Document:

Exhibit
10.2

 

INVESTOR RIGHTS
AGREEMENT

 

This Investor
Rights Agreement (this “Agreement”) is made and entered into as of
December 3, 2003 among NeoRx Corporation, a Washington corporation (the “Company”),
and BayStar Capital II, L.P. and each of the other persons listed on Schedule
1 hereto (collectively, the “Purchasers”).

 

This Agreement
is being entered into pursuant to the Preferred Stock and Warrant Purchase
Agreement, dated as of the date hereof, by and among the Company and the
Purchasers (the “Purchase Agreement”).

 

The Company
and the Purchasers hereby agree as follows:

 

1.             Definitions.

 

Capitalized
terms used and not otherwise defined herein shall have the meanings given such
terms in the Purchase Agreement. As used in this Areement, the following terms
shall have the following meanings:

 

“Advice”
shall have the meaning set forth in Section 3(m).

 

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

 

“Blackout
Period” shall have the meaning set forth in Section 3(n).

 

“Board”
shall have the meaning set forth in Section 3(n).

 

“Business
Day” means any day except Saturday, Sunday and any day which shall be a
legal holiday or a day on which banking institutions in the State of Washington
generally are authorized or required by law or other government actions to
close.

 

 

“Commission”
means the Securities and Exchange Commission.

 

“Common
Stock” means the Company’s Common Stock, par value $0.02 per share.

 

“Conversion
Shares” means the shares of Common Stock issuable upon conversion of the
Preferred Stock issued or to be issued to the Purchasers or their assignees or
designees in connection with the offering consummated under the Purchase
Agreement.

 

“Effectiveness
Period” shall have the meaning set forth in Section 2.

 

“Event”
shall have the meaning set forth in Section 7(e).

 

“Exchange
Act” means the Securities Exchange Act of 1934, as amended.

 

“Filing
Date” means the 20th day following the Closing Date.

 

“Holder”
or “Holders” means the holder or holders, as the case may be, from time
to time of Registrable Securities, including without limitation the Purchasers
and their valid assignees.

 

“Indemnified
Party” shall have the meaning set forth in Section 5(c).

 

“Indemnifying
Party” shall have the meaning set forth in Section 5(c).

 

“Losses”
shall have the meaning set forth in Section 5(a).

 

“Nasdaq”
shall mean The Nasdaq Stock Market.

 

“Person”
means an individual or a corporation, partnership, trust, incorporated or
unincorporated association, joint venture, limited liability company, joint
stock company, government (or an agency or political subdivision thereof) or
other entity of any kind.

 

“Preferred
Stock” means the Company’s Series B Convertible Preferred Stock, $0.02 par
value.

 

“Proceeding”
means an action, claim, suit, investigation or proceeding (including,

 

 

without limitation, an investigation or
partial proceeding, such as a deposition), whether commenced or threatened.

 

“Prospectus”
means the prospectus included in any Registration Statement (including, without
limitation, a prospectus that includes any information previously omitted from
a prospectus filed as part of an effective registration statement in reliance
upon Rule 430A promulgated under the Securities Act), as amended or
supplemented by any prospectus supplement, with respect to the terms of the
offering of any portion of the Registrable Securities covered by such
Registration Statement, and all other amendments and supplements to the
Prospectus, including post-effective amendments, and all material incorporated
by reference in such Prospectus.

 

“Registrable
Securities” means (a) the Conversion Shares and the Warrant Shares (without
regard to any limitations on beneficial ownership contained in the Certificate
of Designation or the Warrants) or other securities issued or issuable to each
Purchaser or its valid transferee or designee (i) upon conversion of the
Preferred Stock and/or upon exercise of the Warrants, or (ii) upon any dividend
or distribution with respect to, any exchange for or any replacement of such
Preferred Stock or Warrants or (iii) upon any conversion, exercise or exchange
of any securities issued in connection with any such distribution, exchange or
replacement; (b) the Common Stock or other securities issued or issuable upon
any stock split, stock dividend, recapitalization or similar event with respect
to the foregoing; and (c) (i) any Common Stock issued or (ii) any Common Stock
received upon exercise, conversion or exchange of any other security issued, in
each case, as a dividend or other distribution with respect to, in exchange
for, in replacement or redemption of, or in reduction of the liquidation value
of, any of the securities referred to in the preceding clauses; provided,
however, that such securities shall cease to be Registrable Securities when such
securities have been sold to or through a broker or dealer or underwriter in a
public distribution or a public securities transaction, when such securities
have been sold in a private transaction in which the transferor’s rights are
not properly assigned pursuant to Section 7(k) of this Agreement, or when such
securities may be sold without any restriction pursuant to Rule 144(k) as
determined by the counsel to the Company pursuant to a written opinion letter,
addressed to the Company’s transfer agent to such effect as described in
Section 2 of this Agreement.

 

“Registration
Statement” means the registration statements and any additional
registration statements contemplated by Section 2, including (in each case) the
Prospectus, amendments and supplements to such registration statement or
Prospectus, including pre- and post-effective amendments, all exhibits thereto,
and all material incorporated by reference in such registration statement.

 

“Rule 144”
means Rule 144 promulgated by the Commission pursuant to the Securities Act, as
such Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission having substantially the same effect as
such

 

 

Rule.

 

“Rule 158”
means Rule 158 promulgated by the Commission pursuant to the Securities Act, as
such Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission having substantially the same effect as
such Rule.

 

“Rule 415”
means Rule 415 promulgated by the Commission pursuant to the Securities Act, as
such Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission having substantially the same effect as
such Rule.

 

“Securities
Act” means the Securities Act of 1933, as amended.

 

“Special
Counsel” means Wiggin & Dana LLP or one special counsel to the Holders
otherwise selected by a majority in interest of the Holders with notice of such
selection given to the Company.

 

“Warrants”
means the Common Stock Purchase Warrants issued or to be issued to the
Purchasers or their assignees or designees in connection with the offering
consummated under the Purchase Agreement.

 

“Warrant
Shares” means the shares of Common Stock issuable upon the exercise of the
Warrants.

 

2.             Registration. As soon as
practicable following the Closing Date (but not later than the Filing Date),
the Company shall prepare and file with the Commission a “shelf” Registration
Statement covering all Registrable Securities for a secondary or resale
offering to be made on a continuous basis pursuant to Rule 415. The
Registration Statement shall be on Form S-3 (or if such form is not available
to the Company on another form appropriate for such registration in accordance
herewith) and the Company represents that it is currently eligible to use Form
S-3 with respect to such Registration Statement. The Company shall use its best
efforts to cause the Registration Statement to be declared effective under the
Securities Act not later than ninety (90) days after the Closing Date (including
filing with the Commission a request for acceleration of effectiveness in
accordance with Rule 461 promulgated under the Securities Act within five (5)
Business Days of the date that the Company is notified (orally or in writing,
whichever is earlier) by the Commission that a Registration Statement will not
be “reviewed,” or not be subject to further review) and to keep such
Registration Statement continuously effective under the Securities Act until
such date as is the earlier of (x) the date when all Registrable Securities
covered by such Registration Statement have been sold or (y) the date on which
the Registrable Securities

 

 

may be sold without any restriction pursuant
to Rule 144(k) as determined by the counsel to the Company pursuant to a
written opinion letter, addressed to the Company’s transfer agent to such
effect (the “Effectiveness Period”). Upon the initial filing thereof,
the Registration Statement shall cover at least 100% of the shares of Common
Stock for issuance upon the conversion of the Preferred Stock and upon exercise
of the Warrants.  Such Registration
Statement also shall cover, to the extent allowable under the Securities Act
and the Rules promulgated thereunder (including Securities Act Rule 416), such
indeterminate number of additional shares of Common Stock resulting from stock
splits, stock dividends or similar transactions with respect to the Registrable
Securities.

 

3.             Registration Procedures.

 

In connection
with the Company’s registration obligations hereunder, the Company shall:

 

(a)  Prepare and file with the Commission on or
prior to the Filing Date, a Registration Statement on Form S-3 (or if such form
is not available to the Company on another form appropriate for such
registration in accordance herewith) (which shall include a Plan of
Distribution substantially in the form of Exhibit A attached hereto),
and cause the Registration Statement to become effective and remain effective
as provided herein; provided, however, that not less than three (3) Business
Days prior to the filing of the Registration Statement or any related
Prospectus or any amendment or supplement thereto, the Company shall (i)
furnish to the Special Counsel, copies of all such documents proposed to be
filed, which documents (other than those incorporated by reference) will be
subject to the review of such Special Counsel, and (ii) at the request of any
Holder cause its officers and directors, counsel and independent certified
public accountants to respond to such inquiries as shall be necessary, in the
reasonable opinion of counsel to such Holders, to conduct a reasonable
investigation within the meaning of the Securities Act. The Company shall not
file the Registration Statement or any such Prospectus or any amendments or
supplements thereto to which the Holders of a majority of the Registrable
Securities or the Special Counsel shall reasonably object in writing within
three (3) Business Days after their receipt thereof.

 

(b)           (i) Prepare and file with the
Commission such amendments, including post-effective amendments, to the
Registration Statement as may be necessary to keep the Registration Statement
continuously effective as to the applicable Registrable Securities for the
Effectiveness Period and to the extent any Registrable Securities are not
included in such Registration Statement for reasons other than the failure of
the Holder to comply with Section 3(m) hereof, shall prepare and file with the
Commission such additional Registration Statements in order to register for
resale under the Securities Act all Registrable Securities; (ii) cause the
related Prospectus to be amended or supplemented by any required Prospectus
supplement, and as so supplemented or amended to be filed pursuant to Rule 424
(or any similar provisions then in force) promulgated under the Securities Act;
(iii) respond as

 

 

promptly as possible, and in no event later
than ten (10) Business Days, to any comments received from the Commission with
respect to the Registration Statement or any amendment thereto and as promptly
as possible provide the Holders true and complete copies of all correspondence
from and to the Commission relating to the Registration Statement; and (iv)
comply in all material respects with the provisions of the Securities Act and
the Exchange Act with respect to the disposition of all Registrable Securities
covered by the Registration Statement during the applicable period in
accordance with the intended methods of disposition by the Holders thereof set
forth in the Registration Statement as so amended or in such Prospectus as so
supplemented.

 

(c)           Notify the Holders of Registrable
Securities to be sold and the Special Counsel as promptly as possible (A) when
a Prospectus or any Prospectus supplement or post-effective amendment to the
Registration Statement is proposed to be filed (but in no event in the case of
this subparagraph (A), less than three (3) Business Days prior to date of such
filing); (B) when the Commission notifies the Company whether there will be a
“review” of such Registration Statement and whenever the Commission comments in
writing on such Registration Statement; and (C) with respect to the
Registration Statement or any post-effective amendment, when the same has
become effective, and after the effectiveness thereof: (i) of any request by
the Commission or any other Federal or state governmental authority for
amendments or supplements to the Registration Statement or Prospectus or for
additional information; (ii) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement covering any
or all of the Registrable Securities or the initiation of any Proceedings for
that purpose; (iii) if at any time any of the representations and warranties of
the Company contained in any agreement contemplated hereby ceases to be true
and correct in all material respects; (iv) of the receipt by the Company of any
notification with respect to the suspension of the qualification or exemption
from qualification of any of the Registrable Securities for sale in any
jurisdiction, or the initiation or threatening of any Proceeding for such
purpose; and (v) if the financial statements included in the Registration
Statement become ineligible for inclusion therein or of the occurrence of any
event that makes any statement made in the Registration Statement or Prospectus
or any document incorporated or deemed to be incorporated therein by reference
untrue in any material respect or that requires any revisions to the
Registration Statement, Prospectus or other documents so that, in the case of
the Registration Statement or the Prospectus, as the case may be, it will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading.

 

(d)           Use its best efforts to avoid the
issuance of, or, if issued, use best efforts to obtain the withdrawal of, (i)
any order suspending the effectiveness of the Registration Statement or (ii)
any suspension of the qualification (or exemption from qualification) of any of
the Registrable Securities for sale in any jurisdiction, at the earliest
practicable moment.

 

 

(e)           If requested by the Holders of a
majority in interest of the Registrable Securities, (i) promptly incorporate in
a Prospectus supplement or post-effective amendment to the Registration
Statement such information as the Company reasonably agrees should be included
therein and (ii) make all required filings of such Prospectus supplement or
such post-effective amendment as soon as practicable after the Company has
received notification of the matters to be incorporated in such Prospectus
supplement or post-effective amendment; provided, however, that the Company shall
not be required to take any action pursuant to this Section 3(e) that would, in
the written opinion of counsel for the Company (addressed to the Holder’s
Special Counsel), violate applicable law.

 

(f)            Furnish to each Holder and the
Special Counsel, without charge, at least one conformed copy of each
Registration Statement and each amendment thereto, including financial
statements and schedules, and all exhibits to the extent requested by such
Person (including those previously furnished or incorporated by reference)
promptly after the filing of such documents with the Commission.

 

(g)           Promptly deliver to each Holder and
the Special Counsel, without charge, as many copies of the Prospectus or
Prospectuses (including each form of prospectus) and each amendment or
supplement thereto as such Persons may reasonably request; and the Company
hereby consents to the use, in accordance with applicable laws, of such
Prospectus and each amendment or supplement thereto by each of the selling
Holders in connection with the offering and sale of the Registrable Securities
covered by such Prospectus and any amendment or supplement thereto.

 

(h)           Prior to any public offering of
Registrable Securities, use its best efforts to register or qualify or
cooperate with the selling Holders and the Special Counsel in connection with
the registration or qualification (or exemption from such registration or
qualification) of such Registrable Securities for offer and sale under the
securities or Blue Sky laws of such jurisdictions within the United States as
any Holder requests in writing, to keep each such registration or qualification
(or exemption therefrom) effective during the Effectiveness Period and to do
any and all other acts or things necessary or advisable to enable the disposition
in such jurisdictions of the Registrable Securities covered by a Registration
Statement; provided, however, that the Company shall not be required to qualify
generally to do business in any jurisdiction where it is not then so qualified
or to take any action that would subject it to general service of process in
any jurisdiction where it is not then so subject or subject the Company to any
material tax in any such jurisdiction where it is not then so subject.

 

(i)            Cooperate with the Holders to facilitate
the timely preparation and delivery of certificates representing Registrable
Securities to be sold pursuant to a Registration Statement, which certificates
shall be free, to the extent permitted by applicable law and the Purchase
Agreement, of all restrictive legends, and to enable such Registrable
Securities to be in such denominations and registered in such names as any
Holder may request at least

 

 

two (2) Business Days prior to any sale of
Registrable Securities. In connection therewith, the Company shall promptly
after the effectiveness of the Registration Statement cause an opinion of
counsel to be delivered to and maintained with its transfer agent, together
with any other authorizations, certificates and directions required by the
transfer agent, which authorize and direct the transfer agent to issue such
Registrable Securities without legend upon sale by the Holder of such shares of
Registrable Securities under the Registration Statement.

 

(j)            Upon the occurrence of any event
contemplated by Section 3(c)(v), as promptly as possible, prepare a supplement
or amendment, including a post-effective amendment, to the Registration
Statement or a supplement to the related Prospectus or any document
incorporated or deemed to be incorporated therein by reference, and file any
other required document so that, as thereafter delivered, neither the
Registration Statement nor such Prospectus will contain an untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.

 

(k)           Cause all Registrable Securities
relating to such Registration Statement to be listed on Nasdaq and any other
United States securities exchange, quotation system, market or over-the-counter
bulletin board, if any, on which similar securities issued by the Company are
then listed as and when required pursuant to the Purchase Agreement.

 

(l)            Comply in all material respects with
all applicable rules and regulations of the Commission and make generally
available to its security holders earnings statements satisfying the provisions
of Section 11(a) of the Securities Act and Rule 158 not later than 45 days
after the end of any 3-month period (or 90 days after the end of any 12-month
period if such period is a fiscal year) commencing on the first day of the
first fiscal quarter of the Company after the effective date of the
Registration Statement, which statement shall conform to the requirements of
Rule 158.

 

(m)          Request each selling Holder to furnish
to the Company information regarding such Holder and the distribution of such
Registrable Securities as is required by law or the Commission to be disclosed
in the Registration Statement, and the Company may exclude from such
registration (including from registration pursuant to Section 7(d)) the
Registrable Securities of any such Holder who fails to furnish such information
within a reasonable time prior to the filing of each Registration Statement,
supplemented Prospectus and/or amended Registration Statement.

 

If the
Registration Statement refers to any Holder by name or otherwise as the holder
of any securities of the Company, then such Holder shall have the right to
require (if such reference to such Holder by name or otherwise is not required
by the Securities Act or any similar federal statute then in force) the
deletion of the reference to such Holder in any

 

 

amendment or supplement to the Registration
Statement filed or prepared subsequent to the time that such reference ceases
to be required.

 

Each Holder
agrees by its acquisition of such Registrable Securities that, upon receipt of
a notice from the Company of the occurrence of any event of the kind described
in Section 3(c)(i), 3(c)(ii), 3(c)(iii), 3(c)(iv), 3(c)(v) or 3(n), such Holder
will forthwith discontinue disposition of such Registrable Securities under the
Registration Statement until such Holder’s receipt of the copies of the
supplemented Prospectus and/or amended Registration Statement contemplated by
Section 3(j), or until it is advised in writing (the “Advice”) by the
Company that the use of the applicable Prospectus may be resumed, and, in
either case, has received copies of any additional or supplemental filings that
are incorporated or deemed to be incorporated by reference in such Prospectus
or Registration Statement.

 

(n)           If (i) there is material non-public
information regarding the Company which the Company’s Board of Directors (the “Board”)
determines, in its good faith judgment in reliance on the advice of counsel,
not to be in the Company’s best interest to disclose and which the Company is
not otherwise required to disclose, or (ii) there is a significant business
opportunity (including, but not limited to, the acquisition or disposition of
assets (other than in the ordinary course of business) or any merger,
consolidation, tender offer or other similar transaction) available to the
Company that would require disclosure under the Exchange Act and with respect
to which the Board has determined in good faith that compliance with this
Agreement may reasonably be expected to either materially interfere with the
Company’s ability to consummate such transaction in a timely fashion or require
the Company to disclose material, non-public information prior to such time as
it would be required to be disclosed, then the Company may:

 

(i)            postpone or delay the filing or
effectiveness of a registration statement for a period not to exceed 45
consecutive days (each, a “Blackout Period”), or

 

(ii)           by notice in writing to each Holder
of Registrable Securities to which a Prospectus relates, require such Holder to
suspend, for up to 45 days (the “Suspension Period”), the use of any
Prospectus included in a Registration Statement filed with the Commission
pursuant to this Agreement;

 

; provided
that the Company may not postpone, delay or suspend its obligation under this
Section 3(n) for more than 60 days in the aggregate during any 12 month period.

 

4.             Registration Expenses.

 

All fees and expenses
incident to the performance of or compliance with this Agreement by the Company
shall be borne by the Company whether or not the Registration

 

 

Statement is filed or becomes effective and
whether or not any Registrable Securities are sold pursuant to the Registration
Statement. The fees and expenses referred to in the foregoing sentence shall
include, without limitation, (i) all registration and filing fees (including,
without limitation, fees and expenses (A) with respect to filings required to
be made with Nasdaq and each other securities exchange, quotation system,
market or over-the-counter bulletin board on which Registrable Securities are
required hereunder to be listed, (B) with respect to filings required to be
made with the Commission, and (C) in compliance with state securities or Blue
Sky laws (including, without limitation, fees and disbursements of Special
Counsel in connection with Blue Sky qualifications of the Registrable
Securities and determination of the eligibility of the Registrable Securities
for investment under the laws of such jurisdictions as the Holders of a
majority of Registrable Securities may designate)), (ii) printing expenses
(including, without limitation, expenses of printing certificates for
Registrable Securities and of printing or photocopying prospectuses), (iii)
messenger, telephone and delivery expenses, (iv) Securities Act liability
insurance, if the Company so desires such insurance, (v) fees and expenses of
all other Persons retained by the Company in connection with the consummation
of the transactions contemplated by this Agreement, including, without
limitation, the Company’s independent public accountants (including, in the
case of an underwritten offering, the expenses of any comfort letters or costs
associated with the delivery by independent public accountants of a comfort
letter or comfort letters) and legal counsel, and (vi) reasonable fees and
expenses of the Special Counsel in connection with any Registration Statement
hereunder. In addition, the Company shall be responsible for all of its
internal expenses incurred in connection with the consummation of the
transactions contemplated by this Agreement (including, without limitation, all
salaries and expenses of its officers and employees performing legal or
accounting duties), the expense of any annual audit, the fees and expenses
incurred in connection with the listing of the Registrable Securities on any
securities exchange as required hereunder. 
The Purchasers shall be responsible for their pro rata share of any
underwriting discounts or commissions in connection with the sale of the
Registrable Securities and all fees and expenses for any counsel for a
Purchaser or the Purchasers other than the Special Counsel.

 

5.             Indemnification.

 

(a)           Indemnification by the Company.
The Company shall, notwithstanding any termination of this Agreement, indemnify
and hold harmless each Holder, the officers, directors, agents, brokers
(including brokers who offer and sell Registrable Securities as principal as a
result of a pledge or any failure to perform under a margin call of Common
Stock), investment advisors and employees of each of them, each Person who
controls any such Holder (within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act) and the officers, directors, agents and
employees of each such controlling Person, to the fullest extent permitted by
applicable law, from and against any and all losses, claims, damages,
liabilities, costs (including, without limitation, costs of preparation and
reasonable attorneys’ fees) and expenses (collectively, “Losses”), as
incurred, arising out of or relating to any untrue or alleged untrue statement
of a material fact contained or

 

 

incorporated by reference in the Registration
Statement, any Prospectus or any form of prospectus or in any amendment or
supplement thereto or in any preliminary prospectus, or arising out of or
relating to any omission or alleged omission of a material fact required to be
stated therein or necessary to make the statements therein (in the case of any
Prospectus or form of prospectus or amendment or supplement thereto, in the
light of the circumstances under which they were made) not misleading, except
to the extent, but only to the extent, that (i) such untrue statements or
omissions are based solely upon information regarding such Holder furnished in
writing to the Company by such Holder expressly for use therein, which
information was reasonably relied on by the Company for use therein or to the
extent that such information relates to (x) such Holder and was reviewed and
expressly approved in writing by such Holder expressly for use in the
Registration Statement, such Prospectus or such form of prospectus or in any
amendment or supplement thereto or (y) such Holder’s proposed method of
distribution of Registrable Securities as set forth in Exhibit A (or as such
Holder otherwise informs the Company in writing); or (ii) in the case of an
occurrence of an event of the type described in Section 3(c)(ii), 3(c)(iii),
3(c)(iv), 3(c)(v) or 3(n), the use by a Holder of an outdated or defective
Prospectus after the delivery to the Holder of written notice from the Company
that the Prospectus is outdated or defective and prior to the receipt by such
Holder of the Advice contemplated in Section 3(m). The Company shall notify the
Holders promptly of the institution, threat or assertion of any Proceeding of
which the Company is aware in connection with the transactions contemplated by
this Agreement. Such indemnity shall remain in full force and effect regardless
of any investigation made by or on behalf of an Indemnified Party (as defined
in Section 5(c) to this Agreement) and shall survive the transfer of the
Registrable Securities by the Holders.

 

(b)           Indemnification by Holders.
Each Holder shall, notwithstanding the termination of this Agreement, severally
and not jointly, indemnify and hold harmless the Company, its directors,
officers, agents and employees, each Person who controls the Company (within
the meaning of Section 15 of the Securities Act and Section 20 of the Exchange
Act), and the directors, officers, agents and employees of such controlling
Persons, to the fullest extent permitted by applicable law, from and against
all Losses, as incurred, arising solely out of or based solely upon any untrue
statement of a material fact contained in the Registration Statement, any
Prospectus, or any form of prospectus, or in any amendment or supplement
thereto, or arising solely out of or based solely upon any omission of a material
fact required to be stated therein or necessary to make the statements therein
(in the case of any Prospectus or form of prospectus or supplement thereto, in
the light of the circumstances under which they were made) not misleading, to
the extent, but only to the extent, that (i) such untrue statement or omission
is contained in or omitted from any information so furnished in writing by such
Holder to the Company specifically for inclusion in the Registration Statement
or such Prospectus and that such information was reasonably relied upon by the
Company for use therein, or to the extent that such information relates to (x)
such Holder and was reviewed and expressly approved in writing by such Holder
expressly for use in the Registration Statement, such Prospectus, or such form
of prospectus or in any amendment or supplement thereto or (y) such Holder’s
proposed method of distribution of Registrable Securities as set forth in
Exhibit A (or as such Holder otherwise informs the Company in writing) or (ii)
in the case of an occurrence of an event of the type

 

 

described in Section 3(c)(ii), 3(c)(iii),
3(c)(iv), 3(c)(v) or 3(n), the use by a Holder of an outdated or defective
Prospectus after the delivery to the Holder of written notice from the Company
that the Prospectus is outdated or defective and prior to the receipt by such
Holder of the Advice contemplated in Section 3(m); provided, however, that the
indemnity agreement contained in this Section 5(b) shall not apply to amounts
paid in settlement of any Losses if such settlement is effected without the
prior written consent of the Holder, which consent shall not be unreasonably
withheld. Notwithstanding anything to the contrary contained herein, the Holder
shall be liable under this Section 5(b) for only that amount as does not exceed
the net proceeds to such Holder as a result of the sale of Registrable
Securities pursuant to such Registration Statement.

 

(c)           Conduct of Indemnification
Proceedings. If any Proceeding shall be brought or asserted against any
Person entitled to indemnity hereunder (an “Indemnified Party”), such
Indemnified Party promptly shall notify the Person from whom indemnity is
sought (the “Indemnifying Party”) in writing, and the Indemnifying Party
shall assume the defense thereof, including the employment of counsel
reasonably satisfactory to the Indemnified Party and the payment of all
reasonable fees and expenses incurred in connection with defense thereof;
provided, that the failure of any Indemnified Party to give such notice shall
not relieve the Indemnifying Party of its obligations or liabilities pursuant
to this Agreement, except (and only) to the extent that it shall be finally
determined by a court of competent jurisdiction (which determination is not
subject to appeal or further review) that such failure shall have proximately
and materially adversely prejudiced the Indemnifying Party.

 

An Indemnified
Party shall have the right to employ separate counsel in any such Proceeding
and to participate in the defense thereof, but the fees and expenses of such
counsel shall be at the expense of such Indemnified Party or Parties unless:
(1) the Indemnifying Party has agreed in writing to pay such fees and expenses;
or (2) the Indemnifying Party shall have failed promptly to assume the defense
of such Proceeding and to employ counsel reasonably satisfactory to such
Indemnified Party in any such Proceeding; or (3) the named parties to any such
Proceeding (including any impleaded parties) include both such Indemnified
Party and the Indemnifying Party, and such Indemnified Party shall have been
advised by counsel in writing (with a copy to the Indemnifying Party) that a
conflict of interest is likely to exist if the same counsel were to represent
such Indemnified Party and the Indemnifying Party (in which case, if such
Indemnified Party notifies the Indemnifying Party in writing that it elects to
employ separate counsel at the expense of the Indemnifying Party, the
Indemnifying Party shall not have the right to assume the defense thereof and
such counsel shall be at the reasonable expense of the Indemnifying Party). The
Indemnifying Party shall not be liable for any settlement of any such
Proceeding effected without its written consent, which consent shall not be
unreasonably withheld. No Indemnifying Party shall, without the prior written
consent of the Indemnified Party, effect any settlement of any pending
Proceeding in respect of which any Indemnified Party is a party, unless such
settlement includes an unconditional release of such Indemnified Party from all
liability on claims that are the subject matter of such Proceeding and does not
impose any monetary or other obligation or restriction on the Indemnified
Party.

 

 

All reasonable
fees and expenses of the Indemnified Party (including reasonable fees and
expenses to the extent incurred in connection with investigating or preparing
to defend such Proceeding in a manner not inconsistent with this Section) shall
be paid to the Indemnified Party, as incurred, within ten (10) Business Days of
written notice thereof to the Indemnifying Party, which notice shall be
delivered no more frequently than on a monthly basis (regardless of whether it
is ultimately determined that an Indemnified Party is not entitled to
indemnification hereunder; provided, that the Indemnifying Party may require
such Indemnified Party to undertake to reimburse all such fees and expenses to
the extent it is finally judicially determined that such Indemnified Party is
not entitled to indemnification hereunder).

 

(d)           Contribution. If a claim for
indemnification under Section 5(a) or 5(b) is unavailable to an Indemnified
Party because of a failure or refusal of a governmental authority to enforce
such indemnification in accordance with its terms (by reason of public policy
or otherwise), then each Indemnifying Party, in lieu of indemnifying such
Indemnified Party, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such Losses, in such proportion as is
appropriate to reflect the relative fault of the Indemnifying Party and
Indemnified Party in connection with the actions, statements or omissions that
resulted in such Losses as well as any other relevant equitable considerations.
The relative fault of such Indemnifying Party and Indemnified Party shall be
determined by reference to, among other things, whether any action in question,
including any untrue or alleged untrue statement of a material fact or omission
or alleged omission of a material fact, has been taken or made by, or relates to
information supplied by, such Indemnifying Party or Indemnified Party, and the
parties’ relative intent, knowledge, access to information and opportunity to
correct or prevent such action, statement or omission. The amount paid or
payable by a party as a result of any Losses shall be deemed to include,
subject to the limitations set forth in Section 5(c), any reasonable attorneys’
or other reasonable fees or expenses incurred by such party in connection with
any Proceeding to the extent such party would have been indemnified for such
fees or expenses if the indemnification provided for in this Section was
available to such party in accordance with its terms. Notwithstanding anything
to the contrary contained herein, the Holder shall be required to contribute
under this Section 5(d) for only that amount as does not exceed the net
proceeds to such Holder as a result of the sale of Registrable Securities
pursuant to such Registration Statement.

 

The parties
hereto agree that it would not be just and equitable if contribution pursuant
to this Section 5(d) were determined by pro rata allocation or by any other
method of allocation that does not take into account the equitable
considerations referred to in the immediately preceding paragraph. No Person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any Person who was
not guilty of such fraudulent misrepresentation.

 

The indemnity
and contribution agreements contained in this Section are in addition to any
liability that the Indemnifying Parties may have to the Indemnified Parties.
The

 

 

indemnity and contribution
agreements herein are in addition to and not in diminution or limitation of any
indemnification provisions under the Purchase Agreement.

 

6.             Rule 144.

 

As long as any
Holder owns Preferred Stock, Conversion Shares, Warrants or Warrant Shares, the
Company covenants to timely file (or obtain extensions in respect thereof and
file within the applicable grace period) all reports required to be filed by
the Company after the date hereof pursuant to Section 13(a) or 15(d) of the
Exchange Act. As long as any Holder owns Preferred Stock, Conversion Shares,
Warrants or Warrant Shares, if the Company is not required to file reports
pursuant to Section 13(a) or 15(d) of the Exchange Act, it will prepare and
furnish to the Holders and make publicly available in accordance with Rule
144(c) promulgated under the Securities Act annual and quarterly financial
statements, together with a discussion and analysis of such financial
statements in form and substance substantially similar to those that would
otherwise be required to be included in reports required by Section 13(a) or
15(d) of the Exchange Act, as well as any other information required thereby,
in the time period that such filings would have been required to have been made
under the Exchange Act. The Company further covenants that it will take such
further action as any Holder may reasonably request, all to the extent required
from time to time to enable such Person to sell Conversion Shares and Warrant
Shares without registration under the Securities Act within the limitation of
the exemptions provided by Rule 144 promulgated under the Securities Act,
including compliance with the provisions of the Purchase Agreement relating to
the transfer of the Conversion Shares and Warrant Shares. Upon the request of
any Holder, the Company shall deliver to such Holder a written certification of
a duly authorized officer as to whether it has complied with such requirements.

 

7.             Miscellaneous.

 

(a)           Remedies. In the event of a
breach by the Company or by a Holder, of any of their obligations under this
Agreement, each Holder or the Company, as the case may be, in addition to being
entitled to exercise all rights granted by law and under this Agreement,
including recovery of damages, will be entitled to specific performance of its
rights under this Agreement. The Company and each Holder agree that monetary
damages would not provide adequate compensation for any losses incurred by
reason of a breach by it of any of the provisions of this Agreement and hereby
further agrees that, in the event of any action for specific performance in
respect of such breach, it shall waive the defense that a remedy at law would
be adequate.

