Document:

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                                                                     EXHIBIT 4.2
                                                                  Conformed Copy

                                    RESTATED
                                     BY-LAWS
                                       of
                       HUTCHINSON TECHNOLOGY INCORPORATED

                                  SHAREHOLDERS

                  Section 1.01 Place of Meetings. Each meeting of the
shareholders shall be held at the principal executive office of the Corporation
or at such other place as may be designated by the Board (the "Board") or the
Chief Executive Officer; provided, however, that any meeting called by or at the
demand of a shareholder or shareholders shall be held in the county where the
principal executive office of the Corporation is located.

                  Section 1.02 Regular Meeting. Regular meetings of the
shareholders may be held on an annual or other less frequent basis as determined
by the Board or the Chief Executive Officer; provided, however, that if a
regular meeting has not been held during the immediately preceding 15 months, a
shareholder or shareholders holding three percent or more of the voting power of
all shares entitled to vote may demand a regular meeting of shareholders by
written demand given to the Chief Executive Officer or Chief Financial Officer
of the Corporation. At each regular meeting the shareholders shall elect
qualified successors for directors whose terms have expired or are due to expire
within six months after the date of the meeting and may transact any other
business, provided, however, that no business with respect to which special
notice is required by law shall be transacted unless such notice shall have been
given.

                  Section 1.03 Special Meetings. A special meeting of the
shareholders may be called for any purpose or purposes at any time by the Chief
Executive Officer; by the Chief Financial Officer; by the Board or any two or
more members thereof; or by one or more shareholders holding not less than ten
percent of the voting power of all shares of the Corporation entitled to vote
(except that a special meeting for the purpose of considering any action to
directly or indirectly facilitate or effect a business combination, including
any action to change or otherwise affect the composition of the Board for that
purpose, must be called by shareholders holding 25 percent or more of the voting
power of all shares of the Corporation entitled to vote), who shall demand such
special meeting by written notice given to the Chief Executive Officer or the
Chief Financial Officer of the Corporation specifying the purposes of such
meeting.

                  Section 1.04 Meetings Held Upon Shareholder Demand. Within 30
days after receipt of a demand by the Chief Executive Officer or the Chief
Financial Officer from any shareholder or shareholders entitled to call a
meeting of the shareholders, it shall be the duty of the Board of the
Corporation to cause a special or regular meeting of shareholders, as the case
may be, to be duly called and held on notice no later than 90 days after receipt
of such demand. If the Board fails to cause such a meeting to be called and held
as required by this Section, the shareholder or shareholders making the demand
may call the meeting by giving notice as provided in Section 1.06 hereof at the
expense of the Corporation.

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                  Section 1.05 Adjournments. Any meeting of the shareholders may
be adjourned from time to time to another date, time and place. If any meeting
of the shareholders is so adjourned, no notice as to such adjourned meeting need
be given if the adjourned meeting is to be held not more than 120 days after the
date fixed for the original meeting and the date, time and place at which the
meeting will be reconvened are announced at the time of adjournment.

                  Section 1.06 Notice of Meetings. Unless otherwise required by
law, written notice of each meeting of the shareholders, stating the date, time
and place and, in the case of a special meeting, the purpose or purposes, shall
be given at least ten days and not more than 60 days prior to the meeting to
every holder of shares entitled to vote at such meeting except as specified in
Section 1.05 or as otherwise permitted by law. The business transacted at a
special meeting of shareholders is limited to the purposes stated in the notice
of the meeting.

                  Section 1.07 Waiver of Notice. A shareholder may waive notice
of the date, time, place and purpose or purposes of a meeting of shareholders. A
waiver of notice by a shareholder entitled to notice is effective whether given
before, at or after the meeting, and whether given in writing, orally or by
attendance. Attendance by a shareholder at a meeting is a waiver of notice of
that meeting, unless the shareholder objects at the beginning of the meeting to
the transaction of business because the meeting is not lawfully called or
convened, or objects before a vote on an item of business because the item may
not lawfully be considered at that meeting and does not participate in the
consideration of the item at that meeting.

                  Section 1.08 Quorum; Acts of Shareholders. The holders of a
majority of the voting power of the shares entitled to vote at a shareholders
meeting are a quorum for the transaction of business. If a quorum is present
when a duly called or held meeting is convened, the shareholders present may
continue to transact business until adjournment, even though the withdrawal of a
number of the shareholders originally present leaves less than the proportion or
number otherwise required for a quorum. Except as otherwise required by law or
specified in the Articles of Incorporation of the Corporation, the shareholders
shall take action by the affirmative vote of the holders of the greater of (a) a
majority of the voting power of the shares present and entitled to vote on that
item of business or (b) a majority of the voting power of the minimum number of
shares entitled to vote that would constitute a quorum for the transaction of
business at a duly held meeting of shareholders.

