
      against any and all claims, actions, losses, costs, damages, lawsuits,
      deficiencies, demands, taxes, expenses, injuries, controversies, judgments,
      and
      liabilities whatsoever, known or unknown, at law or in equity (each, a “Claim”)
      incurred or suffered by any of the aforementioned solely in connection with
      matters arising under, or directly relating to, the Conversion/Settlement
      Agreement and the Debenture Purchase and Warrant Agreement, dated June 30,
      2005,
      between the Company and Debentureholder. For the avoidance of doubt, such
      indemnification shall not extend to special, indirect, incidental, punitive,
      or
      consequential damages, including loss of profits, that may be incurred or
      suffered by the Debentureholder and/or its respective
      Representatives.

     

    4.
      Representations, Warranties and Covenants:

     

    (a)
      Of
      the Company. The Company hereby makes the following representations, warranties
      and covenants in favor of the Debentureholders who are a party to the
      Agreement:

     

    (i)
      Authorized and Validly Issued Shares. Upon the Closing and (i) the exchange
      of
      Debentures, or (ii) the receipt of the Notice of Conversion in accordance with
      Section 2(d) such shares of the Common Stock shall constitute duly authorized
      shares of the capital stock of the Company, duly authorized by the board of
      directors of the Company, and shall be deemed validly issued and outstanding,
      fully paid, nonassessable and free and clear of all liens and encumbrances
      arising through the actions of the Company or its directors, officers, employees
      or agents.

     

    (ii)
      Restrictions on Issuance of Securities. Upon the Closing, the Company shall
      promptly instruct its transfer agent to issue the requisite shares of Common
      Stock pursuant to the conversion of the Debentures in accordance with this
      Agreement. All shares of Common Stock issued by the transfer agent shall
      constitute restricted securities at the time of issuance and shall be endorsed
      with the legends substantially in the form set forth below in Section
      4(b)(viii), subject to the following:

     

    (A)
      Provided the Company remains current with its reporting requirements under
      the
      Securities Exchange Act of 1934 at the time of issuance by the transfer agent,
      the Company shall approve the removal of restrictive legends from those shares
      of Common Stock transferred or issued pursuant to this Agreement under Rule
      144.

     

    (B)
      The
      Company shall make whatever filings are necessary with the SEC, whether by
      way
      of supplement or post-effective amendment to its current Amendment No. 4 to
      the
      Form SB-2 registration statement, filed with the SEC on July 25, 2006 (the
      “Current Registration Statement”) concerning the Underlying Common Stock, to
      permit the issue of common stock at the Reduced Conversion Price of $.05 per
      share; and

     

    (C)
      The
      Company shall use its commercial best efforts to file, at its cost, a second
      registration statement (“Second Registration Statement”) covering the Common
      Stock that is not registered under the Current Registration Statement and the
      registration of Interest Shares, and shall seek to make it declared effective
      by
      the SEC on a timely basis not to exceed 75 days from the Closing (180 days
      if
      reviewed by the SEC). 

     

    (iii)
      “Most Favored Nation”; Piggyback Rights. If at any time within 18 months of the
      Closing Date, the Company shall offer, issue or agree to issue any Common Stock
      or Interest Shares to any person or entity at a price per share or conversion
      or
      exercise price per share which shall be less than the Reduced Conversion Price,
      the Company shall lower the Reduced Conversion Price to the per share price
      of
      any equity offering made by the Company and shall issue such number of Common
      Stock and/or Interest Shares to the Debentureholders to reduce the Reduced
      Conversion Price to that of such subsequent offering. In the event of any such
      equity offering, the Company shall promptly give written notice to
      Debentureholders of the proposed registration of those additional shares under
      the Securities Act and shall offer such Debentureholders the right to request
      inclusion of the Common Stock held by such Debentureholders in the Second
      Registration Statement.

     

    (iv)
      Authorization. Company has full right, power and authority to enter into,
      execute, deliver and perform its obligations under this Agreement without the
      necessity of obtaining any consents or approvals of, or the taking of any other
      action with respect to, any third parties (or if such consents, approvals or
      other actions are required, the same have been accomplished prior to the date
      hereof). 

     

    (v)
      Binding Agreement. This Agreement constitutes the valid, binding and enforceable
      agreement of Company in accordance with its terms, except as such enforceability
      may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
      or similar laws affecting the enforcement of creditor’s or secured party’s
      rights generally and except as enforceability may be subject to general
      principles of equity, whether applied in a proceeding at law or in
      equity.

     

    (vi)
      No
      Conflict. The execution, delivery, and performance of this Agreement by the
      Company will not conflict with, or result in the breach or termination of,
      of
      constitute a default under, any lease, agreement, commitment, or other
      instrument to which it is a party. The transactions, or any part thereof,
      contemplated by this Agreement are not restrained or prohibited by any
      injunction, stay, order or judgment rendered by any court or other governmental
      agency, and, to the best of the Company’s knowledge no proceeding has been
      instituted or is pending in which any person or entity seeks to restrain such
      transactions, or any part thereof, and no threat has been made by any person
      or
      entity to seek any such restraint, attachment, sequester or other
      remedy.

     

    (b)
      Of
      the Debentureholders:

     

    (i)
      Litigation. Upon the Closing (as defined), each Debentureholder shall terminate
      any and all current, pending, or threatened litigation with the Company to
      which
      they are or may become a party, without prejudice to reinstatement if and only
      if the Company defaults in its obligations under this Agreement. For any such
      matters, the Debentureholder shall procure a stipulation of discontinuance
      (the
“Stipulation”) along with the execution and delivery of this Agreement. The
      Stipulation shall be without prejudice solely with respect to the item
      enumerated above.

     

    (ii)
      Voting. In any vote required or requested of Debentureholders under the
      Company’s By-laws, Certificate of Incorporation, or applicable law, each
      Debentureholder shall refrain from (a) voting against any nominee to the Board
      of Directors of the Company, and (b) any proposal designated by the current
      management of the Company that does not affect the Conversion.

     

    (iii)
      Cooperation. Each Debentureholder shall provide the Company with any and all
      information needed to register the shares of Common Stock and the Interest
      Shares with the SEC.

     

    (iv)
      Title to Debentures. Each Debentureholder represents and warrants that it is
      the
      owner of record of the Debentures.

     

    (v)
      Authorization. Debentureholder has the full power and authority to enter into
      this Agreement, and this Agreement, when executed and delivered, will constitute
      a valid and legally binding obligation of the Debentureholder. All
      organizational action required to be taken to authorize (a) the execution and
      delivery of this Agreement by the Debentureholder and (b) the performance by
      such Debentureholder of the Debentureholder's obligations hereunder has been
      taken.

     

    (vi)
      Binding Agreement. This Agreement constitutes the valid, binding and enforceable
      agreement of the Debentureholders in accordance with its terms, except as such
      enforceability may be limited by applicable bankruptcy, insolvency,
      reorganization, moratorium or similar laws affecting the enforcement of
      creditor’s or secured party’s rights generally and except as enforceability may
      be subject to general principles of equity, whether applied in a proceeding
      at
      law or in equity.

     

    (vii)
      No
      Conflict. The execution, delivery, and performance of this Agreement by
      Debentureholders will not conflict with, or result in the breach or termination
      of, of constitute a default under, any lease, agreement, commitment, or other
      instrument to which it is a party. The transactions, or any part thereof,
      contemplated by this Agreement are not restrained or prohibited by any
      injunction, stay, order or judgment rendered by any court or other governmental
      agency, and, to the best of the Debentureholders knowledge no proceeding has
      been instituted or is pending in which any person or entity seeks to restrain
      such transactions, or any part thereof, and no threat has been made by any
      person or entity to seek any such restraint, attachment, sequester or other
      remedy.

     

    (viii)
      Legends. Notwithstanding the Company’s obligation to register the Shares of
      Common Stock as Interest Shares with the SEC, upon conversion of the Debentures,
      each certificate or other document evidencing any of the Common Stock or
      Interest Shares shall be endorsed with the legends substantially in the form
      set
      forth below: 

     

    THE
      SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
      ACT
      OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED, OR
      HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER SUCH ACT, OR UNLESS CHINA
      MOBILITY SOLUTIONS, INC. (THE “COMPANY") HAS RECEIVED AN OPINION OF COUNSEL OR
      OTHER EVIDENCE, SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH
      REGISTRATION IS NOT REQUIRED. 

     

    5.
      Closing Condition; Conversion. The closing of the Conversion (the “Closing”)
      shall occur at such time as the Company has executed this Agreement and
      delivered the number of shares of Common Stock set forth on the signature page
      hereof. The date upon which the Conversion occurs shall be deemed the closing
      date (“Closing Date”). 

     

    6.
      Escrow. Prior to Closing, Debentureholders shall submit the Debenture Documents
      and the executed Conversion/Settlement Agreements to Phillips Nizer LLP, as
      escrow agent (the “Escrow Agent”). The Company shall be solely responsible for
      the fees and expenses of the Escrow Agent. In the event the Closing Conditions
      in Section 5 are not met or the Agreement is terminated, the Escrow Agent shall
      be instructed to return the Conversion/Settlement Agreements promptly to their
      original sources.

     

    7.
      Release. To all whom these presents shall come or may concern, know that the
      Debentureholders on behalf of themselves and their heirs, executors,
      administrators, successors, assigns, attorneys, agents, and affiliates, and
      all
      of their respective officers, directors, members, managers, partners, employees,
      shareholders, heirs, executors, administrators, successors and assigns and
      agents (collectively, the “Releasor”) effective upon the satisfaction by the
      Company of all obligations under the Debenture and/or upon final conversion
      of
      the Debenture by the undersigned Debentureholder shall release and forever
      discharge the Company and all of its officers, directors, members, managers,
      partners, employees, shareholders, heirs, executors, administrators, successors
      and assigns and agents, including, but not limited to, placement agents and
      financial advisors, from any and all claims, counterclaims, demands, actions,
      causes of actions, suits, debts, costs, dues, sums of money, accounts, bonds,
      bills, specialties, covenants, contracts, controversies, agreements, promises,
      variances, trespasses, damages, judgments, executions, expenses and liabilities
      whatsoever, known or unknown, at law or in equity (“Claims”), irrespective of
      whether such Claims arise out of contract, tort, violation of laws or
      regulations or otherwise, including any derivative suits on behalf of the
      Company, which Releasors, individually or collectively, ever had, now has or
      hereafter can, shall or may have against the Company, upon, or by reason of
      any
      matter, cause or thing whatsoever from the beginning of the world to and
      including the date of this Release solely in connection with matters arising
      under, or directly relating to, the Conversion/Settlement Agreement and/or
      the
      Debenture Purchase and Warrant Agreement, dated June 30, 2005, between the
      Company and Debentureholder. For the avoidance of doubt, such indemnification
      shall not extend to special, indirect, incidental, punitive, or consequential
      damages, including loss of profits, that may be incurred or suffered by the
      Debentureholder and/or its respective Representatives. Without limiting the
      generality of the foregoing, the term “Claims” shall include, without
      limitation, any loss, liability, expense and/or detriment, of any kind or
      character, in any way arising out of, connected with, or resulting from the
      acts
      or omissions of the Company or any of them, including, without limitation,
      the
      contracting for, charging, taking, reserving, collecting or receiving interest
      in excess of the highest lawful rate, any breach of fiduciary duty, breach
      of
      any duty of fair dealing, breach of confidence, cause of action or defenses
      based on the negligence of the Company or the Company’s predecessors, breach of
      funding commitment, undue influence, duress, economic coercion, conflict of
      interest, negligence, bad faith, malpractice, violations of the Racketeer
      Influenced and Corrupt Organizations Act, intentional or negligent infliction
      of
      mental distress, tortious interference with contractual relations, tortious
      interference with corporate governance or prospective business advantage, breach
      of contract, fraud, mistake, deceptive trade practices, libel, slander,
      conspiracy, or any claim for wrongfully taking any action in connection with
      the
      Debentures and the Debenture Documents.

     

    (a)
      This
      Release is accepted by the Company as a condition to Debentureholders executing
      this Agreement and Releasor expressly agrees that this Release survives the
      termination of this Agreement.

     

    (b)
      Releasor hereby represents and warrants to the Company that it has not assigned,
      pledged, or contracted to assign or pledge or otherwise disposed of any of
      the
      Claims.

     

    (c)
      This
      Release shall be binding upon Releasor and its legal representatives, successors
      and assigns and shall inure to the benefit of the Company and its successors
      and
      assigns.

     

    (d)
      This
      Release includes a release of, and shall inure to the benefit of, all the
      Company and its respective legal representatives, successors, assigns,
      directors, trustees, officers, agents, servants, employees and attorneys, past,
      present and future.

     

    (e)
      TO
      THE EXTENT PERMITTED BY APPLICABLE LAW, RELEASOR DOES HEREBY INTENTIONALLY,
      KNOWINGLY, VOLUNTARILY, UNCONDITIONALLY AND IRREVOCABLY WAIVE ITS RIGHT TO
      A
      TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF,
      UNDER OR IN CONNECTION WITH THIS RELEASE (INCLUDING, WITHOUT LIMITATION, ANY
      ACTION TO RESCIND OR CANCEL THIS RELEASE OR ANY CLAIMS OR DEFENSES ASSERTING
      THAT THIS RELEASE WAS FRAUDULENTLY INDUCED OR IS OTHERWISE VOID OR VOIDABLE).
      THE FOREGOING WAIVER BY RELEASOR IS A MATERIAL INDUCEMENT FOR THE COMPANY TO
      ACCEPT THIS RELEASE AND ENTER INTO THIS AGREEMENT.

     

    (f)
      Releasor hereby agrees, represents and warrants that it has had advice of
      counsel of its own choosing in negotiations for and the preparation of this
      Release, that it has read the provisions of this Release, and that it is fully
      aware of its contents and legal effect.

     

    (g)
      Releasor hereby acknowledges that it has not relied upon any representation
      of
      any kind made by the Company in making the foregoing release.

     

    8.
      Waiver. Each of the parties hereby waives any breach or non-compliance with
      the
      Debenture or Debenture Documents, as applicable, by any of the parties hereto
      prior to the date of this Agreement.

     

    9.
      Non-disclosure. Neither party shall disclose, announce or otherwise inform
      any
      third parties that are not a party to this transaction, including but not
      limited to the media, any material non-public information regarding the parties
      hereto or the fact that this Agreement was entered into, including the terms
      and
      conditions thereof, except as required in order to consummate the Conversion,
      without the other party’s written consent, and the Debentureholders shall
      execute a Registration FD Disclosure Agreement until the Closing is executed
      between the parties. 

     

    10.
      Remedies. In the event of a breach of this Agreement by Company or the
      Debentureholders, the parties agree that the Debentureholders shall be entitled
      to terminate this Agreement without notice to Company and proceed with any
      and
      all remedies available to them under the Debenture Documents and this
      Agreement.

     

    11.
      Maximum Exercise. Upon conversion of the Debentures and Closing hereunder,
      the
      Debentureholder shall receive 1,927,670 number of shares of Common Stock and,
      subsequently, may request any additional shares of Common Stock issuable to
      the
      Debentureholder hereunder, provided that all issuances hereunder do not result
      in beneficial ownership by the Debentureholder and its affiliates of more than
      4.99% of the outstanding Common Stock at any time. For the purposes of the
      immediately preceding sentence, beneficial ownership shall be determined in
      accordance with Section 13(d) of the Securities Exchange Act of 1934, as
      amended, and the rules thereunder. The restriction described in this paragraph
      may be waived, in whole or in part, upon sixty-one (61) days prior notice from
      the Debentureholder to the Company. 

     

    12.
      Miscellaneous.

     

    (a)
      Notices. Any notice, demand, request, statement or consent made hereunder shall
      be delivered hereunder shall be made in accordance with and governed by the
      notice provision contained in the Debenture Documents. 

     

    (b)
      Modifications, Waivers, Etc. No waiver, and no modification, amendment,
      discharge, or change of the Agreement, except as otherwise provided herein,
      shall be valid unless the same is in writing and signed by the party against
      which the enforcement of such modification, waiver, amendment, discharge, or
      change is sought. 

     

    (c)
      Successors or Assigns. This Agreement shall inure to the benefit of and shall
      be
      binding upon all successors and assigns of the parties hereto.

     

    (d)
      Further Assurances. All parties to this Agreement agree to execute any
      additional documents as necessary to fulfill the intent of this
      Agreement.

     

    (e)
      Judicial Interpretation. Should any provision of this Agreement require judicial
      interpretation, it is agreed that a court interpreting or construing the same
      shall not apply a presumption that the terms hereof shall be more strictly
      construed against any party by reason of the rule of construction that a
      document is to be construed more strictly against the party who itself or
      through its agent prepared the same.

     

    (f)
      Entire Agreement. This Agreement and the Schedules hereto reflect the entire
      understanding of the parties with respect to the subject matter herein,
      contained and supersedes any prior agreements, whether written or oral, in
      regard thereto. 

     

    (g)
      Full
      Force and Effect. Except as expressly modified herein, all terms of the
      Debenture Documents shall be and shall remain in full force and effect and
      shall
      constitute the legal, valid, binding and enforceable obligations of the Company
      and the Debentureholders.

     

    (h)
      Severability. In the event that any of the provisions of this Agreement are
      held
      to be unenforceable under applicable law or are so held by court decision of
      a
      court having competent jurisdiction, the remaining portions of this Agreement
      will remain in full force and effect.

     

    (i)
      Governing Law. This Agreement shall be governed by, and shall be construed
      in
      accordance with, the laws of the State of New York without regard to principles
      of conflicts of law. The parties hereto agree that the exclusive forum for
      the
      resolution of disputes hereunder shall be the state or federal courts located
      in
      New York County, New York, and hereby waive any objection thereto on the basis
      of personal jurisdiction and venue. 

     

    (j)
      Counterparts. This Agreement may be executed in multiple counterparts, each
      of
      which shall be an original and all of which, taken together, shall constitute
      but one and the same agreement among the parties.

     

    (k)
      Binding Nature. This Agreement shall be binding upon and inure to the benefit
      of
      the parties hereto and their respective successors and assigns.

     

    (l)
      Captions. The captions to the Sections and paragraphs of the Agreement are
      for
      the convenience of the parties only, and are not a part of this
      Agreement.

     

    (m)
      Attorneys’ Fees. If any party shall breach this Agreement, the non-breaching
      party shall be entitled to recover all costs, changes, and expenses of enforcing
      this Agreement including reasonable attorneys’ fees, paralegals’ fees, and
      costs, which reasonable fees shall include any such fees incurred in any trial
      or appellate proceedings.

     

    (n)
      Survival of Representations, Warranties and Covenants. All representations,
      warranties, covenants, the release in Section 7, and other agreements contained
      herein and in all documents delivered hereunder shall survive any termination
      of
      this Agreement and continue in full force and effect.

     

     

     

    IN
      WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
      date
      first above written.  

     

     1,547,670

    Number
      of Shares
      of Common Stock issuable upon conversion under Section
      2(a)   

     

     

    380,000

    Number
      of
      Interest Shares issuable under Section 2(b)    

     

     

     

    By:___________________________  

     

    By:___________________________

     

    Name:_________________________

     

    Title:_________________________

     

    

     

    

    
      	 	 	 
	 	
              China
                Mobility Solutions, Inc.

            
	 
 	 
 	 
 
	 	By:  	/s/ Xiao-qing
              Du 
	 	
              
Xiao-qing
              Du 
	 	Title Chief
              Executive OfficerExhibit 4.1

SCIELE
PHARMA, INC.

2.625%
Contingent Convertible Senior Notes Due 2027

INDENTURE

Dated as of
May 14 , 2007

LASALLE BANK
NATIONAL ASSOCIATION

TRUSTEE

CROSS-REFERENCE
TABLE*

	
   

  	
  Indenture

  
	
  Trust Indenture Act Section

  	
   

  	
  Section

  
	
  310

  	
  (a)(1)

  	
  7.10

  
	
   

  	
  (a)(2)

  	
  N.A.

  
	
   

  	
  (a)(3)

  	
  N.A.

  
	
   

  	
  (a)(4)

  	
  N.A.

  
	
   

  	
  (a)(5)

  	
  N.A.

  
	
   

  	
  (b)

  	
  7.10

  
	
   

  	
  (c)

  	
  N.A.

  
	
  311

  	
  (a)

  	
  7.11

  
	
   

  	
  (b)

  	
  7.11

  
	
   

  	
  (c)

  	
  N.A.

  
	
  312

  	
  (a)

  	
  N.A.

  
	
   

  	
  (b)

  	
  11.03

  
	
   

  	
  (c)

  	
  11.03

  
	
  313

  	
  (a)

  	
  7.06

  
	
   

  	
  (b)

  	
  7.06

  
	
   

  	
  (c)

  	
  N.A.

  
	
   

  	
  (d)

  	
  N.A.

  
	
  314

  	
  (a)

  	
  4.02, 6.02

  
	
   

  	
  (b)

  	
  N.A.

  
	
   

  	
  (c)(1)

  	
  N.A.

  
	
   

  	
  (c)(2)

  	
  N.A.

  
	
   

  	
  (c)(3)

  	
  N.A.

  
	
   

  	
  (d)

  	
  N.A.

  
	
   

  	
  (e)

  	
  N.A.

  
	
   

  	
  (f)

  	
  N.A.

  
	
  315

  	
  (a)

  	
  7.01(b)

  
	
   

  	
  (b)

  	
  7.05

  
	
   

  	
  (c)

  	
  N.A.

  
	
   

  	
  (d)

  	
  7.01(c)

  
	
   

  	
  (e)

  	
  6.11

  
	
  316

  	
  (a)(1)(A)

  	
  6.05

  
	
   

  	
  (a)(1)(B)

  	
  6.04

  
	
   

  	
  (a)(2)

  	
  N.A.

  
	
   

  	
  (b)

  	
  N.A.

  
	
   

  	
  (c)

  	
  N.A.

  
	
  317

  	
  (a)(1)

  	
  N.A.

  
	
   

  	
  (a)(2)

  	
  N.A.

  
	
   

  	
  (b)

  	
  N.A.

  
	
  318

  	
  (a)

  	
  N.A.

  
	
  N.A. means not applicable.

  	
   

  
						

*              This Cross-Reference
Table is not part of the Indenture.

 2

TABLE OF
CONTENTS

	
  ARTICLE I.

  DEFINITIONS AND INCOPORATION BY REFERENCE

  
	
  Section 1.01. 

  	
  Definitions

  	
  6

  
	
  Section 1.02.

  	
  Other
  Definitions

  	
  9

  
	
  Section 1.03.

  	
  Incorporation
  by Reference of Trust Indenture Act

  	
  9

  
	
  Section 1.04.

  	
  Rules
  of Construction

  	
  10

  
	
  Section 1.05.

  	
  Acts
  of Holders

  	
  10

  
	
  ARTICLE II.

  THE SECURITIES

  
	
  Section 2.01.

  	
  Form
  and Dating

  	
  11

  
	
  Section 2.02.

  	
  Execution
  and Authentication

  	
  11

  
	
  Section 2.03.

  	
  Registrar,
  Paying Agent and Conversion Agent

  	
  12

  
	
  Section 2.04.

  	
  Paying
  Agent to Hold Money in Trust

  	
  12

  
	
  Section 2.05.