 

(b)           No Inconsistent Agreements.
Except as otherwise disclosed in the Purchase Agreement, neither the Company
nor any of its subsidiaries is a party to an agreement currently in effect, nor
shall the Company or any of its subsidiaries, on or after the date of

 

 

this Agreement, enter into any
agreement with respect to its securities that is inconsistent with the rights
granted to the Holders in this Agreement or otherwise conflicts with the
provisions hereof. Without limiting the generality of the foregoing, without
the written consent of the Holders of a majority of the then outstanding
Registrable Securities, the Company shall not grant to any Person the right to
request the Company to register any securities of the Company under the
Securities Act unless the rights so granted are subject in all respects to the
prior rights in full of the Holders set forth herein, and are not otherwise in
conflict with the provisions of this Agreement.

 

(c)           Notice of Effectiveness.
Within two (2) Business Days after the Registration Statement which includes
the Registrable Securities is ordered effective by the Commission, the Company
shall deliver, and shall cause legal counsel for the Company to deliver, to the
transfer agent for such Registrable Securities (with copies to the Holders
whose Registrable Securities are included in such Registration Statement)
confirmation that the Registration Statement has been declared effective by the
Commission in the form attached hereto as Exhibit B.

 

(d)           Piggy-Back Registrations. If
at any time when there is not an effective Registration Statement covering all
of the Registrable Securities, the Company shall determine to prepare and file
with the Commission a registration statement relating to an offering for its
own account or the account of others under the Securities Act of any of its
equity securities, other than on Form S-4 or Form S-8 (each as promulgated
under the Securities Act) or its then equivalents relating to equity securities
to be issued solely in connection with any acquisition of any entity or
business or equity securities issuable in connection with stock option or other
employee benefit plans, the Company shall send to each Holder of Registrable
Securities written notice of such determination and, if within seven (7)
Business Days after receipt of such notice, any such Holder shall so request in
writing (which request shall specify the Registrable Securities intended to be
disposed of by the Holder), the Company will cause the registration under the
Securities Act of all Registrable Securities which the Company has been so
requested to register by the Holder, to the extent required to permit the
disposition of the Registrable Securities so to be registered, provided that if
at any time after giving written notice of its intention to register any
securities and prior to the effective date of the registration statement filed
in connection with such registration, the Company shall determine for any
reason not to register or to delay registration of such securities, the Company
may, at its election, give written notice of such determination to such Holder
and, thereupon, (i) in the case of a determination not to register, shall be
relieved of its obligation to register any Registrable Securities in connection
with such registration (but not from its obligation to pay expenses in
accordance with Section 4 hereof), and (ii) in the case of a determination to
delay registering, shall be permitted to delay registering any Registrable
Securities being registered pursuant to this Section 7(d) for the same period
as the delay in registering such other securities. The Company shall include in
such registration statement all or any part of such Registrable Securities such
Holder requests to be registered; provided, however, that the Company shall not
be required to register any Registrable Securities pursuant to this Section
7(d) that are eligible for sale

 

 

pursuant to Rule 144(k) of the
Securities Act. In the case of an underwritten public offering, if the managing
underwriter(s) or underwriter(s) should reasonably object to the inclusion of
the Registrable Securities in such registration statement, then if the Company
after consultation with the managing underwriter should reasonably determine
that the inclusion of such Registrable Securities, would materially adversely
affect the offering contemplated in such registration statement, and based on
such determination recommends inclusion in such registration statement of fewer
or none of the Registrable Securities of the Holders, then (x) the number of
Registrable Securities of the Holders included in such registration statement
shall be reduced pro-rata among such Holders (based upon the number of
Registrable Securities requested to be included in the registration), if the
Company after consultation with the underwriter(s) recommends the inclusion of
fewer Registrable Securities, or (y) none of the Registrable Securities of the
Holders shall be included in such registration statement, if the Company after
consultation with the underwriter(s) recommends the inclusion of none of such
Registrable Securities; provided, however, that if securities are being offered
for the account of other persons or entities as well as the Company, such
reduction shall not represent a greater fraction of the number of Registrable
Securities intended to be offered by the Holders than the fraction of similar
reductions imposed on such other persons or entities (other than the Company).

 

(e)           Failure to File Registration
Statement and Other Events. The Company and the Holders agree that the
Holders will suffer damages if the Registration Statement is not filed on or
prior to the twentieth (20th) day following the Closing Date and maintained in
the manner contemplated herein during the Effectiveness Period. The Company and
the Holders further agree that it would not be feasible to ascertain the extent
of such damages with precision. Accordingly, if (i) the Registration Statement
is not filed on or prior to the twentieth (20th) day following the Closing
Date, or (ii) the Company fails to file with the Commission a request for
acceleration in accordance with Rule 461 promulgated under the Securities Act
within five (5) Business Days of the date that the Company is notified (orally
or in writing, whichever is earlier) by the Commission that a Registration
Statement will not be “reviewed,” or not subject to further review, or (iii)
the Registration Statement is filed with and declared effective by the
Commission but thereafter ceases to be effective as to all Registrable
Securities at any time prior to the expiration of the Effectiveness Period,
without being succeeded immediately by a subsequent Registration Statement
filed with the Commission, except as otherwise permitted by this Agreement, including
pursuant to Section 3(n), or (iv) trading in the Common Stock shall be
suspended or if the Common Stock is delisted from Nasdaq or any other
securities exchange, quotation system, market or over-the-counter bulletin
board on which Registrable Securities are required hereunder to be listed (each
an “Exchange”), without immediately being listed on any other Exchange,
for any reason for more than one (1) Business Day, other than pursuant to
Section 3(n), or (v) the conversion rights of the Holders are suspended for any
reason without the consent of the particular Holder other than as set forth in
the Certificate of Designation, or (vi) the Company has breached Section 3(n)
of this Agreement (any such failure or breach being referred to as an “Event”),
the Company shall pay in cash as liquidated damages for such failure and not as
a penalty to each Holder an amount equal to one and one-half percent (1.5%) of
such Holder’s pro rata share of the purchase price paid by all Holders for
Preferred

 

 

Stock purchased and then
outstanding pursuant to the Purchase Agreement for each subsequent thirty (30)
day period thereafter until the applicable Event has been cured or until there
are no longer any Registrable Securities issuable or outstanding (whichever is
earlier) which shall be pro rated for such periods less than thirty days (the “Periodic
Amount”). Payments to be made pursuant to this Section 7(e) shall be due
and payable immediately upon demand in immediately available cash funds. The
parties agree that the Periodic Amount represents a reasonable estimate on the
part of the parties, as of the date of this Agreement, of the amount of damages
that may be incurred by the Holders if the Registration Statement is not filed
on or prior to the twentieth (20th) day following the Closing Date and
maintained in the manner contemplated herein during the Effectiveness Period or
if any other Event as described herein has occurred.

 

(f)            Failure of Registration Statement
to Become Effective.  The Company
and the Holders agree that the Holders will suffer damages if the Registration
Statement is not declared effective on or prior to the ninetieth (90th) day
following the Closing Date.  The Company
and the Holders further agree that it would not be feasible to ascertain the extent
of such damages with precision. Accordingly, if the Registration Statement is
not declared effective within ninety (90) days after the Closing Date, the
Company shall pay in cash as liquidated damages for such failure and not as a
penalty to each Holder an amount equal to one and one-half percent (1.5%) of
such Holder’s pro rata share of the purchase price paid by all Holders for
Preferred Stock purchased and then outstanding pursuant to the Purchase
Agreement for each thirty (30) day period thereafter (which shall be pro rated
for such periods less than thirty (30) days) until either (x) the Registration
Statement is declared effective or (y) until there are no longer any
Registrable Securities issuable or outstanding. Payments to be made pursuant to
this Section 7(f) shall be due and payable immediately upon demand in
immediately available cash funds. The parties agree that the amounts set forth
in this Section 7(f) represent a reasonable estimate on the part of the
parties, as of the date of this Agreement, of the amount of damages that may be
incurred by the Holders if the Registration Statement is not declared effective
on or prior to the ninetieth (90th) day following the Closing Date.

 

(g)           Specific Enforcement, Consent to
Jurisdiction.

 

(i)            The Company and the Holders
acknowledge and agree that irreparable damage would occur in the event that any
of the provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that the
parties shall be entitled to an injunction or injunctions to prevent or cure
breaches of the provisions of this Agreement and to enforce specifically the
terms and provisions hereof, this being in addition to any other remedy to
which any of them may be entitled by law or equity.

 

(ii)           Each of the Company and the Holders
(i) hereby irrevocably submits to the exclusive jurisdiction of the state and
federal courts located in New York City,

 

 

New York for
the purposes of any suit, action or proceeding arising out of or relating to
this Agreement and (ii) hereby waives, and agrees not to assert in any such
suit, action or proceeding, any claim that it is not personally subject to the
jurisdiction of such court, that the suit, action or proceeding is brought in
an inconvenient forum or that the venue of the suit, action or proceeding is
improper. Each of the Company and the Holders consents to process being served
in any such suit, action or proceeding by mailing a copy thereof to such party
at the address in effect for notices to it under this Agreement and agrees that
such service shall constitute good and sufficient service of process and notice
thereof. Nothing in this Section 7(g) shall affect or limit any right to serve
process in any other manner permitted by law.

 

(h)           Amendments and Waivers. The
provisions of this Agreement, including the provisions of this sentence, may
not be amended, modified or supplemented, and waivers or consents to departures
from the provisions hereof may not be given, unless the same shall be in
writing and signed by the Company and the Holders of at least a majority of the
Registrable Securities. Notwithstanding the foregoing, a waiver or consent to
depart from the provisions hereof with respect to a matter that relates exclusively
to the rights of Holders and that does not directly or indirectly affect the
rights of other Holders may be given by Holders of the Registrable Securities
to which such waiver or consent relates; provided, however, that the provisions
of this sentence may not be amended, modified, or supplemented except in
accordance with the provisions of the immediately preceding sentence.

 

(i)            Notices. Any and all notices
or other communications or deliveries required or permitted to be provided
hereunder shall be in writing and shall be deemed given and effective on the
earlier of (i) the date of transmission, if such notice or communication is
delivered via facsimile at the facsimile telephone number specified for notice
prior to 5:00 p.m., New York City time, on a Business Day, (ii) the next
Business Day after the date of transmission, if such notice or communication is
delivered via facsimile at the facsimile number specified in this Section on a
day that is not a Business Day or later than 5:00 p.m., New York City time, on
any date and earlier than 11:59 p.m., New York City time, on such date, (iii)
the Business Day following the date of mailing, if sent by nationally
recognized overnight courier service such as Federal Express or (iv) actual
receipt by the party to whom such notice is required to be given. The addresses
for such communications shall be with respect to each Holder at its address set
forth under its name on Schedule 1 attached hereto, or with respect to
the Company, addressed to:

 

NeoRx
Corporation

 

300 Elliott
Avenue West, Suite 500

 

Seattle,
Washington 98119

 

Attention:  President

 

Facsimile
No.:  (206) 286-2537

 

 

or to such
other address or addresses or facsimile number or numbers as any such party may
most recently have designated in writing to the other parties hereto by such
notice. Copies of notices to the Company shall be sent to Perkins Coie, LLP,
1201 Third Avenue, Suite 4800, Seattle, Washington 98101, Attention:  Faith M. Wilson, Esq., Facsimile No. (206)
359-4237. Copies of notices to any Holder shall be sent to the addresses, if
any, listed on Schedule 1 attached hereto.

 

(j)            Successors and Assigns. This
Agreement shall be binding upon and inure to the benefit of the parties and
their successors and permitted assigns and shall inure to the benefit of each
Holder and its successors and assigns; provided, that the Company may not
assign this Agreement or any of its rights or obligations hereunder without the
prior written consent of each Holder; and provided, further, that each Holder may
assign its rights hereunder in the manner and to the Persons as permitted under
the Purchase Agreement.

 

(k)           Assignment of Registration Rights.
The rights of each Holder hereunder, including the right to have the Company
register for resale Registrable Securities in accordance with the terms of this
Agreement, shall be automatically assignable by each Holder to any transferee
of such Holder of all or a portion of the Preferred Stock, the Warrants or the
Registrable Securities if: (i) the Holder agrees in writing with the transferee
or assignee to assign such rights, and a copy of such agreement is furnished to
the Company within a reasonable time after such assignment, (ii) the Company
is, within a reasonable time after such transfer or assignment, furnished with
written notice of (a) the name and address of such transferee or assignee, and
(b) the securities with respect to which such registration rights are being
transferred or assigned, (iii) following such transfer or assignment the
further disposition of such securities by the transferee or assignees is
restricted under the Securities Act and applicable state securities laws, (iv)
at or before the time the Company receives the written notice contemplated by
clause (ii) of this Section 7(k), the transferee or assignee agrees in writing
with the Company to be bound by all of the provisions of this Agreement, and
(v) such transfer shall have been made in accordance with the applicable
requirements of the Purchase Agreement. The rights to assignment shall apply to
the Holders (and to subsequent) successors and assigns.

 

The Company
may require, as a condition of allowing such assignment in connection with a
transfer of Preferred Stock, Warrants or Registrable Securities (i) that the
Holder or transferee of all or a portion of the Preferred Stock, the Warrants
or the Registrable Securities as the case may be, furnish to the Company a
written opinion of counsel that is reasonably acceptable to the Company to the
effect that such transfer may be made without registration under the Securities
Act, (ii) that the Holder or transferee execute and deliver to the Company an
investment letter in form and substance acceptable to the Company and (iii)
that the transferee be an “accredited investor” as defined in Rule 501(a)
promulgated under the Securities Act.

 

 

(l)            Counterparts; Facsimile. This
Agreement may be executed in any number of counterparts, each of which when so
executed shall be deemed to be an original and, all of which taken together
shall constitute one and the same Agreement. In the event that any signature is
delivered by facsimile transmission, such signature shall create a valid
binding obligation of the party executing (or on whose behalf such signature is
executed) the same with the same force and effect as if such facsimile
signature were the original thereof.

 

(m)          Governing Law. This Agreement
shall be governed by and construed in accordance with the laws of the State of
New York, without regard to principles of conflicts of law thereof.

 

(n)           Cumulative Remedies. The
remedies provided herein are cumulative and not exclusive of any remedies
provided by law.

 

(o)           Severability. If any term,
provision, covenant or restriction of this Agreement is held by a court of
competent jurisdiction to be invalid, illegal, void or unenforceable in any
respect, the remainder of the terms, provisions, covenants and restrictions set
forth herein shall remain in full force and effect and shall in no way be
affected, impaired or invalidated, and the parties hereto shall use their
reasonable efforts to find and employ an alternative means to achieve the same
or substantially the same result as that contemplated by such term, provision,
covenant or restriction. It is hereby stipulated and declared to be the
intention of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of such that may
be hereafter declared invalid, illegal, void or unenforceable.

 

(p)           Headings. The headings herein
are for convenience only, do not constitute a part of this Agreement and shall
not be deemed to limit or affect any of the provisions hereof.

 

(q)           Registrable Securities Held by the
Company and its Affiliates. Whenever the consent or approval of Holders of
a specified percentage of Registrable Securities is required hereunder,
Registrable Securities held by the Company or its Affiliates (other than any
Holder or transferees or successors or assigns thereof if such Holder is deemed
to be an Affiliate solely by reason of its holdings of such Registrable
Securities) shall not be counted in determining whether such consent or
approval was given by the Holders of such required percentage.

 

[signature page follows]

 

 

IN WITNESS
WHEREOF, the parties hereto have caused this Investor Rights Agreement to be
duly executed by their respective authorized persons as of the date first
indicated above.

 

	
   

  	
  COMPANY:

  
	
   

  	
   

  
	
   

  	
  NEORX CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jack L.
  Bowman

  	
   

  
	
   

  	
  Name: Jack L. Bowman

  
	
   

  	
  Title: President and Chief Executive
  Officer

  

 

 

	
   

  	
  PURCHASERS:

  
	
   

  	
   

  
	
   

  	
  Print Exact
  Name:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
   

  
	
   

  	
  Title:

  
					

 

[See attached
list of Purchaser signatories]

 

 

[Omnibus Investor Rights Agreement Signature Page]

 

 

PURCHASERS

 

	
  Name,
  Address and Fax Number of 

  Purchaser

  	
   

  	
  Copies of Notices to

  
	
  BayStar Capital II, LLC

  53 Forest Avenue, Suite 203

  Old Greenwich, CT 06870

  Attn: Steve Derby

  Tel: (203) 967-5875

  Fax: (203) 967-5851

  	
   

  	
  Wiggin & Dana LLP

  400 Atlantic Street

  Stamford, CT 06901

  Telephone: (203) 363-7630

  Facsimile:  (203) 363-7676

  Attn: Michael Grundei, Esq

  
	
   

  	
   

  	
   

  
	
  Royal Bank
  of Canada

  1 Liberty Plaza, 2nd Floor

  165 Broadway

  New York, NY 10006

  Attn: Richard Tavoso

  Attn: Steven Milke

  Tel: (212) 858-7200

  	
   

  	
   

  

 

 

	
  Name,
  Address and Fax Number of 

  Purchaser

  	
   

  	
  Copies of Notices to

  
	
  T. Rowe
  Price Health Sciences Fund, Inc.

  Nominee Name: Lobstercrew & Co.

  Delivery Instructions:

  State Street Bank

  New York Settlements

  DTC/NY Window

  55 Water Street

  New York, NY 10041

  Attn: Robert Mendez

  	
   

  	
  Darrell N.
  Braman

  Vice President

  T. Rowe Price Associates, Inc.

  100 E. Pratt Street

  Baltimore, MD 21202

  Tel: (410) 345-2013

  Fax: (410) 345-6575

  
	
   

  	
   

  	
   

  
	
  TD Mutual
  Funds -TD Health Sciences Fund

  Nominee name: Mac & Co.

  Delivery Instructions:

  Physical Deliveries New York

  Mellon Securities Trust Co.

  120 Broadway, 13th Floor

  New York, NY 10271

  	
   

  	
  Darrell N.
  Braman

  Vice President

  T. Rowe Price Associates, Inc.

  100 E. Pratt Street

  Baltimore, MD 21202

  Tel: (410) 345-2013

  Fax: (410) 345-6575

  

 

 

	
  Name,
  Address and Fax Number of 

  Purchaser

  	
   

  	
  Copies of Notices to

  
	
  Valic
  Company I -Health Sciences Fund

  Nominee name: Squidrig & Co.

  Delivery Instructions:

  State Street Bank

  2 Avenue de Lafayette, 5 Northwest

  Boston, MA 02110

  	
   

  	
  Darrell N.
  Braman

  Vice President

  T. Rowe Price Associates, Inc.

  100 E. Pratt Street

  Baltimore, MD 21202

  Tel: (410) 345-2013

  Fax: (410) 345-6575

  
	
   

  	
   

  	
   

  
	
  Manufacturers
  Investment Trust -Health Sciences Trust

  Nominee name: Lamppost & Co.

  Delivery Instructions:

  State Street Bank

  2 Avenue de Lafayette, 5 Northwest

  Boston, MA 02110

  	
   

  	
  Darrell N.
  Braman

  Vice President

  T. Rowe Price Associates, Inc.

  100 E. Pratt Street

  Baltimore, MD 21202

  Tel: (410) 345-2013

  Fax: (410) 345-6575

  
	
   

  	
   

  	
   

  
	
  IDEX Mutual
  Funds -IDEX T. Rowe Price Health Sciences

  Nominee name: Hare & Co.

  Delivery Instructions:

  Bank of New York

  One Wall Street

  Window A

  New York, NY 10286

  	
   

  	
  Darrell N.
  Braman

  Vice President

  T. Rowe Price Associates, Inc.

  100 E. Pratt Street

  Baltimore, MD 21202

  Tel: (410) 345-2013

  Fax: (410) 345-6575

  

 

 

	
  Name,
  Address and Fax Number of 

  Purchaser

  	
   

  	
  Copies of Notices to

  
	
  Raytheon Company Combined DB/DC Master Trust -Health Sciences

  Nominee
  name: BOST & Co.

  Delivery
  Instructions:

  Mellon
  Securities Trust Co.

  120
  Broadway, 13th Floor

  New York, NY
  10271 

  	
   

  	
  Darrell N.
  Braman

  Vice President

  T. Rowe Price Associates, Inc.

  100 E. Pratt Street

  Baltimore, MD 21202

  Tel: (410) 345-2013

  Fax: (410) 345-6575

  
	
   

  	
   

  	
   

  
	
  Raytheon
  Master Pension Trust -Health Sciences

  Nominee name: BOST & Co.

  Delivery Instructions:

  Mellon Securities Trust Co.

  120 Broadway, 13th Floor

  New York, NY 10271 

  	
   

  	
  Darrell N.
  Brama

  Vice President

  T. Rowe Price Associates, Inc.

  100 E. Pratt Street

  Baltimore, MD 21202

  Tel: (410) 345-2013

  Fax: (410) 345-6575

  

 

 

EXHIBIT A

 

PLAN OF DISTRIBUTION

 

We are
registering the shares of common stock on behalf of the selling security
holders. Sales of shares may be made by selling security holders, including
their respective donees, transferees, pledgees or other successors-in-interest
directly to purchasers or to or through underwriters, broker-dealers or through
agents. Sales may be made from time to time on the Nasdaq SmallCap Market, any
other exchange or market upon which our shares may trade in the future, in the
over-the-counter market or otherwise, at market prices prevailing at the time
of sale, at prices related to market prices, or at negotiated or fixed prices.
The shares may be sold by one or more of, or a combination of, the following:

 

•                                          a
block trade in which the broker-dealer so engaged will attempt to sell the
shares as agent but may position and resell a portion of the block as principal
to facilitate the transaction (including crosses in which the same broker acts
as agent for both sides of the transaction);

 

•                                          purchases
by a broker-dealer as principal and resale by such broker-dealer, including
resales for its account, pursuant to this prospectus;

 

•                                          ordinary
brokerage transactions and transactions in which the broker solicits purchases;

 

•                                          through
options, swaps or derivatives;

 

•                                          in
privately negotiated transactions;

 

•                                          in
making short sales or in transactions to cover short sales; and

 

•                                          put
or call option transactions relating to the shares.

 

The selling
security holders may effect these transactions by selling shares directly to
purchasers or to or through broker-dealers, which may act as agents or
principals. These broker-dealers may receive compensation in the form of
discounts, concessions or commissions from the selling security holders and/or
the purchasers of shares for whom such broker-dealers may act as agents or to
whom they sell as principals, or both (which compensation as to a particular
broker-dealer might be in excess of customary commissions).

 

 

The selling security holders have advised us
that they have not entered into any agreements, understandings or arrangements
with any underwriters or broker-dealers regarding the sale of their securities.

 

The selling
security holders may enter into hedging transactions with broker-dealers or
other financial institutions. In connection with those transactions, the
broker-dealers or other financial institutions may engage in short sales of the
shares or of securities convertible into or exchangeable for the shares in the
course of hedging positions they assume with the selling security holders. The
selling security holders may also enter into options or other transactions with
broker-dealers or other financial institutions which require the delivery of
shares offered by this prospectus to those broker-dealers or other financial
institutions. The broker-dealer or other financial institution may then resell
the shares pursuant to this prospectus (as amended or supplemented, if required
by applicable law, to reflect those transactions).

 

The selling
security holders and any broker-dealers that act in connection with the sale of
shares may be deemed to be “underwriters” within the meaning of Section 2(11)
of the Securities Act of 1933, and any commissions received by broker-dealers
or any profit on the resale of the shares sold by them while acting as
principals may be deemed to be underwriting discounts or commissions under the
Securities Act. The selling security holders may agree to indemnify any agent,
dealer or broker-dealer that participates in transactions involving sales of
the shares against liabilities, including liabilities arising under the
Securities Act. We have agreed to indemnify each of the selling security
holders and each selling security holder has agreed, severally and not jointly,
to indemnify us against some liabilities in connection with the offering of the
shares, including liabilities arising under the Securities Act.

 

The selling
security holders will be subject to the prospectus delivery requirements of the
Securities Act. We have informed the selling security holders that the
anti-manipulative provisions of Regulation M promulgated under the Securities
Exchange Act of 1934 may apply to their sales in the market.

 

Selling
security holders also may resell all or a portion of the shares in open market
transactions in reliance upon Rule 144 under the Securities Act, provided they
meet the criteria and conform to the requirements of Rule 144.

 

Upon being
notified by a selling security holder that a material arrangement has been
entered into with a broker-dealer for the sale of shares through a block trade,
special offering, exchange distribution or secondary distribution or a purchase
by a broker or dealer, we will file a supplement to this prospectus, if
required pursuant to Rule 424(b) under the Securities

 

 

Act, disclosing:

 

•                                          the
name of each such selling security holder and of the participating
broker-dealer(s);

 

•                                          the
number of shares involved;

 

•                                          the
initial price at which the shares were sold;

 

•                                          the
commissions paid or discounts or concessions allowed to the broker-dealer(s),
where applicable;

 

•                                          that
such broker-dealer(s) did not conduct any investigation to verify the
information set out or incorporated by reference in this prospectus; and

 

•                                          other
facts material to the transactions.

 

In addition,
if required under applicable law or the rules or regulations of the Commission,
we will file a supplement to this prospectus when a selling security holder
notifies us that a donee or pledgee intends to sell more than 500 shares of
common stock.

 

We are paying
all expenses and fees in connection with the registration of the shares. The
selling security holders will bear all brokerage or underwriting discounts or
commissions paid to broker-dealers in connection with the sale of the shares.

 

 

EXHIBIT B

 

FORM OF NOTICE OF EFFECTIVENESS

OF REGISTRATION STATEMENT

[Name and
Address of Transfer Agent]

 

Re:  NeoRx Corporation

 

Dear
[           ]:

 

We are counsel
to NeoRx Corporation, a Washington corporation (the “Company”), and have
represented the Company in connection with that certain Preferred Stock and
Warrant Purchase Agreement (the “Purchase Agreement”) dated as of December 3,
2003 by and among the Company and the buyers named therein (collectively, the
“Holders”) pursuant to which the Company issued to the Holders its Series B
Convertible Preferred Stock, par value $0.02 per share, (the “Preferred Stock”)
convertible into shares of the Company’s common stock, par value $0.02 per
share (the “Common Stock”), and warrants to purchase shares of the Common Stock
(the “Warrants”). Pursuant to the Purchase Agreement, the Company has also
entered into an Investor Rights Agreement with the Holders (the “Investor
Rights Agreement”) pursuant to which the Company agreed, among other things, to
register the shares of Common Stock issuable upon conversion of the Preferred
Stock and exercise of the Warrants, under the Securities Act of 1933, as
amended (the “1933 Act”). In connection with the Company’s obligations under
the Investor Rights Agreement, on
                ,
2003, the Company filed a Registration Statement on Form S-3 (File No.
333-                  )
(the “Registration Statement”) with the Securities and Exchange Commission (the
“SEC”) relating to the Registrable Securities which names each of the Holders
as a selling securityholder thereunder.

 

In connection
with the foregoing, we advise you that a member of the SEC’s staff has advised
us by telephone that the SEC has entered an order declaring the Registration
Statement effective under the 1933 Act at [ENTER TIME OF EFFECTIVENESS] on
[ENTER DATE OF EFFECTIVENESS] and we have no knowledge, after telephonic
inquiry of a member of the SEC’s staff, that any stop order suspending its
effectiveness has been issued or that any proceedings for that purpose are
pending before, or threatened by, the SEC and the Registrable Securities are
available for resale under the 1933 Act pursuant to the Registration Statement.

 

 

	
   

  	
  Very truly
  yours,

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  cc:  [LIST NAMES OF HOLDERS]Exhibit
4.1

 

 

GENZYME CORPORATION

 

and

 

U.S. BANK NATIONAL ASSOCIATION

 

as Trustee

 

 

INDENTURE

 

Dated as of December 9, 2003

 

 

Up to $690,000,000 Principal
Amount

 

1.25% CONVERTIBLE SENIOR NOTES
DUE 2023

 

 

 

 

CROSS-REFERENCE TABLE

 

	
  TIA

  Section

  	
   

  	
  Indenture

  Section

  
	
  310(a)(1)

  	
   

  	
    7.10

  
	
   

  	
  (a)(2)

  	
   

  	
    7.10

  
	
   

  	
  (a)(3)

  	
   

  	
  N.A.

  
	
   

  	
  (a)(4)

  	
   

  	
  N.A.

  
	
   

  	
  (a)(5)

  	
   

  	
  N.A.

  
	
   

  	
  (b)

  	
   

  	
    7.08; 7.10; 11.02

  
	
   

  	
  (c)

  	
   

  	
  N.A.

  
	
  311(a)

  	
   

  	
    7.11

  
	
   

  	
  (b)

  	
   

  	
    7.11

  
	
   

  	
  (c)

  	
   

  	
  N.A.

  
	
  312(a)

  	
   

  	
    2.05

  
	
   

  	
  (b)

  	
   

  	
  11.03

  
	
   

  	
  (c)

  	
   

  	
  11.03

  
	
  313(a)

  	
   

  	
    7.06

  
	
   

  	
  (b)(1)

  	
   

  	
  N.A.

  
	
   

  	
  (b)(2)

  	
   

  	
    7.06

  
	
   

  	
  (c)

  	
   

  	
    7.06; 11.02

  
	
   

  	
  (d)

  	
   

  	
    7.06

  
	
  314(a)

  	
   

  	
    4.03

  
	
   

  	
  (b)

  	
   

  	
  N.A.

  
	
   

  	
  (c)(1)

  	
   

  	
  11.04

  
	
   

  	
  (c)(2)

  	
   

  	
  11.04

  
	
   

  	
  (c)(3)

  	
   

  	
  N.A.

  
	
   

  	
  (d)

  	
   

  	
  N.A.

  
	
   

  	
  (e)

  	
   

  	
  11.05

  
	
   

  	
  (f)

  	
   

  	
  N.A.

  
	
  315(a)

  	
   

  	
    7.01(B)

  
	
   

  	
  (b)

  	
   

  	
    7.05; 11.02

  
	
   

  	
  (c)

  	
   

  	
    7.01(A)

  
	
   

  	
  (d)

  	
   

  	
    7.01(C)

  
	
   

  	
  (e)

  	
   

  	
    6.11

  
	
  316(a) (last
  sentence)

  	
   

  	
    2.09

  
	
   

  	
  (a)(1)(A)

  	
   

  	
    6.05

  
	
   

  	
  (a)(1)(B)

  	
   

  	
    6.04

  
	
   

  	
  (a)(2)

  	
   

  	
  N.A.

  
	
   

  	
  (b)

  	
   

  	
    6.07

  
	
   

  	
  (c)

  	
   

  	
  N.A.

  
	
  317(a)(1)

  	
   

  	
    6.08

  
	
   

  	
  (a)(2)

  	
   

  	
    6.09

  
	
   

  	
  (b)

  	
   

  	
    2.04

  
	
  318(a)

  	
   

  	
  11.01

  

 

I

 

TABLE OF CONTENTS

 

 

	
  I.

  	
  DEFINITIONS AND INCORPORATION BY REFERENCE

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  1.01 Definitions.

  	
   

  
	
   

  	
  1.02 Other Definitions.

  	
   

  
	
   

  	
  1.03 Incorporation by Reference of Trust
  Indenture Act.

  	
   

  
	
   

  	
  1.04 Rules of Construction.

  	
   

  
	
   

  	
   

  	
   

  
	
  II.

  	
  THE SECURITIES

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  2.01 Form and Dating.

  	
   

  
	
   

  	
  2.02 Execution and Authentication.

  	
   

  
	
   

  	
  2.03 Registrar, Paying Agent and Conversion
  Agent.

  	
   

  
	
   

  	
  2.04 Paying Agent to Hold Money in Trust.

  	
   

  
	
   

  	
  2.05 Securityholder Lists.

  	
   

  
	
   

  	
  2.06 Transfer and Exchange.

  	
   

  
	
   

  	
  2.07 Replacement Securities.

  	
   

  
	
   

  	
  2.08 Outstanding Securities.

  	
   

  
	
   

  	
  2.09 Securities Held by the Company or an
  Affiliate.

  	
   

  
	
   

  	
  2.10 Temporary Securities.

  	
   

  
	
   

  	
  2.11 Cancellation.

  	
   

  
	
   

  	
  2.12 Defaulted Interest.

  	
   

  
	
   

  	
  2.13 CUSIP Numbers.

  	
   

  
	
   

  	
  2.14 Deposit of Moneys.

  	
   

  
	
   

  	
  2.15 Book-Entry Provisions for Global
  Securities.

  	
   

  
	
   

  	
  2.16 Special Transfer Provisions.

  	
   

  
	
   

  	
  2.17 Restrictive Legends.

  	
   

  
	
   

  	
  2.18 Ranking.

  	
   

  
	
   

  	
   

  	
   

  
	
  III.

  	
  REDEMPTION

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  3.01 Right of Redemption.

