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EXHIBIT 10.1    
    

July 12,
2004 

Via Facsimile to 954-236-8406 and Federal Express  

Robert
J. Brown

2961 West Lake Vista Drive

Davie, FL 33328 

Dear
Bob: 

I
am pleased on behalf of Serologicals Corporation (the "Corporation") to offer you ("you" or the "Executive") employment (the "Employment") on the terms set forth herein (the "Offer"). 

	1.
	Position, Duties and Responsibilities.

	a.
	You
shall serve as the Vice President, Corporate Development and shall be responsible for the duties as agreed between you and the President and Chief Executive Officer, which will be
outlined in a job description to be finalized shortly after your arrival. You shall report to the President and Chief Executive Officer of the Corporation and shall be an officer of the Corporation.
You shall also be a member of the Corporation's Operating Committee.

	b.
	You
will devote all your business time and attention to the business and affairs of the Corporation and its subsidiaries consistent with your position. Nothing herein, however, shall
preclude you from engaging in charitable and community affairs, or giving attention to your investments provided that such activities do not interfere with the performance of your duties and
responsibilities enumerated herein.

	c.
	Except
as otherwise specifically stated herein, you shall be subject to all of the requirements and provisions described in the Corporation's employee handbook, as it may be amended
from time-to-time.

	d.
	Following
any termination of your employment, upon the request of the Corporation, you shall reasonably cooperate with the Corporation in all matters relating to the winding up of
pending work on behalf of the Corporation and the orderly transfer of work to other employees of the Corporation. You shall also reasonably cooperate in the defense of any action brought by any third
party against the Corporation that relates in any way to your acts or omissions while employed by the Corporation. The Corporation shall reimburse you for your reasonable
out-of-pocket costs, if any, as permitted by law, incurred in cooperating with the Corporation.

	2.
	Term.

        Your
Employment under these terms shall commence hereunder as soon as possible but not later than August 1, 2004 (the actual date of commencement being referred to herein as the
"Effective Date") and continue for successive one (1) year periods, unless otherwise terminated pursuant to the provisions hereof. 

	3.
	Compensation and Related Matters.

	a.
	Base Salary. You shall be paid a base salary (the "Base Salary") equal to two hundred fifty thousand dollars ($250,000) per year. The
Base Salary shall be payable to you in the manner and on the date(s) on which the Corporation pays its other executives, but in no event less frequently than monthly. Based upon performance, you shall
be eligible for a salary review on April 1, 2005 and annually thereafter.

	b.
	Special Allowance. To compensate you for miscellaneous expenses associated with your employment, the Corporation will pay you $10,000
(grossed up for taxes) as a one-time 

 

payment
to reimburse you for such expenses. This Special Allowance will be paid within thirty days of the Effective Date. 

	c.
	Incentive Compensation. You shall be entitled to an annual bonus in accordance with and subject to your achievement of the Critical
Success Factors, plus other objectives, to be developed and mutually agreed upon by you and the President and Chief Executive Officer, subject to the Board of Directors authorizing the payment of such
bonus for the given year. You shall also be eligible to participate in such bonus and incentive compensation plans of the Corporation, if any, in which other Corporate Vice President-level employees
of the Corporation are generally eligible to participate, as the Corporation's Board of Directors ("Board") or a Committee thereof shall determine from time-to-time in its sole
discretion, subject to and in accordance with the terms and provisions of such plans. It is understood that should you commence Employment under these terms, you will be eligible for a
pro-rated bonus for the year 2004 calculated from the Effective Date to December 31, 2004.

	d.
	Employee Benefit Programs. You shall be eligible to participate in the employee benefit programs (subject to their respective terms) now
provided or as may hereinafter be provided by the Corporation to its executives. Current benefit programs include:

	•
	Group
Health Insurance

	•
	Executive
Benefits Program

•    Life Insurance

•    Long-term Disability

	•
	Supplemental
and Dependent Supplemental Life Insurance

	•
	Short-term
Disability Insurance

	•
	Serologicals
Corporation's Employees Retirement Plan—401(k)

	•
	Flexible
Spending Account (Medical and Dependent Care)

	•
	Serologicals
Corporation's Employee Stock Purchase Plan

	e.
	Stock Options. On the Effective Date you will be granted a non-qualified employee stock option under the Corporation's Stock
Incentive Plan (the "Stock Incentive Plan") to purchase forty-eight thousand (48,000) shares of the Corporation's $.01 par value common stock at an initial exercise price equal to the fair market
value of such stock on the Effective Date ("Options"). The Options shall have a term of six (6) years and, so long as you are then employed by the Corporation, the right to exercise the Options
shall vest and be fully exercisable at the rate of twenty-five percent (25%) per year commencing on the first anniversary of the Effective Date. Such Options shall be issued pursuant to a
stock option agreement entered into by you and the Corporation and shall be subject to all the other terms and conditions contained in the Stock Incentive Plan, the provisions of which shall be
determined in the sole discretion of the Board or a committee thereof. You acknowledge that the Corporation and you understand that this stock option grant is anticipated to be the only such grant for
a period of two (2) years from the Effective Date.

	f.
	Reimbursement of Expenses. It is contemplated that in connection with your Employment hereunder, you may be required to incur business,
entertainment and travel expenses. The Corporation agrees to promptly reimburse you in full for all reasonable out-of-pocket business, entertainment and other related expenses
(including all expenses of travel and living expenses while away from home on business or at the request of, and in service of, the Corporation) incurred or expended by you incident to the performance
of your duties hereunder, provided that you properly account for such expenses in accordance with the 

2

 

policies
and procedures established by the Board and applicable to the executives of the Corporation. 

	g.
	Paid Time Off. You shall be entitled, in each calendar year of your Employment, to the number of paid vacation days determined by the
Corporation from time-to-time to be appropriate for its executives, but in no event less than four (4) weeks in any such year during your Employment
(pro-rated, as necessary, for partial calendar years during your Employment). You may take your allotted vacation days at such times as are mutually convenient for the Corporation and you,
consistent with the Corporation's vacation policy in effect with respect to its executives. You shall also be entitled to all paid holidays given by the Corporation to its executives.

	4.
	Termination.

	a.
	Disability of the Executive. In the event of your incapacity or inability to perform your services as contemplated herein for an
aggregate of ninety (90) days during any twelve (12) month period due to the fact that your physical or mental health shall have become impaired so as to make it impossible in the
judgment of the Corporation for you to perform the duties and responsibilities contemplated for you hereunder, the Corporation shall have the right to declare, upon two (2) weeks prior written
notice rendered to you, a disability termination, whereupon you shall receive (if you are entitled thereto) the short and/or long-term disability benefits provided by the Corporation. In
the event you have commenced receiving benefits under the Corporation's disability plans, until termination of your employment under this Section 4(a), the Corporation shall not be obligated to
pay to you with regard to Base Salary an amount greater than the difference between your Base Salary then in effect and any such disability benefits you are then receiving.

	b.
	Death of the Executive. In the event you die during your Employment hereunder, your Employment shall automatically terminate without
notice on the date of your death, except that your estate shall receive the death benefits, if any, provided by the Corporation.

	c.
	Termination by the Corporation for Cause. Nothing herein shall prevent the Corporation from terminating your Employment for Cause (as
defined below). From and after the date of such termination, you shall no longer be entitled to receive the Base Salary or any other compensation which would have otherwise been due and all Options
shall terminate immediately. Any rights and benefits that you may have in respect to any other compensation or any employee benefit plans or programs of the Corporation shall be determined in
accordance with the terms of such other compensation arrangements, plans or programs, and in any event, you shall have no rights or benefits under any arrangement, plan or program unless such
arrangement, plan or program is in writing and you are specified as a participant therein. The term "for Cause", as used herein, shall mean (i) an act of dishonesty causing harm to the
Corporation or any subsidiary; (ii) the knowing disclosure of confidential information relating to the Corporation's or any subsidiary's business; (iii) habitual drunkenness or narcotic
drug addiction; (iv) conviction of, or a plea of nolo contendere with respect to, a felony; (v) the willful refusal to perform, or the
gross neglect of, the duties assigned to the Executive; (vi) the Executive's willful breach of any law that, directly or indirectly, affects the Corporation or any subsidiary; (vii) the
Executive's material breach of his duties following a Change in Control that do not differ in any material respect from the Executive's duties and responsibilities during the 90-day period
immediately prior to such Change in Control (other than as a result of incapacity due to physical or mental illness), which is demonstrably willful and deliberate on the Executive's part, which is
committed in bad faith or without reasonable belief that such breach is in the best interests of the Corporation and which is not remedied in a reasonable period after receipt of written notice 

3

 

from
the Corporation specifying such breach. Termination of employment pursuant to this Section 4(c) shall be made to the Executive by, and be effective upon, written notice from the
President/C.E.O. or the Board. 

	d.
	All Other Terminations by the Corporation. Notwithstanding the foregoing, the Corporation may terminate your employment at any time. If
your employment is terminated for any reason other than "for Cause", death or disability, you shall continue to receive your current Base Salary for a period of twelve (12) months from the date
of such termination. In addition, you shall be eligible to elect COBRA coverage and only pay an amount equal to the employee contribution typically paid for your type of medical, dental and vision
coverage. The Corporation will pay the remaining costs associated with COBRA coverage for the 12-month period. After twelve months, you can continue COBRA coverage at your total cost.

	5.
	Nondisclosure. 

        You
acknowledge and agree that, during your employment by the Corporation hereunder, you have or will come to have knowledge and information with respect to trade secrets or confidential
or secret plans, projects, materials, business methods, operations, techniques, customers, employees, donors, products, processes, financial conditions, policies and accounts of the Corporation with
respect to the
business of the Corporation ("Confidential Information.") You agree that you will not at any time divulge, furnish or make accessible to anyone (other than in the regular course of your performance of
services for the benefit of the Corporation, its successors or assigns) any Confidential Information. Notwithstanding the foregoing, Confidential Information shall not include any information which
(i) is known generally to the public (other than as a result of unauthorized disclosure), (ii) was available to you on a non-confidential basis prior to its disclosure to you
by the Corporation or (iii) is required to be disclosed pursuant to the valid order of a governmental agency or a judicial court of competent jurisdiction, in which case you shall give prompt
written notice to the Corporation of such requirement so that the Corporation may take such action as it deems appropriate. 

	6.
	Non-Compete and Non-Solicitation. 

        As
a material inducement to the Corporation to enter into this letter, you agree that at all times during your Employment and for a period of twelve (12) months after the
termination of your Employment, you will not (i) act in a capacity similar to that in which you shall have served in the Corporation for any Competing Business or serve in a capacity in any
such Competing Business that would entail your functioning as a sales and marketing executive for a Competing Business, or (ii) in any way, directly or indirectly, compete with the business of
the Corporation, solicit, divert, or take away or attempt to solicit, divert, or take away customers of, the business of, or any of the donors of, the Corporation that dealt with the Corporation
during your Employment. Competing Business means another business engaged in the business(es) engaged in by the Corporation at any time within one year of or at the time of your termination. 

        You
agree that during your Employment and for a period of twelve (12) months after the termination for any reason of your Employment, you will not within the United States of
America, directly, or indirectly through any means, including a business entity in which you have an ownership interest, request or induce any other employee of the Corporation or its affiliates or
any donor to the Corporation or its affiliates to terminate their relationship with the Corporation or its affiliates and enter into a similar relationship with another business entity engaged in a
business similar to the Corporation's. 

	7.
	Executive Creation and Ideas.

	a.
	You
will maintain current and adequate written records on the development of, and disclose to the Corporation all Creations (as herein defined). "Creations" shall mean all ideas,
potential marketing and sales relationships, inventions, copyrightable expression, research, 

4

 

plans
for products or services, marketing plans, reports, strategies, processes, computer software (including, without limitation, source code), computer programs, original works of authorship,
characters, know-how, trade secrets, information, data, developments, discoveries, improvements, modifications, technology, algorithms, database schema, designs and drawings, whether or
not subject to patent or copyright protection, made, conceived, expressed, developed, or actually or constructively reduced to practice by you solely or jointly with others during your employment with
the Corporation, which refer to, are suggested by, or result from any work which you may perform during your employment, or from any information obtained from the Corporation or any affiliate of the
Corporation. "Creations,' however, shall not include the general business planning concepts, strategies or processes, including, but not limited to, those utilized by you in any prior employment. 

	b.
	The
Creations shall be the exclusive property of the Corporation, and you acknowledge that all of said Creations shall be considered as "work made for hire" belonging to the
Corporation. To the extent that any such Creations, under applicable law, may not be considered work made for hire by you for the Corporation, you hereby agree to assign and, upon its creation,
automatically and irrevocably assign to the Corporation, without any further consideration, all right, title and interest in and to such materials, including, without limitation, any copyright, other
intellectual property rights, moral rights, all contract and licensing rights, and all claims and causes of action of any kind with respect to such materials. The Corporation shall have the exclusive
right to use the Creations, whether original or derivative, for all purposes without additional compensation to you. At the Corporation's expense, you will reasonably assist the Corporation in every
reasonably proper way to perfect the Corporation's rights in the Creations and to protect the Creations throughout the world, including, without limitation, executing in favor of the Corporation or
any designee(s) of the Corporation patent, copyright, and other applications and assignments relating to the Creations.

	c.
	Should
the Corporation be unable to secure your signature on any document necessary to apply for, prosecute, obtain, or enforce any patent, copyright, or other right or protection
relating to any Creation, whether due to your mental or physical incapacity or any other cause, you hereby irrevocably designate and appoint the Corporation and each of its duly authorized officers
and agents as your agent and attorney in fact, to act for and in your behalf and stead and to execute and file any such document, and to do all other lawfully permitted acts to further the
prosecution, issuance, and enforcement of patents, copyrights, or other rights or protections with the same force and effect as if executed and delivered by you.

	d.
	Because
of the difficulty of establishing when any idea, process or invention is first conceived or developed by you, or whether it results from access to Confidential Information or
the Corporation's equipment, supplies, facilities, and data (collectively, "Corporation Information"), you agree that any idea, invention, research, plan for products or services, marketing plan,
computer software (including, without limitation, source code), computer program, original work of authorship, character, know-how, trade secret, information, data, developments,
discoveries, technology, algorithm, design, patent or copyright, or any improvement, rights, or claims (an "Idea") related to the foregoing, which refer to, are suggested by, or result from any work
which you performed during your employment with the Corporation or from any Corporation Information, shall be presumed to be a Creation if it is conceived, developed, used, sold, exploited or reduced
to practice by you or with your aid within one (1) year after termination of employment. This paragraph, however, shall not apply to anything that is specifically excepted from the definition
of "Creations" in the last sentence of Section 7(a). You can rebut the above presumption if you prove that the idea, process or invention (a) was first conceived or developed after
termination of employment, (b) was 

5

 

conceived
or developed entirely on your own time without using any Corporation Information, and (c) did not result from any work performed by you for the Corporation. 

	8.
	Injunctive Relief/Survival. 

        You
agree that any breach of Section 5, 6 or 7 will cause irreparable damage to the Corporation and that, in the event of such breach, the Corporation will have, in addition to
any and all remedies of law, including rights which the Corporation may have to damages, the right to equitable relief including, as appropriate, all injunctive relief or specific performance or other
equitable relief. You understand and agree that the rights and obligations set forth in Sections 5 through 10 of this Agreement shall survive the termination or expiration of this Agreement. 

	9.
	Corporation Resources. 

        You
may not use any of the Corporation's equipment for personal purposes without written permission from the Corporation. You may not give access to the Corporation's offices or files to
any person not in the employ of the Corporation without written permission of the Corporation. 

	10.
	Miscellaneous.

	a.
	General. This Agreement supersedes and replaces any existing agreement between the Executive and the Corporation relating generally to
the same subject matter, and may be modified only in a writing signed by the parties hereto. Failure to enforce any provision of the Agreement shall not constitute a waiver of any term herein. The
Executive agrees that he will not assign, transfer, or otherwise dispose of, whether voluntarily or involuntarily, or by operation of law, any rights or obligations under this Agreement. Any purported
assignment, transfer, or disposition shall be null and void. Nothing in this Agreement shall prevent the consolidation of the Corporation with, or its merger into, any other corporation, or the sale
by the Corporation of all or substantially all of its properties or assets, or the assignment by the Corporation of this Agreement and the performance of its obligations hereunder. Subject to the
foregoing, this Agreement shall be binding upon and shall inure to the benefit of the parties and their respective heirs, legal representatives, successors, and permitted assigns, and shall not
benefit any person or entity other than those enumerated above.

	b.
	Governing Law. This letter is to be governed by and interpreted in accordance with the laws of the State of Georgia applicable to
agreements made and to be performed within that State except as provided herein.

	c.
	No Attorney Provided. The Corporation advises you that it is not providing legal advice in connection with your acceptance and execution
hereof. You acknowledge (a) that you have consulted with or have had the opportunity to consult with independent counsel of your own choice concerning this Agreement and have been advised to do
so by the Corporation, and (b) that you have read and understand the Agreement, are fully aware of its legal effect, and have entered into it freely based on your own judgment.

	d.
	Affiliate. References to the "Corporation" hereunder shall include "affiliates" thereof, as such term is defined in Rule 405
under the Securities Act of 1933, as amended. The Corporation shall have the right to designate as your employer hereunder any affiliate of which the Executive shall have significant operating or
managerial responsibility or any other affiliate to which the Executive agrees.

	e.
	Severability. If any provision of this letter shall be determined to be invalid, illegal or unenforceable in whole or in part, all other
provisions hereof shall remain in full force and effect to the fullest extent permitted by law. 

6

 

	f.
	Expiration. This Offer will expire at 5:00 p.m. Eastern Daylight Savings Time on July 15, 2004 unless you execute this
letter and return it to Robert P. Collins, Vice President, Human Resources prior to that time. Please fax the signature page only to 678-728-2138 and return one copy of the
entire agreement using the enclosed FedEx envelope. The other copy of the agreement is for your records.

	g.
	Contingencies. This Offer is contingent upon satisfactory drug screen results, pre-employment background check and
references. 

Please
indicate your acceptance of this Offer by signing in the space provided below. 

Sincerely,

SEROLOGICALS
CORPORATION 

	By:	 	/s/  DAVID A. DODD      
 David A. Dodd

President and Chief Executive Officer	 	 

ACKNOWLEDGED
AND AGREED this 12 day of July, 2004. 

	 	 	/s/  ROBERT J. BROWN      
 Robert J. Brown

7

QuickLinks

EXHIBIT 10.1Exhibit
4.5

 

 

 

IMCLONE SYSTEMS INCORPORATED

 

and

 

THE BANK OF NEW YORK

as Trustee

 

INDENTURE

 

Dated as of

May 7, 2004

 

13/8% Convertible Notes due 2024

 

 

 

 

 

Reconciliation and Tie
Between the Trust Indenture Act of 1939 and Indenture, dated as of
May 7, 2004, between ImClone Systems Incorporated  and The Bank of New York  as Trustee.

 

	
  TRUST INDENTURE ACT SECTION

  	
   

  	
  INDENTURE SECTION

  	
   

  
	
  Section 310(a)(1)

  	
   

  	
  7.9

  	
   

  
	
            (a)(2)

  	
   

  	
  7.9

  	
   

  
	
            (a)(3)

  	
   

  	
  N.A.

  	
   

  
	
            (a)(4)

  	
   

  	
  N.A.

  	
   

  
	
            (a)(5)

  	
   

  	
  7.9

  	
   

  
	
            (b)

  	
   

  	
  7.8; 7.9; 7.10;
  7.11

  	
   

  
	
  Section 311(a)

  	
   

  	
  7.13

  	
   

  
	
            (b)

  	
   

  	
  7.13

  	
   

  
	
            (b)(2)

  	
   

  	
  7.13

  	
   

  
	
  Section 312(a)

  	
   

  	
  5.1; 5.2(a

  	
  )

  
	
            (b)

  	
   

  	
  5.2(b

  	
  )

  
	
            (c)

  	
   

  	
  5.2(c

  	
  )

  
	
  Section 313(a)

  	
   

  	
  5.3(a

  	
  )

  
	
            (b)

  	
   

  	
  5.3(a

  	
  )

  
	
            (c)

  	
   

  	
  5.3(a

  	
  )

  
	
            (d)

  	
   

  	
  5.3(b

  	
  )

  
	
  Section 314(a)

  	
   

  	
  5.4

  	
   

  
	
            (b)

  	
   

  	
  N.A.

  	
   

  
	
            (c)(1)

  	
   

  	
  15.5

  	
   

  
	
            (c)(2)

  	
   

  	
  15.5

  	
   

  
	
            (c)(3)

  	
   

  	
  N.A.

  	
   

  
	
            (d)

  	
   

  	
  N.A.

  	
   

  
	
            (e)

  	
   

  	
  15.5

  	
   

  
	
  Section 315(a)

  	
   

  	
  7.1

  	
   

  
	
            (b)

  	
   

  	
  6.8

  	
   

  
	
            (c)

  	
   

  	
  7.1

  	
   

  
	
            (d)

  	
   

  	
  7.1

  	
   

  
	
            (d)(1)

  	
   

  	
  7.1(a

  	
  )

  
	
            (d)(2)

  	
   

  	
  7.1(b

  	
  )

  
	
            (d)(3)

  	
   

  	
  7.1(c

  	
  )

  
	
            (e)

  	
   

  	
  6.9

  	
   

  
	
  Section 316(a)

  	
   

  	
  6.7

  	
   

  
	
            (a)(1)(A)

  	
   

  	
  6.7

  	
   

  
	
            (a)(1)(B)

  	
   

  	
  6.7

  	
   

  
	
            (a)(2)

  	
   

  	
  NA.

  	
   

  
	
            (b)

  	
   

  	
  6.4

  	
   

  
	
  Section 317(a)(1)

  	
   

  	
  6.5

  	
   

  
	
            (a)(2)

  	
   

  	
  6.5

  	
   

  
	
            (b)

  	
   

  	
  4.4

  	
   

  
	
  Section 318(a)

  	
   

  	
  15.7

  	
   

  

 

*      Note: 
This reconciliation and tie shall not, for any purpose, be deemed to be
a part of the Indenture.

 

**   Note:  N.A. means Not Applicable.

 

 

i

 

TABLE OF
CONTENTS

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  TABLE OF
  CONTENTS

  	
  i

  
	
  ARTICLE ONE DEFINITIONS

  	
  1

  
	
       Section 1.1.

  	
  Definitions

  	
  1

  
	
  ARTICLE TWO ISSUE, DESCRIPTION,
  EXECUTION, REGISTRATION AND EXCHANGE OF NOTES

  	
  7

  
	
       Section 2.1.

  	
  Designation
  Amount and Issue of Notes

  	
  7

  
	
       Section 2.2.

  	
  Form of Notes

  	
  7

  
	
       Section 2.3.

  	
  Date and
  Denomination of Notes; Payments of Interest

  	
  7

  
	
       Section 2.4.

  	
  Execution of
  Notes

  	
  9

  
	
       Section 2.5.

  	
  Exchange and Registration of Transfer of Notes; Restrictions on
  Transfer; Depositary

  	
  9

  
	
       Section 2.6.

  	
  Mutilated,
  Destroyed, Lost or Stolen Notes

  	
  14

  
	
       Section 2.7.

  	
  Temporary Notes

  	
  15

  
	
       Section 2.8.

  	
  Cancellation of
  Notes Paid, Etc

  	
  16

  
	
       Section 2.9.

  	
  CUSIP Numbers

  	
  16

  
	
       Section 2.10

  	
  Issuance of
  Additional Notes

  	
  16

  
	
  ARTICLE THREE
  REDEMPTION AND REPURCHASE OF NOTES

  	
  16

  
	
       Section
  3.1.

  	
  Optional Redemption by
  the Company

  	
  16

  
	
       Section
  3.2.

  	
  Notice of Redemptions;
  Selection of Notes

  	
  17

  
	
       Section
  3.3.

  	
  Payment of Notes Called
  for Redemption

  	
  18

  
	
       Section
  3.4.

  	
  Conversion Arrangement
  on Call for Redemption

  	
  19

  
	
       Section
  3.5.

  	
  Redemption at Option
  of Holders

  	
  19

  
	
       Section
  3.6.

  	
  Repurchase of Notes by
  the Company at Option of the Holder

  	
  22

  
	
       Section
  3.7.

  	
  Company Repurchase
  Notice.

  	
  23

  
	
       Section
  3.8.

  	
  Effect of Repurchase
  Notice

  	
  24

  
	
       Section
  3.9.

  	
  Deposit of Repurchase
  Price

  	
  24

  
	
       Section
  3.10.

  	
  Notes Repurchased in
  Part

  	
  25

  
	
       Section
  3.11.

  	
  Repayment to the
  Company.

  	
  25

  
	
  ARTICLE FOUR
  PARTICULAR COVENANTS OF THE COMPANY

  	
  25

  
	
       Section
  4.1.

  	
  Payment of Principal
  and Interest

  	
  25

  
	
       Section
  4.2.

  	
  Maintenance of Office
  or Agency

  	
  25

  
	
       Section
  4.3.

  	
  Appointments to Fill
  Vacancies in Trustee’s Office

  	
  26

  
	
       Section
  4.4.

  	
  Provisions as to
  Paying Agent

  	
  26

  
	
       Section
  4.5.

  	
  Existence

  	
  27

  
	
       Section
  4.6.

  	
  Maintenance of
  Properties

  	
  27

  
	
       Section
  4.7.

  	
  Payment of Taxes and
  Other Claims

  	
  27

  
	
       Section
  4.8.

  	
  Rule 144A Information
  Requirement

  	
  27

  

 

ii

 

	
       Section
  4.9.

  	
  Stay, Extension and
  Usury Laws

  	
  28

  
	
       Section
  4.10.

  	
  Compliance Certificate

  	
  28

  
	
       Section
  4.11.

  	
  Additional Interest
  Notice

  	
  28

  
	
  ARTICLE FIVE NOTEHOLDERS’ LISTS AND
  REPORTS BY THE COMPANY AND THE TRUSTEE

  	
  29

  
	
       Section
  5.1.

  	
  Noteholders’ Lists

  	
  29

  
	
       Section
  5.2.

  	
  Preservation and
  Disclosure of Lists

  	
  29

  
	
       Section
  5.3.

  	
  Reports by Trustee

  	
  29

  
	
       Section
  5.4.

  	
  Reports by Company

  	
  29

  
	
  ARTICLE SIX REMEDIES OF THE TRUSTEE AND
  NOTEHOLDERS ON AN EVENT OF DEFAULT

  	
  30

  
	
       Section
  6.1.

  	
  Events of Default

  	
  30

  
	
       Section
  6.2.

  	
  Payments of Notes on
  Default; Suit Therefor

  	
  31

  
	
       Section
  6.3.

  	
  Application of Monies
  Collected by Trustee

  	
  33

  
	
       Section
  6.4.

  	
  Proceedings by
  Noteholder

  	
  33

  
	
       Section
  6.5.

  	
  Proceedings by Trustee

  	
  34

  
	
       Section
  6.6.

  	
  Remedies Cumulative
  and Continuing

  	
  34

  
	
       Section
  6.7.

  	
  Direction of
  Proceedings and Waiver of Defaults by Majority of Noteholders

  	
  34

  
	
       Section
  6.8.

  	
  Notice of Defaults

  	
  35

  
	
       Section
  6.9.

  	
  Undertaking to Pay
  Costs

  	
  35

  
	
  ARTICLE SEVEN THE TRUSTEE

  	
  35

  
	
       Section
  7.1.

  	
  Duties and
  Responsibilities of Trustee

  	
  35

  
	
       Section 7.2.

  	
  Reliance on Documents, Opinions, Etc

  	
  36

  
	
       Section
  7.3.

  	
  No Responsibility for
  Recitals, Etc

  	
  37

  
	
       Section
  7.4.

  	
  Trustee,
  Paying Agents, Conversion Agents or Registrar May Own Notes

  	
  37

  
	
       Section
  7.5.

  	
  Monies to be Held in
  Trust

  	
  37

  
	
       Section
  7.6.

  	
  Compensation and
  Expenses of Trustee

  	
  38

  
	
       Section
  7.7.

  	
  Officers’ Certificate
  as Evidence

  	
  38

  
	
       Section
  7.8.

  	
  Conflicting Interests of
  Trustee

  	
  38

  
	
       Section
  7.9.

  	
  Eligibility of Trustee

  	
  38

  
	
       Section
  7.10.

  	
  Resignation or Removal
  of Trustee

  	
  39

  
	
       Section
  7.11.

  	
  Acceptance by
  Successor Trustee

  	
  40

  
	
       Section
  7.12.

  	
  Succession by Merger,
  Etc

  	
  40

  
	
       Section
  7.13.

  	
  Preferential
  Collection of Claims

  	
  41

  
	
       Section
  7.14.

  	
  Trustee’s
  Application for Instructions from the Company

  	
  41

  
	
  ARTICLE EIGHT THE NOTEHOLDERS

  	
  41

  
	
       Section
  8.1.

  	
  Action by Noteholders

  	
  41

  
	
       Section
  8.2.

  	
  Proof of Execution by
  Noteholders

  	
  41

  
	
       Section
  8.3.

  	
  Who Are Deemed
  Absolute Owners

  	
  42

  
	
       Section
  8.4.

  	
  Company-Owned Notes
  Disregarded

  	
  42

  
	
       Section
  8.5.

  	
  Revocation of
  Consents; Future Holders Bound

  	
  42

  
	
  ARTICLE NINE MEETINGS OF NOTEHOLDERS

  	
  42

  
	
       Section
  9.1.

  	
  Purpose of Meetings

  	
  42

  

 

iii

 

	
       Section
  9.2.

  	
  Call of Meetings by
  Trustee

  	
  43

  
	
       Section
  9.3.

  	
  Call of Meetings by
  Company or Noteholders

  	
  43

  
	
       Section
  9.4.

  	
  Qualifications for
  Voting

  	
  43

  
	
       Section
  9.5.

  	
  Regulations

  	
  43

  
	
       Section
  9.6.

  	
  Voting

  	
  44

  
	
       Section
  9.7.

  	
  No Delay of Rights by
  Meeting

  	
  44

  
	
  ARTICLE TEN
  SUPPLEMENTAL INDENTURES

  	
  45

  
	
       Section 10.1.

  	
  Supplemental
  Indentures Without Consent of Noteholders

  	
  45

  
	
       Section
  10.2.

  	
  Supplemental Indenture
  with Consent of Noteholders

  	
  46

  
	
       Section
  10.3.

  	
  Effect of Supplemental
  Indenture

  	
  46

  
	
       Section
  10.4.

  	
  Notation on Notes

  	
  47

  
	
       Section
  10.5.

  	
  Evidence
  of Compliance of Supplemental Indenture to be Furnished to Trustee

  	
  47

  
	
  ARTICLE ELEVEN CONSOLIDATION, MERGER,
  SALE, CONVEYANCE AND LEASE

  	
  47

  
	
       Section
  11.1.

  	
  Company May
  Consolidate, Etc on Certain Terms

  	
  47

  
	
       Section
  11.2.

  	
  Successor Corporation
  to be Substituted

  	
  48

  
	
       Section
  11.3.

  	
  Opinion of Counsel
  to be Given Trustee

  	
  48

  
	
  ARTICLE TWELVE SATISFACTION AND
  DISCHARGE OF INDENTURE

  	
  48

  
	
       Section
  12.1.

  	
  Discharge of
  Indenture

  	
  48

  
	
       Section
  12.2.

  	
  Deposited Monies to
  be Held in Trust by Trustee

  	
  49

  
	
       Section
  12.3.

  	
  Paying Agent to
  Repay Monies Held

  	
  49

  
	
       Section
  12.4.

  	
  Return of Unclaimed
  Monies

  	
  49

  
	
       Section
  12.5.

  	
  Reinstatement

  	
  49

  
	
  ARTICLE
  THIRTEEN IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS

  	
  50

  
	
       Section
  13.1.

  	
  Indenture and Notes
  Solely Corporate Obligations

  	
  50

  
	
  ARTICLE
  FOURTEEN CONVERSION OF NOTES

  	
  50

  
	
       Section
  14.1.

  	
  Right to Convert

  	
  50

  
	
       Section
  14.2.