  	
  Securityholder
  Lists

  	
  12

  
	
  Section 2.06.

  	
  Transfer
  and Exchange

  	
  12

  
	
  Section 2.07.

  	
  Replacement
  Securities

  	
  13

  
	
  Section 2.08.

  	
  Outstanding
  Securities; Determinations of Holders’ Action

  	
  13

  
	
  Section 2.09.

  	
  Temporary
  Securities

  	
  14

  
	
  Section 2.10.

  	
  Cancellation

  	
  14

  
	
  Section 2.11.

  	
  Persons
  Deemed Owners

  	
  14

  
	
  Section 2.12.

  	
  Global
  Securities

  	
  14

  
	
  Section 2.13.

  	
  CUSIP
  Numbers

  	
  15

  
	
  ARTICLE III.

  REDEMPTION AND PURCHASES

  
	
  Section 3.01

  	
  Right
  To Redeem; Notices To Trustee

  	
  16

  
	
  Section 3.02.

  	
  Selection
  of Securities to Be Redeemed

  	
  16

  
	
  Section 3.03.

  	
  Notice
  of Redemption

  	
  16

  
	
  Section 3.04.

  	
  Effect
  of Notice of Redemption

  	
  17

  
	
  Section 3.05.

  	
  Deposit
  of Redemption Price

  	
  17

  
	
  Section 3.06.

  	
  Securities
  Redeemed in Part

  	
  17

  
	
  Section 3.07.

  	
  Reserved

  	
  17

  
	
  Section 3.08.

  	
  Purchase
  of Securities at Option of the Holder

  	
  17

  
	
  Section 3.09.

  	
  Purchase
  of Securities at Option of the Holder upon Fundamental Change

  	
  19

  
	
  Section 3.10.

  	
  Effect
  of Purchase Notice or Fundamental Change Purchase Notice

  	
  21

  
	
  Section 3.11.

  	
  Deposit
  of Purchase Price or Fundamental Change Purchase Price

  	
  21

  
	
  Section 3.12.

  	
  Securities
  Purchased in Part

  	
  22

  
	
  Section 3.13.

  	
  Covenant
  to Comply with Securities Laws upon Purchase of Securities

  	
  22

  
	
  Section 3.14.

  	
  Repayment
  to the Company

  	
  22

  
	
  ARTICLE IV.

  COVENANTS

  
	
  Section 4.01.

  	
  Payment
  of Securities

  	
  22

  
	
  Section 4.02.

  	
  SEC
  and Other Reports

  	
  22

  
	
  Section 4.03.

  	
  Compliance
  Certificate

  	
  23

  
	
  Section 4.04.

  	
  Further
  Instruments and Acts

  	
  23

  
	
  Section 4.05.

  	
  Maintenance
  of Office or Agency

  	
  23

  
	
  Section 4.06.

  	
  Tax
  Treatment of Securities

  	
  23

  
	
  ARTICLE V.

  SUCCESSOR CORPORATION

  
	
  Section 5.01.

  	
  When
  the Company May Merge or Transfer Assets

  	
  24

  
	
  ARTICLE VI.

  DEFAULTS AND REMEDIES

  
	
  Section 6.01.

  	
  Events
  of Default

  	
  24

  
	
  Section 6.02.

  	
  Defaults
  and Remedies

  	
  25

  
	
  Section 6.03.

  	
  Other
  Remedies

  	
  26

  
	
  Section 6.04.

  	
  Waiver
  of Past Defaults

  	
  26

  
	
  Section 6.05.

  	
  Control
  by Majority

  	
  26

  

 

 3
 

 

	
  Section 6.06.

  	
  Limitation
  on Suits

  	
  26

  
	
  Section 6.07.

  	
  Rights
  of Holders to Receive Payment

  	
  27

  
	
  Section 6.08.

  	
  Collection
  Suit by Trustee

  	
  27

  
	
  Section 6.09.

  	
  Trustee
  May File Proofs of Claim

  	
  27

  
	
  Section 6.10.

  	
  Priorities

  	
  27

  
	
  Section 6.11.

  	
  Undertaking
  for Costs

  	
  28

  
	
  Section 6.12.

  	
  Waiver
  of Stay, Extension or Usury Laws

  	
  28

  
	
  ARTICLE VII.

  TRUSTEE

  
	
  Section 7.01.

  	
  Duties
  of Trustee

  	
  28

  
	
  Section 7.02.

  	
  Rights
  of Trustee

  	
  29

  
	
  Section 7.03.

  	
  Individual
  Rights of Trustee

  	
  30

  
	
  Section 7.04.

  	
  Trustee’s
  Disclaimer

  	
  30

  
	
  Section 7.05.

  	
  Notice
  of Defaults

  	
  30

  
	
  Section 7.06.

  	
  Reports
  by Trustee to Holders

  	
  30

  
	
  Section 7.07.

  	
  Compensation
  and Indemnity

  	
  30

  
	
  Section 7.08.

  	
  Replacement
  of Trustee

  	
  31

  
	
  Section 7.09.

  	
  Successor
  Trustee by Merger

  	
  31

  
	
  Section 7.10.

  	
  Eligibility;
  Disqualification

  	
  31

  
	
  Section 7.11.

  	
  Preferential
  Collection of Claims Against Company

  	
  31

  
	
  ARTICLE VIII.

  DISCHARGE OF INDENTURE

  
	
  Section 8.01.

  	
  Discharge
  of Liability on Securities

  	
  31

  
	
  Section 8.02.

  	
  Repayment
  to the Company

  	
  32

  
	
  ARTICLE IX.

  AMENDMENTS

  
	
  Section 9.01.

  	
  Without
  Consent of Holders

  	
  32

  
	
  Section 9.02.

  	
  With
  Consent of Holders

  	
  32

  
	
  Section 9.03.

  	
  Compliance
  with Trust Indenture Act

  	
  33

  
	
  Section 9.04.

  	
  Revocation
  and Effect of Consents

  	
  33

  
	
  Section 9.05.

  	
  Notation
  on or Exchange of Securities

  	
  33

  
	
  Section 9.06.

  	
  Trustee
  to Sign Supplemental Indentures

  	
  33

  
	
  Section 9.07.

  	
  Effect
  of Supplemental Indentures

  	
  33

  
	
  ARTICLE X.

  CONVERSIONS

  
	
  Section 10.01.

  	
  Conversion
  Privilege

  	
  33

  
	
  Section 10.02.

  	
  Consideration
  Upon Conversion

  	
  36

  
	
  Section 10.03.

  	
  Conversion
  Procedure

  	
  37

  
	
  Section 10.04.

  	
  Adjustments
  Below Par Value

  	
  38

  
	
  Section 10.05.

  	
  Taxes
  on Conversion

  	
  38

  
	
  Section 10.06.

  	
  Company
  to Provide Stock

  	
  38

  
	
  Section 10.07.

  	
  Adjustment
  of Conversion Rate

  	
  38

  
	
  Section 10.08.

  	
  Adjustment
  to the Conversion Rate Upon the Occurrence of a Make-Whole Fundamental
  Change

  	
  41

  
	
  Section 10.09.

  	
  Reserved

  	
  43

  
	
  Section 10.10.

  	
  No
  Adjustment

  	
  43

  
	
  Section 10.11.

  	
  Equivalent
  Adjustments

  	
  43

  
	
  Section 10.12.

  	
  Adjustment
  for Tax Purposes

  	
  43

  
	
  Section 10.13.

  	
  Notice
  of Adjustment

  	
  43

  
	
  Section 10.14.

  	
  Notice
  of Certain Transactions

  	
  44

  
	
  Section 10.15.

  	
  Effect
  of Reclassification, Consolidation, Merger, Share Exchange or Sale on
  Conversion Privilege

  	
  44

  
	
  Section 10.16.

  	
  Trustee’s
  Disclaimer

  	
  45

  
	
  Section 10.17.

  	
  Voluntary
  Increase

  	
  45

  
	
  Section 10.18.

  	
  Simultaneous
  Adjustments

  	
  45

  
	
  ARTICLE XI.

  MISCELLANEOUS

  
	
  Section 11.01.

  	
  Trust
  Indenture Act Controls

  	
  45

  
	
  Section 11.02.

  	
  Notices

  	
  45

  
	
  Section 11.03.

  	
  Communication
  by Holders with Other Holders

  	
  46

  
	
  Section 11.04.

  	
  Certificate
  and Opinion as to Conditions Precedent

  	
  46

  

 

 4
 

 

	
  Section 11.05.

  	
  Statements
  Required in Certificate or Opinion

  	
  47

  
	
  Section 11.06.

  	
  Separability
  Clause

  	
  47

  
	
  Section 11.07.

  	
  Rules
  by Trustee, Paying Agent, Conversion Agent and Registrar

  	
  47

  
	
  Section 11.08.

  	
  Legal
  Holidays

  	
  47

  
	
  Section 11.09.

  	
  Governing
  Law

  	
  47

  
	
  Section 11.10.

  	
  No
  Recourse Against Others

  	
  47

  
	
  Section 11.11.

  	
  Successors

  	
  47

  
	
  Section 11.12.

  	
  Calculations
  in Respect of the Securities

  	
  47

  
	
  Section 11.13.

  	
  Multiple
  Originals

  	
  47

  

 

Exhibit
A-1—Form of Global Security

Exhibit A-2—Form of Certificated Security

 5

INDENTURE dated as of May 14, 2007 between SCIELE
PHARMA, INC., a Delaware corporation (the “Company”), and LASALLE BANK NATIONAL ASSOCIATION, a national
banking association duly organized and existing under the laws of the United
States of America (the “Trustee”).

Each party agrees as follows for the benefit of the other
party and for the equal and ratable benefit of the Holders of the Company’s
2.625% Contingent Convertible Senior Notes Due 2027 (the “Security”):

ARTICLE I.

DEFINITIONS AND INCORPORATION BY REFERENCE

                Section
1.01.  Definitions

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

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

“Base Conversion Price”
has the meaning specified in Section 10.01.

“Base Conversion Rate”
has the meaning specified in Section 10.01.

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

“Board Resolution”
means a copy of one or more resolutions, certified by an Officer of the Company
to have been duly adopted or consented to by the applicable Board of Directors
and to be in full force and effect, and delivered to the Trustee.

“Business Day”
means, with respect to any Security, a day that in the City of New York or
Chicago, Illinois is not a day on which banking institutions are authorized by
law or regulation to close.

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

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

“Closing Sale Price”
means the price of a share of Common Stock on the relevant date, determined
(a) on the basis of the closing sale price per share of Common Stock (or
if no closing sale price per share of Common Stock is reported, the average of
the bid and ask prices per share of Common Stock or, if more than one in either
case, the average of the average bid and the average ask prices per share of
Common Stock) on such date on the U.S. 
principal national securities exchange on which the Common Stock is
listed; or (b) if the Common Stock is not listed on a U.S.  national securities exchange, as reported on
the over-the-counter securities or other market on which the Common Stock is
listed.  In the absence of a quotation,
the Closing Sale Price shall be such price as the Company shall reasonably
determine on the basis of such quotations as most accurately reflecting the price
that a fully informed buyer, acting on his or her own accord, would pay to a
fully informed seller, acting on his or her own accord in an arms-length
transaction, for a share of such Common Stock.

“Common Stock”
shall mean shares of the Company’s Common Stock, $0.001 par value per share, as
they exist on the date of this Indenture or any other shares of Capital Stock
of the Company into which the Common Stock shall be reclassified or changed.

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

 6
 

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

“Conversion Price”
means, at any time, an amount equal to $1,000 divided by the Conversion Rate in
effect at such time, rounded to the nearest cent.

“Conversion Rate”
means the number of shares of Common Stock issuable upon conversion of each
$1,000 principal amount of Securities.

“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
hereof is located at 135 South LaSalle Street, Suite 1560 Chicago,
Illinois 60603, Attention: Corporate Debt Trust Services Division Sciele
Pharma, Inc. Notes due 2027, or such other address as the Trustee may
designate from time to time by notice to the Holders and the Company, or the
principal corporate trust office of any successor Trustee (or such other
address as a successor Trustee may designate from time to time by notice to the
Holders and the Company).

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

“Depositary”
means DTC or any successor thereto and any such nominee.

“DTC” means
The Depository Trust Company or the nominee thereof.

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

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

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

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

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

“Market Disruption
Event” means either (i) a failure by the primary U.S.  national securities exchange,
over-the-counter securities market or other market on which the Common Stock is
listed or admitted to trading to open for trading during its regular trading
session; or (ii) the occurrence or existence prior to 1:00 p.m.  New York City time on any Trading Day for the
Common Stock for an aggregate of at least 30 minutes of any suspension or
limitation imposed on trading (by reason of movements in price exceeding limits
permitted by the stock exchange or otherwise) in the Common Stock or in any
options, contracts or future contracts relating to the Common Stock.

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

“Officers’ Certificate”
means a written certificate containing the information specified in Sections
11.04 and 11.05, signed in the name of the Company by any two Officers, and
delivered to the Trustee.  An Officers’
Certificate given pursuant to Section 4.03 shall be signed by the
Treasurer or Chief Financial Officer of the Company but need not contain the
information specified in Sections 11.04 and 11.05.

“Opinion of Counsel”
means a written opinion containing the information specified in
Section 11.04 and 11.05, from legal counsel who is acceptable to the
Trustee in its reasonable discretion. 
The counsel may be an employee of, or counsel to, the Company or the
Trustee.

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

 7
 

“Principal Amount”
or “principal amount” of a
Security means the Principal Amount as set forth on the face of the Security.

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

“Redemption Price”
shall have the meaning set forth in paragraph 5 of the Securities.

“Responsible Officer”
means, when used with respect to the Trustee, any managing director, director,
vice president, assistant vice president, assistant treasurer, assistant
secretary, associate or any other officer within the corporate trust department
of the Trustee customarily performing functions similar to those performed by
any of the above designated officers and also shall mean, with respect to a
particular corporate trust matter, any other officer to whom such matter is
referred because of his knowledge and familiarity with the particular subject.

“SEC” means
the Securities and Exchange Commission.

“Security”
or “Securities” means any of the
Company’s 2.625% Contingent Convertible Senior Notes Due 2027, as amended or
supplemented from time to time, issued under this Indenture.

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

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

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

“Subsidiary”
means any person in which at least a majority of the outstanding Voting Stock
shall at the time directly or indirectly be owned or controlled by the Company or
by one or more Subsidiaries or by the Company and one or more Subsidiaries.

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

“Trading Day”
means a day during which (i) trading in the Common Stock generally occurs;
(ii) there is no Market Disruption Event; and (iii) a closing sale
price for the Common Stock is provided on the NASDAQ Global Select Market or,
if the Common Stock is not then listed on the NASDAQ Global Select Market, on
the principal other U.S.  national or
regional securities exchange on which the Common Stock is then listed or, if
the Common Stock is not then listed on a U.S. 
national or regional securities exchange, on the principal
over-the-counter securities market or other market on which the Common Stock is
then traded.

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

“Voting Stock”
of a person means Capital Stock of such person of the class or classes pursuant
to which the holders thereof have the general voting power under ordinary
circumstances to elect at least a majority of the board of directors, managers
or trustees of such person (irrespective of whether or not at the time Capital
Stock of any other class or classes shall have or might have voting power by
reason of the happening of any contingency).

 8
 

 

                Section
1.02.  Other Definitions

 

	
  Term:

  	
   

  	
  Defined in

  Section:

  
	
  Act

  	
   

  	
  1.05(a)

  
	
  Agent Members

  	
   

  	
  2.12(c)(v)

  
	
  Aggregate Market
  Premium

  	
   

  	
  10.06(f)

  
	
  Applicable Price

  	
   

  	
  10.08(a)

  
	
  Applicable Stock
  Price

  	
   

  	
  10.01

  
	
  Base Conversion
  Price

  	
   

  	
  10.01

  
	
  Base Conversion
  Rate

  	
   

  	
  10.01

  
	
  Beneficial Owner

  	
   

  	
  3.09(a)

  
	
  Cash

  	
   

  	
  3.08(b)

  
	
  Cash Settlement
  Averaging Period

  	
   

  	
  10.02(a)

  
	
  Company Notice

  	
   

  	
  3.08(c)

  
	
  Company Notice
  Date

  	
   

  	
  3.08(c)

  
	
  Consolidation

  	
   

  	
  10.01

  
	
  Continuing
  Directors

  	
   

  	
  3.09(a)

  
	
  Conversion Agent

  	
   

  	
  2.03

  
	
  Conversion Date

  	
   

  	
  10.03

  
	
  Conversion
  Notice

  	
   

  	
  10.02(a)

  
	
  Conversion Price

  	
   

  	
  10.07

  
	
  Conversion
  Shares

  	
   

  	
  10.01

  
	
  Conversion Value

  	
   

  	
  10.02(a)

  
	
  current market
  price

  	
   

  	
  10.07(g)

  
	
  Daily Conversion
  Value

  	
   

  	
  10.02(a)

  
	
  Daily Net Shares

  	
   

  	
  10.02(a)

  
	
  Daily Principal
  Return

  	
   

  	
  10.02(a)

  
	
  Effective Date

  	
   

  	
  10.08(a)

  
	
  Event of Default

  	
   

  	
  6.01

  
	
  Ex Date

  	
   

  	
  10.02(a)

  
	
  Ex-Dividend
  Date

  	
   

  	
  10.01

  
	
  Fundamental
  Change

  	
   

  	
  3.09(a)

  
	
  Fundamental
  Change Purchase Date

  	
   

  	
  3.09(a)

  
	
  Fundamental
  Change Purchase Notice

  	
   

  	
  3.09(c)

  
	
  Fundamental
  Change Purchase Price

  	
   

  	
  3.09(a)

  
	
  Group

  	
   

  	
  3.09(a)

  
	
  Incremental
  Share Factor

  	
   

  	
  10.01

  
	
  Legal Holiday

  	
   

  	
  11.08

  
	
  Make-Whole
  Fundamental Change

  	
   

  	
  10.08

  
	
  Net Shares

  	
   

  	
  10.02(a)

  
	
  Principal Return

  	
   

  	
  10.02(a)

  
	
  Purchase Date

  	
   

  	
  3.08(a)

  
	
  Purchase Notice

  	
   

  	
  3.08(a)

  
	
  Purchase Price

  	
   

  	
  3.08(a)

  
	
  Quarter

  	
   

  	
  10.01(a)

  
	
  Registrar

  	
   

  	
  2.03

  
	
  Security Trading
  Price

  	
   

  	
  10.01

  
	
  Special Interest

  	
   

  	
  6.02

  
	
  Spin-Off

  	
   

  	
  10.07(d)

  
	
  Stockholder
  Rights Plan

  	
   

  	
  10.07(h)

  
	
  Trigger Event

  	
   

  	
  10.07(h)

  
	
  Volume-Weighted
  Average Price

  	
   

  	
  10.02(a)

  

                Section 1.03.  Incorporation
by Reference of Trust Indenture Act.

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

“Commission”
means the SEC.

“indenture 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.

 9
 

“obligor”
on the indenture securities means the Company.

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

                Section 1.04.  Rules
of Construction.

Unless the context otherwise requires:

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

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

(c)           “or”
is not exclusive;

(d)           “including”
means including, without limitation;

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

(f)            the
term “interest,” when used in respect of a Security, means the amount payable
on such Security in accordance with paragraph 1 thereof and all Special
Interest payable in respect of such Security pursuant to Section 6.02 of
this Indenture.

                Section 1.05.  Acts
of Holders.

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

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

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

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

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

(e)           If the
Company shall solicit from the Holders any request, demand, authorization,
direction, notice, consent, waiver or other Act, the Company may, at its
option, by or pursuant to a Board Resolution, fix in advance a record date for
the determination of Holders entitled to give such request, demand,
authorization, direction, notice, consent, waiver or other Act, but the Company
shall have no obligation to do so.  If
such a record date is fixed, such request, demand, authorization, direction,
notice, consent, waiver or other Act may be given before or after such record
date, but only the Holders of record at the close of business on such record
date shall be deemed to be Holders for the purposes of determining whether
Holders of the requisite proportion of outstanding Securities have authorized
or agreed or consented to such request, demand, authorization, direction, 

 10
 

notice, consent, waiver or other Act, and for that purpose the
outstanding Securities shall be computed as of such record date; provided that no such authorization,
agreement or consent by the Holders on such record date shall be deemed
effective unless it shall become effective pursuant to the provisions of this
Indenture not later than six months after the record date.

ARTICLE II.

THE SECURITIES

                Section 2.01.  Form
and Dating.  The
Securities and the Trustee’s certificate of authentication shall be
substantially in the forms set forth on Exhibits A-1 and A-2, which are a part
of this Indenture and incorporated by reference herein.  The Securities may have notations, legends or
endorsements required by law, stock exchange rule or usage; provided that any
such notation, legend or endorsement required by usage is in a form acceptable
to the Company.  The Company shall
provide any such notations, legends or endorsements to the Trustee in a Company
Order.  Each Security shall be dated the
date of its authentication.

                (a)  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 and conversions.

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.

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

“UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO SCIELE PHARMA, 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.”

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

                Section
2.02.  Execution and Authentication.  The Securities
shall be executed on behalf of the Company by any Officer.  The signature of the Officer of the Company
on the Securities may be manual or facsimile.

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

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

 11
 

The Trustee shall authenticate and deliver Securities for
original issue in an aggregate Principal Amount of up to $325,000,000 upon a
Company Order without any further action by the Company.  The aggregate Principal Amount of Securities
outstanding at any time may not exceed the amount set forth in the foregoing
sentence, except as provided in Section 2.07.

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

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

The Company shall enter into an appropriate agency
agreement with any Registrar, Paying Agent, Conversion Agent or co-registrar
(other than the Trustee).  The agreement
shall implement the provisions of this Indenture that relate to such
agent.  The Company shall notify the
Trustee by a Company Order of the name and address of any such agent.  If the Company fails to maintain a Registrar,
Paying Agent or Conversion Agent, the Trustee shall act as such and shall be
entitled to appropriate compensation therefor pursuant to
Section 7.07.  The Company or any
Subsidiary or an Affiliate of either of them may act as Paying Agent, Registrar,
Conversion Agent or co-registrar.

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

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

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

                Section 2.06.  Transfer
and Exchange.

(a)           Subject
to Section 2.12 hereof, upon surrender for registration of transfer of any
Securities, together with a written instrument of transfer satisfactory to the
Registrar duly executed by the Securityholder or such Securityholder’s attorney
duly authorized in writing, at the Corporate Trust Office, the Company shall
execute and the Trustee shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Securities of any
authorized denomination or denominations, of a like aggregate Principal
Amount.  The Company shall not charge a
service charge for any registration of transfer or exchange, but the Company
may require payment of a sum sufficient to pay all taxes, assessments or other
governmental charges that may be imposed in connection with the transfer or
exchange of the Securities from the Securityholder requesting such transfer or
exchange.

At the option of the Holder, Securities may be exchanged
for other Securities of any authorized denomination or denominations, of a like
aggregate Principal Amount, upon surrender of the Securities to be exchanged,
together with a written instrument of transfer satisfactory to the Registrar
duly executed by the Securityholder or such Securityholder’s attorney duly 

 12
 

authorized in writing, at such office or agency.  Whenever any Securities are so surrendered
for exchange, the Company shall execute, and the Trustee shall authenticate and
deliver, the Securities that the Holder making the exchange is entitled to
receive.