  	
   

  
	
   

  	
  3.02 Notices to Trustee.

  	
   

  
	
   

  	
  3.03 Selection of Securities to Be
  Redeemed.

  	
   

  
	
   

  	
  3.04 Notice of Redemption.

  	
   

  
	
   

  	
  3.05 Effect of Notice of Redemption.

  	
   

  
	
   

  	
  3.06 Deposit of Redemption Price.

  	
   

  
	
   

  	
  3.07 Securities Redeemed in Part.

  	
   

  
	
   

  	
  3.08 Purchase of Securities at Option of
  the Holder.

  	
   

  
	
   

  	
  3.09 Repurchase at Option of Holder upon a
  Repurchase Event.

  	
   

  
	
   

  	
  3.10 Conversion Arrangement on Call for Redemption.

  	
   

  

 

i

 

	
  IV.

  	
  COVENANTS

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  4.01 Payment of Securities.

  	
   

  
	
   

  	
  4.02 Maintenance of Office or Agency.

  	
   

  
	
   

  	
  4.03 Reports.

  	
   

  
	
   

  	
  4.04 Compliance Certificate.

  	
   

  
	
   

  	
  4.05 Stay, Extension and Usury Laws.

  	
   

  
	
   

  	
  4.06 Corporate Existence.

  	
   

  
	
   

  	
  4.07 Notice of Default.

  	
   

  
	
   

  	
  4.08 Further Instruments and Acts.

  	
   

  
	
   

  	
   

  	
   

  
	
  V.

  	
  SUCCESSORS

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  5.01 When Company May Merge, etc.

  	
   

  
	
   

  	
  5.02 Successor Substituted.

  	
   

  
	
   

  	
   

  	
   

  
	
  VI.

  	
  DEFAULTS AND REMEDIES

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  6.01 Events of Default.

  	
   

  
	
   

  	
  6.02 Acceleration.

  	
   

  
	
   

  	
  6.03 Other Remedies.

  	
   

  
	
   

  	
  6.04 Waiver of Past Defaults.

  	
   

  
	
   

  	
  6.05 Control by Majority.

  	
   

  
	
   

  	
  6.06 Limitation on Suits.

  	
   

  
	
   

  	
  6.07 Rights of Holders to Receive Payment.

  	
   

  
	
   

  	
  6.08 Collection Suit by Trustee.

  	
   

  
	
   

  	
  6.09 Trustee May File Proofs of Claim.

  	
   

  
	
   

  	
  6.10 Priorities.

  	
   

  
	
   

  	
  6.11 Undertaking for Costs.

  	
   

  
	
   

  	
   

  	
   

  
	
  VII.

  	
  TRUSTEE

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  7.01 Duties of Trustee.

  	
   

  
	
   

  	
  7.02 Rights of Trustee.

  	
   

  
	
   

  	
  7.03 Individual Rights of Trustee.

  	
   

  
	
   

  	
  7.04 Trustee’s Disclaimer.

  	
   

  
	
   

  	
  7.05 Notice of Defaults.

  	
   

  
	
   

  	
  7.06 Reports by Trustee to Holders.

  	
   

  
	
   

  	
  7.07 Compensation and Indemnity.

  	
   

  
	
   

  	
  7.08 Replacement of Trustee.

  	
   

  
	
   

  	
  7.09 Successor Trustee by Merger, etc.

  	
   

  
	
   

  	
  7.10 Eligibility; Disqualification.

  	
   

  
	
   

  	
  7.11 Preferential Collection of Claims
  Against Company.

  	
   

  
	
   

  	
   

  	
   

  
	
  VIII.

  	
  DISCHARGE OF INDENTURE

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  8.01 Termination of the Obligations of the
  Company.

  	
   

  
	
   

  	
  8.02 Application of Trust Money.

  	
   

  

 

ii

 

	
   

  	
  8.03 Repayment to Company.

  	
   

  
	
   

  	
  8.04 Reinstatement.

  	
   

  
	
   

  	
   

  	
   

  
	
  IX.

  	
  AMENDMENTS

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  9.01 Without Consent of Holders.

  	
   

  
	
   

  	
  9.02 With Consent of Holders.

  	
   

  
	
   

  	
  9.03 Compliance with Trust Indenture Act.

  	
   

  
	
   

  	
  9.04 Revocation and Effect of Consents.

  	
   

  
	
   

  	
  9.05 Notation on or Exchange of Securities.

  	
   

  
	
   

  	
  9.06 Trustee Protected.

  	
   

  
	
   

  	
   

  	
   

  
	
  X.

  	
  CONVERSION

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  10.01 Conversion Privilege; Restrictive
  Legends.

  	
   

  
	
   

  	
  10.02 Conversion Procedure.

  	
   

  
	
   

  	
  10.03 Fractional Shares.

  	
   

  
	
   

  	
  10.04 Taxes on Conversion.

  	
   

  
	
   

  	
  10.05 Company to Provide Stock.

  	
   

  
	
   

  	
  10.06 Adjustment of Conversion Rate.

  	
   

  
	
   

  	
  10.07 No Adjustment.

  	
   

  
	
   

  	
  10.08 Other Adjustments.

  	
   

  
	
   

  	
  10.09 Adjustments for Tax Purposes.

  	
   

  
	
   

  	
  10.10 Notice of Adjustment.

  	
   

  
	
   

  	
  10.11 Notice of Certain Transactions.

  	
   

  
	
   

  	
  10.12 Effect of Reclassifications, Consolidations, Mergers, Binding
  Share Exchanges or Sales on Conversion Privilege.

  	
   

  
	
   

  	
  10.13 Trustee’s Disclaimer.

  	
   

  
	
   

  	
  10.14 Rights Distributions Pursuant to Shareholders’ Rights Plans.

  	
   

  
	
   

  	
   

  	
   

  
	
  XI.

  	
  MISCELLANEOUS

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  11.01 Trust Indenture Act Controls.

  	
   

  
	
   

  	
  11.02 Notices.

  	
   

  
	
   

  	
  11.03 Communication by Holders with Other
  Holders.

  	
   

  
	
   

  	
  11.04 Certificate and Opinion as to
  Conditions Precedent.

  	
   

  
	
   

  	
  11.05 Statements Required in Certificate or
  Opinion.

  	
   

  
	
   

  	
  11.06 Rules by Trustee and Agents.

  	
   

  
	
   

  	
  11.07 Legal Holidays.

  	
   

  
	
   

  	
  11.08 Duplicate Originals.

  	
   

  
	
   

  	
  11.09 Governing Law.

  	
   

  
	
   

  	
  11.10 No Adverse Interpretation of Other
  Agreements.

  	
   

  
	
   

  	
  11.11 Successors.

  	
   

  
	
   

  	
  11.12 Separability.

  	
   

  
	
   

  	
  11.13 Table of Contents, Headings, etc.

  	
   

  
	
   

  	
  11.14 Calculations in Respect of the
  Securities.

  	
   

  

 

iii

 

	
  Exhibit A

  	
  -

  	
  Form of Global Security

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Exhibit
  B-1

  	
  -

  	
  Form
  of Private Placement Legend

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Exhibit
  B-2

  	
  -

  	
  Form
  of Legend for Global Security

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Exhibit C

  	
  -

  	
  Form of Notice of Transfer Pursuant to
  Registration Statement

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Exhibit D

  	
  -

  	
  Form of Opinion of Counsel in Connection
  with Registration of Securities

  	
   

  

 

iv

 

INDENTURE, dated as
of December 9, 2003 between Genzyme Corporation, a Massachusetts
corporation (the “Company”), and U.S. Bank National
Association, as trustee (the “Trustee”).

 

Each party agrees as follows
for the benefit of the other parties and for the equal and ratable benefit of
the Holders of the Company’s 1.25% Convertible Senior Notes due 2023 (the “Securities”).

 

I.                                         DEFINITIONS AND INCORPORATION BY REFERENCE

 

1.01                           DEFINITIONS.

 

“Affiliate” means any person
directly or indirectly controlling or controlled by or under direct or indirect
common control with the Company.  For
this purpose, “control” shall mean the power to direct the management and policies
of a person through the ownership of securities, by contract or otherwise.

 

“Bid Solicitation Agent”  means
a Company-appointed agent that performs the calculations pursuant to Article X
and paragraph
10 of the Securities; provided, however, that the Bid
Solicitation Agent shall not be an Affiliate of the Company.

 

“Board of Directors” means the
Board of Directors of the Company or any committee thereof authorized to act
for it hereunder.

 

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

 

“Capital Stock” of any Person
means any and all shares, interests, participations or other equivalents
(however designated) of capital stock of such Person and all warrants or
options to acquire such capital stock.

 

“Clerk” and “Assistant
Clerk” of the Company mean the clerk or assistant clerk,
respectively, of the Company or such person holding an equivalent statutory
office under the corporation law of the jurisdiction then governing the
Company.

 

“Closing Sale Price” means the
price of a share of Common Stock on the relevant date, determined (a) on the
basis of the closing per share sale price (or if no closing sale price is
reported, the average of the bid and ask prices or, if more than one in either
case, the average of the average bid and the average ask prices) 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 by the National Association of Securities Dealers
Automated Quotation System; or (c) if not so quoted, as reported by National
Quotation Bureau, Incorporated or a similar organization.  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 own accord, would pay

 

1

 

to a fully informed seller,
acting on his own accord in an arms-length transaction, for a share of such
Common Stock.

 

“Common Stock” means the
series of common stock of the Company, $0.01 par value per share, designated as
Genzyme General Division Common Stock, or such other Capital Stock of the
Company into which such series is reclassified or changed, including, but not
limited to, by amendment to the articles of organization of the Company to
rename the Common Stock.

 

“Company” means the party
named as such above until a successor replaces it pursuant to the applicable
provision hereof and thereafter means the successor.

 

“Company Request” or “Company
Order” means a written request or order signed on behalf of the
Company by its Chairman of the Board, its Chief Executive Officer, its
President, its Chief Operating Officer, its Chief Financial Officer, any
Executive Vice President or any Senior Vice President and by its Treasurer or
an Assistant Treasurer or its Clerk or an Assistant Clerk, and delivered to the
Trustee.

 

“Conversion Rate”  means  the
number of shares of Common Stock issuable upon conversion of a Security per
$1,000 principal amount, which Conversion Rate shall initially be 14.0366
shares of Common Stock per $1,000 principal amount, subject to adjustment as
provided in Article X.

 

“Conversion Price”  means,
as of any date of determination, the dollar amount derived by dividing $1,000
principal amount by the Conversion Rate then in effect.

 

“Corporate Trust Office of the Trustee”
shall be at the address of the Trustee specified in Section 11.02 or such
other address as the Trustee may give notice of to 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 The
Depository Trust Company, its nominees and successors.

 

“Exchange Act” means the
Securities Exchange Act of 1934, as amended.

 

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

 

“Indebtedness” means, with respect to any
person, the principal of, and premium, if any, and interest on and all other
obligations in respect of (a) all indebtedness of such person for borrowed
money (including all indebtedness evidenced by notes, bonds, debentures or
other securities), (b) all reimbursement obligations of such person with
respect to letters of credit, bankers’ acceptances or similar facilities issued
for the account of such person, (c) all capital lease obligations of such
person, (d) all net obligations of such person under interest rate swap,
currency exchange or similar agreements of such person, (e) guarantees by such
person of indebtedness described in clauses
(a) through (d) of another person, and (f) all renewals, extensions,
deferrals, amendments and modifications of any indebtedness, obligation,
guarantee or liability of the kind described in clauses (a) through (e).

 

2

 

“Indenture” means this
Indenture as amended or supplemented from time to time.

 

“Initial Purchasers” means UBS
Securities LLC, Credit Suisse First Boston LLC and Lehman Brothers Inc.

 

The term “interest” includes liquidated
damages, unless the context or the terms of the Registration Rights Agreement
otherwise requires.

 

“Issue Date” means
December 9, 2003.

 

“liquidated damages” has the
meaning ascribed to it in the Registration Rights Agreement.

 

“Maturity Date” means
December 1, 2023.

 

“Officer” means the Chairman
of the Board, the Chief Executive Officer, the President, the Chief Operating
Officer, the Chief Financial Officer, any Executive Vice President, any Senior
Vice President, the Treasurer or the Clerk of the Company.

 

“Officer’s Certificate” means
a certificate signed by an Officer of the Company, other than an Officer acting
solely in his or her capacity as a Clerk of the Company.

 

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

 

“Option”  means the Initial
Purchasers’ option to acquire up to $90,000,000 of additional Securities (“Additional
Securities”) as provided for in the Purchase Agreement.

 

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

 

“Purchase Agreement” means the
Purchase Agreement dated December 4, 2003 between the Company and the
Initial Purchasers.

 

“Purchase Notice” means a
Purchase Notice in the form set forth in the Securities.

 

“QIB” means a “qualified
institutional buyer” within the meaning of Rule 144A under the Securities Act.

 

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

 

“Redemption Price” means, with
respect to a Security to be redeemed by the Company in accordance with Article III,
one hundred percent (100%) of the outstanding principal amount of such Security
to be redeemed.

 

“Registration Rights Agreement”
means the Registration Rights Agreement dated as of the date hereof between the
Company and the Initial Purchasers.

 

3

 

“Responsible Officer” shall
mean, when used with respect to the Trustee, any officer within the corporate
trust department of the Trustee, including any vice president, assistant vice
president, assistant secretary, assistant clerk, assistant treasurer, trust
officer or any other officer of the Trustee who customarily performs functions
similar to those performed by the Persons who at the time shall be such
officers, respectively, or to whom any corporate trust matter is referred
because of such person’s knowledge of and familiarity with the particular
subject and who shall have direct responsibility for the administration of this
Indenture.

 

“Restricted Security” means a
Security that constitutes a “restricted security” within the meaning of
Rule 144(a)(3) under the Securities Act; provided, however,
that the Trustee shall be entitled to request and conclusively rely on an
Opinion of Counsel with respect to whether any Security constitutes a
Restricted Security.

 

“Rights Agreement” means that
certain Third Amended and Restated Renewed Rights Agreement between the Company
and American Stock Transfer & Trust Company, dated June 30, 2003, as
the same may be amended, supplemented or superceded.

 

“Rule 144A”  means
Rule 144A under the Securities Act.

 

“SEC” means the Securities and
Exchange Commission.

 

“Securities” means the 1.25%
Convertible Senior Notes due 2023 issued by the Company pursuant to this
Indenture.

 

“Securities Act” means the
Securities Act of 1933, as amended.

 

“Security Agent” means any
Registrar, Paying Agent, Conversion Agent, Bid Solicitation Agent or
co-Registrar or co-agent.

 

“Significant Subsidiary” with
respect to any person means any subsidiary of such person that constitutes a
“significant subsidiary” within the meaning of Rule 1-02 of Regulation S-X
under the Securities Act, as such regulation is in effect on the date of this
Indenture.

 

“Subsidiary” means (i) a
corporation a majority of whose Capital Stock with voting power, under ordinary
circumstances, to elect directors is at the time, directly or indirectly, owned
by the Company, by one or more subsidiaries of the Company or by the Company
and one or more of its subsidiaries or (ii) any other Person (other than a
corporation) in which the Company, one or more of its subsidiaries or the
Company and one or more its subsidiaries, directly or indirectly, at the date
of determination thereof, own at least a majority of the ownership interests in
such Person that have voting power to elect members of such Person’s board of
directors or other body performing similar functions.

 

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

 

“Trading Day” means a day
during which trading in securities generally occurs on the principal national
or regional securities exchange in the United States on which the Common

 

4

 

Stock is then listed or, if the
Common Stock is not listed on a national or regional securities exchange in the
United States, on the National Association of Securities Dealers Automated
Quotation System or, if the Common Stock is not quoted on the National
Association of Securities Dealers Automated Quotation System, on the principal
other market on which the Common Stock is then traded.

 

“Trading Price” means, on any
date, the average of the secondary market bid quotations per $1,000 principal
amount of Securities obtained by the Bid Solicitation Agent on behalf of the
Trustee for five million dollars ($5,000,000) principal amount of Securities at
approximately 4:00 p.m., New York City time, on such date, from three (3)
independent, nationally recognized securities dealers selected by the Company; provided, that
if the Bid Solicitation Agent on behalf of the Trustee can reasonably obtain
only two (2) such bids, then the average of such two (2) bids shall instead be
used; provided
further, that if the Bid Solicitation Agent on behalf of the Trustee
can reasonably obtain only one (1) such bid, then such bid shall instead be
used; provided
further, that if the Bid Solicitation Agent on behalf of the Trustee
cannot reasonably obtain at least one (1) bid for five million dollars
($5,000,000) principal amount of Securities from a nationally recognized
securities dealer, or if, in the Company’s reasonable judgment, the bid
quotation or quotations so obtained by the Bid Solicitation Agent on behalf of
the Trustee are not indicative of the secondary market value of the Securities,
then, in each case, the Trading Price per $1,000 principal amount of Securities
on the applicable date of determination shall be deemed to be equal to the
product of (I) the Conversion Rate in effect on such date of determination and
(II) the average of the Closing Sale Prices for the ten (10) consecutive
Trading Days ending on, and including, such date of determination, which
average shall be appropriately adjusted in the good faith determination of the
Board of Directors (whose determination shall be conclusive and described in a
Board Resolution) to account for the occurrence, during such ten (10) Trading
Day period, of any event that requires an adjustment to the Conversion Rate
pursuant to Section 10.06 or that is described in Section 10.12.

 

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

 

“Voting Stock” of any Person
means the total voting power of all classes of the Capital Stock of such Person
entitled to vote generally in the election of directors of such Person.

 

1.02                           OTHER
DEFINITIONS.

 

	
   

  	
  Term

  	
   

  	
  Defined in Section

  
	
   

  	
  “Additional
  Securities”

  	
   

  	
  1.01

  	
   

  
	
   

  	
  “Aggregate
  Amount”

  	
   

  	
  10.06

  	
   

  
	
   

  	
  “Bankruptcy
  Law”

  	
   

  	
  6.01

  	
   

  
	
   

  	
  “Business
  Day”

  	
   

  	
  11.07

  	
   

  
	
   

  	
  “Change in
  Control”

  	
   

  	
  3.09

  	
   

  
	
   

  	
  “Conversion
  Agent”

  	
   

  	
  2.03

  	
   

  
	
   

  	
  “Conversion
  Date”

  	
   

  	
  10.02

  	
   

  
	
   

  	
  “Conversion
  Shares”

  	
   

  	
  10.06

  	
   

  
	
   

  	
  “current
  market price”

  	
   

  	
  10.06

  	
   

  

 

5

 

	
   

  	
  “Custodian”

  	
   

  	
  6.01

  	
   

  
	
   

  	
  “Determination
  Date”

  	
   

  	
  10.06

  	
   

  
	
   

  	
  “Distribution
  Date”

  	
   

  	
  10.06

  	
   

  
	
   

  	
  “Event of
  Default”

  	
   

  	
  6.01

  	
   

  
	
   

  	
  “Expiration
  Date”

  	
   

  	
  10.06

  	
   

  
	
   

  	
  “Expiration
  Time”

  	
   

  	
  10.06

  	
   

  
	
   

  	
  “Global
  Security”

  	
   

  	
  2.01

  	
   

  
	
   

  	
  “Legal
  Holiday”

  	
   

  	
  11.07

  	
   

  
	
   

  	
  “Market
  Price”

  	
   

  	
  3.08

  	
   

  
	
   

  	
  “Notice of
  Default”

  	
   

  	
  6.01

  	
   

  
	
   

  	
  “Option
  Purchase Date”

  	
   

  	
  3.08

  	
   

  
	
   

  	
  “Option
  Purchase Notice”

  	
   

  	
  3.08

  	
   

  
	
   

  	
  “Option
  Purchase Price”

  	
   

  	
  3.08

  	
   

  
	
   

  	
  “Participants”

  	
   

  	
  2.15

  	
   

  
	
   

  	
  “Paying Agent”

  	
   

  	
  2.03

  	
   

  
	
   

  	
  “Physical
  Securities”

  	
   

  	
  2.01

  	
   

  
	
   

  	
  “Private
  Placement Legend”

  	
   

  	
  2.17

  	
   

  
	
   

  	
  “Purchased
  Shares”

  	
   

  	
  10.06

  	
   

  
	
   

  	
  “Redemption”

  	
   

  	
  3.01

  	
   

  
	
   

  	
  “Registrar”

  	
   

  	
  2.03

  	
   

  
	
   

  	
  “Repurchase
  at Holder’s Option”

  	
   

  	
  3.01

  	
   

  
	
   

  	
  “Repurchase
  Date”

  	
   

  	
  3.09

  	
   

  
	
   

  	
  “Repurchase
  Event”

  	
   

  	
  3.09

  	
   

  
	
   

  	
  “Repurchase
  Event Notice”

  	
   

  	
  3.09

  	
   

  
	
   

  	
  “Repurchase
  Price”

  	
   

  	
  3.09

  	
   

  
	
   

  	
  “Repurchase
  Right”

  	
   

  	
  3.09

  	
   

  
	
   

  	
  “Repurchase
  Upon Repurchase Event”

  	
   

  	
  3.01

  	
   

  
	
   

  	
  “Resale
  Restriction Termination Date”

  	
   

  	
  2.17

  	
   

  
	
   

  	
  “Rights”

  	
   

  	
  10.06

  	
   

  

 

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 or a Holder;

“indenture to be qualified”
means this Indenture;

“indenture trustee” or “institutional
trustee” means the Trustee; and

“obligor” on the indenture
securities means the Company or any successor.

 

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

 

6

 

1.04                           RULES
OF CONSTRUCTION.

 

Unless the context otherwise
requires:

 

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

 

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

 

(iii)                     “or” is not exclusive;

 

(iv)                    words
in the singular include the plural and in the plural include the singular;

 

(v)                       provisions
apply to successive events and transactions;

 

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

 

(vii)                 references to currency shall mean the
lawful currency of the United States of America, unless the context requires
otherwise.

 

II.                                     THE SECURITIES

 

2.01                           FORM
AND DATING.

 

The Securities and the
Trustee’s certificate of authentication shall be substantially in the form set
forth in Exhibit
A, which is incorporated in and forms a part of this Indenture.  The Securities may have notations, legends
or endorsements required by law, stock exchange rule or usage (provided, that
any such notation, legend or endorsement required by usage is in a form
reasonably acceptable to the Company). 
The Company shall provide any such notations, legends or endorsements to
the Trustee in writing.  Each Security
shall be dated the date of its authentication.

 

All of the Securities are being
initially offered and sold by the Initial Purchasers to QIBs in reliance on Rule 144A.  Securities offered and sold to QIBs in
reliance on Rule 144A shall be issued initially in the form of one or more
Global Securities, substantially in the form set forth in Exhibit A (the “Global
Security”), deposited with the Trustee, as custodian for the
Depositary, duly executed by the Company and authenticated by the Trustee as
hereinafter provided and bearing the legends set forth in Exhibits B-1 and B-2.  The aggregate principal amount of the Global
Security may from time to time be increased or decreased by adjustments made on
the records of the Trustee, as custodian for the Depositary, as hereinafter
provided; provided,
that in no event shall the aggregate principal amount of the Global Security or
Securities exceed $600,000,000 (or $690,000,000 if the Initial Purchasers elect
to purchase all of the Additional Securities pursuant to the Option).

 

7

 

Securities issued in exchange
for interests in a Global Security pursuant to Section 2.15 may be
issued in the form of permanent certificated Securities in registered form in
substantially the form set forth in Exhibit A (the “Physical Securities”) and, if
applicable, bearing any legends required by Section 2.17.

 

2.02                           EXECUTION AND AUTHENTICATION.

 

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

 

A Security bearing the manual
or facsimile signature of an individual who was at the time of the execution of
the Security an Officer shall bind the Company, notwithstanding that such
individual has ceased to hold such office(s) prior to the authentication and
delivery of such Security or did not hold such office(s) at the time of
authentication of such Security.

 

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 in Exhibit A hereto duly executed by the
Trustee by manual signature of an authorized signatory of the Trustee, and such
certificate upon any Security shall be conclusive evidence, and the only
evidence, that such Security has been duly authenticated and delivered
hereunder.

 

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

 

A Security shall not be valid
until authenticated by the manual signature of the Trustee.  The signature shall be conclusive evidence
that the Security has been authenticated under this Indenture.

 

Upon a written order of the
Company signed by one Officer of the Company, the Trustee shall authenticate
Securities for original issue in the aggregate principal amount of 600,000,000
and such additional principal amount, if any, as shall be determined pursuant
to the next sentence of this Section 2.02.  Upon receipt by the Trustee of an Officer’s
Certificate stating that the Initial Purchasers have elected to purchase from
the Company a specified principal amount of Additional Securities, not to
exceed $90,000,000, pursuant to the Option, the Trustee shall authenticate and
deliver such specified principal amount of Additional Securities to or upon the
written order of the Company signed as provided in the immediately preceding
sentence.  Such Officer’s Certificate
must be received by the Trustee not later than the proposed date for delivering
of such Additional Securities.  The
aggregate principal amount of Securities outstanding at any time may not exceed
$600,000,000 except as provided in this Section 2.02.

 

Upon a written order of the
Company signed by an Officer of the Company, the Trustee shall authenticate
Securities not bearing the Private Placement Legend to be issued to the
transferee when sold pursuant to an effective registration statement under the
Securities Act as set forth in Section 2.16(B).

 

The Trustee shall act as the
initial authenticating agent. 
Thereafter, the Trustee may appoint an authenticating agent acceptable
to the Company to authenticate Securities. 
An

 

8

 

authenticating agent may
authenticate Securities whenever the Trustee may do so.  Each reference in this Indenture to
authentication by the Trustee includes authentication by such authenticating
agent.  An authenticating agent has the
same rights as a Security Agent to deal with the Company and its Affiliates.

 

If a written order of the
Company pursuant to this Section 2.02 has been, or
simultaneously is, delivered, any instructions by the Company to the Trustee
with respect to endorsement, delivery or redelivery of a Security issued in
global form shall be in writing but need not comply with Section 11.04 hereof and
need not be accompanied by an Opinion of Counsel.

 

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

 

2.03                           REGISTRAR, PAYING AGENT AND CONVERSION AGENT.

 

The Company shall maintain, or
cause to be maintained, an office or agency in the Borough of Manhattan, The
City of New York, where Securities may be presented for registration of
transfer or for exchange (“Registrar”), an office or agency in the
Borough of Manhattan, The City of New York, where Securities may be presented
for payment (“Paying Agent”) and an office or agency in the Borough of
Manhattan, The City of New York, where Securities may be presented for
conversion (“Conversion Agent”). 
The Registrar shall keep a register of the Securities and of their
transfer and exchange.  The Company may
appoint or change one or more co-Registrars, one or more additional paying
agents and one or more additional conversion agents without notice and may act
in any such capacity on its own behalf. 
The term “Registrar” includes any co-Registrar; the term “Paying Agent”
includes any additional paying agent; and the term “Conversion Agent” includes
any additional conversion agent.

 

The Company shall enter into an
appropriate agency agreement with any Security Agent not a party to this
Indenture.  The agreement shall
implement the provisions of this Indenture that relate to such Security Agent.  The Company shall notify the Trustee of the
name and address of any Security Agent not a party to this Indenture.  If the Company fails to maintain a
Registrar, Paying Agent or Conversion Agent, the Trustee shall act as such.

 

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

 

2.04                           PAYING
AGENT TO HOLD
MONEY IN TRUST.

 

Each Paying Agent shall hold in
trust for the benefit of the Securityholders or the Trustee all moneys held by
the Paying Agent for the payment of the Securities, and shall notify the
Trustee of any default by the Company in making any such payment.  While any such default continues, the
Trustee may require a Paying Agent to pay all money held by it to the
Trustee.  The Company at any time may
require a Paying Agent to pay all money held by it to the Trustee.  Upon payment over to the Trustee, the Paying
Agent shall have no further liability for the money.  If the Company acts as Paying Agent, it shall segregate and hold
as a separate trust fund all money held by it as Paying Agent.

 

9

 

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 furnish to
the Trustee on or before each interest payment date and at such other times as
the Trustee may request in writing a list, in such form and as of such date as
the Trustee may reasonably require, of the names and addresses of
Securityholders.

 

2.06                           TRANSFER
AND EXCHANGE.

 

Subject to Sections 2.15 and 2.16 hereof, where Securities are presented
to the Registrar with a request to register their transfer or to exchange them
for an equal principal amount of Securities of other authorized denominations,
the Registrar shall register the transfer or make the exchange if its
requirements for such transaction are met. 
To permit registrations of transfer and exchanges, the Trustee shall
authenticate Securities at the Registrar’s request.  The Company or the Trustee, as the case may be, shall not be
required (A) to issue, authenticate, register the transfer of or exchange any
Security (i) during a period beginning at the opening of business fifteen (15)
days before the mailing of a notice of redemption of the Securities selected
for Redemption under Section 3.04 and ending at the close
of business on the day of such mailing or (ii) for a period of fifteen (15)
days before selecting, pursuant to Section 3.03, Securities to be
redeemed; or (B) to register the transfer of or exchange any Security that has
been selected for Redemption or for which a Purchase Notice has been delivered,
and not withdrawn, in accordance with this Indenture, except the unredeemed or
unrepurchased portion of Securities being redeemed or repurchased in part.  Every Security presented or surrendered for
registration of transfer or exchange shall be duly endorsed or accompanied by
an assignment form in the form included in Exhibit A, and in form reasonably satisfactory
to the Registrar, duly executed by the Holder thereof or its attorney duly
authorized in writing.

 

No service charge shall be
imposed for any transfer, exchange or conversion of Securities, but the Company
may require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any transfer, exchange or
conversion of Securities, other than exchanges pursuant to Sections 2.10, 3.07, 3.08, 3.09, 9.05 or 10.02
not involving any transfer.

 

Each Holder of a Security
agrees to indemnify the Company, the Registrar and the Trustee against any
liability they may incur as a result of the transfer, exchange or assignment of
such Holder’s Securities at such Holder’s request in violation of any provision
of this Indenture and/or applicable United States federal or state securities
law.

 

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

 

10

 

2.07                           REPLACEMENT SECURITIES.

 

If the Holder of a Security
claims that the Security has been mutilated, lost, destroyed or wrongfully
taken, the Company shall issue and the Trustee shall authenticate a replacement
Security upon surrender to the Trustee of the mutilated Security, or upon
delivery to the Trustee of evidence of the loss, destruction or theft of the
Security satisfactory to the Trustee and the Company.  In the case of lost, destroyed or wrongfully taken Securities, if
required by the Trustee or the Company, an indemnity bond must be provided by
such Holder that is satisfactory to the Trustee and the Company to protect the
Company, the Trustee and/or any Security Agent from any loss which any of them
may suffer if a Security is replaced. 
The Trustee may charge such Holder for its expenses in replacing a
Security.

 

In case any such mutilated,
lost, destroyed or wrongfully taken Security has become or is about to become
due and payable, the Company in its discretion may, instead of issuing a new Security,
pay such Security when due.

 

Every replacement Security is
an additional obligation of the Company only as provided in Section 2.08.

 

2.08                           OUTSTANDING SECURITIES.

 

Securities outstanding at any
time are all the Securities authenticated by the Trustee (or an authenticating
agent duly appointed pursuant to Section 2.02) except for those
converted, those cancelled by it, those delivered to it for cancellation and
those described in this Section 2.08 as not outstanding.  Except to the extent provided in Section 2.09,
a Security does not cease to be outstanding because the Company or one of its
Subsidiaries or Affiliates holds the Security.

 

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

 

If the Paying Agent (other than
the Company) holds on an Option Purchase Date, Redemption Date, Repurchase Date
or Maturity Date, money sufficient to pay the Option Purchase Price, Redemption
Price, Repurchase Price or principal amount, as the case may be, with respect
to a Security, plus, if applicable, accrued and unpaid interest, if any,
payable as herein provided upon Repurchase at Holder’s Option, Redemption,
Repurchase Upon Repurchase Event or maturity, then on and after such date such
Security shall be deemed to be no longer outstanding, interest on such Security
shall cease to accrue, and such Security shall be deemed paid whether or not
such Security is delivered to the Paying Agent.  Thereafter, all rights of the Holder of such Security shall
terminate with respect to such Security, other than the right to receive the
Option Purchase Price, Redemption Price, Repurchase Price or principal amount,
as the case may be, plus, if applicable, such accrued and unpaid interest, in
accordance with this Indenture.

 

If a Security is converted in
accordance with Article X, then, from and after the time of such
conversion on the Conversion Date, such Security shall cease to be outstanding,
and interest (including liquidated damages attributable to the Security that
was converted), if any, shall cease

 

11

 

to accrue on such Security; provided,
however,
that nothing in this paragraph shall affect the provision in the Registration
Rights Agreement for liquidated damages on shares of Common Stock issued upon
conversion of such Security.