  	
  Exercise of
  Conversion Privilege; Issuance of Common Stock on Conversion; No Adjustment
  For Interest or Dividends

  	
  53

  
	
       Section
  14.3.

  	
  Cash Payments in
  Lieu of Fractional Shares

  	
  54

  
	
       Section
  14.4.

  	
  Conversion Rate

  	
  54

  
	
       Section
  14.5.

  	
  Adjustment of
  Conversion Rate

  	
  54

  
	
       Section
  14.6.

  	
  Effect of
  Reclassification, Consolidation, Merger or Sale

  	
  60

  
	
       Section
  14.7.

  	
  Taxes on Shares Issued

  	
  61

  
	
       Section
  14.8.

  	
  Reservation of
  Shares; Shares to be Fully Paid; Compliance with Governmental Requirements;
  Listing of Common Stock

  	
  61

  
	
       Section
  14.9.

  	
  Responsibility of
  Trustee

  	
  62

  
	
       Section
  14.10.

  	
  Notice to Holders
  Prior to Certain Actions

  	
  62

  
	
       Section
  14.11

  	
  Shareholder Rights
  Plans.

  	
  64

  
	
  ARTICLE FIFTEEN
  MISCELLANEOUS PROVISIONS

  	
  63

  
	
       Section
  15.1.

  	
  Provisions Binding
  on Company’s Successors

  	
  63

  

 

iv

 

	
       Section
  15.2.

  	
  Official Acts by
  Successor Corporation

  	
  63

  
	
       Section
  15.3.

  	
  Addresses for
  Notices, Etc

  	
  64

  
	
       Section
  15.4.

  	
  Governing Law

  	
  64

  
	
       Section
  15.5.

  	
  Evidence
  of Compliance with Conditions Precedent; Certificates to Trustee

  	
  64

  
	
       Section
  15.6.

  	
  Legal Holidays

  	
  64

  
	
       Section
  15.7.

  	
  Trust Indenture Act

  	
  65

  
	
       Section
  15.8.

  	
  No Security Interest
  Created

  	
  65

  
	
       Section
  15.9.

  	
  Benefits of Indenture

  	
  65

  
	
       Section
  15.10.

  	
  Table of Contents,
  Headings, Etc

  	
  65

  
	
       Section
  15.11.

  	
  Authenticating
  Agent

  	
  65

  
	
       Section
  15.12.

  	
  Execution in
  Counterparts

  	
  66

  
	
       Section
  15.13.

  	
  Severability

  	
  66

  

 

 

v

INDENTURE

INDENTURE, dated as of May 7, 2004, between ImClone Systems
Incorporated, a Delaware corporation (hereinafter called the “Company”), having
its principal office at 180 Varick Street, 7th Floor, New York, New
York  10014, and The Bank of New York, a
New York banking corporation, as trustee hereunder (hereinafter called the
“Trustee”), having its principal corporate trust office at 101 Barclay Street,
Floor 8 West, New York, New York, 10286.

W I T N E S S E T H:

WHEREAS, for its lawful corporate purposes, the Company has duly
authorized the issue of its 13/8% Convertible Notes due 2024 (hereinafter called the
“Notes”), in an unlimited aggregate principal amount and, to provide the terms
and conditions upon which the Notes are to be authenticated, issued and
delivered, the Company has duly authorized the execution and delivery of this
Indenture; and

WHEREAS, the Notes, the certificate of authentication to be borne by
the Notes, a form of assignment, a form of Designated Event repurchase notice,
a form of repurchase notice and a form of conversion notice to be borne by the
Notes are to be substantially in the forms hereinafter provided for; and

WHEREAS, all acts and things necessary to make the Notes, when executed
by the Company and authenticated and delivered by the Trustee or a duly
authorized authenticating agent, as in this Indenture provided, the valid,
binding and legal obligations of the Company, and to constitute this Indenture
a valid agreement according to its terms, have been done and performed, and the
execution of this Indenture and the issue hereunder of the Notes have in all
respects been duly authorized.

NOW, THEREFORE, THIS INDENTURE WITNESSETH:

That in order to declare the terms and conditions upon which the Notes
are, and are to be, authenticated, issued and delivered, and in consideration
of the premises and of the purchase and acceptance of the Notes by the holders
thereof, the Company covenants and agrees with the Trustee for the equal and
proportionate benefit of the respective holders from time to time of the Notes
(except as otherwise provided below), as follows:

ARTICLE One

DEFINITIONS

Section 1.1.    Definitions. 
The terms defined in this Section 1.1 (except as herein otherwise
expressly provided or unless the context otherwise requires) for all purposes
of this Indenture and of any indenture supplemental hereto shall have the
respective meanings specified in this Section 1.1.  All other terms used in this Indenture that
are defined in the Trust Indenture Act or which are by reference therein
defined in the Securities Act (except as herein otherwise expressly provided or
unless the context otherwise requires) shall have the meanings assigned to such
terms in said Trust Indenture Act and in said Securities Act as in force at the
date of the execution of this Indenture. 
The words “herein”, “hereof”, “hereunder”, and words of similar import
refer to this Indenture as a whole and not to any particular Article,
Section or other Subdivision.  The
terms defined in this Article include the plural as well as the singular.

“Additional Interest” has the meaning specified in
Section 2(e) of the Registration Rights Agreement.

 

1

 

“Additional Interest Notice” has the meaning specified in
Section 4.11.

“Additional Notes” means Notes issued under this Indenture
after the Issue Date and in compliance with Section 2.10.

“Adjustment Event” has the meaning specified in Section 14.5(k).

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

“Board of Directors” means the Board of Directors of the Company
or a committee of such Board duly authorized to act for it hereunder.

“Business Day” means each Monday, Tuesday, Wednesday, Thursday
and Friday which is not a day on which the banking institutions in The City of
New York or the city in which the Corporate Trust Office is located are
authorized or obligated by law or executive order to close or be closed.

“Closing Sale Price” has the meaning specified in
Section 14.5(g)(1).

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

“Common Stock” means any stock of any class of the Company which
has no preference in respect of dividends or of amounts payable in the event of
any voluntary or involuntary liquidation, dissolution or winding up of the
Company and which is not subject to redemption by the Company.  Subject to the provisions of
Section 14.6, however, shares issuable on conversion of Notes shall
include only shares of the class designated as common stock of the Company at
the date of this Indenture (namely, the Common Stock, par value $.001 per
share) or shares of any class or classes resulting from any reclassification or
reclassifications thereof and which have no preference in respect of dividends
or of amounts payable in the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Company and which are not subject to
redemption by the Company; provided, however, that if at any time
there shall be more than one such resulting class, the shares of each such
class then so issuable shall be substantially in the proportion which the total
number of shares of such class resulting from all such reclassifications bears
to the total number of shares of all such classes resulting from all such
reclassifications.

“Company” means the corporation named as the “Company” in the
first paragraph of this Indenture, and, subject to the provisions of Article
Eleven and Section 14.6, shall include its successors and assigns.

“Company Repurchase Notice” has the meaning specified in Section
3.7(b).

“Company Repurchase Notice Date” has the meaning specified in
Section 3.7(b)

“Conversion Notice” has the meaning specified in Section 14.2.

 

2

 

“Conversion Price” as of any day will equal $1,000 divided by
the Conversion Rate as of such date.

“Conversion Rate” has the meaning specified in Section 14.4.

“Corporate Trust Office” or other similar term, means the
designated office of the Trustee at which at any particular time its corporate
trust business shall be administered, which office is, at the date as of which
this Indenture is dated, located at 101 Barclay Street, 8th Floor West, New
York, New York, 10286, Attention: Corporate Trust Trustee Administration.

“Current Market Price” has the meaning specified in Section
14.5(g).

“Custodian” means The Bank of New York, as custodian with
respect to the Notes in global form, or any successor entity thereto.

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

“Defaulted Interest” has the meaning specified in
Section 2.3.

“Depositary” means, with respect to the Notes issuable or issued
in whole or in part in global form, the Person specified in Section 2.5(d)
as the Depositary with respect to such Notes, until a successor shall have been
appointed and become such pursuant to the applicable provisions of this
Indenture, and thereafter, “Depositary” shall mean or include such successor.

“Designated Event” shall mean any Fundamental Change or a
Termination of Trading.

“Designated Event Expiration Time” has the meaning specified in
Section 3.5(b).

“Designated Event Notice” has the meaning specified in Section
3.5(b).

“Designated Event Repurchase Date” has the meaning specified in
Section 3.5(a).

“Determination Date” has the meaning specified in Section
14.5(k).

“Event of Default” means any event specified in
Section 6.1(a), (b), (c), (d), (e) or (f).

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

“Ex-Dividend Date” has the meaning specified in Section 14.5(d).

“Expiration Time” has the meaning specified in Section 14.5(f).

“Fair Market Value” has the meaning specified in
Section 14.5(g).

“Fundamental Change” means the occurrence of any transaction or
event (whether by means of an exchange offer, liquidation, tender offer,
consolidation, merger, combination, reclassification, recapitalization or
otherwise) in connection with which all or substantially all of the Common
Stock shall be exchanged for, converted into, acquired for or constitutes
solely the right to receive consideration that is not all or 

 

3

 

substantially all common stock that is listed (or,
upon consummation of or immediately following such transaction or event, which
will be listed) on a United States national securities exchange or approved
(or, upon consummation of or immediately following such transaction or event,
which will be approved) for quotation on the Nasdaq National Market or any
similar United States system of automated dissemination of quotations of
securities prices.

“Global Note” has the meaning specified in Section 2.5(b).

“Indenture” means this instrument as originally executed or, if
amended or supplemented as herein provided, as so amended or supplemented.

“Initial Purchasers” means Morgan Stanley & Co.
Incorporated and UBS Securities LLC.

“Issue Date” means May 7, 2004.

“Interest” means, when used with reference to the Notes, any
interest payable under the terms of the Notes, including Additional Interest,
if any, payable under the terms of the Registration Rights Agreement.

“Measurement Period” has the meaning specified in Section 14.1.

“Non-Electing Share” has the meaning specified in Section 14.6.

“Note” or “Notes” means any Note or Notes, as the case
may be, authenticated and delivered under this Indenture, including the Global
Note.

“Note register” has the meaning specified in
Section 2.5(a).

“Note registrar” has the meaning specified in
Section 2.5(a).

“Noteholder” or “holder” as applied to any Note, or other
similar terms (but excluding the term “beneficial holder”), means any Person in
whose name at the time a particular Note is registered on the Note registrar’s
books.

“Notice Date” means the date of mailing of the notice of
redemption pursuant to Section 3.2.

“Officers’ Certificate” means a written certificate containing
the information specified in Section 15.5 signed in the name of the Company by
its Chairman of the Board, Chief Executive Officer, President or any Vice
President and by its Treasurer or any Assistant Treasurer, Controller or any
Assistant Controller, or  Secretary or
any Assistant Secretary of the Company, and delivered to the Trustee.

“Opinion of Counsel” means an opinion in writing signed by legal
counsel, who may be an employee of or counsel to the Company, or other counsel
reasonably acceptable to the Trustee.

“Outstanding”, when used with reference to Notes and subject to
the provisions of Section 8.4, means, as of any particular time, all Notes
authenticated and delivered by the Trustee under this Indenture, except:

(a)   Notes theretofore canceled by the Trustee or
delivered to the Trustee for cancellation;

 

4

 

(b)   Notes, or portions thereof, (i) for the
redemption of which monies in the necessary amount shall have been deposited in
trust with the Trustee or with any paying agent (other than the Company) or
(ii) which shall have been otherwise defeased in accordance with Article
Twelve;

(c)   Notes paid pursuant to Section 2.6 or in lieu
of which, or in substitution for which, other Notes shall have been
authenticated and delivered pursuant to the terms of Section 2.6; and

(d)   Notes converted into Common Stock pursuant to
Article Fourteen and Notes deemed not outstanding pursuant to Article Three.

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

“Portal Market” means The Portal Market operated by the National
Association of Securities Dealers, Inc. or any successor thereto.

“Predecessor Note” of any particular Note means every previous
Note evidencing all or a portion of the same debt as that evidenced by such
particular Note, and, for the purposes of this definition, any Note
authenticated and delivered under Section 2.6 in lieu of a lost, destroyed
or stolen Note shall be deemed to evidence the same debt as the lost, destroyed
or stolen Note that it replaces.

“Purchased Shares” has the meaning specified in Section 14.5(f).

“QIB” means a “qualified institutional buyer” as defined in
Rule 144A.

“Record Date” means has the meaning specified in Section 14.5(g)(4).

“Registration Rights Agreement” means that certain Registration
Rights Agreement, dated as of May 7, 2004, among the Company and the
Initial Purchasers, as amended from time to time in accordance with its terms.

“Repurchase Date” has the meaning specified in Section 3.6.

“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 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 Securities” has the meaning specified in
Section 2.5(d).

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

“Securities” has the meaning specified in Section 14.5(d).

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

 

5

 

“Significant Subsidiary” means, as of any date of determination,
a Subsidiary of the Company, if as of such date of determination either
(a) the assets of such subsidiary equal 10% or more of the Company’s total
consolidated assets or (b) the total revenue of which represented 10% or
more of the Company’s consolidated total revenue for the most recently
completed fiscal year.

“Subsidiary” means, with respect to any Person, (i) any
corporation, association or other business entity of which more than 50% of the
total voting power of shares of capital stock or other equity interest entitled
(without regard to the occurrence of any contingency) to vote in the election
of directors, managers or trustees thereof is at the time owned or controlled,
directly or indirectly, by such Person or one or more of the other subsidiaries
of that Person (or a combination thereof) and (ii) any partnership
(a) the sole general partner or managing general partner of which is such
Person or a subsidiary of such Person or (b) the only general partners of
which are such Person or of one or more subsidiaries of such Person (or any
combination thereof).

“Termination of Trading” shall be deemed to have occurred if the
Common Stock (or other common stock into which the Notes are then convertible)
is neither listed for trading on a United States national securities exchange
nor approved for trading on The Nasdaq National Market.  

“Trading Day” has
the meaning specified in Section 14.5(g)(5).

“Trading Price” of the Notes on any date of
determination means the average of the secondary market bid quotations obtained
by the Trustee for $10,000,000 principal amount of the Notes at approximately
3:30 p.m., New York City time, on such determination date from three
independent nationally recognized securities dealers selected by the Company; provided that if three such bids
cannot reasonably be obtained by the Trustee, but two such bids are obtained,
then the average of the two bids shall be used, and if only one such bid can
reasonably be obtained by the Trustee, that one bid shall be used.  If the Trustee cannot reasonably obtain at
least one bid for $10,000,000 principal amount of the Notes from a nationally
recognized securities dealer then the Trading Price per $1,000 principal amount
of Notes will be deemed to be less than 98% of the product of (a) the
Closing Sale Price on such date and (b)  the number of shares of Common
Stock issuable upon conversion of $1,000 principal amount of the Notes.

“Trigger Event” has the meaning specified in
Section 14.5(d).

“Trust Indenture Act” means the Trust Indenture Act of 1939, as
amended, as it was in force at the date of this Indenture, except as provided
in Sections 10.3 and 14.6; provided, however, that, in the
event the Trust Indenture Act of 1939 is amended after the date hereof, the
term “Trust Indenture Act” shall mean, to the extent required by such
amendment, the Trust Indenture Act of 1939 as so amended.

“Trustee” means The Bank of New York  and its successors and any corporation resulting from or
surviving any consolidation or merger to which it or its successors may be a
party and any successor trustee at the time serving as successor trustee
hereunder.

The definitions of certain other terms are as specified in
Sections 2.5 and 3.5 and Article Fourteen.

 

6

 

ARTICLE TWO

ISSUE, DESCRIPTION, EXECUTION,

REGISTRATION AND EXCHANGE OF NOTES

Section 2.1.    Designation Amount and Issue of Notes.  The Notes shall be designated as
“13/8% Convertible Notes due 2024”.  On the Issue Date, the Trustee shall
authenticate and deliver $600,000,000 of  Notes and, at any time and from time to time
thereafter, the Trustee shall authenticate and deliver Notes for original issue
in an aggregate principal amount specified in such order, in each case upon a
written order of the Company signed by its Chairman of the Board, Chief
Executive Officer, President or any Vice President and by its Treasurer or
any Assistant Treasurer, Controller or any Assistant Controller or Secretary or
any Assistant Secretary, without any further action by the Company
hereunder.  Such order shall specify the
amount of the Notes to be authenticated and the date on which the original
issue of Notes is to be authenticated. 
The aggregate principal amount of Notes outstanding at any time is
unlimited.

Section 2.2.    Form
of Notes.  The Notes and the Trustee’s certificate of authentication
to be borne by such Notes shall be substantially in the form set forth in Exhibit A
and the terms and provisions contained in the form of Note attached as Exhibit A
hereto shall constitute, and are hereby expressly made, a part of this
Indenture and, to the extent applicable, the Company and the Trustee, by their
execution and delivery of this Indenture, expressly agree to such terms and
provisions and to be bound thereby.

Any of the Notes may have such letters, numbers or other marks of
identification and such notations, legends and endorsements as the officers
executing the same may approve (execution thereof to be conclusive evidence of
such approval) and as are not inconsistent with the provisions of this
Indenture, or as may be required to comply with any law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any
securities exchange or automated quotation system on which the Notes may be
listed, or to conform to usage.

Any Global Note shall represent such of the outstanding Notes as shall
be specified therein and shall provide that it shall represent the aggregate
amount of outstanding Notes from time to time endorsed thereon and that the
aggregate amount of outstanding Notes represented thereby may from time to time
be increased or reduced to reflect redemptions, repurchases, conversions,
transfers or exchanges permitted hereby. 
Any endorsement of a Global Note to reflect the amount of any increase
or decrease in the amount of outstanding Notes represented thereby shall be
made by the Trustee or the Custodian, at the direction of the Trustee, in such
manner and upon instructions given by the holder of such Notes in accordance
with this Indenture.  Payment of
principal of and Interest on any Global Note shall be made to the holder of
such Note.

Section 2.3.    Date
and Denomination of Notes; Payments of Interest.  The Notes shall be
issuable in registered form without coupons in denominations of $1,000
principal amount and integral multiples thereof.  Every Note shall be dated the date of its authentication and
shall bear Interest from the applicable date in each case as specified on the
face of the form of Note attached as Exhibit A hereto.  Interest on the Notes shall be computed on
the basis of a 360-day year comprised of twelve (12) 30-day months.

The Person in whose name any Note (or its Predecessor Note) is
registered on the Note register at the close of business on any record date
with respect to any interest payment date shall be entitled to receive the
Interest payable on such interest payment date, except that the Interest
payable upon redemption or repurchase will be payable to the Person to whom
principal is payable pursuant to such redemption or repurchase (unless the
redemption date or the repurchase date, as the case may be, falls after a
record date and on or prior to the 

 

7

 

corresponding interest payment date, in which case the
semi-annual payment of Interest becoming due on such interest payment date
shall be payable to the holders of such Notes registered as such on the
applicable record date).

Interest shall be payable at the office of the Company maintained by
the Company for such purposes in New York, New York, which shall initially be
an office or agency of the Trustee and may, as the Company shall specify to the
paying agent in writing by each record date, be paid either (i) by check
mailed to the address of the Person entitled thereto as it appears in the Note
register (provided that the holder of Notes with an aggregate principal amount
in excess of $2,000,000 shall, at the written election of such holder, be paid
by wire transfer in immediately available funds) or (ii) by transfer to an
account maintained by such Person located in the United States; provided,
however, that payments to the Depositary will be made by wire transfer
of immediately available funds to the account of the Depositary or its
nominee.  The term “record date” with
respect to any interest payment date shall mean the May 1 or
November 1 preceding the relevant May 15 or November 15,
respectively.

Any Interest on any Note which is payable, but is not punctually paid
or duly provided for, on any May 15 or November 15 (herein called “Defaulted
Interest”) shall forthwith cease to be payable to the Noteholder on the
relevant record date by virtue of his having been such Noteholder, and such
Defaulted Interest shall be paid by the Company, at its election in each case,
as provided in clause (1) or (2) below:

(1)           The Company may elect to make payment
of any Defaulted Interest to the Persons in whose names the Notes (or their respective
Predecessor Notes) are registered at the close of business on a special record
date for the payment of such Defaulted Interest, which shall be fixed in the
following manner.  The Company shall
notify the Trustee in writing of the amount of Defaulted Interest to be paid on
each Note and the date of the payment (which shall be not less than twenty-five
(25) days after the receipt by the Trustee of such notice, unless the Trustee
shall consent to an earlier date), and at the same time the Company shall
deposit with the Trustee an amount of money equal to the aggregate amount to be
paid in respect of such Defaulted Interest or shall make arrangements
satisfactory to the Trustee for such deposit prior to the date of the proposed
payment, such money when deposited to be held in trust for the benefit of the
Person entitled to such Defaulted Interest as in this clause provided.  Thereupon the Trustee shall fix a special
record date for the payment of such Defaulted Interest which shall be not more
than fifteen (15) days and not less than ten (10) days prior to the date of the
proposed payment, and not less than ten (10) days after the receipt by the
Trustee of the notice of the proposed payment, the Trustee shall promptly
notify the Company of such special record date and, in the name and at the
expense of the Company, shall cause notice of the proposed payment of such
Defaulted Interest and the special record date therefor to be mailed,
first-class postage prepaid, to each Noteholder at his address as it appears in
the Note register, not less than ten (10) days prior to such special record
date.  Notice of the proposed payment of
such Defaulted Interest and the special record date therefor having been so
mailed, such Defaulted Interest shall be paid to the Persons in whose names the
Notes (or their respective Predecessor Notes) were registered at the close of
business on such special record date and shall no longer be payable pursuant to
the following clause (2) of this Section 2.3.

(2)           The Company may make payment of any
Defaulted Interest in any other lawful manner not inconsistent with the
requirements of any securities exchange or automated quotation system on which
the Notes may be listed or designated for issuance, and upon such notice as may
be required by such exchange or automated quotation system, if, after notice
given 

 

8

 

by the Company to the
Trustee of the proposed payment pursuant to this clause, such manner of payment
shall be deemed practicable by the Trustee.

Section 2.4.    Execution
of Notes.  The Notes shall be signed in the name and on behalf of the
Company by the manual or facsimile signature of its Chairman of the Board,
Chief Executive Officer, President or any Vice President and attested by the
manual or facsimile signature of its Secretary or any of its Assistant
Secretaries or its Treasurer or any of its Assistant Treasurers (which may be
printed, engraved or otherwise reproduced thereon, by facsimile or otherwise).  Only such Notes as shall bear thereon a
certificate of authentication substantially in the form set forth on the form
of Note attached as Exhibit A hereto, manually executed by the
Trustee (or an authenticating agent appointed by the Trustee as provided by
Section 15.11), shall be entitled to the benefits of this Indenture or be
valid or obligatory for any purpose. 
Such certificate by the Trustee (or such an authenticating agent) upon
any Note executed by the Company shall be conclusive evidence that the Note so
authenticated has been duly authenticated and delivered hereunder and that the
holder is entitled to the benefits of this Indenture.

In case any officer of the Company who shall have signed any of the
Notes shall cease to be such officer before the Notes so signed shall have been
authenticated and delivered by the Trustee, or disposed of by the Company, such
Notes nevertheless may be authenticated and delivered or disposed of as though
the person who signed such Notes had not ceased to be such officer of the
Company, and any Note may be signed on behalf of the Company by such persons
as, at the actual date of the execution of such Note, shall be the proper
officers of the Company, although at the date of the execution of this
Indenture any such person was not such an officer.

Section 2.5.      Exchange
and Registration of Transfer of Notes; Restrictions on Transfer; Depositary.

(a)   The Company shall cause to be kept at the
Corporate Trust Office a register (the register maintained in such office and
in any other office or agency of the Company designated pursuant to
Section 4.2 being herein sometimes collectively referred to as the “Note
register”) in which, subject to such reasonable regulations as it may
prescribe, the Company shall provide for the registration of Notes and of
transfers of Notes.  The Note register
shall be in written form or in any form capable of being converted into written
form within a reasonably prompt period of time.  The Trustee is hereby appointed “Note registrar” for the purpose
of registering Notes and transfers of Notes as herein provided.  The Company may appoint one or more
co-registrars in accordance with Section 4.2.

Upon surrender for registration of transfer of any Note to the Note
registrar or any co-registrar, and satisfaction of the requirements for such
transfer set forth in this Section 2.5, the Company shall execute, and the
Trustee shall authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Notes of any authorized
denominations and of a like aggregate principal amount and bearing such
restrictive legends as may be required by this Indenture.

Notes may be exchanged for other Notes of any authorized denominations
and of a like aggregate principal amount, upon surrender of the Notes to be
exchanged at any such office or agency maintained by the Company pursuant to
Section 4.2.  Whenever any Notes
are so surrendered for exchange, the Company shall execute, and the Trustee
shall authenticate and deliver, the Notes which the Noteholder making the exchange
is entitled to receive bearing registration numbers not contemporaneously
outstanding.

 

9

 

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

All Notes presented or surrendered for registration of transfer or for
exchange, redemption, repurchase or conversion shall (if so required by the
Company or the Note registrar) be duly endorsed, or be accompanied by a written
instrument or instruments of transfer in form satisfactory to the Company, and
the Notes shall be duly executed by the Noteholder thereof or his attorney duly
authorized in writing.

No service charge shall be made to any holder for any registration of
transfer or exchange of Notes, but the Company may require payment by the
holder of a sum sufficient to cover any tax, assessment or other governmental
charge that may be imposed in connection with any registration of transfer or
exchange of Notes.

Neither the Company nor the Trustee nor any Note registrar shall be
required to exchange or register a transfer of (a) any Notes for a period
of fifteen (15) days next preceding the mailing of a notice of redemption of
Notes to be redeemed, (b) any Notes or portions thereof called for
redemption pursuant to Section 3.2, (c) any Notes or portions thereof
surrendered for conversion pursuant to Article Fourteen, (d) any Notes or
portions thereof tendered for redemption (and not withdrawn) pursuant to
Section 3.5 or (e) any Notes or portions thereof tendered for
repurchase (and not withdrawn) pursuant to Section 3.6.

(b)   So long as the Notes are eligible for
book-entry settlement with the Depositary, or unless otherwise required by law,
all Notes that, upon initial issuance are beneficially owned by QIBs or as a
result of a sale or transfer after initial issuance are beneficially owned by
QIBs, will be represented by one or more Notes in global form registered in the
name of the Depositary or the nominee of the Depositary (the “Global Note”),
except as otherwise specified below. 
The transfer and exchange of beneficial interests in any such Global
Note shall be effected through the Depositary in accordance with this Indenture
and the procedures of the Depositary therefor. 
The Trustee shall make appropriate endorsements to reflect increases or
decreases in the principal amounts of any such Global Note as set forth on the
face of the Note (“Principal Amount”) to reflect any such transfers.  Except as provided below, beneficial owners
of a Global Note shall not be entitled to have certificates registered in their
names, will not receive or be entitled to receive physical delivery of
certificates in definitive form and will not be considered holders of such
Global Note.

(c)   So long as the Notes are eligible for
book-entry settlement with the Depositary, or unless otherwise required by law,
upon any transfer of a definitive Note to a QIB in accordance with
Rule 144A, and upon receipt of the definitive Note or Notes being so
transferred, together with a certification, substantially in the form on the
reverse of the Note, from the transferor that the transfer is being made in
compliance with Rule 144A (or other evidence satisfactory to the Trustee),
the Trustee shall make an endorsement on the Global Note to reflect an increase
in the aggregate Principal Amount of the Notes represented by such Global Note,
and the Trustee shall cancel such definitive Note or Notes in accordance with
the standing instructions and procedures of the Depositary, the aggregate
Principal Amount of the Notes represented by such Global Note to be increased
accordingly; provided, however, that no definitive Note, or
portion thereof, in respect of which the Company or an Affiliate of the Company
held any beneficial interest shall be included in such Global Note until such
definitive Note is freely tradable in accordance with Rule 144(k) under the
Securities Act, provided further that the Trustee shall issue Notes in
definitive form upon any transfer of a beneficial interest in the Global Note
to the Company or any Affiliate of the Company.

 

10

 

Any Global Note may be endorsed with or have incorporated in the text
thereof such legends or recitals or changes not inconsistent with the
provisions of this Indenture as may be required by the Custodian, the
Depositary or by the National Association of Securities Dealers, Inc. in order
for the Notes to be tradeable on The Portal Market or as may be required for
the Notes to be tradeable on any other market developed for trading of
securities pursuant to Rule 144A or required to comply with any applicable law
or any regulation thereunder or with the rules and regulations of any
securities exchange or automated quotation system upon which the Notes may be
listed or traded or to conform with any usage with respect thereto, or to
indicate any special limitations or restrictions to which any particular Notes
are subject.

(d)   Every Note that bears or is required under
this Section 2.5(d) to bear the legend set forth in this
Section 2.5(d) (together with any Common Stock issued upon conversion of
the Notes and required to bear the legend set forth in Section 2.5(e),
collectively, the “Restricted Securities”) shall be subject to the restrictions
on transfer set forth in this Section 2.5(d) (including those set forth in
the legend set forth below) unless such restrictions on transfer shall be
waived by written consent of the Company, and the holder of each such
Restricted Security, by such Noteholder’s acceptance thereof, agrees to be
bound by all such restrictions on transfer. 
As used in Sections 2.5(d) and 2.5(e), the term “transfer”
encompasses any sale, pledge, loan, transfer or other disposition whatsoever of
any Restricted Security.

Until the expiration of the holding period applicable to sales thereof
under Rule 144(k) under the Securities Act (or any successor provision),
any certificate evidencing such Note (and all securities issued in exchange
therefor or substitution thereof, other than Common Stock, if any, issued upon
conversion thereof, which shall bear the legend set forth in Section 2.5(e),
if applicable) shall bear a legend in substantially the following form, unless
such Note has been sold pursuant to a registration statement that has been
declared effective under the Securities Act (and which continues to be
effective at the time of such transfer), or unless otherwise agreed by the
Company in writing, with written notice thereof to the Trustee:

 

THIS NOTE HAS NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE ‘‘SECURITIES
ACT’’), OR ANY STATE SECURITIES LAWS. NEITHER THIS NOTE NOR ANY INTEREST OR
PARTICIPATION HEREIN OR THEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED,
PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH
REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO,
REGISTRATION.

THE HOLDER OF THIS NOTE,
BY ITS ACCEPTANCE HEREOF, AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH
NOTE, PRIOR TO THE DATE (THE ‘‘RESALE RESTRICTION TERMINATION DATE’’) THAT IS
TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE
ON WHICH IMCLONE SYSTEMS INCORPORATED (THE “COMPANY”) OR ANY AFFILIATE OF THE
COMPANY WAS THE OWNER OF THIS NOTE (OR ANY PREDECESSOR OF SUCH NOTE) ONLY (A)
TO THE COMPANY OR ANY SUBSIDIARY THEREOF, (B) FOR SO LONG AS THE SECURITIES ARE
ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON IT REASONABLY BELIEVES
IS A ‘‘QUALIFIED INSTITUTIONAL BUYER’’ AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER TO WHICH NOTICE IS GIVEN THAT THE TRANSFER 

 

11

 

IS BEING MADE IN RELIANCE
ON RULE 144A, (C) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED
EFFECTIVE UNDER THE SECURITIES ACT, OR (D) PURSUANT TO ANOTHER AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO
THE RIGHTS OF THE COMPANY AND THE TRUSTEE PRIOR TO ANY SUCH OFFER, SALE OR
TRANSFER PURSUANT TO CLAUSE (D) TO REQUIRE THE DELIVERY OF AN OPINION OF
COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM,
AND IN EACH OF THE FOREGOING CASES WHERE REGISTRATION OR TRANSFER OF THIS NOTE
IS REQUIRED, A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THE OTHER SIDE
OF THIS NOTE COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE TRUSTEE. THIS
LEGEND WILL BE REMOVED AFTER THE RESALE RESTRICTION TERMINATION DATE UPON THE
REQUEST OF THE HOLDER AND THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATES
AND/OR OTHER INFORMATION SATISFACTORY TO THE COMPANY.