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

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

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

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

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

                Section
2.07.  Replacement Securities.  If any mutilated
Security is surrendered to the Trustee, or the Company and the Trustee receive
evidence to their satisfaction of the destruction, loss or theft of any
Security, and there is delivered to the Company and the Trustee such security
or indemnity as may be required by them to save each of them harmless, then, in
the absence of actual knowledge by the Company or the Trustee that such
Security has been acquired by a protected purchaser (within the meaning of
Section 8-303 of the Uniform Commercial Code), the Company shall execute,
and upon the Company’s 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
purchased by the Company pursuant to Article III hereof, the Company in
its discretion may, instead of issuing a new Security, pay or purchase such
Security, as the case may be.

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

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

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

                Section
2.08.  Outstanding Securities; Determinations of Holders’ Action.  Securities
outstanding at any time are all the Securities authenticated by the Trustee,
except for those cancelled by it, those paid pursuant to Section 2.07,
those delivered to it for cancellation pursuant to Section 2.10, those for
which payment has been provided in accordance with Article VIII and those
described in this Section 2.08 as not outstanding.  A Security does not cease to be outstanding
because the Company or an Affiliate thereof holds the Security; provided,
however, that in determining whether the Holders of the requisite Principal
Amount of Securities have given or concurred in any request, demand,
authorization, direction, notice, consent or waiver hereunder, Securities owned
by the Company or any other obligor upon the Securities or any Affiliate of the
Company or such other obligor shall be disregarded and deemed not to be
outstanding, except that, in determining whether the Trustee shall be 

 13
 

protected in relying upon any such request, demand, authorization,
direction, notice, consent or waiver, only Securities of which a Responsible
Officer of the Trustee has actual knowledge to be so owned shall be so
disregarded.  Subject to the foregoing,
only Securities outstanding at the time of such determination shall be
considered in any such determination (including, without limitation, determinations
pursuant to Articles VI and IX).

If a Security is replaced pursuant to Section 2.07,
it ceases to be outstanding unless the Trustee receives proof satisfactory to
it that the replaced Security is held by a protected purchaser.

If the Paying Agent holds, in accordance with this
Indenture, on a Redemption Date, or on the Business Day following a Purchase
Date or a Fundamental Change Purchase Date, or on Stated Maturity, money
sufficient to pay amounts owed with respect to Securities payable on that date,
then immediately after such Redemption Date, Purchase Date, Fundamental Change
Purchase Date or Stated Maturity, as the case may be, such Securities shall
cease to be outstanding and interest (including contingent interest and Special
Interest, if any) on such Securities shall cease to accrue; provided that if
such Securities are to be redeemed, notice of such redemption has been duly
given pursuant to this Indenture or provision therefor satisfactory to the
Trustee has been made.

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

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

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

                Section
2.10.  Cancellation.  All
Securities surrendered for payment or purchase by the Company pursuant to
Article III, conversion, redemption or registration of transfer or
exchange (other than Securities exchanged pursuant to Section 10.03),
shall, if surrendered to any person other than the Trustee, be delivered to the
Trustee and shall be promptly cancelled by it. 
The Company may at any time deliver to the Trustee for cancellation any
Securities previously authenticated and delivered hereunder that the Company
may have acquired in any manner whatsoever, and all Securities so delivered
shall be promptly cancelled by the Trustee. 
The Company may not issue new Securities to replace Securities it has
paid or delivered to the Trustee for cancellation or that any Holder has
converted pursuant to Article X.  No
Securities shall be authenticated in lieu of or in exchange for any Securities
cancelled as provided in this Section, except as expressly permitted by this
Indenture.  All cancelled Securities held
by the Trustee shall be disposed of by the Trustee in accordance with the
Trustee’s customary procedure.

                Section
2.11.  Persons Deemed Owners.  Prior to due
presentment of a Security for registration of transfer, the Company, the
Trustee and any agent of the Company or the Trustee may treat the Person in
whose name such Security is registered as the owner of such Security for the
purpose of receiving payment of the Principal Amount of the Security or the
payment of any Redemption Price, Purchase Price or Fundamental Change Purchase
Price in respect thereof, and accrued and unpaid interest thereon, for the
purpose of conversion and for all other purposes whatsoever, whether or not
such Security be overdue, and neither the Company, the Trustee nor any agent of
the Company or the Trustee shall be affected by notice to the contrary.

                Section 2.12.  Global
Securities.

(a)           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 

 14
 

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 Section 2.06 and this
Section 2.12.

(b)           As
used in Section 2.12(a) above, the term “transfer” encompasses any sale,
pledge, transfer, hypothecation or other disposition of any Security.

(c)           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
(x) the Depositary has notified the Company and the Trustee 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, (y) the Company has provided the Depositary and the Trustee
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
(z) an Event of Default has occurred and is continuing with respect to the
Securities.  Any Global Security
exchanged pursuant to clause (x) or (y) above shall be so exchanged
in whole and not in part, and any Global Security exchanged pursuant to
clause (z) above may be exchanged in whole or from time to time in part as
directed by the Depositary.  Any Security
issued in exchange for a Global Security or any portion thereof shall be a
Global Security; provided that any such Security so issued that is registered
in the name of a Person other than the Depositary or a nominee thereof shall
not be a Global Security.

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

(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.

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

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

 

 15

Article III.

REDEMPTION AND PURCHASES

Section 3.01.  Right
To Redeem; Notices To Trustee

                (a)  Optional
Redemption.  The Company, at
its option, may redeem the Securities in accordance with the provisions of
paragraphs 5 and 7 of the Securities and at the Redemption Price specified in
paragraph 5 of the Securities, together with accrued and unpaid interest
(including contingent interest and Special Interest, if any) thereon up to but
not including the Redemption Date; provided
that if the Redemption Date is on or after an interest record date, but on or
prior to the related interest payment date, interest will be payable to the
Holders in whose names the Securities are registered at the close of business
on the relevant record date for payment of such interest.

                (b)  Notice to
Trustee.  If the Company
elects to redeem Securities pursuant to this Section 3.01, it shall notify
the Trustee in writing of the Redemption Date, the Principal Amount of
Securities to be redeemed and the Redemption Price.  The Company shall give the notice to the
Trustee provided for in this Section 3.01(b) by a Company Order at least
45 days before the Redemption Date (unless a shorter notice shall be
satisfactory to the Trustee).

                Section
3.02.  Selection of Securities to Be Redeemed.  If less than all
the Securities are to be redeemed, unless the procedures of the Depositary
provide otherwise, the Trustee shall select the Securities to be redeemed on a
pro rata basis.  The Trustee may select
for redemption portions of the Principal Amount of Securities that have
denominations of $1,000 and integral multiples thereof.

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

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

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

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

(a)           the
Redemption Date;

(b)           the
Redemption Price;

(c)           the
Conversion Rate;

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

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

(f)            that
Holders who want to convert Securities must satisfy the requirements set forth
in paragraph 8 of the Securities;

(g)           that
Securities called for redemption must be surrendered to the Paying Agent to
collect the Redemption Price therefor, together with all accrued and unpaid
interest;

(h)           if
fewer than all the outstanding Securities are to be redeemed, the certificate
numbers, if any, and Principal Amounts of the particular Securities to be
redeemed;

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

 16
 

(j)            the
CUSIP number of the Securities.

At the Company’s request, the Trustee shall give the
notice of redemption in the Company’s name and at the Company’s expense;
provided that the Company makes such request prior to the date by which such
notice of redemption must be given to Holders in accordance with this
Section 3.03 and the Company provides the Trustee with all information
required for such notice of redemption.

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

                Section
3.05.  Deposit of Redemption Price.  Prior to
10:00 a.m.  (New York City time) on
the Redemption Date the Company shall deposit with the Paying Agent (or if the
Company or a Subsidiary or an Affiliate of either of them is the Paying Agent,
shall segregate and hold in trust as provided in Section 2.04) an amount
of money in immediately available funds sufficient to pay the Redemption Price
of all Securities to be redeemed on that date, together with accrued and unpaid
interest (including contingent interest and Special Interest, if any) thereon
up to but not including the Redemption Date, other than Securities or portions
of Securities called for redemption that on or prior thereto have been
delivered by the Company to the Trustee for cancellation or have been converted.  The Paying Agent shall as promptly as
practicable return to the Company any money not required for that purpose
because of conversion of Securities pursuant to Article X.  If such money is then held by the Company in
trust and is not required for such purpose it shall be discharged from such
trust.

                Section
3.06.  Securities Redeemed in Part.  Upon surrender of a
Security that is redeemed in part, the Company shall execute and the Trustee
shall authenticate and deliver to the Holder, without service charge, a new
Security or Securities, of any authorized denomination as requested by such
Holder in aggregate Principal Amount equal to, and in exchange for, the
unredeemed portion of the Principal Amount of the Security surrendered.

                Section 3.07.  Reserved

                Section 3.08.  Purchase
of Securities at Option of the Holder

                (a)  General.  Securities shall be purchased by
the Company in accordance with the provisions of paragraph 6 of the
Securities on May 15, 2012, May 15, 2017 and May 15, 2022 (each,
a “Purchase Date”) at a purchase
price per Security equal to 100% of the aggregate Principal Amount of the
Security (the “Purchase Price”),
together with accrued and unpaid interest (including contingent interest and
Special Interest, if any) thereon, up to but not including the Purchase Date; provided that if the Purchase Date is on
or after an interest record date but on or prior to the related interest
payment date, interest (including contingent interest and Special Interest, if
any) will be payable to the Holders in whose names the Securities are
registered at the close of business on the relevant record date.

Purchases of Securities hereunder shall be made, at the
option of the Holder thereof, upon:

(i)            delivery
to the Company and the Paying Agent by the Holder of a written notice of
purchase (a “Purchase Notice”) at
any time from the opening of business on the date that is 30 Business Days
prior to the Purchase Date until the close of business on the Business Day
prior to such Purchase Date stating:

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

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

(C)           that
such Security shall be purchased as of the Purchase Date pursuant to the terms
and conditions specified in paragraph 6 of the Securities and in this
Indenture; and

(ii)           delivery
of such Security to the Paying Agent prior to, on or after the Purchase Date
(together with all necessary endorsements) at the offices of the Paying Agent,
such delivery being a condition to receipt by the Holder of the Purchase Price
therefor, together with accrued and unpaid interest (including contingent
interest and Special Interest, if any); provided,
however, that such Purchase
Price, together with accrued and unpaid interest (including contingent interest
and Special 

 17
 

Interest, if any) shall be so paid pursuant to this Section 3.08
only if the Security so delivered to the Paying Agent shall conform in all
respects to the description thereof in the related Purchase Notice, as
determined by the Company in its sole discretion.

The Company shall purchase from the Holder thereof,
pursuant to this Section 3.08, a portion of a Security if the Principal
Amount of such portion is $1,000 or an integral multiple of $1,000.  Provisions of this Indenture that apply to
the purchase of all of a Security also apply to the purchase of such portion of
such Security.

Any purchase by the Company contemplated pursuant to the
provisions of this Section 3.08 shall be consummated by the delivery of
the consideration to be received by the Holder promptly following the later of
the Purchase Date and the time of delivery of the Security.

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

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

                (b)  Manner of
Payment of Purchase Price.  The
Purchase Price of Securities in respect of which a Purchase Notice pursuant to
Section 3.08 has been given shall be paid in U.S.  legal tender (“Cash”).

                (c)  Company
Notice.  In connection with
any purchase of Securities pursuant to this Section 3.08, the Company
shall give written notice of the Purchase Date to the Holders (the “Company Notice”).  The Company Notice shall be sent by first-class
mail to the Trustee and to each Holder not less than 30 Business Days prior to
any Purchase Date (the “Company Notice Date”).  Each Company Notice shall include a form of
Purchase Notice to be completed by a Securityholder and shall state:

(i)            the
Purchase Price and the Conversion Rate;

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

(iii)          that
Securities as to which a Purchase Notice has been given may be converted if
they are otherwise convertible only in accordance with Article X hereof
and paragraph 8 of the Securities if the applicable Purchase Notice has
been withdrawn in accordance with the terms of this Indenture;

(iv)          that
Securities must be surrendered to the Paying Agent to collect payment;

(v)           that
the Purchase Price for, and any accrued and unpaid interest (including
contingent interest and Special Interest, if any) on, any Security as to which
a Purchase Notice has been given and not withdrawn will be paid promptly
following the later of the Purchase Date and the time of surrender of such
Security as described in subclause (iv) above;

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

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

(viii)        the
procedures for withdrawing a Purchase Notice (as specified in
Section 3.10);

(ix)           that,
unless the Company defaults in making payment on Securities for which a
Purchase Notice has been submitted, interest (including contingent interest and
Special Interest, if any), on such Securities will cease to accrue on the
Purchase Date; and

(x)            the
CUSIP number of the Securities.

At the Company’s request, the Trustee shall give such
Company Notice in the Company’s name and at the Company’s expense; provided,
however, that the Company makes such request at least three (3) Business
Days prior to the date by which such Company Notice must be given to the
Holders and that, in all cases, the text of such Company Notice shall be
prepared by the Company.

 18
 

Section 3.09.  Purchase
of Securities at Option of the Holder upon Fundamental Change.

(a)           If at
any time that Securities remain outstanding there shall have occurred a
Fundamental Change (as hereinafter defined), Securities shall be repurchased by
the Company, at the option of the Holder thereof, in whole or in part, at a
purchase price (the “Fundamental Change
Purchase Price”) equal to the Principal Amount thereof plus accrued
and unpaid interest (including contingent interest and Special Interest, if
any) thereon, up to and including the date (the “Fundamental Change Purchase Date”) fixed by the Company that
is 30 Business Days after the later of the Effective Date of the Fundamental
Change and the date the Company gives notice of the consummation of the
Fundamental Change, subject to satisfaction by or on behalf of the Holder of
the requirements set forth in Section 3.09(c).

A “Fundamental Change”
shall be deemed to have occurred at such time after the original issuance of
the Securities as any of the following occur:

(i)            any
sale, lease, exchange or other transfer (in one transaction or a series of
related transactions), directly or indirectly, of all or substantially all of
the assets of the Company and its Subsidiaries, taken as a whole, to any person
or group of related persons, as defined in Section 13(d) of the Exchange
Act (a “Group”) other than a
sale, transfer, lease, conveyance or other disposition of all or substantially
all of the Company’s and its Subsidiaries, taken as a whole, property or assets
that falls within the description contained in clause (ii) below;

(ii)           there
occurs any transaction or event or any series of transactions or events
(whether by means of an exchange offer, liquidation, tender offer,
consolidation, merger, combination, reclassification, recapitalization, asset
sale, lease of assets or otherwise) in connection with which all or
substantially all of the Common Stock is exchanged for, converted into,
acquired for or constitutes solely the right to receive stock, other
securities, other property, assets or Cash, unless either:

(A)          the
persons that Beneficially Owned, directly or indirectly, the Voting Stock of
the Company immediately prior to such transaction, Beneficially Own, directly
or indirectly, immediately after such transaction, shares of the surviving or
continuing corporation’s voting stock representing at least a majority of the
total voting power of all outstanding classes of Voting Stock of the surviving
or continuing corporation; or

(B)           at
least 90% of the consideration (other than Cash payments for fractional shares
or pursuant to statutory appraisal rights) in such transaction consists of
common stock, ordinary shares or American Depository Shares, and any associated
rights, traded on a U.S.  national securities
exchange or an established automated over-the-counter trading market in the
United States or quoted on the NASDAQ Global Select Market (or that will be so
traded or quoted when issued or exchanged in connection with such transaction);

(iii)          the approval
by the holders of Capital Stock of the Company of any plan or proposal for the
liquidation or dissolution of the Company, whether or not otherwise in
compliance with the provisions of this Indenture;

(iv)          any
person or Group shall become the Beneficial Owner of shares representing more
than 50% of the aggregate ordinary voting power represented by the Company’s
issued and outstanding Voting Stock;

(v)           the
first day on which a majority of the members of the Board of Directors are not
Continuing Directors; or

(vi)          the
Common Stock ceases to be listed on a United States national or regional
securities exchange or is not approved for trading on an established automated
over-the-counter trading market in the United States.

“Beneficial Owner”
shall be determined in accordance with Rule 13d-3 and 13d-5 promulgated by
the SEC under the Exchange Act or any successor provision, except that a Person
shall be deemed to have “beneficial ownership” of all securities that such
Person has the right to acquire, whether exercisable immediately or only after
the passage of time.

“Continuing Directors”
means, as of any date of determination, any member of the Board of Directors
who (i) was a member of such Board of Directors on the date of the
original issuance of the Securities or (ii) was nominated for election or
elected to the Board of Directors with the approval of a majority of the
Continuing Directors who were members of such Board of Directors at the time of
such nomination or election.

(b)           Within
5 Business Days after the occurrence of a Fundamental Change, the Company shall
mail a written notice of the Fundamental Change by first-class mail to
the Trustee and to each Holder (and to beneficial owners as required by 

 19
 

applicable law).  The notice shall
include a form of Fundamental Change Purchase Notice to be completed by the
Securityholder and shall state:

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

(ii)           the
date by which the Fundamental Change Purchase Notice pursuant to this
Section 3.09 must be given;

(iii)          the
Fundamental Change Purchase Date;

(iv)          the
Fundamental Change Purchase Price;

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

(vi)          the
Conversion Rate and any adjustments thereto;

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

(viii)        that Securities
must be surrendered to the Paying Agent to collect payment;

(ix)           that
the Fundamental Change Purchase Price for any Security as to which a
Fundamental Change Purchase Notice has been duly given and not withdrawn will
be paid promptly following the later of the Fundamental Change Purchase Date
and the time of surrender of such Security as described in clause (viii);

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

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

(xii)          the
procedures for withdrawing a Fundamental Change Purchase Notice (as specified
in Section 3.10);

(xiii)         that,
unless the Company defaults in making payment of such Fundamental Change
Purchase Price, interest (including contingent interest and Special Interest,
if any) on Securities surrendered for purchase by the Company will cease to
accrue on and after the Fundamental Change Purchase Date; and

(xiv)        the
CUSIP number of the Securities.

(c)           A
Holder may exercise its rights specified in Section 3.09(a) upon delivery
of a written notice of purchase (a “Fundamental
Change Purchase Notice”), together with the Securities subject
thereto, to the Company and the Paying Agent at any time prior to the close of
business on the third Business Day prior to the Fundamental Change Purchase
Date, stating:

(i)            the
certificate number of the Security that the Holder will deliver to be
purchased;

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

(iii)          that
such Security shall be purchased pursuant to the terms and conditions specified
in paragraph 6 of the Securities.

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

 20
 

 

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

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

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

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

Notwithstanding anything herein to the contrary, the
Company’s obligations pursuant to this Section 3.09 shall be satisfied if
a third party makes a Fundamental Change offer in the manner and at the times
and otherwise in compliance in all material respects with the requirements of
this Section 3.09 and purchases all Securities properly tendered and not
withdrawn pursuant to the requirements of this Section 3.09.

                Section 3.10.  Effect
of Purchase Notice or Fundamental Change Purchase Notice.

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

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

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

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

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

                Section
3.11.  Deposit of Purchase Price or Fundamental Change Purchase Price.  Prior to
10:00 a.m.  (New York City time) on
the Business Day following the Purchase Date or the Fundamental Change Purchase
Date, as the case may be, the Company shall deposit with the Trustee or with
the Paying Agent (or, if the Company or a Subsidiary or an Affiliate of either
of them is acting as the Paying Agent, shall segregate and hold in trust as
provided in Section 2.04) an amount of money (in 

 21
 

immediately available funds) sufficient to pay the aggregate Purchase
Price or Fundamental Change Purchase Price, as the case may be, together with
all accrued and unpaid interest (including contingent interest and Special
Interest, if any) thereon, to but not including the Purchase Date or
Fundamental Change Purchase Date, as the case may be, of all the Securities or
portions thereof which are to be purchased as of the Purchase Date or
Fundamental Change Purchase Date, as the case may be.

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

                Section 3.13.  Covenant
to Comply with Securities Laws upon Purchase of Securities.

When complying with the provisions of Section 3.08
or 3.09 hereof (provided that such offer or purchase constitutes an “issuer
tender offer” for purposes of Rule 13e-4 (which term, as used herein,
includes any successor provision thereto) under the Exchange Act at the time of
such offer or purchase), the Company shall (i) comply in all material
respects with Rule 13e-4 and Rule 14e-1 under the Exchange Act,
(ii) file the related Schedule TO (or any successor schedule, form or
report) under the Exchange Act, and (iii) otherwise comply in all material
respects with all Federal and state securities laws so as to permit the rights
and obligations under Section 3.08 or 3.09 to be exercised in the time and
in the manner specified in Section 3.08 or 3.09.

                Section
3.14.  Repayment to the Company.  The Trustee and the
Paying Agent shall return to the Company any Cash that remains unclaimed as
provided in paragraph 11 of the Securities, together with interest or
dividends, if any, thereon (subject to the provisions of Section 7.01(f)),
held by them for the payment of the Purchase Price or Fundamental Change
Purchase Price, as the case may be, and accrued and unpaid interest (including
contingent interest and Special Interest, if any); provided, however,
that to the extent that the aggregate amount of Cash deposited by the Company
pursuant to Section 3.11 exceeds the aggregate Purchase Price or
Fundamental Change Purchase Price, as the case may be, of the Securities or
portions thereof which the Company is obligated to purchase as of the Purchase
Date or Fundamental Change Purchase Date, as the case may be, and accrued and
unpaid interest thereon, if any (including contingent interest and Special
Interest, if any) then, unless otherwise agreed in writing with the Company,
promptly after the Business Day following the Purchase Date or Fundamental
Change Purchase Date, as the case may be, the Trustee shall return any such
excess to the Company together with interest or dividends, if any, thereon
(subject to the provisions of Section 7.01(f)).

ARTICLE IV.

COVENANTS

                Section
4.01.  Payment of Securities.  The Company shall
promptly make all payments in respect of the Securities on the dates and in the
manner provided in the Securities or pursuant to this Indenture.  Any amounts to be given to the Trustee or
Paying Agent, as the case may be, shall be deposited with the Trustee or Paying
Agent, as the case may be, in immediately available funds by
10:00 a.m.  (New York City time) by
the Company.  Interest installments
(including contingent interest and Special Interest, if any), Principal Amount,
Redemption Price, Purchase Price, Fundamental Change Purchase Price and
interest, if any, due on overdue amounts shall be considered paid on the
applicable date due if at 10:00 a.m. 
(New York City time) on such date (or, in the case of a Purchase Price
or Fundamental Change Purchase Price, on the Business Day following the
applicable Purchase Date or Fundamental Change Purchase Date, as the case may
be) the Trustee or the Paying Agent, as the case may be, holds, in accordance
with this Indenture, money sufficient to pay all such amounts then due.