 

2.09                           SECURITIES HELD BY THE COMPANY OR AN
AFFILIATE.

 

In determining whether the
Holders of the required aggregate principal amount of Securities have concurred
in any direction, waiver or consent, Securities owned by the Company or any of
its Subsidiaries or Affiliates shall be considered as though not outstanding,
except that, for the purposes of determining whether a Responsible Officer of
the Trustee shall be protected in relying on any such direction, waiver or
consent, only Securities for which the Trustee has received evidence from the
Registrar or the Company to be so owned shall be so disregarded.  Securities so owned which have been pledged
in good faith may be considered to be outstanding for purposes of this Section 2.09
if the pledgee establishes, to the satisfaction of the Trustee, the pledgee’s
right so to concur with respect to such Securities and that the pledgee is not,
and is not acting at the direction or on behalf of, the Company, any other
obligor on the Securities, an Affiliate of the Company or an affiliate of any
such other obligor.  In the event of a
dispute as to whether the pledgee has established the foregoing, the Trustee
may rely on the advice of counsel or on an Officer’s Certificate.

 

2.10                           TEMPORARY SECURITIES.

 

Until definitive Securities are
ready for delivery, the Company may prepare and the Trustee shall authenticate
temporary Securities.  Temporary
Securities shall be substantially in the form of definitive Securities but may
have variations that the Company considers appropriate for temporary
Securities.  Without unreasonable delay,
the Company shall prepare and the Trustee shall authenticate definitive
Securities in exchange for temporary Securities.

 

2.11                           CANCELLATION.

 

The Company at any time may
deliver Securities to the Trustee for cancellation.  The Registrar, Paying Agent and Conversion Agent shall forward to
the Trustee any Securities surrendered to them for transfer, exchange, payment,
redemption or conversion.  The Trustee
shall promptly cancel all Securities surrendered for transfer, exchange,
payment, conversion or cancellation in accordance with its customary
procedures.  The Company may not issue
new Securities to replace Securities that it has paid or delivered to the
Trustee for cancellation or that any Securityholder has converted pursuant to Article X.

 

2.12                           DEFAULTED INTEREST.

 

If and to the extent the
Company defaults in a payment of interest on the Securities to the Holder of
record at the close of business on the relevant record date, such interest
shall forthwith cease to be payable to such Holder by virtue of his having been
the holder of record at the close of business on such record date.  The Company shall pay such defaulted
interest (a) to the Holder in whose name the Securities are registered at
the close of business on a special record date for the payment of such
defaulted interest to be fixed by the Trustee, provided the Company shall mail
to Holders at least fifteen (15) calendar days prior to such special record
date a notice that states such special record date, the payment date and the
amount of interest to be paid or (b) at

 

12

 

any time in any other lawful
manner not inconsistent with the requirements of any securities exchange on
which the Securities may be listed, and upon such notice as may be required by
such exchange and applicable law, if, after notice given by the Company to the
Trustee of the proposed payment, such manner of payment shall be deemed
practicable by the Trustee.  To the
extent not prohibited by applicable statute or case law, interest shall accrue
on such defaulted interest at the rate provided in the Securities.

 

2.13                           CUSIP NUMBERS.

 

The Company in issuing the
Securities may use one or more “CUSIP” numbers, and, if so, the Trustee shall
use the CUSIP numbers in notices of redemption or exchange as a convenience to
Holders; provided,
however,
that no representation is hereby deemed to be made by the Trustee as to the
correctness or accuracy of the CUSIP numbers printed on the notice or on the
Securities; provided
further, that reliance may be placed only on the other
identification numbers printed on the Securities, and the effectiveness of any
such notice shall not be affected by any defect in, or omission of, such CUSIP
numbers.  The Company shall promptly
notify the Trustee of any change in the CUSIP numbers.

 

2.14                           DEPOSIT OF MONEYS.

 

Prior to 11:00 A.M., New York
City time, on each interest payment date, Maturity Date, Redemption Date,
Option Purchase Date or Repurchase Date, the Company shall have deposited with
a Paying Agent (or, if the Company is acting as its own Paying Agent, segregate
and hold in trust in accordance with Section 2.04) money, in funds immediately
available on such date, sufficient to make cash payments, if any, due on such
interest payment date, Maturity Date, Redemption Date, Option Purchase Date or
Repurchase Date, as the case may be, in a timely manner which permits the
Paying Agent to remit, in the manner provided in this Indenture, all payment
due to the Holders on such interest payment date, Maturity Date, Redemption
Date, Option Purchase Date or Repurchase Date, as the case may be.  If, pursuant to Section 4.01, such
payment may be made by check, then such deposit shall be in such manner as will
permit such remittance to be made by check drawn upon a bank in the city in
which the Paying Agent’s principal office, or the Corporate Trust Office of the
Trustee, is located.

 

2.15                           BOOK-ENTRY PROVISIONS FOR GLOBAL SECURITIES.

 

(A)                              The
Global Securities initially shall (i) be registered in the name of the
Depositary or the nominee of such Depositary, (ii) be delivered to the
Trustee as custodian for such Depositary and (iii) bear legends as set
forth in Section 2.17.

 

Members of, or participants in,
the Depositary (“Participants”) shall have no rights under this Indenture with
respect to any Global Security held on their behalf by the Depositary, or the
Trustee as its custodian, or under the Global Security, and the Depositary may
be treated by the Company, the Trustee and any agent of the Company or the
Trustee as the absolute owner of the 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

 

13

 

Depositary or impair, as
between the Depositary and Participants, the operation of customary practices
governing the exercise of the rights of a Holder of any Security.

 

(B)                                Transfers
of Global Securities shall be limited to transfers in whole, but not in part,
to the Depositary, its successors or their respective nominees.  In addition, Physical Securities shall be
transferred to all beneficial owners, as identified by the Depositary, in exchange
for their beneficial interests in Global Securities only if (i) the
Depositary notifies the Company that it is unwilling or unable to continue as
depositary for any Global Security (or the Depositary ceases to be a “clearing
agency” registered under Section 17A of the Exchange Act) and a successor
Depositary is not appointed by the Company within ninety (90) days of such
notice or cessation or (ii) an Event of Default has occurred and is
continuing and the Registrar has received a written request from the Depositary
to issue Physical Securities.

 

(C)                                In
connection with the transfer of a Global Security in its entirety to beneficial
owners pursuant to Section 2.15(B), such Global Security
shall be deemed to be surrendered to the Trustee for cancellation, and the
Company shall execute, and the Trustee shall upon written instructions from the
Company authenticate and deliver, to each beneficial owner identified by the
Depositary in exchange for its beneficial interest in such Global Security, an
equal aggregate principal amount of Physical Securities of authorized
denominations.

 

(D)                               Any
Physical Security constituting a Restricted Security delivered in exchange for
an interest in a Global Security pursuant to Section 2.15(B) shall,
except as otherwise provided by Section 2.16, bear the Private
Placement Legend.

 

(E)                                 The
Holder of any Global Security may grant proxies and otherwise authorize any
Person, including Participants and Persons that may hold interests through
Participants, to take any action which a Holder is entitled to take under this
Indenture or the Securities.

 

2.16                           SPECIAL TRANSFER PROVISIONS.

 

(A)                              Restrictions
on Transfer and Exchange of Global Securities.  Notwithstanding any other provisions of this
Indenture, a Global Security may not be transferred except as a whole by the
Depositary to a nominee of the Depositary or by a nominee of the Depositary to
the Depositary or another nominee of the Depositary or by the Depositary or any
such nominee to a successor Depositary or a nominee of such successor
Depositary.

 

(B)                                Private
Placement Legend.  Upon the
transfer, exchange or replacement of Securities not bearing the Private
Placement Legend, the Registrar or co-Registrar shall deliver Securities that
do not bear the Private Placement Legend. 
Upon the transfer, exchange or replacement of Securities bearing the
Private Placement Legend, the Registrar or co-Registrar shall deliver only Securities
that bear the Private Placement Legend unless (i) the requested transfer
is after the Resale Restriction Termination Date, (ii) there is delivered
to the Trustee and the Company an opinion of counsel reasonably satisfactory to
the Company and addressed to the Trustee and the Company to the effect that
neither such legend nor the related restrictions on transfer are required in
order to maintain compliance with the provisions of the Securities Act or
(iii) such Security has been sold pursuant to an effective registration
statement under the Securities Act and the Holder selling such Securities has
delivered to the Registrar or co-Registrar

 

14

 

a notice in the form of Exhibit C
hereto.  Upon the effectiveness of the
Shelf Registration Statement (as defined in the Registration Rights Agreement),
the Company shall deliver to the Trustee a notice of effectiveness, a Global
Security or Global Securities, which do not bear the Private Placement Legend,
an authentication order in accordance with Section 2.02 and an Opinion of Counsel
in the form of Exhibit D hereto, and, if required by the Depositary, the
Company shall deliver to the Depositary a letter of representations in a form
reasonably acceptable to the Depositary. 
Upon any sale, pursuant to such Shelf Registration Statement, of a
beneficial interest in a Global Security that constitutes a Restricted Security
and delivery of appropriate evidence thereof to the Trustee, and upon any sale
or transfer of a beneficial interest in connection with which the Private
Placement Legend will be removed in accordance with this Indenture, the Trustee
shall increase the principal amount of the Global Security that does not
constitute a Restricted Security by the principal amount of such sale or
transfer and likewise reduce the principal amount of the Global Security that
does constitute a Restricted Security.

 

(C)                                General.  By its acceptance of any Security bearing
the Private Placement Legend, each Holder of such a Security acknowledges the
restrictions on transfer of such Security set forth in this Indenture and in
the Private Placement Legend and agrees that it will transfer such Security
only as provided in this Indenture.

 

The Registrar shall retain
copies of all letters, notices and other written communications received
pursuant to Section 2.15 or this Section 2.16.  The Company shall have the right to inspect
and make copies of all such letters, notices or other written communications at
any reasonable time upon the giving of reasonable written notice to the
Registrar.

 

(D)                               Transfers of
Securities Held by Affiliates. 
Any certificate (i) evidencing a Security that has been transferred
to an Affiliate within two (2) years after the Issue Date, as evidenced by a
notation on the assignment form for such transfer or in the representation
letter delivered in respect thereof or (ii) evidencing a Security that has
been acquired from an Affiliate (other than by an Affiliate) in a transaction
or a chain of transactions not involving any public offering, shall, until two
(2) years after the last date on which the Company or any Affiliate was an
owner of such Security (or such longer period of time as may be required under
the Securities Act or applicable state securities laws), in each case, bear the
Private Placement Legend, unless otherwise agreed by the Company (with written
notice thereof to the Trustee).

 

2.17                           RESTRICTIVE LEGENDS.

 

Each Global Security and
Physical Security that constitutes a Restricted Security shall bear the legend
(the “Private
Placement Legend”) as set forth in Exhibit B-1 on the face
thereof until after the second anniversary of the later of (i) the Issue Date
and (ii) the last date on which the Company or any Affiliate was the owner
of such Security (or any predecessor security) (or such shorter period of time
as permitted by Rule 144(k) under the Securities Act or any successor provision
thereunder) (or such longer period of time as may be required under the
Securities Act or applicable state securities laws, as set forth in an Opinion
of Counsel, unless otherwise agreed between the Company and the Holder thereof)
(such date, the “Resale Restriction Termination Date”).

 

Each Global Security shall also
bear the legend as set forth in Exhibit B-2.

 

15

 

2.18                           RANKING.

 

The indebtedness of the Company
arising under or in connection with this Indenture and every outstanding
Security issued under this Indenture from time to time constitutes and will
constitute a senior unsecured general obligation of the Company, ranking
equally with other existing and future senior unsecured Indebtedness of the
Company and ranking senior to any existing or future Indebtedness of the
Company that, by its terms, is made subordinate to senior Indebtedness of the
Company.

 

III.                                 REDEMPTION

 

3.01                           RIGHT OF REDEMPTION.

 

Redemption of the Securities,
as permitted by any provision of this Indenture, shall be made, with respect to
a repurchase at the Company’s option, in accordance with paragraphs 6 and 7 of the
Securities (a “Redemption”), with respect to a repurchase at the Holder’s
option, in accordance with paragraph 8 of the Securities (a “Repurchase
at Holder’s Option”), and with respect to any repurchase upon a
Repurchase Event, in accordance with paragraph 9 of the Securities (a “Repurchase
Upon Repurchase Event”), in each case in accordance with the
applicable provisions of this Article III.

 

The Company will comply with
all federal and state securities laws, and the applicable laws of any foreign
jurisdiction, in connection with any solicitations of offers to buy Securities
pursuant to this Article III.

 

The Company will not have the
right to redeem any Securities prior to December 1, 2008.  On or after December 1, 2008, the
Company will have the right, at its option, to redeem all or any part of the
Securities at a price payable in cash equal to the Redemption Price plus
accrued and unpaid interest, if any, to, but excluding, the Redemption Date.

 

3.02                           NOTICES TO TRUSTEE.

 

If the Company elects to redeem
Securities pursuant to paragraph 6 of the Securities, it shall
notify the Trustee at least fifteen (15) days prior to the mailing under Section 3.04
of the notice of redemption of the Securities selected for Redemption  (unless
a shorter notice period shall be satisfactory to the Trustee) of the Redemption
Date and the aggregate principal amount of Securities to be redeemed.

 

3.03                           SELECTION OF SECURITIES TO BE REDEEMED.

 

If the Company has elected to
redeem less than all the Securities pursuant to paragraph 6 of the
Securities, the Trustee shall, within five (5) Business Days after receiving
the notice specified in Section 3.02, select the Securities to
be redeemed by lot, on a pro rata basis or in accordance with any
other method the Trustee considers fair and appropriate.  The Trustee shall make such selection from
Securities then outstanding and not already to be redeemed by virtue of having
been previously called for Redemption. 
The Trustee may select for Redemption portions of the principal amount
of Securities that have denominations larger than $1,000

 

16

 

principal amount.  Securities and portions of them the Trustee
selects for Redemption shall be in amounts of $1,000 principal amount or
integral multiples of $1,000 principal amount. 
The Trustee shall promptly notify the Company in writing of the
Securities selected for Redemption and the principal amount thereof to be
redeemed.

 

The Registrar need not transfer
or exchange any Securities selected for Redemption, except the unredeemed
portion of the Securities redeemed in part. 
The Registrar need not transfer or exchange any Securities for a period
of fifteen (15) days before selecting Securities to be redeemed.

 

3.04                           NOTICE OF REDEMPTION.

 

At least thirty (30) days but
not more than sixty (60) days before a Redemption Date, the Company shall mail,
or cause to be mailed, by first-class mail a notice of Redemption to each
Holder whose Securities are to be redeemed, at the address of such Holder
appearing in the security register.

 

The notice shall identify the
Securities and the aggregate principal amount thereof to be redeemed pursuant
to a Redemption and shall state:

 

(i)                           the
Redemption Date;

 

(ii)                        the
Redemption Price plus accrued and unpaid interest, if any, to, but excluding,
the Redemption Date;

 

(iii)                     the Conversion Rate and the
Conversion Price;

 

(iv)                    the
names and addresses of the Paying Agent and the Conversion Agent and, if
different therefrom, the place or places where such Securities may be
surrendered for conversion;

 

(v)                       that
the right to convert the Securities called for Redemption will terminate at
5:00 p.m., New York City time, on the third (3rd) Business Day immediately
preceding the Redemption Date;

 

(vi)                    that
Holders who want to convert Securities must satisfy the requirements of Article X;

 

(vii)                 that Securities called for Redemption
must be surrendered to the Paying Agent to collect the Redemption Price plus
accrued and unpaid interest, if any, payable as herein provided upon
Redemption;

 

(viii)              that, unless the Company shall default in
the payment of the Redemption Price, or accrued and unpaid interest (including
liquidated damages), if any, payable as herein provided upon Redemption,
interest (including liquidated damages) on Securities called for Redemption
ceases to accrue on and after the Redemption Date, and all rights of the
Holders of such Securities shall terminate on and after the Redemption Date,
other than the right to receive, upon surrender of such Securities (together
with all

 

17

 

necessary endorsements) and in accordance with this Indenture, the
Redemption Price and such accrued and unpaid interest;

 

(ix)                      the
CUSIP number or numbers, as the case may be, of the Securities; and

 

(x)                         any
other information, at the Company’s discretion.

 

The right, pursuant to Article X,
to convert Securities called for Redemption shall terminate at 5:00 p.m., New
York City time, on the third (3rd) Business Day immediately preceding the
Redemption Date.

 

At the Company’s request, upon
reasonable prior notice, the Trustee shall give the notice of Redemption in the
Company’s name and at the Company’s expense; provided that the form and
content of such notice shall be prepared by the Company.

 

3.05                           EFFECT OF NOTICE OF REDEMPTION.

 

Once notice of Redemption is
mailed, Securities called for Redemption become due and payable on the
Redemption Date at the Redemption Price plus accrued and unpaid interest to,
but excluding, the Redemption Date, and, on and after such Redemption Date
(unless the Company shall default in the payment of the Redemption Price or
such accrued and unpaid interest), such Securities shall cease to bear
interest, and all rights of the Holders of such Securities shall terminate,
other than the right to receive, upon surrender of such Securities and in
accordance with the next sentence, the Redemption Price and such accrued and
unpaid interest.  Upon surrender to the
Paying Agent of a Security subject to Redemption, such Security shall be paid
at the Redemption Price plus accrued and unpaid interest to, but excluding, the
Redemption Date, unless the Redemption Date is an interest payment date, in
which case such accrued and unpaid interest will instead be paid on such
interest payment date to the Holder of such Security at the close of business
on the record date for such interest payment.

 

If any Security shall not be
paid upon surrender thereof for Redemption, the principal of, and accrued and
unpaid interest on, such Security shall, until paid, bear interest from the
Redemption Date at the rate borne by such Security on the principal amount of
such Security, and such Security shall continue to be convertible pursuant to Article X.

 

Notwithstanding anything herein
to the contrary, there shall be no purchase of any Securities pursuant to a
Redemption if there has occurred (prior to, on or after, as the case may be,
the mailing of the notice of Redemption specified in Section 3.04) and is
continuing an Event of Default (other than a default in the payment of the
Redemption Price or accrued and unpaid interest, if any, payable as herein
provided upon Redemption).  The Paying
Agent will promptly return to the respective Holders thereof any Securities
held by it during the continuance of an Event of Default (other than a default
in the payment of the Redemption Price or accrued and unpaid interest, if any,
payable as herein provided upon Redemption).

 

3.06                           DEPOSIT OF REDEMPTION PRICE.

 

Prior to 11:00 A.M., New York
City time on the Redemption Date, the Company shall deposit with a Paying Agent
(or, if the Company is acting as its own Paying Agent, segregate

 

18

 

and hold in trust in accordance
with Section 2.04)
money, in funds immediately available on the Redemption Date, sufficient to pay
the Redemption Price, plus accrued and unpaid interest, if any, to, but
excluding, the Redemption Date, of all Securities to be redeemed on the
Redemption Date.  The Paying Agent shall
return to the Company, as soon as practicable, any money not required for that
purpose.

 

3.07                           SECURITIES REDEEMED IN PART.

 

Any Security to be redeemed
only in part shall be delivered pursuant to Section 3.05 (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 its attorney duly authorized in
writing).  Upon receipt of such
Security, together with any required endorsements or transfer instruments, the
Company shall execute, and the Trustee shall authenticate and make available
for delivery to the Holder of such Security without service charge, a new
Security or Securities, of any authorized denomination as requested by such
Holder, of the same tenor and in aggregate principal amount equal to the
portion of such Security not being redeemed.

 

If any Security selected for
partial Redemption is converted in part, the principal amount of such Security
subject to Redemption shall be reduced by the principal amount of such Security
that is converted.

 

3.08                           PURCHASE OF SECURITIES AT OPTION OF THE
HOLDER.

 

(A)                              At
the option of the Holder thereof, Securities shall be purchased by the Company
pursuant to paragraph 8 of the Securities on December 1, 2008,
December 1, 2013 and December 1, 2018 (each, an “Option Purchase Date”), at
one hundred percent (100%) of the principal amount of the Securities (the “Option
Purchase Price”), plus accrued and unpaid interest, if any, to, but
excluding, the applicable Option Purchase Date, upon:

 

(i)                                    delivery
to the Paying Agent, by the Holder, of a Purchase Notice, in the form set forth
in the Securities, or any other form of written notice substantially similar
thereto, at any time from the opening of business on the date that is twenty
(20) Business Days prior to the applicable Option Purchase Date until 5:00 p.m.,
New York City time, on the third (3rd) Business Day immediately preceding the
applicable Option Purchase Date, stating:

 

(I)                                     if
the Holder’s Securities are certificated, the certificate number of the
Securities which the Holder will deliver to be purchased;

 

(II)                                 the
principal amount of Securities to be purchased, which must be $1,000 or an
integral multiple thereof;

 

(III)                             that
such principal amount of Securities shall be purchased as of the applicable
Option Purchase Date pursuant to the terms and conditions specified in paragraph 8 of
the Securities and in this Indenture; and

 

19

 

(IV)                             whether,
in the event the Company shall elect, pursuant to Section 3.08(B), to pay
the Option Purchase Price, in whole or in part, in shares of Common Stock, and
such portion of the Option Purchase Price shall ultimately be paid to such
Holder entirely in cash because any of the conditions, as provided in this Section 3.08,
to payment of the Option Purchase Price in shares of Common Stock is not
satisfied prior to the applicable Option Purchase Date, such Holder elects (i)
to withdraw such Purchase Notice as to some or all of the Securities to which
such Purchase Notice relates (stating the principal amount and, if the Holder’s
Securities are certificated, certificate numbers, if any, of the Securities to
be so withdrawn, which amount must be $1,000 or an integral multiple thereof)
or (ii) to receive cash in respect of the entire Option Purchase Price for the
Securities (or portions thereof) to which such Purchase Notice relates; and

 

(ii)                                 delivery
of such Securities (together with all necessary endorsements) to the Paying
Agent after delivery of the Purchase Notice at the offices of the Paying Agent,
such delivery being a condition to receipt by the Holder of the Option Purchase
Price therefor plus accrued and unpaid interest thereon, if any, to, but
excluding, the applicable Option Purchase Date; provided, however, that such
Option Purchase Price and such accrued and unpaid interest shall be so paid
pursuant to this Section 3.08 only if the Securities 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.

 

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
(together with accrued and unpaid interest, if any) promptly following the
later of the applicable Option Purchase Date or the time of delivery of the
Security, but, if any of such consideration consists of shares of Common Stock,
in no event more than three (3) Business Days following the later of the
applicable Option Purchase Date or the time of delivery of the Security.  In accordance with the preceding sentence,
if all or a portion of the Option Purchase Price is to be paid in shares of
Common Stock pursuant to and in accordance with this Section 3.08, the
Company shall deliver, to each Holder entitled to receive shares of Common
Stock through the Paying Agent, a certificate for the number of full shares of
Common Stock issuable in full or partial payment of the Option Purchase Price
as herein provided, together with cash for (i) any portion of the Option Purchase
Price not to be paid in shares of Common Stock, (ii) accrued and unpaid
interest, if any, payable as herein provided upon Repurchase at Holder’s Option
and (iii) any fractional interests as herein provided.  The person in whose name the certificate for
the shares of Common Stock is registered shall be treated as a holder of record
of Common Stock on the Business Day following the date of delivery of such
certificate as described in the previous sentence.  Except as otherwise provided in this Section 3.08, no payment
or adjustment will be made for dividends on the shares of Common Stock the
record date for which occurred on or prior to the applicable Option Purchase
Date.

 

If the Security is held in
book-entry form through the Depositary, the Purchase Notice must comply with
applicable procedures of the Depositary.

 

If a Holder, in such Holder’s
Purchase Notice, fails to indicate such Holder’s choice with respect to the
election set forth in Section 3.08(A)(i)(IV), such Holder
shall be deemed to have

 

20

 

elected to receive, in the
circumstances set forth in such Section 3.08(A)(i)(IV), cash in
respect of the entire Option Purchase Price for all Securities (or portions
thereof) subject to such Purchase Notice.

 

Notwithstanding anything herein
to the contrary, any Holder delivering to the Paying Agent the Purchase Notice
contemplated by this Section 3.08(A) shall have the right
to withdraw such Purchase Notice by delivery, at any time prior to 5:00 p.m., New
York City time, on the third (3rd) Business Day prior to the applicable Option
Purchase Date, or such later time as may be required by law, of a written
notice of withdrawal to the Paying Agent, which notice shall contain the
information specified in Section 3.08(D)(vii).  Securities as to which a Purchase Notice has
been given may be converted pursuant to Article X only if such Purchase Notice
has been withdrawn in accordance with the preceding sentence and the
requirements set forth in paragraph 10 of the Securities are
satisfied.

 

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

 

(B)                                The
Option Purchase Price may be paid for, in whole or in part, at the election of
the Company, in cash or shares of Common Stock or in any combination of cash
and shares of Common Stock; provided, however, that:

 

(i)                   no
portion of the Option Purchase Price shall be paid in shares of Common Stock
unless the conditions set forth in Section 3.08(C) are satisfied;

 

(ii)                nothing
in this Section 3.08
shall permit the Company to pay accrued and unpaid interest, if any, payable as
herein provided in respect of Securities upon a Repurchase at Holder’s Option
in shares of Common Stock; the Company shall pay such accrued and unpaid in
interest, if any, in cash; and

 

(iii)             the Company shall not issue fractional
shares of Common Stock in payment of the Option Purchase Price and shall
instead pay cash for all fractional shares, which cash shall be in an amount
equal to the Market Price of such fractional shares; for purposes of
determining the existence of potential fractional interests, all Securities
subject to such Repurchase at Holder’s Option held by a Holder shall be
considered together without regard to the number of separate certificates
representing such Securities.

 

Except as
provided in this Section 3.08, once the Company has given the Option
Purchase Notice to Holders, the Company shall not change its election set forth
in such Option Purchase Notice pursuant Section 3.08(D)(x) with respect to the
portion of the Option Purchase Price to be paid in cash or shares of Common
Stock.

 

Except as
otherwise provided in this Section 3.08, each Holder whose
Securities are purchased shall receive the same percentage of cash or shares of
Common Stock in payment of the Option Purchase Price for such Securities.

 

The portion of
the Option Purchase Price to be paid in shares of Common Stock, if payment in
shares of Common Stock is permitted pursuant to this Section 3.08, shall be
paid

 

21

 

by the issuance of a number of
shares of Common Stock equal to a fraction whose numerator is such portion of
the Option Purchase Price to be paid in shares of Common Stock and whose
denominator is the Market Price per share of Common Stock as determined by the
Company, except that (i) accrued and unpaid interest, if any, payable as herein
provided in respect of Securities upon a Repurchase at Holder’s Option shall be
paid in cash and (ii) fractional shares of Common Stock shall be paid in cash
as provided in Section 3.08(B)(iii).

 

All shares of
Common Stock delivered as full or partial payment of the Option Purchase Price
pursuant to this Section 3.08 shall be newly issued shares or treasury
shares, shall be duly authorized, validly issued, fully paid and nonassessable
and shall be free from preemptive rights and free of any lien or adverse claim.

 

If a Holder is
paid in shares of Common Stock as full or partial payment of the Option
Purchase Price pursuant to this Section 3.08, the Company shall pay
any documentary, stamp or similar issue or transfer tax due on such issue of
Common Stock.  However, the Holder shall
pay any such tax which is due because the Holder requests the Common Stock to
be issued in a name other than the Holder’s name.  The Paying Agent may refuse to deliver the certificates
representing the shares of Common Stock being issued in a name other than the
Holder’s name until the Paying Agent receives a sum sufficient to pay any tax
which will be due because the shares of Common Stock are to be issued in a name
other than the Holder’s name. Nothing herein shall preclude any income tax
withholding required by law or regulations.

 

“Market Price”
means the average of the Closing Sale Prices for the ten (10) consecutive
Trading Days ending on, and including, the third Business Day prior to the
applicable Option Purchase Date (if the third Business Day prior to the
applicable Option Purchase Date is not a Trading Day, then ending on, and
including, the last Trading Day prior to such third Business Day),
appropriately adjusted to take into account the occurrence, during such ten
(10) Trading Day period, of any event described in Section 10.06, subject,
however, to the provisions of Section 10.07.

 

(C)                                The
Company shall not be entitled to pay any portion of the Option Purchase Price
in shares of Common Stock pursuant to Section 3.08(B) unless all of the
following conditions are satisfied:

 

(i)                   The
Company shall have specified, in the Option Purchase Notice timely given to all
Holders in accordance with Section 3.08(D), that the Company will
pay all or a portion of the Option Purchase Price in shares of Common Stock and
shall have specified in such Option Purchase Notice the percentages of the
Option Purchase Price in respect of which the Company will pay in cash or
shares of Common Stock;

 

(ii)                before
an Option Purchase Notice is given to Holders pursuant to Section 3.08(D), the
Company shall have delivered an Officer’s Certificate to the Trustee specifying
(I) the manner of payment selected by the Company, (II) the information
required by Section 3.08(D) to be included in the Option Purchase
Notice and (III) if the Company elects to pay all or a portion of the Option
Purchase Price in shares of Common Stock, that the conditions to such manner of
payment set forth in this Section 3.08 have been, or will be,
complied with;

 

22

 

(iii)             the information necessary to calculate the
Market Price is published in a daily newspaper of national circulation;

 

(iv)            the
shares of Common Stock to be delivered as payment, in whole or in part, of the
Option Purchase Price shall be registered under the Securities Act, unless such
registration is not necessary to permit the Holders who receive such shares to
publicly resell the same (for purposes of this Section 3.08(C)(iv),
resales subject to the volume, manner of sale and notice restrictions of Rule
144 under the Securities Act are deemed not to be “public resales”);

 

(v)               the
shares of Common Stock to be delivered as payment, in whole or in part, of the
Option Purchase Price shall be duly qualified or registered under applicable
state securities laws or shall be qualified for an available exemption from
such qualification and registration;

 

(vi)            the
shares of Common Stock to be delivered as payment, in whole or in part, of the
Option Purchase Price shall be listed on a U.S. national securities exchange or
qualified for quotation on The Nasdaq National Market;

 

(vii)         before the close of business on the Business
Day immediately preceding the applicable Option Purchase Date (or such other
time to which the Trustee and the Company may agree), the Trustee shall have
received an Officer’s Certificate stating:

 

(I)                                     that
the conditions in clauses (i), (iii), (iv), (v) and (vi) above have been
satisfied; and

 

(II)                                 the
number of shares of Common Stock to be issued for each $1,000 principal amount
of Securities and the Closing Sale Price per share of Common Stock on each
Trading Day in the period during which the Market Price is calculated pursuant
to this Section 3.08;

 

(viii)                                                       before
the close of business on the Business Day immediately preceding the applicable
Option Purchase Date (or such other time to which the Trustee and the Company
may agree), the Trustee shall have received an Opinion of Counsel stating that:

 

(I)                                     the
shares of Common Stock to be issued by the Company in full or partial payment
of the Option Purchase Price have been duly authorized and, when issued and
delivered pursuant to the terms of this Indenture in payment of the Option
Purchase Price, will be validly issued, fully paid and non-assessable and, to
the best of such counsel’s knowledge, free from preemptive rights;

 

(II)                                 the
shares of Common Stock to be delivered as payment, in whole or in part, of the
Option Purchase Price are registered under the Securities Act, unless such
registration is not necessary to permit the Holders who receive such shares to
publicly resell the same;

 

23

 

(III)                             the
shares of Common Stock to be delivered as payment, in whole or in part, of the
Option Purchase Price are duly qualified or registered under applicable state
securities laws or are qualified for an available exemption from such
qualification and registration; and

 

(IV)                             the
shares of Common Stock to be delivered as payment, in whole or in part, of the
Option Purchase Price are qualified for listing on a U.S. national securities
exchange or for quotation on The Nasdaq National Market; and

 

(ix)              upon
determination of the actual number of shares of Common Stock to be delivered as
provided in this Section 3.08 in full or partial payment of the Option
Purchase Price, the Company shall have disseminated a press release through PR
Newswire, or a comparable newswire service, containing this information or
shall have published the information on the Company’s web site or through such
other public medium as the Company may use at that time.

 

If, prior to
the applicable Option Purchase Date (or, with respect to clauses (vii) and (viii)
above, prior to such other time to which the Trustee and the Company shall have
agreed in accordance with such clauses, as applicable), any of the foregoing
conditions are not satisfied with respect to a Holder of Securities subject to
the Repurchase at Holder’s Option, and the Company has elected, pursuant to
this Section 3.08,
to pay all or a portion of the Option Purchase Price in shares of Common Stock,
the Company shall pay the entire Option Purchase Price of such Securities in
cash in accordance with such Holder’s election (or deemed election) as provided
in Section 3.08(A)(i)(IV).