Any Note (or security issued in exchange or substitution therefor) as
to which such restrictions on transfer shall have expired in accordance with
their terms or as to conditions for removal of the foregoing legend set forth
therein have been satisfied may, upon surrender of such Note for exchange to
the Note registrar in accordance with the provisions of this Section 2.5,
be exchanged for a new Note or Notes, of like tenor and aggregate principal
amount, which shall not bear the restrictive legend required by this Section 2.5(d).

Notwithstanding any other provisions of this Indenture (other than the
provisions set forth in the second paragraph of Section 2.5(c) and in this
Section 2.5(d)), a Global Note may not be transferred as a whole or in
part except by the Depositary to a nominee of the Depositary or by a nominee of
the Depositary to the Depositary or another nominee of the Depositary or by the
Depositary or any such nominee to a successor Depositary or a nominee of such
successor Depositary.

The Depositary shall be a clearing agency registered under the Exchange
Act.  The Company initially appoints The
Depository Trust Company to act as Depositary with respect to the Notes in
global form.  Initially, the Global Note
shall be issued to the Depositary, registered in the name of Cede &
Co., as the nominee of the Depositary, and deposited with the Custodian for
Cede & Co.

If at any time the Depositary for a Global Note notifies the Company
that it is unwilling or unable to continue as Depositary for such Note, or the
Depositary ceases to be a clearing agency registered under the Exchange Act,
the Company may appoint a successor Depositary with respect to such Note.  If (i) a successor Depositary is not
appointed by the Company within ninety (90) days after the Company receives
such notice or the Depositary ceases to be a clearing agency registered under
the Exchange Act or (ii) an Event of Default has occurred and is continuing and
the maturity of the Notes shall have been accelerated in accordance with
Section 6.1 and any Noteholder shall have given written notice to the Company
requesting the issuance of definitive Notes, the Company will execute, and the
Trustee, upon receipt of an Officers’ Certificate for the authentication and
delivery of Notes, will authenticate and deliver, Notes in certificated form,
in aggregate principal amount equal to the principal amount of such Global
Note, in exchange for such Global Note.

If a Note in certificated form is issued in exchange for any portion of
a Global Note after the close of business at the office or agency where such
exchange occurs on any record date and before the opening of 

 

12

 

business at such office or agency on the next
succeeding interest payment date, Interest will not be payable on such interest
payment date in respect of such certificated Note, but will be payable on such
interest payment date, subject to the provisions of Section 2.3, only to
the Person to whom Interest in respect of such portion of such Global Note is
payable in accordance with the provisions of this Indenture.

Notes in certificated form issued in exchange for all or a part of a
Global Note pursuant to this Section 2.5 shall be registered in such names
and in such authorized denominations as the Depositary, pursuant to
instructions from its direct or indirect participants or otherwise, shall
instruct the Trustee.  Upon execution
and authentication, the Trustee shall deliver such Notes in certificated form
to the Persons in whose names such Notes in certificated form are so
registered.

At such time as all interests in a Global Note have been redeemed,
converted, canceled, exchanged for Notes in certificated form, or transferred
to a transferee who receives Notes in certificated form thereof, such Global Note
shall, upon receipt thereof, be canceled by the Trustee in accordance with
standing procedures and instructions existing between the Depositary and the
Custodian.  At any time prior to such
cancellation, if any interest in a Global Note is exchanged for Notes in
certificated form, redeemed, converted, repurchased or canceled, or transferred
to a transferee who receives Notes in certificated form therefor or any Note in
certificated form is exchanged or transferred for part of a Global Note, the
principal amount of such Global Note shall, in accordance with the standing
procedures and instructions existing between the Depositary and the Custodian,
be appropriately reduced or increased, as the case may be, and an endorsement
shall be made on such Global Note, by the Trustee or the Custodian, at the
direction of the Trustee, to reflect such reduction or increase.

(e)   Until the expiration of the holding period
applicable to sales thereof under Rule 144(k) under the Securities Act (or
any successor provision), any stock certificate representing Common Stock
issued upon conversion of any Note shall bear a legend in substantially the
following form, unless such Common Stock has been sold pursuant to a
registration statement that has been declared effective under the Securities
Act (and which continues to be effective at the time of such transfer) or such
Common Stock has been issued upon conversion of Notes that have been
transferred pursuant to a registration statement that has been declared
effective under the Securities Act, or unless otherwise agreed by the Company
in writing with written notice thereof to the transfer agent:

 

THE COMMON STOCK EVIDENCED
HEREBY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE ‘‘SECURITIES ACT’’), OR ANY STATE SECURITIES LAWS.  NEITHER THE COMMON STOCK EVIDENCED HEREBY
NOR ANY INTEREST OR PARTICIPATION HEREIN OR THEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, REGISTRATION.

THE HOLDER OF THE COMMON
STOCK EVIDENCED HEREBY, BY ITS ACCEPTANCE HEREOF, AGREES TO OFFER, SELL OR
OTHERWISE TRANSFER SUCH COMMON STOCK, PRIOR TO THE DATE (THE ‘‘RESALE
RESTRICTION TERMINATION DATE’’) THAT IS TWO YEARS AFTER THE LATER OF THE
ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH IMCLONE SYSTEMS
INCORPORATED (THE “COMPANY”) OR ANY 

 

13

 

AFFILIATE OF THE COMPANY
WAS THE OWNER OF THE COMMON STOCK EVIDENCED HEREBY (OR ANY PREDECESSOR OF SUCH
COMMON STOCK) ONLY (A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, (B) FOR SO
LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A
PERSON IT REASONABLY BELIEVES IS A ‘‘QUALIFIED INSTITUTIONAL BUYER’’ AS DEFINED
IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR
THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHICH NOTICE IS GIVEN THAT
THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (C) PURSUANT TO A
REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES
ACT, OR (D) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE RIGHTS OF THE COMPANY AND
EQUISERVE, AS TRANSFER AGENT (OR A SUCCESSOR TRANSFER AGENT, AS APPLICABLE),
PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (D) TO REQUIRE THE
DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION
SATISFACTORY TO EACH OF THEM, AND IN EACH OF THE FOREGOING CASES WHERE
REGISTRATION OR TRANSFER OF THE COMMON STOCK EVIDENCED HEREBY IS REQUIRED, A
CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THE OTHER SIDE OF THE COMMON
STOCK EVIDENCED HEREBY COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE TRANSFER
AGENT.  THIS LEGEND WILL BE REMOVED
AFTER THE RESALE RESTRICTION TERMINATION DATE UPON THE REQUEST OF THE HOLDER
AND THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATES AND/OR OTHER
INFORMATION SATISFACTORY TO THE COMPANY.

Any such Common Stock as to which such restrictions on transfer shall
have expired in accordance with their terms or as to which the conditions for
removal of the foregoing legend set forth therein have been satisfied may, upon
surrender of the certificates representing such shares of Common Stock for
exchange in accordance with the procedures of the transfer agent for the Common
Stock, be exchanged for a new certificate or certificates for a like number of
shares of Common Stock, which shall not bear the restrictive legend required by
this Section 2.5(e).

(f)    Any Note or Common Stock issued upon the
conversion or exchange of a Note that, prior to the expiration of the holding
period applicable to sales thereof under Rule 144(k) under the Securities
Act (or any successor provision), is purchased or owned by the Company or any
Affiliate thereof may not be resold by the Company or such Affiliate unless
registered under the Securities Act or 
resold pursuant to an exemption from the registration requirements of
the Securities Act in a transaction which results in such Notes or Common
Stock, as the case may be, no longer being “restricted securities” (as defined
under Rule 144).

Section 2.6.    Mutilated,
Destroyed, Lost or Stolen Notes.  In case any Note shall become
mutilated or be destroyed, lost or stolen, the Company in its discretion may
execute, and upon its written request the Trustee or an authenticating agent
appointed by the Trustee shall authenticate and make available for delivery, a
new Note, bearing a number not contemporaneously outstanding, in exchange and
substitution for the mutilated Note, or in lieu of and in substitution for the
Note so destroyed, lost or stolen.  In
every case the applicant for a substituted Note shall furnish to the Company,
to the Trustee and, if applicable, to such 

 

14

 

authenticating agent such security or indemnity as may
be required by them to save each of them harmless for any loss, liability, cost
or expense caused by or connected with such substitution, and, in every case of
destruction, loss or theft, the applicant shall also furnish to the Company, to
the Trustee and, if applicable, to such authenticating agent evidence to their
satisfaction of the destruction, loss or theft of such Note and of the
ownership thereof.

Following receipt by the Trustee or such authenticating agent, as the
case may be, of satisfactory security or indemnity and evidence, as described
in the preceding paragraph, the Trustee or such authenticating agent may
authenticate any such substituted Note and make available for delivery such
Note.  Upon the issuance of any
substituted Note, the Company may require the payment by the holder of a sum
sufficient to cover any tax, assessment or other governmental charge that may
be imposed in relation thereto and any other expenses connected therewith.  In case any Note which has matured or is
about to mature or has been called for redemption or has been tendered for
repurchase upon a Designated Event (and not withdrawn) or has been surrendered
for repurchase on a Repurchase Date (and not withdrawn) or is to be converted
into Common Stock shall become mutilated or be destroyed, lost or stolen, the
Company may, instead of issuing a substitute Note, pay or authorize the payment
of or convert or authorize the conversion of the same (without surrender
thereof except in the case of a mutilated Note), as the case may be, if the
applicant for such payment or conversion shall furnish to the Company, to the
Trustee and, if applicable, to such authenticating agent such security or
indemnity as may be required by them to save each of them harmless for any
loss, liability, cost or expense caused by or connected with such substitution,
and, in every case of destruction, loss or theft, the applicant shall also
furnish to the Company, the Trustee and, if applicable, any paying agent or
conversion agent evidence to their satisfaction of the destruction, loss or
theft of such Note and of the ownership thereof.

Every substitute Note issued pursuant to the provisions of this
Section 2.6 by virtue of the fact that any Note is destroyed, lost or
stolen shall constitute an additional contractual obligation of the Company,
whether or not the destroyed, lost or stolen Note shall be found at any time,
and shall be entitled to all the benefits of (but shall be subject to all the
limitations set forth in) this Indenture equally and proportionately with any
and all other Notes duly issued hereunder. 
To the extent permitted by law, all Notes shall be held and owned upon the
express condition that the foregoing provisions are exclusive with respect to
the replacement or payment or conversion or redemption or repurchase of
mutilated, destroyed, lost or stolen Notes and shall preclude any and all other
rights or remedies notwithstanding any law or statute existing or hereafter
enacted to the contrary with respect to the replacement or payment or
conversion or redemption or repurchase of negotiable instruments or other
securities without their surrender.

Section 2.7.    Temporary
Notes.  Pending the preparation of Notes in certificated form, the
Company may execute and the Trustee or an authenticating agent appointed by the
Trustee shall, upon the written request of the Company, authenticate and
deliver temporary Notes (printed or lithographed).  Temporary Notes shall be issuable in any authorized denomination,
and substantially in the form of the Notes in certificated form, but with such
omissions, insertions and variations as may be appropriate for temporary Notes,
all as may be determined by the Company. 
Every such temporary Note shall be executed by the Company and
authenticated by the Trustee or such authenticating agent upon the same
conditions and in substantially the same manner, and with the same effect, as
the Notes in certificated form.  Without
unreasonable delay the Company will execute and deliver to the Trustee or such
authenticating agent Notes in certificated form (other than in the case of
Notes in global form) and thereupon any or all temporary Notes (other than any
such Global Note) may be surrendered in exchange therefor, at each office or
agency maintained by the Company pursuant to Section 5.2 and the Trustee
or such authenticating agent shall authenticate and make available for delivery
in exchange for such temporary Notes an equal aggregate principal amount of
Notes in certificated form.  Such
exchange shall be made by the Company at its own 

 

15

 

expense and without any charge therefor.  Until so exchanged, the temporary Notes
shall in all respects be entitled to the same benefits and subject to the same
limitations under this Indenture as Notes in certificated form authenticated
and delivered hereunder.

Section 2.8.    Cancellation
of Notes Paid, Etc.  All Notes surrendered for the purpose of payment,
redemption, repurchase, conversion, exchange or registration of transfer shall,
if surrendered to the Company or any paying agent or any Note registrar or any
conversion agent, be surrendered to the Trustee and promptly canceled by it,
or, if surrendered to the Trustee, shall be promptly canceled by it, and no
Notes shall be issued in lieu thereof except as expressly permitted by any of
the provisions of this Indenture.  The
Trustee shall dispose of such canceled Notes in accordance with its customary
procedures.  If the Company shall
acquire any of the Notes, such acquisition shall not operate as a redemption,
repurchase, or satisfaction of the indebtedness represented by such Notes
unless and until the same are delivered to the Trustee for cancellation.

Section 2.9.    CUSIP
Numbers.  The Company in issuing the Notes may use “CUSIP” numbers (if
then generally in use), and, if so, the Trustee shall use “CUSIP” numbers in
notices of redemption, or repurchases as a convenience to Noteholders; provided,
however, that any such notice may state that no representation is made
as to the correctness of such numbers either as printed on the Notes or as
contained in any notice of a redemption or a repurchase and that reliance may
be placed only on the other identification numbers printed on the Notes, and
any such redemption or repurchase shall not be affected by any defect in or
omission of such numbers.  The Company
will promptly notify the Trustee of any change in the “CUSIP” numbers.

Section 2.10.  Issuance
of Additional Notes.   The Company shall be entitled to issue Additional Notes under this
Indenture, which Notes shall have identical terms as the Notes issued on the
Issue Date, other than with respect to the date of issuance and issue
price.  All the Notes issued under this
Indenture shall be treated as a single class for all purposes of this Indenture
including waivers, amendments, redemptions and offers to repurchase.

With respect to any Additional Notes, the Company
shall set forth in a resolution of the Board of Directors and an Officers’
Certificate, a copy of each which shall be delivered to the Trustee, the
following information:

(a)   the aggregate principal amount of such
Additional Notes to be authenticated and delivered pursuant to this Indenture;
and

(b)   the issue price, the issue date and the CUSIP
number of such Additional Notes; provided, however, that no
Additional Notes may be issued at a price that would cause such Additional
Notes to not be fungible for U.S. federal income tax purposes with any other
Notes issued under this Indenture.

ARTICLE Three

REDEMPTION AND REPURCHASE OF NOTES

Section 3.1.    Optional
Redemption by the Company.  The
Company may not redeem any Notes prior to May 20, 2009.  At any time on or after May 20, 2009
and prior to maturity, the Notes may be redeemed at the option of the Company,
in whole or in part, upon notice as set forth in Section 3.2, at a cash
redemption price equal to 100% of the principal amount of the Notes being
redeemed, together with accrued and unpaid Interest, if any, to, but excluding,
the date fixed for redemption; provided that if the redemption date falls after
a record date and on or prior to the corresponding interest payment date, then
the Interest 

 

16

 

payable on such interest payment date shall be paid to
the holders of record of such Notes on the applicable record date instead of
the holders surrendering such Notes for redemption on such date and the
redemption price payable to the holders surrendering such Notes for redemption
will be 100% of the principal amount of such Notes.

Section 3.2.    Notice
of Redemptions; Selection of Notes.  In case the Company shall desire
to exercise the right to redeem all or, as the case may be, any part of the
Notes pursuant to Section 3.1, it shall fix a date for redemption and it
or, at its written request received by the Trustee not fewer than forty-five
(45) days prior (or such shorter period of time as may be acceptable to the Trustee)
to the date fixed for redemption, the Trustee in the name of and at the expense
of the Company, shall mail or cause to be mailed a notice of such redemption
not fewer than thirty (30) nor more than sixty (60) days prior to the date
fixed for redemption to the holders of Notes so to be redeemed as a whole or in
part at their last addresses as the same appear on the Note register; provided,
however, that if the Company shall give such notice, it shall also give
written notice, and written notice of the Notes to be redeemed, to the
Trustee..  Such mailing shall be by
first class mail.  The notice, if mailed
in the manner herein provided, shall be conclusively presumed to have been duly
given, whether or not the holder receives such notice.  In any case, failure to give such notice by
mail or any defect in the notice to the holder of any Note designated for
redemption as a whole or in part shall not affect the validity of the
proceedings for the redemption of any other Note.  Concurrently with the mailing of any such notice of redemption,
the Company shall issue a press release announcing such redemption, the form
and content of which press release shall be determined by the Company in its
sole discretion.  The failure to issue
any such press release or any defect therein shall not affect the validity of
the redemption notice or any of the proceedings for the redemption of any Note
called for redemption.

Each such notice of redemption shall specify the aggregate principal
amount of Notes to be redeemed, the CUSIP number or numbers of the Notes being
redeemed, the date fixed for redemption (which shall be a Business Day), the
redemption price at which Notes are to be redeemed, the place or places of
payment, that payment will be made upon presentation and surrender of such
Notes, that Interest accrued to the date fixed for redemption will be paid as
specified in said notice, and that on and after said date Interest thereon or
on the portion thereof to be redeemed will cease to accrue.  Such notice shall also state the current
Conversion Rate and the date on which the right to convert such Notes or
portions thereof into Common Stock will expire. If fewer than all the Notes are
to be redeemed, the notice of redemption shall identify the Notes to be
redeemed (including CUSIP numbers, if any). 
In case any Note is to be redeemed in part only, the notice of
redemption shall state the portion of the principal amount thereof to be
redeemed and shall state that, on and after the date fixed for redemption, upon
surrender of such Note, a new Note or Notes in principal amount equal to the
unredeemed portion thereof will be issued.

On or prior to the redemption date specified in the notice of
redemption given as provided in this Section 3.2, the Company will deposit
with the Trustee or with one or more paying agents (or, if the Company is
acting as its own paying agent, set aside, segregate and hold in trust as
provided in Section 4.4) an amount of money in immediately available funds
sufficient to redeem on the redemption date all the Notes (or portions thereof)
so called for redemption (other than those theretofore surrendered for
conversion into Common Stock) at the appropriate redemption price, together
with accrued Interest to, but excluding, the date fixed for redemption; provided,
however, that if such payment is made on the redemption date it must be
received by the Trustee or paying agent, as the case may be, by 10:00 a.m.
New York City time on such date.  The
Company shall be entitled to retain any interest, yield or gain on amounts
deposited with the Trustee or any paying agent pursuant to this
Section 3.2 in excess of amounts required hereunder to pay the redemption
price together with accrued Interest to, but excluding, the date fixed for
redemption.  If any Note called for
redemption is converted pursuant hereto prior to such redemption, any money
deposited with the Trustee or 

 

17

 

any paying agent or so segregated and held in trust
for the redemption of such Note shall be paid to the Company upon its written
request, or, if then held by the Company, shall be discharged from such
trust.  Whenever any Notes are to be
redeemed, the Company will give the Trustee written notice in the form of an
Officers’ Certificate not fewer than forty-five (45) days (or such shorter
period of time as may be acceptable to the Trustee) prior to the redemption
date as to the aggregate principal amount of Notes to be redeemed.

If less than all of the outstanding Notes are to be redeemed, the Trustee
shall select the Notes or portions thereof of the Global Note or the Notes in
certificated form to be redeemed (in principal amounts of $1,000 or integral
multiples thereof) by lot, on a pro rata basis or by another method the Trustee
deems fair and appropriate. If any Note selected for partial redemption is
submitted for conversion in part after such selection, the portion of such Note
submitted for conversion shall be deemed (so far as may be possible) to be the
portion to be selected for redemption.  The Notes (or portions thereof) so selected shall be deemed duly
selected for redemption for all purposes hereof, notwithstanding that any such
Note is submitted for conversion in part before the mailing of the notice of
redemption.

Upon any redemption of less than all of the outstanding Notes, the
Company and the Trustee may (but need not), solely for purposes of determining
the pro rata allocation among such Notes as are unconverted and outstanding at
the time of redemption, treat as outstanding any Notes surrendered for
conversion during the period of fifteen (15) days next preceding the mailing of
a notice of redemption and may (but need not) treat as outstanding any Note
authenticated and delivered during such period in exchange for the unconverted
portion of any Note converted in part during such period.

Section 3.3.    Payment
of Notes Called for Redemption.  If notice of redemption has been
given as above provided, the Notes or portion of Notes with respect to which
such notice has been given shall, unless converted into Common Stock pursuant
to the terms hereof, become due and payable on the date fixed for redemption
and at the place or places stated in such notice at the applicable redemption
price, together with Interest accrued to (but excluding) the date fixed for
redemption, and on and after said date (unless the Company shall default in the
payment of such Notes at the redemption price, together with Interest accrued
to said date) Interest on the Notes or portion of Notes so called for
redemption shall cease to accrue and, after the close of business on the
Business Day next preceding the date fixed for redemption (unless the Company
shall default in the payment of such Notes at the redemption price, together
with Interest accrued to said date), such Notes shall cease to be convertible
into Common Stock and, except as provided in Sections 7.5 and 12.4, to be
entitled to any benefit or security under this Indenture, and the holders
thereof shall have no right in respect of such Notes except the right to
receive the redemption price thereof and unpaid Interest to (but excluding) the
date fixed for redemption.  On
presentation and surrender of such Notes at a place of payment in said notice
specified, the said Notes or the specified portions thereof shall be paid and
redeemed by the Company at the applicable redemption price, together with
Interest accrued thereon to (but excluding) the date fixed for redemption and; provided,
however, that if the redemption date falls after a record date and on or
prior to the corresponding interest payment date, then the Interest payable on
such interest payment date shall be paid to the holders of record of such Notes
on the applicable record date instead of the holders surrendering such Notes
for redemption on such date and the redemption price payable to the holders
surrendering such Notes for redemption will be 100% of the principal amount of
such Notes.

Upon presentation of any Note redeemed in part only, the Company shall
execute and the Trustee shall authenticate and make available for delivery to
the holder thereof, at the expense of the Company, a new Note or Notes, of
authorized denominations, in principal amount equal to the unredeemed portion
of the Notes so presented.

 

18

 

Notwithstanding the foregoing, the Trustee shall not redeem any Notes
or mail any notice of redemption during the continuance of a default in payment
of Interest on the Notes.  If any Note
called for redemption shall not be so paid upon surrender thereof for
redemption, the principal shall, until paid or duly provided for, bear interest
from the date fixed for redemption a rate equal to 1% per annum plus the rate
borne by the Note and such Note shall remain convertible into Common Stock
until the principal and Interest shall have been paid or duly provided for.

Section 3.4.    Conversion
Arrangement on Call for Redemption.  In connection with any redemption
of Notes, the Company may arrange for the purchase and conversion of any Notes
by an agreement with one or more investment banks or other purchasers to
purchase such Notes by paying to the Trustee in trust for the Noteholders, on
or before the date fixed for redemption, an amount not less than the applicable
redemption price, together with Interest accrued to (but excluding) the date
fixed for redemption, of such Notes. 
Notwithstanding anything to the contrary contained in this Article
Three, the obligation of the Company to pay the redemption price of such Notes,
together with Interest accrued to (but excluding) the date fixed for redemption
shall be deemed to be satisfied and discharged to the extent such amount is so
paid by such purchasers.  If such an
agreement is entered into, a copy of which will be filed with the Trustee prior
to the date fixed for redemption, any Notes 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 Fourteen)
surrendered by such purchasers for conversion, all as of immediately prior to
the close of business on the date fixed for redemption (and the right to
convert any such Notes shall be extended through such time), subject to payment
of the above amount as aforesaid.  At
the direction of the Company, the Trustee shall hold and dispose of any such
amount paid to it in the same manner as it would monies deposited with it by
the Company for the redemption of Notes. 
Without the Trustee’s prior written consent, no arrangement between the
Company and such purchasers for the purchase and conversion of any Notes shall
increase or otherwise affect any of the powers, duties, responsibilities or
obligations of the Trustee as set forth in this Indenture.

Section 3.5.    Repurchase at Option of Holders Upon a
Designated Event.  (a)       If
there shall occur a Designated Event at any time prior to maturity of the
Notes, then each Noteholder shall have the right, at such holder’s option, to
require the Company to repurchase all of such holder’s Notes, or any portion
thereof that is an integral multiple of $1,000 principal amount, on the date
(the “Designated Event Repurchase Date”) specified by the Company that is at
least twenty (20) Business Days and no later than thirty five (35) Business
Days after the date of the Designated Event Notice (as defined in Section
3.5(b)) of such Designated Event at a cash repurchase price equal to 100% of
the principal amount thereof, together with accrued Interest to, but excluding,
the Designated Event Repurchase Date; provided that if such Designated Event
Repurchase Date falls after a record date and on or prior the corresponding
interest payment date, then the Interest payable on such interest payment date
shall be paid to the holders of record of the Notes on the applicable record
date instead of the holders surrendering the Notes for repurchase on such date
and the repurchase price payable to the holders surrendering such Notes for
repurchase will be 100% of the principal amount of such Notes.  Repurchases of Notes under this Section 3.5
shall be made, at the option of the holder thereof, upon:

(i)    delivery to the Trustee (or other paying
agent appointed by the Company) by a holder of a duly completed notice (the
“Designated Event Repurchase Notice”) in the form set forth on the reverse of
the Note prior to the close of business on the date two Business Days prior to
the Designated Event Repurchase Date; and

(ii)   delivery or book-entry transfer of the Notes
to the Trustee (or other paying agent appointed by the Company) at any time
after delivery of the Designated Event Repurchase Notice 

 

19

 

(together with all necessary endorsements) at the
Corporate Trust Office of the Trustee (or other paying agent appointed by the
Company) in the Borough of Manhattan, The City of New York, as provided in
Section 4.2, such delivery being a condition to receipt by the holder of the
repurchase price therefor; provided that such repurchase price shall be so paid
pursuant to this Section 3.5 only if the Note so delivered to the Trustee (or
other paying agent appointed by the Company) shall conform in all respects to
the description thereof in the related Designated Event Repurchase Notice.

The Company shall purchase from the holder thereof, pursuant to this
Section 3.5, a portion of a Note, if the principal amount of such portion is
$1,000 or a whole multiple of $1,000. 
Provisions of this Indenture that apply to the purchase of all of a Note
also apply to the purchase of such portion of such Note.

Any purchase by the Company contemplated pursuant to the provisions of
this Section 3.5 shall be consummated by the delivery of the consideration to
be received by the holder promptly following the later of the Designated Event
Repurchase Date and the time of the book-entry transfer or delivery of the
Note.

Notwithstanding anything herein to the contrary, any holder delivering
to the Trustee (or other paying agent appointed by the Company) the Designated
Event Repurchase Notice contemplated by this Section 3.5 shall have the
right to withdraw such Designated Event Repurchase Notice at any time prior to
the close of business on the date that is two Business Days prior to the Designated
Event Repurchase Date by delivery of a written notice of withdrawal to the
Trustee (or other paying agent appointed by the Company) in accordance with
Section 3.5(c) below.

The Trustee (or other paying agent appointed by the Company) shall
promptly notify the Company of the receipt by it of any Designated Event
Repurchase Notice or written notice of withdrawal thereof.

(b)   On or before the tenth day after the
occurrence of a Designated Event, the Company or at its written request (which
must be received by the Trustee at least five (5) Business Days prior to the
date the Trustee is requested to give notice as described below, unless the
Trustee shall agree in writing to a shorter period), the Trustee, in the name
of and at the expense of the Company, shall mail or cause to be mailed to all
holders of record on the date of the Designated Event a notice (the “Designated
Event Notice”) of the occurrence of such Designated Event and of the repurchase
right at the option of the holders arising as a result thereof.  Such notice shall be mailed in the manner
and with the effect set forth in the first paragraph of Section 3.2 (without
regard for the time limits set forth therein). 
If the Company shall give such notice, the Company shall also deliver a
copy of the Designated Event Notice to the Trustee at such time as it is mailed
to Noteholders.  Concurrently with the
mailing of any Designated Event Notice, the Company shall issue a press release
announcing such Designated Event referred to in the Designated Event Notice,
the form and content of which press release shall be determined by the Company
in its sole discretion.  The failure to
issue any such press release or any defect therein shall not affect the
validity of the Designated Event Notice or any proceedings for the repurchase
of any Note which any Noteholder may elect to have the Company repurchase as
provided in this Section 3.5.

Each Designated Event Notice shall specify the circumstances
constituting the Designated Event, the Designated Event Repurchase Date, the
price at which the Company shall be obligated to repurchase Notes, that the
holder must exercise the repurchase right on or prior to the close of business
on the date that is two Business Days prior to the Designated Event Repurchase
Date (the “Designated Event Expiration Time”), that the holder shall have the
right to withdraw any Notes surrendered prior to the Designated Event
Expiration Time, a description of the procedure which a Noteholder must follow
to exercise such repurchase right and to withdraw any surrendered Notes, the
place or places where the holder is to surrender such holder’s Notes, the 

 

20

 

amount of Interest accrued on each Note to the
Designated Event Repurchase Date and the CUSIP number or numbers of the Notes
(if then generally in use) and include a form of Designated Event Repurchase
Notice.

No failure of the Company to give the foregoing notices and no defect
therein shall limit the Noteholders’ repurchase rights or affect the validity
of the proceedings for the repurchase of the Notes pursuant to this Section
3.5.

(c)   A Designated Event Repurchase Notice may be
withdrawn by means of a written notice of withdrawal delivered to the office of
the Trustee (or other paying agent appointed by the Company) in accordance with
the Designated Event Repurchase Notice at any time prior to the close of
business on the date that is two Business Days prior to the Designated Event
Repurchase Date, specifying:

(i)    the certificate number, if any, of the Note
in respect of which such notice of withdrawal is being submitted, or the
appropriate Depositary information if the Note in respect of which such notice
of withdrawal is being submitted is represented by a Global Note,

(ii)   the principal amount of the Note with respect
to which such notice of withdrawal is being submitted, and

(iii)  the principal amount, if any, of such Note
which remains subject to the original Designated Event Repurchase Notice and
which has been or will be delivered for purchase by the Company.

(d)   On or prior to the Designated Event
Repurchase Date, the Company will deposit with the Trustee (or other paying
agent appointed by the Company or if the Company is acting as its own paying
agent, set aside, segregate and hold in trust as provided in Section 4.4) an
amount of money sufficient to repurchase on the Designated Event Repurchase
Date all the Notes to be repurchased on such date at the appropriate repurchase
price, together with accrued Interest to, but excluding, the Designated Event
Repurchase Date; provided that if such payment is made on the Designated Event
Repurchase Date it must be received by the Trustee or paying agent, as the case
may be, by 10:00 a.m. New York City time, on such date. Subject to receipt of
funds and/or Notes by the Trustee (or other paying agent appointed by the
Company), payment for Notes surrendered for repurchase (and not withdrawn)
prior to the Designated Event Expiration Time will be made promptly following
the later of (x) the Designated Event Repurchase Date with respect to such Note
(provided the holder has satisfied the conditions in Section 3.5) and (y) the
time of delivery of such Note to the Trustee (or other paying agent appointed
by the Company) by the holder thereof in the manner required by Section 3.5) by
mailing checks for the amount payable to the holders of such Notes entitled
thereto as they shall appear in the Note register.

If the Trustee (or other paying agent appointed by the Company) holds
money sufficient to repurchase on the Designated Event Repurchase Date all the
Notes or portions thereof that are to be purchased as of the Designated Event
Repurchase Date, then on or after the Designated Event Repurchase Date (i) the
Notes will cease to be outstanding, (ii) Interest on the Notes will cease to
accrue, and (iii) all other rights of the holders of such Notes will terminate,
whether or not book-entry transfer of the Notes has been made or the Notes have
been delivered to the Trustee or paying agent, other than the right to receive
the repurchase price upon delivery of the Notes.