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

                Section
4.02.  SEC and Other Reports.  The Company shall file with the
Trustee, within 15 days after it is required to file such annual and
quarterly reports, information, documents and other reports with the SEC,
copies of its annual report and of the information, documents and other reports
(or copies of such portions of any of the foregoing as the SEC may by rules and
regulations prescribe) which the Company is required to file with the SEC
pursuant to Section 13 or 15(d) of the Exchange Act.  In the event the Company is at any time no
longer subject to the reporting requirements of Section 13 or 15(d) of the
Exchange Act, it shall continue to provide the Trustee with reports containing
substantially the same information as would have been 

 22
 

required to be filed with the SEC had the Company continued to have been
subject to such reporting requirements. 
In such event, such reports shall be provided to the Trustee at the
times the Company would have been required to provide reports had it continued
to have been subject to such reporting requirements.  Delivery of such reports, information and
documents is for informational purposes only and the Trustee’s receipt of such
shall not constitute notice or constructive notice of any information contained
therein or determinable from information contained therein.

In addition, the Company shall comply with the other
provisions of TIA Section 314(a).

                Section
4.03.  Compliance Certificate.  The Company shall
deliver to the Trustee within 120 days after the end of each fiscal year
of the Company (beginning with the fiscal year ended December 31, 2007) an
Officers’ Certificate, stating whether or not to the best knowledge of the
signers thereof the Company is in default in the performance and observance of
any of the terms, provisions and conditions of this Indenture (without regard
to any period of grace or requirement of notice provided hereunder) and if the
Company shall be in default, specifying all such Defaults and the nature and
status thereof of which they may have knowledge.

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

                Section
4.05.  Maintenance of Office or Agency.  The Company will
maintain in Chicago, Illinois, an office or agency of the Trustee, Registrar,
Paying Agent and Conversion Agent where Securities may be presented or
surrendered for payment, where Securities may be surrendered for registration
of transfer, exchange, purchase, redemption or conversion and where notices and
demands to or upon the Company in respect of the Securities and this Indenture
may be served.  The Corporate Trust
Office of the Trustee shall initially be such office or agency for all of the
aforesaid purposes.  The Company shall
give prompt written notice to the Trustee of the location, and of any change in
the location, of any such office or agency (other than a change in the location
of the office of the Trustee).  If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the address of the
Trustee set forth in Section 11.02.

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

                Section
4.06.  Tax Treatment of Securities.  The Company and the
Holders, by purchasing the Securities, agree that (i) the Securities are
contingent payment debt instruments as described in Treasury Regulations
Section 1.1275-4, (ii) each Holder shall be bound by the Company’s
application of the Treasury Regulations to the Securities, including the
Company’s determination that the rate at which interest will be deemed to
accrue on the Securities for United States federal income tax purposes, will be
7.29% compounded semiannually, which is the rate comparable to the rate at
which the Company would borrow on a noncontingent, nonconvertible borrowing
with no contingent payments, but with terms and conditions otherwise comparable
to the Securities, (iii) each Holder shall use the projected payment schedule
with respect to the Securities provided by the Company to the Holder, as
provided in Treasury Regulations Section 1.1275-4(b)(4), to determine its
interest accruals and adjustments as provided in Treasury Regulations
Section 1.1275-4(b)(4)(iv), (iv) for purposes of Treasury Regulations
Section 1.1275-4, to treat the fair market value of any Common Stock
received upon any conversion of the Securities as a contingent payment, and
(v) the Company and each Holder will not take any position on a tax return
inconsistent with (i), (ii), or (iii), unless required by applicable law.

On conversion of the Securities, that portion of accrued
interest including accrued contingent interest and Special Interest, if any,
with respect to the converted Securities shall not be canceled, extinguished or
forfeited, but rather shall be deemed to be paid in full to the Holder thereof
through delivery of Cash, or if applicable, Conversion Shares (together with
the Cash payment, if any, in lieu of fractional Conversion Shares) in exchange
for the Securities being converted pursuant to the provisions hereof, and such
Cash payment, together with the fair market value of such Conversion Shares, if
any (together with any such Cash payment in lieu of fractional Conversion
Shares), shall be treated as paid or issued, to the extent thereof, first in
exchange for interest accrued and unpaid through the Conversion Date and
accrued and unpaid contingent interest and Special Interest, if any, and the
balance, if any, of such Cash payment, together with such fair market value of
any such Conversion Shares (together with any such Cash payment in lieu of
fractional Conversion Shares) shall be treated as paid or issued in exchange
for the Principal Amount of the Securities being converted pursuant to the
provisions hereof.

 23
 

ARTICLE V.

SUCCESSOR CORPORATION

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

(i)            (1)
the Company shall be the resulting or surviving corporation or (2) the
person (if other than the Company) formed by such consolidation or into which
the Company is merged or the person which acquires by conveyance, transfer or
lease the properties and assets of the Company substantially as an entirety
(i) shall be a corporation organized and validly existing under the laws
of the United States or any State thereof or the District of Columbia, and
(ii) shall expressly assume, by an indenture supplemental hereto, executed
and delivered to the Trustee, in form satisfactory to the Trustee, all of the
obligations of the Company under the Securities and this Indenture;

(ii)           immediately
after giving effect to such transaction, no Default or Event of Default shall
have occurred and be continuing; and

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

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

The successor person formed by such consolidation or into
which the Company is merged or the successor person to which such conveyance,
transfer or lease is made shall succeed to, and be substituted for, and may
exercise every right and power of, the Company under this Indenture with the
same effect as if such successor had been named as the Company herein; and
thereafter, except in the case of a lease and obligations the Company may have
under a supplemental indenture pursuant to Section 10.15, the Company
shall be discharged from all obligations and covenants under this Indenture and
the Securities.  Subject to
Section 9.06, the Company, the Trustee and the successor person shall
enter into a supplemental indenture to evidence the succession and substitution
of such successor person and such discharge and release of the Company.

ARTICLE VI.

DEFAULTS AND REMEDIES

                Section
6.01.  Events of Default.  Subject
to the provisions set forth below in this Section 6.01, an “Event of Default” occurs if:

(a)           the
Company defaults in the payment of interest (including contingent interest and
Special Interest, if any) payable on any Security when the same becomes due and
payable and such default continues for 10 Business Days;

(b)           the
Company defaults in the payment of the Principal Amount, Redemption Price,
Purchase Price or Fundamental Change Purchase Price on any Security when the
same becomes due and payable, whether at its Stated Maturity, upon redemption,
upon declaration, when due for purchase by the Company or otherwise;

(c)           the
Company fails to comply with any of its agreements in the Securities or this
Indenture (other than, in either case, agreements to make the payment or give
the notice described in clause (g) below) upon receipt of notice to the
Company of such default from the Trustee or to the Company and the Trustee from
Holders of not less than 25% in aggregate principal amount of the Securities
then outstanding, and the Company’s failure to cure (or obtain a waiver of)
such default within 60 days after the Company receives such notice;

(d)           the
Company or a Subsidiary of the Company defaults in the payment when due of
indebtedness in excess of $5,000,000;

(e)           the
Company or a Subsidiary of the Company fails to pay when due any final,
non-appealable judgments (other than any judgment as to which a reputable
insurance company has accepted full liability) aggregating in excess of
$5,000,000, which judgments are not stayed, bonded or discharged within
60 days after their entry;

 24
 

 

(f)            the
Company fails to deliver the Conversion Value upon conversion of Securities by
a Holder in accordance with the provisions of this Indenture;

(g)           the
Company fails to give notice to Holders of an occurrence of a Fundamental
Change required under Sections 3.09(b) and 10.08(c) or fails to make a payment
to purchase Securities tendered following a Fundamental Change;

(h)           if a
material portion of the Company’s or a Subsidiary’s assets, which assets
represent a material portion of the assets of the Company and its Subsidiaries
as a whole, is attached, seized, subjected to a writ or distress warrant or is
levied upon, or comes within the possession of any receiver, trustee, custodian
or assignee for the benefit of creditors, and the same is not terminated or
dismissed within 30 days thereafter;

(i)            a
court having jurisdiction in the premises shall enter a decree or order for
relief in respect of the Company or any Subsidiary of the Company in an
involuntary case under any applicable bankruptcy, insolvency or other similar
law now or hereafter in effect, or appointing a receiver, liquidator, assignee,
custodian, trustee or sequestrator (or similar official) of the Company or for
any substantial part of its property or ordering the winding up or liquidation
of its affairs and such decree or order shall remain unstayed and in effect for
a period of 45 days; or

(j)            the
Company or any Subsidiary of the Company shall commence a voluntary case under
any applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, or consent to the entry of an order for relief in an involuntary case
under any such law, or consent to the appointment of or taking possession by a
receiver, liquidator, assignee, custodian, trustee or sequestrator (or similar
official) of the Company or any Subsidiary of the Company or for any
substantial part of its property or make any general assignment for the benefit
of creditors.

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

                Section
6.02.  Defaults and Remedies.  If an Event of
Default (other than an Event of Default specified in
Section 6.01(i) or 6.01(j)) occurs and is continuing, the Trustee by
notice to the Company, or the Holders of at least 25% in aggregate Principal
Amount of the Securities at the time outstanding by notice to the Company and
the Trustee, may declare the Principal Amount of all the Securities plus
accrued and unpaid interest (including contingent interest and Special
Interest, if any) thereon, through the date of declaration to be immediately
due and payable.  Upon such a
declaration, such Principal Amount plus accrued and unpaid interest (including
contingent interest and Special Interest, if any) shall become and be
immediately due and payable.  If an Event
of Default specified in Section 6.01(i) or 6.01(j) occurs and is
continuing, the Principal Amount of all the Securities plus accrued and unpaid
interest (including contingent interest and Special Interest, if any) thereon,
shall become and be immediately due and payable without any declaration or
other act on the part of the Trustee or any Securityholder.

Notwithstanding the foregoing, at the election of the
Company, the sole remedy for an Event of Default specified in
Section 6.01(c) relating to the failure by the Company to comply with its
obligations under Section 4.02 and for any failure by the Company to
comply with the requirements of Section 314(a)(1) of the Trust Indenture
Act, shall for the first 60 days after the occurrence of such an Event of
Default consist exclusively of the right to receive special interest on the
Securities at an annual rate equal to 0.25% of the principal amount of the
outstanding Securities (“Special Interest”). 
Special Interest will accrue on all outstanding Securities from and
including the date on which an Event of Default relating to a failure to comply
with the obligations under Section 4.02 or the failure to comply with the
requirements of Section 314(a)(1) of the Trust Indenture Act first occurs
to but not including the 60th day thereafter (or such earlier date on which the
Event of Default relating to such obligations shall have been cured or waived
pursuant to Section 6.04).  On such
60th day (or earlier, if such Event of Default is cured or waived pursuant to
Section 6.04 prior to such 60th day), such Special Interest will cease to
accrue and, if such Event of Default has not been cured or waived pursuant to
Section 6.04 prior to such 60th day, then the Trustee or the Holders of
not less than 25% in principal amount of the outstanding Securities may declare
the principal of and accrued and unpaid interest (and contingent interest, if
any) and Special Interest on all such Securities to be due and payable
immediately.  This provision shall not
affect the rights of the Holders in the event of the occurrence of any other
Event of Default.

If the Company elects to pay Special Interest as the sole
remedy for an Event of Default specified in Section 6.01(c) relating to
the failure by the Company to comply with its obligations under
Section 4.02 and for any failure by the Company to comply with the
requirements of Section 314(a)(1) of the Trust Indenture Act, the Company
shall notify, in the manner provided for in Section 11.02, the Holders and
the Trustee of such election at any time on or before the close of business on
the date on which such Event of Default first occurs.  If Special Interest is payable under this
Section 6.02, the Company shall deliver to the Trustee a certificate to
that effect stating (i) the amount of Special Interest that is payable and
(ii) the date on which Special 

 25
 

Interest is payable.  Unless and
until a Responsible Officer of the Trustee receives at the Corporate Trust
Office such a certificate, the Trustee may assume without inquiry that no
Special Interest is payable.  If Special
Interest has been paid by the Company directly to the persons entitled to them,
the Company shall deliver to the Trustee a certificate setting forth the
particulars of such payment.

The Holders of a majority in Principal Amount of the
Securities then outstanding by notice to the Trustee may rescind an
acceleration and its consequences if (a) all existing Events of Default,
other than the nonpayment of the principal of and accrued and unpaid interest
(including contingent interest and Special Interest, if any) on the Securities
which has become due solely by such declaration of acceleration, have been
cured or waived; (b) the Company has paid or deposited with the Trustee a
sum in immediately available funds sufficient to pay (i) all overdue
interest (including contingent interest and Special Interest, if any) on the Securities,
(ii) the principal of any Security which has become due otherwise than by
such declaration of acceleration, and (iii) to the extent the payment of
such interest is lawful, interest on overdue installments of interest
(including contingent interest and Special Interest, if any) and overdue
principal, which has become due otherwise than by such declaration of
acceleration; (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 7.07 have been
made.  No such rescission shall affect
any subsequent Default or Event of Default or impair any right consequent
thereon.

                Section
6.03.  Other Remedies.  If
an Event of Default occurs and is continuing, the Trustee may pursue any
available remedy to collect the payment of the Principal Amount of all the
Securities, together with all accrued and unpaid interest (including contingent
interest and Special Interest, if any) thereon or to enforce the performance of
any provision of the Securities or this Indenture.

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

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

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

                Section
6.06  Limitation on Suits.  A Securityholder may not pursue
any remedy with respect to this Indenture or the Securities unless:

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

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

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

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

 26
 

 

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

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

                Section
6.07  Rights of Holders to Receive Payment.  Notwithstanding any
other provision of this Indenture, the right of any Holder to receive payment
of any amount due in respect of the Securities held by such Holder, on or after
the respective due dates expressed in the Securities, and to convert the
Securities in accordance with Article X, or to bring suit for the
enforcement of any such payment on or after such respective dates or the right
to convert, shall not be impaired or affected adversely without the consent of
such Holder.

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

                Section
6.09  Trustee May File Proofs of Claim.  In case of the
pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to the Company or any other obligor upon the Securities or
the property of the Company or of such other obligor or their creditors, the
Trustee (irrespective of whether interest installments (including contingent
interest and Special Interest, if any), the Principal Amount, Redemption Price,
Purchase Price, Fundamental Change Purchase Price or interest, if any, due on
overdue amounts in respect of the Securities shall then be due and payable as
therein expressed or by declaration or otherwise and irrespective of whether
the Trustee shall have made any demand on the Company for the payment of any
such amount) shall be entitled and empowered, by intervention in such
proceeding or otherwise,

(a)           to
file and prove a claim for any accrued and unpaid interest installments
(including contingent interest and Special Interest, if any), the whole amount
of the Principal Amount, Redemption Price, Purchase Price, Fundamental Change
Purchase Price or interest, if any, due on overdue amounts in respect of the
Securities, and to file such other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee (including any claim for the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel or any other amounts due the Trustee under
Section 7.07) and of the Holders allowed in such judicial proceeding, and

(b)           to
collect and receive any moneys or other property payable or deliverable on any
such claims and to distribute the same; and any custodian, receiver, assignee,
trustee, liquidator, sequestrator or similar official in any such judicial
proceeding is hereby authorized by each Holder to make such payments to the
Trustee and, in the event that the Trustee shall consent to the making of such
payments directly to the Holders, to pay the Trustee any amount due it for the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel, and any other amounts due the Trustee under
Section 7.07.

Nothing herein contained shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any Holder
any plan of reorganization, arrangement, adjustment or composition affecting
the Securities or the rights of any Holder thereof, or to authorize the Trustee
to vote in respect of the claim of any Holder in any such proceeding.

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

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

SECOND: to Securityholders for amounts due and unpaid on
the Securities for any accrued and unpaid interest installments (including
contingent interest and Special Interest, if any), the Principal Amount,
Redemption Price, Purchase Price, Fundamental Change Purchase Price or
interest, if any, due on overdue amounts in respect of the Securities, as the
case may be, ratably, without preference or priority of any kind, according to
such amounts due and payable on the Securities; and

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

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

 27

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

                Section
6.12  Waiver of Stay, Extension or Usury Laws.  The Company
covenants (to the extent that it may lawfully do so) that it will not at any
time insist upon, or plead, or in any manner whatsoever claim or take the
benefit or advantage of, any stay or extension law or any usury or other law
wherever enacted, now or at any time hereafter in force, which would prohibit
or forgive the Company from paying all or any portion of any interest
installment (including contingent interest and Special Interest, if any), the
Principal Amount, Redemption Price, Purchase Price, Fundamental Change Purchase
Price or interest, if any, due on overdue amounts in respect of the securities,
as contemplated herein, or which may affect the covenants or the performance of
this Indenture; and the Company (to the extent that it may lawfully do so)
hereby expressly waives all benefit or advantage of any such law and covenants
that it will not hinder, delay or impede the execution of any power herein
granted to the Trustee, but will suffer and permit the execution of every such
power as though no such law had been enacted.

ARTICLE VII.

TRUSTEE

                Section 7.01.  Duties
of Trustee.

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

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

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

This Section 7.01(b) shall be in lieu of
Section 3.15(a) of the TIA and such Section 315(a) is hereby
expressly excluded from this Indenture, as permitted by the TIA.

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

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

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

(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 6.05.

Sections 7.01(c)(i), (ii) and (iii) shall be in
lieu of Sections 315(d)(1), 315(d)(2) and 315(d)(3) of the TIA and such
Sections 315(d)(1), 315(d)(2) and 315(d)(3) are hereby expressly excluded from
this Indenture, as permitted by the TIA.

 28
 

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

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

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

                Section
7.02  Rights of Trustee.  Subject to its duties and
responsibilities under the TIA,

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

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

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

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

(e)           the
Trustee may consult with counsel selected by it and any advice or opinion of
such counsel shall be full and complete authorization and protection in respect
of any action taken or suffered or omitted by it hereunder in good faith and in
accordance with such advice or opinion of 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, order or direction of any of the
Holders, pursuant to the provisions of this Indenture, unless such Holders
shall have offered to the Trustee security or indemnity satisfactory to it
against the costs, expenses and liabilities which may be incurred therein or
thereby;

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

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

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

(j)            the
rights, privileges, protections, immunities and benefits given to the Trustee,
including 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;

 29
 

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

(l)            neither
the Trustee nor any of its officers, directors, employees or agents shall be
liable for any action taken or omitted under this Indenture or in connection
therewith except to the extent caused by the Trustee’s gross negligence, bad
faith or willful misconduct, as determined by the final judgment of a court of
competent jurisdiction, no longer subject to appeal or review.  Anything in this Indenture to the contrary
notwithstanding, in no event shall the Trustee be liable for special, indirect
or consequential loss or damage of any kind whatsoever (including but not
limited to lost profits), even if the Trustee has been advised of the
likelihood of such loss or damage and regardless of the form of action.

                Section
7.03  Individual Rights of Trustee.  The Trustee in its
individual or any other capacity may become the owner or pledgee of Securities
and may otherwise deal with the Company or its Affiliates with the same rights
it would have if it were not Trustee. 
Any Paying Agent, Registrar, Conversion Agent or co-registrar may do the
same with like rights.  However, the
Trustee must comply with Sections 7.10 and 7.11.

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

                Section
7.05  Notice of Defaults.  If a Default occurs and if it is
known to the Trustee, the Trustee shall give to each Securityholder notice of
all current Defaults known to it within 90 days after any such Default
occurs or, if later, within 15 days after it is known to the Trustee,
unless such Default shall have been cured or waived before the giving of such
notice.  Notwithstanding the preceding
sentence, except in the case of a Default described in Sections 6.01(a) and
6.01(b), the Trustee may withhold the notice if and so long as a committee of
its Responsible Officers in good faith determines that withholding the notice
is in the interests of Securityholders. 
The second sentence of this Section 7.05 shall be in lieu of the
proviso to Section 315(b) of the TIA and such proviso is hereby expressly
excluded from this Indenture, as permitted by the TIA.

                Section
7.06   Reports by Trustee to Holders.  Within
60 days after each March 31 beginning with the March 31
following the date of this Indenture, the Trustee shall mail to each
Securityholder a brief report dated as of such March 31 that complies with
TIA Section 313(a), if required by such Section 313(a).  The Trustee also shall comply with TIA
Section 313(b).

A copy of each report at the time of its mailing to
Securityholders shall be filed with the SEC and each securities exchange, if
any, on which the Securities are listed. 
The Company agrees to notify the Trustee promptly whenever the securities
become listed on any securities exchange and of any delisting thereof.

                Section
7.07   Compensation and Indemnity.  The Company
agrees:

(a)           to pay
to the Trustee from time to time, pursuant to a side letter between the Company
and the Trustee and the Trustee shall be entitled to, such compensation for all
services rendered by it hereunder (which compensation shall not be limited (to
the extent permitted by law) by any provision of law in regard to the
compensation of a trustee of an express trust);

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

(c)           to
indemnify the Trustee or any predecessor Trustee and their agents, officers, directors
and employees for, and to hold them harmless against, any loss, damage, claim,
liability, cost or expense (including attorneys’ fees and expenses and taxes
(other than taxes based upon, measured by or determined by the income of the
Trustee)) incurred without negligence, misconduct or bad faith on its part,
arising out of or in connection with the acceptance or administration of this
trust, including the costs and expenses of defending itself against any claim
(whether asserted by the Company or any Holder or any other Person) or
liability in connection with the exercise or performance of any of its powers
or duties hereunder.

To secure the Company’s payment obligations in this
Section 7.07, the Trustee shall have a lien prior to the Securities on all
money or property held or collected by the Trustee, except that held in trust
to pay interest installments (including 

 30
 

contingent interest and Special Interest, if any), the Principal Amount,
Redemption Price, Purchase Price, Fundamental Change Purchase Price or
interest, if any, due on overdue amounts, as the case may be, in respect of any
particular Securities.

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

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

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

(b)           the
Trustee is adjudged bankrupt or insolvent;

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

(d)           the
Trustee otherwise becomes incapable of acting.

If the Trustee resigns or is removed or if a vacancy
exists in the office of Trustee for any reason, the Company shall promptly
appoint, by resolution of its Board of Directors, a successor Trustee.

A successor Trustee shall deliver a written acceptance of
its appointment to the retiring Trustee and to the Company satisfactory in form
and substance to the retiring Trustee and the Company.  Thereupon the resignation or removal of the
retiring Trustee shall become effective, and the successor Trustee shall have
all the rights, powers and duties of the Trustee under this Indenture.  The successor Trustee shall mail a notice of
its succession to Securityholders.  The
retiring Trustee shall promptly transfer all property held by it as Trustee to
the successor Trustee, subject to the lien provided for in Section 7.07.

If a successor Trustee does not take office within
30 days after the retiring Trustee gives its notice of resignation or is
removed, the retiring Trustee, the Company or the Holders of a majority in
aggregate Principal Amount of the Securities at the time outstanding may
petition any court of competent jurisdiction at the expense of the Company for
the appointment of a successor Trustee.

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

                Section
7.09  Successor Trustee by Merger.  If the Trustee
consolidates with, merges or converts into, or transfers all or substantially
all its corporate trust business or assets (including the administration of the
trust created by this Indenture) to, another corporation, the resulting,
surviving or transferee corporation without any further act shall be the
successor Trustee.