 

(D)                               The
Company shall give notice (“Option Purchase Notice”) on a date not less
than twenty (20) Business Days prior to each Option Purchase Date to all
Holders at their addresses shown in the register and to beneficial owners as
required by applicable law.  Such notice
shall state:

 

(i)                                    the
Option Purchase Price plus accrued and unpaid interest, if any, to, but
excluding, the applicable Option Purchase Date 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
pursuant to Article X only if the applicable Purchase Notice has been
withdrawn in accordance with the terms of this Indenture and the requirements
set forth in paragraph 10 of the Securities are satisfied;

 

(iv)                             that
Securities must be surrendered (together with any necessary endorsements) to
the Paying Agent to collect payment of the Option Purchase Price plus accrued
and unpaid interest, if any, to, but excluding, the applicable Option Purchase
Date;

 

(v)                                that
the Option Purchase Price, plus accrued and unpaid interest, if any, to, but
excluding, the applicable Option Purchase Date, for any Security as to which a
Purchase Notice has been given and not withdrawn will be paid promptly
following the

 

24

 

later of the applicable Option Purchase Date or the time of delivery of
the Security, but, if any portion of the Option Purchase Price consists of
shares of Common stock, in no event more than three (3) Business Days following
the later of the applicable Option Purchase Date or the time of delivery of the
Security as described in (iv);

 

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

 

(vii)                          that a
Holder will be entitled to withdraw its election if the Company (if acting as
its own Paying Agent), or the Paying Agent receives, at any time prior to 5:00
p.m., New York City time, on the third (3rd) Business Day prior to the
applicable Option Purchase Date, or such later time as may be required by law,
a letter or telegram, telex or facsimile transmission (receipt of which is
confirmed and promptly followed by a letter) setting forth (I) the name of such
Holder, (II) statement that such Holder is withdrawing his election to have
Securities repurchased, (III) the principal amount of Securities of such Holder
to be so withdrawn, which amount must be $1,000 or an integral multiple
thereof, (IV) if such Holder’s Securities are certificated, the certificate
number of such Securities to be so withdrawn and (V) the principal amount, if
any, of Securities of such Holder that remain subject to the Purchase Notice
delivered by such Holder in accordance with this Section 3.08, which
amount must be $1,000 or an integral multiple thereof;

 

(viii)                       that,
unless the Company defaults in making payment of such Option Purchase Price or
such accrued and unpaid interest (including any liquidated damages), interest
(including any liquidated damages) on Securities surrendered for purchase will
cease to accrue on and after the applicable Option Purchase Date and all rights
of the Holders of such Securities shall terminate on and after the such Option
Purchase Date, other than the right to receive, upon surrender of such
Securities (together with all necessary endorsements) and in accordance with
this Indenture, the Option Purchase Price and such accrued and unpaid interest
(including any liquidated damages);

 

(ix)                               the
CUSIP number of the Securities;

 

(x)                                  whether
the Company will pay the Option Purchase Price in cash or shares of Common
Stock or in a combination thereof, in each case specifying the percentages of
the Option Purchase Price in respect of which the Company will pay in cash or
shares of Common Stock;

 

(xi)                               if
applicable, that each Holder will receive shares of Common Stock, the Market
Price (determined as of a specified date prior to the applicable Option
Purchase Date) of which shares will be equal to a specified portion of the
Option Purchase Price of the Securities held by such Holder (except any cash
amount to be paid in lieu of fractional shares);

 

(xii)                            if
applicable, the method of calculating the Market Price of the shares of Common
Stock to be delivered as payment, in whole or in part, of the Option Purchase
Price; and

 

25

 

(xiii)                         if
applicable, that because the Market Price of shares of Common Stock will be
determined prior to the applicable Option Purchase Date, Holders of the
Securities will bear the market risk that the Common Stock will decline in
value between the date such Market Price is determined and the applicable
Option Purchase Date.

 

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

 

There shall be no purchase of
any Securities pursuant to this Section 3.08 if there has occurred
(prior to, on or after, as the case may be, the giving, by the Holders of such
Securities, of the required Purchase Notice) and is continuing an Event of
Default (other than a default in the payment of the Option Purchase Price or
accrued and unpaid interest, if any, payable as herein provided upon Repurchase
at Holder’s Option).  The Paying Agent
will promptly return to the respective Holders thereof any Securities held by
it during the continuance of an Event of Default (other than a default in the
payment of the Option Purchase Price or such accrued and unpaid interest) in
which case, upon such return, the Purchase Notice with respect thereto shall be
deemed to have been withdrawn.

 

Notwithstanding anything herein
to the contrary, if the option granted to Securityholders to require the
repurchase of the Securities on an Option Purchase Date is determined to
constitute a tender offer, the Company will comply with all applicable tender
offer rules under the Exchange Act, including Rules 13e-4 and 14e-1, and file a
Schedule TO or any other schedules required under the Exchange Act.

 

3.09                           REPURCHASE AT OPTION OF HOLDER UPON A
REPURCHASE EVENT.

 

Upon any Repurchase Event (as
defined below), each Holder of Securities shall have the right (the “Repurchase
Right”), at the Holder’s option, to require the Company to
repurchase all of such Holder’s Securities, or a portion thereof which is
$1,000 in principal amount or any integral multiple thereof, on a date selected
by the Company (the “Repurchase Date”) no later than thirty (30)
days after the date the Repurchase Event Notice (as defined below) is mailed in
accordance with the immediately succeeding paragraph, at a price, payable in
cash, equal to one hundred percent (100%) of the principal amount of the
Securities (or portions thereof) to be so repurchased (the “Repurchase
Price”), plus accrued and unpaid interest, if any, to, but
excluding, the Repurchase Date.

 

Within thirty (30) days after
the occurrence of a Repurchase Event, the Company shall mail, or cause to be
mailed, to all Holders of record of the Securities at their addresses shown in
the register of the Registrar, and to beneficial owners as required by
applicable law, a notice (the “Repurchase Event Notice”) of the occurrence
of such Repurchase Event and the Repurchase Right arising as a result
thereof.  The Company shall deliver a
copy of the Repurchase Event Notice to the Trustee and shall cause a copy to be
published at the expense of the Company in THE NEW YORK TIMES
or THE WALL STREET JOURNAL  or another newspaper of national circulation.

 

Each Repurchase Event Notice
shall state:

 

26

 

(i)                           the
events causing the Repurchase Event;

 

(ii)                        the
date of such Repurchase Event;

 

(iii)                     the Repurchase Date;

 

(iv)                    the
date by which the Repurchase Right must be exercised;

 

(v)                       the
Repurchase Price plus accrued and unpaid interest, if any, to, but excluding,
the Repurchase Date;

 

(vi)                    the
names and addresses of the Paying Agent and the Conversion Agent;

 

(vii)                 a description of the procedure which a
Holder must follow to exercise the Repurchase Right;

 

(viii)              that, in order to exercise the Repurchase
Right, the Securities must be surrendered for payment of the Repurchase Price
plus accrued and unpaid interest, if any, payable as herein provided upon
Repurchase Upon Repurchase Event;

 

(ix)                      that
the Repurchase Price, plus accrued and unpaid interest, if any, to, but
excluding, the Repurchase Date, for any Security as to which a Purchase Notice
has been given and not withdrawn will be paid promptly following the later of
the Repurchase Date or the time of delivery of the Security as described in
(viii);

 

(x)                          that,
on and after the Repurchase Date (unless the Company defaults in the payment of
such Repurchase Price or such accrued and unpaid interest (including any
liquidated damages)), interest (including any liquidated damages) on Securities
subject to Repurchase Upon Repurchase Event will cease to accrue and all rights
of the Holders of such Securities shall terminate, other than the right to
receive, upon surrender of such Securities, the Repurchase Price and such
accrued and unpaid interest;

 

(xi)                      that
a Holder will be entitled to withdraw its election if the Company (if acting as
its own Paying Agent), or the Paying Agent receives, prior to 5:00 p.m., New
York City time, on the third (3rd) Business Day immediately preceding the
Repurchase Date, or such later time as may be required by law, a letter or
telegram, telex or facsimile transmission (receipt of which is confirmed and
promptly followed by a letter) setting forth (I) the name of such Holder, (II)
a statement that such Holder is withdrawing its election to have Securities
repurchased, (III) the principal amount of the Securities of such Holder to be
so withdrawn, which amount must be $1,000 or an integral multiple thereof, (IV)
if such Holder’s Securities are certificated, the certificate number of such
Securities to be so withdrawn, and (V) the principal amount, if any, of the
Securities of such Holder that remains subject to the Purchase Notice delivered
by such Holder in accordance with this Section 3.09, which amount must be
$1,000 or an integral multiple thereof;

 

(xii)                   the Conversion Rate and any
adjustments to the Conversion Rate that will result from the Repurchase Event;

 

27

 

(xiii)                that Securities with respect to which a
Purchase Notice is given by a Holder may be converted pursuant to Article X,
if otherwise convertible in accordance with Article X, only if such
Purchase Notice has been withdrawn in accordance with this Section 3.09 at any time
prior to 5:00 p.m., New York City time, on the third (3rd) Business Day prior
to the Repurchase Date, or such later time as may be required by law;

 

(xiv)               the place or places where such
Securities may be surrendered for conversion; and

 

(xv)                  the
CUSIP number or numbers, as the case may be, of the Securities.

 

No failure of the Company to
give the foregoing notice shall limit any Holder’s right to exercise a
Repurchase Right.

 

To exercise a Repurchase Right,
a Holder shall deliver to the Company (if it is acting as its own Paying
Agent), or to a Paying Agent designated by the Company for such purpose in the
Repurchase Event Notice, (i) no later than 5:00 p.m., New York City time, on
the third (3rd) Business Day immediately preceding the Repurchase Date, a
Purchase Notice, in the form set forth in the Securities or any other form of
written notice substantially similar thereto, in each case, duly completed and
signed, with appropriate signature guarantee, and stating (A) if the Holder’s
Securities are certificated, the certificate number of the Security which the
Holder will deliver to be repurchased, (B) the principal amount of Securities
to be repurchased, which must be $1,000 or an integral multiple thereof, and
(C) that such Securities are being tendered for repurchase pursuant to the
terms and conditions specified in paragraph 9 of the Securities and in this
Indenture; and (ii) at any time after the delivery of such Purchase Notice,
such Securities with respect to which the Repurchase Right is being exercised,
duly endorsed for transfer to the Company. 
Upon such delivery of such Securities to the Company (if it is acting as
its own Paying Agent) or such Paying Agent, such Holder shall be entitled to
receive from the Company or such Paying Agent, as the case may be, a
nontransferable receipt of deposit evidencing such delivery.

 

Notwithstanding anything herein
to the contrary, any Holder delivering to the Paying Agent the Purchase Notice
contemplated by this Section 3.09 shall have the right to
withdraw such Purchase Notice by delivery, at any time prior to 5:00 p.m., New
York City time, on the third (3rd) Business Day prior to the Repurchase Date,
or such later time as may be required by law, of a written notice of withdrawal
to the Paying Agent, which notice shall set forth (I) the name of such Holder, (II)
a statement that such Holder is withdrawing its election to have Securities
repurchased, (III) the principal amount of the Securities of such Holder to be
so withdrawn, which amount must be $1,000 or an integral multiple thereof, (IV)
if such Holder’s Securities are certificated, the certificate number of such
Securities to be so withdrawn, and (V) the principal amount, if any, of the
Securities of such Holder that remains subject to the Purchase Notice delivered
by such Holder in accordance with this Section 3.09, which amount must be
$1,000 or an integral multiple thereof. 
Securities as to which a Purchase Notice has been given may be converted
pursuant to Article X only if such Purchase Notice has been withdrawn
in accordance with the preceding sentence and the requirements set forth in paragraph 10
of the Securities are satisfied.

 

28

 

In the event a Repurchase Right
shall be exercised in accordance with the terms hereof, the Company shall pay,
or cause to be paid, the Repurchase Price, plus accrued and unpaid interest, if
any, to, but excluding, the Repurchase Date, with respect to each Security as
to which the Repurchase Right shall have been exercised to the Holder thereof
promptly following the later of the Repurchase Date and the time such Security
is surrendered to the Paying Agent, subject to the provisions of the
immediately preceding paragraph.

 

Prior to 11:00 A.M., New York
City time on a Repurchase Date, the Company shall deposit with a Paying Agent
(or, if the Company is acting as its own Paying Agent, segregate and hold in
trust in accordance with Section 2.04) money, in funds
immediately available on the Repurchase Date, sufficient to pay the Repurchase
Price, plus accrued and unpaid interest, if any, to, but excluding, the
Repurchase Date, of all of the Securities which are to be repurchased on that
date.  The Paying Agent shall return to
the Company, as soon as practicable, any money not required for that purpose.

 

Both the Repurchase Event Notice
and the Purchase Notice having been duly given as specified in this Section 3.09,
the Securities to be so repurchased shall, on the Repurchase Date, become due
and payable at the Repurchase Price (plus accrued and unpaid interest, if any,
to, but excluding, the Repurchase Date) applicable thereto, and, on and after
such date (unless there shall be a default in the payment of the Repurchase
Price or such accrued and unpaid interest), such Securities shall cease to bear
interest (including any liquidated damages), and all rights of the Holders of
such Securities shall terminate, other than the right to receive, in accordance
with this Section 3.09,
the Repurchase Price and such accrued and unpaid interest.

 

If any Security shall not be
paid upon surrender thereof for Repurchase Upon Repurchase Event, the principal
of, and accrued and unpaid interest on, such Security shall, until paid, bear
interest from the Repurchase Date at the rate borne by such Security on the
principal amount of such Security, and such Security shall continue to be
convertible pursuant to Article X.

 

Any Security which is to be
submitted for Repurchase Upon Repurchase Event only in part shall be delivered
pursuant to this Section 3.09 (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 its attorney duly authorized in writing), and the Company shall
execute, and the Trustee shall authenticate and make available for delivery to
the Holder of such Security without service charge, a new Security or
Securities, of any authorized denomination as requested by such Holder, of the
same tenor and in aggregate principal amount equal to the portion of such
Security not submitted for Repurchase Upon Repurchase Event.

 

Notwithstanding anything herein
to the contrary, there shall be no purchase of any Securities pursuant to this Section 3.09
if there has occurred (prior to, on or after, as the case may be, the giving,
by the Holders of such Securities, of the required Purchase Notice) and is
continuing an Event of Default (other than a default in the payment of the
Repurchase Price or accrued and unpaid interest, if any, payable as herein
provided upon Repurchase Upon Repurchase Event).  The Paying Agent will promptly return to the respective Holders
thereof any Securities held by it during the continuance of an Event of Default
(other than a default in the payment of the Repurchase Price or such accrued
and unpaid interest) in which case, upon such

 

29

 

return, the Purchase Notice
with respect to the Redemption Upon Repurchase Event shall be deemed to have
been withdrawn.

 

Notwithstanding anything herein
to the contrary, if the option granted to Securityholders to require the
repurchase of the Securities upon the occurrence of a Repurchase Event is determined
to constitute a tender offer, the Company will comply with all applicable
tender offer rules under the Exchange Act, including Rules 13e-4 and 14e-1, and
with all other applicable laws, and will file a Schedule TO or any other
schedules required under the Exchange Act or any other applicable laws.

 

As used in this Section 3.09
and in the Securities:

 

A “Repurchase Event” shall be
deemed to have occurred upon the occurrence of a “Change in Control”

 

A “Change in Control” shall be
deemed to have occurred at such time as:

 

(i)                                    any
“person” or “group” (as such terms are used for purposes of Sections 13(d) and
14(d) of the Exchange Act) is or becomes the “beneficial owner” (as such term
is used in Rule 13d-3 under the Exchange Act), directly or indirectly, of fifty
percent (50%) or more of the total voting power of all classes of the Capital
Stock of the Company entitled to vote generally in the election of directors,
other than an acquisition by the Company, any of its Subsidiaries or any of the
Company’s employee benefit plans; or

 

(ii)                                 at
any time the following persons cease for any reason to constitute a majority of
the Company’s Board of Directors:

 

(1)                                  individuals
who on the Issue Date constituted the Company’s Board of Directors; and

 

(2)                                  any
new directors whose election to the Company’s Board of Directors or whose
nomination for election by the Company’s shareholders was approved by at least
a majority of the members of the Board of Directors, or of the nominating
committee thereof, then still in office who were either directors of the
Company on the Issue Date or whose election or nomination for election was previously
so approved; or

 

(iii)                                the Company
consolidates with, or merges with or into, another person or any person
consolidates with, or merges with or into, the Company, in any such event other
than pursuant to a transaction in which the persons that “beneficially owned,”
directly or indirectly, the shares of 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 the Voting Stock of the
continuing or surviving corporation in substantially the same proportion as
such ownership immediately prior to the transaction; or

 

30

 

(iv)                    the
sale, lease, transfer or other conveyance or disposition of all or
substantially all of the property and assets of the Company to any “person” or
“group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange
Act), including any group acting for the purpose of acquiring, holding, or
disposing of securities within the meaning of Rule 13d-5(b)(1) under the
Exchange Act; or

 

(v)                       the
Company is liquidated or dissolved or the holders of the Capital Stock of the
Company approve any plan or proposal for the liquidation or dissolution of the
Company;

 

provided,
however,
that a Change in Control will not be deemed to have occurred if either:

 

(1)                                  the
Closing Sale Price for each of any five (5) Trading Days (whether or not
consecutive) during the ten (10) consecutive Trading Days immediately preceding
the Change in Control is equal to at least one hundred and five percent (105%)
of the Conversion Price in effect on such Trading Day; or

 

(2)                                  in
the case of a merger or consolidation, at least ninety percent (90%) of the
consideration (other than cash payments for fractional shares or pursuant to
statutory appraisal rights) in the merger or consolidation constituting the
Change in Control consists of common stock and any associated rights traded on
a U.S. national securities exchange or quoted on The Nasdaq National Market (or
which will be so traded or quoted when issued or exchanged in connection with
such Change in Control), and, as a result of such transaction or transactions,
the Securities become convertible into such common stock and associated rights.

 

3.10                           CONVERSION ARRANGEMENT ON CALL FOR REDEMPTION.

 

In connection with a Redemption of
Securities, the Company may arrange, in lieu of Redemption, for the purchase
and conversion of any Securities called for Redemption by an agreement with one
or more investment bankers or other purchasers to purchase all or a portion of
such Securities by paying to the Paying Agent in trust for the Holders whose
Securities are to be so purchased, on or before the close of business on the
Redemption Date, an amount that, together with any amounts deposited with the
Paying Agent by the Company for Redemption of such Securities, is not less than
the Redemption Price, together with accrued and unpaid interest, if any, to,
but excluding, the Redemption Date, of such Securities.  Notwithstanding anything to the contrary
contained in this Article III, the obligation of the
Company to pay the Redemption Price of such Securities, including all accrued
interest, if any, shall be deemed to be satisfied and discharged to the extent
such amount is so paid by such purchasers, but no such agreement shall relieve
the Company of its obligation to pay such Redemption Price or such accrued and
unpaid interest, if any.  If such an
agreement is entered into, any Securities not duly surrendered for conversion
by the Holders thereof may, at the option of the Company, be deemed, to the fullest
extent permitted by law, acquired by such purchasers from such Holders and
(notwithstanding anything to the contrary contained in Article X) surrendered
by such purchasers for conversion, all as of immediately prior to the close of
business on the Redemption Date, subject to payment of the above amount as
aforesaid.  The Paying Agent shall hold
and pay to the Holders whose

 

31

 

Securities are selected for
Redemption any such amount paid to it for purchase and conversion in the same
manner as it would moneys deposited with it by the Company for the Redemption
of Securities.  Without the prior
written consent of the Trustee and the Paying Agent, no arrangement between the
Company and such purchasers for the purchase and conversion of any Securities
shall increase or otherwise affect any of the powers, duties, rights,
immunities, responsibilities or obligations of the Trustee or Paying Agent as
set forth in this Indenture, and the Company agrees to indemnify the Trustee
and Paying Agent from, and hold them harmless against, any and all loss,
liability or expense arising out of or in connection with any such arrangement
for the purchase and conversion of any Securities between the Company and such
purchasers, including the costs and expenses (including counsel fees and
expenses) incurred by the Trustee or Paying Agent in the defense of any claim
or liability arising out of or in connection with the exercise or performance
of any of their powers, duties, responsibilities or obligations under this Indenture
except to the extent arising from their bad faith, willful misconduct or
negligence.

 

IV.                                 COVENANTS

 

4.01                           PAYMENT OF SECURITIES.

 

The Company shall pay all
amounts due with respect to the Securities on the dates and in the manner
provided in the Securities.  All such
amounts shall be considered paid on the date due if the Paying Agent holds (or,
if the Company is acting as Paying Agent, the Company has segregated and holds
in trust in accordance with Section 2.04) on that date money
sufficient to pay the amount then due with respect to the Securities.

 

The Company shall pay interest
on any overdue amount (including, to the extent permitted by applicable law,
overdue interest) at the rate borne by the Securities.

 

Except as otherwise provided in
this Indenture, the Company shall pay interest on the Securities to the Holder
in whose name the Securities are registered at the close of business on the
record date next preceding the corresponding interest payment date, as provided
herein.

 

The Company shall pay all
amounts due with respect to the Securities in money of the United States that
at the time of payment is legal tender for payment of public and private debts
or, if permitted under this Indenture, in shares of Common Stock in accordance
with this Indenture.  With respect to
Securities that are in global form, the Company shall make payments on such
Securities by wire transfer of immediately available funds to the account
specified by the Holders thereof.  With
respect to a Security that is held, other than in global form, by a Holder of
more than $5.0 million aggregate principal amount of Securities, the Company
shall make payments on such Security by wire transfer of immediately available
funds to the account specified by such Holder or, if no such account is
specified, by mailing a check to such Holder’s registered address.  With respect to a Security that is held,
other than in global form, by a Holder of not more than $5.0 million aggregate
principal amount of Securities, the Company shall make payments on such
Security by mailing a check to such Holder’s registered address.  Notwithstanding the foregoing, so long as the Securities are in global
form and registered in the name of the Depositary or its nominee, all payments
with respect to the Securities shall be made by wire transfer of immediately
available funds to the account of the Depositary or its nominee.

 

32

 

4.02                           MAINTENANCE OF OFFICE OR AGENCY.

 

The Company will maintain, or
cause to be maintained, in the Borough of Manhattan, the City of New York, an
office or agency (which may be an office of the Trustee or an affiliate of the
Trustee, Registrar or co-Registrar) where Securities may be surrendered for
registration of transfer or exchange or conversion and where notices and
demands to or upon the Company in respect of the Securities and this Indenture
may be served.  The Company will give
prompt written notice to the Trustee of the location, and any change in the
location, of such office or agency.  If
at any time the Company shall fail to maintain any such required office or
agency or shall fail to furnish the Trustee with the address thereof, such
presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Trustee.

 

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, or cause to be maintained, an office or agency in the
Borough of Manhattan, the City of New York for such purposes.  The Company will give prompt written notice
to the Trustee of any such designation or rescission and of any change in the
location of any such other office or agency.

 

The Company hereby designates
the Corporate Trust Office of the Trustee as an agency of the Company in
accordance with Section 2.03.

 

4.03                           REPORTS.

 

(A)                              The
Company will promptly provide to the Trustee and shall, upon request, provide
to any Holder or beneficial owner of Securities or prospective purchaser of
Securities that so requests, the information required to be delivered pursuant
to Rule 144A(d)(4) until such time as the Securities and the underlying Common
Stock have been registered by the Company for resale under the Securities Act
pursuant to the Registration Rights Agreement. 
In addition, the Company will furnish such Rule 144A(d)(4) information
if, at any time while the Securities or the Common Stock issuable upon
conversion of the Securities are “restricted securities” within the meaning of
the Securities Act, the Company is not subject to the informational
requirements of the Exchange Act.

 

(B)                                The
Company shall, in accordance with TIA § 314(a), deliver to the Trustee,
within thirty (30) calendar days after the Company files such annual reports,
information, documents and other reports with the SEC, copies of its annual
reports 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 Section 15(d) of the Exchange Act; provided,
however, that the Company shall not be required to deliver to the
Trustee any material for which the Company has sought and received confidential
treatment by the SEC.  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, the Company shall
continue to provide the Trustee and to each Holder, within thirty (30) calendar
days after the Company would have been required to file such reports with the
SEC, annual and quarterly consolidated financial statements substantially
equivalent to financial statements that would have

 

33

 

been included in reports filed
with the SEC if the Company were subject to the reporting requirements of
Section 13 or 15(d) of the Exchange Act, including, with respect to annual
information only, a report thereon by the Company’s certified independent
public accountants as such would be required in such reports filed with the SEC
and, in each case, together with a management’s discussion and analysis of
financial condition and results of operations which would be so required. The
Company also shall comply with the other provisions of TIA § 314(a).
Delivery of such reports, information and documents to the Trustee is for
informational purposes only, and the Trustee’s receipt thereof shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company’s
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officer’s Certificates).

 

4.04                           COMPLIANCE CERTIFICATE.

 

The Company shall deliver to
the Trustee, within one hundred and twenty (120) days after the end of each
fiscal year of the Company (beginning with the fiscal year ending
December 31, 2003), an Officer’s Certificate stating whether or not, to
the signer’s actual knowledge, there has occurred any Default or Event of
Default by the Company in performing any of its obligations under this
Indenture or the Securities.  If such
Officer does know of any such Default or Event of Default, the certificate
shall describe the Default or Event of Default and its status.

 

4.05                           STAY, EXTENSION AND USURY LAWS.

 

The Company covenants (to the
extent that it may lawfully do so) that it will not at any time insist upon,
plead, or in any manner whatsoever claim or take the benefit or advantage of,
any stay, extension or usury law wherever enacted, now or at any time hereafter
in force, which may affect the covenants or the performance of this Indenture;
and the Company (in each case, 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, by resort to any such law, hinder, delay or impede the execution
of any power herein granted to the Trustee, but will suffer and permit the
execution of every such power as though no such law has been enacted.

 

4.06                           CORPORATE EXISTENCE.

 

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

 

4.07                           NOTICE
OF DEFAULT.

 

In the event the Company
becomes aware of the occurrence of any Default or Event of Default, the Company
will give prompt written notice of such Default or Event of Default to the
Trustee and any remedial action proposed to be taken.

 

34

 

4.08                           FURTHER INSTRUMENTS AND ACTS.

 

If reasonably requested by the
Trustee and not otherwise provided for herein, the Company shall execute and
deliver such further instruments and do such further acts as may be necessary
and proper to carry out more effectively the purposes of this Indenture.

 

V.                                     SUCCESSORS

 

5.01                           WHEN COMPANY
MAY MERGE, ETC.

 

The Company shall not
consolidate with, merge with or into, or sell, convey, transfer, lease or
otherwise dispose of all or substantially all of its properties and assets to,
another person, whether in a single transaction or series of related
transactions, unless (i) such other person is a corporation organized under the
laws of the United States, any State thereof or the District of Columbia; (ii)
such person assumes by supplemental indenture all the obligations of the
Company, under the Securities and this Indenture; and (iii) immediately after
giving effect to the transaction, no Default or Event of Default shall exist.

 

The Company shall deliver to
the Trustee prior to the consummation of the proposed transaction an Officer’s
Certificate to the foregoing effect and an Opinion of Counsel, which may rely
upon (i) a certificate of the appropriate official of the jurisdiction in which
such person, if a corporation, is organized certifying that such person is a
corporation organized in such jurisdiction and (ii) such Officer’s Certificate
as to the absence of Defaults and Events of Default, and stating that the
proposed transaction and such supplemental indenture will, upon consummation of
the proposed transaction, comply with Article V and, to the extent
applicable, Article X and that all conditions precedent herein
provided for relating to such transaction have been satisfied.

 

5.02                           SUCCESSOR SUBSTITUTED.

 

Upon any consolidation, merger
or sale, conveyance, transfer, lease, or other disposition of all or
substantially all of the assets of the Company, the successor person formed by
such consolidation or into which the Company is merged or to which such sale,
conveyance, transfer, lease, or other disposition is made shall succeed to,
and, except in the case of a lease, be substituted for, and may exercise every
right and power of, and shall assume every duty and obligation of, the Company
under this Indenture with the same effect as if such successor had been named
as the Company herein.  When the
successor assumes all obligations of the Company hereunder, except in the case
of a lease, all obligations of the predecessor shall terminate.

 

VI.                                 DEFAULTS AND REMEDIES

 

6.01                           EVENTS
OF DEFAULT.

 

An “Event of Default” occurs if:

 

35

 

(i)                           the
Company fails to pay the principal of any Security when the same becomes due
and payable, whether at maturity, upon Redemption, on an Option Purchase Date
with respect to a Repurchase at Holder’s Option, on a Repurchase Date with
respect to a Repurchase Upon Repurchase Event or otherwise;

 

(ii)                        the
Company fails to pay an installment of interest or liquidated damages on the
Securities when due, if such failure continues for thirty (30) days after the
date when due;

 

(iii)                     the Company fails to comply with
any other term, covenant or agreement set forth in the Securities or this
Indenture and such failure continues for the period, and after the notice, specified
below;

 

(iv)                    the
acceleration of any Indebtedness of the Company or any Subsidiary for money
borrowed in the aggregate principal amount then outstanding of fifty million
dollars ($50,000,000) or more so that such Indebtedness becomes due and payable
prior to the date on which it would otherwise become due and payable, and such
acceleration is not rescinded within sixty (60) days after notice to the
Company by the Trustee or to the Company and the Trustee by Holders of not less
than twenty five percent (25%) in the aggregate principal amount of the
Securities then outstanding, each in accordance with this Indenture;

 

(v)                       the
Company or any of its Significant Subsidiaries, pursuant to, or within the
meaning of, any Bankruptcy Law:

 

(A)                              commences
a voluntary case,

 

(B)                                consents
to the entry of an order for relief against it in an involuntary case,

 

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

 

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

 

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

 

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

 

(B)                                appoints
a Custodian of the Company or any of its Significant Subsidiaries for all or
substantially all of the property of the Company or any such Significant
Subsidiary, as the case may be, or

 

(C)                                orders
the winding up or liquidation of the Company or any of its Significant
Subsidiaries,

 

36

 

and, in the case of each of subclauses (A), (B) or (C) of
this Section 6.01(vi),
the order or decree remains unstayed and in effect for ninety (90) consecutive
days.

 

The term “Bankruptcy Law” means Title
11, U.S. Code or any similar Federal or State law for the relief of
debtors.  The term “Custodian” means any
receiver, trustee, assignee, liquidator or similar official under any
Bankruptcy Law.

 

A Default under clause (iii)
is not an Event of Default until (I) the Trustee notifies the
Company or the Holders of at least twenty five percent (25%) in aggregate
principal amount of the Securities then outstanding notify the Company and the
Trustee of the Default and (II) the Default is not cured within sixty (60) days
after receipt of the notice.  The notice
must specify the Default, demand that it be remedied and state that the notice
is a “Notice
of Default”.  If the Holders
of at least twenty five percent (25%) in aggregate principal amount of the outstanding
Securities request the Trustee to give such notice on their behalf, the Trustee
shall do so.  When a Default is cured,
it ceases to exist for every purpose under this Indenture and is deemed not to
be continuing, but no waiver of a Default shall extend to any subsequent or
other Default or Event of Default or impair any consequent right.

 

6.02                           ACCELERATION.

 

If an Event of Default (other
than an Event of Default specified in Section 6.01(v) or (vi) with respect to the
Company) as to which the Trustee has received notice pursuant to the provisions
of this Indenture occurs and is continuing, the Trustee by notice to the
Company or the Holders of at least twenty five percent (25%) in principal
amount of the Securities then outstanding by notice to the Company and the
Trustee may declare the Securities to be due and payable.  Upon such declaration, the principal of and
any accrued and unpaid interest on all Securities shall be due and payable
immediately.  If an Event of Default
specified in Section 6.01(v) or (vi) with respect to the Company
(excluding, for purposes of this sentence, an Event of Default specified in Section 6.01(v)
or (vi) solely with respect to a Significant Subsidiary of the
Company) occurs, the principal of and accrued and unpaid interest on all the
Securities shall ipso facto become and be immediately due and payable without
any declaration or other act on the part of the Trustee or any Securityholder.  The Holders of a majority in aggregate
principal amount of the Securities then outstanding by written notice to the
Trustee may rescind or annul an acceleration and its consequences if (i) the
rescission would not conflict with any order or decree; (ii) all existing
Events of Default have been cured or waived except nonpayment of principal or
interest that has become due solely because of the acceleration; and (iii)
either (A) all amounts due to the Trustee under Section 7.07 have been
paid or (B) the Company has given reasonable assurances to the Trustee that all
amounts due to the Trustee under Section 7.07 shall be paid.