(e)   In the case of a reclassification, change,
consolidation, merger, combination, sale or conveyance to which Section 14.6
applies, in which the Common Stock of the Company is changed or 

 

21

 

exchanged as a result into the right to receive stock,
securities or other property or assets (including cash), which includes shares
of Common Stock of the Company or shares of common stock of another Person that
are, or upon issuance will be, traded on a United States national securities
exchange or approved for trading on an established automated over-the-counter
trading market in the United States and such shares constitute at the time such
change or exchange becomes effective in excess of 50% of the aggregate Fair
Market Value of such stock, securities or other property or assets (including
cash) (as determined by the Company, which determination shall be conclusive
and binding), then the Person formed by such consolidation or resulting from
such merger or which acquires such assets, as the case may be, shall execute
and deliver to the Trustee a supplemental indenture (accompanied by an Opinion
of Counsel that such supplemental indenture complies with the Trust Indenture
Act as in force at the date of execution of such supplemental indenture)
modifying the provisions of this Indenture relating to the right of holders of
the Notes to cause the Company to repurchase the Notes following a Designated
Event, including without limitation the applicable provisions of this Section
3.5 and the definitions of Common Stock and Designated Event, as appropriate,
as determined in good faith by the Company (which determination shall be
conclusive and binding), to make such provisions apply to such other Person if
different from the Company and the common stock issued by such Person (in lieu
of the Company and the Common Stock of the Company).

(f)    The Company will comply with the provisions
of Rule 13e-4 and any other tender offer rules under the Exchange Act to the
extent then applicable in connection with the repurchase rights of the holders
of Notes in the event of a Designated Event. 
The Company will file a Schedule TO or any other schedule required in
connection with any offer by the Company to repurchase the Notes following a
Designated Event.

Section 3.6.    Repurchase
of Notes by the Company at Option of the Holder.  Notes shall be purchased by the Company pursuant to the terms of
the Notes at the option of the holder on May 15 of 2009, 2014 and 2019 (each a
“Repurchase Date”), for cash, at a repurchase price of 100% of the principal
amount, plus any accrued and unpaid Interest to, but excluding, the Repurchase
Date, subject to the provisions of Section 3.7(a).  Repurchases of Notes under this Section 3.6 shall be made, at the
option of the holder thereof, upon:

(a)   delivery to the Trustee (or other paying
agent appointed by the Company) by a holder of a duly completed notice (the
“Repurchase Notice”) in the form set forth on the reverse of the Note during
the period beginning at any time from the opening of business on the date that
is 20 Business Days prior to the Repurchase Date until the close of business on
the date that is two Business Days prior to the Repurchase Date; and

(b)   delivery or book-entry transfer of the Notes
to the Trustee (or other paying agent appointed by the Company) at any time
after delivery of the Repurchase Notice (together with all necessary
endorsements) at the Corporate Trust Office of the Trustee (or other paying
agent appointed by the Company) in the Borough of Manhattan, The City of New
York, as provided in Section 4.2, such delivery being a condition to receipt by
the holder of the repurchase price therefor; provided that such repurchase
price shall be so paid pursuant to this Section 3.6 only if the Note so
delivered to the Trustee (or other paying agent appointed by the Company) shall
conform in all respects to the description thereof in the related Repurchase
Notice.

The Company shall purchase from the holder thereof, pursuant to this
Section 3.6, a portion of a Note, if the principal amount of such portion is
$1,000 or a whole multiple of $1,000. 
Provisions of this Indenture that apply to the purchase of all of a Note
also apply to the purchase of such portion of such Note.

 

22

 

Any purchase by the Company contemplated pursuant to the provisions of
this Section 3.6 shall be consummated by the delivery of the consideration to
be received by the holder promptly following the later of the Repurchase Date
and the time of the book-entry transfer or delivery of the Note.

Notwithstanding anything herein to the contrary, any holder delivering
to the Trustee (or other paying agent appointed by the Company) the Repurchase
Notice contemplated by this Section 3.6 shall have the right to withdraw such
Repurchase Notice at any time prior to the close of business on the date that
is two Business Days prior to the Repurchase Date by delivery of a written
notice of withdrawal to the Trustee (or other paying agent appointed by the
Company) in accordance with Section 3.8.

The Trustee (or other paying agent appointed by the Company) shall
promptly notify the Company of the receipt by it of any Repurchase Notice or
written notice of withdrawal thereof.

Section 3.7.    Company
Repurchase Notice.

(a)   The Notes to be repurchased on the Repurchase
Date pursuant to Section 3.6 will be paid for in cash.

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

(i)    the information required by Section 3.7(b)
in the Company Repurchase Notice, and

(ii)   whether the Company desires the Trustee to
give the Company Repurchase Notice required by Section 3.7(b).

(b)   Unless the Company has elected to redeem all
of the Notes on the Repurchase Date in accordance with Section 3.1, in
connection with any repurchase of Notes, the Company shall, no less than 20
Business Days prior to the Repurchase Date (the “Company Repurchase Notice
Date”), give notice to holders at their addresses shown in the Note Register
setting forth information specified in this Section 3.7(b) (the “Company
Repurchase Notice”).  The Company will
also give notice to beneficial owners as required by applicable law.

The Company Repurchase Notice shall:

(1)   state the repurchase price and the Repurchase
Date to which the Company Repurchase Notice relates;

(2)   include a form of Repurchase Notice;

(3)   state the name and address of the Trustee (or
other paying agent appointed by the Company);

(4)   state that Notes must be surrendered to the
Trustee (or other paying agent appointed by the Company) to collect the
repurchase price;

 

23

 

(5)   if the Notes are then convertible, state that
Notes as to which a Repurchase Notice has been given may be converted only if
the Repurchase Notice is withdrawn in accordance with the terms of this
Indenture; and

(6)   state the CUSIP number of the Notes.

The Company Repurchase Notice may be given by the Company or, at the
Company’s request, the Trustee shall give such Company Repurchase Notice in the
Company’s name and at the Company’s expense.

(c)   The Company will comply with the provisions
of Rule 13e-4 and any other tender offer rules under the Exchange Act to the
extent then applicable in connection with the repurchase rights of the holders
of Notes.  The Company will file a
Schedule TO or any other schedule required in connection with any offer by the
Company to repurchase Notes.

Section 3.8.    Effect
of Repurchase Notice.  Upon receipt
by the Trustee (or other paying agent appointed by the Company) of the
Repurchase Notice specified in Section 3.6, the holder of the Note in respect
of which such Repurchase Notice was given shall (unless such Repurchase Notice
is validly withdrawn) thereafter be entitled to receive solely the repurchase
price with respect to such Note.  Such
repurchase price shall be paid to such holder, subject to receipt of funds
and/or Notes by the Trustee (or other paying agent appointed by the Company),
promptly following the later of (x) the Repurchase Date with respect to such
Note (provided the holder has satisfied the conditions in Section 3.6) and (y)
the time of delivery of such Note to the Trustee (or other paying agent
appointed by the Company) by the holder thereof in the manner required by
Section 3.6.  Notes in respect of which
a Repurchase Notice has been given by the holder thereof may not be converted
pursuant to Article Fourteen hereof on or after the date of the delivery of
such Repurchase Notice unless such Repurchase Notice has first been validly
withdrawn.

A Repurchase Notice may be withdrawn by means of a written notice of
withdrawal delivered to the office of the Trustee (or other paying agent
appointed by the Company) in accordance with the Repurchase Notice at any time
prior to the close of business on the date that is two Business Days prior to
the Repurchase Date, specifying:

(a)   the certificate number, if any, of the Note
in respect of which such notice of withdrawal is being submitted, or the
appropriate Depositary information if the Note in respect of which such notice
of withdrawal is being submitted is represented by a Global Note,

(b)   the principal amount of the Note with respect
to which such notice of withdrawal is being submitted, and

(c)   the principal amount, if any, of such Note
which remains subject to the original Repurchase Notice and which has been or
will be delivered for purchase by the Company.

Section 3.9.    Deposit
of Repurchase Price.

(a)   Prior to 10:00 a.m. (New York City Time) on
the Repurchase Date, the Company shall deposit with the Trustee (or other
paying agent appointed by the Company; or, if the Company or a Subsidiary or an
Affiliate of either of them is acting as the paying agent, shall segregate and
hold in trust as provided in Section 4.4) an amount of cash (in immediately
available funds if deposited on such Business Day), sufficient to pay the
aggregate repurchase price of all the Notes or portions thereof that are to be
purchased as of the Repurchase Date.

 

24

 

(b)   If the Trustee or other paying agent
appointed by the Company, or the Company or a Subsidiary or Affiliate of either
of them, if such entity is acting as the paying agent, holds cash sufficient to
pay the aggregate repurchase price of all the Notes, or portions thereof that
are to be purchased as of the Repurchase Date, on or after the Repurchase Date
(i) the Notes will cease to be outstanding, (ii) Interest on the Notes will
cease to accrue, and (iii) all other rights of the holders of such Notes will
terminate, whether or not book-entry transfer of the Notes has been made or the
Notes have been delivered to the Trustee or paying agent, other than the right
to receive the repurchase price upon delivery of the Notes.

Section 3.10.  Notes
Repurchased in Part.  Upon
presentation of any Note repurchased pursuant to Section 3.5 or 3.6, as the
case may be, only in part, the Company shall execute and the Trustee shall
authenticate and make available for delivery to the holder thereof, at the
expense of the Company, a new Note or Notes, of any authorized denomination, in
aggregate principal amount equal to the unrepurchased portion of the Notes
presented.

Section 3.11.  Repayment
to the Company.  The Trustee (or
other paying agent appointed by the Company) shall return to the Company any
cash or money that remains unclaimed as provided in Section 12.4, together with
interest, if any, thereon, held by them for the payment of the repurchase price
pursuant to Section 3.5 or 3.6, as the case may be; provided that to the extent
that the aggregate amount of cash or money deposited by the Company pursuant to
Section 3.5(d) or Section 3.9, as the case may be, exceeds the aggregate
repurchase price of the Notes or portions thereof which the Company is
obligated to purchase as of the Designated Event Repurchase Date or the
Repurchase Date, as the case may be, then, unless otherwise agreed in writing
with the Company, promptly after the Business Day following the Designated
Event Repurchase Date or the Repurchase Date, as the case may be, the Trustee
shall return any such excess to the Company together with interest, if any,
thereon.

ARTICLE Four

PARTICULAR COVENANTS OF THE COMPANY

Section 4.1.    Payment
of Principal and Interest.  The Company covenants and agrees that it
will duly and punctually pay or cause to be paid the principal of (including
the redemption price upon redemption or the repurchase price upon repurchase,
in each case pursuant Article Three) and Interest on each of the Notes at the
places, at the respective times and in the manner provided herein and in the
Notes.

Section 4.2.    Maintenance
of Office or Agency.  The Company will maintain an office or agency in
New York, New York, where the Notes may be surrendered for registration of
transfer or exchange or for presentation for payment or for conversion,
redemption or repurchase and where notices and demands to or upon the Company
in respect of the Notes 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 not designated or appointed by the Trustee.  If at any time the Company shall fail to maintain any such
required office or agency or shall fail to furnish the Trustee with the address
thereof, such presentations, surrenders, notices and demands may be made or
served at the Corporate Trust Office or the office of agency of the Trustee in  New York, New York (which shall initially be
located at  The Bank of New York,  101 Barclay Street, 8th Floor West, New York, New York, 10286,
Attention:  Corporate Trust Trustee
Administration.

The Company may also from time to time designate co-registrars and one
or more offices or agencies where the Notes may be presented or surrendered for
any or all such purposes and may from time to time 

 

25

 

rescind such designations.  The Company will give prompt written notice of any such
designation or rescission and of any change in the location of any such other
office or agency.

The Company hereby initially designates the Trustee as paying agent,
Note registrar, Custodian and conversion agent and each of the Corporate Trust
Office and the office of agency of the Trustee in New York, New York (which
shall initially be located at The Bank of New York, 101 Barclay Street, 8th Floor West, New York, New York, 10286,
Attention:  Corporate Trust Trustee
Administration), shall be considered as one such office or agency of the
Company for each of the aforesaid purposes.

So long as the Trustee is the Note registrar, the Trustee agrees to
mail, or cause to be mailed, the notices set forth in Section 7.10(a) and
the third paragraph of Section 7.11. 
If co-registrars have been appointed in accordance with this
Section, the Trustee shall mail such notices only to the Company and the
holders of Notes it can identify from its records.

Section 4.3.    Appointments
to Fill Vacancies in Trustee’s Office.  The Company, whenever
necessary to avoid or fill a vacancy in the office of Trustee, will appoint, in
the manner provided in Section 7.10, a Trustee, so that there shall at all
times be a Trustee hereunder.

Section 4.4.    Provisions
as to Paying Agent.

(a)   If the Company shall appoint a paying agent
other than the Trustee, or if the Trustee shall appoint such a paying agent,
the Company will cause such paying agent to execute and deliver to the Trustee
an instrument in which such agent shall agree with the Trustee, subject to the
provisions of this Section 4.4:

(1)   that it will hold all sums held by it as such
agent for the payment of the principal of or Interest on the Notes (whether
such sums have been paid to it by the Company or by any other obligor on the
Notes) in trust for the benefit of the holders of the Notes;

(2)   that it will give the Trustee written notice
of any failure by the Company (or by any other obligor on the Notes) to make
any payment of the principal of or Interest on the Notes when the same shall be
due and payable; and

(3)   that at any time during the continuance of an
Event of Default, upon request of the Trustee, it will forthwith pay to the
Trustee all sums so held in trust.

The Company shall, on or before each due date of the principal or
Interest on the Notes, deposit with the paying agent a sum (in funds which are
immediately available on the due date for such payment) sufficient to pay such
principal or Interest, and (unless such paying agent is the Trustee) the
Company will promptly notify the Trustee in writing of any failure to take such
action; provided, however, that if such deposit is made on the
due date, such deposit shall be received by the paying agent by 10:00 a.m.
New York City time, on such date.

(b)   If the Company shall act as its own paying
agent, it will, on or before each due date of the principal of or Interest on
the Notes, set aside, segregate and hold in trust for the benefit of the
holders of the Notes a sum sufficient to pay such principal or Interest so
becoming due and will promptly notify the Trustee in writing of any failure to
take such action and of any failure by the Company (or any other obligor under
the Notes) to make any payment of the principal or Interest on the Notes when
the same shall become due and payable.

 

26

 

(c)   Anything in this Section 4.4 to the
contrary notwithstanding, the Company may, at any time, for the purpose of
obtaining a satisfaction and discharge of this Indenture, or for any other
reason, pay or cause to be paid to the Trustee all sums held in trust by the
Company or any paying agent hereunder as required by this Section 4.4,
such sums to be held by the Trustee upon the trusts herein contained and upon
such payment by the Company or any paying agent to the Trustee, the Company or
such paying agent shall be released from all further liability with respect to
such sums.

(d)   Anything in this Section 4.4 to the
contrary notwithstanding, the agreement to hold sums in trust as provided in
this Section 4.4 is subject to Sections 12.3 and 12.4.

The Trustee shall not be responsible for the actions of any other
paying agents (including the Company if acting as its own paying agent) and
shall have no control of any funds held by such other paying agents.

Section 4.5.    Existence. 
Subject to Article Eleven, the Company will do or cause to be done all things
necessary to preserve and keep in full force and effect its existence and
rights (charter and statutory); provided, however, that the
Company shall not be required to preserve any such right if the Company shall
determine that the preservation thereof is no longer desirable in the conduct
of the business of the Company and that the loss thereof is not disadvantageous
in any material respect to the Noteholders.

Section 4.6.    Maintenance
of Properties.  The Company will cause all properties used or useful
in the conduct of its business or the business of any Significant Subsidiary to
be maintained and kept in good condition, repair and working order and supplied
with all necessary equipment and will cause to be made all necessary repairs,
renewals, replacements, betterments and improvements thereof, all as in the
judgment of the Company may be necessary so that the business carried on in connection
therewith may be properly and advantageously conducted at all times; provided,
however, that nothing in this Section shall prevent the Company from
discontinuing the operation or maintenance of any of such properties if such
discontinuance is, in the judgment of the Company, desirable in the conduct of
its business or the business of any subsidiary and not disadvantageous in any
material respect to the Noteholders.

Section 4.7.    Payment
of Taxes and Other Claims.  The Company will pay or discharge, or
cause to be paid or discharged, before the same may become delinquent,
(i) all taxes, assessments and governmental charges levied or imposed upon
the Company or any Significant Subsidiary or upon the income, profits or
property of the Company or any Significant Subsidiary, (ii) all claims for
labor, materials and supplies which, if unpaid, might by law become a lien or
charge upon the property of the Company or any Significant Subsidiary and
(iii) all stamp taxes and other duties, if any, which may be imposed by
the United States or any political subdivision thereof or therein in connection
with the issuance, transfer, exchange, conversion, redemption or repurchase of
any Notes or with respect to this Indenture; provided, however,
that, in the case of clauses (i) and (ii), the Company shall not be
required to pay or discharge or cause to be paid or discharged any such tax,
assessment, charge or claim (A) if the failure to do so will not, in the
aggregate, have a material adverse impact on the Company, or (B) if the
amount, applicability or validity is being contested in good faith by
appropriate proceedings.

Section 4.8.    Rule
144A Information Requirement.  Within the period prior to the
expiration of the holding period applicable to sales thereof under Rule 144(k)
under the Securities Act (or any successor provision), the Company covenants
and agrees that it shall, during any period in which it is not subject to
Section 13 or 15(d) under the Exchange Act, make available to any holder
or beneficial holder of Notes or any Common Stock issued upon conversion
thereof which continue to be Restricted Securities in connection 

 

27

 

with any sale thereof and any prospective purchaser of
Notes or such Common Stock designated by such holder or beneficial holder, the
information required pursuant to Rule 144A(d)(4) under the Securities Act
upon the request of any holder or beneficial holder of the Notes or such Common
Stock and it will take such further action as any holder or beneficial holder
of such Notes or such Common Stock may reasonably request, all to the extent
required from time to time to enable such holder or beneficial holder to sell
its Notes or Common Stock without registration under the Securities Act within
the limitation of the exemption provided by Rule 144A, as such Rule may be
amended from time to time.  Upon the
request of any holder or any beneficial holder of the Notes or such Common
Stock, the Company will deliver to such holder a written statement as to
whether it has complied with such requirements.

Section 4.9.    Stay,
Extension and Usury Laws.  The Company covenants (to the extent that
it may lawfully do so) that it shall not at any time insist upon, plead, or in
any manner whatsoever claim or take the benefit or advantage of, any stay,
extension or usury law or other law which would prohibit or forgive the Company
from paying all or any portion of the principal of or Interest on the Notes as
contemplated herein, wherever enacted, now or at any time hereafter in force,
or which may affect the covenants or the performance of this Indenture and the
Company (to the extent it may lawfully do so) hereby expressly waives all
benefit or advantage of any such law, and covenants that it will not, by resort
to any such law, hinder, delay or impede the execution of any power herein
granted to the Trustee, but will suffer and permit the execution of every such
power as though no such law had been enacted.

Section 4.10.  Compliance
Certificate.  The Company shall deliver to the Trustee, within one
hundred twenty (120) days after the end of each fiscal year of the Company, a
certificate signed by either the principal executive officer, principal
financial officer or principal accounting officer of the Company, stating
whether or not to the best knowledge of the signer thereof the Company is in
default in the performance and observance of any of the terms, provisions and
conditions of this Indenture (without regard to any period of grace or
requirement of notice provided hereunder) and, if the Company shall be in
default, specifying all such defaults and the nature and the status thereof of
which the signer may have knowledge.

The Company will deliver to the Trustee, forthwith upon becoming aware
of (i) any default in the performance or observance of any covenant,
agreement or condition contained in this Indenture, or (ii) any Event of
Default, an Officers’ Certificate specifying with particularity such Default or
Event of Default and further stating what action the Company has taken, is
taking or proposes to take with respect thereto.

Any notice required to be given under this Section 4.10 shall be
delivered to a Responsible Officer of the Trustee at its Corporate Trust
Office.

Section 4.11.  Additional
Interest Notice.  In the event that the Company is required to pay
Additional Interest to holders of Notes pursuant to the Registration Rights
Agreement, the Company will provide written notice (“Additional Interest
Notice”) to the Trustee of its obligation to pay Additional Interest no later
than fifteen days prior to the proposed payment date for the Additional
Interest, and the Additional Interest Notice shall set forth the amount of
Additional Interest to be paid by the Company on such payment date.  The Trustee shall not at any time be under
any duty or owe a responsibility to any holder of Notes to determine the
Additional Interest, or with respect to the nature, extent or calculation of
the amount of Additional Interest when made, or with respect to the method
employed in such calculation of the Additional Interest.

 

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ARTICLE FIVE

NOTEHOLDERS’ LISTS AND REPORTS

BY THE COMPANY AND THE TRUSTEE

Section 5.1.    Noteholders’
Lists.  The Company covenants and agrees that it will furnish or cause
to be furnished to the Trustee, semiannually, not more than fifteen (15) days
after each May 15 and November 15 in each year beginning with
November 15, 2004, and at such other times as the Trustee may request in
writing, within thirty (30) days after receipt by the Company of any such
request (or such lesser time as the Trustee may reasonably request in order to
enable it to timely provide any notice to be provided by it hereunder), a list
in such form as the Trustee may reasonably require of the names and addresses
of the holders of Notes as of a date not more than fifteen (15) days (or such
other date as the Trustee may reasonably request in order to so provide any
such notices) prior to the time such information is furnished, except that no
such list need be furnished by the Company to the Trustee so long as the
Trustee is acting as the sole Note registrar.

Section 5.2.    Preservation
and Disclosure of Lists.

(a)   The Trustee shall preserve, in as current a
form as is reasonably practicable, all information as to the names and
addresses of the holders of Notes contained in the most recent list furnished
to it as provided in Section 5.1 or maintained by the Trustee in its
capacity as Note registrar or co-registrar in respect of the Notes, if so
acting.  The Trustee may destroy any
list furnished to it as provided in Section 5.1 upon receipt of a new list
so furnished.

(b)   The rights of Noteholders to communicate with
other holders of Notes with respect to their rights under this Indenture or under
the Notes, and the corresponding rights and duties of the Trustee, shall be as
provided by the Trust Indenture Act.

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

Section 5.3.    Reports
by Trustee.

(a)   Within sixty (60) days after February 15 of
each year commencing with the year 2005, the Trustee shall transmit to holders
of Notes such reports dated as of February 15 of the year in which such
reports are made concerning the Trustee and its actions under this Indenture as
may be required pursuant to the Trust Indenture Act at the times and in the
manner provided pursuant thereto.

(b)   A copy of such report shall, at the time of
such transmission to holders of Notes, be filed by the Trustee with each stock
exchange and automated quotation system upon which the Notes are listed and
with the Company.  The Company will
promptly notify the Trustee in writing when the Notes are listed on any stock
exchange or automated quotation system or delisted therefrom.

Section 5.4.    Reports
by Company.  The Company shall file with the Trustee (and the
Commission if at any time after the Indenture becomes qualified under the Trust
Indenture Act), and transmit to holders of Notes, such information, documents
and other reports and such summaries thereof, as may be required 

 

 

29

 

pursuant to the Trust Indenture Act at the times and
in the manner provided pursuant to such Act, whether or not the Notes are
governed by such Act; provided, however, that any such
information, documents or reports required to be filed with the Commission
pursuant to Section 13 or 15(d) of the Exchange Act shall be filed with
the Trustee within fifteen (15) days after the same is so required to be filed
with the Commission.  Delivery of such
reports, information and documents to the Trustee is for informational purposes
only and the Trustee’s receipt of such shall not constitute constructive notice
of any information contained therein or determinable from information contained
therein, including the Company’s compliance with any of its covenants hereunder
(as to which the Trustee is entitled to rely exclusively on Officers’
Certificates).

ARTICLE SIX

REMEDIES OF THE TRUSTEE AND

NOTEHOLDERS ON AN EVENT OF DEFAULT

Section 6.1.    Events
of Default.  In case one or more of the following Events of Default
(whatever the reason for such Event of Default and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body) shall have occurred and be continuing:

(a)   default in the payment of any installment of
Interest upon any of the Notes as and when the same shall become due and
payable, and continuance of such default for a period of thirty (30) days; or

(b)   default in the payment of the principal of or
any of the Notes as and when the same shall become due and payable either at
maturity or in connection with any redemption or repurchase pursuant to Article
Three, by acceleration or otherwise; or

(c)   failure on the part of the Company duly to
observe or perform any other of the covenants or agreements on the part of the
Company in the Notes or in this Indenture (other than a covenant or agreement a
default in whose performance or whose breach is elsewhere in this
Section 6.1 specifically dealt with) continued for a period of sixty (60)
days after the date on which written notice of such failure, requiring the
Company to remedy the same, shall have been given to the Company by the
Trustee, or the Company and a Responsible Officer of the Trustee by the holders
of at least twenty-five percent (25%) in aggregate principal amount of the
Notes at the time outstanding determined in accordance with Section 8.4;
or

(d)   the Company shall commence a voluntary case
or other proceeding seeking liquidation, reorganization or other relief with
respect to the Company or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of the Company or any
substantial part of the property of the Company, or shall consent to any such
relief or to the appointment of or taking possession by any such official in an
involuntary case or other proceeding commenced against the Company, or shall
make a general assignment for the benefit of creditors, or shall fail generally
to pay its debts as they become due; or

(e)   an involuntary case or other proceeding shall
be commenced against the Company seeking liquidation, reorganization or other
relief with respect to the Company or its debts under any bankruptcy,
insolvency or other similar law now or hereafter in effect or seeking the
appointment of a trustee, receiver, liquidator, custodian or other similar
official of the Company or any substantial part of the property of the Company,
and such involuntary case or other proceeding shall remain undismissed and
unstayed for a period of ninety (90) consecutive days; or

 

30

 

(f)    failure on the part of the Company to
provide a Designated Event Notice upon a Designated Event as provided in
Section 3.5 within ten (10) days after such Designated Event occurs;

then, and in each and every such case (other than an
Event of Default specified in Section 6.1(d) or (e)), unless the principal
of all of the Notes shall have already become due and payable, either the
Trustee or the holders of not less than twenty-five percent (25%) in aggregate
principal amount of the Notes then outstanding hereunder determined in
accordance with Section 8.4, by notice in writing to the Company (and to
the Trustee if given by Noteholders), may declare the principal of on all the
Notes and the Interest accrued thereon to be due and payable immediately, and
upon any such declaration the same shall become and shall be immediately due
and payable, anything in this Indenture or in the Notes contained to the
contrary notwithstanding.  If an Event
of Default specified in Section 6.1(d) or (e) occurs, the principal of all
the Notes and the Interest accrued thereon shall be immediately and
automatically due and payable without necessity of further action.  This provision, however, is subject to the
conditions that if, at any time after the principal of the Notes shall have
been so declared due and payable, and before any judgment or decree for the
payment of the monies due shall have been obtained or entered as hereinafter
provided, the Company shall pay or shall deposit with the Trustee a sum
sufficient to pay all matured installments of Interest upon all Notes and the
principal of any and all Notes which shall have become due otherwise than by
acceleration (with Interest on overdue installments of Interest (to the extent
that payment of such interest is enforceable under applicable law) and on such
principal at the rate borne by the Notes plus 1%, to the date of such payment
or deposit) and amounts due to the Trustee pursuant to Section 7.6, and if
any and all defaults under this Indenture, other than the nonpayment of
principal of and accrued Interest on Notes which shall have become due by
acceleration, shall have been cured or waived pursuant to Section 6.7,
then and in every such case the holders of a majority in aggregate principal
amount of the Notes then outstanding, by written notice to the Company and to
the Trustee, may waive all Defaults or Events of Default and rescind and annul
such declaration and its consequences; but no such waiver or rescission and
annulment shall extend to or shall affect any subsequent Default or Event of
Default, or shall impair any right consequent thereon.  The Company shall notify a Responsible
Officer of the Trustee in writing, promptly upon becoming aware thereof, of any
Event of Default.

In case the Trustee shall have proceeded to enforce any right under
this Indenture and such proceedings shall have been discontinued or abandoned
because of such waiver or rescission and annulment or for any other reason or
shall have been determined adversely to the Trustee, then and in every such
case the Company, the holders of Notes, and the Trustee shall be restored
respectively to their several positions and rights hereunder, and all rights,
remedies and powers of the Company, the holders of Notes, and the Trustee shall
continue as though no such proceeding had been taken.

Section 6.2.    Payments
of Notes on Default; Suit Therefor.  The Company covenants that
(a) in case default shall be made in the payment of any installment of
Interest upon any of the Notes as and when the same shall become due and
payable, and such default shall have continued for a period of thirty (30)
days, or (b) in case default shall be made in the payment of the principal
of any of the Notes as and when the same shall have become due and payable,
whether at maturity of the Notes or in connection with any redemption, by or
under this Indenture declaration or otherwise, then, upon demand of the
Trustee, the Company will pay to the Trustee, for the benefit of the holders of
the Notes, the whole amount that then shall have become due and payable on all
such Notes for principal or Interest, as the case may be, with interest upon
the overdue principal and (to the extent that payment of such interest is
enforceable under applicable law) upon the overdue installments of Interest at
the rate borne by the Notes plus 1% and, in addition thereto, such further
amount as shall be sufficient to cover the costs and expenses of collection,
including reasonable compensation to the Trustee, its agents, attorneys and
counsel, and all other amounts due the Trustee under Section 7.6.

 

 

31

 

 

Until such demand by the Trustee, the Company may pay
the principal and Interest on the Notes to the registered holders, whether or
not the Notes are overdue.

In case the Company shall fail forthwith to pay such amounts upon such
demand, the Trustee, in its own name and as trustee of an express trust, shall
be entitled and empowered to institute any actions or proceedings at law or in
equity for the collection of the sums so due and unpaid, and may prosecute any
such action or proceeding to judgment or final decree, and may enforce any such
judgment or final decree against the Company or any other obligor on the Notes
and collect in the manner provided by law out of the property of the Company or
any other obligor on the Notes wherever situated the monies adjudged or decreed
to be payable.

In case there shall be pending proceedings for the bankruptcy or for
the reorganization of the Company or any other obligor on the Notes under Title
11 of the United States Code, or any other applicable law, or in case a
receiver, assignee or trustee in bankruptcy or reorganization, liquidator,
sequestrator or similar official shall have been appointed for or taken
possession of the Company or such other obligor, the property of the Company or
such other obligor, or in the case of any other judicial proceedings relative
to the Company or such other obligor upon the Notes, or to the creditors or
property of the Company or such other obligor, the Trustee, irrespective of
whether the principal of the Notes shall then be due and payable as therein
expressed or by declaration or otherwise and irrespective of whether the Trustee
shall have made any demand pursuant to the provisions of this Section 6.2,
shall be entitled and empowered, by intervention in such proceedings or
otherwise, to file and prove a claim or claims for the whole amount of
principal and Interest owing and unpaid in respect of the Notes, and, in case
of any judicial proceedings, to 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 and of the Noteholders allowed in such judicial proceedings relative to
the Company or any other obligor on the Notes, its or their creditors, or its
or their property, and to collect and receive any monies or other property
payable or deliverable on any such claims, and to distribute the same after the
deduction of any amounts due the Trustee under Section 7.6, and to take
any other action with respect to such claims, including participating as a
member of any official committee of creditors, as it reasonably deems necessary
or advisable, and, unless prohibited by law or applicable regulations, and any
receiver, assignee or trustee in bankruptcy or reorganization, liquidator,
custodian or similar official is hereby authorized by each of the Noteholders
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 Noteholders, to pay to
the Trustee any amount due it for reasonable compensation, expenses, advances
and disbursements, including reasonable counsel fees and expenses incurred by
it up to the date of such distribution. 
To the extent that such payment of reasonable compensation, expenses,
advances and disbursements out of the estate in any such proceedings shall be
denied for any reason, payment of the same shall be secured by a lien on, and
shall be paid out of, any and all distributions, dividends, monies, securities
and other property which the holders of the Notes may be entitled to receive in
such proceedings, whether in liquidation or under any plan of reorganization or
arrangement or otherwise.

All rights of action and of asserting claims under this Indenture, or
under any of the Notes, may be enforced by the Trustee without the possession
of any of the Notes, or the production thereof at any trial or other proceeding
relative thereto, and any such suit or proceeding instituted by the Trustee
shall be brought in its own name as trustee of an express trust, and any
recovery of judgment shall, after provision for the payment of the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agent
and counsel, be for the ratable benefit of the holders of the Notes.