                Section
7.10  Eligibility; Disqualification.  The Trustee shall
at all times satisfy the requirements of TIA Section 310(a)(1).  The Trustee (or its parent holding company)
shall have a combined capital and surplus of at least $50,000,000 as set forth
in its most recent published annual report of condition.  Nothing herein contained shall prevent the
Trustee from filing with the SEC the application referred to in the penultimate
paragraph of TIA Section 310(b). 
The Trustee shall comply with TIA Section 310(b); provided,
however, that there shall be excluded from the operation of TIA
Section 310(b)(1) any indenture or indentures under which other securities
or certificates of interest or participation in other securities of the Company
are outstanding if the requirements for such exclusion set forth in TIA
Section 310(b)(1) are met.

                Section
7.11  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 VIII.

DISCHARGE OF INDENTURE

                Section
8.01   Discharge of Liability on
Securities.  When
(i) the Company delivers to the Trustee all outstanding Securities (other
than Securities replaced pursuant to Section 2.07) for cancellation or
(ii) all outstanding Securities have become 

 31
 

due and payable and the Company deposits with the Trustee Cash, in
immediately available funds, sufficient to pay all amounts due and owing on all
outstanding Securities (other than Securities replaced pursuant to
Section 2.07), and if in either case the Company pays all other sums
payable hereunder by the Company, then this Indenture shall, subject to
Section 7.07, cease to be of further effect.  The Trustee shall join in the execution of a
document prepared by the Company acknowledging satisfaction and discharge of
this Indenture on demand at the cost and expense of the Company and accompanied
by an Officers’ Certificate and Opinion of Counsel.

                Section
8.02 
Repayment to the Company.  The Trustee
and the Paying Agent shall return to the Company upon written request any money
held by them for the payment of any amount with respect to the Securities that
remains unclaimed for two years, subject to applicable unclaimed property
law.  After return to the Company, as
applicable, Holders entitled to the money must look to the Company for payment
as general creditors unless an applicable abandoned property law designates
another person and the Trustee and the Paying Agent shall have no further
liability to the Securityholders with respect to such money or securities for
that period commencing after the return thereof.

ARTICLE IX.

AMENDMENTS

                Section
9.01  Without Consent of Holders.  The Company and the
Trustee may amend or supplement this Indenture or the Securities without notice
to or consent of any Securityholder:

(a)           to
comply with Article V or Section 10.15;

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

(c)           to
make provisions with respect to the conversion right of the Holders pursuant to
the requirements of Section 10.01, Section 10.07, Section 10.08
and Section 10.15;

(d)           to
evidence and provide for the acceptance of appointment hereunder by a successor
Trustee with respect to the Securities;

(e)           to
increase the Conversion Rate;

(f)            to
make any changes that would provide the holders of Securities with any
additional rights or benefits;

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

(h)           to comply
with the provisions of the TIA, or with any requirement of the SEC arising as a
result of the qualification of this Indenture under the TIA.

                Section
9.02  With Consent of Holders.  The Company and the
Trustee may amend or supplement this Indenture or the Securities without notice
to any Securityholder but with the written consent of the Holders of a majority
in aggregate Principal Amount of the Securities then outstanding.  The Holders of a majority in aggregate
Principal Amount of the Securities then outstanding may waive compliance by the
Company with restrictive provisions of this Indenture other than as set forth
in this Section 9.02 below, and waive any past Default under this
Indenture and its consequences, except a Default in the payment of the principal
of or interest on any Security or in respect of a provision which under this
Indenture cannot be modified or amended without the consent of the Holder of
each outstanding Security affected.

Subject to Section 9.04, without the written consent
of each Securityholder affected, however, an amendment, supplement or waiver,
including a waiver pursuant to Section 6.04, may not:

(a)           change
the Stated Maturity of the principal of, or any payment date of any installment
of interest (including contingent interest and Special Interest, if any) on,
any Security;

(b)           reduce
the Principal Amount of, or the rate of interest (including contingent interest
and Special Interest, if any) on, any Security, whether upon acceleration,
redemption or otherwise, or alter the manner of calculation of interest or the
rate of accrual thereof on any Security;

(c)           change
the currency for payment of principal of, or interest (including contingent
interest and Special Interest, if any) on any Security;

 32
 

(d)           impair
the right to institute suit for the enforcement of any payment of principal of,
or interest (including contingent interest and Special Interest, if any) on,
any Security when due;

(e)           adversely
affect the conversion rights provided in Article X;

(f)            modify
the provisions of this Indenture requiring the Company to make an offer to
repurchase Securities upon a Fundamental Change or to repurchase the Securities
at the option of the Holders pursuant to Section 3.08 in any case in a
manner adverse to the Holders of the Securities;

(g)           reduce
the percentage of Principal Amount of the outstanding Securities necessary to
modify or amend this Indenture or to consent to any waiver provided for in this
Indenture;

(h)           waive
a Default in the payment of the Principal Amount of, or interest (including
contingent interest and Special Interest, if any) on, any Security (except as
provided in Section 6.02); or

(i)            make
any changes in Section 6.04, Section 6.07 or this Section 9.02.

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

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

                Section
9.03  Compliance with Trust Indenture Act.  Every supplemental
indenture executed pursuant to this Article IX shall comply with the TIA.

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

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

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

                Section
9.07  Effect of Supplemental Indentures.  Upon the execution
of any supplemental indenture under this Article IX, 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 X.

CONVERSIONS

                Section
10.01 
Conversion Privilege.  Subject to the
provisions of this Article X, a Holder of a Security may convert such
Security into Cash, and if applicable, Common Stock (the shares of Common Stock
issuable upon such conversion, if any, 

 33
 

the “Conversion Shares”),
at the Conversion Rate then in effect, together with those rights, warrants or
options specified in Section 10.07, to the extent applicable, if any of the
following conditions is satisfied:

(a)           during
any calendar quarter (the “Quarter”),
if the Closing Sale Price per share of Common Stock for each of at least 20
Trading Days in the period of 30 consecutive Trading Days ending on the last
Trading Day of the Quarter preceding the Quarter in which the conversion of
such Security occurs is more than 120% of the Base Conversion Price on such
thirtieth Trading Day;

(b)           the
Security has been called for redemption by the Company pursuant to
Section 3.01;

(c)           the
conversion of such Security occurs during the nine Trading Day period
immediately following a period of five consecutive Trading Days in which the
Security Trading Price (as determined following a request by a Holder of the
Securities in accordance with the procedures set forth below in this
Section 10.01) for each Trading Day in such period was less than 95% of the
then-applicable Conversion Rate per $1,000 Principal Amount of the Securities
multiplied by the Volume-Weighted Average Price per share of Common Stock
on such Trading Day (assuming satisfaction of conditions to conversion);

(d)           (i) an
issuance of rights, warrants or options referred to in Section 10.07(b)
occurs or (ii) a distribution referred to in Section 10.07(c) occurs
where the fair market value of such distribution per share of Common Stock (as
determined by the Board of Directors of the Company, which determination shall
be conclusive evidence of such fair market value) exceeds 10% of the Closing
Sale Price per share of Common Stock on the Trading Day immediately preceding
the date of declaration of such distribution;

(e)           (i) subject
to Section 10.08, (A) a Fundamental Change occurs or (B) the
Company is party to any other consolidation, merger, share exchange, sale of
all or substantially all of its assets or other similar transaction pursuant to
which the Common Stock is subject to conversion into shares of stock, other
securities or property (including Cash) pursuant to Section 10.15
(collectively, a “Consolidation”) and (ii) the conversion of such Security
occurs at any time from and after the date that is 30 days prior to the
date the Company originally announces as the anticipated Effective Date of such
transaction until and including the date that is 30 Business Days after the
actual Effective Date of such Consolidation, or if such transaction is a
Fundamental Change, until the Fundamental Change Purchase Date; or

(f)            at
any time from and including March 15, 2012 to and including May 20,
2012, and any time on or after March 15, 2027.

In connection with the foregoing clause (a), at the
end of each Quarter the Company shall determine whether the Securities are
convertible in the subsequent Quarter pursuant to such clause (a), and
based upon such determination provided by the Company to the Trustee, the
Trustee shall promptly notify the Holders if the Securities are convertible.

In the case of the foregoing clauses (d)(i) and
(ii), the Company must notify the Holders at least 20 days prior to the
Ex-Dividend Date for such issuance or distribution.  Once the Company has given such notice,
Holders may surrender their Securities for conversion at any time thereafter
until the earlier of the close of business on the Business Day prior to the
Ex-Dividend Date or the Company’s announcement that such issuance or
distribution will not take place.  This
provision shall not apply if the Holder of a Security otherwise participates in
the distribution without conversion.

The “Ex-Dividend Date”
for any such issuance or distribution means the date immediately prior to the
commencement of “ex-dividend” trading for such issuance or distribution on the
New York Stock Exchange or such other national securities exchange or the
NASDAQ Global Select Market or similar system of automated dissemination of
quotations of securities prices on which the Common Stock is then listed or
quoted.

If, in respect of a Conversion Date, the Applicable Stock
Price is less than or equal to the Base Conversion Price, the Conversion Rate
will be the Base Conversion Rate.

If, in respect of a Conversion Date, the Applicable Stock
Price is greater than the Base Conversion Price, then the Conversion Rate will
be determined in accordance with the following formula:

CR1 =
BCR0 + [((ASP - BCP)/ASP)  ́ ISF]

where:

 34
 

CR1 =
the adjusted Conversion Rate;

BCR0 =
the Base Conversion Rate;

ASP = the Applicable Stock Price;

BCP = the Base Conversion Price; and

ISF = the Incremental Share Factor.

The Conversion Rate, including any additional shares of
Common Stock added to the Conversion Rate in connection with a Make-Whole
Fundamental Change, will not exceed 42.1408 (which is equal to a Conversion
Price of $23.73 per share); however, such maximum Conversion Rate will be
appropriately adjusted for the Conversion Rate adjustments set forth in
Section 10.07.

The “Base Conversion
Rate” is 28.5700, subject to adjustment as set forth in
Section 10.07 hereof.

The “Base Conversion
Price” is a dollar amount derived by dividing $1,000 by the Base
Conversion Rate.

The “Incremental Share
Factor” is 13.5708, subject to the same proportional adjustments as
the Base Conversion Rate.

The “Applicable Stock
Price” is equal to the average of the daily Volume-Weighted
Average Price per share of the Common Stock during the Cash Settlement
Averaging Period.

A Holder may convert a portion of a Security equal to
$1,000 or any integral multiple thereof. 
Provisions of this Indenture that apply to conversion of all of a
Security also apply to conversion of a portion of a Security.

If a Security is called for redemption pursuant to
Article III, the right to convert such Security shall terminate at the
close of business on the second Business Day before the Redemption Date for
such Security (unless the Company shall default in making the redemption
payment then due, in which case the conversion right shall terminate on the
date such Default is cured and such Security is redeemed).  A Security in respect of which a Holder has
delivered a Purchase Notice pursuant to Section 3.08 or a Fundamental
Change Purchase Notice pursuant to Section 3.09 exercising the option of
such Holder to require the Company to repurchase such Security may be converted
only if such Purchase Notice or Fundamental Change Purchase Notice, as the case
may be, is withdrawn by a written notice of withdrawal delivered to the Paying
Agent prior to the close of business on the Business Day prior to the Purchase
Date or prior to the close of business on the Fundamental Change Purchase Date,
as the case may be, in accordance with Section 3.10.

A Holder of Securities is not entitled to any rights of a
holder of Common Stock unless such Holder has received Conversion Shares upon
conversion of its Securities pursuant to this Article X.

The “Security Trading
Price” per $1,000 in Principal Amount of Securities on any date of
determination means the average of the secondary market bid quotations per
$1,000 in Principal Amount of Securities obtained by the Conversion Agent for
$5,000,000 in 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 by the Conversion
Agent, but two such bids are obtained, then the average of the two bids shall
be used, and if only one such bid can reasonably be obtained by the Conversion
Agent, such one bid shall be used.  If
the Conversion Agent cannot reasonably obtain at least one bid for $5,000,000
in Principal Amount of Securities from a 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
Security Trading Price will be determined in good faith by the calculation
agent (which shall initially be the Company unless the Company shall have
appointed a calculation agent, which may be any investment bank with a national
or international reputation with experience in such matters) taking into
account in such determination such factors as it, in its sole discretion after
consultation with the Company, deems appropriate.  Other than in connection with a determination
of whether contingent interest shall be payable, the Conversion Agent shall
have no obligation to determine the Security Trading Price unless the Company
has requested such determination; and the Company shall have no obligation to
make such request unless a Holder of the Securities provides the Company with
reasonable evidence that the Security Trading Price is less than 95% of the
product of the Volume-Weighted Average Price per share of the Common
Stock on that day and the then-applicable Conversion Rate per $1,000 in
Principal Amount of Securities (assuming satisfaction of conditions to such
conversion); at which time the Company shall instruct the Conversion Agent to
determine the Security Trading Price beginning on the next Trading Day and on
each successive Trading Day until the Security Trading Price is greater 

 35
 

than or equal to 95% of the product of the Volume-Weighted Average
Price per share of the Common Stock and the then-applicable Conversion Rate per
$1,000 in Principal Amount of Securities (assuming satisfaction of conditions
to such conversion).

                Section 10.02.  Consideration
Upon Conversion.

(a)           Upon
conversion of Securities pursuant to this Article X, the Company shall
deliver to each Securityholder validly tendering their Securities for
conversion the following (the “Conversion
Value”):

(i)            an
amount (the “Principal Return”)
in cash equal to the sum of the Daily Principal Return for each Trading Day in
the Cash Settlement Averaging Period for such conversion; and

(ii)           if
the sum of the Daily Net Shares for each Trading Day in the Cash Settlement
Averaging Period for such conversion is greater than or equal to one (1), a
certificate for a number of shares of Common Stock (the “Net Shares”) equal to such sum; provided,
however, that the Company shall not issue fractional shares of Common Stock and
shall instead deliver cash (in addition to any other consideration payable upon
such conversion) in an amount equal to the value of such fraction computed on
the basis of the Volume-Weighted Average Price per share of Common Stock
on the last Trading Day of such Cash Settlement Averaging Period.

(b)           The
Company shall deliver such Principal Return and, if applicable, such Net Shares
as soon as practicable following the Conversion Date (as defined below), but in
no event later than three (3) Business Days after the last Trading Day in
the Cash Settlement Averaging Period applicable to such conversion (assuming
the Holder has satisfied all conversion requirements); provided, however, that:

(i)            if a
Securityholder surrenders a Security for conversion in connection with a
Make-Whole Fundamental Change under circumstances where the Company must
increase the Conversion Rate applicable to that Security, then the Company will
deliver, through the Conversion Agent, the consideration that is payable on
account of the increase in the Conversion Rate as soon as practicable, but in
no event after the third Business Day after the later of:

·                  the date the
Securityholder surrenders the Security for conversion;

·                  the last Trading
Day in the applicable Cash Settlement Averaging Period; and

·                  the Effective
Date of the Make-Whole Fundamental Change;

(ii)           if
the conversion is in connection with a redemption, the settlement date will be
the Redemption Date; and

(iii)          if a
Securityholder submits a conversion notice on the back of the Security (a ”Conversion
Notice”) during the period beginning on the 33rd scheduled Trading Day prior to
the Stated Maturity and ending at the close of business on the Business Day
immediately preceding the Stated Maturity, the settlement date will be the
Stated Maturity.

“Cash Settlement
Averaging Period” shall mean, with respect to a Security that is
tendered for conversion in accordance with this Article X, either
(i) in the event such Security is surrendered for such conversion during
the period beginning on the thirty-third (33rd) scheduled Trading Day
prior to the Stated Maturity and ending at the close of business on the
Business Day immediately preceding the Stated Maturity, the thirty
(30) consecutive Trading Days beginning on, and including, the thirtieth
(30th) scheduled Trading Day prior to the Stated Maturity; and (ii) in all
other circumstances, the thirty (30) consecutive Trading-Day period that
begins on, and includes, the third (3rd) Trading Day after the day of the
Conversion Date for such conversion.

“Daily Principal
Return” shall mean, with respect to a Trading Day, the lesser of
thirty-three dollars and thirty-three cents ($33.33) and the Daily
Conversion Value for such Trading Day.

“Daily Conversion
Value” shall mean, with respect to a Trading Day, one-thirtieth
(1/30th) of the product of (i) the Conversion Rate in effect on such
Trading Day and (ii) the Volume-Weighted Average Price per share of
Common Stock on such Trading Day.

“Daily Net Shares”
shall mean, with respect to a Trading Day, an amount equal to the following:
(i) if the Daily Conversion Value for such Trading Day is equal to or less
than thirty-three dollars and thirty-three cents ($33.33), then the
Daily 

 36
 

Net Shares with respect to such Trading Day shall mean an amount equal
to zero (0); and (ii) if the Daily Conversion Value for such Trading Day
exceeds thirty-three dollars and thirty-three cents ($33.33), then
the Daily Net Shares with respect to such Trading Day shall mean a fraction
(a) whose numerator is the excess of such Daily Conversion Value over
thirty-three dollars and thirty-three cents ($33.33) and
(b) whose denominator is the Volume-Weighted Average Price per share
of the Common Stock on such Trading Day; provided, however, that the Board of
Directors shall, in its good faith determination, which shall be described in a
Board Resolution, make appropriate adjustments to such Daily Net Shares to
account for any adjustments to the Conversion Rate which shall have become
effective, or any event requiring an adjustment to the Conversion Rate where
the Ex Date of such event occurs, during the applicable Cash Settlement
Averaging Period.

The “Ex Date”
(i) when used with respect to any issuance or distribution, means the
first date on which the Common Stock trades the 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 issuance or distribution, (ii) when
used with respect to any subdivision or combination of shares of Common Stock,
means the first date on which the Common Stock trades the regular way on such
exchange or in such market after the time at which such subdivision or
combination becomes effective, and (iii) when used with respect to any
tender offer or exchange offer means the first date on which the Common Stock
trades the regular way on such exchange or in such market after the expiration
time of such tender offer or exchange offer (as it may be amended or extended).

The “Volume-Weighted
Average Price” per share of the Common Stock on any Trading Day
shall mean the volume-weighted average price per share of Common Stock on
the NASDAQ Global Select Market or, if the Common Stock shall not be listed on
the NASDAQ Global Select Market, on the principal exchange or over-the-counter
market on which the Common Stock shall then be listed or traded, from
9:30 a.m.  to 4:00 p.m.  (New York City time) on such Trading Day as
displayed by Bloomberg; provided, however, that if such volume-weighted
average price shall not be available, then the amount to be used as the Volume-Weighted
Average Price on such Trading Day for purposes hereof shall be determined by a
nationally recognized investment banking firm retained for such purpose by the
Company.

                Section
10.03 
Conversion
Procedure.  To
convert a Security, a Holder must satisfy the requirements in paragraph 8
of the Securities and (i) complete and manually sign the Conversion Notice
and deliver such notice to the Conversion Agent, (ii) surrender the
Security to the Conversion Agent, (iii) furnish appropriate endorsements
and transfer documents if required by the Registrar or the Conversion Agent,
(iv) pay any transfer or other tax, if required by Section 10.05 and
(v) if the Security is held in book-entry form, complete and deliver to
the Depositary appropriate instructions pursuant to the Depositary’s book-entry
conversion programs.  The date on which
the Holder satisfies all of the foregoing requirements is the “Conversion Date”.  As soon as practicable after the Conversion
Date, the Company shall deliver to the Holder through the Conversion Agent
Cash, and if applicable, either (i) a certificate for or (ii) a
book-entry notation of the number of whole Conversion Shares and Cash in lieu
of any fractional Conversion Share pursuant to Section 10.06.

The person in whose name any such 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 Rate
in effect on the date that such Security shall have been surrendered for
conversion, as if the stock transfer books of the Company had not been
closed.  Upon conversion of a Security,
such person shall no longer be a Holder of such Security.

No payment or adjustment will be made for accrued
interest (including contingent interest and Special Interest, if any), on a
converted Security or for dividends or distributions on Conversion Shares, but
if any Holder surrenders a Security for conversion between the record date for
the payment of an installment of interest and the next interest payment date,
then, notwithstanding such conversion, the interest (including contingent
interest and Special Interest, if any) payable on such interest payment date
shall be paid to the Holder of such Security on such record date.  In such event, such Security, when surrendered
for conversion, must be accompanied by delivery of a check payable to the
Conversion Agent in an amount equal to the interest (including contingent
interest and Special Interest, if any) payable on such interest payment date on
the portion so converted.  If such
payment does not accompany such Security, the Security shall not be converted;
provided, however, that no such check shall be required if such Security has
been called for redemption on a Redemption Date within the period between and
including such record date and such interest payment date, or if such Security
is surrendered for conversion on the interest payment date.  If the Company defaults in the payment of
interest (including contingent interest and Special Interest, if any) payable on
the interest payment date, the Conversion Agent shall repay such funds to the
Holder.

 

 37

If a Holder converts more than one Security at the same
time, the amount of Cash and number of Conversion Shares, if any are issued,
shall be based on the aggregate Principal Amount of Securities converted.

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
10.04 
Adjustments Below
Par Value.  Before
taking any action which would cause an adjustment increasing the Conversion
Rate such that the shares of Common Stock issuable upon conversion of the
Securities would be issued for less than the par value of such Common Stock,
the Company will take all corporate action which may be necessary in order that
the Company may validly and legally issue fully paid and nonassessable shares
of such Common Stock at such adjusted Conversion Rate.

                Section
10.05 
Taxes on
Conversion.  If
a Holder converts a Security, the Company shall pay any documentary, stamp or
similar issue or transfer tax due on any Conversion Shares issued.  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 certificates representing the
Conversion Shares 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 regulations.

                Section
10.06 
Company to
Provide Stock.  The
Company shall, prior to issuance of any Securities hereunder, and from time to
time as may be necessary, reserve, out of its authorized but unissued Common
Stock a sufficient number of shares of Common Stock as would be required
pursuant to this Article X to be delivered to Holders upon the conversion
of their Securities pursuant to this Article X.

The Company covenants that any Conversion Shares
delivered upon conversion of the Securities shall be newly issued shares or
treasury shares, shall be duly authorized, validly issued, fully paid and
non-assessable and shall be free from preemptive rights and free of any lien or
adverse claim.

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

                Section
10.07 
Adjustment of
Conversion Rate.   The
Conversion Rate shall be adjusted from time to time by the Company as follows:

(a)           In
case the Company shall (i) pay a dividend or other distribution in shares
of Common Stock or other Capital Stock to all or substantially all holders of
Common Stock, (ii) split its outstanding Common Stock into a greater
number of shares, (iii) combine its outstanding Common Stock into a
smaller number of shares or (iv) reclassify its outstanding Common Stock,
the Conversion Rate in effect immediately prior thereto shall be adjusted so
that the Holder of any Security thereafter surrendered for conversion shall be
entitled to receive the number of shares of Capital Stock which it would have
owned or have been entitled to receive had such Security been converted
immediately prior to the happening of such event.  An adjustment made pursuant to this
subsection (a) shall become effective immediately after the record date in
the case of a dividend or other distribution and shall become effective
immediately after the effective date in the case of a split, combination or
reclassification.