 

6.03                           OTHER
REMEDIES.

 

Notwithstanding any other
provision of this Indenture, if an Event of Default occurs and is continuing,
the Trustee may pursue any available remedy by proceeding at law or in equity
to collect the payment of amounts due with respect to the Securities or to
enforce the performance of any provision of the Securities or this Indenture.

 

37

 

The Trustee may maintain a
proceeding even if it does not possess any of the Securities or does not
produce any of them in the proceeding. 
A delay or omission by the Trustee or any Securityholder in exercising
any right or remedy accruing upon an Event of Default shall not impair the
right or remedy or constitute a waiver of or acquiescence in the Event of
Default.  All remedies are cumulative.

 

6.04                           WAIVER OF PAST DEFAULTS.

 

Subject to Sections 6.07 and 9.02,
the Holders of a majority in aggregate principal amount of the Securities then
outstanding by notice to the Trustee may waive any past Default or Event of
Default and its consequences, other than (A) a Default or Event of Default in
the payment of the principal of, or interest or liquidated damages on, any
Security, or in the payment of the Redemption Price, the Option Purchase Price
or the Repurchase Price (or accrued and unpaid interest, if any, payable as
herein provided upon Redemption, Repurchase at Holder’s Option or Repurchase
Upon Repurchase Event), (B) a Default or Event of Default arising from a
failure by the Company to deliver shares of Common Stock upon conversion of any
Securities or (C) any Default or Event of Default in respect of any provision
of this Indenture or the Securities which, under Section 9.02, cannot be
modified or amended without the consent of the Holder of each Security
affected.  When a Default or an Event of
Default is waived, it is cured, ceases to exist for every purpose of this Indenture
and is deemed not to be continuing, but no waiver of a Default or Event of
Default shall extend to any subsequent or other Default or Event of Default or
impair any consequent right.  This Section 6.04
shall be in lieu of TIA § 316(a)(1)(B), and TIA § 316(a)(1)(B) is
hereby expressly excluded from this Indenture, as permitted by the TIA.

 

6.05                           CONTROL
BY MAJORITY.

 

The Holders of a majority in
aggregate principal amount of the Securities then outstanding may direct the
time, method and place of conducting any proceeding for any remedy available to
the Trustee or exercising any trust or power conferred on it.  However, the Trustee may refuse to follow
any direction that conflicts with law or this Indenture or is unduly
prejudicial to the rights of other Securityholders or if the Securityholders
have not offered to the Trustee indemnity reasonably satisfactory to it; provided
that the Trustee may take any other action deemed proper by the Trustee which
is not inconsistent with such direction. 
This Section 6.05 shall be in lieu of TIA § 316(a)(1)(A),
and TIA § 316(a)(1)(A) is hereby expressly excluded from this Indenture,
as permitted by the TIA.

 

6.06                           LIMITATION
ON SUITS.

 

Except as provided in Section 6.07,
a Securityholder may not institute any proceeding under this Indenture or
pursue a remedy with respect to this Indenture or the Securities unless:

 

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

 

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

 

38

 

(iii)                     such Holder or Holders offer and,
if requested, provide to the Trustee reasonable indemnity against any loss,
liability or expense;

 

(iv)                    the
Trustee does not comply with the request within sixty (60) days after receipt
of notice, the request and the offer of indemnity; and

 

(v)                       during
such sixty (60) day period, the Holders of a majority in aggregate principal
amount of the Securities then outstanding do not give the Trustee a direction
inconsistent with the request.

 

No provision of this Indenture
shall be deemed to grant a Securityholder the right to prejudice the rights of
another Securityholder or to obtain a preference or priority over another
Securityholder.

 

6.07                           RIGHTS
OF HOLDERS TO
RECEIVE PAYMENT.

 

Notwithstanding any other
provision of this Indenture, the right of any Holder to receive payment of all
amounts due with respect to the Securities, on or after the respective due
dates expressed in the Securities, or to bring suit for the enforcement of any
such payment on or after such respective dates, shall not be impaired or
affected without the consent of the Holder.

 

Notwithstanding any other
provision of this Indenture, the right of any Holder to bring suit for the
enforcement of the right to convert the Security in accordance with this
Indenture shall not be impaired or affected without the consent of the Holder.

 

6.08                           COLLECTION
SUIT BY TRUSTEE.

 

If an Event of Default
specified in Section 6.01(i) or (ii)
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 due
with respect to the Securities, including any unpaid and accrued interest.

 

6.09                           TRUSTEE MAY FILE PROOFS OF CLAIM.

 

The Trustee may file such
proofs of claim and other papers or documents as may be necessary or advisable
in order to have the claims of the Trustee, any predecessor Trustee and the
Securityholders allowed in any judicial proceedings relative to the Company or
its creditors or properties.

 

The Trustee may 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 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.

 

39

 

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.

 

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 all amounts due and unpaid on the Securities, without
preference or priority of any kind, according to the amounts due and payable on
the Securities; and

 

Third:                                         to
the Company.

 

The Trustee, upon prior written
notice to the Company may fix a record date and payment date for any payment by
it to Securityholders pursuant to this Section 6.10.

 

6.11                           UNDERTAKING FOR COSTS.

 

In any suit for the enforcement
of any right or remedy under this Indenture or in any suit against the Trustee
for any action taken or omitted by it as Trustee, a court in its discretion may
require the filing by any party litigant in the suit other than the Trustee of
an undertaking to pay the costs of the suit, and the court in its discretion
may assess reasonable costs, including reasonable attorneys’ fees, 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 ten percent (10%) in aggregate principal amount of the
outstanding Securities.

 

VII.                             TRUSTEE

 

7.01                           DUTIES
OF TRUSTEE.

 

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

 

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

 

(i)                           the
Trustee need perform only those duties that are specifically set forth in this
Indenture and no implied covenants or obligations shall be read into this
Indenture against the Trustee; and

 

40

 

(ii)                        in
the absence of bad faith, willful misconduct or negligence on its part, the
Trustee may conclusively rely, as to the truth of the statements (including the
calculations referred to in Section 11.14) and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to the
Trustee and conforming to the requirements of this Indenture; but in the case
of any such certificates or opinions which by any provision hereof are specifically
required to be furnished to the Trustee, the Trustee shall 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 content therein).

 

(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)                           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;

 

(ii)                        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;
and

 

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

 

This Section 7.01(C)
shall not limit the effect of Section 7.01(B).

 

(D)                               Every
provision of this Indenture that in any way relates to the Trustee is subject
to the provisions of this Section 7.01.

 

(E)                                 The
Trustee shall not be liable for interest on any money received by it except as
the Trustee may agree in writing with the Company.  Money held in trust by the Trustee shall be segregated from other
funds as directed by the Company and to the extent required by law and shall be
invested by the Trustee pursuant to the written directions of the Company
reasonably satisfactory to the Trustee.

 

7.02                           RIGHTS
OF TRUSTEE.

 

(A)                              Subject
to Section 7.01,
the Trustee may conclusively rely on any document believed by it to be genuine
and to have been signed or presented by the proper person.  The Trustee need not investigate any fact or
matter stated in the document; if, however, the Trustee shall determine to make
such further inquiry or investigation, it shall be entitled during normal
business hours to examine the relevant books, records and premises of the
Company, personally or by agent or attorney upon reasonable prior notice.

 

41

 

(B)                                Before
the Trustee acts or refrains from acting, it may require an Officer’s
Certificate and/or an Opinion of Counsel. 
The Trustee shall not be liable for any action it takes or omits to take
in good faith in reliance on such Officer’s Certificate or Opinion of Counsel.

 

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

 

(D)                               The
Trustee may consult with counsel (such counsel to be reasonably selected by the
Trustee with due care) and the advice of such counsel or any Opinion of Counsel
shall be full and complete authorization and protection in respect of any
action taken, suffered or omitted by it hereunder in good faith and in reliance
thereon.

 

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

 

(F)                                 The
Trustee shall not be liable for any action it takes or omits to take in good
faith which it believes to be authorized or within its discretion, rights or
powers conferred upon it by this Indenture.

 

(G)                               Except
with respect to Section 6.01, the Trustee shall have no duty to inquire
as to the performance of the Company with respect to the covenants contained in
Article IV.  In addition, the Trustee shall not be deemed
to have knowledge of an Event of Default except (i) any Default or Event of
Default occurring pursuant to Sections 6.01(i) and (ii) or (ii) any Default or Event of
Default of which a Responsible Officer of the Trustee shall have received
written notification or obtained actual knowledge.  Delivery of reports, information and documents to the Trustee
under Article IV
(other than Sections 4.04 and 4.07)
is for informational purposes only and the Trustee’s receipt of the foregoing
shall not constitute constructive notice of any information contained therein
or determinable from information contained therein, including the Company’s
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officer’s Certificates).

 

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

 

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

 

(J)                                  The
Trustee may request that the Company deliver an Officer’s 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 Officer’s
Certificate may be signed by any person authorized to sign an Officer’s
Certificate, including any person specified as so authorized in any such
certificate previously delivered and not superseded.

 

42

 

(K)                              The
Trustee shall not be required to give any bond or surety in respect of the
execution of its trusts and powers or in respect of this Indenture.

 

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 any of its Affiliates with the same rights
it would have if it were not Trustee. 
Any Security Agent may do the same with like rights.  The Trustee, however, must comply with Sections 7.10
and 7.11.

 

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 of the proceeds
from the Securities; and it shall not be responsible for any statement in the
Securities other than its certificate of authentication.

 

7.05                           NOTICE OF DEFAULTS.

 

If a Default or Event of
Default occurs and is continuing as to which the Trustee has received notice
pursuant to the provisions of this Indenture, the Trustee shall mail to each
Securityholder a notice of the Default or Event of Default within thirty (30)
days after it occurs unless such Default or Event of Default has been cured or
waived.  Except in the case of a Default
or Event of Default in payment of any amounts due with respect to any Security,
the Trustee may withhold the notice if, and so long as it in good faith
determines that, withholding the notice is in the best interests of
Securityholders.

 

7.06                           REPORTS
BY TRUSTEE
TO HOLDERS.

 

Within sixty (60) days after
each May 15 beginning with May 15, 2004, the Trustee shall mail to
each Securityholder if required by TIA § 313(a) a brief report dated as of
such May 15 that complies with TIA § 313(c).  In such event, the Trustee also shall comply
with TIA § 313(b).

 

A copy of each report at the
time of its mailing to Securityholders shall be mailed to the Company and filed
by the Trustee with the SEC and each stock exchange, if any, on which the Securities
are listed.  The Company shall promptly
notify the Trustee when the Securities are listed on any stock exchange.

 

7.07                           COMPENSATION
AND INDEMNITY.

 

The Company shall pay to the
Trustee from time to time such compensation for its services as shall be agreed
upon in writing.  The Trustee’s
compensation shall not be limited by any law on compensation of a trustee of an
express trust.  The Company shall
reimburse the Trustee upon request for all reasonable out-of-pocket expenses
incurred by it.  Such expenses shall
include the reasonable compensation and out-of-pocket expenses of the Trustee’s
agents and counsel.

 

43

 

All rights, protections and
benefits of the Trustee shall extend to the Trustee acting as Conversion Agent,
Paying Agent, Registrar or other Security Agent with respect hereto.

 

The Company shall indemnify the
Trustee for, and hold it harmless against, any and all loss, liability, damage,
claim or expense (including the reasonable fees and expenses of counsel and
taxes other than those based upon the income of the Trustee) incurred by it in
connection with the acceptance or administration of this trust and the
performance of its duties hereunder, including the reasonable costs and
expenses of defending itself against any claim (whether asserted by the
Company, any Holder or any other Person) or liability in connection with the
exercise or performance of any of its powers and duties hereunder.  The Company need not pay for any settlement
made without its consent, which consent shall not be unreasonably
withheld.  The Trustee shall notify the
Company promptly of any claim for which it may seek indemnification.  The Company need not reimburse any expense
or indemnify against any loss or liability incurred by the Trustee through the
Trustee’s negligence, bad faith or willful misconduct.

 

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 amounts due on particular Securities.

 

The indemnity obligations of
the Company with respect to the Trustee provided for in this Section 7.07
shall survive any resignation or removal of the Trustee.

 

When the Trustee incurs
expenses or renders services after an Event of Default specified in Section 6.01(v)
or (vi) occurs, the expenses and the compensation for the
services are intended to constitute expenses of administration under any
Bankruptcy Law.

 

7.08                           REPLACEMENT
OF TRUSTEE.

 

A resignation or removal of the
Trustee and appointment of a successor Trustee shall become effective only upon
the successor Trustee’s acceptance of appointment as provided in this Section 7.08.

 

The Trustee may resign by so
notifying the Company in writing thirty (30) Business Days prior to such
resignation.  The Holders of a majority
in aggregate principal amount of the Securities then outstanding may remove the
Trustee by so notifying the Trustee and the Company in writing and may appoint
a successor Trustee with the Company’s consent.  The Company may remove the Trustee if:

 

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

 

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

 

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

 

(iv)                    the
Trustee becomes incapable of acting.

 

44

 

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

 

If a successor Trustee does not
take office within thirty (30) days after the retiring Trustee resigns or is
removed, the retiring Trustee (at the Company’s expense), the Company or the
Holders of at least ten percent (10%) in aggregate principal amount of the
outstanding Securities may petition any court of competent jurisdiction for the
appointment of a successor Trustee.

 

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

 

A successor Trustee shall
deliver a written acceptance of its appointment to the retiring Trustee and to
the Company.  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.

 

7.09                           SUCCESSOR TRUSTEE BY MERGER, ETC.

 

If the Trustee consolidates
with, merges or converts into, or transfers all or substantially all of its
corporate trust business to, another corporation, the successor corporation
without any further act shall be the successor Trustee, if such successor
corporation is otherwise eligible hereunder.

 

7.10                           ELIGIBILITY; DISQUALIFICATION.

 

There shall at all times be a Trustee
hereunder that is a corporation organized and doing business under the laws of
the United States of America or of any state thereof that is authorized under
such laws to exercise corporate trustee power, that is subject to supervision
or examination by federal or state authorities and that has a combined capital
and surplus of at least $100 million as set forth in its most recent published
annual report of condition.  The Trustee
shall comply with TIA § 310(b). 
Nothing in this Indenture shall prevent the Trustee from filing with the
SEC the application referred to in the penultimate paragraph of TIA
§ 310(b).

 

7.11                           PREFERENTIAL
COLLECTION
OF CLAIMS AGAINST COMPANY.

 

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

 

45

 

VIII.                         DISCHARGE OF INDENTURE

 

8.01                           TERMINATION OF THE OBLIGATIONS OF THE COMPANY.

 

This Indenture shall cease to
be of further effect if (a) either (i) all outstanding Securities (other than
Securities replaced pursuant to Section 2.07 hereof) have been
delivered to the Trustee for cancellation or (ii) all outstanding Securities
have become due and payable at their scheduled maturity or upon Repurchase at
Holder’s Option, Redemption or Repurchase Upon Repurchase Event or upon
acceleration pursuant to Section 6.02, and in either case the
Company irrevocably deposits, prior to the applicable due date, with the
Trustee or the Paying Agent (if the Paying Agent is not the Company or any of
its Affiliates) cash sufficient to pay all amounts due and owing on all
outstanding Securities (other than Securities replaced pursuant to Section 2.07
hereof) on the Maturity Date or an Option Purchase Date, Redemption Date or
Repurchase Date or, in the case of a discharge upon acceleration, the date of
such deposit, as the case may be; (b) the Company pays to the Trustee all other
sums payable hereunder by the Company; (c) such deposit will not result in a
breach or violation of, or constitute a default under any agreement or
instrument (other than this Indenture) to which the Company is a party or by
which it is bound; and (d) the Company has delivered to the Trustee an
Officer’s Certificate and an Opinion of Counsel, each stating that all
conditions precedent provided for herein relating to the satisfaction and discharge
of this Indenture have been complied with; provided, however, that Sections
2.02, 2.03, 2.04, 2.05, 2.06,
2.07, 2.08, 2.15, 2.16, 2.17, 3.05, 3.08, 3.09, 4.01, 4.02, 4.05, 7.07
and 7.08 and Articles
VIII and X  shall survive any discharge of this
Indenture until such time as the Securities have been paid in full and there
are no Securities outstanding. 
Thereafter, the obligations of Section 7.07 shall survive.

 

8.02                           APPLICATION
OF TRUST
MONEY.

 

The Trustee shall hold in trust
money deposited with it pursuant to Section 8.01.  It shall apply the deposited money through
the Paying Agent and in accordance with this Indenture to the payment of the
principal of and any unpaid and accrued interest on the Securities.

 

8.03                           REPAYMENT
TO COMPANY.

 

The Trustee and the Paying
Agent shall promptly notify the Company of, and pay to the Company upon the
request of the Company, any excess money held by them at any time.  The Trustee or the Paying Agent, as the case
may be, shall
provide written notice to the Company of any money that has been held by it and
has remained unclaimed for the payment of the principal of or any accrued and
unpaid interest on the Securities for a period of two (2) years. The Trustee
and the Paying Agent shall pay to the Company, upon the written request
of the Company, any such money held by them; provided, however,
that the Trustee or such Paying Agent, before being required to make any such
repayment, may, at the expense and request of the Company, cause to be
published once in a newspaper of general circulation in the City of New York or
cause to be mailed to each Holder, notice stating that such money remains and
that, after a date specified therein, which shall not be less than thirty (30)
days from the date of such publication or mailing, any unclaimed balance of
such money then remaining will be repaid to the Company.  After payment to the Company,
Securityholders entitled to the money must look to the Company for payment as
general creditors unless an applicable abandoned property law designates
another

 

46

 

person and all liability of the
Trustee and the Paying Agent shall, subject to applicable law, cease.

 

8.04                           REINSTATEMENT.

 

If the Trustee or Paying Agent
is unable to apply any money in accordance with Sections 8.01 and 8.02 by reason of any legal proceeding or
by reason of any order or judgment of any court or governmental authority
enjoining, restraining or otherwise prohibiting such application, the
obligations of the Company under this Indenture and the Securities shall be
revived and reinstated as though no deposit had occurred pursuant to Sections 8.01
and 8.02 until such time as the
Trustee or Paying Agent is permitted to apply all such money in accordance with
Sections 8.01
and 8.02; provided, however, that if the Company
has made any payment of amounts due with respect to any Securities because of
the reinstatement of its obligations, the Company shall be subrogated to the
rights of the Holders of such Securities to receive such payment from the money
held by the Trustee or Paying Agent.

 

IX.                                AMENDMENTS

 

9.01                           WITHOUT
CONSENT
OF HOLDERS.

 

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

 

(i)                           to
comply with Sections 5.01 and 10.12;

 

(ii)                        to
make any changes or modifications to this Indenture necessary in connection
with the registration of the Securities under the Securities Act pursuant to
the Registration Rights Agreement or the qualification of this Indenture under
the TIA;

 

(iii)                     to secure the obligations of the
Company in respect of the Securities;

 

(iv)                    to
add to the covenants of the Company described in this Indenture for the benefit
of Securityholders or to surrender any right or power conferred upon the
Company;

 

(v)                       to
make provisions with respect to adjustments to the Conversion Rate as required
by this Indenture or to increase the Conversion Rate in accordance with this
Indenture;

 

(vi)            to
add additional Events of Default with respect to the Securities; and

 

(vii)         to cure any ambiguity or correct or supplement any provision
herein that may be defective or inconsistent with any other provision herein,
or to make any other provisions with respect to matters or questions arising
hereunder that the Company and the Trustee deem necessary or desirable and which shall not be inconsistent with the
provisions of this Indenture;
provided,
however,
that no amendment or supplement

 

47

 

to this Indenture made pursuant to
this Section 9.01(vii)
may adversely affect the interests of Holders in any material respect.

 

9.02                           WITH CONSENT OF HOLDERS.

 

The Company may amend or
supplement this Indenture or the Securities without notice to any Securityholder
but with the written consent of the Holders of at least a majority in aggregate
principal amount of the outstanding Securities.  Subject to Sections 6.07 and 6.04, the Holders of
a majority in aggregate principal amount of the outstanding Securities may
waive compliance by the Company with any provision of this Indenture or the
Securities without notice to any other Securityholder.  However, without the consent of each Holder
of each outstanding Security affected, 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 the payment date of any installment
of interest on, any Security;

 

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

 

(c)                                  change
the place or currency of payment of principal of, or interest or liquidated
damages on, any Security;

 

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

 

(e)                                  modify
the provisions with respect to the right of Holders pursuant to Article III
to require the Company to purchase Securities on an Option Purchase Date or to
repurchase Securities upon the occurrence of a Repurchase Event in a manner
adverse to Holders;

 

(f)                                    modify
the provisions of Section 2.18 in a manner adverse to
Holders;

 

(g)                                 adversely
affect the right of Holders to convert Securities other than as provided in or
under Article X;

 

(h)                                 reduce
the percentage of the aggregate principal amount of the outstanding Securities
whose Holders must consent to a modification to or amendment of any provision
of this Indenture;

 

(i)                                     reduce
the percentage of the aggregate principal amount of the outstanding Securities
whose Holders must consent to a waiver of compliance with any provision of this
Indenture or a waiver of any Default or Event of Default; or

 

(j)                                     modify
the provisions of this Indenture with respect to modification and waiver
(including waiver of a Default or an Event of Default), except to increase the
percentage required for modification or waiver or to provide for consent of
each affected Holder.

 

48

 

Promptly after an amendment,
supplement or waiver under Section 9.01 or this Section 9.02
becomes effective, the Company shall mail, or cause to be mailed, to
Securityholders a notice briefly describing such amendment, supplement or
waiver.  Any failure of the Company to
mail such notice shall not in any way impair or affect the validity of such
amendment, supplement or waiver.

 

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.  The Company may establish, by delivery of an
Officer’s Certificate to the Trustee, a record date for determining
Securityholders of record entitled to give any consent or waiver; provided
that (i) such record date shall not be more than fifteen (15) days prior to the
date of the commencement of solicitation for such consent or waiver; and (ii)
at least fifteen (15) days prior to such record date, the Company shall mail,
or cause to be mailed, by first-class mail a notice of such record date to each
Holder or shall disseminate a press release through PR Newswire, or a
comparable newswire service, disclosing such record date.

 

Nothing in this Section 9.02
shall impair the Company’s rights under Section 9.01(i) to amend this Indenture or the
Securities without the consent of any Securityholder to provide for the
assumption of the Company’s obligations to the Holders of Securities in the
case of a merger, consolidation, conveyance, transfer, sale, lease or other
disposition in accordance with, and to the extent required under, Article V.

 

9.03                           COMPLIANCE WITH TRUST INDENTURE ACT.

 

Every amendment, waiver or
supplement to this Indenture or the Securities shall comply with the TIA as
then in effect.

 

9.04                           REVOCATION AND EFFECT OF CONSENTS.

 

Until an amendment, supplement
or waiver becomes effective, a consent to it by a Holder is a continuing
consent by the Holder and every subsequent Holder of a Security or portion of a
Security that evidences the same debt as the consenting Holder’s Security, even
if notation of the consent is not made on any Security.  However, any such Holder or subsequent
Holder may revoke the consent as to its Security or portion of a Security if
the Trustee receives written notice of revocation before the date the
amendment, supplement or waiver becomes effective; provided, however,
that if a record date has been established, in accordance with Section 9.02,
for the purpose of determining Securityholders entitled to consent, such notice
of revocation must be signed by the Securityholder of record as of the close of
business on such record date or his or her duly appointed proxy.  An amendment, supplement or waiver becomes
effective in accordance with its terms and thereafter binds every
Securityholder.

 

After an amendment, supplement
or waiver becomes effective with respect to the Securities, it shall bind every
Securityholder unless it makes a change that requires, pursuant to Section 9.02,
the consent of each Securityholder affected. 
In that case, the amendment, supplement or waiver shall bind each Holder
of a Security who has consented to it and, provided that notice of such
amendment, supplement or waiver is reflected on a Security that evidences

 

49

 

the same debt as the consenting
Holder’s Security, every subsequent Holder of a Security or portion of a
Security that evidences the same debt as the consenting Holder’s Security.

 

9.05                           NOTATION ON OR EXCHANGE OF
SECURITIES.

 

If an amendment, supplement or
waiver changes the terms of a Security, the Trustee may require the Holder of
the Security to deliver it to the Trustee. 
The Trustee may place an appropriate notation on the Security as
directed and prepared by the Company about the changed terms and return it to
the Holder.  Alternatively, if the Company
so determines, the Company in exchange for the Security shall issue and the
Trustee shall authenticate a new Security that reflects the changed terms.  Subject to the provisions of Section 9.04, Holders and subsequent
Holders of the Securities shall be bound by such amendment, supplement or
waiver notwithstanding any failure of the Trustee to make such notation on the
Securities or any failure of the Company to issue new Securities that reflect
the changed terms.

 

9.06                           TRUSTEE
PROTECTED.

 

The Trustee shall sign any
amendment, supplemental indenture or waiver authorized pursuant to this Article IX;
provided,
however,
that the Trustee need not sign any amendment, supplement or waiver authorized
pursuant to this Article IX that adversely affects the Trustee’s rights,
duties, liabilities or immunities.  The
Trustee shall be entitled to receive and conclusively rely upon an Opinion of
Counsel (as to legal matters) and an Officer’s Certificate (as to factual
matters) that any supplemental indenture, amendment or waiver is permitted or
authorized pursuant to this Indenture.

 

X.                                    CONVERSION

 

10.01                     CONVERSION
PRIVILEGE;
RESTRICTIVE LEGENDS.

 

Subject to the provisions of Sections
3.04, 3.07, 3.08 and 3.09,
a Holder may convert a Security into shares of Common Stock under the
circumstances set forth in, and pursuant to, paragraph 10 of the
Securities upon the satisfaction of the applicable conditions set forth in paragraph 10
of the Securities.  The initial
Conversion Rate is 14.0366 shares of Common Stock per $1,000 principal
amount.  The Conversion Rate is subject
to adjustment in accordance with Sections 10.06 through 10.12.

 

A Holder may convert a portion
of the principal of such Security if the portion is $1,000 principal amount or
an integral multiple of $1,000 principal amount.  Provisions of this Indenture that apply to conversion of all of a
Security also apply to conversion of a portion of it.

 

Any shares of Common Stock
issued upon conversion of a Security shall bear the Private Placement Legend
until after the second anniversary of the later of the Issue Date and the last
date on which the Company or any Affiliate was the owner of such shares or the
Security (or any predecessor security) from which such shares were converted
(or such shorter period of time as permitted by Rule 144(k) under the
Securities Act or any successor provision thereunder) (or such longer period of
time as may be required under the Securities Act or applicable state

 

50

 

securities laws in the Opinion
of Counsel for the Company, unless otherwise agreed by the Company and the
Holder thereof).

 

10.02                     CONVERSION
PROCEDURE.

 

To convert a Security, a Holder
must satisfy the requirements of paragraph 10 of the Securities.  As soon as practicable following the date
(the “Conversion
Date”) on which the Holder satisfies all those requirements, the
Company shall deliver to the Holder through the Conversion Agent a certificate
for the number of full shares of Common Stock issuable upon the conversion, as
provided in paragraph 10 of the Securities, and a check for the amount of
cash payable in lieu of any fractional share. 
Immediately prior to the close of business on the Conversion Date, the
person in whose name such certificate is to be registered shall be treated as a
shareholder of record of the Company (and the Company shall cause such
conversion to be effective as of such time on the books of the transfer agent
for the Common Stock), the Security to be converted shall be deemed to have
been converted and all rights of the Holder of such Security shall terminate,
other than the right to receive the shares of Common Stock and cash deliverable
as provided in the preceding sentence. 
A Holder of Securities is not entitled to any rights of a holder of
Common Stock until such Holder has converted its Securities into shares of
Common Stock, or is deemed to be a shareholder of record of the Company, as
provided in this paragraph, and then only to the extent such Securities are
deemed to have been so converted or such Holder is so deemed to be a
shareholder of record.  Upon delivery of
the cash, if any, and shares of Common Stock issuable upon conversion of the
Securities, the Company shall have discharged in full its obligations with
respect to such Securites so converted.

 

Except as provided in this Article X,
no payment or adjustment will be made for accrued interest on, or liquidated
damages with respect to, a converted Security or for dividends on any Common
Stock issued on or prior to conversion. 
If a Holder surrenders a Security for conversion after the close of
business on the record date for the payment of an installment of interest and
prior to the related interest payment date, then, notwithstanding such
conversion, the interest payable with respect to such Security on such interest
payment date shall be paid on such interest payment date to the Holder of such
Security at the close of business on such record date; provided, however, that such
Security, when surrendered for conversion, must be accompanied by payment to
the Conversion Agent on behalf of the Company of an amount equal to the
interest payable on such interest payment date on the portion so converted; provided
further, however, that such payment to the Conversion Agent
described in the immediately preceding proviso in respect of a Security
surrendered for conversion (i) shall not be required if such Security is called
for Redemption pursuant to Section 3.04 and paragraphs 6  and 7
of the Securities and (ii) shall not be required with respect to any unpaid
interest that is overdue and shall have accrued prior to the interest payment
date immediately preceding the Conversion Date.

 

If a Holder converts more than
one Security at the same time, the number of full shares issuable upon the
conversion shall be based on the total principal amount of the Securities converted.

 

51

 

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

 

If the last day on which a
Security may be converted is a Legal Holiday in a place where a Conversion
Agent is located, the Security may be surrendered to that Conversion Agent on
the next succeeding day that is not a Legal Holiday.

 

10.03                     FRACTIONAL SHARES.

 

The Company will not issue
fractional shares of Common Stock upon conversion of Securities and instead
will deliver a check in an amount equal to the value of such fraction computed
on the basis of the Closing Sale Price on the Trading Day immediately before
the Conversion Date.

 

10.04                     TAXES
ON CONVERSION.

 

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

 

10.05                     COMPANY
TO PROVIDE STOCK.

 

The Company shall reserve out
of its authorized but unissued Common Stock or Common Stock held in its
treasury enough shares of Common Stock to permit the conversion of all of the
Securities into shares of Common Stock.

 

All shares of Common Stock
which may be issued upon conversion of the Securities shall be validly issued,
fully paid and non-assessable and shall be free of preemptive rights and free
of any lien or adverse claim created by the Company.

 

The Company shall comply with
all securities laws regulating the offer and delivery of shares of Common Stock
upon conversion of Securities and shall list such shares on each national
securities exchange or automated quotation system on which the Common Stock is
listed.

 

10.06                     ADJUSTMENT
OF CONVERSION
RATE.

 

The Conversion Rate shall be
subject to adjustment from time to time as follows:

 

(a)                                  In
case the Company shall (1) pay a dividend in shares of Common Stock to all
holders of Common Stock, (2) make a distribution in shares of Common Stock to
all holders of Common Stock, (3) subdivide the outstanding shares of Common
Stock

 

52

 

into a greater number of shares of Common Stock or (4) combine the
outstanding shares of Common Stock into a smaller number of shares of Common
Stock, the Conversion Rate in effect immediately prior to such action shall be
adjusted so that the holder of any Security thereafter surrendered for
conversion shall be entitled to receive the number of shares of Common Stock
which he would have owned immediately following such action had such Securities
been converted immediately prior thereto. 
Any adjustment made pursuant to this Section 10.06(a) shall
become effective immediately after the record date in the case of a dividend or
distribution and shall become effective immediately after the effective date in
the case of a subdivision or combination.

 

(b)                                 In
case the Company shall, except pursuant to a shareholders’ rights plan of the
Company, issue rights or warrants to all holders of Common Stock entitling
them, for a period commencing on the record date for the determination of
holders of Common Stock entitled to receive such rights or warrants and
expiring not more than sixty (60) days after such record date, to subscribe for
or purchase shares of Common Stock (or securities convertible into or exchangeable or exercisable for Common
Stock), at a price per share (or having a conversion, exchange or exercise
price per share) less than the current market price (as determined pursuant to Section 10.06(g))
of Common Stock on such record date, the Conversion Rate shall be increased by
multiplying the Conversion Rate in effect immediately prior to such record date
by a fraction of which the numerator shall be the number of shares of Common
Stock outstanding on such record date, plus the number of shares of Common
Stock so offered for subscription or purchase, and the denominator of which
shall be the number of shares of Common Stock outstanding at the close of
business on such record date plus the number of shares of Common Stock which
the aggregate of the offering price of the total number of shares of Common
Stock so offered for subscription or purchase would purchase at such current
market price.  Such adjustments shall
become effective immediately after such record date.