In any proceedings brought by the Trustee (and in any proceedings
involving the interpretation of any provision of this Indenture to which the Trustee
shall be a party) the Trustee shall be held to represent all the 

 

32

 

holders of the Notes, and it shall not be necessary to
make any holders of the Notes parties to any such proceedings.

Section 6.3.    Application
of Monies Collected by Trustee.  Any monies collected by the Trustee
pursuant to this Article Six shall be applied in the order following, at the
date or dates fixed by the Trustee for the distribution of such monies, upon
presentation of the several Notes, and stamping thereon the payment, if only
partially paid, and upon surrender thereof, if fully paid:

FIRST: To the payment of all amounts due the Trustee
under Section 7.6;

SECOND: In case the principal of the outstanding Notes
shall not have become due and be unpaid, to the payment of Interest on the
Notes in default in the order of the maturity of the installments of such
Interest, with interest (to the extent that such interest has been collected by
the Trustee) upon the overdue installments of Interest at the rate borne by the
Notes plus 1%, such payments to be made ratably to the Persons entitled
thereto;

THIRD: In case the principal of the outstanding Notes
shall have become due, by declaration or otherwise, and be unpaid to the
payment of the whole amount then owing and unpaid upon the Notes for principal
and Interest, with Interest on the overdue principal and (to the extent that
such Interest has been collected by the Trustee) upon overdue installments of
Interest at the rate borne by the Notes plus 1%, and in case such monies shall
be insufficient to pay in full the whole amounts so due and unpaid upon the
Notes, then to the payment of such Interest without preference or priority of
principal and over Interest or of Interest over principal or of any installment
of Interest over any other installment of Interest, or of any Note over any
other Note, ratably to the aggregate of such principal and accrued and unpaid
Interest; and

FOURTH: To the payment of the remainder, if any, to
the Company or any other Person lawfully entitled thereto.

Section 6.4.    Proceedings
by Noteholder.  No holder of any Note shall have any right by virtue
of or by reference to any provision of this Indenture to institute any suit,
action or proceeding in equity or at law upon or under or with respect to this
Indenture, or for the appointment of a receiver, trustee, liquidator, custodian
or other similar official, or for any other remedy hereunder, unless such
holder previously shall have given to the Trustee written notice of an Event of
Default and of the continuance thereof, as hereinbefore provided, and unless
also the holders of not less than twenty-five percent (25%) in aggregate
principal amount of the Notes then outstanding shall have made written request
upon the Trustee to institute such action, suit or proceeding in its own name
as Trustee hereunder and shall have offered to the Trustee such reasonable
indemnity satisfactory to it against the costs, expenses and liabilities to be
incurred therein or thereby, and the Trustee for sixty (60) days after its
receipt of such notice, request and offer of indemnity, shall have neglected or
refused to institute any such action, suit or proceeding and no direction
inconsistent with such written request shall have been given to the Trustee
pursuant to Section 6.7; it being understood and intended, and being
expressly covenanted by the taker and holder of every Note with every other
taker and holder and the Trustee, that no one or more holders of Notes shall
have any right in any manner whatever by virtue of or by reference to any
provision of this Indenture to affect, disturb or prejudice the rights of any
other holder of Notes, or to obtain or seek to obtain priority over or
preference to any other such holder, or to enforce any right under this
Indenture, except in the manner herein provided and for the equal, ratable and
common benefit of all holders of Notes (except as otherwise provided
herein).  For the protection and
enforcement of this Section 6.4, each and every Noteholder and the Trustee
shall be entitled to such relief as can be given either at law or in equity.

 

33

 

Notwithstanding any other provision of this Indenture and any provision
of any Note, the right of any holder of any Note to receive payment of the
principal of (including the redemption or repurchase price upon redemption or
repurchase pursuant to Article Three), and accrued Interest on such Note, on or
after the respective due dates expressed in such Note or in the event of
redemption or repurchase, or to institute suit for the enforcement of any such
payment on or after such respective dates against the Company shall not be
impaired or affected without the consent of such holder.

Anything in this Indenture or the Notes to the contrary
notwithstanding, the holder of any Note, without the consent of either the
Trustee or the holder of any other Note, in its own behalf and for its own
benefit, may enforce, and may institute and maintain any proceeding suitable to
enforce, its rights of conversion as provided herein.

Section 6.5.    Proceedings
by Trustee.  In case of an Event of Default known to a Responsible
Officer of the Trustee, the Trustee may, in its discretion, proceed to protect
and enforce the rights vested in it by this Indenture by such appropriate
judicial proceedings as are necessary to protect and enforce any of such
rights, either by suit in equity or by action at law or by proceeding in
bankruptcy or otherwise, whether for the specific enforcement of any covenant
or agreement contained in this Indenture or in aid of the exercise of any power
granted in this Indenture, or to enforce any other legal or equitable right
vested in the Trustee by this Indenture or by law.

Section 6.6.    Remedies
Cumulative and Continuing.  Except as provided in Section 2.6,
all powers and remedies given by this Article Six to the Trustee or to the
Noteholders shall, to the extent permitted by law, be deemed cumulative and not
exclusive of any thereof or of any other powers and remedies available to the
Trustee or the holders of the Notes, by judicial proceedings or otherwise, to
enforce the performance or observance of the covenants and agreements contained
in this Indenture, and no delay or omission of the Trustee or of any holder of
any of the Notes to exercise any right or power accruing upon any Default or
Event of Default occurring and continuing as aforesaid shall impair any such
right or power, or shall be construed to be a waiver of any such Default or any
acquiescence therein, and, subject to the provisions of Section 6.4, every
power and remedy given by this Article Six or by law to the Trustee or to the
Noteholders may be exercised from time to time, and as often as shall be deemed
expedient, by the Trustee or by the Noteholders.

Section 6.7.    Direction
of Proceedings and Waiver of Defaults by Majority of Noteholders.  The
holders of a majority in aggregate principal amount of the Notes at the time
outstanding determined in accordance with Section 8.4 shall have the right
to direct the time, method and place of conducting any proceeding for any
remedy available to the Trustee or exercising any trust or power conferred on
the Trustee; provided, however, that (a) such direction
shall not be in conflict with any rule of law or with this Indenture,
(b) the Trustee may take any other action which is not inconsistent with
such direction and (c) the Trustee may decline to take any action that
would benefit some Noteholder to the detriment of other Noteholders.  The holders of a majority in aggregate
principal amount of the Notes at the time outstanding determined in accordance
with Section 8.4 may, on behalf of the holders of all of the Notes, waive
any past Default or Event of Default hereunder and its consequences except (i) a
default in the payment of Interest on, or the principal of, the Notes,
(ii) a failure by the Company to convert any Notes into Common Stock,
(iii) a default in the payment of the redemption price pursuant to Article
Three, (iv) a default in the payment of the repurchase price pursuant to
Article Three or (v) a default in respect of a covenant or provisions
hereof which under Article Ten cannot be modified or amended without the
consent of the holders of each or all Notes then outstanding or affected thereby.  Upon any such waiver, the Company, the
Trustee and the holders of the Notes shall be restored to their former
positions and rights hereunder; but no such waiver shall extend to any 

 

 

34

 

 

subsequent or other Default or Event of Default or
impair any right consequent thereon. 
Whenever any Default or Event of Default hereunder shall have been
waived as permitted by this Section 6.7, said Default or Event of Default
shall for all purposes of the Notes and this Indenture be deemed to have been
cured and to be not continuing; but no such waiver shall extend to any
subsequent or other Default or Event of Default or impair any right consequent
thereon.

Section 6.8.    Notice
of Defaults.  The Trustee shall, within ninety (90) days after a
Responsible Officer of the Trustee has knowledge of the occurrence of a
default, mail to all Noteholders, as the names and addresses of such holders
appear upon the Note register, notice of all defaults known to a Responsible Officer,
unless such defaults shall have been cured or waived before the giving of such
notice; provided, however, that except in the case of default in
the payment of the principal of or Interest on any of the Notes, the Trustee
shall be protected in withholding such notice if and so long as a trust
committee of directors and/or Responsible Officers of the Trustee in good faith
determines that the withholding of such notice is in the interests of the
Noteholders.

Section 6.9.    Undertaking
to Pay Costs.  All parties to this Indenture agree, and each holder of
any Note by his acceptance thereof shall be deemed to have agreed, that any
court may, in its discretion, require, in any suit for the enforcement of any
right or remedy under this Indenture, or in any suit against the Trustee for
any action taken or omitted by it as Trustee, the filing by any party litigant
in such suit of an undertaking to pay the costs of such suit and that such
court may in its discretion assess reasonable costs, including reasonable attorneys’
fees and expenses, against any party litigant in such suit, having due regard
to the merits and good faith of the claims or defenses made by such party
litigant; provided, however, that the provisions of this
Section 6.9 (to the extent permitted by law) shall not apply to any suit
instituted by the Trustee, to any suit instituted by any Noteholder, or group
of Noteholders, holding in the aggregate more than ten percent in principal
amount of the Notes at the time outstanding determined in accordance with
Section 8.4, or to any suit instituted by any Noteholder for the
enforcement of the payment of the principal of or Interest on any Note on or
after the due date expressed in such Note or to any suit for the enforcement of
the right to convert any Note in accordance with the provisions of Article
Fourteen.

ARTICLE SEVEN

THE TRUSTEE

Section 7.1.    Duties
and Responsibilities of Trustee.  The Trustee, prior to the occurrence
of an Event of Default and after the curing of all Events of Default which may
have occurred, undertakes to perform such duties and only such duties as are
specifically set forth in this Indenture. 
In case an Event of Default has occurred (which has not been cured or
waived), the Trustee shall exercise such of the rights and powers vested in it
by this Indenture, and use the same degree of care and skill in their exercise,
as a prudent person would exercise or use under the circumstances in the
conduct of his own affairs.

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

(a)   prior to the occurrence of an Event of
Default and after the curing or waiving of all Events of Default which may have
occurred:

(1)   the duties and obligations of the Trustee
shall be determined solely by the express provisions of this Indenture and the
Trust Indenture Act, and the Trustee shall not be liable except 

 

35

 

for the performance of such duties and obligations as
are specifically set forth in this Indenture and no implied covenants or
obligations shall be read into this Indenture and the Trust Indenture Act
against the Trustee; and

(2)   in the absence of bad faith and willful
misconduct on the part of the Trustee, the Trustee may conclusively rely as to
the truth of the statements and the correctness of the opinions expressed
therein, upon any 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 provisions hereof are specifically
required to be furnished to the Trustee, the Trustee shall be under a duty to
examine the same to determine whether or not they conform to the requirements
of this Indenture;

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

(c)   the Trustee shall not be liable with respect
to any action taken or omitted to be taken by it in good faith in accordance
with the written direction of the holders of not less than a majority in
principal amount of the Notes at the time outstanding determined as provided in
Section 8.4 relating to the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust or
power conferred upon the Trustee, under this Indenture;

(d)   whether or not therein provided, every
provision of this Indenture relating to the conduct or affecting the liability
of, or affording protection to, the Trustee shall be subject to the provisions
of this Section;

(e)   the Trustee shall not be liable in respect of
any payment (as to the correctness of amount, entitlement to receive or any
other matters relating to payment) or notice effected by the Company or any
paying agent or any records maintained by any co-registrar with respect to the
Notes; and

(f)    if any party fails to deliver a notice
relating to an event the fact of which, pursuant to this Indenture, requires
notice to be sent to the Trustee, the Trustee may conclusively rely on its
failure to receive such notice as reason to act as if no such event occurred.

None of the provisions contained in this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties or in the exercise of any of
its rights or powers, if there is reasonable ground for believing that the
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.

Section 7.2.    Reliance on
Documents, Opinions, Etc.  Except as otherwise provided in
Section 7.1:

(a)   the Trustee may conclusively rely and shall
be protected in acting upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, bond, debenture, note, coupon
or other paper or document (whether in its original or facsimile form) believed
by it in good faith to be genuine and to have been signed or presented by the
proper party or parties;

(b)   any request, direction, order or demand of
the Company mentioned herein shall be sufficiently evidenced by an Officers’
Certificate (unless other evidence in respect thereof be herein specifically
prescribed); and any resolution of the Board of Directors may be evidenced to
the Trustee by a copy thereof certified by the Secretary or an Assistant
Secretary of the Company;

 

36

 

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

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

(e)   the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture or other paper or document, but the Trustee, in its discretion, may
make such further inquiry or investigation into such facts or matters as it may
see fit, and, if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and premises
of the Company, personally or by agent or attorney;

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

(g)   the Trustee shall not be liable for any
action taken, suffered or omitted to be taken by it in good faith and
reasonably believed by it to be authorized or within the discretion or rights
or powers conferred upon it by this Indenture unless the Trustee’s actions or
omissions constitute gross negligence;

(h)   the Trustee shall not be deemed to have
notice of any Default of Event of Default unless a Responsible Officer has
actual knowledge thereof or unless written notice of any event constituting
such a Default or Event of Default has been given; and

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

Section 7.3.    No
Responsibility for Recitals, Etc.  The recitals contained herein and
in the Notes (except in the Trustee’s certificate of authentication) shall be
taken as the statements of the Company, and the Trustee assumes no
responsibility for the correctness of the same.  The Trustee makes no representations as to the validity or
sufficiency of this Indenture or of the Notes. 
The Trustee shall not be accountable for the use or application by the
Company of any Notes or the proceeds of any Notes authenticated and delivered
by the Trustee in conformity with the provisions of this Indenture.

Section 7.4.    Trustee,
Paying Agents, Conversion Agents or Registrar May Own Notes.  The
Trustee, any paying agent, any conversion agent or Note registrar, in its
individual or any other capacity, may become the owner or pledgee of Notes with
the same rights it would have if it were not Trustee, paying agent, conversion
agent or Note registrar.

Section 7.5.    Monies
to be Held in Trust.  Subject to the provisions of Section 12.4
all monies received by the Trustee shall, until used or applied as herein
provided, be held in trust for the purposes for which they 

 

 

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

Section 7.6.    Compensation
and Expenses of Trustee.  The Company covenants and agrees to pay to
the Trustee from time to time, and the Trustee shall be entitled to,
compensation for all services rendered by it hereunder in any capacity (which
shall not be limited by any provision of law in regard to the compensation of a
trustee of an express trust) as mutually agreed to from time to time in writing
between the Company and the Trustee, and the Company will pay or reimburse the
Trustee upon its request for all reasonable expenses, disbursements and
advances reasonably incurred or made by the Trustee in accordance with any of
the provisions of this Indenture (including the reasonable compensation and the
expenses and disbursements of its counsel and of all Persons not regularly in
its employ) except any such expense, disbursement or advance as may arise from
its negligence, willful misconduct, recklessness or bad faith.  The Company also covenants to indemnify the
Trustee (or any officer, director or employee of the Trustee), in any capacity
under this Indenture and its agents and any authenticating agent for, and to
hold them harmless against, any and all loss, liability, damage, claim or
expense, including taxes (other than those based upon, measured by or
determined by the income of the Trustee), incurred without negligence, willful
misconduct, recklessness or bad faith on the part of the Trustee or such
officers, directors, employees and agent or authenticating agent, as the case
may be, and arising out of or in connection with the acceptance or
administration of this trust or in any other capacity hereunder, including the
costs and expenses of defending themselves against any claim (whether asserted
by the Company, a holder of Notes or any other Person) of liability in the
premises.  The obligations of the
Company under this Section 7.6 to compensate or indemnify the Trustee and
to pay or reimburse the Trustee for expenses, disbursements and advances shall
be secured by a lien prior to that of the Notes upon all property and funds
held or collected by the Trustee as such, except funds held in trust for the
benefit of the holders of particular Notes. 
The obligation of the Company under this Section shall survive the satisfaction
and discharge of this Indenture and the resignation or removal of the Trustee.

When the Trustee and its agents and any authenticating agent incur
expenses or render services after an Event of Default specified in
Section 6.1(d) or (e) with respect to the Company occurs, the expenses and
the compensation for the services are intended to constitute expenses of
administration under any bankruptcy, insolvency or similar laws.

Section 7.7.    Officers’
Certificate as Evidence.  Except as otherwise provided in
Section 7.1, whenever in the administration of the provisions of this
Indenture the Trustee shall deem it necessary or desirable that a matter be
proved or established prior to taking or omitting any action hereunder, such
matter (unless other evidence in respect thereof be herein specifically
prescribed) may, in the absence of negligence or willful misconduct on the part
of the Trustee, be deemed to be conclusively proved and established by an
Officers’ Certificate delivered to the Trustee.

Section 7.8.    Conflicting
Interests of Trustee.  If the Trustee has or shall acquire a
conflicting interest within the meaning of the Trust Indenture Act, the Trustee
shall either eliminate such interest or resign, to the extent and in the manner
provided by, and subject to the provisions of, the Trust Indenture Act and this
Indenture.

Section 7.9.    Eligibility
of Trustee.  There shall at all times be a Trustee hereunder which
shall be a Person that is eligible pursuant to the Trust Indenture Act to act
as such and has a combined capital and surplus of at least $50,000,000 (or if
such Person is a member of a bank holding company system, its bank holding
company shall have a combined capital and surplus of at least
$50,000,000).  If such Person publishes

 

38

 

reports of condition at least annually, pursuant to
law or to the requirements of any supervising or examining authority, then for
the purposes of this Section the combined capital and surplus of such Person
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. 
If at any time the Trustee shall cease to be eligible in accordance with
the provisions of this Section 7.9, it shall resign immediately in the manner
and with the effect hereinafter specified in this Article.

Section 7.10.  Resignation or Removal of Trustee. 

(a)   The Trustee may at any time resign by giving
written notice of such resignation to the Company and to the holders of
Notes.  Upon receiving such notice of
resignation, the Company shall promptly appoint a successor trustee by written
instrument, in duplicate, executed by order of the Board of Directors, one copy
of which instrument shall be delivered to the resigning Trustee and one copy to
the successor trustee.  If no successor
trustee shall have been so appointed and have accepted appointment sixty (60)
days after the mailing of such notice of resignation to the Noteholders, the
resigning Trustee may, upon ten (10) Business Days’ notice to the Company and
the Noteholders, petition, at the expense of the Company, any court of
competent jurisdiction for the appointment of a successor trustee, or, any
Noteholder who has been a bona fide holder of a Note or Notes for at least six
(6) months may, at the expense of the Company and subject to the provisions of
Section 6.9, on behalf of himself and all others similarly situated,
petition any such court for the appointment of a successor trustee.  Such court may thereupon, after such notice,
if any, as it may deem proper and prescribe, appoint a successor trustee.

(b)   In case at any time any of the following
shall occur:

(1)   the Trustee shall fail to comply with
Section 7.8 after written request therefor by the Company or by any
Noteholder who has been a bona fide holder of a Note or Notes for at least six
(6) months; or

(2)   the Trustee shall cease to be eligible in
accordance with the provisions of Section 7.9 and shall fail to resign
after written request therefor by the Company or by any such Noteholder; or

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

then, in any such case, the Company may remove the Trustee and appoint
a successor trustee by written instrument, in duplicate, executed by order of
the Board of Directors, one copy of which instrument shall be delivered to the
Trustee so removed and one copy to the successor trustee, or, subject to the
provisions of Section 6.9, any Noteholder who has been a bona fide holder
of a Note or Notes for at least six (6) months may, on behalf of himself and
all others similarly situated, petition any court of competent jurisdiction for
the removal of the Trustee and the appointment of a successor trustee; provided,
however, that if no successor Trustee shall have been appointed and have
accepted appointment sixty (60) days after either the Company or the
Noteholders has removed the Trustee, the Trustee so removed may petition, at
the expense of the Company, any court of competent jurisdiction for an
appointment of a successor trustee.  Such
court may thereupon, after such notice, if any, as it may deem proper and
prescribe, remove the Trustee and appoint a successor trustee.

 

 

39

 

(c)   The holders of a majority in aggregate
principal amount of the Notes at the time outstanding may at any time remove
the Trustee and nominate a successor trustee which shall be deemed appointed as
successor trustee unless, within ten (10) days after notice to the Company of
such nomination, the Company objects thereto, in which case the Trustee so
removed or any Noteholder, or if such Trustee so removed or any Noteholder
fails to act, the Company, upon the terms and conditions and otherwise as in
Section 7.10(a) provided, may petition any court of competent jurisdiction
for an appointment of a successor trustee.

(d)   Any resignation or removal of the Trustee and
appointment of a successor trustee pursuant to any of the provisions of this
Section 7.10 shall become effective upon acceptance of appointment by the
successor trustee as provided in Section 7.11.

Section 7.11.  Acceptance
by Successor Trustee.  Any successor trustee appointed as provided in
Section 7.10 shall execute, acknowledge and deliver to the Company and to
its predecessor trustee an instrument accepting such appointment hereunder, and
thereupon the resignation or removal of the predecessor trustee shall become
effective and such successor trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, duties and obligations
of its predecessor hereunder, with like effect as if originally named as
trustee herein; but, nevertheless, on the written request of the Company or of
the successor trustee, the trustee ceasing to act shall, upon payment of any
amount then due it pursuant to the provisions of Section 7.6, execute and
deliver an instrument transferring to such successor trustee all the rights and
powers of the trustee so ceasing to act. 
Upon request of any such successor trustee, the Company shall execute
any and all instruments in writing for more fully and certainly vesting in and
confirming to such successor trustee all such rights and powers.  Any trustee ceasing to act shall,
nevertheless, retain a lien upon all property and funds held or collected by
such trustee as such, except for funds held in trust for the benefit of holders
of particular Notes, to secure any amounts then due it pursuant to the
provisions of Section 7.6.

No successor trustee shall accept appointment as provided in this
Section 7.11 unless, at the time of such acceptance, such successor
trustee shall be qualified under the provisions of Section 7.8 and be
eligible under the provisions of Section 7.9.

Upon acceptance of appointment by a successor trustee as provided in
this Section 7.11, the Company (or the former trustee, at the written
direction of the Company) shall mail or cause to be mailed notice of the
succession of such trustee hereunder to the holders of Notes at their addresses
as they shall appear on the Note register. 
If the Company fails to mail such notice within ten (10) days after
acceptance of appointment by the successor trustee, the successor trustee shall
cause such notice to be mailed at the expense of the Company.

Section 7.12.  Succession
by Merger, Etc.  Any corporation into which the Trustee may be merged
or converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Trustee shall be a
party, or any corporation succeeding to all or substantially all of the
corporate trust business of the Trustee (including any trust created by this
Indenture), shall be the successor to the Trustee hereunder without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, provided that in the case of any corporation succeeding to all
or substantially all of the corporate trust business of the Trustee, such
corporation shall be qualified under the provisions of Section 7.8 and
eligible under the provisions of Section 7.9.

In case at the time such successor to the Trustee shall succeed to the
trusts created by this Indenture, any of the Notes shall have been
authenticated but not delivered, any such successor to the Trustee may adopt 

 

40

 

the certificate of authentication of any predecessor
trustee or authenticating agent appointed by such predecessor trustee, and
deliver such Notes so authenticated; and in case at that time any of the Notes
shall not have been authenticated, any successor to the Trustee or any
authenticating agent appointed by such successor trustee may authenticate such
Notes in the name of the successor trustee; and in all such cases such
certificates shall have the full force that is provided in the Notes or in this
Indenture; provided, however, that the right to adopt the
certificate of authentication of any predecessor Trustee or authenticate Notes
in the name of any predecessor Trustee shall apply only to its successor or
successors by merger, conversion or consolidation.

Section 7.13.  Preferential
Collection of Claims.  If and when the Trustee shall be or become a
creditor of the Company (or any other obligor upon the Notes), the Trustee
shall be subject to the provisions of the Trust Indenture Act regarding the
collection of the claims against the Company (or any such other obligor).

Section 7.14.  Trustee’s
Application for Instructions from the Company.  Any application by the
Trustee for written instructions from the Company (other than with regard to
any action proposed to be taken or omitted to be taken by the Trustee that
affects the rights of the holders of the Notes under this Indenture may, at the
option of the Trustee, set forth in writing any action proposed to be taken or
omitted by the Trustee under this Indenture and the date on and/or after which
such action shall be taken or such omission shall be effective.  The Trustee shall not be liable for any
action taken by, or omission of, the Trustee in accordance with a proposal
included in such application on or after the date specified in such application
(which date shall not be less than three (3) Business Days after the date any
officer of the Company actually receives such application, unless any such
officer shall have consented in writing to any earlier date) unless prior to
taking any such action (or the effective date in the case of an omission), the
Trustee shall have received written instructions in response to such
application specifying the action to be taken or omitted.

ARTICLE EIGHT

THE NOTEHOLDERS

Section 8.1.    Action
by Noteholders.  Whenever in this Indenture it is provided that the
holders of a specified percentage in aggregate principal amount of the Notes
may take any action (including the making of any demand or request, the giving of
any notice, consent or waiver or the taking of any other action), the fact that
at the time of taking any such action, the holders of such specified percentage
have joined therein may be evidenced (a) by any instrument or any number
of instruments of similar tenor executed by Noteholders in person or by agent
or proxy appointed in writing, or (b) by the record of the holders of
Notes voting in favor thereof at any meeting of Noteholders duly called and
held in accordance with the provisions of Article Nine, or (c) by a
combination of such instrument or instruments and any such record of such a
meeting of Noteholders.  Whenever the
Company or the Trustee solicits the taking of any action by the holders of the
Notes, the Company or the Trustee may fix in advance of such solicitation, a
date as the record date for determining holders entitled to take such
action.  The record date shall be not
more than fifteen (15) days prior to the date of commencement of solicitation
of such action.

Section 8.2.    Proof
of Execution by Noteholders.  Subject to the provisions of
Sections 7.1, 7.2 and 9.5, proof of the execution of any instrument by a
Noteholder or its agent or proxy shall be sufficient if made in accordance with
such reasonable rules and regulations as may be prescribed by the Trustee or in
such manner as shall be satisfactory to the Trustee.  The holding of Notes shall be proved by the registry of such
Notes or by a certificate of the Note registrar.

 

41

 

The record of any Noteholders’ meeting shall be proved
in the manner provided in Section 9.6.

Section 8.3.    Who
Are Deemed Absolute Owners.  The Company, the Trustee, any paying
agent, any conversion agent and any Note registrar may deem the Person in whose
name such Note shall be registered upon the Note register to be, and may treat
it as, the absolute owner of such Note (whether or not such Note shall be
overdue and notwithstanding any notation of ownership or other writing thereon
made by any Person other than the Company or any Note registrar) for the
purpose of receiving payment of or on account of the principal of and Interest
on such Note, for conversion of such Note and for all other purposes; and
neither the Company nor the Trustee nor any paying agent nor any conversion
agent nor any Note registrar shall be affected by any notice to the
contrary.  All such payments so made to
any holder for the time being, or upon his order, shall be valid, and, to the
extent of the sum or sums so paid, effectual to satisfy and discharge the
liability for monies payable upon any such Note.

Section 8.4.    Company-Owned
Notes Disregarded.  In determining whether the holders of the
requisite aggregate principal amount of Notes have concurred in any direction,
consent, waiver or other action under this Indenture, Notes which are owned by
the Company or any other obligor on the Notes or any Affiliate of the Company
or any other obligor on the Notes shall be disregarded and deemed not to be
outstanding for the purpose of any such determination; provided, however,
that, for the purposes of determining whether the Trustee shall be protected in
relying on any such direction, consent, waiver or other action, only Notes
which a Responsible Officer knows are so owned shall be so disregarded.  Notes so owned which have been pledged in
good faith may be regarded as outstanding for the purposes of this
Section 8.4 if the pledgee shall establish to the satisfaction of the
Trustee the pledgee’s right to vote such Notes and that the pledgee is not the
Company, any other obligor on the Notes or any Affiliate of the Company or any
such other obligor.  In the case of a
dispute as to such right, any decision by the Trustee taken upon the advice of
counsel shall be full protection to the Trustee.  Upon request of the Trustee, the Company shall furnish to the
Trustee promptly an Officers’ Certificate listing and identifying all Notes, if
any, known by the Company to be owned or held by or for the account of any of
the above described Persons, and, subject to Section 7.1, the Trustee
shall be entitled to accept such Officers’ Certificate as conclusive evidence
of the facts therein set forth and of the fact that all Notes not listed
therein are outstanding for the purpose of any such determination.

Section 8.5.    Revocation
of Consents; Future Holders Bound.  At any time prior to (but not
after) the evidencing to the Trustee, as provided in Section 8.1, of the
taking of any action by the holders of the percentage in aggregate principal
amount of the Notes specified in this Indenture in connection with such action,
any holder of a Note which is shown by the evidence to be included in the Notes
the holders of which have consented to such action may, by filing written
notice with the Trustee at its Corporate Trust Office and upon proof of holding
as provided in Section 8.2, revoke such action so far as concerns such
Note.  Except as aforesaid, any such
action taken by the holder of any Note shall be conclusive and binding upon
such holder and upon all future holders and owners of such Note and of any
Notes issued in exchange or substitution 
therefor, irrespective of whether any notation in regard thereto is made
upon such Note or any Note issued in exchange or substitution therefor.

ARTICLE NINE

MEETINGS OF NOTEHOLDERS

Section 9.1.    Purpose
of Meetings.  A meeting of Noteholders may be called at any time and
from time to time pursuant to the provisions of this Article Nine for any of
the following purposes:

 

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(1)           to give any notice to the Company or
to the Trustee or to give any directions to the Trustee permitted under this
Indenture, or to consent to the waiving of any Default or Event of Default
hereunder and its consequences, or to take any other action authorized to be
taken by Noteholders pursuant to any of the provisions of Article Six;

(2)           to remove the Trustee and nominate a
successor trustee pursuant to the provisions of Article Seven;

(3)           to consent to the execution of an
indenture or indentures supplemental hereto pursuant to the provisions of
Section 10.2; or

(4)           to take any other action authorized
to be taken by or on behalf of the holders of any specified aggregate principal
amount of the Notes under any other provision of this Indenture or under applicable
law.

Section 9.2.    Call
of Meetings by Trustee.  The Trustee may at any time call a meeting of
Noteholders to take any action specified in Section 9.1, to be held at
such time and at such place as the Trustee shall determine.  Notice of every meeting of the Noteholders,
setting forth the time and the place of such meeting and in general terms the
action proposed to be taken at such meeting and the establishment of any record
date pursuant to Section 8.1, shall be mailed to holders of Notes at their
addresses as they shall appear on the Note register.  Such notice shall also be mailed to the Company.  Such notices shall be mailed not less than
twenty (20) nor more than ninety (90) days prior to the date fixed for the
meeting.

Any meeting of Noteholders shall be valid without notice if the holders
of all Notes then outstanding are present in person or by proxy or if notice is
waived before or after the meeting by the holders of all Notes outstanding, and
if the Company and the Trustee are either present by duly authorized
representatives or have, before or after the meeting, waived notice.

Section 9.3.    Call
of Meetings by Company or Noteholders.  In case at any time the
Company, pursuant to a resolution of its Board of Directors, or the holders of
at least ten percent (10%) in aggregate principal amount of the Notes then
outstanding, shall have requested the Trustee to call a meeting of Noteholders,
by written request setting forth in reasonable detail the action proposed to be
taken at the meeting, and the Trustee shall not have mailed the notice of such
meeting within twenty (20) days after receipt of such request, then the Company
or such Noteholders may determine the time and the place for such meeting and
may call such meeting to take any action authorized in Section 9.1, by
mailing notice thereof as provided in Section 9.2.

Section 9.4.    Qualifications
for Voting.  To be entitled to vote at any meeting of Noteholders a
person shall (a) be a holder of one or more Notes on the record date
pertaining to such meeting or (b) be a person appointed by an instrument
in writing as proxy by a holder of one or more Notes on the record date
pertaining to such meeting.  The only
persons who shall be entitled to be present or to speak at any meeting of
Noteholders shall be the persons entitled to vote at such meeting and their
counsel and any representatives of the Trustee and its counsel and any
representatives of the Company and its counsel.