                  Section 1.09 Voting Rights. Subdivision 1. A shareholder shall
have one vote for each share held which is entitled to vote. Except as otherwise
required by law, a holder of shares entitled to vote may vote any portion of the
shares in any way the shareholder chooses. If a shareholder votes without
designating the proportion or number of shares voted in a particular way, the
shareholder is deemed to have voted all of the shares in that way.

                  Subdivision 2. The Board or, if permitted by law, the Chief
Executive Officer may fix a date not more than 60 days before the date of a
meeting of shareholders as the date for the determination of the holders of
shares entitled to notice of and entitled to vote at the meeting. When a date is
so fixed, only shareholders on that date are entitled to notice of and permitted
to vote at that meeting of shareholders.

                  Section 1.10 Proxies. Subdivision 1. A shareholder may cast or
authorize the casting of a vote by filing a written appointment of a proxy with
an officer of the Corporation at

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or before the meeting at which the appointment is to be effective or by
otherwise appointing a proxy as permitted by law. The shareholder may sign or
authorize the written appointment by telegram, cablegram or other means of
electronic transmission, provided that the Corporation has no reason to believe
that the telegram, cablegram or other electronic transmission was not authorized
by the shareholder, or as otherwise permitted by law. Any copy, facsimile,
telecommunication or other reproduction of the original of either the writing or
transmission may be used in lieu of the original, provided that it is a complete
and legible reproduction of the entire original.

                  Subdivision 2. A shareholder voting by proxy authorized to
vote on less than all items of business considered at the meeting shall be
considered to be present and entitled to vote only with respect to those items
of business for which the proxy has authority to vote. A proxy who is given
authority by a shareholder who abstains with respect to an item of business
shall be considered to have authority to vote on that item of business.

                  Section 1.11 Action Without a Meeting. Any action required or
permitted to be taken at a meeting of the shareholders of the Corporation may be
taken without a meeting by written action signed by all of the shareholders
entitled to vote on that action. The written action is effective when it has
been signed by all of those shareholders, unless a different effective time is
provided in the written action.

                  Section 1.12 Advance Notice of Shareholder Proposals. As
provided in Section 1.06, the business conducted at any special meeting of
shareholders of the Corporation shall be limited to the purposes stated in the
notice of the special meeting. Notwithstanding anything to the contrary stated
in Section 1.02, at any regular meeting of shareholders of the Corporation, only
such business (other than the nomination and election of directors, which shall
be subject to Section 2.17) may be conducted as shall be appropriate for
consideration at the meeting of shareholders and as shall have been brought
before the meeting (i) by or at the direction of the Board, or (ii) by any
shareholder of the Corporation entitled to vote at the meeting who complies with
the notice procedures hereinafter set forth in this Section.

                           (a) Timing of Notice. For such business to be
                  properly brought before any regular meeting by a shareholder,
                  the shareholder must have given timely notice thereof in
                  writing to the Secretary of the Corporation. To be timely, a
                  shareholder's notice of any such business to be conducted at
                  an annual meeting must be delivered to the Secretary of the
                  Corporation, or mailed and received at the principal executive
                  office of the Corporation, not less than 90 days before the
                  first anniversary of the date of the preceding year's annual
                  meeting of shareholders. If, however, the date of the annual
                  meeting of shareholders is more than 30 days before or after
                  such anniversary date, notice by a shareholder shall be timely
                  only if so delivered or so mailed and received not less than
                  90 days before such annual meeting or, if later, within 10
                  days after the first public announcement of the date of such
                  annual meeting. To be timely, a shareholder's notice of any
                  such business to be conducted at a regular meeting other than
                  an annual meeting must be delivered to the Secretary of the
                  Corporation, or mailed and received at the principal executive
                  office of the Corporation, not less than 90 days before such
                  regular meeting or, if later, within 10 days after the first
                  public announcement of the date of such regular meeting.
                  Except to the extent otherwise

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                  required by law, the adjournment of a regular meeting of
                  shareholders shall not commence a new time period for the
                  giving of a shareholder's notice as described above.

                           (b) Content of Notice. A shareholder's notice to the
                  Corporation shall set forth as to each matter the shareholder
                  proposes to bring before the regular meeting (i) a brief
                  description of the business desired to be brought before the
                  meeting and the reasons for conducting such business at the
                  meeting, (ii) the name and address, as they appear on the
                  Corporation's books, of the shareholder proposing such
                  business, (iii) the class or series (if any) and number of
                  shares of the Corporation that are beneficially owned by the
                  shareholder, (iv) any material interest of the shareholder in
                  such business, and (v) a representation that the shareholder
                  is a holder of record of shares entitled to vote at the
                  meeting and intends to appear in person or by proxy at the
                  meeting to make the proposal.