 

(c)                                  In
case the Company shall dividend or distribute to all holders of Common Stock
shares of Capital Stock of the Company (other than Common Stock), evidences of
Indebtedness or other assets (other than any dividends or distributions paid exclusively in cash),
or shall dividend or distribute to all holders of Common Stock rights or
warrants to subscribe for securities (other than those referred to in Section10.06(b)),
then in each such case the Conversion Rate shall be increased by multiplying
the Conversion Rate in effect immediately prior to the close of business on the
record date for the determination of shareholders entitled to such distribution
by a fraction of which the numerator shall be the current market price of
Common Stock (as determined pursuant to Section 10.06(g)) on such date and the
denominator shall be such current market price less the fair market value (as
determined in good faith by the Board of Directors whose determination shall be
conclusive and described in a Board Resolution) on such date of the portion of
the shares of Capital Stock, evidences of Indebtedness and other assets to be
distributed or of such rights or warrants applicable to one share of Common
Stock, such increase to become effective immediately prior to the opening of
business on the day following such record date; provided, however,
that if such denominator is equal to or less than zero, then, in lieu of the
foregoing adjustment to the Conversion Rate, adequate provision shall be made
so that each Holder shall have the right to receive upon conversion of its
Securities, in addition to the shares of Common Stock issuable (and cash, if
any, payable) upon such

 

53

 

conversion, an amount of shares of Capital Stock, evidences of
Indebtedness, assets, rights and/or warrants that such Holder would have
received had such Holder converted each Security on such record date.  Notwithstanding the foregoing, in the event
that the Company shall distribute rights or warrants (other than those referred
to in Section 10.06(b))
(“Rights”)
pro rata
to holders of Common Stock, the Company may, in lieu of making any adjustment
pursuant to this Section 10.06(c), make proper provision so that each
Holder of a Security who converts such Security (or any portion thereof) after
the record date for such distribution and prior to the expiration or redemption
of the Rights shall be entitled to receive upon such conversion, in addition to
the shares of Common Stock issuable (and cash, if any, payable) upon such
conversion (the “Conversion Shares”), a number of Rights to be determined as
follows:  (i) if such conversion occurs
on or prior to the date for the distribution to the holders of Rights of
separate certificates evidencing such Rights (the “Distribution Date”), the same
number of Rights to which a holder of a number of shares of Common Stock equal
to the number of shares of Conversion Shares would be entitled at the time of
such conversion in accordance with the terms and provisions of and applicable
to the Rights; and (ii) if such conversion occurs after the Distribution Date,
the same number of Rights to which a holder of the number of shares of Common
Stock into which the principal amount of the Security so converted was
convertible immediately prior to the Distribution Date would have been entitled
on the Distribution Date in accordance with the terms and provisions of and
applicable to the Rights.  Any
distribution of rights or warrants pursuant to a shareholders’ rights plan
complying with the requirements set forth in the preceding sentence of this
paragraph shall not constitute a distribution of rights or warrants pursuant to
this Section 10.06(c).

 

(d)                                 In
case the Company shall, by dividend or otherwise, at any time make a
distribution of cash (excluding any cash that is distributed as part of a
distribution requiring a Conversion Rate adjustment pursuant to subsection (e)
below) to all holders of Common Stock, the Conversion Rate shall be
increased by multiplying the Conversion Rate in effect immediately prior to the
close of business on the record date for the determination of holders of Common
Stock entitled to such distribution by a fraction (A) whose numerator shall be
the current market price per share of Common Stock (as determined pursuant to Section 10.06(g))
on such record date and (B) whose denominator shall be an amount equal to (a)
such current market price per share of Common Stock less (b) the lesser of (i)
the amount of the distribution per share of Common Stock and (ii) such current
market price per share of Common Stock; provided, however, that the Conversion
Rate shall not be adjusted pursuant to this Section 10.06(d) to the
extent, and only to the extent, such adjustment would cause the Conversion
Price to be less than one cent ($0.01); provided further that, if the denominator
of such fraction shall be zero, the Conversion Rate shall be instead adjusted
so that the Conversion Price is equal to one cent ($0.01).  An adjustment to the Conversion Rate
pursuant to this Section 10.06(d) shall become effective immediately prior
to the opening of business on the day immediately following such record date.

 

(e)                                  In
case the Company or any Subsidiary shall distribute cash or other consideration
in respect of a tender offer or exchange offer (other than an odd-lot offer)
made by the Company or any Subsidiary for all or any portion of the Common
Stock

 

54

 

where the sum of the aggregate amount of such cash distributed and the
aggregate fair market value (as determined in good faith by the Board of
Directors, whose determination shall be conclusive and set forth in a Board
Resolution), as of the Expiration Date (as defined below), of such other
consideration distributed (such sum, the “Aggregate Amount”) expressed as an amount
per share of Common Stock validly tendered or exchanged, and not withdrawn,
pursuant to such tender offer or exchange offer as of the Expiration Time (as
defined below) (such tendered or exchanged shares of Common Stock, the “Purchased
Shares”) exceeds the current market price per share of Common Stock
(as determined pursuant to Section 10.06(g)) on the last date
(such last date, the “Expiration Date”) on which tenders or
exchanges could have been made pursuant to such tender offer or exchange offer
(as the same may be amended through the Expiration Date), then the Conversion
Rate shall be increased by multiplying the Conversion Rate in effect
immediately prior to the close of business on the Expiration Date by a fraction
(A) whose numerator is equal to the sum of (I) the Aggregate Amount and (II)
the product of (a) the current market price per share of Common Stock (as
determined pursuant to Section 10.06(g)) on the Expiration
Date and (b) an amount equal to (i) the number of shares of Common Stock
outstanding as of the last time (the “Expiration Time”) at which tenders or
exchanges could have been made pursuant to such tender offer or exchange offer
less (ii) the Purchased Shares and (B) whose denominator is equal to the
product of (I) the number of shares of Common Stock outstanding as of the
Expiration Time (including all Purchased Shares) and (II) the current market
price per share of Common Stock on the Expiration Date.

 

An adjustment, if any, to the Conversion Rate pursuant to this Section 10.06(e)
shall become effective immediately prior to the opening of business on the
Business Day following the Expiration Date. 
In the event that the Company or a Subsidiary is obligated to purchase
shares of Common Stock pursuant to any such tender offer or exchange offer, but
the Company or such Subsidiary is permanently prevented by applicable law from
effecting any such purchases, or all such purchases are rescinded, then the
Conversion Rate shall again be adjusted to be the Conversion Rate which would
then be in effect if such tender offer or exchange offer had not been made.  If the application of this Section 10.06(e)
to any tender offer or exchange offer would result in a decrease in the
Conversion Rate, no adjustment shall be made for such tender offer or exchange
offer under this Section 10.06(e).

 

(f)                                    In
addition to the foregoing adjustments in subsections (a), (b), (c), (d)  and
(e) above, the Company, from time
to time and to the extent permitted by law, may increase the Conversion Rate by
any amount for a period of at least twenty (20) days or such longer period as
may be required by law, if the Board of Directors has made a determination,
which determination shall be conclusive, that such increase would be in the
best interests of the Company, provided that the then effective Conversion
Price is not less than the par value of a share of Common Stock.  Such Conversion Rate increase shall be
irrevocable during such period.  The
Company shall give notice to the Trustee and cause notice of such increase to
be mailed to each Holder of Securities at such Holder’s address as the same
appears on the registry books of the Registrar, at least fifteen (15) days
prior to the date on which such increase commences.

 

55

 

(g)                                 For
the purpose of any computation under subsections (a), (b), (c)  and
(d)  above of this Section 10.06,
the current market price per share of Common Stock on the date fixed for
determination of the shareholders entitled to receive the issuance or
distribution requiring such computation (the “Determination Date”) shall be
deemed to be the average of the Closing Sale Prices for the ten (10)
consecutive Trading Days immediately preceding the Determination Date, and, for
the purpose of any computation under Section 10.06(e) the current market
price per share of Common Stock on the Expiration Date for the tender offer or
exchange offer requiring such computation shall be deemed to be the average of
the Closing Sale Price for the ten (10) consecutive Trading Days immediately
preceding the Expiration Date; provided, however, that (i) if
the “ex” date for any event (other than the event requiring such computation)
that requires an adjustment to the Conversion Rate pursuant to subsection (a),
(b), (c), (d) or (e) above occurs on or after the tenth (10th)
Trading Day prior to the Determination Date or Expiration Date, whichever is
applicable, and prior to the “ex” date for the issuance or distribution
requiring such computation, the Closing Sale Price for each Trading Day prior
to the “ex” date for such other event shall be adjusted by multiplying such
Closing Sale Price by the reciprocal of the fraction by which the Conversion
Rate is so required to be adjusted as a result of such other event,
(ii) if the “ex” date for any event (other than the event requiring such
computation) that requires an adjustment to the Conversion Rate pursuant to subsection (a),
(b), (c), (d) or (e) above occurs on or after the “ex” date for the
issuance or distribution requiring such computation and on or prior to the
Determination Date or the Expiration Date, whichever is applicable, the Closing
Sale Price for each Trading Day on and after the “ex” date for such other event
shall be adjusted by multiplying such Closing Sale Price by the same fraction
by which the Conversion Rate is so required to be adjusted as a result of such
other event, and (iii) if the “ex” date for the event requiring such
computation is on or prior to the Determination Date or Expiration Date,
whichever is applicable, after taking into account any adjustment required
pursuant to clause (i) or (ii) of this proviso, the Closing Sale
Price for each Trading Day on and after such “ex” date shall be adjusted by
adding thereto the amount of any cash and the fair market value (as determined
in good faith by the Board of Directors in a manner consistent with any
determination of such value for the purposes of this Section 10.06, whose
determination shall be conclusive and described in a Resolution of the Board of
Directors) of the evidences of Indebtedness, shares of Capital Stock or other
securities or assets or cash being distributed (in the event requiring such
computation) applicable to one share of Common Stock as of the close of
business on the day before such “ex” date.

 

For purposes of this subsection, the term “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

 

56

 

exchange or in such market after the expiration time of such tender
offer or exchange offer (as it may be amended or extended).

 

For purposes of Paragraph 10(iv)(A) of the Securities, the
current market price per share of Common Stock on the declaration date of the
distribution described in such Paragraph 10(iv)(A) shall be deemed to be
the average of the Closing Sale Prices for the ten (10) consecutive Trading
Days immediately preceding such declaration date, appropriately adjusted in the
good faith determination of the Board of Directors (whose determination shall
be conclusive and described in a Board Resolution) to account for the
occurrence, during such ten (10) Trading Day period, of any event that requires
an adjustment to the Conversion Rate pursuant to this Section 10.06 or that is
described in Section 10.12.

 

10.07                     NO
ADJUSTMENT.

 

No adjustment in the Conversion
Rate shall be required until cumulative adjustments amount to one percent (1%)
or more of the Conversion Price as last adjusted; provided, however, that any
adjustments which by reason of this Section 10.07 are not required to be
made shall be carried forward and taken into account in any subsequent
adjustment.  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.

 

If any rights, options or
warrants issued by the Company as described in Section 10.06 are only
exercisable upon the occurrence of certain triggering events, then the
Conversion Rate will not be adjusted as provided in Section 10.06 until the
earliest of such triggering event occurs. 
Upon the expiration or termination of any rights, options or warrants
without the exercise of such rights, options or warrants, the Conversion Rate
then in effect shall be adjusted immediately to the Conversion Rate which would
have been in effect at the time of such expiration or termination had such
rights, options or warrants, to the extent outstanding immediately prior to
such expiration or termination, never been issued.

 

If any dividend or distribution
is declared and the Conversion Rate is adjusted pursuant to Section 10.06
on account of such dividend or distribution, but such dividend or distribution
is thereafter not paid or made, the Conversion Rate shall again be adjusted to
the Conversion Rate which would then be in effect had such dividend or
distribution not been declared.

 

No adjustment to the Conversion
Rate need be made for a transaction referred to in this Article X if
Securityholders are to participate in the transaction without conversion on a
basis and with notice that the Board of Directors determines in good faith to
be fair and appropriate in light of the basis and notice on which holders of
Common Stock participate in the transaction.

 

Except as otherwise provided in
this Indenture, no adjustment to
the Conversion Rate shall be required for the issuance of Common Stock or the
right to purchase Common Stock or any convertible or exchangeable securities.

 

No adjustment to the Conversion
Rate will be made as a result of the distribution of separate certificates
representing the rights under the Rights Agreement or any similar

 

57

 

shareholders’ rights plan of
the Company then in effect or the exercise of rights in accordance with any
such plan.

 

No adjustment to the Conversion
Rate as provided herein shall be made to, and only to, the extent such
adjustment would reduce the then effective Conversion Price below the par value
per share of Common Stock at the time such adjustment is to be made.

 

10.08                     OTHER ADJUSTMENTS.

 

In the event that, as a result
of an adjustment made pursuant to Section 10.06 hereof, the Holder of
any Security thereafter surrendered for conversion shall become entitled to
receive any shares of Capital Stock other than shares of Common Stock,
thereafter the Conversion Rate of such other shares so receivable upon
conversion of any Security 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.

 

10.09                     ADJUSTMENTS
FOR TAX
PURPOSES.

 

The Company may make such
increases in the Conversion Rate, in addition to those required by Section 10.06
hereof, as it determines to be advisable in order that any stock dividend,
subdivision of shares, distribution or rights to purchase stock or securities
or distribution of securities convertible into or exchangeable for stock made
by the Company or to its shareholders will not be taxable to the recipients
thereof.

 

10.10                     NOTICE OF ADJUSTMENT.

 

Whenever the Conversion Rate is
adjusted, the Company shall promptly mail to Holders at the addresses appearing
on the Registrar’s books a notice of the adjustment and file with the Trustee
an Officer’s 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.

 

10.11                     NOTICE
OF CERTAIN TRANSACTIONS.

 

In the event that:

 

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

 

(2)                                  the
Company takes any action that would require a supplemental indenture pursuant
to Section 10.12;
or

 

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

 

the Company shall mail to Holders
at the addresses appearing on the Registrar’s books and the Trustee a notice
stating the proposed record or effective date, as the case may be, of any
transaction referred to in clause (1), (2)  or (3) of this Section 10.11.  The Company shall mail such notice at least
fifteen (15) days before such date; however, failure to mail such notice or any

 

58

 

defect therein shall not affect
the validity of any transaction referred to in clause (1), (2) or (3)
of this Section 10.11.

 

10.12                     EFFECT
OF
RECLASSIFICATIONS, CONSOLIDATIONS, MERGERS, BINDING SHARE EXCHANGES OR SALES ON
CONVERSION PRIVILEGE.

 

If any of the following shall
occur, namely: (i) any reclassification or change in the Common Stock issuable
upon conversion of Securities (other than a change in par value, or from par
value to no par value, or from no par value to par value, or as a result of a
subdivision or combination), (ii) any consolidation, merger or binding share
exchange to which the Company is a party and pursuant to which the Common Stock
is converted or exchanged for cash, securities or other property or (iii) any
transfer, sale or conveyance of all or substantially all of the property and
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, binding share exchange,
transfer, sale or conveyance, execute and deliver to the Trustee a supplemental
indenture in form reasonably satisfactory to the Trustee 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 stock and other securities,
property and/or assets (including cash) receivable upon such reclassification,
change, consolidation, merger, binding share exchange, transfer, sale or
conveyance by a holder of the number of shares of Common Stock deliverable upon
conversion of such Security immediately prior to such reclassification, change,
consolidation, merger, binding share exchange, transfer, sale or conveyance,
assuming that such Holder would not have exercised any rights of election that
such Holder would have had as a holder of Common Stock to select a particular
type of consideration.  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.  The foregoing, however, shall not in any way affect the right a
Holder of a Security may otherwise have, pursuant to Section 10.06(c) or Section 10.14
hereof, to receive Rights upon conversion of a Security.  If, in the case of any such consolidation,
merger, binding share exchange, transfer, sale or conveyance, the stock or
other securities, property and/or assets (including cash) receivable thereupon
by a holder of Common Stock includes shares of stock or other securities,
property and/or assets of a corporation other than the successor or purchasing
corporation, as the case may be, in such consolidation, merger, binding share
exchange, transfer, 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 shall reasonably consider necessary by reason of the
foregoing.  The provision of this Section 10.12
shall similarly apply to successive consolidations, mergers, binding share
exchanges, transfer, sales or conveyances.

 

In the event the Company shall
execute a supplemental indenture pursuant to this Section 10.12, the
Company shall promptly file with the Trustee an Officer’s 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, binding share exchange, transfer sale or
conveyance and any adjustment to be made with respect thereto.

 

59

 

10.13                     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, but may accept as conclusive
evidence of the correctness of any such adjustment, and shall be protected in
relying upon, the Officer’s Certificate with respect thereto which the Company is
obligated to file with the Trustee pursuant to Section 10.10
hereof.  The Trustee makes no
representation as to the validity or value of any securities or assets issued
upon conversion of Securities, and the Trustee shall not be responsible for the
failure by the Company to comply with any provisions of this Article X.

 

The Trustee shall not be under
any responsibility to determine the correctness of any provisions contained in
any supplemental indenture executed pursuant to Section 10.12, but may
accept as conclusive evidence of the correctness thereof, and shall be
protected in relying upon, the Officer’s Certificate with respect thereto which
the Company is obligated to file with the Trustee pursuant to Section 10.12
hereof.

 

10.14                     RIGHTS DISTRIBUTIONS PURSUANT TO SHAREHOLDERS’ RIGHTS PLANS.

 

The Company shall provide
Holders, upon conversion of their Securities, in addition to shares of Common
Stock issuable (and cash, if any, payable) upon such conversion, the rights
described in the Rights Agreement and/or any similar shareholders’ rights plan
in effect at the time of such conversion (whether or not the rights have been
separated from the Common Stock prior to the time of conversion), subject to
the limitations set forth in such shareholders’ rights plan, and, in the event
that the Company implements other similar shareholders’ rights plans after the
date hereof or amends, supplements or supercedes the Rights Agreement, the
Company shall not deprive the Holders from receiving such rights in a manner that
is substantially consistent with the manner in which the existing or new
stockholders of the Company shall be entitled to receive such rights.  Any distribution of rights or warrants
pursuant to a shareholders’ rights plan (whether or not the rights or warrants
have been separated from the Common Stock) complying with the requirements set
forth in the preceding sentence of this paragraph shall not constitute a
distribution of rights or warrants pursuant to Section 10.06(c).

 

XI.                                MISCELLANEOUS

 

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 of
the TIA shall control.

 

11.02                     NOTICES.

 

Any notice or communication by
the Company or the Trustee to the other is duly given if in writing and
delivered:

 

(a)                                  by hand (in which case it will be
effective upon delivery);

 

60

 

(b)                                 by facsimile (in which case it will be
effective upon receipt of confirmation of good transmission thereof); or

 

(c)                                  by overnight delivery by a nationally
recognized courier service (in which case it will be effective on the Business
Day immediately after being deposited with such courier service),

 

in each case to the other
party’s address or fax number, as applicable, stated in this Section 11.02.  The Company or the Trustee by notice to the
other may designate additional or different addresses for subsequent notices or
communications.

 

Any notice or communication to
a Securityholder shall be mailed by first-class mail to its address shown on
the register kept by the Registrar. 
Failure to mail a notice or communication to a Securityholder or any defect
in it shall not affect its sufficiency with respect to other Securityholders.

 

If a notice or communication is
mailed in the manner provided above, it is duly given, whether or not the
addressee receives it.

 

If the Company mails a notice
or communication to Securityholders, it shall mail a copy to the Trustee and
each Security Agent at the same time.

 

All notices or communications
shall be in writing.

 

The Company’s address is:

 

Genzyme Corporation

500 Kendall Street

Cambridge, MA 02142

Attention: Chief Financial Officer

Facsimile: (617) 642-2435

 

The Trustee’s address is:

 

U.S. Bank
National Association

One Federal Street, Third Floor

Boston, MA 02110

Attn: Gerald Wheeler, Vice President

Facsimile: (617) 603-6665

 

61

 

11.03                     COMMUNICATION BY HOLDERS WITH OTHER HOLDERS.

 

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

 

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:

 

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

 

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

 

Each signer of an Officer’s
Certificate or an Opinion of Counsel may (if so stated) rely, effectively, upon
an Opinion of Counsel as to legal matters and an Officer’s Certificate or
certificates of public officials as to factual matters if such signer
reasonably and in good faith believes in the accuracy of the document relied
upon.

 

11.05                     STATEMENTS
REQUIRED
IN CERTIFICATE OR OPINION.

 

Each Officer’s Certificate or
Opinion of Counsel with respect to compliance with a condition or covenant
provided for in this Indenture shall include:

 

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

 

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

 

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

 

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

 

11.06                     RULES
BY TRUSTEE
AND AGENTS.

 

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

 

62

 

11.07                     LEGAL
HOLIDAYS.

 

A “Legal Holiday” is a Saturday,
a Sunday or a day on which banking institutions are not required to be open in
the City of New York, in the State of New York or in the City of Boston,
Massachusetts.  If a payment date is a
Legal Holiday at a place of payment, payment may be made at that place on the
next succeeding day that is not a Legal Holiday, and no interest shall accrue
on that payment for the intervening period.

 

A “Business Day” is a day other
than a Legal Holiday.

 

11.08                     DUPLICATE
ORIGINALS.

 

The parties may sign any number
of copies of this Indenture.  Each
signed copy shall be an original, but all of them together represent the same
agreement.  Delivery of an executed
counterpart by facsimile shall be effective as delivery of a manually executed
counterpart thereof.

 

11.09                     GOVERNING
LAW.

 

This Indenture and the
Securities shall be governed by, and construed in accordance with, the laws of
the State of New York but without giving effect to applicable principles of
conflicts of law to the extent that the application of the laws of another
jurisdiction would be required thereby.

 

11.10                     NO
ADVERSE INTERPRETATION
OF OTHER AGREEMENTS.

 

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

 

11.11                     SUCCESSORS.

 

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

 

11.12                     SEPARABILITY.

 

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 and a Holder shall have no claim
therefor against any party hereto.

 

11.13                     TABLE OF
CONTENTS, HEADINGS, ETC.

 

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

 

63

 

11.14                     CALCULATIONS IN RESPECT OF THE SECURITIES.

 

The Company and its agents
(including, without limitation, the Bid Solicitation Agent) 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 Holders.  The Company shall provide a copy of such
calculations to the Trustee as required hereunder.

 

[The Remainder of This Page Left Blank; Signature Page
Follows]

 

64

 

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

 

	
   

  	
  GENZYME CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/
  Michael Wyzga

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Michael
  Wyzga

  
	
   

  	
   

  	
  Title:

  	
  Chief
  Financial and Accounting Officer;

  Executive Vice President, Finance

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  U.S. BANK NATIONAL ASSOCIATION

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/
  Gerald R. Wheeler

  
	
   

  	
   

  	
  Name:

  	
  Gerald R.
  Wheeler

  
	
   

  	
   

  	
  Title:

  	
  Vice
  President

  
							

 

 

EXHIBIT A

 

[Face of Security]

 

GENZYME
CORPORATION

 

Certificate
No.              

 

[INSERT
PRIVATE PLACEMENT LEGEND AND GLOBAL SECURITY LEGEND

AS REQUIRED]

 

1.25% Convertible
Senior Note due 2023

CUSIP No.
                

 

Genzyme Corporation, a
Massachusetts corporation (the “Company”), for value received, hereby
promises to pay to Cede & Co., or its registered assigns, the principal sum
of
                         
Dollars
($            ) on
December 1, 2023 and to pay interest thereon, as provided on the reverse
hereof, until the principal and any unpaid and accrued interest are paid or
duly provided for.

 

Interest Payment Dates:
June 1 and December 1, with the first payment to be made on
June 1, 2004.

 

Record Dates: May 15 and
November 15.

 

The provisions on the back of
this certificate are incorporated as if set forth on the face hereof.

 

IN WITNESS WHEREOF,
Genzyme Corporation has caused this instrument to be duly signed.

 

	
   

  	
  GENZYME CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  	
   

  
						

 

A-1

 

TRUSTEE’S CERTIFICATE OF
AUTHENTICATION

 

This is one of the Securities
referred to

in the within-mentioned Indenture.

 

	
  U.S. BANK NATIONAL ASSOCIATION,  as Trustee

  
	
   

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Authorized
  Signatory

  
	
   

  
	
  Dated:

  	
   

  	
   

  
						

 

A-2

 

[REVERSE OF SECURITY]

GENZYME CORPORATION

1.25% Convertible Senior Note due
2023

 

1.                                       Interest.  Genzyme Corporation, a Massachusetts
corporation (the “Company”), promises to pay interest on the
principal amount of this Security at the rate per annum shown above.  The Company will pay interest semi-annually
on June 1 and December 1 of each year, with the first payment to be
made on June 1, 2004.  Interest on
the Securities will accrue on the principal amount from, and including, the
most recent date to which interest has been paid or provided for or, if no
interest has been paid, from, and including, December 9, 2003, in each
case to, but excluding, the next interest payment date or Maturity Date, as the
case may be.  Interest will be computed
on the basis of a 360-day year of twelve 30-day months.

 

2.                                       Maturity.  The Securities will mature on
December 1, 2023.

 

3.                                       Method of
Payment.  The Company will
pay interest on the Securities (except defaulted interest) to the persons who
are registered Holders of Securities at the close of business on the record
date set forth on the face of this Security immediately preceding the
applicable interest payment date. 
Holders must surrender Securities to a Paying Agent to collect the
principal, Redemption Price, Option Purchase Price or Repurchase Price of the
Securities, plus, if applicable, accrued and unpaid interest, if any, payable
as herein provided upon Redemption, Repurchase at Holder’s Option or Repurchase
Upon Repurchase Event, as the case may be. 
The Company will pay all amounts due with respect to the Securities in
money of the United States that at the time of payment is legal tender for
payment of public and private debts or, if permitted under the Indenture, in
shares of Common Stock in accordance with the Indenture.  With respect to Securities that are in
global form, the Company will make payments on such Securities by wire transfer
of immediately available funds to the account specified by the Holders
thereof.  With respect to a Security
that is held, other than in global form, by a Holder of more than $5.0 million
aggregate principal amount of Securities, the Company will make payments on
such Security by wire transfer of immediately available funds to the account
specified by such Holder or, if no such account is specified, by mailing a
check to such Holder’s registered address. 
With respect to a Security that is held, other than in global form, by a
Holder of not more than $5.0 million aggregate principal amount of Securities,
the Company will make payments on such Security by mailing a check to such
Holder’s registered address.

 

4.                                       Paying
Agent, Registrar, Conversion Agent. 
Initially, U.S. Bank National Association (the “Trustee”) will act as Paying
Agent, Registrar, Bid Solicitation Agent and Conversion Agent.  The Company may change any Paying Agent,
Registrar, Bid Solicitation Agent or Conversion Agent without notice.

 

5.                                       Indenture.  The Company issued the Securities under an
Indenture dated as of December 9, 2003 (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 (the “Act”).  The Securities are subject to all such
terms, and

 

A-3

 

Securityholders are referred to
the Indenture and the Act for a statement of such terms.  The Securities are general unsecured senior
obligations of the Company limited to $600,000,000 aggregate principal amount
($690,000,000 if the Initial Purchasers have elected to exercise in full the
Option to purchase up to an additional $90,000,000 aggregate principal amount
of the Securities), except as otherwise provided in the Indenture (except for
Securities issued in substitution for destroyed, mutilated, lost or stolen
Securities).  Terms used herein which
are defined in the Indenture have the meanings assigned to them in the
Indenture.

 

6.                                       Optional
Redemption.  The Securities
will be redeemable prior to maturity at the option of the Company, in whole or
in part, at any time on or after December 1, 2008 (the date of any such
time, the “Redemption Date”), on any date not less than 30 nor more than
60 days after the mailing of a redemption notice to each holder of Securities
to be redeemed, at a redemption price, payable in cash, equal to one hundred
percent (100%) of the principal amount of the Securities to be redeemed plus
any accrued and unpaid interest to, but excluding, the Redemption Date; provided,
that if such Redemption Date is also an interest payment date, such accrued and
unpaid interest with respect to a Security called for Redemption will be paid
on such interest payment date to the Holder of record of such Security at the
close of business on the relevant record date; provided further, that the
Company will make at least ten (10) semi-annual interest payments with respect
to the Securities prior to redeeming any Securities under this paragraph 6.

 

If the Paying
Agent (other than the Company) holds on the Redemption Date money sufficient to
pay the Redemption Price, and accrued and unpaid interest, if any, to, but
excluding, the Redemption Date, payable on the Redemption Date with respect to
a Security, then (unless the Company defaults in the payment of the Redemption
Price or such accrued and unpaid interest) on and after the Redemption Date
such Security shall be deemed to be no longer outstanding, interest on such
Security shall cease to accrue, and such Security shall be deemed paid whether
or not such Security is delivered to the Paying Agent.  Thereafter, all rights of the Holder of such
Security shall terminate with respect to such Security, other than the right to
receive the Redemption Price plus such accrued and unpaid interest.

 

7.                                       Notice of
Redemption.  Notice of
Redemption will be mailed at least thirty (30) days but not more than sixty
(60) days before the Redemption Date to each Holder of Securities to be
redeemed at its registered address. 
Securities in denominations larger than $1,000 principal amount may be
redeemed in part but only in integral multiples of $1,000 principal amount.

 

8.                                       Purchase by
the Company at the Option of the Holder.  Subject to the terms and conditions of the Indenture, the Company
shall become obligated to purchase, at the option of the Holder, the Securities
held by such Holder on December 1, 2008, December 1, 2013 and
December 1, 2018 (each, an “Option Purchase Date”) at an Option
Purchase Price equal to one hundred percent (100%) of the principal amount of
Securities to be purchased, plus accrued and unpaid interest, if any, to, but
excluding, applicable Option Purchase Date, upon delivery of a Purchase Notice
containing the information set forth in the Indenture, at any time from the
opening of business on the date that is twenty (20) Business Days prior to the
applicable Option Purchase Date until 5:00 p.m., New York City time, on the
third (3rd) Business Day immediately preceding the applicable Option Purchase
Date and upon delivery of the Securities to the Paying Agent by the Holder as
set forth in the Indenture.  Subject to
certain conditions and exceptions

 

A-4

 

set forth in the Indenture, the
Option Purchase Price may be paid for, in whole or in part, at the election of
the Company, in cash or shares of Common Stock or in any combination of cash
and shares of Common Stock.

 

Holders have
the right to withdraw any Purchase Notice by delivering to the Paying Agent a
written notice of withdrawal in accordance with the provisions of the Indenture
at any time prior to 5:00 p.m., New York City time, on the third (3rd) Business
Day prior to the applicable Option Purchase Date, or such later time as may be
required by law.

 

If the Paying
Agent (other than the Company) holds on the applicable Option Purchase Date
money and/or Common Stock, if applicable and as provided in the Indenture,
sufficient to pay the Option Purchase Price, and accrued and unpaid interest,
if any, to, but excluding, such Option Purchase Date, payable in respect of a
Security on such Option Purchase Date, then on and after such Option Purchase
Date such Security shall be deemed to be no longer outstanding and interest on
it shall cease to accrue, and such Security shall be deemed paid whether or not
such Security is delivered to the Paying Agent.  Thereafter, all other rights of the Holder(s) of such Security
shall terminate with respect to such Security, other than the right to receive
the Option Purchase Price plus such accrued and unpaid interest.

 

9.                                       Repurchase
at Option of Holder Upon a Repurchase Event.  Subject to the terms and conditions of the
Indenture, in the event of a Repurchase Event, each Holder of the Securities
shall have the right, at the Holder’s option, to require the Company to
repurchase such Holder’s Securities including any portion thereof which is
$1,000 in principal amount or any integral multiple thereof on a date selected
by the Company (the “Repurchase Date”) no later than thirty (30)
days after the date on which notice of such Repurchase Event is mailed in
accordance with the immediately succeeding paragraph, at a price payable in
cash equal to one hundred percent (100%) of the outstanding principal amount of
such Security, plus accrued and unpaid interest to, but excluding, the
Repurchase Date.

 

Within thirty (30) days after
the occurrence of the Repurchase Event, the Company is obligated to give notice
of the occurrence of such Repurchase Event to each Holder.  Such notice shall include, among other
things, the date by which Holder must notify the Company of such Holder’s
intention to exercise the Repurchase Right and of the procedure which such
Holder must follow to exercise such right. 
To exercise the Repurchase Right, a Holder of Securities must, in
accordance with the provisions of the Indenture, (i) deliver, no later than
5:00 p.m., New York City time, on the third (3rd) Business Day immediately
preceding the Repurchase Date, written notice to the Paying Agent of the
Holder’s exercise of such right; and (ii) deliver, at any time after the
delivery of such written notice, the Securities with respect to which the
Holder is exercising its Repurchase Right, duly endorsed for transfer to the
Company.