Section 9.5.    Regulations. 
Notwithstanding any other provisions of this Indenture, the Trustee may make
such reasonable regulations as it may deem advisable for any meeting of
Noteholders, in regard to proof of the holding of Notes and of the appointment
of proxies, and in regard to the appointment and duties of 

 

 

43

 

inspectors of votes, the submission and examination of
proxies, certificates and other evidence of the right to vote, and such other
matters concerning the conduct of the meeting as it shall think fit.

The Trustee shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the
Company or by Noteholders as provided in Section 9.3, in which case the
Company or the Noteholders calling the meeting, as the case may be, shall in
like manner appoint a temporary chairman. 
A permanent chairman and a permanent secretary of the meeting shall be
elected by vote of the holders of a majority in principal amount of the Notes
represented at the meeting and entitled to vote at the meeting.

Subject to the provisions of Section 8.4, at any meeting each
Noteholder or proxyholder shall be entitled to one vote for each $1,000
principal amount of Notes held or represented by him; provided, however,
that no vote shall be cast or counted at any meeting in respect of any Note
challenged as not outstanding and ruled by the chairman of the meeting to be
not outstanding.  The chairman of the
meeting shall have no right to vote other than by virtue of Notes held by him
or instruments in writing as aforesaid duly designating him as the proxy to
vote on behalf of other Noteholders. 
Any meeting of Noteholders duly called pursuant to the provisions of
Section 9.2 or 9.3 may be adjourned from time to time by the holders of a
majority of the aggregate principal amount of Notes represented at the meeting,
whether or not constituting a quorum, and the meeting may be held as so
adjourned without further notice.

Section 9.6.    Voting. 
The vote upon any resolution submitted to any meeting of Noteholders shall be
by written ballot on which shall be subscribed the signatures of the holders of
Notes or of their representatives by proxy and the outstanding principal amount
of the Notes held or represented by them. 
The permanent chairman of the meeting shall appoint two inspectors of
votes who shall count all votes cast at the meeting for or against any
resolution and who shall make and file with the secretary of the meeting their
verified written reports in duplicate of all votes cast at the meeting.  A record in duplicate of the proceedings of
each meeting of Noteholders shall be prepared by the secretary of the meeting
and there shall be attached to said record the original reports of the
inspectors of votes on any vote by ballot taken thereat and affidavits by one
or more persons having knowledge of the facts setting forth a copy of the
notice of the meeting and showing that said notice was mailed as provided in
Section 9.2.  The record shall show
the principal amount of the Notes voting in favor of or against any
resolution.  The record shall be signed
and verified by the affidavits of the permanent chairman and secretary of the
meeting and one of the duplicates shall be delivered to the Company and the
other to the Trustee to be preserved by the Trustee, the latter to have
attached thereto the ballots voted at the meeting.

Any record so signed and verified shall be conclusive evidence of the
matters therein stated.

Section 9.7.    No
Delay of Rights by Meeting.  Nothing contained in this Article Nine
shall be deemed or construed to authorize or permit, by reason of any call of a
meeting of Noteholders or any rights expressly or impliedly conferred hereunder
to make such call, any hindrance or delay in the exercise of any right or
rights conferred upon or reserved to the Trustee or to the Noteholders under
any of the provisions of this Indenture or of the Notes.

 

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ARTICLE TEN

SUPPLEMENTAL INDENTURES

Section 10.1.  Supplemental
Indentures Without Consent of Noteholders.  The Company, when
authorized by the resolutions of the Board of Directors, and the Trustee may,
from time to time, and at any time enter into an indenture or indentures
supplemental hereto for one or more of the following purposes:

(a)   make provision with respect to the conversion
rights of the holders of Notes pursuant to the requirements of
Section 14.6 and the repurchase obligations of the Company pursuant to the
requirements of Section 3.5(e);

(b)   to convey, transfer, assign, mortgage or
pledge to the Trustee as security for the Notes, any property or assets;

(c)   to evidence the succession of another Person
to the Company, or successive successions, and the assumption by the successor
Person of the covenants, agreements and obligations of the Company pursuant to
Article Eleven;

(d)   to add to the covenants of the Company such
further covenants, restrictions or conditions as the Board of Directors and the
Trustee shall consider to be for the benefit of the holders of Notes, and to
make the occurrence, or the occurrence and continuance, of a default in any
such additional covenants, restrictions or conditions a default or an Event of
Default permitting the enforcement of all or any of the several remedies
provided in this Indenture as herein set forth; provided, however,
that in respect of any such additional covenant, restriction or condition, such
supplemental indenture may provide for a particular period of grace after
default (which period may be shorter or longer than that allowed in the case of
other defaults) or may provide for an immediate enforcement upon such default
or may limit the remedies available to the Trustee upon such default;

(e)   to provide for the issuance under this
Indenture of Notes in coupon form (including Notes registrable as to principal
only) and to provide for exchangeability of such Notes with the Notes issued
hereunder in fully registered form and to make all appropriate changes for such
purpose;

(f)    to cure any ambiguity or to correct or
supplement any provision contained herein or in any supplemental indenture that
may be defective or inconsistent with any other provision contained herein or
in any supplemental indenture, or to make such other provisions in regard to
matters or questions arising under this Indenture that shall not materially
adversely affect the interests of the holders of the Notes;

(g)   to evidence and provide for the acceptance of
appointment hereunder by a successor Trustee with respect to the Notes; or

(h)   to modify, eliminate or add to the provisions
of this Indenture to such extent as shall be necessary to effect the
qualifications of this Indenture under the Trust Indenture Act, or under any
similar federal statute hereafter enacted.

Upon the written request of the Company, accompanied by a copy of the
resolutions of the Board of Directors certified by its Secretary or Assistant
Secretary authorizing the execution of any supplemental indenture, the Trustee
is hereby authorized to join with the Company in the execution of any such
supplemental indenture, to make any further appropriate agreements and
stipulations that may be therein 

 

45

 

contained and to accept the conveyance, transfer and
assignment of any property thereunder, but the Trustee shall not be obligated
to, but may in its discretion, enter into any supplemental indenture that
affects the Trustee’s own rights, duties or immunities under this Indenture or
otherwise.

Any supplemental indenture authorized by the provisions of this
Section 10.1 may be executed by the Company and the Trustee without the
consent of the holders of any of the Notes at the time outstanding,
notwithstanding any of the provisions of Section 10.2.

Notwithstanding any other provision of the Indenture or the Notes, the
Registration Rights Agreement and the obligation to pay Additional Interest
thereunder may be amended, modified or waived in accordance with the provisions
of the Registration Rights Agreement.

Section 10.2.  Supplemental
Indenture with Consent of Noteholders.  With the consent (evidenced as
provided in Article Eight) of the holders of not less than a majority in
aggregate principal amount of the Notes at the time outstanding, the Company,
when authorized by the resolutions of the Board of Directors, and the Trustee
may, from time to time and at any time, enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Indenture or any
supplemental indenture or of modifying in any manner the rights of the holders
of the Notes; provided, however, that no such supplemental
indenture shall (i) extend the fixed maturity of any Note, or reduce the
rate or extend the time of payment of Interest thereon, or reduce the principal
amount thereof or reduce any amount payable on redemption or repurchase
thereof, or change the obligation of the Company to repurchase any Note at the
option of a Noteholder on a Repurchase Date in a manner adverse to the holders
of the Notes, or impair the right of any Noteholder to institute suit for the
payment thereof, or make the principal thereof or Interest thereon payable in
any coin or currency other than that provided in the Notes, or change the
obligation of the Company to redeem any Note upon the happening of a Designated
Event in a manner adverse to the holder of Notes, or impair the right to
convert the Notes into Common Stock subject to the terms set forth herein,
including Section 14.6, in each case, without the consent of the holder of
each Note so affected, or modify any provisions of this Section 10.2 or
Section 6.7, except to increase any such percentage or to provide that
certain other provisions of this Indenture cannot be modified or waived without
the consent of the holder of each Note so affected, or reduce the quorum or
voting requirements set forth in Article Nine or (ii) reduce the
aforesaid percentage of Notes, the holders of which are required to consent to
any such supplemental indenture, without the consent of the holders of all
Notes then outstanding.

Upon the written request of the Company, accompanied by a copy of the
resolutions of the Board of Directors certified by its Secretary or Assistant
Secretary authorizing the execution of any such supplemental indenture, and
upon the filing with the Trustee of evidence of the consent of Noteholders as
aforesaid, the Trustee shall join with the Company in the execution of such
supplemental indenture unless such supplemental indenture affects the Trustee’s
own rights, duties or immunities under this Indenture or otherwise, in which
case the Trustee may in its discretion, but shall not be obligated to, enter
into such supplemental indenture.

It shall not be necessary for the consent of the Noteholders under this
Section 10.2 to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such consent shall approve the
substance thereof.

Section 10.3.  Effect
of Supplemental Indenture.  Any supplemental indenture executed
pursuant to the provisions of this Article Ten shall comply with the Trust
Indenture Act, as then in effect, provided that 

 

 

46

 

this Section 10.3 shall not require such
supplemental indenture or the Trustee to be qualified under the Trust Indenture
Act prior to the time such qualification is in fact required under the terms of
the Trust Indenture Act or the Indenture has been qualified under the Trust
Indenture Act, nor shall it constitute any admission or acknowledgment by any
party to such supplemental indenture that any such qualification is required
prior to the time such qualification is in fact required under the terms of the
Trust Indenture Act or the Indenture has been qualified under the Trust
Indenture Act.  Upon the execution of
any supplemental indenture pursuant to the provisions of this Article Ten, this
Indenture shall be and be deemed to be modified and amended in accordance
therewith and the respective rights, limitation of rights, obligations, duties
and immunities under this Indenture of the Trustee, the Company and the holders
of Notes shall thereafter be determined, exercised and enforced hereunder,
subject in all respects to such modifications and amendments and all the terms
and conditions of any such supplemental indenture shall be and be deemed to be
part of the terms and conditions of this Indenture for any and all purposes.

Section 10.4.  Notation
on Notes.  Notes authenticated and delivered after the execution of
any supplemental indenture pursuant to the provisions of this Article Ten may
bear a notation in form approved by the Trustee as to any matter provided for
in such supplemental indenture.  If the
Company or the Trustee shall so determine, new Notes so modified as to conform,
in the opinion of the Trustee and the Board of Directors, to any modification
of this Indenture contained in any such supplemental indenture may, at the
Company’s expense, be prepared and executed by the Company, authenticated by
the Trustee (or an authenticating agent duly appointed by the Trustee pursuant
to Section 15.11) and delivered in exchange for the Notes then
outstanding, upon surrender of such Notes then outstanding.

Section 10.5.  Evidence of Compliance of Supplemental Indenture to be
Furnished to Trustee. 
Prior to entering into any supplemental indenture, the Trustee shall receive an
Officers’ Certificate and an Opinion of Counsel as conclusive evidence that any
supplemental indenture executed pursuant hereto complies with the requirements
of this Article Ten.

ARTICLE ELEVEN

CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE

Section 11.1.  Company
May Consolidate, Etc on Certain Terms. 
Subject to the provisions of Section 11.2, nothing contained in
this Indenture or in any of the Notes shall prevent any consolidation or merger
of the Company with or into any other Person or Persons (whether or not
affiliated with the Company), or successive consolidations or mergers in which
the Company or its successor or successors shall be a party or parties, or
shall prevent any sale, conveyance, transfer or lease (or successive sales,
conveyances, transfer or leases) the property and assets of the Company
substantially as an entirety, to any other Person (whether or not affiliated
with the Company); provided, however, that upon any such
consolidation, merger, sale, conveyance, transfer or lease, (i) the
Company is the surviving Person, or the resulting, surviving or transferee
Person, if other than the Company, is a corporation organized and existing
under the laws of the United States of America, any state thereof or the
District of Columbia, (ii) the due and punctual payment of the principal
and Interest on all of the Notes, according to their tenor and the due and
punctual performance and observance of all of the covenants and conditions of
this Indenture to be performed by the Company, shall be expressly assumed, by
supplemental indenture satisfactory in form to the Trustee, executed and
delivered to the Trustee by the Person (if other than the Company) formed by
such consolidation, or into which the Company shall have been merged, or by the
Person that shall have acquired or leased such property, and such supplemental
indenture shall provide for the applicable conversion rights set 

 

47

 

forth in Section 14.6 and (iii) immediately
after giving effect to the transaction described above, no Default or Event of
Default shall have happened and be continuing.

Section 11.2.  Successor
Corporation to be Substituted.  In case of any such consolidation,
merger, sale, conveyance, transfer or lease and upon the assumption by the
successor Person, by supplemental indenture, executed and delivered to the
Trustee and satisfactory in form to the Trustee, of the due and punctual
payment of the principal and Interest on all of the Notes and the due and
punctual performance of all of the covenants and conditions of this Indenture
to be performed by the Company, such successor Person shall succeed to and be
substituted for the Company, with the same effect as if it had been named
herein as the party of this first part. 
Such successor Person thereupon may cause to be signed, and may issue
either in its own name or in the name of ImClone Systems Incorporated  any or all of the Notes, issuable hereunder that
theretofore shall not have been signed by the Company and delivered to the
Trustee; and, upon the order of such successor Person instead of the Company
and subject to all the terms, conditions and limitations in this Indenture
prescribed, the Trustee shall authenticate and shall deliver, or cause to be
authenticated and delivered, any Notes that previously shall have been signed
and delivered by the officers of the Company to the Trustee for authentication,
and any Notes that such successor Person thereafter shall cause to be signed
and delivered to the Trustee for that purpose. 
All the Notes so issued shall in all respects have the same legal rank
and benefit under this Indenture as the Notes theretofore or thereafter issued
in accordance with the terms of this Indenture as though all of such Notes had
been issued at the date of the execution hereof.  In the event of any such consolidation, merger, sale, conveyance,
transfer or lease, the Person named as the “Company” in the first paragraph of
this Indenture or any successor that shall thereafter have become such in the
manner prescribed in this Article Eleven may be dissolved, wound up and
liquidated at any time thereafter and such Person shall be released from its
liabilities as obligor and maker of the Notes and from its obligations under
this Indenture.

In case of any such consolidation, merger, sale, conveyance, transfer
or lease, such changes in phraseology and form (but not in substance) may be
made in the Notes thereafter to be issued as may be appropriate.

Section 11.3.  Opinion of Counsel to be Given Trustee.  The Trustee shall receive an
Officers’ Certificate and an Opinion of Counsel as conclusive evidence that any
such consolidation, merger, sale, conveyance or lease and any such assumption
complies with the provisions of this Article Eleven.

ARTICLE TWELVE

SATISFACTION AND DISCHARGE OF INDENTURE

Section 12.1.  Discharge
of Indenture.  When (a) the Company shall deliver to the Trustee
for cancellation all Notes theretofore authenticated (other than any Notes that
have been destroyed, lost or stolen and in lieu of or in substitution for which
other Notes shall have been authenticated and delivered) and not theretofore
canceled, or (b) all the Notes not theretofore canceled or delivered to the
Trustee for cancellation shall have become due and payable, or are by their
terms to become due and payable within one year or are to be called for
redemption within one year under arrangements satisfactory to the Trustee for
the giving of notice of redemption, and the Company shall deposit with the
Trustee, in trust, funds sufficient to pay at maturity or upon redemption of
all of the Notes (other than any Notes that shall have been mutilated,
destroyed, lost or stolen and in lieu of or in substitution for which other
Notes shall have been authenticated and delivered) not theretofore canceled or
delivered to the Trustee for cancellation, including principal and Interest due
or to become due to such date of maturity or redemption date, as the case may
be, accompanied 

 

 

48

 

by a verification report, as to the sufficiency of the
deposited amount, from an independent certified accountant or other financial
professional satisfactory to the Trustee, and if the Company shall also pay or
cause to be paid all other sums payable hereunder by the Company, then this
Indenture shall cease to be of further effect (except as to (i) remaining
rights of registration of transfer, substitution and exchange and conversion of
Notes, (ii) rights hereunder of Noteholders to receive payments of
principal of and Interest on, the Notes and the other rights, duties and
obligations of Noteholders, as beneficiaries hereof with respect to the
amounts, if any, so deposited with the Trustee and (iii) the rights,
obligations and immunities of the Trustee hereunder), and the Trustee, on
written demand of the Company accompanied by an Officers’ Certificate and an
Opinion of Counsel as required by Section 15.5 and at the cost and expense
of the Company, shall execute proper instruments acknowledging satisfaction of
and discharging this Indenture; the Company, however, hereby agrees to
reimburse the Trustee for any costs or expenses thereafter reasonably and
properly incurred by the Trustee and to compensate the Trustee for any services
thereafter reasonably and properly rendered by the Trustee in connection with
this Indenture or the Notes.

Section 12.2.  Deposited
Monies to be Held in Trust by Trustee.  Subject to Section 12.4,
all monies deposited with the Trustee pursuant to Section 12.1, shall be
held in trust for the sole benefit of the Noteholders and such monies shall be
applied by the Trustee to the payment, either directly or through any paying
agent (including the Company if acting as its own paying agent), to the holders
of the particular Notes for the payment or redemption of which such monies have
been deposited with the Trustee, of all sums due and to become due thereon for
principal and Interest.

Section 12.3.  Paying
Agent to Repay Monies Held.  Upon the satisfaction and discharge of
this Indenture, all monies then held by any paying agent of the Notes (other
than the Trustee) shall, upon written request of the Company, be repaid to it
or paid to the Trustee, and thereupon such paying agent shall be released from
all further liability with respect to such monies.

Section 12.4.  Return
of Unclaimed Monies.  Subject to the requirements of applicable law,
any monies deposited with or paid to the Trustee for payment of the principal
or Interest on Notes and not applied but remaining unclaimed by the holders of
Notes for two years after the date upon which the principal or Interest on such
Notes, as the case may be, shall have become due and payable, shall be repaid
to the Company by the Trustee on written demand and all liability of the
Trustee shall thereupon cease with respect to such monies; and the holder of
any of the Notes shall thereafter look only to the Company for any payment that
such holder may be entitled to collect unless an applicable abandoned property
law designates another Person.

Section 12.5.  Reinstatement. 
If the Trustee or the paying agent is unable to apply any money in accordance
with Section 12.2 by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, the Company’s obligations under this Indenture and the Notes shall
be revived and reinstated as though no deposit had occurred pursuant to
Section 12.1 until such time as the Trustee or the paying agent is
permitted to apply all such money in accordance with Section 12.2; provided,
however, that if the Company makes any payment of Interest on or
principal of any Note following the reinstatement of its obligations, the
Company shall be subrogated to the rights of the holders of such Notes to
receive such payment from the money held by the Trustee or paying agent.

ARTICLE THIRTEEN

49

 

IMMUNITY OF INCORPORATORS,

STOCKHOLDERS, OFFICERS AND DIRECTORS

Section 13.1.  Indenture
and Notes Solely Corporate Obligations.  No recourse for the payment
of the principal or Interest on any Note, or for any claim based thereon or
otherwise in respect thereof, and no recourse under or upon any obligation,
covenant or agreement of the Company in this Indenture or in any supplemental
indenture or in any Note, or because of the creation of any indebtedness
represented thereby, shall be had against any incorporator, stockholder,
employee, agent, officer, director or subsidiary, as such, past, present or
future, of the Company or of any successor corporation, either directly or
through the Company or any successor corporation, whether by virtue of any
constitution, statute or rule of law, or by the enforcement of any assessment
or penalty or otherwise; it being expressly understood that all such liability
is hereby expressly waived and released as a condition of, and as a
consideration for, the execution of this Indenture and the issue of the Notes.

ARTICLE Fourteen

CONVERSION OF NOTES

Section 14.1.  Right
to Convert.  (a) Subject to and upon compliance with the
provisions of this Indenture, the holder of any Note shall have the right, at
its option, at any time after the original issuance of the Notes hereunder
through the close of business on the Business Day immediately prior to the
final maturity date of the Notes (except that, with respect to any Note or
portion of a Note that shall be called for redemption, such right shall
terminate, except as provided in Section 14.2, Section 3.2 or
Section 3.4, at the close of business on the second Business Day next
preceding the date fixed for redemption of such Note or portion of a Note
unless the Company shall default in payment due upon redemption thereof) to
convert the principal amount of any such Note, or any portion of such principal
amount which is $1,000 or an integral multiple thereof, into that number of
fully paid and non-assessable shares of Common Stock (as such shares shall then
be constituted) obtained by multiplying the principal amount of the Note or
portion thereof surrendered for conversion by the Conversion Rate in effect at
such time, by surrender of the Note so to be converted in whole or in part in
the manner provided, together with any required funds, under the circumstances
described in this Section 14.1 and in the manner provided in Section 14.2. The
Notes shall be convertible only upon the occurrence of one of the following
events:

(i)    on or prior to May 15, 2019 during any
calendar quarter commencing after June 30, 2004, if the Closing Sale Price
exceeds 120% of the Conversion Price for at least twenty (20) Trading Days in
the thirty (30) consecutive Trading Day period ending on the last Trading Day
of the immediately preceding calendar quarter (it being understood for purposes
of this Section 14.1(a)(i) that the Conversion Price in effect at the close of
business on each of the thirty (30) 
consecutive Trading Days should be used) ; provided, however,
that if the foregoing test is met, the Notes will thereafter be convertible at
any time at the option of the holder prior to the close of business on the
Business Day immediately prior to the maturity date of the Notes;

(ii)   after May 15, 2019, if the Closing Sale Price
exceeds 120% of the Conversion Price on the immediately preceding Trading Day; provided,
however, that if the foregoing test is met, the Notes will thereafter be
convertible at any time at the option of the holder prior to the close of
business on the Business Day immediately prior to the maturity date of the
Notes;

 

50

 

(iii)  during the five Business Day period
immediately following any five (5) consecutive Trading Day period (the
“Measurement Period”) in which the Trading Price per $1,000 principal amount of
the Notes for each day of such Measurement Period was less than 98% of the
product of the Closing Sale Price and the number of shares of Common Stock
issuable upon conversion of $1,000 principal amount of the Notes; provided that
no conversion pursuant to this clause (iii) may be made after May 15, 2019, if
on any Trading Day during the Measurement Period, the Closing Sale Price is
more than 100%, but less than 120% of the Conversion Price on such Trading Day;

(iv)  if such Note has been called for redemption,
at any time on or after the date the notice of redemption has been given until
the close of business on the second Business Day immediately preceding the
redemption date; or

(v)   as provided in Section (b) of this Section
14.1.

The Trustee (or other
conversion agent appointed by the Company) shall, on behalf of the Company,
determine on each Trading Day during the time period specified in Section
14.1(a)(i) and Section 14.1(a)(ii) whether the Notes shall be convertible as a
result of the occurrence of an event specified in clause (i) or (ii) above and,
if the Notes shall be so convertible, the Trustee (or other conversion agent
appointed by the Company) shall promptly deliver to the Company and the Trustee
(if the Trustee is not the conversion agent) written notice thereof.  Whenever the Notes shall become convertible
pursuant to this Section 14.1, the Company or, at the Company’s request, the
Trustee in the name and at the expense of the Company, shall notify the holders
of the event triggering such convertibility in the manner provided in Section
15.3.  Any notice so given shall be
conclusively presumed to have been duly given, whether or not the holder
receives such notice.

The Trustee (or other
conversion agent appointed by the Company) shall have no obligation to
determine the Trading Price under this Section 14.1 unless the Company has
requested such a determination; and the Company shall have no obligation to
make such request unless a holder provides it with reasonable evidence that the
Trading Price per $1,000 principal amount of Notes would be less than 98% of
the product of the Closing Sale Price and the number of shares of Common Stock
issuable upon conversion of $1,000 principal amount of Notes.  If such evidence is provided, the Company
shall instruct the Trustee (or other conversion agent) to determine the Trading
Price of the Notes beginning on the next Trading Day and on each successive
Trading Day until the Trading Price per $1,000 principal amount of Notes is
greater than or equal to 98% of the product of the Closing Sale Price and the
number of shares issuable upon conversion of $1,000 principal amount of the
Notes; provided that the Trustee shall be under no duty or obligation to make
the calculations described in Section 14.1(a)(iii) hereof or to determine
whether the Notes are convertible pursuant to such section.  For the avoidance of doubt, the Company
shall make the calculations described in Section 14.1(a)(iii), using the
Trading Price provided by the Trustee.

The Trustee shall be
entitled at its sole discretion to consult with the Company and to request the
assistance of the Company in connection with the Trustee’s duties and
obligations pursuant to Section 14.1(a)(i), Section 14.1(a)(ii), and Section
14.1(a)(iii) hereof (including without limitation the calculation or
determination of the Conversion Rate, the Conversion Price, the Closing Sale
Price and the Trading Price), and the Company agrees, if requested by the
Trustee, to cooperate with, and provide assistance to, the Trustee in carrying
out its duties under this Section 14.1; provided that nothing herein shall be
construed to relieve the Trustee of its duties pursuant to Section 14.1(a)(i),
Section 14.1(a)(ii), and Section 14.1(a)(iii) hereof.

 

51

 

(b)   In addition, if:

(i)    (A) 
the Company distributes to all holders of its Common Stock rights or
warrants entitling them (for a period expiring within 45 days of the record
date for the determination of the stockholders entitled to receive such
distribution) to subscribe for or purchase shares of Common Stock, at a price
per share less than the average of the Closing Sale Price for the ten (10)
Trading Days immediately preceding, but not including, the date such
distribution is first publicly announced by the Company, or (B) the Company
distributes to all holders of its Common Stock, assets, debt securities or
rights to purchase its securities, where the Fair Market Value of such
distribution per share of Common Stock exceeds 5% of the Closing Sale Price on
the Trading Day immediately preceding the date such distribution is first
publicly announced by the Company, then, in either case, the Notes may be
surrendered for conversion at any time on and after the date that the Company
gives notice to the holders of such distribution, which shall be not less than
20 days prior to the Ex-Dividend Time for such distribution, until the earlier
of the close of business on the Business Day immediately preceding, but not
including, the Ex-Dividend Time or the date the Company publicly announces that
such distribution will not take place; provided that if the holders of Notes
will otherwise participate in such distribution without conversion, holders of
Notes will not have the ability to convert pursuant to this Section 14.1(b); or

(ii)   the Company consolidates with or merges with
or into another Person or is a party to a binding share exchange or conveys,
transfers, sells, leases or otherwise disposes of all or substantially all of
its assets in each case pursuant to which the Company’s Common Stock is
converted into cash, securities or other property, then the Notes may be
surrendered for conversion at any time from and after the date fifteen (15)
days prior to the anticipated effective date of the transaction and ending on
and including the date fifteen (15) days after the consummation of the
transaction.  If such transaction
constitutes a Designated Event, the Notes may be surrendered for conversion
until the corresponding Designated Event Purchase Date.  In such an event, a holder of Notes may
elect to exercise its option to require the Company to repurchase all or a
portion of such holder’s Notes.  The
Board of Directors shall determine the anticipated effective date of the
transaction, and such determination shall be conclusive and binding on the
holders and shall be publicly announced by the Company and posted on its web
site not later than two Business Days prior to such 15th day.  If Notes are not surrendered pursuant to
this paragraph for conversion, on the date that is 16 days from the effective
date of the transaction, the right to convert the Notes into Common Stock will
convert into a right to convert the Notes into the kind and amount of cash,
securities and other property that a Noteholder would have received if such
holder had converted such holder’s Notes immediately prior to the transaction.

“Ex-Dividend Time” means,
with respect to any distribution on shares of Common Stock, the first date on
which the shares of Common Stock trade regular way on the principal securities
market on which the shares of Common Stock are then traded without the right to
receive such distribution.

(c)   A Note in respect of which a holder is
electing to exercise its option to require the Company to repurchase such
holder’s Notes upon a Designated Event pursuant to Section 3.5, or at the
option of the holder pursuant to Section 3.6, may be converted only if such
holder withdraws its election in accordance with Section 3.5(c) or Section 3.8,
respectively.  A holder of Notes is not
entitled to any rights of a holder of Common Stock until such holder has
converted his Notes to Common Stock, and only to the extent such Notes are
deemed to have been converted to Common Stock under this Article Fourteen.

Section 14.2.  Exercise
of Conversion Privilege; Issuance of Common Stock On Conversion; No Adjustment
for Interest or Dividends.  In order
to exercise the conversion privilege with respect to any Note 

 

 

52

 

in certificated form, the holder of any such Note to
be converted in whole or in part shall surrender such Note, duly endorsed, at
an office or agency maintained by the Company pursuant to Section 4.2,
accompanied by the funds, if any, required by the penultimate paragraph of this
Section 14.2, and shall give written notice of conversion in the form
provided on the Notes (or such other notice which is acceptable to the Company)
to the office or agency that the holder elects to convert such Note or the
portion thereof specified in said notice. 
Such notice shall also state the name or names (with address or
addresses) in which the certificate or certificates for shares of Common Stock
which shall be issuable on such conversion shall be issued, and shall be
accompanied by transfer taxes, if required pursuant to Section 14.7.  Each such Note surrendered for conversion
shall, unless the shares of Common Stock issuable on conversion are to be
issued in the same name as the registration of such Note, be duly endorsed by,
or be accompanied by instruments of transfer in form satisfactory to the
Company duly executed by, the holder or his duly authorized attorney.

In order to exercise the
conversion privilege with respect to any interest in a Global Note, the
beneficial holder must complete, or cause to be completed, the appropriate
instruction form for conversion pursuant to the Depositary’s book-entry
conversion program, deliver, or cause to be delivered, by book-entry delivery
an interest in such Global Note, furnish appropriate endorsements and transfer
documents if required by the Company or the Trustee or conversion agent, and
pay the funds, if any, required by this Section 14.2 and any transfer taxes if
required pursuant to Section 14.7.

As promptly as
practicable after satisfaction of the requirements for conversion set forth
above, subject to compliance with any restrictions on transfer if shares of
Common Stock issuable on conversion are to be issued in a name other than that
of the Noteholder (as if such transfer were a transfer of the Note or Notes (or
portion thereof) so converted), the Company shall issue and shall deliver to
such Noteholder at the office or agency maintained by the Company for such
purpose pursuant to Section 4.2, a certificate or certificates for the number
of full shares of Common Stock issuable upon the conversion of such Note or
portion thereof as determined by the Company in accordance with the provisions
of this Article Fourteen and a check or cash in respect of any fractional
interest in respect of a share of Common Stock arising upon such conversion,
calculated by the Company as provided in Section 14.3.  In case any Note of a denomination greater
than $1,000 shall be surrendered for partial conversion, and subject to Section
2.3, the Company shall execute and the Trustee shall authenticate and deliver
to the holder of the Note so surrendered, without charge to him, a new Note or
Notes in authorized denominations in an aggregate principal amount equal to the
unconverted portion of the surrendered Note.

Each conversion shall be
deemed to have been effected as to any such Note (or portion thereof) on the
date on which the requirements set forth above in this Section 14.2 have been
satisfied as to such Note (or portion thereof), and the Person in whose name
any certificate or certificates for shares of Common Stock shall be issuable
upon such conversion shall be deemed to have become on said date the holder of
record of the shares of Common Stock represented thereby; provided that any
such surrender on any date when the stock transfer books of the Company shall
be closed shall constitute the Person in whose name the certificates are to be
issued as the record holder thereof for all purposes on the next succeeding day
on which such stock transfer books are open, but such conversion shall be at
the Conversion Rate in effect on the date upon which such Note shall be
surrendered.

Any Note or portion
thereof surrendered for conversion during the period from the close of business
on the record date for any interest payment date to the close of business on
the corresponding interest payment date shall be accompanied by payment, in
immediately available funds or other funds acceptable to the Company, of an
amount equal to the Interest otherwise payable on such interest payment date on
the 

 

53

 

principal amount being
converted; provided that no such payment need be made (1) if the Company has
specified a redemption date that is after a record date and on or prior to the
next interest payment date, (2) if the Company has specified a Designed Event
Repurchase Date that is after a record date and on or prior to the next
interest payment date or (3) to the extent of any overdue Interest, if any
overdue Interest exists at the time of conversion with respect to such
Note.  Except as provided above in this
Section 14.2, no payment or other adjustment shall be made for Interest accrued
on any Note converted or for dividends on any shares issued upon the conversion
of such Note as provided in this Article Fourteen.