(b)           In
case the Company shall issue to all holders of its Common Stock, rights,
warrants or options entitling such holders (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 an exercise price per share of
Common Stock less than the average of the Closing Sale Prices per share for the
ten Trading Days immediately preceding the date such issuance was publicly
announced, the Conversion Rate in effect immediately prior such issuance shall
be adjusted in accordance with the following formula:

CR1 =
CR0  ́ (OS0 + X)/(OS0 + Y)

where:

CR0 =
the Conversion Rate in effect immediately prior to the Ex-Dividend Date for
such distribution;

CR1 =
the new Conversion Rate in effect immediately on and after the Ex-Dividend Date
for such distribution;

 38
 

OS0 =
the number of shares of Common Stock outstanding immediately prior to the
Ex-Dividend Date for such distribution;

X = the aggregate number of shares of Common Stock
issuable pursuant to such rights, warrants or options; and

Y = the number of shares of Common Stock equal to
the quotient of (A) the aggregate price payable to exercise all such
rights, warrants or options and (B) the average of the Closing Sale Prices
of the Common Stock for the ten consecutive Trading Days ending on the Trading
Day immediately preceding the date of announcement for the issuance of such
rights, warrants or options.

Such adjustment shall be made successively whenever any
such rights, warrants or options are issued, and shall become effective
immediately after such record date.  If
at the end of the period during which such rights, warrants or options are
exercisable not all rights, warrants or options shall have been exercised, the
adjusted Conversion Rate shall be immediately readjusted to what it would have
been upon application of the foregoing adjustment substituting 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) for the total number of shares of Common Stock offered (or the
convertible securities offered).

(c)           In
case the Company shall distribute to all holders of its Common Stock any shares
of Capital Stock of the Company (other than Common Stock) or evidences of its
indebtedness, Cash, other securities or other assets, or shall distribute to
all holders of its Common Stock, rights, warrants or options to subscribe for
or purchase any of its securities (excluding: (i) rights, options,
warrants and other securities referred to in subsections (b) above or (d),
(e) or (h) below; and (ii) those dividends, distributions,
splits and combinations referred to in subsection (a) above); then in each
such case the Conversion Rate shall be adjusted in accordance with the
following formula:

CR1 =
CR0  ́ SP0/(SP0 - FMV)

where:

CR0 =
the Conversion Rate in effect immediately prior to the Ex-Dividend Date for
such distribution;

CR1 =
the new Conversion Rate in effect immediately on and after the Ex-Dividend Date
for such distribution;

SP0 =
the Closing Sale Price of Common Stock on the Trading Day immediately preceding
the Ex-Dividend Date for such distribution; and

FMV = the fair market value (as determined in good
faith by the Board of Directors) of the shares of capital stock, evidences of
indebtedness, assets or property distributed with respect to each outstanding
share of Common Stock on the earlier of the record date and the Ex-Dividend
Date for such distribution;

provided that if “FMV” with respect to such distribution
is equal to or greater than “SP0” with
respect to such distribution, then in lieu of the foregoing adjustment,
adequate provision shall be made so that each Securityholder shall have the
right to receive on the date such shares of capital stock, evidences of
indebtedness, other assets or property of the Company, or rights, warrants or
options to purchase securities of the Company are distributed to holders of
Common Stock, for each Security, the amount of shares of capital stock,
evidences of indebtedness, other assets or property of the Company, or rights,
warrants or options to purchase securities of the Company such Securityholder
would have received had such Securityholder owned a number of shares of Common
Stock equal to a fraction the numerator of which is the product of the
Conversion Rate in effect immediately prior to the Ex-Dividend Date for such
distribution, and the aggregate
principal amount of Securities held by such Securityholder and the denominator
of which is one thousand dollars ($1,000). 
An adjustment to the Conversion Rate made pursuant to the immediately
preceding paragraph shall become effective as of the open of business on the
Ex-Dividend Date for such distribution.

(d)           In the
event the Company pays a dividend or makes a distribution to all holders of its
Common Stock consisting of publicly-traded Capital Stock of any class or
series, or similar equity interests, of or relating to a Subsidiary or other
business unit of the Company (each, a “Spin-Off”), the Conversion Rate
shall be adjusted, if at all, in accordance with the following formula:

CR1 =
CR0  ́ (FMV0 + MP0)/MP0

 39
 

where:

CR0 =
the Conversion Rate in effect on the tenth Trading Day immediately following,
and including, the Ex Date in respect of such Spin-Off;

CR1 =
the new Conversion Rate immediately after the tenth Trading Day immediately
following, and including, the Ex Date in respect of such Spin-Off;

FMV0 =
the average of the Closing Sale Prices of the capital stock or similar equity
interest distributed to holders of Common Stock applicable to one share of
Common Stock over the first ten consecutive Trading Days after the Ex Date in
respect of such Spin-Off; and

MP0 =
the average of the Closing Sale Prices of the Common Stock over the first ten
consecutive Trading Days commencing on and including such fifth Trading Day
after the Ex Date in respect of such Spin-Off.

An adjustment to the Conversion Rate made pursuant to the
immediately preceding paragraph will occur as of the close of business on the
tenth Trading Day immediately following and including the Ex Date in respect of
such Spin-Off; provided, that in respect of any conversion within the ten
Trading Days following the Ex Date in respect of such Spin-Off, references
within this subsection (d) to ten Trading Days shall be deemed replaced
with such lesser number of Trading Days as have elapsed between the Ex Date in
respect of such Spin-Off and the Conversion Date in determining the applicable
Conversion Rate.

If any Spin-Off described in this subsection (d) is
declared but not paid or made, the new Conversion Rate shall be readjusted to
be the Conversion Rate that would then be in effect if such Spin-Off had not
been declared.

(e)           In
case the Company shall declare a Cash dividend or distribution to all the
holders of Common Stock, the Conversion Rate shall be increased by multiplying
the Conversion Rate in effect immediately prior to the opening of business on
the Ex Date in respect of such dividend or distribution by a fraction
(i) whose numerator shall be the current market price per share of Common
Stock on such Ex Date and (ii) whose denominator shall be an amount equal
to (x) such current market price per share of Common Stock on the Ex Date
less (y) the amount of the distribution per share of the Common Stock;
provided, however, that the Conversion Rate shall not be adjusted pursuant to
this Section 10.07(e) to the extent, and only to the extent, such
adjustment would cause the Conversion Price to be less than $0.001 (which
minimum amount shall be subject to appropriate adjustments, in the good faith
determination of the Board of Directors (whose determination shall be described
in a Board Resolution), to account for stock splits and combinations, stock
dividends, reclassifications and similar events); provided further that, if the
denominator of such fraction shall be equal to or less than zero, the Conversion
Rate shall be instead adjusted so that the Conversion Price is equal to $0.001
(as adjusted in accordance with the immediately preceding proviso).  An adjustment to the Conversion Rate pursuant
to this Section 10.07(e) shall become effective as of the opening of
business on the Ex Date.  It is expressly
understood that a stock buyback or repurchase by the Company or a similar
transaction or program shall in no event trigger an adjustment to the
Conversion Rate pursuant to this Section 10.07(e).  In no event shall the Conversion Rate be
decreased pursuant to this Section 10.07(e), except as provided in
Section 10.10.

If any dividend or distribution described in this
subsection (e) is declared but not so paid or made, the Conversion Rate
shall not be adjusted.

(f)            If
the Company or any of its Subsidiaries completes a repurchase, by way of a
tender or exchange offer (other than an odd lot tender offer), of the Common
Stock to the extent that the Cash and value of any other consideration included
in the payment per share of the Common Stock exceeds the Closing Sale Price of
a share of Common Stock on the Trading Day next succeeding the last date on
which tenders or exchanges may be made pursuant to such tender or exchange
offer, the Conversion Rate will be increased based on the following formula:

CR1 =
CR0  ́ (AC + (SP1  ́ OS1))/(SP1  ́ OS0)

where

CR0 =
the Conversion Rate in effect on the Trading Day immediately following the date
such tender offer or exchange offer expires;

CR1 =
the Conversion Rate in effect on the second Trading Day immediately following
the date such tender offer or exchange offer expires;

 40
 

AC = the aggregate value of all Cash and any other
consideration (as determined by the Board of Directors) paid or payable for the
Common Stock purchased in such tender or exchange offer;

OS0 =
the number of shares of Common Stock outstanding immediately prior to the date
such tender offer or exchange offer expires;

OS1 =
the number of shares of Common Stock outstanding immediately after the date
such tender or exchange offer expires (after giving effect to the purchase or
exchange of shares pursuant to such tender offer or exchange offer); and

SP1 =
the Closing Sale Price of the Common Stock on the Trading Day next succeeding
the date such tender offer or exchange offer expires.

If the application of the foregoing formula would result
in a decrease in the Conversion Rate, no adjustment to the Conversion Rate will
be made.  Any adjustment to the
Conversion Rate made pursuant to this subsection (f) shall become
effective as of the opening of business on the second day immediately following
the date such tender offer or exchange offer expires.

(g)           For
the purpose of any computation under this Section 10.07, the “current market price” per share of Common
Stock on any date shall be deemed to be the average of the Closing Sale Prices
per share for the ten consecutive Trading Days ending on, but excluding, the
earlier of such date and the Ex Date with respect to the issuance or
distribution requiring such computation; provided, however, that such current
market price per share of Common Stock shall be appropriately adjusted by the
Company, in its good faith determination, to account for any adjustment,
pursuant hereto, to the Conversion Rate that shall become effective, or any
event requiring, pursuant hereto, an adjustment to the Conversion Rate where
the Ex Date of such event occurs at any time during the period that begins on,
and includes, the first day of such ten consecutive Trading Days and ends on,
and includes, the date when the adjustment to the Conversion Rate on account of
the event requiring the computation of such current market price becomes
effective.

(h)           If the
Company has implemented or implements a Stockholder Rights Plan (as defined
below), the Company agrees that such Stockholder Rights Plan will provide that
upon any conversion of the Securities by any Holder, in which Conversion Shares
are issued, if any, prior to a Trigger Event (as defined below), the Holders
shall receive the rights, warrants or options issued under such plan.  Rights, warrants or options 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, warrants or options,
until the occurrence of a specified event or events (a “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,
(a “Stockholder Rights Plan”)
shall not be deemed distributed for purposes of this Section 10.07 and no
adjustment to the Conversion Price shall be required to be made until the
occurrence of the earliest Trigger Event. 
In addition, in the event of any Trigger Event with respect thereto,
that shall have resulted in an adjustment to the Conversion Rate under this
Section 10.07, (1) in the case of any such rights, warrants or
options which shall all have been redeemed or repurchased without exercise by
any holders thereof, the Conversion Rate shall be readjusted upon such final
redemption or repurchase to give effect to such distribution or Trigger Event,
as the case may be, as though it were a Cash distribution, equal to the per
share redemption or repurchase price received by a holder of Common Stock with
respect to such rights, warrants or options (assuming such holder had retained
such rights, warrants or options), made to all holders of Common Stock as of
the date of such redemption or repurchase, and (2) in the case of any such
rights, warrants or options all of which shall have expired without exercise by
any holder thereof, the Conversion Rate shall be readjusted as if such issuance
had not occurred.

In any case in which this Section 10.07 shall
require that an adjustment be made immediately following a record date
established for purposes of this Section 10.07, 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 10.13) issuing to
the Holder of any Security converted after such record date the Cash, the
Conversion Shares, if applicable, and other Capital Stock of the Company, if
applicable, issuable upon such conversion over and above the Cash, the
Conversion Shares, if applicable, and other Capital Stock of the Company, if
applicable, issuable upon such conversion only on the basis of the Conversion
Rate prior to adjustment; and, in lieu of such consideration the issuance of
which is so deferred, the Company shall issue or cause its transfer agents to
issue due bills or other appropriate evidence of the right to receive such
consideration.

                Section 10.08.  Adjustment
to the Conversion Rate Upon the Occurrence of a Make-Whole Fundamental Change.

(a)           Upon
the occurrence of events specified under clause (i) or (ii) of the
definition of Fundamental Change (each, a “Make-Whole
Fundamental Change”) prior to May 20, 2012, the Company shall
increase the Conversion Rate at any 

 41
 

time from, and including, the 30th day before
the date the Company originally announces as the anticipated Effective Date of
such Make-Whole Fundamental Change to, and including, the Fundamental Change
Purchase Date.

As used herein, “Effective
Date” means the date upon which a consolidation, merger, share
exchange, sale of all or substantially all assets of the Company and its
Subsidiaries, taken as a whole, or similar transactions, including, without
limitation, a Fundamental Change, becomes effective and (i) in the case of
a Make-Whole Fundamental Change described under clause (i) of the
definition of Fundamental Change, if the consideration paid for the Company’s
property and assets consists solely of Cash, “Applicable
Price” means the Cash amount paid for the Company’s property and
assets, expressed as an amount per share of the Common Stock outstanding on the
Effective Date of the asset sale, (ii) in the case of a Make-Whole
Fundamental Change described under clause (ii) of the definition of
Fundamental Change, if the consideration (excluding Cash payments for
fractional shares or pursuant to statutory appraisal rights) for the Common
Stock in the Make-Whole Fundamental Change consists solely of Cash, then the “Applicable Price” means the Cash amount
paid per share of the Common Stock in the Make-Whole Fundamental Change, and
(iii) in all other cases, the “Applicable
Price” means the average of the Closing Sale Prices per share of the
Common Stock for the five consecutive Trading Days prior to the Effective
Date.  The Board of Directors shall make
appropriate adjustments, in its good faith determination, to account for any
adjustment to the Conversion Rate that becomes effective, or any event
requiring an adjustment to the Conversion Rate where the Ex-Date of the
event occurs at any time during those five consecutive Trading Days.

(b)           In
connection with the Make-Whole Fundamental Change, the Company shall increase
the Conversion Rate by reference to the table below, based on the Effective
Date and the Applicable Price.

If an event occurs that requires an adjustment to the
Conversion Rate, the Company shall, on the date the Company is required to
adjust the Conversion Rate, adjust each Applicable Price set forth in the first
column of the table below by multiplying the Applicable Price in effect
immediately before the adjustment by a fraction:

(i)            whose
numerator is the Conversion Rate in effect immediately before the adjustment;
and

(ii)           whose
denominator is the adjusted Conversion Rate.

In addition, the Company shall adjust the number of
additional shares in the table below in the same manner in which, and for the
same events for which, the Company must adjust the conversion rate as described
under this Section 10.08.

 

Number of additional shares per $1,000 principal amount of notes

 

	
  

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Effective Date

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Applicable

  Price

  	
   

  	
  May 9,

  2007

  	
   

  	
  May 15,

  2008

  	
   

  	
  May 15,

  2009

  	
   

  	
  May 15,

  2010

  	
   

  	
  May 15,

  2011

  	
   

  	
  May 20,

  2012

  	
   

  
	
  $23.73

  	
   

  	
  13.57

  	
   

  	
  13.57

  	
   

  	
  13.57

  	
   

  	
  13.57

  	
   

  	
  13.57

  	
   

  	
  13.57

  	
   

  
	
  $25.00

  	
   

  	
  13.24

  	
   

  	
  12.56

  	
   

  	
  11.79

  	
   

  	
  11.43

  	
   

  	
  11.43

  	
   

  	
  11.43

  	
   

  
	
  $30.00

  	
   

  	
  11.15

  	
   

  	
  10.22

  	
   

  	
  9.11

  	
   

  	
  7.82

  	
   

  	
  6.27

  	
   

  	
  4.76

  	
   

  
	
  $35.00

  	
   

  	
  10.19

  	
   

  	
  9.18

  	
   

  	
  7.98

  	
   

  	
  6.54

  	
   

  	
  4.63

  	
   

  	
  0.00

  	
   

  
	
  $40.00

  	
   

  	
  8.08

  	
   

  	
  7.10

  	
   

  	
  5.94

  	
   

  	
  4.53

  	
   

  	
  2.71

  	
   

  	
  0.00

  	
   

  
	
  $45.00

  	
   

  	
  6.64

  	
   

  	
  5.72

  	
   

  	
  4.65

  	
   

  	
  3.37

  	
   

  	
  1.79

  	
   

  	
  0.00

  	
   

  
	
  $50.00

  	
   

  	
  5.62

  	
   

  	
  4.76

  	
   

  	
  3.79

  	
   

  	
  2.66

  	
   

  	
  1.34

  	
   

  	
  0.00

  	
   

  
	
  $60.00

  	
   

  	
  4.27

  	
   

  	
  3.56

  	
   

  	
  2.78

  	
   

  	
  1.91

  	
   

  	
  0.95

  	
   

  	
  0.00

  	
   

  
	
  $70.00

  	
   

  	
  3.43

  	
   

  	
  2.85

  	
   

  	
  2.21

  	
   

  	
  1.52

  	
   

  	
  0.78

  	
   

  	
  0.00

  	
   

  
	
  $80.00

  	
   

  	
  2.86

  	
   

  	
  2.37

  	
   

  	
  1.85

  	
   

  	
  1.28

  	
   

  	
  0.66

  	
   

  	
  0.00

  	
   

  
	
  $90.00

  	
   

  	
  2.45

  	
   

  	
  2.03

  	
   

  	
  1.59

  	
   

  	
  1.10

  	
   

  	
  0.58

  	
   

  	
  0.00

  	
   

  
	
  $100.00

  	
   

  	
  2.13

  	
   

  	
  1.77

  	
   

  	
  1.39

  	
   

  	
  0.97

  	
   

  	
  0.51

  	
   

  	
  0.00

  	
   

  
	
  $125.00

  	
   

  	
  1.58

  	
   

  	
  1.32

  	
   

  	
  1.04

  	
   

  	
  0.73

  	
   

  	
  0.39

  	
   

  	
  0.00

  	
   

  
	
  $150.00

  	
   

  	
  1.23

  	
   

  	
  1.03

  	
   

  	
  0.81

  	
   

  	
  0.57

  	
   

  	
  0.30

  	
   

  	
  0.00

  	
   

  
	
  $175.00

  	
   

  	
  0.98

  	
   

  	
  0.82

  	
   

  	
  0.65

  	
   

  	
  0.46

  	
   

  	
  0.25

  	
   

  	
  0.00

  	
   

  
	
  $200.00

  	
   

  	
  0.79

  	
   

  	
  0.67

  	
   

  	
  0.53

  	
   

  	
  0.38

  	
   

  	
  0.20

  	
   

  	
  0.00

  	
   

  

                In the event the
Applicable Price and Effective Date are not as set forth in the table above:

(i)            if the
actual Applicable Price is between two Applicable Prices listed in the table,
or the actual Effective Date is between two Effective Dates listed in the table
above, the Company shall determine the number of additional 

 42
 

shares of Common Stock by linear interpolation between the numbers of
additional shares of Common Stock set forth for the two Applicable Prices, or
for the two Effective Dates based on a 365-day year, as applicable;

(ii)           if
the actual Applicable Price is greater than $200.00 per share (subject to
adjustment), the Conversion Rate shall not be increased; and

(iii)          if
the actual Applicable Price is less than $23.73 per share (subject to
adjustment), the Conversion Rate shall not be increased.

The Company will not increase the Conversion Rate as set
forth above to the extent the increase will cause the Conversion Rate to exceed
42.1408 shares of Common Stock per $1,000 Principal Amount of the
Securities.  This maximum Conversion Rate
shall be adjusted in the same manner in which, and for the same events for
which, the Conversion Rate shall be adjusted pursuant to
Section 10.07.  The Company’s
obligation to increase the Conversion Rate as described above could be
considered a penalty, in which case the enforceability thereof would be subject
to general principles of reasonableness of economic remedies.

(c)           The
Company shall mail to Holders, at their addresses appearing in the security
register, notice of, and the Company shall publicly announce, through a
reputable national newswire service, the anticipated Effective Date of any
proposed Make-Whole Fundamental Change. 
The Company must make this mailing, announcement and publication at
least 30 days prior to the anticipated Effective Date of such Make-Whole Fundamental
Change.  No later than the fifth Business
Day after the Effective Date of each Make-Whole Fundamental Change, the Company
shall mail written notice of, and shall publicly announce, through a reputable
national newswire service, such Effective Date and the Applicable Price
applicable to such Make-Whole Fundamental Change.

(d)           If a
Securityholder surrenders its Securities for conversion in connection with a
Make-Whole Fundamental Change that the Company has announced, but such
Make-Whole Fundamental Change is not consummated, then the Securityholder will
not be entitled to the increased Conversion Rate referred to above in
connection with the conversion.

                Section 10.09.  Reserved.

                Section
10.10 
No Adjustment.  No adjustment in the Conversion
Rate shall be required unless the adjustment would require an increase or
decrease of at least 1% in the Conversion Rate as last adjusted; provided, however,
that any adjustments which by reason of this Section 10.10 are not
required to be made shall be carried forward and taken into account in any subsequent
adjustment.  Notwithstanding the
foregoing, on each annual anniversary of the first original issuance date of
the Securities, upon any redemption and on the applicable Conversion Date, all
adjustments not previously made will be made on such date.  All calculations under this Article X
shall be made to the nearest cent or to the nearest one-hundredth of a share,
as the case may be.

No adjustment need be made for a transaction referred to
in Section 10.07 if Holders are to participate in the transaction on a
basis and with notice that the Board of Directors determines to be fair and
appropriate in light of the basis and notice on which holders of Common Stock
participate in the transaction.

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

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

                Section
10.11 
Equivalent
Adjustments.  In
the event that, as a result of an adjustment made pursuant to
Section 10.07, the Holder of any Security thereafter surrendered for
conversion shall become entitled to receive any shares of Capital Stock of the
Company other than shares of its Common Stock, thereafter the Conversion Rate
applicable to such other shares so receivable upon conversion of any Securities
shall be subject to adjustment from time to time in a manner and on terms as
nearly equivalent as practicable to the provisions with respect to Common Stock
contained in this Article X.

                Section
10.12 
Adjustment for
Tax Purposes.  The
Company shall be entitled to make such increases in the Conversion Rate, in
addition to those required by Section 10.07 and 10.08, as it in its
discretion shall determine to be advisable in order that any stock dividends,
subdivision of shares, distribution of rights to purchase stock or securities,
or a distribution or securities convertible into or exchangeable for stock
hereafter made by the Company to its stockholders shall not be taxable.

                Section
10.13 
Notice of
Adjustment.  Whenever
the Conversion Rate is adjusted, or Securityholders become entitled to 

 43
 

other securities or assets, 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.  The
certificate shall be conclusive evidence of the correctness of such adjustment
and the Trustee may conclusively assume that, unless and until such certificate
is received by it, no such adjustment is required.

                Section
10.14 
Notice of Certain
Transactions.  In
case:

(a)           the
Company shall declare a dividend (or any other distribution) on its Common
Stock (other than in Cash out of retained earnings); or

(b)           the
Company shall authorize the granting to the holders of its Common Stock of
rights, warrants or options to subscribe for or purchase any share of any class
or any other rights, warrants or options; or

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

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

the Company shall cause to be filed with the Trustee and the Conversion
Agent and to be mailed to each Holder of Securities at its address appearing on
the list provided for in Section 2.05, as promptly as possible but in any
event at least ten days prior to the applicable date hereinafter specified, a
notice stating (x) the date on which a record is to be taken for the
purpose of such dividend, distribution or rights, warrants or options, or, if a
record is not to be taken, the date as of which the holders of Common Stock of
record to be entitled to such dividend, distribution or rights are to be
determined, or (y) the date on which such reclassification, consolidation,
merger, share exchange, sale, transfer, dissolution, liquidation or winding-up
is expected to become effective or occur, and the date as of which it is
expected that holders of Common Stock of record shall be entitled to exchange
their Common Stock for securities or other property deliverable upon such reclassification,
consolidation, merger, share exchange, sale, transfer, dissolution, liquidation
or winding-up.  Failure to give such
notice, or any defect therein, shall not affect the legality or validity of
such dividend, distribution, reclassification, consolidation, merger, sale,
share exchange, transfer, dissolution, liquidation or winding-up.