 

A “Repurchase Event” shall be
deemed to have occurred upon the occurrence of a “Change in Control.”

 

A “Change in Control” shall be
deemed to have occurred at such time as:

 

(i)                   any
“person” or “group” (as such terms are used for purposes of Sections 13(d) and
14(d) of the Exchange Act) is or becomes the “beneficial

 

A-5

 

owner” (as such term is used in Rule 13d-3 under the Exchange Act),
directly or indirectly, of fifty percent (50%) or more of the total voting
power of all classes of the Capital Stock of the Company entitled to vote
generally in the election of directors, other than an acquisition by the
Company, any of its Subsidiaries or any of the Company’s employee benefit
plans; or

 

(ii)                at
any time the following persons cease for any reason to constitute a majority of
the Company’s Board of Directors:

 

(1)                                  individuals
who on the Issue Date constituted the Company’s Board of Directors; and

 

(2)                                  any
new directors whose election to the Company’s Board of Directors or whose
nomination for election by the Company’s shareholders was approved by at least
a majority of the members of the Board of Directors, or of the nominating
committee thereof, then still in office who were either directors of the
Company on the Issue Date or whose election or nomination for election was
previously so approved; or

 

(iii)             the Company consolidates with, or merges
with or into, another person or any person consolidates with, or merges with or
into, the Company, in any such event other than pursuant to a transaction in
which the persons that “beneficially owned,” directly or indirectly, the shares
of 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 the
Voting Stock of the continuing or surviving corporation in substantially the
same proportion as such ownership immediately prior to the transaction; or

 

(iv)            the
sale, lease, transfer or other conveyance or disposition of all or
substantially all of the property and assets of the Company to any “person” or
“group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange
Act), including any group acting for the purpose of acquiring, holding, or
disposing of securities within the meaning of Rule 13d-5(b)(1) under the
Exchange Act; or

 

(v)               the
Company is liquidated or dissolved or the holders of the Capital Stock of the
Company approve any plan or proposal for the liquidation or dissolution of the
Company;

 

provided,
however,
that a Change in Control will not be deemed to have occurred if either:

 

(1)                                  the
Closing Sale Price for each of any five (5) Trading Days (whether or not
consecutive) during the ten (10) consecutive Trading Days immediately preceding
the Change in Control is equal to at least one hundred and five percent (105%)
of the Conversion Price in effect on such Trading Day; or

 

A-6

 

(2)                                  in
the case of a merger or consolidation, at least ninety percent (90%) of the
consideration (other than cash payments for fractional shares or pursuant to
statutory appraisal rights) in the merger or consolidation constituting the
Change in Control consists of common stock and any associated rights traded on
a U.S. national securities exchange or quoted on The Nasdaq National Market (or
which will be so traded or quoted when issued or exchanged in connection with
such Change in Control), and, as a result of such transaction or transactions,
the Securities become convertible into such common stock and associated rights.

 

If the Paying
Agent (other than the Company) holds on the Repurchase Date money sufficient to
pay the Repurchase Price with respect to a Security, plus accrued and unpaid
interest, if any, payable as provided in the Indenture upon Repurchase Upon
Repurchase Event, then (unless the Company defaults in the payment of the
Repurchase Price or such accrued and unpaid interest) on and after such date
such Security shall be deemed to be no longer outstanding, interest on such
Security shall cease to accrue, and such Security shall be deemed paid whether
or not such Security is delivered to the Paying Agent.  Thereafter, all rights of the Holder of such
Security shall terminate with respect to such Security, other than the right to
receive the Repurchase Price, plus such accrued and unpaid interest, in
accordance with the Indenture.

 

10.                                 Conversion.

 

The Securities shall be
convertible as follows:

 

(i)                   Conversion
Based on Closing Sale Price of Common Stock.  Subject to earlier Redemption, Repurchase at Holder’s Option or
Repurchase Upon Repurchase Event, Holders may surrender Securities in integral
multiples of $1,000 principal amount for conversion into shares of the
Company’s Common Stock on any Business Day, if the Closing Sale Price of the Company’s Common Stock for at least twenty (20) consecutive
Trading Days in a period of thirty (30) consecutive Trading Days ending on the
Trading Day immediately preceding such Business Day exceeds one hundred and
twenty percent (120%) of the Conversion Price in effect on such thirtieth (30th)
Trading Day.

 

(ii)                Conversion Upon
Satisfaction of Trading Price Condition. 
Subject to earlier Redemption, Repurchase at Holder’s Option or
Repurchase Upon Repurchase Event, Securities in integral multiples of $1,000
principal amount may be surrendered for conversion into shares of Common Stock
any time during the five (5) consecutive Trading Day period after any ten (10)
consecutive Trading Day period (the “Note Measurement Period”), if the Trading Price per $1,000
principal amount of the Securities on each Trading Day during the Note
Measurement Period was less than ninety five percent (95%) of the Conversion
Value (as defined below) on such Trading Day; provided, however,
no Security shall be convertible into shares of Common Stock pursuant to this
paragraph after December 1, 2018 if the Closing Sale Price on the Trading
Day immediately preceding the day on which the Security is surrendered for
conversion pursuant to this paragraph is greater than 100% of the Conversion
Price then in effect but equal to or less than 120% of the Conversion Price
then in effect.  In

 

A-7

 

connection with any conversion, the Bid Solicitation Agent shall not
have any obligation to determine the Trading Price unless the Company has
requested such determination, and the Company shall have no obligation to make
such request unless a Holder of at least $10,000,000 aggregate principal amount
of Securities provides the Company with reasonable evidence that the Trading
Price per $1,000 principal amount of the Securities would be less than ninety
five percent (95%) of the Conversion Value. 
Upon receipt of such evidence, the Company shall instruct the Bid
Solicitation Agent to determine the Trading Price per $1,000 principal amount
of the Securities beginning with the next Trading Day, and on each successive
Trading Day until the Trading Price per $1,000 principal amount of the
Securities is equal to or greater than ninety five percent (95%) of the
Conversion Value.  For purposes of this
paragraph, the “Conversion Value,” on a given Trading Day, means the product
of Closing Sale Price on such Trading Day and the Conversion Rate in effect on
such Trading Day.

 

(iii)             Conversion Based on
Redemption.  A Security, or portion
of a Security, which has been called for Redemption pursuant to paragraph 6
may be surrendered in integral multiples of $1,000 principal amount for
conversion into shares of Common Stock; provided, however, that such Security
or portion thereof may be surrendered for conversion pursuant to this paragraph
only until 5:00 p.m., New York City time, on the third (3rd) Business Day
immediately preceding the Redemption Date.

 

(iv)            Conversion
Upon Certain Distributions. 
If:

 

(A)            other than
pursuant to a stockholder rights plan, the Company distributes
to all holders of Common Stock rights or warrants entitling them to purchase
shares of Common Stock at a purchase price per share of Common Stock that is
less than the “current market price” (as defined in Section 10.06(g) of the
Indenture) per share of Common Stock on the declaration date of such
distribution; or

 

(B)              the
Company distributes to all holders of Common Stock cash or other assets, debt
securities or rights to purchase the Company’s securities, which distribution
has a value per share of Common Stock (as determined in good faith by the Board
of Directors whose determination shall be conclusive and described in a Board
Resolution) exceeding fifteen percent (15%) of the Closing Sale Price on the
Trading Day immediately preceding the date of declaration for such
distribution,

 

then, in each case, the Company shall notify, in writing, Holders of
such distribution at least twenty (20) days prior to the “ex” date for such
distribution, after which time Holders shall have the right to surrender their
Securities for conversion into shares of Common Stock at any time until the
earlier of the close of business on the Business Day immediately preceding such
“ex” date or the date of announcement by the Company that such distribution
shall not take place.  For purposes of
this paragraph, the term “ex” date 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 distribution.

 

A-8

 

(v)               Conversion Upon
Occurrence of Certain Corporate Transactions.  If the Company is a party to a consolidation, merger or binding
share exchange pursuant to which the Common Stock would be converted or
exchanged into cash, securities or other property, or a transfer, sale or
conveyance of all or substantially all of the property or business of the
Company, the Securities may be surrendered in integral multiples of $1,000
principal amount for conversion into shares of Common Stock at any time from
and after the date which is fifteen (15) days prior to the date announced by
the Company as the anticipated effective date of such transaction until the
date that is fifteen (15) days after the actual effective date of such
transaction, and, at the effective date of such transaction, the right to
convert a Security into shares of Common Stock will be deemed to have changed
into a right to convert it into the kind and amount of cash, securities or
other property which the Holder thereof would have received if such Holder had
converted such Holder’s Security immediately prior to the transaction, assuming
that such Holder would not have exercised any rights of election that such
Holder would have had as a holder of Common Stock to select a particular type
of consideration.

 

The initial
Conversion Rate is 14.0366 shares of Common Stock per $1,000 principal amount
of Securities, or an effective initial Conversion Price of approximately $71.24
per share, subject to adjustment in the event of certain circumstances as
specified in the Indenture.  The Company
will deliver a check in lieu of any fractional share.  On conversion, no payment or adjustment for any unpaid and
accrued interest on, or liquidated damages with respect to, the Securities will
be made.  If a Holder surrenders a
Security for conversion after the close of business on the record date for the
payment of an installment of interest and prior to the related interest payment
date, such Security, when surrendered for conversion, must be accompanied by
payment to the Conversion Agent on behalf of the Company of an amount equal to
the interest thereon which the registered Holder at the close of business on
such record date is to receive on the portion of such Security that is
converted, unless such Security has been called for Redemption as described in
the Indenture and except to the extent of any unpaid interest that is overdue
and shall have accrued prior to the interest payment date immediately preceding
the Conversion Date.

 

To convert a Security, a Holder
must (1) complete and sign the Conversion Notice, with appropriate signature
guarantee, on the back of the Security, (2) deliver the Security and completed
Conversion Notice to a Conversion Agent, (3) furnish appropriate endorsements
and transfer documents if required by the Registrar or Conversion Agent, (4)
pay the amount of interest, if any, the Holder must pay as provided in the last
sentence of the immediately preceding paragraph and (5) pay any transfer or
similar tax if required pursuant to the Indenture.  A Holder may convert a portion of a Security if the portion is
$1,000 principal amount or an integral multiple of $1,000 principal
amount.  A Security as to which a
Purchase Notice has been duly delivered electing that such Security be
repurchased by the Company pursuant to Section 3.08 or Section 3.09 of the
Indenture, as the case may be, may be converted pursuant to Article X
of the Indenture and this paragraph 10 only if such Purchase Notice
has been withdrawn in accordance with the Indenture prior to 5:00 p.m., New
York City time, on the third (3rd) Business Day prior to the applicable Option
Purchase Date or the Repurchase Date, as the case may be (or such later time as
may be required by law).

 

A-9

 

Any shares of Common Stock
issued upon conversion of a Security shall bear the Private Placement Legend
until after the second anniversary of the later of the Issue Date and the last
date on which the Company or any Affiliate was the owner of such shares or the
Security (or any predecessor security) from which such shares were converted (or
such shorter period of time as permitted by Rule 144(k) under the Securities
Act or any successor provision thereunder) (or such longer period of time as
may be required under the Securities Act or applicable state securities laws,
as set forth in an Opinion of Counsel, unless otherwise agreed by the Company
and the Holder thereof).

 

11.                                 Denominations,
Transfer, Exchange.  The
Securities are in registered form without coupons in denominations of $1,000
principal amount and integral multiples of $1,000 principal amount.  The transfer of Securities may be registered
and Securities may be exchanged as provided in the Indenture.  The Registrar may require a Holder, among
other things, to furnish appropriate endorsements and transfer documents.  No service charge shall be made for any such
registration of transfer or exchange, but the Company may require payment of a
sum sufficient to cover any tax or other governmental charge payable in
connection therewith.  The Registrar
need not exchange or register the transfer of any Security selected for
Redemption, in whole or in part, except the unredeemed portion of Securities to
be redeemed in part.  Also, it need not
exchange or register the transfer of any Securities for a period of fifteen
(15) days before the mailing of a notice of Redemption and in certain other
circumstances provided in the Indenture.

 

12.                                 Persons
Deemed Owners.  The
registered Holder of a Security may be treated as the owner of such Security
for all purposes.

 

13.                                 Merger or
Consolidation.  The Company
shall not consolidate with, or merge with or into, or sell, convey, transfer,
lease or otherwise dispose of all or substantially all of its properties and
assets to, another person, whether in a single or series of related
transactions, unless (i) such other person is a corporation organized under the
laws of the United States, any State thereof or the District of Columbia; (ii)
such person assumes by supplemental indenture all the obligations of the
Company, under the Securities and the Indenture; and (iii) immediately after
giving effect to the transaction, no Default or Event of Default shall exist.

 

14.                                 Amendments,
Supplements and Waivers. 
Subject to certain exceptions, the Indenture or the Securities may be
amended or supplemented with the consent of the Holders of at least a majority
in aggregate principal amount of the Securities then outstanding, and any existing
Default or Event of Default may be waived with the consent of the Holders of a
majority in aggregate principal amount of the Securities then outstanding.  In accordance with the terms of the
Indenture, without notice to or the consent of any Securityholder, the
Indenture or the Securities may be amended or supplemented to (i) comply with Sections 5.01
and 10.12 of the Indenture; (ii) make any changes or modifications
to the Indenture necessary in connection with the registration of the
Securities under the Securities Act pursuant to the Registration Rights
Agreement or the qualification of the Indenture under the TIA; (iii) secure the
obligations of the Company in respect of the Securities; (iv) add to covenants
of the Company described in the Indenture for the benefit of Securityholders;
(v) surrender any right or power conferred upon the Company; (vi) make
provisions with respect to adjustments to the Conversion Rate as required by
the Indenture or increase the Conversion Rate in accordance with the Indenture;
(vii) to add additional
Events of Default with respect to the Securities; and (viii) to cure any ambiguity or

 

A-10

 

correct or supplement any
provision in the Indenture that may be defective or inconsistent with any other
provision therein, or to make any other provisions with respect to matters or
questions arising thereunder that the Company and the Trustee deem necessary or
desirable and which shall not be inconsistent with the provisions of the
Indenture, provided that such amendment or supplement does not adversely affect
the interests of Holders in any material respect.

 

15.                                 Defaults and
Remedies.  Subject to the
provisions of the Indenture, an Event of Default includes the occurrence of any
of the following: (i) default in payment of principal, whether at maturity,
upon Redemption, on an Option Purchase Date with respect to a Repurchase at
Holder’s Option, on a Repurchase Date with respect to a Repurchase Upon
Repurchase Event or otherwise; (ii) default for thirty (30) days in payment of
interest or liquidated damages; (iii) failure by the Company for sixty (60)
days after notice is given, as specified in the Indenture, to it to comply with
any other term, covenant or agreement set forth in the Securities or the
Indenture; (iv) the acceleration of certain Indebtedness of the Company or any
of its Subsidiaries; and (v) certain events of bankruptcy or insolvency
involving the Company or its Significant Subsidiaries.  If any Event of Default occurs and is
continuing, the Trustee or the Holders of at least 25% in aggregate principal
amount of the Securities then outstanding may declare all the Securities to be
due and payable immediately, except as provided in the Indenture.  If an Event of Default specified in Section 6.01(v)
or (vi) of the Indenture with respect to the Company occurs, the
principal of and accrued interest on all the Securities shall ipso facto become
and be immediately due and payable without any declaration or other act on the
part of the Trustee or any Securityholder. 
Securityholders may not enforce the Indenture or the Securities except
as provided in the Indenture.  The
Trustee may require from the Holders indemnity reasonably satisfactory to the
Trustee before it enforces the Indenture or the Securities.  Subject to certain limitations, Holders of a
majority in principal amount of the Securities then outstanding may direct the
Trustee in its exercise of any trust or power. 
The Trustee may withhold from Securityholders notice of any continuing
Default or Event of Default (except a Default or Event of Default in payment)
if, and so long as it in good faith determines that, withholding the notice is
in the best interests of Securityholders. 
The Company must furnish an annual compliance certificate to the
Trustee.

 

16.                                 Registration
Rights.  The Holders are
entitled to registration rights as set forth in the Registration Rights
Agreement.  The Holders shall be entitled
to receive liquidated damages in certain circumstances, all as set forth in the
Registration Rights Agreement.

 

17.                                 Trustee
Dealings with the Company. 
The Trustee under the Indenture, or any banking institution serving as
successor Trustee thereunder, in its individual or any other capacity, may make
loans to, accept deposits from, and perform services for the Company or its
Affiliates, and may otherwise deal with the Company or its Affiliates, as if it
were not Trustee.

 

18.                                 No Recourse
Against Others.  No past,
present or future director, officer, employee or shareholder, as such, of the
Company shall 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. 
Each Securityholder by accepting a Security waives and releases all such
liability.  The waiver and release are
part of the consideration for the issue of the Securities.

 

A-11

 

19.                                 Authentication.  This Security shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating
agent.

 

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

 

THE COMPANY WILL FURNISH TO ANY
SECURITYHOLDER UPON WRITTEN REQUEST AND WITHOUT CHARGE A COPY OF THE
INDENTURE.  REQUESTS MAY BE MADE
TO:

 

Genzyme
Corporation

500 Kendall Street

Cambridge, MA 02142

 

A-12

 

	
  [FORM OF ASSIGNMENT]

  
	
   

  
	
  I or we
  assign to

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  PLEASE
  INSERT SOCIAL SECURITY OR

  OTHER IDENTIFYING NUMBER

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (please
  print or type name and address)

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  
	
  the within
  Security and all rights thereunder, and hereby irrevocably constitutes and
  appoints

  
	
   

  
	
   

  
	
  Attorney to
  transfer the Security on the books of the Company with full power of
  substitution in the premises.

  
	
   

  
	
  Dated:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  NOTICE:  The signature on this assignment must
  correspond with the name as it appears upon the face of the within Security
  in every particular without alteration or enlargement or any change
  whatsoever and be guaranteed by a guarantor institution participating in the
  Securities Transfer Agents Medallion Program or in such other guarantee
  program acceptable to the Trustee.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Signature
  Guarantee:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  In
  connection with any transfer of this Security occurring prior to the date
  which is the earlier of (i) the date of the declaration by the Commission of
  the effectiveness of a registration statement under the Securities Act of
  1933, as amended, covering resales of this Security (which effectiveness
  shall not have been suspended or terminated at the date of the transfer) and
  (ii) the Resale Restriction Termination Date, the undersigned confirms that
  it is making, and it has not utilized any general solicitation or general advertising
  in connection with, the transfer:

  
								

 

A-13

 

[Check One]

 

	
  (1)

  	
  o

  	
  to the
  Company or any Subsidiary thereof; or

  
	
   

  	
   

  	
   

  
	
  (2)

  	
  o

  	
  pursuant to
  and in compliance with Rule 144A under the Securities Act of 1933, as
  amended; or

  
	
   

  	
   

  	
   

  
	
  (3)

  	
  o

  	
  pursuant to
  the exemption from registration provided by Rule 144 under the Securities Act
  of 1933, as amended; or

  
	
   

  	
   

  	
   

  
	
  (4)

  	
  o

  	
  pursuant to
  the exemption from registration under the Securities Act of 1933, as amended,
  other than under Rule 144A or Rule 144;

  
	
   

  	
   

  	
   

  
	
  (5)

  	
  o

  	
  pursuant to
  an effective registration statement under the Securities Act of 1933, as
  amended.

  

 

and unless the box below is
checked, the undersigned confirms that such Security is not being transferred
to an “affiliate” of the Company as defined in Rule 144 under the Securities
Act of 1933, as amended (an “Affiliate”):

 

o              The transferee is an
Affiliate of the Company.  (If the
Security is transferred to an Affiliate, the restrictive legend must remain on
the Security for at least two (2) years following the date of the transfer.)

 

Unless one of
the items is checked, the Trustee will refuse to register any of the Securities
evidenced by this certificate in the name of any person other than the
registered Holder thereof; provided, however, that if item (3)
or (4) is checked, the Company or the Trustee may require, prior to registering
any such transfer of the Securities, in their sole discretion, such written
legal opinions, certifications and other information as the Trustee or the
Company have reasonably requested to confirm that such transfer is being made
pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act of 1933, as amended.

 

If none of the
foregoing items are checked, the Trustee or Registrar shall not be obligated to
register this Security in the name of any person other than the Holder hereof
unless and until the conditions to any such transfer of registration set forth
herein and in the Indenture shall have been satisfied.

 

	
  Dated:

  	
   

  	
   

  	
  Signed:

  	
   

  
	
   

  	
   

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

  
	
   

  	
   

  
	
  Signature
  Guarantee:

  	
   

  
							

 

A-14

 

TO BE COMPLETED BY PURCHASER IF
(2) ABOVE IS CHECKED

 

The
undersigned represents and warrants that it is purchasing this Security for its
own account or an account with respect to which it exercises sole investment
discretion and that it and any such account is a “qualified institutional
buyer” within the meaning of Rule 144A under the Securities Act of 1933, as
amended, and is aware that the sale to it is being made in reliance on Rule
144A and acknowledges that it has received such information regarding the
Company as the undersigned has requested pursuant to Rule 144A and acknowledges
that the transferor is relying upon the undersigned’s foregoing representations
in order to claim the exemption from registration provided by Rule 144A.

 

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  NOTICE:

  	
  To be
  executed by an executive officer

  

 

A-15

 

CONVERSION NOTICE

 

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

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  To convert
  only part of this Security, state the principal amount to be converted (must
  be in multiples of $1,000):

  
	
   

  
	
   

  
	
  $                  

  
	
   

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

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

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

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

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

  
	
   

  
	
   

  
	
  Date:

  	
   

  	
   

  	
  Signature(s):

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

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

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Signature(s)
  guaranteed by:

  	
   

  
	
   

  	
  (All
  signatures must be guaranteed by a guarantor institution participating in the
  Securities Transfer Agents Medallion Program or in such other guarantee
  program acceptable to the Trustee.)

  
												

 

A-16

 

PURCHASE NOTICE

 

	
  Certificate No. of
  Security:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Check the appropriate box:

  	
   

  
	
   

  	
   

  
	
  o

  	
  I elect to have the
  following principal amount of this Security purchased by the Company pursuant
  to Section 3.08
  of the Indenture:

  
	
   

  	
   

  
	
   

  	
   

  	
  $                                        

  	
   

  	
   

  
	
   

  	
   

  	
  (in an integral multiple
  of $1,000)

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  If you checked the above
  box, then check the appropriate boxes below:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1.

  	
  Check the box below
  corresponding to the date on which you elect to have the principal amount of
  this Security specified above purchased by the Company:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  o

  	
  December 1, 2008

  
	
   

  	
   

  	
   

  	
  o

  	
  December 1, 2013

  
	
   

  	
   

  	
   

  	
  o

  	
  December 1, 2018

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2.

  	
  In the event the Company
  elects to pay the Option Purchase Price, in whole or in part, in shares of
  Common Stock, but the Option Purchase Price is ultimately to be paid entirely
  in cash because any of the conditions to payment of the Option Purchase Price
  in shares of Common Stock is not satisfied before the Option Purchase Date,
  you elect:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  o

  	
  to withdraw this Purchase
  Notice as to the following principal amount of this Security:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
  (in an integral multiple
  of $1,000)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  or

  
	
   

  
	
   

  	
   

  	
   

  	
  o

  	
  to receive cash in respect
  of the Option Purchase Price for that portion of the principal amount of this
  Security which I have elected above to be purchased by the Company pursuant
  to Section 3.08
  of the Indenture.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  o

  	
  I elect to have the
  following principal amount of this Security purchased by the Company pursuant
  to Section 3.09
  of the Indenture:

  
	
   

  
	
   

  	
  $                                            

  	
   

  
	
   

  	
  (in an integral multiple
  of $1,000)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
  Signature(s):

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

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

  
	
   

  	
   

  	
   

  	
   

  
	
  Signature(s) guaranteed
  by:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (All signatures must be
  guaranteed by a guarantor institution participating in the Securities
  Transfer Agents Medallion Program or in such other guarantee program
  acceptable to the Trustee.)

  
																			

 

A-17

 

SCHEDULE A

 

SCHEDULE OF
EXCHANGES OF INTERESTS IN THE GLOBAL SECURITY(a)

 

The following
exchanges of a part of this Global Security for an interest in another Global
Security or for Securities in certificated form, have been made:

 

	
  Date of Exchange

  	
   

  	
  Amount of decrease

  in Principal amount

  of this Global

  Security

  	
   

  	
  Amount of increase

  in Principal amount

  of this Global

  Security

  	
   

  	
  Principal amount of

  this Global

  Security following 

  such decrease

  (or increase)

  	
   

  	
  Signature or 

  authorized signatory

  of Trustee or Note

  Custodian

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

(a) This is included in Global
Securities only.

 

A-18

 

EXHIBIT B-1

 

FORM OF PRIVATE PLACEMENT LEGEND

 

THIS SECURITY AND THE COMMON STOCK ISSUABLE UPON CONVERSION OF THIS
SECURITY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “SECURITIES ACT”), AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED EXCEPT IN ACCORDANCE WITH THE FOLLOWING SENTENCE.  BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL
INTEREST HEREIN, THE ACQUIRER:

 

(1)                                  REPRESENTS THAT IT AND ANY ACCOUNT FOR WHICH
IT IS ACTING IS A “QUALIFIED INSTITUTIONAL BUYER” (WITHIN THE MEANING OF RULE
144A UNDER THE SECURITIES ACT) AND THAT IT EXERCISES SOLE INVESTMENT DISCRETION
WITH RESPECT TO EACH SUCH ACCOUNT, AND

 

(2)                                  AGREES THAT IT WILL NOT DIRECTLY OR
INDIRECTLY ENGAGE IN ANY HEDGING TRANSACTIONS INVOLVING THIS SECURITY OR THE
COMMON STOCK ISSUABLE UPON CONVERSION OF THIS SECURITY UNLESS IN COMPLIANCE
WITH THE SECURITIES ACT, AND

 

(3)                                  AGREES FOR THE BENEFIT OF THE COMPANY THAT IT
WILL NOT OFFER, SELL, PLEDGE OR OTHERWISE TRANSFER THIS SECURITY OR ANY
BENEFICIAL INTEREST HEREIN, PRIOR TO THE DATE THAT IS THE LATER OF (X) TWO
YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON
WHICH THE COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS
SECURITY (OR ANY PREDECESSOR OF THIS SECURITY) OR SUCH SHORTER PERIOD OF TIME
AS PERMITTED BY RULE 144(K) UNDER THE SECURITIES ACT OR ANY SUCCESSOR PROVISION
THEREUNDER, AND (Y) SUCH LATER DATE, IF ANY, AS MAY BE REQUIRED BY APPLICABLE
LAW, EXCEPT ONLY

 

(A)                               TO THE COMPANY OR ANY SUBSIDIARY THEREOF,

 

(B)                                 PURSUANT TO A REGISTRATION STATEMENT WHICH IS
EFFECTIVE UNDER THE SECURITIES ACT,

 

(C)                                 TO A QUALIFIED INSTITUTIONAL BUYER IN
COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, OR

 

(D)                                PURSUANT TO THE SAFE HARBOR FROM REGISTRATION PROVIDED BY RULE 144
UNDER THE SECURITIES ACT OR ANY AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT.

 

PRIOR TO THE REGISTRATION OF ANY TRANSFER IN
ACCORDANCE WITH (3)(C) ABOVE, A DULY COMPLETED AND SIGNED CERTIFICATE (THE FORM
OF WHICH MAY BE OBTAINED FROM THE TRUSTEE) MUST BE DELIVERED TO THE
TRUSTEE.  PRIOR TO THE REGISTRATION OF
ANY TRANSFER IN ACCORDANCE WITH (3)(D) ABOVE, THE COMPANY AND THE TRUSTEE
RESERVE THE RIGHT TO REQUIRE THE DELIVERY OF SUCH LEGAL OPINIONS,
CERTIFICATIONS OR OTHER EVIDENCE AS MAY REASONABLY BE REQUIRED IN ORDER TO
DETERMINE THAT THE PROPOSED TRANSFER IS BEING MADE IN COMPLIANCE WITH THE
SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS.  NO REPRESENTATION IS MADE AS TO THE AVAILABILITY OF ANY EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.

 

B-1-1

 

EXHIBIT B-2

 

FORM OF LEGEND FOR GLOBAL SECURITY

 

Any Global Security
authenticated and delivered hereunder shall bear a legend (which would be in
addition to any other legends required in the case of a Restricted Security) in
substantially the following form:

 

THIS SECURITY IS A GLOBAL
SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS
REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE OF A DEPOSITARY OR A
SUCCESSOR DEPOSITARY.  THIS SECURITY IS
NOT EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN
THE DEPOSITARY OR ITS NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN
THE INDENTURE, AND NO TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER OF THIS
SECURITY AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A
NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE
DEPOSITARY) MAY BE REGISTERED EXCEPT IN THE LIMITED CIRCUMSTANCES
DESCRIBED IN THE INDENTURE.

 

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

 

TRANSFERS OF THIS GLOBAL
SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES
OF CEDE & CO. 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 SECTION 2.16 OF THE
INDENTURE.

 

B-2-1

 

EXHIBIT C

 

Form of Notice of Transfer Pursuant to Registration Statement

 

Genzyme
Corporation

One Kendall Square

Cambridge, MA 02139

Attention: General Counsel

 

U.S. Bank National Association

One Federal Street, Third Floor

Boston, MA 02110

Attn: Gerald Wheeler, Vice President

 

Re:                               Genzyme Corporation (the
“Company”)
1.25% Convertible Senior Notes due 2023 (the “Securities”)

 

Ladies and Gentlemen:

 

Please be advised that
                     
has transferred
$                 
aggregate principal amount of the Securities or
             
shares of the Common Stock, designated as Genzyme General Stock, $0.01 par
value per share, of the Company issuable on conversion of the Securities (“Stock”)
pursuant to an effective Shelf Registration Statement on Form S-3 (File No.
333-             ).

 

We hereby certify that the
prospectus delivery requirements, if any, of the Securities Act of 1933 as amended,
have been satisfied with respect to the transfer described above and that the
above-named beneficial owner of the Securities or Stock is named as a “Selling
Security Holder” in the Prospectus dated
               ,
or in amendments or supplements thereto, and that the aggregate principal
amount of the Securities, or number of shares of Stock transferred are [a
portion of] the Securities or Stock listed in such Prospectus, as amended or
supplemented, opposite such owner’s name.

 

 

	
   

  	
  Very truly
  yours,

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (Name)

  	
   

  

 

C-1

 

EXHIBIT D

 

Form of Opinion of Counsel in Connection with Registration of
Securities

 

U.S. Bank National Association

One Federal Street, Third Floor

Boston, MA 02110

Attn: Gerald Wheeler, Vice President

 

Re:                               Genzyme Corporation (the
“Company”)
1.25% Convertible Senior Notes due 2023 (the “Securities”)

 

Ladies and Gentlemen:

 

Reference is made to the
Securities issued pursuant to a certain Indenture dated as of December 9,
2003 by and between the Company and U.S. Bank National Association, as trustee
(the “Trustee”).  The Company issued $600,000,000 principal
amount of Securities on December 9, 2003 [and an additional
$               
on                    
[IF THE INITIAL PURCHASERS’ OPTION IS EXERCISED]] in transactions exempt from
registration under the Securities Act of 1933, as amended (the “Securities
Act”).  The Company has filed
with the Securities and Exchange Commission (the “SEC”) a registration
statement on Form S-3 (File No. 333-              )
(the “Registration
Statement”) relating to the registration under the Securities Act of
the resale of
$              
principal amount of the Securities and the shares of Common Stock of the
Company (the “Shares”) issuable upon conversion of such Securities.  The Registration Statement was declared
effective by order of the SEC dated
                 .

 

We have acted as counsel for
the Company in connection with the issuance of the Securities and the
preparation and filing of the Registration Statement and are familiar with the
Securities, the Indenture, the Registration Statement, the above-mentioned SEC
order and such other documents as are necessary to render this opinion.

 

Based on the foregoing, it is
our opinion that (1) the Registration Statement has become effective under
the Securities Act and, to our knowledge, no stop order suspending the
effectiveness of the Registration Statement has been issued, (2) assuming
that the Securities covered by the Registration Statement and the Shares
issuable upon conversion of such Securities are sold by the Holder or Holders
identified in the Registration Statement in a manner specified in the
Registration Statement, such sale or sales of the Securities and Shares
issuable upon conversion of the Securities will have been duly registered under
the Securities Act and (3) the Indenture has been duly qualified
under the Trust Indenture Act of 1939, as amended.

 

Yours truly,

 

 

D-1

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00059-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00059-of-00352.parquet"}]]