Upon the conversion of an
interest in a Global Note, the Trustee (or other conversion agent appointed by
the Company), or the Custodian at the direction of the Trustee (or other
conversion agent appointed by the Company), shall make a notation on such
Global Note as to the reduction in the principal amount represented
thereby.  The Company shall notify the
Trustee in writing of any conversions of Notes effected through any conversion
agent other than the Trustee.

Section 14.3.  Cash Payments in Lieu of Fractional Shares.  No fractional shares of Common
Stock or scrip representing fractional shares shall be issued upon conversion
of Notes.  If more than one Note shall
be surrendered for conversion at one time by the same holder, the number of
full shares that shall be issuable upon conversion shall be computed on the
basis of the aggregate principal amount of the Notes (or specified portions
thereof to the extent permitted hereby) so surrendered.  If any fractional share of stock would be
issuable upon the conversion of any Note or Notes, the Company shall make an
adjustment and payment therefor in cash at the current market price thereof to
the holder of Notes.  The current market
price of a share of Common Stock shall be the Closing Sale Price on the last
Trading Day immediately preceding the day on which the Notes (or specified
portions thereof) are deemed to have been converted.

Section 14.4.  Conversion
Rate.  Each $1,000 principal amount of the Notes shall be convertible
into the number of share of Common Stock specified in the form of Note (herein
called the “Conversion Rate”) attached as Exhibit A hereto, subject to
adjustment as provided in this Article Fourteen.

Section 14.5.  Adjustment of Conversion Rate.  The Conversion Rate shall be
adjusted from time to time by the Company as follows:

(a)   In case the Company shall hereafter pay a
dividend or make a distribution to all holders of the outstanding Common Stock
in shares of Common Stock, the Conversion Rate shall be increased so that the
same shall equal the rate determined by multiplying the Conversion Rate in
effect at the opening of business on the date following the Record Date for
such dividend or distribution by a fraction, the numerator of which shall be
the sum of the number of shares of Common Stock outstanding at the close of
business on such Record Date plus the total number of shares of Common Stock
constituting such dividend or other distribution and the denominator of which
shall be the number of shares of Common Stock outstanding at the close of
business on such Record Date, such increase to become effective immediately
after the opening of business on the day following such Record Date.  If any dividend or distribution of the type
described in this Section 14.5(a) is declared but not so paid or made, the
Conversion Rate shall again be adjusted to the Conversion Rate that would then
be in effect if such dividend or distribution had not been declared.

(b)   In case the Company shall issue rights or
warrants to all holders of its outstanding shares of Common Stock entitling
them (for a period expiring within forty-five (45) days after the Record Date
for the issuance of such rights or warrants) to subscribe for or purchase
shares of Common Stock at a price per share less than the average of the
Closing Sale Prices of the Common Stock for the ten (10) Trading Days 

 

 

54

 

immediately preceding the date such distribution is
first publicly announced, the Conversion Rate shall be increased so that the
same shall equal the rate determined by multiplying the Conversion Rate in
effect immediately prior to such Record Date by a fraction, the numerator of
which shall be the number of shares of Common Stock outstanding at the close of
business on such Record Date plus the total number of additional shares of
Common Stock 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 that the
aggregate offering price of the total number of shares of Common Stock so
offered would purchase at a price equal to the average of the Closing Sale
Prices of the Common Stock for the ten (10) Trading Days immediately preceding
the date such distribution is first publicly announced by the Company.  Such adjustment shall be successively made
whenever any such rights or warrants are issued, and shall become effective
immediately after the opening of business on the day following the Record Date
for the issuance of such rights or warrants. 
To the extent that shares of Common Stock are not delivered after the
expiration of such rights or warrants, the Conversion Rate shall be readjusted
to the Conversion Rate that would then be in effect had the adjustments made
upon the issuance of such rights or warrants been made on the basis of delivery
of only the number of shares of Common Stock actually delivered.  In the event that such rights or warrants
are not so issued, the Conversion Rate shall again be adjusted to be the
Conversion Rate that would then be in effect if such Record Date had not been
fixed.  In determining whether any
rights or warrants entitle the holders to subscribe for or purchase shares of
Common Stock at a price less than the average of the Closing Sale Prices of the
Common Stock for the ten (10) Trading Days immediately preceding the date such
distribution is first publicly announced by the Company, and in determining the
aggregate offering price of such shares of Common Stock, there shall be taken
into account any consideration received by the Company for such rights or
warrants and any amount payable on exercise or conversion thereof, the value of
such consideration, if other than cash, to be determined by the Board of
Directors.

(c)   In case outstanding shares of Common Stock
shall be subdivided into a greater number of shares of Common Stock, the
Conversion Rate in effect at the opening of business on the day following the
day upon which such subdivision becomes effective shall be proportionately
increased, and conversely, in case outstanding shares of Common Stock shall be
combined into a smaller number of shares of Common Stock, the Conversion Rate
in effect at the opening of business on the day following the day upon which
such combination becomes effective shall be proportionately reduced, such
reduction or increase, as the case may be, to become effective immediately
after the opening of business on the day following the day upon which such
subdivision or combination becomes effective.

(d)   In case the Company shall, by dividend or
otherwise, distribute to all holders of its Common Stock shares of any class of
capital stock of the Company (other than any dividends or distributions to which
Section 14.5(a) applies) or evidences of its indebtedness or assets
(including securities, but excluding any rights or warrants referred to in
Section 14.5(b), and excluding any dividend or distribution (x) paid
exclusively in cash or (y) referred to in Section 14.5(a) (any of the
foregoing hereinafter in this Section 14.5(d) called the “Securities”)),
then, in each such case (unless the Company elects to reserve such Securities
for distribution to the Noteholders upon the conversion of the Notes so that
any such holder converting Notes will receive upon such conversion, in addition
to the shares of Common Stock to which such holder is entitled, the amount and
kind of such Securities which such holder would have received if such holder
had converted its Notes into Common Stock immediately prior to the Record Date
for such distribution of the Securities)), the Conversion Rate shall be
increased so that the same shall be equal to the rate determined by multiplying
the Conversion Rate in effect on the Record Date with respect to such
distribution by a fraction, the numerator of which shall be the Current Market
Price on such Record Date and the denominator of which shall be the Current
Market Price on such Record Date less the Fair Market Value (as determined by
the Board of Directors, whose determination shall be conclusive, and described
in a resolution 

 

55

 

of the Board of Directors) on such Record Date of the
portion of the Securities so distributed applicable to one share of Common
Stock, such adjustment to become effective immediately prior to the opening of
business on the day following such Record Date; provided, however, that in the event the then Fair Market
Value (as so determined) of the portion of the Securities so distributed
applicable to one share of Common Stock is equal to or greater than the Current
Market Price on the Record Date with respect to such distribution, in lieu of
the foregoing adjustment, adequate provision shall be made so that each
Noteholder shall have the right to receive upon conversion the amount of
Securities such holder would have received had such holder converted each Note
on the Record Date with respect to such distribution.  In the event that such dividend or distribution is not so paid or
made, the Conversion Rate shall again be adjusted to be the Conversion Rate
that would then be in effect if such dividend or distribution had not been
declared.  If the Board of Directors
determines the Fair Market Value of any distribution for purposes of this
Section 14.5(d) by reference to the actual or when issued trading market
for any securities, it must in doing so consider the prices in such market over
the same period used in computing the Current Market Price.  Notwithstanding the foregoing, if the
Securities distributed by the Company to all holders of its Common Stock
consist of capital stock of, or similar equity interests in, a Subsidiary or
other business unit of the Company, the Conversion Rate shall be increased so
that the same shall be equal to the rate determined by multiplying the
Conversion Rate in effect on the Record Date with respect to such distribution
by a fraction, (i) the numerator of which shall be the sum of (A) the average
of the Closing Sale Prices of the Common Stock for the ten (10) Trading Days
commencing on and including the fifth Trading Day after the date on which
“ex-dividend trading” commences for such dividend or distribution on The Nasdaq
National Market or such other national or regional exchange or market which
such Securities are then listed or quoted (the “Ex-Dividend Date”) plus (B) the
Fair Market Value of the Securities distributed in respect of each share of
Common Stock for which this Section 14.5(d) applies and shall equal the number
of Securities distributed in respect of each share of Common Stock multiplied
by the average of the closing sale prices of those Securities distributed for
the ten (10) Trading Days commencing on and including the fifth Trading Day
after the Ex-Dividend Date; and (ii) the denominator of which shall be the
average of the Closing Sale Prices of the Common Stock for the ten (10) Trading
Days commencing on and including the fifth Trading Day after the Ex-Dividend
Date, such adjustment to become effective immediately prior to the opening of
business on the day following such Record Date; provided that the Company may
in lieu of the foregoing adjustment make adequate provision so that each
Noteholder shall have the right to receive upon conversion the amount of Securities
such holder would have received had such holder converted each Note on the
Record Date with respect to such distribution.

Rights or warrants distributed by the Company to all holders of Common
Stock entitling the holders thereof to subscribe for or purchase shares of the
Company’s capital stock (either initially or under certain circumstances),
which rights or warrants, until the occurrence of a specified event or events
(“Trigger Event”): (i) are deemed to be transferred with such shares of
Common Stock; (ii) are not exercisable; and (iii) are also issued in
respect of future issuances of Common Stock, shall be deemed not to have been
distributed for purposes of this Section 14.5 (and no adjustment to the
Conversion Rate under this Section 14.5 will be required) until the
occurrence of the earliest Trigger Event, whereupon such rights and warrants
shall be deemed to have been distributed and an appropriate adjustment (if any
is required) to the Conversion Rate shall be made under this Section 14.5(d).  If any such right or warrant, including any
such existing rights or warrants distributed prior to the date of this
Indenture, are subject to events, upon the occurrence of which such rights or
warrants become exercisable to purchase different securities, evidences of
indebtedness or other assets, then the date of the occurrence of any and each
such event shall be deemed to be the date of distribution and Record Date with
respect to new rights or warrants with such rights (and a termination or
expiration of the existing rights or warrants without exercise by any of the
holders thereof).  In addition, in the
event of any distribution (or deemed distribution) of rights or warrants, or
any Trigger Event 

 

56

 

or other event (of the type described in the preceding
sentence) with respect thereto that was counted for purposes of calculating a
distribution amount for which an adjustment to the Conversion Rate under this
Section 14.5 was made, (1) in the case of any such rights or warrants
that shall all have been redeemed or repurchased without exercise by any
holders thereof, the Conversion Rate shall be readjusted upon such final
redemption or repurchase to give effect to such distribution or Trigger Event,
as the case may be, as though it were a cash distribution, equal to the per
share redemption or repurchase price received by a holder or holders of Common
Stock with respect to such rights or warrants (assuming such holder had
retained such rights or warrants), made to all holders of Common Stock as of
the date of such redemption or repurchase, and (2) in the case of such
rights or warrants that shall have expired or been terminated without exercise
by any holders thereof, the Conversion Rate shall be readjusted as if such
rights and warrants had not been issued.

No adjustment of the Conversion Rate shall be made pursuant to this
Section 14.5(d) in respect of rights or warrants distributed or deemed
distributed on any Trigger Event to the extent that such rights or warrants are
actually distributed, or reserved by the Company for distribution to holders of
Notes upon conversion by such holders of Notes to Common Stock.

For purposes of this Section 14.5(d) and Sections 14.5(a) and (b),
any dividend or distribution to which this Section 14.5(d) is applicable
that also includes shares of Common Stock, or rights or warrants to subscribe
for or purchase shares of Common Stock (or both), shall be deemed instead to be
(1) a dividend or distribution of the evidences of indebtedness, assets or
shares of capital stock other than such shares of Common Stock or rights or
warrants (and any Conversion Rate adjustment required by this
Section 14.5(d) with respect to such dividend or distribution shall then
be made) immediately followed by (2) a dividend or distribution of such
shares of Common Stock or such rights or warrants (and any further Conversion
Rate adjustment required by Sections 14.5(a) and (b) with respect to such
dividend or distribution shall then be made), except (A) the Record Date
of such dividend or distribution shall be substituted as “the date fixed for
the determination of stockholders entitled to receive such dividend or other
distribution”, “the date fixed for the determination of stockholders entitled
to receive such rights or warrants” and “the date fixed for such determination”
within the meaning of Sections 14.5(a) and (b), and (B) any shares of
Common Stock included in such dividend or distribution shall not be deemed
“outstanding at the close of business on the date fixed for such determination”
within the meaning of Section 14.5(a).

(e)   In case the Company shall, by dividend or
otherwise, distribute to all holders of its Common Stock cash (excluding any
dividend or distribution in connection with the liquidation, dissolution or
winding up of the Company, whether voluntary or involuntary), then, in such
case, the Conversion Rate shall be increased so that the same shall equal the
rate determined by multiplying the Conversion Rate in effect immediately prior
to the close of business on the Record Date for such dividend or distribution
by a fraction, the numerator of which shall be the Current Market Price on such
Record Date, and the denominator of which shall be the Current Market Price on
such Record Date less the amount of cash so distributed applicable to one share
of Common Stock, such adjustment to be effective immediately prior to the
opening of business on the day following such Record Date; provided, however,
that in the event the portion of the cash so distributed applicable to one
share of Common Stock is equal to or greater than the Current Market Price on
such Record Date, in lieu of the foregoing adjustment, adequate provision shall
be made so that each Noteholder shall have the right to receive upon conversion
the amount of cash such holder would have received had such holder converted
each Note on such Record Date.  In the
event that such dividend or distribution is not so paid or made, the Conversion
Rate shall again be adjusted to be the Conversion Rate that would then be in
effect if such dividend or distribution had not been declared.

 

57

 

(f)    In case a tender or exchange offer made by
the Company or any Subsidiary for all or any portion of the Common Stock shall
expire and such tender or exchange offer (as amended upon the expiration
thereof) shall require the payment to stockholders of consideration per share
of Common Stock having a Fair Market Value (as determined by the Board of
Directors, whose determination shall be conclusive and described in a
resolution of the Board of Directors) that as of the last time (the “Expiration
Time”) tenders or exchanges may be made pursuant to such tender or exchange
offer (as it may be amended) exceeds the Closing Sale Price of a share of
Common Stock on the Trading Day next succeeding the Expiration Time, the
Conversion Rate shall be increased so that the same shall equal the rate
determined by multiplying the Conversion Rate in effect immediately prior to
the Expiration Time by a fraction the numerator of which shall be the sum of
(x) the Fair Market Value (determined as aforesaid) of the aggregate
consideration payable to stockholders based on the acceptance (up to any
maximum specified in the terms of the tender or exchange offer) of all shares
validly tendered or exchanged and not withdrawn as of the Expiration Time (the
shares deemed so accepted, up to any such maximum, being referred to as the
“Purchased Shares”) and (y) the product of the number of shares of Common
Stock outstanding (less any Purchased Shares) at the Expiration Time and the
Closing Sale Price of a share of Common Stock on the Trading Day next
succeeding the Expiration Time and the denominator of which shall be the number
of shares of Common Stock outstanding (including any Purchased Shares) at the
Expiration Time multiplied by the Closing Sale Price of a share of Common Stock
on the Trading Day next succeeding the Expiration Time, such adjustment to
become effective immediately prior to the opening of business on the Trading
Day following the Expiration Time.  In
the event that the Company is obligated to purchase shares pursuant to any such
tender or exchange offer, but the Company is permanently prevented by
applicable law from effecting any such purchases or all such purchases are
rescinded, the Conversion Rate shall again be adjusted to be the Conversion
Rate that would then be in effect if such tender or exchange offer had not been
made.

(g)   For purposes of this Section 14.5, the
following terms shall have the meaning indicated:

(1)   “Closing Sale Price” of the shares of Common
Stock on any date means the closing sale price per share (or, if no closing
sale price is reported, the average of the closing bid and ask prices or, if
more than one in either case, the average of the average closing bid and the
average closing ask prices) on such date as reported in composite transactions
for the principal United States securities exchange on which shares of Common
Stock are traded or, if the shares of Common Stock are not listed on a United
States national or regional securities exchange, as reported by the Nasdaq
System or by the National Quotation Bureau Incorporated.  In the absence of such quotation or reporting,
the Company shall be entitled to determine the Closing Sale Price on the basis
it considers appropriate and such determination shall be conclusive.

(2)   “Current Market Price” shall mean the average
of the daily Closing Sale Prices per share of Common Stock for the ten
consecutive Trading Days ending on the earlier of such date of determination
and the day before the “ex” date with respect to the issuance, distribution,
subdivision or combination requiring such computation immediately prior to the
date in question.  For purposes of this
paragraph, the term “ex” date, (1) when used with respect to any issuance or
distribution, means the first date on which the Common Stock trades, regular
way, on the relevant exchange or in the relevant market from which the Closing
Sale Price was obtained without the right to receive such issuance or
distribution, and (2) when used with respect to any subdivision or combination
of shares of Common Stock, means the first date on which the Common Stock
trades, regular way, on such exchange or in such market after the time at which
such subdivision or combination becomes effective.

 

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If another
issuance, distribution, subdivision or combination to which Section 14.5
applies occurs during the period applicable for calculating “Current Market
Price” pursuant to the definition in the preceding paragraph, “Current Market
Price” shall be calculated for such period in a manner determined by the Board
of Directors to reflect the impact of such issuance, distribution, subdivision
or combination on the Closing Sale Price of the Common Stock during such
period.

(3)   “Fair Market Value” shall mean the amount
which a willing buyer would pay a willing seller in an arm’s-length
transaction.

(4)   “Record Date” shall mean, with respect to any
dividend, distribution or other transaction or event in which the holders of
Common Stock have the right to receive any cash, securities or other property
or in which the Common Stock (or other applicable security) is exchanged for or
converted into any combination of cash, securities or other property, the date
fixed for determination of stockholders entitled to receive such cash,
securities or other property (whether such date is fixed by the Board of
Directors or by statute, contract or otherwise).

(5)   “Trading Day” shall mean a day during which
trading in the Common Stock occurs (x) on The Nasdaq National Market, or (y) if
the Common Stock is not quoted on The Nasdaq National Market, on the principal
national or regional securities exchange on which the Common Stock is then
listed or (z) if the Common Stock is not listed on a national or regional
securities exchange, on the principal market on which the Common Stock is then
traded.

(h)   The Company may make such increases in the
Conversion Rate, in addition to those required by Sections 14.5(a), (b),
(c), (d), (e) or (f) as the Board of Directors considers to be advisable to
avoid or diminish any income tax to holders of Common Stock or rights to
purchase Common Stock resulting from any dividend or distribution of stock (or
rights to acquire stock) or from any event treated as such for income tax
purposes.

To the extent permitted by applicable law and Nasdaq
Marketplace rules, the Company from time to time may increase the Conversion
Rate by any amount for any period of time if the Board of Directors shall have
made a determination that such reduction would be in the best interests of the
Company, which determination shall be conclusive.

(i)    No adjustment in the Conversion Rate shall
be required unless such adjustment would require an increase or decrease of at
least one percent (1%) in such rate; provided, however, that any
adjustments that by reason of this Section 14.5(i) are not required to be
made shall be carried forward and taken into account in any subsequent
adjustment.  All calculations under this
Article Fourteen shall be made by the Company and shall be made to the nearest
cent or to the nearest one-hundredth (1/100) of a share, as the case may be.  No adjustment need be made for rights to
purchase Common Stock pursuant to a Company plan for reinvestment of dividends
or interest.  To the extent the Notes
become convertible into cash, assets, property or securities (other than
capital stock of the Company), no adjustment need be made thereafter as to the
cash, assets, property or such securities. 
Interest will not accrue on any cash into which the Notes are
convertible.

(j)    Whenever the Conversion Rate is adjusted as
herein provided, the Company shall promptly file with the Trustee and any conversion
agent other than the Trustee an Officers’ Certificate setting forth the
Conversion Rate after such adjustment and setting forth a brief statement of
the facts requiring such adjustment. 
Unless and until a Responsible Officer of the Trustee shall have
received such Officers’ 

 

 

59

 

Certificate, the Trustee shall not be deemed to have
knowledge of any adjustment of the Conversion Rate and may assume that the last
Conversion Rate of which it has knowledge is still in effect.  Promptly after delivery of such certificate,
the Company shall prepare a notice of such adjustment of the Conversion Rate
setting forth the adjusted Conversion Rate and the date on which each
adjustment becomes effective and shall mail such notice of such adjustment of
the Conversion Rate to the holder of each Note at his last address appearing on
the Note register provided for in Section 2.5 of this Indenture, within
twenty (20) days after execution thereof. 
Failure to deliver such notice shall not affect the legality or validity
of any such adjustment.

(k)   In any case in which this Section 14.5
provides that an adjustment shall become effective immediately after (1) a
Record Date for an event, (2) the Record Date for a dividend or distribution
pursuant to Section 14.5(a), (3) the Record Date for the issuance of
rights or warrants pursuant to Section 14.5(b) or (4) the Expiration Time
for any tender or exchange offer pursuant to Section 14.5(f) (each a
“Determination Date”), the Company may elect to defer until the occurrence of
the relevant Adjustment Event (as hereinafter defined) (x) issuing to the
holder of any Note converted after such Determination Date and before the
occurrence of such Adjustment Event, the additional shares of Common Stock or
other securities issuable upon such conversion by reason of the adjustment
required by such Adjustment Event over and above the Common Stock issuable upon
such conversion before giving effect to such adjustment and (y) paying to such
holder any amount in cash in lieu of any fraction pursuant to
Section 14.3.  For purposes of this
Section 14.5(k), the term “Adjustment Event” shall mean:

(a)           in
any case referred to in clause (1) hereof, the occurrence of such event,

(b)           in
any case referred to in clause (2) hereof, the date any such dividend or
distribution is paid or made,

(c)           in
any case referred to in clause (3) hereof, the date of expiration of such
rights or warrants, and

(d)           in
any case referred to in clause (4) hereof, the date a sale or exchange of
Common Stock pursuant to such tender or exchange offer is consummated and
becomes irrevocable.

(l)    For purposes of this Section 14.5, the
number of shares of Common Stock at any time outstanding shall not include
shares held in the treasury of the Company but shall include shares issuable in
respect of scrip certificates issued in lieu of fractions of shares of Common
Stock.  The Company will not pay any
dividend or make any distribution on shares of Common Stock held in the
treasury of the Company.

Section 14.6.  Effect of Reclassification, Consolidation, Merger or
Sale.  If
any of the following events occur, namely (i) any reclassification or
change of the outstanding shares of Common Stock (other than a subdivision or
combination to which Section 14.5(c) applies), (ii) any
consolidation, merger or combination of the Company with another Person as a
result of which holders of Common Stock shall be entitled to receive stock,
other securities or other property or assets (including cash) with respect to
or in exchange for such Common Stock, or (iii) any sale or conveyance of
all or substantially all of the properties and assets of the Company to any
other Person as a result of which holders of Common Stock shall be entitled to
receive stock, other securities or other property or assets (including cash)
with respect to or in exchange for such Common Stock, then the Company or the
successor or purchasing Person, as the case may be, shall execute with the
Trustee a supplemental indenture (which shall comply with the Trust Indenture
Act as in force at the date of execution of such supplemental indenture)
providing that each Note shall be convertible 

 

 

60

 

into the kind and amount of shares of stock, other
securities or other property or assets (including cash) receivable upon such
reclassification, change, consolidation, merger, combination, sale or
conveyance by a holder of a number of shares of Common Stock issuable upon
conversion of such Notes (assuming, for such purposes, a sufficient number of
authorized shares of Common Stock are available to convert all such Notes)
immediately prior to such reclassification, change, consolidation, merger,
combination, sale or conveyance assuming such holder of Common Stock did not
exercise his rights of election, if any, as to the kind or amount of stock,
other securities or other property or assets (including cash) receivable upon
such reclassification, change, consolidation, merger, combination, sale or
conveyance (provided that, if the kind or amount of stock, other securities or
other property or assets (including cash) receivable upon such
reclassification, change, consolidation, merger, combination, sale or
conveyance is not the same for each share of Common Stock in respect of which
such rights of election shall not have been exercised (“Non-Electing Share”),
then for the purposes of this Section 14.6 the kind and amount of stock,
other securities or other property or assets (including cash) receivable upon such
reclassification, change, consolidation, merger, combination, sale or
conveyance for each Non-Electing Share shall be deemed to be the kind and
amount so receivable per share by a plurality of the Non-Electing Shares).  Such supplemental indenture shall provide
for adjustments which shall be as nearly equivalent as may be practicable to
the adjustments provided for in this Article Fourteen.

The Company shall cause notice of the execution of such supplemental
indenture to be mailed to each holder of Notes, at its address appearing on the
Note register provided for in Section 2.5 of this Indenture, within twenty
(20) days after execution thereof. 
Failure to deliver such notice shall not affect the legality or validity
of such supplemental indenture.

The above provisions of this Section shall similarly apply to
successive reclassifications, changes, consolidations, mergers, combinations,
sales and conveyances.

If this Section 14.6 applies to any event or occurrence,
Section 14.5 shall not apply.

Section 14.7.  Taxes
on Shares Issued.  The issuance of stock certificates on conversions
of Notes shall be made without charge to the converting Noteholder for any tax
in respect of the issue thereof.  The
Company shall not, however, be required to pay any such tax which may be
payable in respect of any transfer involved in the issue and delivery of stock
in any name other than that of the holder of any Note converted, and the
Company shall not be required to issue or deliver any such stock certificate
unless and until the Person or Persons requesting the issue thereof shall have
paid to the Company the amount of such tax or shall have established to the
satisfaction of the Company that such tax has been paid.

Section 14.8.  Reservation
of Shares; Shares to be Fully Paid; Compliance with Governmental Requirements;
Listing of Common Stock.  The Company shall provide, free from
preemptive rights, out of its authorized but unissued shares or shares held in
treasury, sufficient shares of Common Stock to provide for the conversion of
the Notes from time to time as such Notes are presented for conversion.

Before taking any action which would cause an adjustment increasing the
Conversion Rate to an amount that would cause the Conversion Price to be
reduced below the then par value, if any, of the shares of Common Stock
issuable upon conversion of the Notes, the Company will take all corporate
action which may, in the opinion of its counsel, be necessary in order that the
Company may validly and legally issue shares of such Common Stock at such
adjusted Conversion Rate.

 

61

 

The Company covenants that all shares of Common Stock which may be
issued upon conversion of Notes will upon issue be fully paid and
non-assessable by the Company and free from all taxes, liens and charges with
respect to the issue thereof.

The Company covenants that, if any shares of Common Stock to be
provided for the purpose of conversion of Notes hereunder require registration
with or approval of any governmental authority under any federal or state law
before such shares may be validly issued upon conversion, the Company will in
good faith and as expeditiously as possible, to the extent then permitted by
the rules and interpretations of the Commission (or any successor thereto),
endeavor to secure such registration or approval, as the case may be.

The Company further covenants that, if at any time the Common Stock
shall be listed on the Nasdaq National Market or any other national securities
exchange or automated quotation system, the Company will, if permitted by the
rules of such exchange or automated quotation system, list and keep listed, so
long as the Common Stock shall be so listed on such exchange or automated
quotation system, all Common Stock issuable upon conversion of the Notes; provided,
however, that, if the rules of such exchange or automated quotation
system permit the Company to defer the listing of such Common Stock until the
first conversion of the Notes into Common Stock in accordance with the
provisions of this Indenture, the Company covenants to list such Common Stock
issuable upon conversion of the Notes in accordance with the requirements of
such exchange or automated quotation system at such time.

Section 14.9.  Responsibility
of Trustee.  The Trustee and any other conversion agent shall not at
any time be under any duty or responsibility to any holder of Notes to
determine the Conversion Rate or whether any facts exist which may require any
adjustment of the Conversion Rate, or with respect to the nature or extent or
calculation of any such adjustment when made, or with respect to the method
employed, or herein or in any supplemental indenture provided to be employed,
in making the same.  The Trustee and any
other conversion agent shall not be accountable with respect to the validity or
value (or the kind or amount) of any shares of Common Stock, or of any
securities or property, which may at any time be issued or delivered upon the
conversion of any Note; and the Trustee and any other conversion agent make no
representations with respect thereto. 
Neither the Trustee nor any conversion agent shall be responsible for
any failure of the Company to issue, transfer or deliver any shares of Common
Stock or stock certificates or other securities or property or cash upon the
surrender of any Note for the purpose of conversion or to comply with any of
the duties, responsibilities or covenants of the Company contained in this
Article Fourteen.  Without limiting the
generality of the foregoing, neither the Trustee nor any conversion agent shall
be under any responsibility to determine the correctness of any provisions
contained in any supplemental indenture entered into pursuant to
Section 14.6 relating either to the kind or amount of shares of stock or securities
or property (including cash) receivable by Noteholders upon the conversion of
their Notes after any event referred to in such Section 14.6 or to any
adjustment to be made with respect thereto, but, subject to the provisions of
Section 7.1, may accept as conclusive evidence of the correctness of any
such provisions, and shall be protected in relying upon, the Officers’
Certificate (which the Company shall be obligated to file with the Trustee
prior to the execution of any such supplemental indenture) with respect
thereto.

Section 14.10.        Notice
to Holders Prior to Certain Actions.  In case:

(a)   the Company shall declare a dividend (or any
other distribution) on its Common Stock that would require an adjustment in the
Conversion Rate pursuant to Section 14.5; or

 

62

 

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

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

(d)   of the voluntary or involuntary dissolution,
liquidation or winding up of the Company or any Significant Subsidiary;

the Company shall cause to be filed with the Trustee
and to be mailed to each holder of Notes at his address appearing on the Note
register provided for in Section 2.5 of this Indenture, as promptly as
possible but in any event at least ten (10) days prior to the applicable date
hereinafter specified, a notice stating (x) the date on which a record is
to be taken for the purpose of such dividend, distribution or rights or
warrants, or, if a record is not to be taken, the date as of which the holders
of Common Stock of record to be entitled to such dividend, distribution or
rights are to be determined, or (y) the date on which such
reclassification, consolidation, merger, sale, transfer, dissolution,
liquidation or winding up is expected to become effective or occur, and the
date as of which it is expected that holders of Common Stock of record shall be
entitled to exchange their Common Stock for securities or other property
deliverable upon such reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding up. 
Failure to give such notice, or any defect therein, shall not affect the
legality or validity of such dividend, distribution, reclassification,
consolidation, merger, sale, transfer, dissolution, liquidation or winding up.

Section 14.11.        Shareholder
Rights Plans.  Each share of Common
Stock issued upon conversion of Notes pursuant to this Section 14 shall be
entitled to receive the appropriate number of rights, if any, and the
certificates representing the Common Stock issued upon such conversion shall
bear such legends, if any, in each case as may be provided by the terms of any
shareholder rights plan adopted by the Company, as the same may be amended from
time to time. If at the time of conversion, however, the rights have separated
from the shares of Common Stock in accordance with the provisions of the
applicable shareholder rights agreement so that the holders of the Notes would
not be entitled to receive any rights in respect of Common Stock issuable upon
conversion of the Notes, the conversion rate will be adjusted in accordance
with Section 14.5(d) treating all rights previously issued as Securities
for purposes of such adjustment, subject to readjustment in the event of the
expiration, termination or redemption of the rights.

ARTICLE FIFTEEN

MISCELLANEOUS PROVISIONS

Section 15.1.  Provisions
Binding on Company’s Successors.  All the covenants, stipulations,
promises and agreements by the Company contained in this Indenture shall bind
its successors and assigns whether so expressed or not.

Section 15.2.  Official Acts by Successor Corporation.  Any act or proceeding by any
provision of this Indenture authorized or required to be done or performed by
any board, committee or officer of the 

 

63

 

Company shall and may be done and performed with like
force and effect by the like board, committee or officer of any Person that
shall at the time be the lawful sole successor of the Company.

Section 15.3.  Addresses for Notices, Etc.  Any notice or demand which by any
provision of this Indenture is required or permitted to be given or served by
the Trustee or by the holders of Notes on the Company shall be deemed to have
been sufficiently given or made, for all purposes, if given or served by being
deposited postage prepaid by registered or certified mail in a post office
letter box addressed (until another address is filed by the Company with the
Trustee) to ImClone Systems Incorporated, 180 Varick Street, 7th
Floor, New York, New York  10014,
Attention:  Treasurer.  Any notice, direction, request or demand
hereunder to or upon the Trustee shall be deemed to have been sufficiently
given or made, for all purposes, if given or served by being deposited, postage
prepaid, by registered or certified mail in a post office letter box addressed
to the Corporate Trust Office, which office is, at the date as of which this
Indenture is dated, located at The Bank of New York, 101 Barclay Street, 21st
Floor West, New York, New York, 10286, Attention:  Corporate Trust Trustee Administration.