                Section
10.15 
Effect of
Reclassification, Consolidation, Merger, Share Exchange or Sale on Conversion
Privilege.  If any of the following shall
occur, namely: (i) any reclassification or change of outstanding shares of
Common Stock (other than a change in par value, or from par value to no par
value, or from no par value to par value, or as a result of a subdivision or
combination); (ii) any consolidation, combination, merger or share
exchange 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 a change in name, or 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 (iii) any sale or conveyance of all or substantially all of the
assets of the Company, then the Company, or such successor or purchasing
corporation, as the case may be, shall, as a condition precedent to such
reclassification, change, consolidation, merger, share exchange, 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 the kind and amount of shares of Capital Stock and
other securities and property (including Cash) receivable upon such
reclassification, change, consolidation, merger, share exchange, sale or
conveyance by a holder of the number of shares of Common Stock equal to the
Conversion Value deliverable upon conversion of such Security immediately prior
to such reclassification, change, consolidation, merger, share exchange, sale
or conveyance.  Such supplemental
indenture shall provide for adjustments of the Conversion Rate which shall be
as nearly equivalent as may be practicable to the adjustments of the Conversion
Rate provided for in this Article X. 
For purposes of the foregoing, where such a reclassification, change,
consolidation, merger, share exchange, sale or conveyance involves a
transaction that causes shares of the Common Stock to be exchanged into the
right to receive more than a single type of consideration based upon any form
of shareholder election, such consideration will be deemed to be the weighted
average of the types and amounts of consideration received by the holders of
the Common Stock that affirmatively make such an election.  If, in the case of any such consolidation,
merger, share exchange, sale or conveyance, the stock or other securities and
property (including Cash) receivable thereupon by a holder of Common Stock
includes shares of Capital Stock or other securities and property of a corporation
other than the successor or purchasing corporation, as the case may be, in such
consolidation, merger, share exchange, sale or conveyance, then such
supplemental indenture shall also be executed by such other corporation and
shall contain such additional provisions to protect the interests of the
Holders of the Securities as the Board of Directors of the Company shall
reasonably consider necessary by reason of the foregoing.  The provision of this Section 10.15
shall similarly apply to successive consolidations, mergers, share exchanges,
sales or conveyances.  Notwithstanding
the foregoing, a distribution by the Company to all or substantially all 

 44
 

holders of its Common Stock for which an adjustment to the Conversion
Rate or provision for conversion of the Securities may be made pursuant to
Section 10.07 shall not be deemed to be a sale or conveyance of all or
substantially all of the assets of the Company for purposes of this
Section 10.15.

In the event the Company shall execute a supplemental indenture
pursuant to this Section 10.15, the Company shall promptly file with the
Trustee an Opinion of Counsel stating that such supplemental indenture is
authorized or permitted by this Indenture and an Officers’ Certificate briefly
stating the reasons therefor, the kind or amount of shares of stock or
securities or property (including Cash) receivable by Holders of the Securities
upon the conversion of their Securities after any such reclassification,
change, consolidation, merger, share exchange, sale or conveyance, any
adjustment to be made with respect thereto and that all conditions precedent
have been complied with.

                Section
10.16 
Trustee’s
Disclaimer.  The
Trustee has no duty to determine when an adjustment under this Article X
should be made, how it should be made or what such adjustment should be made,
but may accept as conclusive evidence of the correctness of any such
adjustment, and shall be protected in relying upon, the Officers’ Certificate
with respect thereto which the Company is obligated to file with the Trustee
pursuant to Section 10.13.  The
Trustee shall not be accountable for and makes no representation as to the
validity or value of any securities or assets issued upon conversion of Securities,
and the Trustee shall not be responsible for the Company’s failure to comply
with any provisions of this Article X. 
Each Conversion Agent (other than the Company or an Affiliate of the
Company) shall have the same protection under this Section 10.16 as the
Trustee.

The Trustee shall not be under any responsibility to
determine the correctness of any provisions contained in any supplemental
indenture executed pursuant to Section 10.15, but may accept as conclusive
evidence of the correctness thereof, and shall be protected in relying upon,
the Officers’ Certificate with respect thereto which the Company is obligated
to file with the Trustee pursuant to Section 10.13.

                Section
10.17 
Voluntary
Increase.  The
Company from time to time may increase the Conversion Rate by any amount for
any period of time if the period is at least 20 Trading Days or such longer
period as may be required by law and if the increase is irrevocable during the
period; provided that in no event
may the Conversion Rate be adjusted such that the resulting Conversion Price
shall be less than the par value of a share of Common Stock.

                Section
10.18 
Simultaneous
Adjustments.  In
the event that this Article X requires adjustments to the Conversion Rate
under more than one of Sections 10.07(c), (d) and (e), and the record
dates for the distributions giving rise to such adjustments shall occur on the
same date, then such adjustments shall be made by applying, first, the
provisions of Section 10.07(d) or (e), as applicable, and, second, the
provisions of Section 10.07(c).  If
more than one event requiring adjustment shall occur before completing the
determination of the Conversion Rate for the first event requiring such
adjustment, then the Board of Directors (whose determination shall, if made in
good faith, be conclusive) shall make such adjustments to the Conversion Rate
(and the calculation thereof) after giving effect to all such events as shall
preserve for Securityholders the Conversion Rate protection provided in
Section 10.07 and 10.08.

ARTICLE XI.

MISCELLANEOUS

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

                Section
11.02 
Notices.  Any request, demand,
authorization, notice, waiver, consent or communication shall be in writing and
delivered in person or mailed by first-class mail, postage prepaid,
addressed as follows, or transmitted by facsimile transmission (confirmed
orally) to the following facsimile numbers:

	
  if to the Company, to:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  5 Concourse
  Parkway, Suite 1800

  	
   

  	
   

  
	
  Atlanta, GA
  30328

  	
   

  	
   

  
	
  Attention:
  President

  	
   

  	
   

  
	
  Facsimile No.:
  (678) 992-1012

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  in either case, with a copy to:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Paul, Hastings,
  Janofsky & Walker LLP

  	
   

  	
   

  
	
  600 Peachtree
  Street, N.E.

  	
   

  	
   

  

 

 45
 

 

	
  Twenty-Fourth Floor

  	
   

  	
   

  
	
  Atlanta, GA
  30308

  	
   

  	
   

  
	
  Attention:
  Tinley Anderson, Esq.

  	
   

  	
   

  
	
  Facsimile No.:
  (404) 685-5215

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  if to the Trustee, to:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  LaSalle Bank
  National Association

  	
   

  	
   

  
	
  135 South
  LaSalle Street, Suite 1560

  	
   

  	
   

  
	
  Chicago, IL
  60603

  	
   

  	
   

  
	
  Attention:
  Corporate Trust Debt

  	
   

  	
   

  
	
  Services
  Division - Sciele

  	
   

  	
   

  
	
  Pharma, Inc.
  Notes due 2027

  	
   

  	
   

  

 

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

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

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

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

                Section
11.03 
Communication by
Holders with Other Holders.  Securityholders may
communicate pursuant to TIA Section 312(b) with other Securityholders with
respect to their rights under this Indenture or the Securities.  The Company, the Trustee, the Registrar, the
Paying Agent, the Conversion Agent and anyone else shall have the protection of
TIA Section 312(c).

                Section
11.04 
Certificate and
Opinion as to Conditions Precedent.  Upon any request or
application by the Company to the Trustee to take any action under this
Indenture, the Company shall furnish to the Trustee:

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

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

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

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

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

 46
 

Section
11.05  Statements Required in
Certificate or Opinion.  Each Officers’ Certificate or Opinion of
Counsel with respect to compliance with a covenant or condition provided for in
this Indenture shall include:

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

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

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

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

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

                Section
11.07 
Rules by Trustee,
Paying Agent, Conversion Agent and Registrar.  The Trustee may
make reasonable rules for action by or a meeting of Securityholders.  The Registrar, the Conversion Agent and the
Paying Agent may make reasonable rules for their functions.  The Paying Agent, the Registrar and the
Conversion Agent shall be afforded all of the same rights, protections and
immunities as the Trustee hereunder.

                Section
11.08 
Legal Holidays.  A “Legal Holiday” is any day other than a Business Day.  If any specified date (including a date for
giving notice) is a Legal Holiday, the action shall be taken on the next
succeeding day that is not a Legal Holiday, and, if the action to be taken on
such date is a payment in respect of the Securities, no interest (including
contingent interest and Special Interesst, if any) shall accrue for the intervening
period.

                Section
11.09 
Governing Law.  THIS INDENTURE AND EACH SECURITY
SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE LAWS OF THE STATE OF NEW YORK,
INCLUDING SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW, BUT OTHERWISE WITHOUT
REGARD TO CONFLICT OF LAWS RULES.

                Section
11.10 
No Recourse
Against Others.  A
director, officer, employee or stockholder, as such, of the Company shall not
have any liability for any obligations of the Company under the Securities or
for any claim based on, in respect of or by reason of such obligations or their
creation.  By accepting a Security, each
Securityholder shall waive and release all such liability.  The waiver and release shall be part of the
consideration for the issue of the Securities.

                Section
11.11 
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 11.12.  Calculations
in Respect of the Securities.

                                                The Company and its agents shall make all
calculations under this Indenture and the Securities in good faith.  In the absence of manifest error, such
calculations shall be final and binding on all Securityholders.  The Company shall provide a copy of such
calculations to the Trustee as required hereunder, and, absent such manifest
error, the Trustee shall be entitled to rely on the accuracy of any such
calculation without independent verification. 
For the avoidance of doubt, the Trustee shall not be responsible for
making any calculations under this Agreement.

Section 11.13.  Multiple
Originals

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

 47
 

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

 

	
  

  	
   

  	
   

  	
   

  	
  SCIELE PHARMA, INC.

  
	
   

  	
   

  	
   

  	
   

  	
  By:

  	
  /s/ Darrell Borne

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Name: Darrell Borne 

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Title: Executive Vice President, Chief

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Financial Officer, Secretary and

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Treasurer

  
	
   

  	
   

  	
   

  	
   

  	
  LASALLE BANK NATIONAL 

  
	
   

  	
   

  	
   

  	
   

  	
  ASSOCIATION, as Trustee

  
	
   

  	
   

  	
   

  	
   

  	
  By:

  	
  /s/ Erik Benson

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Name: Erik Benson 

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Title: First Vice President

  

 

 

 48

EXHIBIT A-1

[FORM OF FACE OF
GLOBAL SECURITY]

THIS SECURITY WAS ISSUED WITH ORIGINAL ISSUE DISCOUNT FOR
U.S.  FEDERAL INCOME TAX PURPOSES.  FOR PURPOSES OF SECTIONS 1273 AND 1275 OF THE
INTERNAL REVENUE CODE, THE ISSUE PRICE OF EACH SECURITY IS $1000 PER $1000 OF
PRINCIPAL AMOUNT, THE ISSUE DATE IS MAY 14, 2007 AND THE COMPARABLE YIELD IS
7.29 % PER ANNUM.  HOLDERS OF THIS
SECURITY MAY OBTAIN INFORMATION REGARDING THE AMOUNT OF ORIGINAL ISSUE
DISCOUNT, YIELD TO MATURITY AND THE PROJECTED PAYMENT SCHEDULE FOR THIS
SECURITY BY SUBMITTING A WRITTEN REQUEST FOR SUCH INFORMATION TO: SCIELE
PHARMA, INC., 5 CONCOURSE PARKWAY, SUITE 1800, ATLANTA, GA 30328, ATTN.:
CHIEF FINANCIAL OFFICER, SUCH INFORMATION TO BE MADE AVAILABLE, BEGINNING NO
LATER THAN 10 DAYS AFTER THE ISSUE DATE, PROMPTLY UPON REQUEST.

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO SCIELE PHARMA, 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.

SCIELE PHARMA, INC.

2.625% Contingent Convertible Senior Notes Due 2027

 

	
  No.:

  	
  CUSIP: [

  ]

  
	
  Issue Date:

  	
  Principal

  Amount: 

  $[            ]

  

 

SCIELE PHARMA, INC., a Delaware corporation,
promises to pay to Cede & Co. or registered assigns, the Principal
Amount as set forth above, on May 15, 2027, subject to the further
provisions of this Note set forth on the reverse hereof, which further
provisions shall for all purposes have the same effect as if set forth at this
place.  This Security is convertible as
specified on the other side of this Security.

 

	
  Interest Payment Dates:

  	
  May 15 and November 15, commencing
  November 15, 2007

  	
   

  
	
  Record Dates:

  	
  May 1 and November 1

  	
   

  
	
  Dated:

  	
   

  	
   

  
	
   

  	
  SCIELE PHARMA, INC.

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
				

 

TRUSTEE’S
CERTIFICATE OF AUTHENTICATION

LaSalle
Bank National Association, as Trustee, certifies that this is one of the
Securities referred to in the within-mentioned Indenture.

 

	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
  Authorized
  Signatory

  	
   

  	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Authorized
  Signatory

  	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  
				

 

 2
 

[FORM OF REVERSE SIDE OF NOTE]

SCIELE PHARMA, INC.

2.625% Contingent Convertible Senior Notes Due 2027

1.  Interest.

This Security shall accrue interest at an initial rate of
2.625% per annum.  The Company promises
to pay interest on the Securities in Cash semiannually on each May 15 and
November 15, commencing November 15, 2007, to Holders of record on
the immediately preceding May 1 and November 1, respectively, whether
or not such day is a Business Day. 
Interest on the Securities will accrue from the most recent date to
which interest has been paid, or if no interest has been paid, from May 14,
2007, until the Principal Amount is paid or duly made available for
payment.  The Company will pay interest
on any overdue Principal Amount at the interest rate borne by the Securities at
the time such interest on the overdue Principal Amount accrues, compounded
semiannually, and it shall pay interest on overdue installments of interest
(without regard to any applicable grace period), at the same interest rate
compounded semiannually.  Interest
(including contingent interest and Special Interest, if any) on the Securities
will be computed on the basis of a 360-day year comprised of twelve 30-day
months.

The Company shall pay contingent interest to the Holders
during any six-month period (a “Contingent
Interest Period”) from, and including May 15 to, but excluding,
November 15 and from, and including November 15 to, but excluding,
May 15, with the initial six-month period commencing May 15, 2012, if
the average Security Trading Price for the five Trading Day period ending on
the third Trading Day immediately preceding the first day of the applicable
Contingent Interest Period equals 120% or more of the Principal Amount of such
Security.  The amount of contingent
interest payable per $1,000 Principal Amount of Securities in respect of any
Contingent Interest Period shall equal 0.5% per annum.  The Company will pay contingent interest, if
any, in the same manner as it will pay interest as described above.

2.  Method of Payment.

The Company will pay interest (including contingent
interest and Special Interest, if any) on this Security (except defaulted
interest) to the Person who is the registered Holder of this Security at the
close of business on May 1 or November 1, as the case may be, next
preceding the related interest payment date. 
Subject to the terms and conditions of the Indenture, the Company will
make payments in respect of the Redemption Price, Purchase Price, Fundamental
Change Purchase Price and the Principal Amount at Stated Maturity, as the case
may be, to the Holder who surrenders a Security to a Paying Agent to collect
such payments in respect of the Security. 
The Company will pay Cash amounts in money of the United States that at
the time of payment is legal tender for payment of public and private
debts.  However, the Company may pay
interest (including contingent interest and Special Interest, if any), the
Redemption Price, the Purchase Price, Fundamental Change Purchase Price and the
Principal Amount at Stated Maturity, as the case may be, by check or wire
payable in such money; provided, however, that a Holder holding Securities
with an aggregate Principal Amount in excess of $1,000,000 will be paid by wire
transfer in immediately available funds at the election of such Holder.  The Company may mail an interest check to the
Holder’s registered address.

Notwithstanding the foregoing, so long as this Security
is registered in the name of a Depositary or its nominee, all payments hereon
shall be made by wire transfer of immediately available funds to the account of
the Depositary or its nominee.

3.  Paying Agent, Conversion Agent and Registrar.

Initially, LaSalle Bank National Association (the “Trustee”) will act as Paying Agent,
Conversion Agent and Registrar.  The
Company may appoint and change any Paying Agent, Conversion Agent or Registrar
without notice, other than notice to the Trustee; provided that the Company
will maintain at least one Paying Agent in Chicago, Illinois, which shall
initially be an office or agency of the Trustee.  The Company or any of its Subsidiaries or any
of their Affiliates may act as Paying Agent, Conversion Agent or Registrar.

4.  Indenture; Ranking.

The Company issued the Securities under an Indenture
dated as of May 14, 2007 (the “Indenture”),
between the Company and the Trustee.  The
terms of the Securities include those stated in the Indenture and those made
part of the Indenture by reference to the Trust Indenture Act of 1939, as in
effect from time to time (the “TIA”).  Capitalized terms used herein and not defined
herein have the meanings ascribed thereto in the Indenture.  The Securities are subject to all such terms,
and Securityholders are referred to the Indenture and the TIA for a statement
of those terms.

 3
 

The Securities are limited to $325,000,000 aggregate
Principal Amount (subject to Section 2.07 of the Indenture).  The Securities are the Company’s senior
unsecured obligations and will be subordinated in right of payment to all of
the Company’s existing and future secured indebtedness (to the extent of the
value of the collateral securing the same), if any, and will be structurally
subordinated to all existing and future indebtedness and other liabilities of
the Subsidiaries.  The Securities will
rank pari passu with each other
and with all of the Company’s other existing and future senior unsecured
indebtedness.  The Indenture does not
limit other indebtedness of the Company, secured or unsecured.

5.  Redemption at the Option of the Company.

No sinking fund is provided for the Securities.  Prior to May 20, 2012, the Company may
not redeem the Securities.  At any time
on or after May 20, 2012, the Company may redeem the Securities, in whole
or in part, at a redemption price, payable in cash (the “Redemption Price”),
equal to 100% of the principal amount thereof, plus accrued and unpaid interest
(including contingent interest and Special Interest, if any) thereon, to, but
excluding, the redemption date therefor (the “Redemption Date”).  If a Redemption Date is on or after an
interest record date but on or prior to the related interest payment date,
interest (including contingent interest and Special Interest, if any) will be
payable to the Holders in whose names the Securities are registered at the
close of business on the relevant record date.

6.  Purchase By the Company at the Option of the Holder.

Subject to the terms and conditions of the Indenture, the
Company shall become obligated to purchase, at the option of the Holder, all or
any portion of the Securities held by such Holder, in any integral multiple of
$1,000, on May 15, 2012, May 15, 2017 and May 15, 2022 (each, a “Purchase Date”) at a purchase price per
Security equal to 100% of the aggregate Principal Amount of the Security (the “Purchase Price”), together with accrued
and unpaid interest (including contingent interest and Special Interest, if
any) thereon, up to but not including the Purchase Date (provided that, if the
Purchase Date is on or after an interest record date but on or prior to the
related interest payment date, accrued and unpaid interest (including
contingent interest and Special Interest, if any) will be payable to the
Holders in whose names the Securities are registered at the close of business
on the relevant record date) upon delivery of a Purchase Notice containing the
information set forth in the Indenture, together with the Securities subject
thereto, at any time from the opening of business on the date that is 30
Business Days prior to such Purchase Date until the close of business on the
Business Day prior to such Purchase Date, and upon delivery of the Securities
to the Paying Agent by the Holder as set forth in the Indenture.

At the option of the Holder and subject to the terms and
conditions of the Indenture, including, without limitation, Section 10.08
thereof, the Company shall become obligated to purchase the Securities held by
such Holder after the occurrence of a Fundamental Change of the Company for a
Fundamental Change Purchase Price equal to 100% of the Principal Amount thereof
plus accrued and unpaid interest (including contingent interest and Special
Interest, if any) thereon, up to but not including the Fundamental Change
Purchase Date which Fundamental Change Purchase Price shall be paid in
Cash.  Holders have the right to withdraw
any Purchase Notice or Fundamental Change Purchase Notice, as the case may be,
by delivering to the Paying Agent a written notice of withdrawal in accordance
with the provisions of the Indenture.

If Cash sufficient to pay the Purchase Price or
Fundamental Change Purchase Price, as the case may be, and accrued and unpaid
interest (including contingent interest, and Special Interest, if any) of all
Securities or portions thereof to be purchased as of the Purchase Date or the
Fundamental Change Purchase Date, as the case may be, is deposited with the
Paying Agent on the Business Day following the Purchase Date or the Fundamental
Change Purchase Date, interest (including contingent interest and Special
Interest, if any) cease to accrue on such Securities (or portions thereof)
immediately after such Purchase Date or Fundamental Change Purchase Date, and
the Holder thereof shall have no other rights as such other than the right to
receive the Purchase Price or Fundamental Change Purchase Price, as the case
may be, upon surrender of such Security.

7.  Notice of Redemption.

Notice of redemption pursuant to paragraph 5 of this
Security will be mailed at least 30 days but not more than 60 days
before the Redemption Date to each Holder of Securities to be redeemed at the
Holder’s registered address.  If money
sufficient to pay the Redemption Price of all Securities (or portions thereof)
to be redeemed on the Redemption Date is deposited with the Paying Agent prior
to or on the Redemption Date, immediately after such Redemption Date interest
(including contingent interest and Special Interest, if any) cease to accrue on
such Securities or portions thereof. 
Securities in denominations larger than $1,000 of Principal Amount may
be redeemed in part but only in integral multiples of $1,000 of Principal
Amount, and a new Security in Principal Amount equal to the unredeemed
principal portion will be issued.

 4
 

8.  Conversion.

Subject to the provisions of Article X of the
Indenture, a Holder of a Security may convert such Security into shares of
Common Stock of the Company if any of the conditions specified in paragraphs
(a) through (f) of Section 10.01 of the Indenture is
satisfied.  Upon conversion, no
adjustment for interest (including contingent interest and Special Interest, if
any), or dividends will be made.  If, in
respect of a Conversion Date, the Applicable Stock Price is greater than the
Base Conversion Price, the Conversion Rate will be adjusted as specified in
Section 10.01 of the Indenture.  No
fractional shares required to be issued upon conversion; in lieu thereof, an
amount will be paid in Cash based upon the Volume-Weighted Average Price
per share of the Common Stock on the last Trading Day of the applicable Cash
Settlement Averaging Period.

To convert a Security, a Holder must (a) complete
and sign the Conversion Notice set forth below and deliver such notice to the
Conversion Agent, (b) surrender the Security to the Conversion Agent,
(c) furnish appropriate endorsements and transfer documents if required by
the Registrar or the Conversion Agent, (d) pay any transfer or similar
tax, if required and (e) if the Security is held in book-entry form,
complete and deliver to the Depositary appropriate instructions pursuant to the
Depositary’s book-entry conversion programs. 
If a Holder surrenders a Security for conversion between the record date
for the payment of an installment of interest and the next interest payment
date, the Security must be accompanied by payment of an amount equal to the
interest (including contingent interest, and Special Interest, if any) payable
on such interest payment date on the Principal Amount of the Security or
portion thereof then converted; provided,
however, that no such payment
shall be required if such Security has been called for redemption on a
Redemption Date within the period between and including such record date and
such interest payment date, or if such Security is surrendered for conversion
on the interest payment date.  A Holder
may convert a portion of a Security equal to $1,000 or any integral multiple
thereof.

A Security in respect of which a Holder has delivered a
Purchase Notice or a Fundamental Change Purchase Notice exercising the option
of such Holder to require the Company to repurchase such Security as provided
in Section 3.08 or Section 3.09, respectively, of the Indenture may
be converted only if such notice of exercise is withdrawn as provided above and
in accordance with the terms of the Indenture.

9.  Denominations; Transfer; Exchange.

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

10.  Persons Deemed Owners.

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

11.  Unclaimed Money or Securities.

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

12.  Amendment; Waiver.

Subject to certain exceptions set forth in the Indenture,
(i) the Indenture or the Securities may be amended with the written
consent of the Holders of at least a majority in aggregate Principal Amount of
the Securities at the time outstanding and (ii) certain Defaults may be
waived with the written consent of the Holders of a majority in aggregate
Principal Amount of the Securities at the time outstanding.  Subject to certain exceptions set forth in
the Indenture, without the consent of any Securityholder, the Company and the
Trustee may amend the Indenture or the Securities so long as such changes,
other than those in clause (ii), do not adversely affect the interest of
Securityholders (i) to cure any ambiguity, omission, defect or
inconsistency, (ii) to comply with Article V or Section 10.01(e)
or Section 10.15 of the Indenture, (iii) to evidence and provide for
the acceptance of appointment under the Indenture by a successor Trustee, or
(iv) to comply with any requirement of the SEC in connection with the
qualification of the Indenture under the TIA.

 5
 

13.  Defaults and Remedies.

Under the Indenture, Events of Default include, in
summary form, (i) default in the payment of any interest (including
contingent interest and Special Interest, if any) on any Securities and such
default continues for 10 Business Days; (ii) default in payment of the
Principal Amount, Redemption Price, Purchase Price or Fundamental Change
Purchase Price, as the case may be, in respect of the Securities when the same
becomes due and payable; (iii) failure by the Company in the performance,
or breach, of any of the Company’s other covenants in this Security or the
Indenture which are not remedied within 45 days of receipt of notice
thereof; (iv) defaults by the Company or a Subsidiary in the payment when
due of indebtedness in excess of $5,000,000; (v) the Company or a
Subsidiary fails to pay when due any final, non-appealable judgment (other than
any judgment as to which a reputable insurance company has accepted full
liability) aggregating in excess of $5,000,000, which judgments are not stayed,
bonded or discharged within 60 days of their entry; (vi) failure by
the Company to deliver the Conversion Value upon conversion of Securities by a
Holder in accordance with the provisions of the Indenture; (vii) failure
by the Company to give notice to Holders of their right to require the Company
to repurchase Securities upon a Fundamental Change or to make a payment to
purchase Securities tendered following a Fundamental Change; (viii) if a
material portion of the Company’s or a Subsidiary’s assets, which assets
represent a material portion of the assets of the Company and its Subsidiaries
as a whole, is attached, seized or subjected to a writ or distress warrant or
is levied upon, or comes within the possession of any receiver, trustee,
custodian or assignee for the benefit of creditors and the same is not
terminated or dismissed within 30 days thereafter; and (ix) certain
events of bankruptcy or insolvency.

Pursuant to Section 6.02 of the Indenture,
notwithstanding the foregoing, at the election of the Company, the sole remedy
for an Event of Default specified in Section 6.01(c) of the Indenture
relating to the failure by the Company to comply with its obligations under
Section 4.02 of the Indenture and for any failure by the Company to comply
with the requirements of Section 314(a)(1) of the Trust Indenture Act,
shall for the first 60 days after the occurrence of such an Event of
Default consist exclusively of the right to receive special interest on the
Securities at an annual rate equal to 0.25% of the principal amount of the
outstanding Securities.

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

14.  Trustee Dealings with the Company.

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

15.  No Recourse Against Others.

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

16.  Authentication.

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

17.  Abbreviations.

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

 6
 

18.  Governing Law.

THE INDENTURE AND THIS SECURITY SHALL BE GOVERNED BY THE
LAWS OF THE STATE OF NEW YORK, INCLUDING SECTION 5-1401 OF THE GENERAL
OBLIGATIONS LAW, BUT OTHERWISE WITHOUT REGARD TO CONFLICT OF LAWS RULES.

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

Sciele
Pharma, Inc.

5
Concourse Parkway, Suite 1800

Atlanta,
GA 30328

Attn.: Chief Financial Officer

 7
 

 

	
  ASSIGNMENT FORM

  	
  CONVERSION NOTICE

  
	
  To assign this Security, fill
  in the form below: 

  	
  To
  convert this Security, check the box o

  
	
  I or we assign and transfer
  this Security to 

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

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

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

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

  	
   

  
	
  agent to transfer 

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

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

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

  
	
  Your Signature: 

  	
  Date:

  
	
   

  	
   

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

  
	
  Signature Guaranteed 

  	
   

  
	
  Participant in a Recognized
  Signature Guarantee Medallion Program 

  	
   

  
	
  By: 

  	
   

  Authorized
  Signatory

  	
   

  

 

 

 8

EXHIBIT A-2

[Form of Certificated Security]

THIS SECURITY WAS ISSUED WITH ORIGINAL ISSUE DISCOUNT FOR
U.S.  FEDERAL INCOME TAX PURPOSES.  FOR PURPOSES OF SECTIONS 1273 AND 1275
OF THE INTERNAL REVENUE CODE, THE ISSUE PRICE OF EACH SECURITY IS $1000 PER $1000
OF PRINCIPAL AMOUNT, THE ISSUE DATE IS MAY 14, 2007 AND THE COMPARABLE
YIELD IS 7.29% PER ANNUM.  HOLDERS OF
THIS SECURITY MAY OBTAIN INFORMATION REGARDING THE AMOUNT OF ORIGINAL ISSUE
DISCOUNT, YIELD TO MATURITY AND THE PROJECTED PAYMENT SCHEDULE FOR THIS
SECURITY BY SUBMITTING A WRITTEN REQUEST FOR SUCH INFORMATION TO: SCIELE
PHARMA, INC. (THE “COMPANY”), 5 CONCOURSE PARKWAY, SUITE 1800, ATLANTA,
GA, 30328, ATTN.: CHIEF FINANCIAL OFFICER, SUCH INFORMATION TO BE MADE
AVAILABLE, BEGINNING NO LATER THAN 10 DAYS AFTER THE ISSUE DATE, PROMPTLY UPON
REQUEST.

SCIELE PHARMA, INC.

2.625% Contingent Convertible Senior Notes
Due 2027

	
  No.: 

  	
  CUSIP:
  [                    ]

  
	
  Issue Date: 

  	
  Principal
  Amount:

  

 

SCIELE PHARMA, INC., a Delaware corporation,
promises to pay to [            ] or
registered assigns, the Principal Amount set forth above, on May 15, 2027
subject to the further provisions of this Note set forth on the reverse hereof,
which further provisions shall for all purposes have the same effect as if set
forth at this place.  This Security is
convertible as specified on the other side of this Security.

	
  Interest Payment Dates: 

  	
  May 15,
  and November 15, commencing November 15

  
	
  Record Dates: 

  	
  May 1
  and November 1

  
	
  Dated: 

  	
   

  	
   

  
	
   

  	
  SCIELE
  PHARMA, INC.

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 2
 

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

LaSalle Bank National Association, as Trustee, certifies
that this is one of the Securities referred to in the within-mentioned
Indenture.

	
  By: 

  	
   

  	
   

  
	
   

  	
  Authorized
  Signatory

  	
   

  
	
  Dated: 

  	
   

  
	
  By: 

  	
   

  	
   

  
	
   

  	
  Authorized
  Signatory

  	
   

  
	
  Dated: 

  	
   

  

 

SCIELE PHARMA, INC.

2.625% Contingent Convertible Senior Notes
Due 2027

1.  Interest.

This Security shall accrue interest at an initial rate of
2.625% per annum.  The Company promises
to pay interest on the Securities in Cash semiannually on each May 15 and
November 15, commencing November 15, 2007, to Holders of record on
the immediately preceding May 1 and November 1, respectively, whether
or not such day is a Business Day. 
Interest on the Securities will accrue from the most recent date to
which interest has been paid, or if no interest has been paid, from
May 14, 2007, until the Principal Amount is paid or duly made available
for payment.  The Company will pay
interest on any overdue Principal Amount at the interest rate borne by the
Securities at the time such interest on the overdue Principal Amount accrues,
compounded semiannually, and it shall pay interest on overdue installments of
interest (without regard to any applicable grace period), at the same interest
rate compounded semiannually.  Interest
(including contingent interest and Special Interest, if any) on the Securities
will be computed on the basis of a 360-day year comprised of twelve 30-day
months.

The Company shall pay contingent interest to the Holders
during any six-month period (a “Contingent
Interest Period”) from, and including May 15 to, but excluding,
November 15 and from, and including November 15 to, but excluding,
May 15, with the initial six-month period commencing May 15, 2012, if
the average Security Trading Price for the five Trading Day period ending on
the third Trading Day immediately preceding the first day of the applicable
Contingent Interest Period equals 120% or more of the Principal Amount of such
Security.  The amount of contingent
interest payable per $1,000 Principal Amount of Securities in respect of any
Contingent Interest Period shall equal 0.5% per annum.  The Company will pay contingent interest, if
any, in the same manner as it will pay interest as described above.

2.  Method of Payment.

The Company will pay interest (including contingent
interest and Special Interest, if any) on this Security (except defaulted
interest) to the Person who is the registered Holder of this Security at the
close of business on May 1 or November 1, as the case may be, next
preceding the related interest payment date. 
Subject to the terms and conditions of the Indenture, the Company will
make payments in respect of the Redemption Price, the Purchase Price,
Fundamental Change Purchase Price and the Principal Amount at Stated Maturity,
as the case may be, to the Holder who surrenders a Security to a Paying Agent
to collect such payments in respect of the Security.  The Company will pay Cash amounts in money of
the United States that at the time of payment is legal tender for payment of
public and private debts.  However, the
Company may pay interest (including contingent interest and Special Interest,
if any), the Redemption Price, Purchase Price, Fundamental Change Purchase
Price and the Principal Amount at Stated Maturity, as the case may be, by check
or wire payable in such money; provided,
however, that a Holder holding
Securities with an aggregate Principal Amount in excess of $1,000,000 will be
paid by wire transfer in immediately available funds at the election of such
Holder.  The Company may mail an interest
check to the Holder’s registered address.

Notwithstanding the foregoing, so long as this Security
is registered in the name of a Depositary or its nominee, all payments hereon
shall be made by wire transfer of immediately available funds to the account of
the Depositary or its nominee.

3.  Paying Agent, Conversion Agent and Registrar.

Initially, LaSalle Bank National Association (the “Trustee”) will act as Paying Agent,
Conversion Agent and Registrar.  The
Company may appoint and change any Paying Agent, Conversion Agent or Registrar
without notice, other than notice to the Trustee; provided that the Company
will maintain at least one Paying Agent in Chicago, Illinois, which shall
initially be an 

 3
 

office or agency of the Trustee. 
The Company or any of its Subsidiaries or any of their Affiliates may
act as Paying Agent, Conversion Agent or Registrar.

4.  Indenture; Ranking.

The Company issued the Securities under an Indenture
dated as of May 14, 2007 (the “Indenture”),
between the Company and the Trustee.  The
terms of the Securities include those stated in the Indenture and those made
part of the Indenture by reference to the Trust Indenture Act of 1939, as in
effect from time to time (the “TIA”).  Capitalized terms used herein and not defined
herein have the meanings ascribed thereto in the Indenture.  The Securities are subject to all such terms,
and Securityholders are referred to the Indenture and the TIA for a statement
of those terms.

The Securities are limited to $325,000,000 aggregate
Principal Amount (subject to Section 2.07 of the Indenture).  The Securities are the Company’s senior
unsecured obligations and will be subordinated in right of payment to all of
the Company’s existing and future secured indebtedness (to the extent of the
value of the collateral securing the same), if any, and will be structurally
subordinated to all existing and future indebtedness and other liabilities of
the Subsidiaries.  The Securities will
rank pari passu with each other
and with all of the Company’s other existing and future senior unsecured
indebtedness.  The Indenture does not
limit other indebtedness of the Company, secured or unsecured.

5.  Redemption at the Option of the Company.

No sinking fund is provided for the Securities.  Prior to May 20, 2012, the Company may
not redeem the Securities.  At any time
on or after May 20, 2012, the Company may redeem the Securities, in whole
or in part, at a redemption price, payable in cash (the “Redemption Price”),
equal to 100% of the principal amount thereof, plus accrued and unpaid interest
(including contingent interest and Special Interest, if any) thereon to, but
excluding, the redemption date therefor (the “Redemption Date”).  If a Redemption Date is on or after an
interest record date but on or prior to the related interest payment date,
interest (including contingent interest and Special Interest, if any) will be
payable to the Holders in whose names the Securities are registered at the
close of business on the relevant record date.

6.  Purchase By the Company at the Option of the Holder.

Subject to the terms and conditions of the Indenture, the
Company shall become obligated to purchase, at the option of the Holder, all or
any portion of the Securities held by such Holder, in any integral multiple of
$1,000, on May 15, 2012, May 15, 2017 and May 15, 2022 (each, a “Purchase Date”) at a purchase price per
Security equal to 100% of the aggregate Principal Amount of the Security (the “Purchase Price”), together with accrued
and unpaid interest (including contingent interest and Special Interest, if
any) thereon, up to but not including the Purchase Date (provided that, if the
Purchase Date is on or after an interest record date but on or prior to the
related interest payment date, accrued and unpaid interest (including
contingent interest and Special Interest, if any) will be payable to the
Holders in whose names the Securities are registered at the close of business
on the relevant record date) upon delivery of a Purchase Notice containing the
information set forth in the Indenture, together with the Securities subject
thereto, at any time from the opening of business on the date that is 30
Business Days prior to such Purchase Date until the close of business on the
Business Day prior to such Purchase Date, and upon delivery of the Securities
to the Paying Agent by the Holder as set forth in the Indenture.

At the option of the Holder and subject to the terms and
conditions of the Indenture, including, without limitation, Section 10.08
thereof, the Company shall become obligated to purchase the Securities held by
such Holder after the occurrence of a Fundamental Change of the Company for a
Fundamental Change Purchase Price equal to 100% of the Principal Amount thereof
plus accrued and unpaid interest (including contingent interest and Special
Interest, if any) thereon, up to but not including the Fundamental Change
Purchase Date which Fundamental Change Purchase Price shall be paid in
Cash.  Holders have the right to withdraw
any Purchase Notice or Fundamental Change Purchase Notice, as the case may be,
by delivering to the Paying Agent a written notice of withdrawal in accordance
with the provisions of the Indenture.

If Cash sufficient to pay the Purchase Price or
Fundamental Change Purchase Price, as the case may be, and accrued and unpaid
interest (including contingent interest and Special Interest, if any) of all
Securities or portions thereof to be purchased as of the Purchase Date or the
Fundamental Change Purchase Date, as the case may be, is deposited with the
Paying Agent on the Business Day following the Purchase Date or the Fundamental
Change Purchase Date, interest (including contingent interest and Special
Interest, if any) cease to accrue on such Securities (or portions thereof)
immediately after such Purchase Date or Fundamental Change Purchase Date, and
the Holder thereof shall have no other rights as such other than the right to
receive the Purchase Price or Fundamental Change Purchase Price, as the case
may be, upon surrender of such Security.

 4
 

7.  Notice of Redemption.

Notice of redemption pursuant to paragraph 5 of this
Security will be mailed at least 30 days but not more than 60 days
before the Redemption Date to each Holder of Securities to be redeemed at the
Holder’s registered address.  If money
sufficient to pay the Redemption Price of all Securities (or portions thereof)
to be redeemed on the Redemption Date is deposited with the Paying Agent prior
to or on the Redemption Date, immediately after such Redemption Date interest
(including contingent interest and Special Interest, if any) cease to accrue on
such Securities or portions thereof. 
Securities in denominations larger than $1,000 of Principal Amount may
be redeemed in part but only in integral multiples of $1,000 of Principal
Amount, and a new Security in Principal Amount equal to the unredeemed
principal portion will be issued.

8.  Conversion.

Subject to the provisions of Article X of the
Indenture, a Holder of a Security may convert such Security into shares of
Common Stock of the Company if any of the conditions specified in
paragraphs (a) through (f) of Section 10.01 of the Indenture is
satisfied.  Upon conversion, no adjustment
for interest (including contingent interest and Special Interest, if any), or
dividends will be made.  If, in respect
of a Conversion Date, the Applicable Stock Price is greater than the Base
Conversion Price, the Conversion Rate will be adjusted as specified in
Section 10.01 of the Indenture.  No
fractional shares required to be issued upon conversion; in lieu thereof, an
amount will be paid in Cash based upon the Volume-Weighted Average Price
per share of the Common Stock on the last Trading Day of the applicable Cash
Settlement Averaging Period.

To convert a Security, a Holder must (a) complete
and sign the Conversion Notice set forth below and deliver such notice to the
Conversion Agent, (b) surrender the Security to the Conversion Agent,
(c) furnish appropriate endorsements and transfer documents if required by
the Registrar or the Conversion Agent, (d) pay any transfer or similar
tax, if required and (e) if the Security is held in book-entry form,
complete and deliver to the Depositary appropriate instructions pursuant to the
Depositary’s book-entry conversion programs. 
If a Holder surrenders a Security for conversion between the record date
for the payment of an installment of interest and the next interest payment
date, the Security must be accompanied by payment of an amount equal to the
interest (including contingent interest and Special Interest, if any) payable
on such interest payment date on the Principal Amount of the Security or
portion thereof then converted; provided,
however, that no such payment
shall be required if such Security has been called for redemption on a
Redemption Date within the period between and including such record date and
such interest payment date, or if such Security is surrendered for conversion
on the interest payment date.  A Holder
may convert a portion of a Security equal to $1,000 or any integral multiple
thereof.

A Security in respect of which a Holder has delivered a
Purchase Notice or a Fundamental Change Purchase Notice exercising the option
of such Holder to require the Company to repurchase such Security as provided
in Section 3.08 or Section 3.09, respectively, of the Indenture may
be converted only if such notice of exercise is withdrawn as provided above and
in accordance with the terms of the Indenture.

9.  Denominations; Transfer; Exchange.

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

10.  Persons Deemed Owners.

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

11.  Unclaimed Money or Securities.

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

 5
 

12.  Amendment; Waiver.

Subject to certain exceptions set forth in the Indenture,
(i) the Indenture or the Securities may be amended with the written consent
of the Holders of at least a majority in aggregate Principal Amount of the
Securities at the time outstanding and (ii) certain Defaults may be waived
with the written consent of the Holders of a majority in aggregate Principal
Amount of the Securities at the time outstanding.  Subject to certain exceptions set forth in
the Indenture, without the consent of any Securityholder, the Company and the
Trustee may amend the Indenture or the Securities so long as such changes,
other than those in clause (ii), do not adversely affect the interest of
Securityholders (i) to cure any ambiguity, omission, defect or
inconsistency, (ii) to comply with Article V or Section 10.01(e)
or Section 10.15 of the Indenture, (iii) to evidence and provide for
the acceptance of appointment under the Indenture by a successor Trustee, or
(iv) to comply with any requirement of the SEC in connection with the
qualification of the Indenture under the TIA.

13.  Defaults and Remedies.

Under the Indenture, Events of Default include, in summary
form, (i) default in the payment of any interest (including contingent
interest and Special Interest, if any) on any Securities and such default
continues for 10 Business Days; (ii) default in payment of the Principal
Amount, Redemption Price, Purchase Price or Fundamental Change Purchase Price,
as the case may be, in respect of the Securities when the same becomes due and
payable; (iii) failure by the Company in the performance, or breach, of
any of the Company’s other covenants in this Security or the Indenture which
are not remedied within 45 days of receipt of notice thereof;
(iv) defaults by the Company or a Subsidiary in the payment when due of
indebtedness in excess of $5,000,000; (v) the Company or a Subsidiary
fails to pay when due any final, non-appealable judgment (other than any
judgment as to which a reputable insurance company has accepted full liability)
aggregating in excess of $5,000,000, which judgments are not stayed, bonded or
discharged within 60 days of their entry; (vi) failure by the Company
to deliver the Conversion Value upon conversion of Securities by a Holder in
accordance with the provisions of the Indenture; (vii) failure by the
Company to give notice to Holders of their right to require the Company to
repurchase Securities upon a Fundamental Change or to make a payment to
purchase Securities tendered following a Fundamental Change; (viii) if a
material portion of the Company’s or a Subsidiary’s assets, which assets
represent a material portion of the assets of the Company and its Subsidiaries
as a whole, is attached, seized or subjected to a writ or distress warrant or
is levied upon, or comes within the possession of any receiver, trustee,
custodian or assignee for the benefit of creditors and the same is not
terminated or dismissed within 30 days thereafter; and (ix) certain
events of bankruptcy or insolvency.

Pursuant to Section 6.02 of the Indenture,
notwithstanding the foregoing, at the election of the Company, the sole remedy
for an Event of Default specified in Section 6.01(c) of the Indenture
relating to the failure by the Company to comply with its obligations under
Section 4.02 of the Indenture and for any failure by the Company to comply
with the requirements of Section 314(a)(1) of the Trust Indenture Act, shall
for the first 60 days after the occurrence of such an Event of Default
consist exclusively of the right to receive special interest on the Securities
at an annual rate equal to 0.25% of the principal amount of the outstanding
Securities.

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

14.  Trustee Dealings with the Company.

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

15.  No Recourse Against Others.

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

 6
 

16.  Authentication.

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

17.  Abbreviations.

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

18.  Governing Law.

THE INDENTURE AND THIS SECURITY SHALL BE GOVERNED BY THE
LAWS OF THE STATE OF NEW YORK, INCLUDING SECTION 5-1401 OF THE GENERAL
OBLIGATIONS LAW, BUT OTHERWISE WITHOUT REGARD TO CONFLICT OF LAWS RULES.

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

Sciele
Pharma, Inc.

5
Concourse Parkway, Suite 1800

Atlanta,
GA 30328

Attn.: Chief Financial Officer

 7
 

 

	
  ASSIGNMENT FORM

  	
  CONVERSION NOTICE

  
	
  To assign this Security, fill
  in the form below: 

  	
  To
  convert this Security, check the box o

  
	
  I or we assign and transfer
  this Security to 

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

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

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

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

  	
   

  
	
  agent to transfer 

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

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

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

  
	
  Your Signature: 

  	
  Date:

  
	
   

  	
   

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

  
	
  Signature Guaranteed 

  	
   

  
	
  Participant in a Recognized
  Signature Guarantee Medallion Program 

  	
   

  
	
  By: 

  	
   

  	
   

  
	
   

  	
  Authorized
  Signatory

  	
   

  

 

 8

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