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

Any notice or communication mailed to a Noteholder shall be mailed to
him by first class mail, postage prepaid, at his address as it appears on the
Note register and shall be sufficiently given to him if so mailed within the
time prescribed.

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

Section 15.4.  Governing Law.  This Indenture and each Note shall be deemed
to be a contract made under the laws of the State of New York, and for all
purposes shall be construed in accordance with the laws of the State of New
York, without regard to the conflict of laws provisions thereof.

Section 15.5.  Evidence
of Compliance with Conditions Precedent; Certificates to Trustee. 
Upon any application or demand by the Company to the Trustee to take any action
under any of the provisions of this Indenture, the Company shall furnish to the
Trustee an Officers’ Certificate stating that all conditions precedent, if any,
provided for in this Indenture relating to the proposed action have been complied
with, and an Opinion of Counsel stating that, in the opinion of such counsel,
all such conditions precedent have been complied with.

Each certificate or opinion provided for in this Indenture and
delivered to the Trustee with respect to compliance with a condition or
covenant provided for in this Indenture shall include: (1) a statement
that the person making such certificate or opinion has read such covenant or
condition; (2) a brief statement as to the nature and scope of the
examination or investigation upon which the statement or opinion contained in
such certificate or opinion is based; (3) a statement that, in the opinion
of such person, he has made such examination or investigation as is necessary
to enable him to express an informed opinion as to whether or not such covenant
or condition has been complied with; and (4) a statement as to whether or
not, in the opinion of such person, such condition or covenant has been
complied with.

Section 15.6.  Legal
Holidays.  In any case in which the date of maturity of Interest on or
principal of the Notes or the date fixed for redemption of any Note will not be
a Business Day, then payment of such 

 

64

 

Interest on or principal of the Notes need not be made
on such date, but may be made on the next succeeding Business Day with the same
force and effect as if made on the date of maturity or the date fixed for
redemption, and no Interest shall accrue for the period from and after such
date.

Section 15.7.  Trust
Indenture Act.  This Indenture is hereby made subject to, and shall be
governed by, the provisions of the Trust Indenture Act required to be part of
and to govern indentures qualified under the Trust Indenture Act; provided,
however, that, unless otherwise required by law, notwithstanding the
foregoing, this Indenture and the Notes issued hereunder shall not be subject
to the provisions of subsections (a)(1), (a)(2), and (a)(3) of
Section 314 of the Trust Indenture Act as now in effect or as hereafter
amended or modified; provided  further that this Section 15.7
shall not require this Indenture or the Trustee to be qualified under the Trust
Indenture Act prior to the time such qualification is in fact required under
the terms of the Trust Indenture Act, nor shall it constitute any admission or
acknowledgment by any party to the Indenture that any such qualification is
required prior to the time such qualification is in fact required under the
terms of the Trust Indenture Act.  If
any provision hereof limits, qualifies or conflicts with another provision
hereof which is required to be included in an indenture qualified under the
Trust Indenture Act, such required provision shall control.

Section 15.8.  No
Security Interest Created.  Nothing in this Indenture or in the Notes,
expressed or implied, shall be construed to constitute a security interest
under the Uniform Commercial Code or similar legislation, as now or hereafter
enacted and in effect, in any jurisdiction in which property of the Company or
its subsidiaries is located.

Section 15.9.  Benefits
of Indenture.  Nothing in this Indenture or in the Notes, express or
implied, shall give to any Person, other than the parties hereto, any paying
agent, any authenticating agent, any Note registrar and their successors hereunder
and the holders of Notes any benefit or any legal or equitable right, remedy or
claim under this Indenture.

Section 15.10.        Table
of Contents, Headings, Etc.  The table of contents and the titles 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.

Section 15.11.        Authenticating
Agent.  The Trustee may appoint an authenticating agent that shall be
authorized to act on its behalf, and subject to its direction, in the
authentication and delivery of Notes in connection with the original issuance
thereof and transfers and exchanges of Notes hereunder, including under
Sections 2.4, 2.5, 2.6, 2.7, 2.10, 3.3 and 3.5, as fully to all intents
and purposes as though the authenticating agent had been expressly authorized
by this Indenture and those Sections to authenticate and deliver Notes.  For all purposes of this Indenture, the
authentication and delivery of Notes by the authenticating agent shall be
deemed to be authentication and delivery of such Notes “by the Trustee” and a
certificate of authentication executed on behalf of the Trustee by an
authenticating agent shall be deemed to satisfy any requirement hereunder or in
the Notes for the Trustee’s certificate of authentication.  Such authenticating agent shall at all times
be a Person eligible to serve as trustee hereunder pursuant to Section 7.9.

Any corporation into which any authenticating agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, consolidation or conversion to which any authenticating agent
shall be a party, or any corporation succeeding to all or substantially all the
corporate trust business of any authenticating agent, shall be the successor of
the authenticating agent hereunder, if such successor corporation is otherwise
eligible under this Section 15.11, without the execution or filing of any 

 

 

65

 

paper or any further act on the part of the parties
hereto or the authenticating agent or such successor corporation.

Any authenticating agent may at any time resign by giving written
notice of resignation to the Trustee and to the Company.  The Trustee may at any time terminate the
agency of any authenticating agent by giving written notice of termination to
such authenticating agent and to the Company. 
Upon receiving such a notice of resignation or upon such a termination,
or in case at any time any authenticating agent shall cease to be eligible
under this Section , the Trustee shall either promptly appoint a successor
authenticating agent or itself assume the duties and obligations of the former
authenticating agent under this Indenture and, upon such appointment of a
successor authenticating agent, if made, shall give written notice of such
appointment of a successor authenticating agent to the Company and shall mail
notice of such appointment of a successor authenticating agent to all holders
of Notes as the names and addresses of such holders appear on the Note
register.

The Company agrees to pay to the authenticating agent from time to time
such reasonable compensation for its services as shall be agreed upon in
writing between the Company and the authenticating agent.

The provisions of Sections 7.2, 7.3, 7.4, 8.3 and this
Section 15.11 shall be applicable to any authenticating agent.

Section 15.12.        Execution
in Counterparts.  This Indenture may be executed in any number of
counterparts, each of which shall be an original, but such counterparts shall
together constitute but one and the same instrument.

Section 15.13.        Severability. 
In case any provision in this Indenture or in the Notes shall be invalid, illegal
or unenforceable, then (to the extent permitted by law) the validity, legality
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.

 

66

 

The Bank of New York hereby accepts the trusts in this Indenture
declared and provided, upon the terms and conditions herein above set forth.

IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed.

 

	
   

  	
  IMCLONE SYSTEMS
  INCORPORATED

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  THE BANK OF NEW YORK,

  
	
   

  	
  as Trustee

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  

 

 

67

 

EXHIBIT A

                For
Global Note only: UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW
YORK) (THE “DEPOSITARY”, WHICH TERM INCLUDES ANY SUCCESSOR DEPOSITARY FOR THE
CERTIFICATES) TO IMCLONE SYSTEMS INCORPORATED (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 REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY (AND ANY PAYMENT HEREIN IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITARY), 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.

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE ‘‘SECURITIES ACT’’), OR ANY STATE
SECURITIES LAWS. NEITHER THIS NOTE NOR ANY INTEREST OR PARTICIPATION HEREIN OR
THEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR
OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH
TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION.

THE HOLDER OF THIS NOTE, BY ITS ACCEPTANCE
HEREOF, AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH NOTE, PRIOR TO THE
DATE (THE ‘‘RESALE RESTRICTION TERMINATION DATE’’) THAT IS 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 NOTE (OR ANY PREDECESSOR
OF SUCH NOTE) ONLY (A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, (B) FOR SO
LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A
PERSON IT REASONABLY BELIEVES IS A ‘‘QUALIFIED INSTITUTIONAL BUYER’’ AS DEFINED
IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR
THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHICH NOTICE IS GIVEN THAT
THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (C) PURSUANT TO A
REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES
ACT, OR (D) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE RIGHTS OF THE COMPANY AND
THE TRUSTEE PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (D) TO
REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER
INFORMATION SATISFACTORY TO EACH OF THEM, AND IN EACH OF THE FOREGOING CASES
WHERE REGISTRATION OR TRANSFER OF THIS NOTE IS REQUIRED, A CERTIFICATE OF
TRANSFER IN THE FORM APPEARING ON THE OTHER SIDE OF THIS NOTE COMPLETED AND
DELIVERED BY THE TRANSFEROR TO THE TRUSTEE. THIS LEGEND WILL BE REMOVED AFTER
THE RESALE RESTRICTION TERMINATION DATE UPON THE REQUEST OF THE HOLDER AND THE
DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATES AND/OR OTHER INFORMATION
SATISFACTORY TO THE COMPANY.

 

68

IMCLONE SYSTEMS
INCORPORATED

13/8% 
CONVERTIBLE NOTES DUE 2024

Rule 144A CUSIP:  45245WAE9

 

	
  No.

  	
   

  	
  $

  

ImClone Systems Incorporated, a corporation duly organized and validly
existing under the laws of the State of Delaware (herein called the “Company”,
which term includes any successor corporation under the Indenture referred to
on the reverse hereof), for value received hereby promises to pay
to          or its registered
assigns, the principal sum
of                         
DOLLARS
($              )
on May 15, 2024, at the office or agency of the Company maintained for
that purpose in accordance with the terms of the Indenture, in such coin or
currency of the United States of America as at the time of payment shall be
legal tender for the payment of public and private debts, and to pay interest,
semi-annually on May 15 and November 15 of each year, commencing November 15,
2004, on said principal sum at said office or agency, in like coin or currency,
at the rate per annum of 13⁄8%, from May 15 or November 15, as the case may
be, next preceding the date of this Note to which interest has been paid or
duly provided for, unless the date hereof is a date to which interest has been
paid or duly provided for, in which case from the date of this Note, or unless
no interest has been paid or duly provided for on the Notes, in which case from
May 7, 2004, until payment of said principal sum has been made or duly
provided for.  Notwithstanding the
foregoing, if the date hereof is after any May 1 or November 1, as
the case may be, and before the following May 15 or November 15, this
Note shall bear interest from such May 15 or November 15; provided, however,
that if the Company shall default in the payment of interest due on such May 15
or November 15, then this Note shall bear interest from the next preceding May
15 or November 15 to which interest has been paid or duly provided for or, if
no interest has been paid or duly provided for on such Note, from May 7, 2004.  Except as otherwise provided in the
Indenture, the interest payable on the Note pursuant to the Indenture on any
May 15 or November 15 will be paid to the Person entitled thereto as it appears
in the Note register at the close of business on the record date, which shall
be the May 1 or November 1 (whether or not a Business Day) next
preceding such May 15 or November 15, as provided in the Indenture; provided,
however, that any such interest not punctually paid or duly provided for
shall be payable as provided in the Indenture. 
Interest may, at the option of the Company, be paid either (i) by
check mailed to the registered address of such Person (provided that the holder
of Notes with an aggregate principal amount in excess of $2,000,000 shall, at
the written election of such holder, be paid by wire transfer of immediately
available funds) or (ii) by transfer to an account maintained by such
Person located in the United States; provided, however, that
payments to the Depositary will be made by wire transfer of immediately
available funds to the account of the Depositary or its nominee.

The Company promises to pay interest on overdue principal and (to the
extent that payment of such interest is enforceable under applicable law)
interest at a rate borne by this Note plus 1% per annum.

Reference is made to the further provisions of this Note set forth on
the reverse hereof, including, without limitation, provisions giving the holder
of this Note the right to convert this Note into Common Stock of the Company on
the terms and subject to the limitations referred to on the reverse hereof and
as more fully specified in the Indenture. 
Such further provisions shall for all purposes have the same effect as
though fully set forth at this place.

 

 

A-2

 

This Note shall be deemed to be a contract made under the laws of the
State of New York, and for all purposes shall be construed in accordance with
and governed by the laws of the State of New York, without regard to conflict
of laws provisions thereof.

This Note shall not be valid or become obligatory for any purpose until
the certificate of authentication hereon shall have been manually signed by the
Trustee or a duly authorized authenticating agent under the Indenture.

 

A-3

 

 

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

 

	
   

  	
  IMCLONE SYSTEMS
  INCORPORATED

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  

 

 

	
  Attest:

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  

 

 

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

This is one of the Notes described in the within-named
Indenture.

 

	
  THE BANK OF NEW YORK,
  as Trustee

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Authorized Signatory

  	
   

  
	
   

  	
   

  	
   

  	
  , or

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  As Authenticating Agent

  	
   

  
	
   

  	
   

  	
  (if different from
  Trustee)

  	
   

  

 

A-4

 

FORM OF REVERSE OF NOTE

IMCLONE SYSTEMS INCORPORATED

13/8% CONVERTIBLE NOTES DUE 2024

This Note is one of a duly authorized issue of Notes of the Company,
designated as its 13/8% Convertible Notes due 2024 (herein called the
“Notes”) all issued or to be issued under and pursuant to an Indenture dated as
of May 7, 2004 (herein called the “Indenture”), between the Company and The
Bank of New York, as trustee (herein called the “Trustee”), to which Indenture
and all indentures supplemental thereto reference is hereby made for a
description of the rights, limitations of rights, obligations, duties and
immunities thereunder of the Trustee, the Company and the holders of the Notes.

In case an Event of Default (as defined in the Indenture) shall have
occurred and be continuing, the principal of and accrued Interest (as defined
in the Indenture) on all Notes may be declared by either the Trustee or the
holders of not less than 25% in aggregate principal amount of the Notes then
outstanding, and upon said declaration shall become, due and payable, in the
manner, with the effect and subject to the conditions provided in the
Indenture.

The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the holders of not less than a majority in
aggregate principal amount of the Notes at the time outstanding, to execute
supplemental indentures adding any provisions to or changing in any manner or
eliminating any of the provisions of the Indenture or of any supplemental
indenture or modifying in any manner the rights of the holders of the Notes; provided,
however, that no such supplemental indenture shall (i) extend the
fixed maturity of any Note, or reduce the rate or extend the time of payment of
Interest thereon, or reduce the principal amount thereof or any amount payable
upon redemption or repurchase thereof, or change the obligation of the Company
to repurchase any Note at the option of a Noteholder on a Repurchase Date in a
manner adverse to the holders of Notes, or impair the right of any Noteholder
to institute suit for the payment thereof, or make the principal thereof or
Interest thereon payable in any coin or currency other than that provided in
the Notes, or change the obligation of the Company to repurchase any Note upon
the happening of a Designated Event (as defined in the Indenture) in a manner
adverse to the holder of the Notes, or impair the right to convert the Notes
into Common Stock subject to the terms set forth in the Indenture, including
Section 14.6 thereof, in each case, without the consent of the holder of
each Note so affected or modify any provisions of Section 10.2 or
Section 6.7, except to increase any such percentage or to provide that
certain other provisions of the Indenture cannot be modified or waived without
the consent of the holder of each Note so affected, or reduce the quorum or
voting requirements set forth in Article Nine or (ii) reduce the
aforesaid percentage of Notes, the holders of which are required to consent to any
such supplemental indenture, without the consent of the holders of all Notes
then outstanding.  Subject to the
provisions of the Indenture, the holders of a majority in aggregate principal
amount of the Notes at the time outstanding may on behalf of the holders of all
of the Notes waive any past Default or Event of Default under the Indenture and
its consequences except a default in the payment of Interest on, or the
principal of, any of the Notes, or a failure by the Company to convert any
Notes into Common Stock of the Company, or a default in the payment of the
redemption price pursuant to Article Three of the Indenture, a default in the
payment of the repurchase price pursuant to Article Three of the Indenture or a
default in respect of a covenant or provisions of the Indenture 

 

A-5

 

which under Article Ten of the Indenture cannot be
modified or amended without the consent of the holders of each or all Notes
then outstanding or affected thereby. 
Any such consent or waiver by the holder of this Note (unless revoked as
provided in the Indenture) shall be conclusive and binding upon such holder and
upon all future holders and owners of this Note and any Notes which may be
issued in exchange or substitution hereof, irrespective of whether or not any
notation thereof is made upon this Note or such other Notes.

No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and Interest on this Note
at the place, at the respective times, at the rate and in the coin or currency
herein prescribed.

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

The Notes are issuable in fully registered form, without coupons, in
denominations of $1,000 principal amount and any integral multiple of
$1,000.  At the office or agency of the
Company referred to on the face hereof, and in the manner and subject to the
limitations provided in the Indenture, without payment of any service charge
but with payment of a sum sufficient to cover any tax, assessment or other
governmental charge that may be imposed in connection with any registration or
exchange of Notes, Notes may be exchanged for a like aggregate principal amount
of Notes of any other authorized denominations.

At any time on or after May 20, 2009 and prior to maturity, the Notes
may be redeemed at the option of the Company, in whole or in part, upon mailing
a notice of such redemption not less than 30 days but not more than 60 days
before the redemption date to the holders of Notes at their last registered
addresses, all as provided in the Indenture, at a cash redemption price equal
to 100% of the principal amount of the Notes being redeemed and accrued and
unpaid Interest, to, but excluding, the redemption date; provided that if the
redemption date falls after a record date and on or prior the corresponding
interest payment date, then the Interest payable on such interest payment date
shall be paid to the holders of record of such Notes on the applicable record
date instead of the holders surrendering such Notes for redemption on such date
and the redemption price payable to the holders surrendering such Notes for
redemption will be 100% of the principal amount of such Notes.

The Company may not give notice of any redemption of the Notes if a
default in the payment of Interest on the Notes has occurred and is continuing.

The Notes are not subject to redemption through the operation of any
sinking fund.

If a Designated Event occurs at any time prior to maturity of the
Notes, the Company shall become obligated to purchase, at the option of the
holder, all or any portion of the Notes held by such holder, on a date (the
“Designated Event Repurchase Date”) specified by the Company that is at least
twenty (20) Business Days (as defined in the Indenture) and no later than
thirty five (35) Business Days after notice thereof at a cash repurchase price
of 100% of the principal amount, plus any accrued and unpaid Interest, on such
Note up to, but excluding, the Designated Event Repurchase Date; provided that
if the repurchase date falls after a record date and on or prior the
corresponding interest payment date, then the Interest payable on such interest
payment date shall be paid to the holders of record of such Notes on the
applicable record date instead of the holders surrendering such Notes for
repurchase on such date. The Notes will be redeemable in multiples of $1,000
principal amount.  The Company shall
mail to all holders of record of the Notes a notice of the occurrence of a
Designated Event and of the repurchase right arising as a result thereof on or
before the 

 

A-6

 

10th day after the occurrence of such Designated
Event.  To exercise such right, a holder
shall deliver to the Trustee (or other paying agent appointed by the Company)
the Note with the form entitled “Designated Event Repurchase Notice” on the
reverse thereof duly completed, together with the Note, duly endorsed for
transfer, at any time prior to the close of business on the date two Business
Days prior to the Designated Event Repurchase Date.

Subject to the terms and conditions of the Indenture, the Company shall
become obligated to purchase, at the option of the holder, all or any portion
of the Notes held by such holder on May 15 of 2009, 2014 and 2019 (each a
“Repurchase Date”) in whole multiples of $1,000 at a cash repurchase price of
100% of the principal amount, plus any accrued and unpaid Interest, on such
Note up to, but excluding, the Repurchase Date.  To exercise such right, a holder shall deliver to the Company
such Note with the form entitled “Repurchase Notice” on the reverse thereof
duly completed, together with the Note, duly endorsed for transfer, at any time
from the opening of business on the date that is 20 Business Days prior to such
Repurchase Date until the close of business on the date that is two Business
Days prior to the Repurchase Date, and shall deliver the Notes to the Trustee
(or other paying agent appointed by the Company) as set forth in the Indenture.

Holders have the right to withdraw any Designated Event Repurchase
Notice or the Repurchase Notice, as the case may be, by delivering to the
Trustee (or other paying agent appointed by the Company) a written notice of
withdrawal up to the close of business on the date that is two Business Days
prior to the Designated Event Repurchase Date or the Repurchase Date, as the
case may be, all as provided in the Indenture.

If money or cash, sufficient to pay the repurchase price of all Notes
or portions thereof to be purchased as of the Designated Event Repurchase Date
or the Repurchase Date, as the case may be, is deposited with the Trustee (or
other paying agent appointed by the Company), on the Designated Event
Repurchase Date or the Repurchase Date, as the case may be, Interest will cease
to accrue on such Notes (or portions thereof) immediately after such Designated
Event Repurchase Date or Repurchase Date, and the holder thereof shall have no
other rights as such other than the right to receive the repurchase price upon
surrender of such Note.

Subject to the occurrence of certain events and in compliance with the
provisions of the Indenture, prior to the close of business on the Business Day
immediately prior to the final maturity date of the Notes, the holder hereof
has the right, at its option, to convert each $1,000 principal amount of the
Notes into 10.5613 shares of the Company’s Common Stock (a conversion price of
approximately $94.69 per share), as such shares shall be constituted at the
date of conversion and subject to adjustment from time to time as provided in
the Indenture, upon surrender of this Note with the form entitled “Conversion
Notice” on the reverse thereof duly completed, to the Company at the office or
agency of the Company maintained for that purpose in accordance with the terms
of the Indenture, or at the option of such holder, the Corporate Trust Office,
and, unless the shares issuable on conversion are to be issued in the same name
as this Note, duly endorsed by, or accompanied by instruments of transfer in
form satisfactory to the Company duly executed by, the holder or by his duly
authorized attorney.  The Company will
notify the holder thereof of any event triggering the right to convert the
Notes as specified above in accordance with the Indenture.

No adjustment in respect of Interest on any Note converted or dividends
on any shares issued upon conversion of such Note will be made upon any
conversion except as set forth in the next sentence.  If this Note (or portion hereof) is surrendered for conversion
during the period from the close of business on any record date for the payment
of Interest to the corresponding interest payment date, this Note (or portion
hereof 

 

A-7

 

being converted) must be accompanied by payment, in
immediately available funds or other funds acceptable to the Company, of an amount
equal to the Interest otherwise payable on such interest payment date on the
principal amount being converted; provided that no such payment shall be
required (1) if the Company has specified a redemption date that is after a
record date and prior to the next interest payment date, (2) if the Company has
specified a Designated Event Repurchase Date that is during such period or (3)
to the extent of any overdue Interest, if any overdue Interest exists at the
time of conversion with respect to such Note.

No fractional shares will be issued upon any conversion, but an
adjustment and payment in cash will be made, as provided in the Indenture, in
respect of any fraction of a share which would otherwise be issuable upon the
surrender of any Note or Notes for conversion. 
A Note in respect of which a holder is exercising its right to require
repurchase upon a Designated Event or repurchase on a Repurchase Date may be
converted only if such holder withdraws its election to exercise either such
right in accordance with the terms of the Indenture.  Any Notes called for redemption, unless surrendered for
conversion by the holders thereof on or before the close of business on the
Business Day preceding the date fixed for redemption, may be deemed to be
redeemed from the holders of such Notes for an amount equal to the applicable
redemption price, together with accrued but unpaid Interest to (but excluding)
the date fixed for redemption, by one or more investment banks or other
purchasers who may agree with the Company (i) to purchase such Notes from
the holders thereof and convert them into shares of the Company’s Common Stock
and (ii) to make payment for such Notes as aforesaid to the Trustee in trust
for the holders.

Upon due presentment for registration of transfer of this Note at the
office or agency of the Company maintained for that purpose in accordance with
the terms of the Indenture, a new Note or Notes of authorized denominations for
an equal aggregate principal amount will be issued to the transferee in exchange
thereof; subject to the limitations provided in the Indenture, without charge
except for any tax, assessment or other governmental charge imposed in
connection therewith.

The Company, the Trustee, any authenticating agent, any paying agent,
any conversion agent and any Note registrar may deem and treat the registered
holder hereof as the absolute owner of this Note (whether or not this Note
shall be overdue and notwithstanding any notation of ownership or other writing
hereon made by anyone other than the Company or any Note registrar) for the
purpose of receiving payment hereof, or on account hereof, for the conversion
hereof and for all other purposes, and neither the Company nor the Trustee nor
any other authenticating agent nor any paying agent nor other conversion agent
nor any Note registrar shall be affected by any notice to the contrary.  All payments made to or upon the order of
such registered holder shall, to the extent of the sum or sums paid, satisfy and
discharge liability for monies payable on this Note.

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

Terms used in this Note and defined in the Indenture are used herein as
therein defined.

 

A-8

ABBREVIATIONS

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

	
   

  	
   

  	
   

  	
   

  	
  UNIF GIFT MIN ACT — 

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Custodian

  
	
  TEN COM—

  	
   

  	
  as tenants in common

  	
   

  	
  (Cust)

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (Minor)

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  TEN ENT—

  	
   

  	
  as tenants by the
  entireties

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Under Uniform Gifts to
  Minors Act 

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  JT TEN—

  	
   

  	
  as joint tenants with
  right of survivorship and not as tenants in common

  	
   

  	
  (State)

  	
   

  	
   

  

 

additional abbreviations may also be used

though not in the above list.

 

 

CONVERSION NOTICE

	
  TO:

  	
   

  	
  IMCLONE SYSTEMS
  INCORPORATED

  
	
   

  	
   

  	
  THE BANK OF NEW YORK

  

The undersigned registered owner of this Note hereby irrevocably
exercises the option to convert this Note, or the portion thereof (which is
$1,000 or an integral multiple thereof) below designated, into shares of Common
Stock of ImClone Systems Incorporated in accordance with the terms of the Indenture
referred to in this Note, and directs that the shares issuable and deliverable
upon such conversion, together with any check in payment for fractional shares
and any Notes representing any unconverted principal amount hereof, be issued
and delivered to the registered holder hereof unless a different name has been
indicated below.  If shares or any
portion of this Note not converted are to be issued in the name of a person
other than the undersigned, the undersigned will provide the appropriate
information below and pay all transfer taxes payable with respect thereto.  Any amount required to be paid by the
undersigned on account of interest accompanies this Note.

 

	
  Dated:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Signature(s)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Signature(s)
  must be guaranteed by an “eligible guarantor institution” meeting the
  requirements of the Note registrar, which requirements include membership or
  participation in the Security Transfer Agent Medallion Program (“STAMP”) or
  such other “signature guarantee program” as may be determined by the Note
  registrar in addition to, or in substitution for, STAMP, all in accordance
  with the Securities Exchange Act of 1934, as amended.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Signature
  Guarantee

  

Fill in the registration of shares of Common Stock if to be issued, and
Notes if to be delivered, other than to and in the name of the registered
holder:

 

	
   

  	
   

  
	
  (Name)

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  (Street Address)

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  (City, State and Zip
  Code)

  	
   

  

 

 

	
   

  	
   

  
	
  Please print name and
  address

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Principal amount to be
  converted

  	
   

  
	
  (if less than all):

  	
   

  
	
   

  	
   

  	
   

  
	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Social Security or
  Other Taxpayer

  	
   

  
	
  Identification Number:

  	
   

  
	
   

  	
   

  

DESIGNATED EVENT REPURCHASE NOTICE

 

	
  TO:

  	
   

  	
  IMCLONE SYSTEMS
  INCORPORATED

  

The undersigned registered owner of this Note hereby irrevocably
acknowledges receipt of a notice from ImClone Systems Incorporated (the
“Company”) regarding the right of holders to elect to require the Company to
repurchase the Notes upon the occurrence of a Designated Event with respect to
the Company and requests and instructs the Company to repay the entire
principal amount of this Note, or the portion thereof (which is $1,000 or an
integral multiple thereof) below designated, in accordance with the terms of
the Indenture at the price of 100% of such entire principal amount or portion
thereof, together with accrued Interest to, but excluding, the Designated Event
Repurchase Date, to the registered holder hereof.  Capitalized terms used herein but not defined shall have the
meanings ascribed to such terms in the Indenture.  The Notes shall be repurchased by the Company as of the portion
thereof, together with accrued Interest to, but excluding, the Designated Event
Repurchase Date pursuant to the terms and conditions specified in the
Indenture.

 

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Signature(s)

  

 

	
   

  	
   

  	
   

  	
  NOTICE:  The above signatures
  of the holder(s) hereof must correspond with the name as written upon the
  face of the Note in every particular without alteration or enlargement or any
  change whatever.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Principal
  amount to be repaid (if less than all):

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Social
  Security or Other

  
	
   

  	
   

  	
   

  	
  Taxpayer
  Identification Number

  

REPURCHASE NOTICE

TO:         IMCLONE SYSTEMS INCORPORATED

The undersigned registered owner of this Note hereby irrevocably
acknowledges receipt of a notice from ImClone Systems Incorporated (the
“Company”) regarding the right of holders to elect to require the Company to
repurchase the Notes and requests and instructs the Company to repay the entire
principal amount of this Note, or the portion thereof (which is $1,000 or an
integral multiple thereof) below designated, in accordance with the terms of
the Indenture at the price of 100% of such entire principal amount or portion
thereof, together with accrued Interest to, but excluding, the Repurchase Date,
to the registered holder hereof. 
Capitalized terms used herein but not defined shall have the meanings
ascribed to such terms in the Indenture. 
The Notes shall be repurchased by the Company as of the Repurchase Date
pursuant to the terms and conditions specified in the Indenture.

 

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Signature(s)

  

 

	
   

  	
   

  	
   

  	
  NOTICE:  The above signatures
  of the holder(s) hereof must correspond with the name as written upon the
  face of the Note in every particular without alteration or enlargement or any
  change whatever.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Principal
  amount to be repaid (if less than all):

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Social
  Security or Other

  
	
   

  	
   

  	
   

  	
  Taxpayer
  Identification Number

  

ASSIGNMENT

For value received
__________________________________________ hereby sell(s) assign(s) and
transfer(s) unto ____________________________________________ (Please insert
social security or other Taxpayer Identification Number of assignee) the within
Note, and hereby irrevocably constitutes and appoints
____________________________________ attorney to transfer said Note on the
books of the Company, with full power of substitution in the premises.

In connection with any transfer of the Note prior to the expiration of
the holding period applicable to sales thereof under Rule 144(k) under the
Securities Act (or any successor provision) (other than any transfer pursuant
to a registration statement that has been declared effective under the
Securities Act), the undersigned confirms that such Note is being transferred:

•                                          To ImClone Systems Incorporated or a
subsidiary thereof; or

•                                          To a “qualified institutional buyer” in
compliance with Rule 144A under the Securities Act of 1933, as amended; or

•                                          Pursuant to a Registration Statement
which has been declared effective under the Securities Act of 1933, as amended,
and which continues to be effective at the time of transfer; or

•                                          Pursuant to and in compliance with Rule
144 under the Securities Act of 1933, as amended;

and unless the Note has
been transferred to ImClone Systems Incorporated or a subsidiary thereof, the
undersigned confirms that such Note is not being transferred to an “affiliate”
of the Company as defined in Rule 144 under the Securities Act of 1933, as
amended.

                Unless one of the boxes is
checked, the Trustee will refuse to register any of the Notes evidenced by this
certificate in the name of any person other than the registered holder thereof.

 

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Signature(s)

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Signature(s) must be
  guaranteed by an “eligible guarantor institution” meeting the requirements of
  the Note registrar, which requirements include membership or participation in
  the Security Transfer Agent Medallion Program (“STAMP”) or such other
  “signature guarantee program” as may be determined by the Note registrar in
  addition to, or in substitution for, STAMP, all in accordance with the
  Securities Exchange Act of 1934, as amended.

  
	
   

  	
   

  	
   

  	
   

  

 

	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Signature Guarantee

  

 

NOTICE: The signature on the Conversion Notice, the
Designated Event Repurchase Notice, the Repurchase Notice or the Assignment
must correspond with the name as written upon the face of the Note in every
particular without alteration or enlargement or any change whatever

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