                           (c) Consequences of Failure to Give Timely Notice.
                  Notwithstanding anything in these By-Laws to the contrary, no
                  business (other than the nomination and election of directors)
                  shall be conducted at any regular meeting except in accordance
                  with the procedures set forth in this Section. The officer of
                  the Corporation chairing the meeting shall, if the facts
                  warrant, determine and declare to the meeting that business
                  was not properly brought before the meeting in accordance with
                  the procedures described in this Section and, if such officer
                  should so determine, such officer shall so declare to the
                  meeting, and any such business not properly brought before the
                  meeting shall not be transacted. Nothing in this Section shall
                  be deemed to preclude discussion by any shareholder of any
                  business properly brought before the meeting in accordance
                  with these By-Laws.

                           (d) Public Announcement. For purposes of this Section
                  and Section 2.17, "public announcement" means disclosure (i)
                  when made in a press release reported by the Dow Jones News
                  Service, Associated Press, or comparable national news
                  service, (ii) when filed in a document publicly filed by the
                  Corporation with the Securities and Exchange Commission
                  pursuant to Section 13, 14, or 15(d) of the Securities
                  Exchange Act of 1934, as amended, or (iii) when mailed as the
                  notice of the meeting pursuant to Section 1.06.

                           (e) Compliance with Law. Notwithstanding the
                  foregoing provisions of this Section, a shareholder shall also
                  comply with all applicable requirements of Minnesota law and
                  the Securities Exchange Act of 1934, as amended, and the rules
                  and regulations thereunder with respect to the matters set
                  forth in this Section.

                                    DIRECTORS

                  Section 2.01 Number; Qualifications. The business and affairs
of the Corporation shall be managed by or under the direction of a Board of not
less than three nor more than nine directors. Directors shall be natural
persons. The shareholders at each regular meeting shall determine the number of
directors to constitute the Board for the ensuing year,

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provided that thereafter the authorized number of directors may be increased by
the shareholders or the Board and decreased by the shareholders. Directors need
not be shareholders.

                  Section 2.02 Term. At each regular meeting the shareholders
shall elect qualified successors for directors whose terms have expired or are
due to expire within six months after the date of the meeting. Each director
shall be elected to hold office for one year and until a successor is elected
and has qualified or until the earlier death, resignation, removal or
disqualification of the director.

                  Section 2.03 Vacancies. Vacancies on the Board resulting from
the death, resignation, removal or disqualification of a director may be filled
by the affirmative vote of a majority of the remaining members of the Board,
though less than a quorum. Vacancies on the Board resulting from newly created
directorships may be filled by the affirmative vote of a majority of the
directors serving at the time such directorships are created. Each person
elected to fill a vacancy shall hold office until a qualified successor is
elected by the shareholders at the next regular meeting or at any special
meeting duly called for that purpose.

                  Section 2.04 Removal of Directors. The entire Board or any
individual director may be removed from office at any time, with or without
cause, by the affirmative vote of the holders of a majority of the shares
entitled to vote at an election of directors. A director appointed by the Board
to fill a vacancy may be removed by the affirmative vote of a majority of the
remaining directors present if the shareholders have not elected directors in
the interval between such appointment and the time of removal. New directors may
be elected at the same meeting at which the director or directors are removed.

                  Section 2.05 Place of Meetings. Each meeting of the Board
shall be held at the principal executive office of the Corporation or at such
other place as may be designated from time to time by a majority of the members
of the Board, by the Chairman of the Board or by the Chief Executive Officer. A
meeting may be held by conference among the directors using any means of
communication through which the directors may simultaneously hear each other
during the conference.

                  Section 2.06 Regular Meetings. Regular meetings of the Board
for the transaction of any business shall be held without notice at the place of
and immediately after each regular meeting of the shareholders.

                  Section 2.07 Special Meetings. A special meeting of the Board
may be called for any purpose or purposes at any time by any member of the Board
by giving not less than two days' notice to all directors of the date, time and
place of the meeting, provided that when notice is mailed, at least four days'
notice shall be given. The notice need not state the purpose of the meeting.

                  Section 2.08 Waiver of Notice; Previously Scheduled Meetings.

                  Subdivision 1. A director of the Corporation may waive notice
of the date, time and place of a meeting of the Board. A waiver of notice by a
director entitled to notice is effective whether given before, at or after the
meeting, and whether given in writing, orally or by attendance. Attendance by a
director at a meeting is a waiver of notice of that meeting, unless

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the director objects at the beginning of the meeting to the transaction of
business because the meeting is not lawfully called or convened and thereafter
does not participate in the meeting.

                  Subdivision 2. If the day or date, time and place of a Board
meeting have been provided herein or announced at a previous meeting of the
Board, no notice is required, notwithstanding Sections 2.05 or 2.07 hereof.
Notice of an adjourned meeting need not be given other than by announcement at
the meeting at which adjournment is taken of the date, time and place at which
the meeting will be reconvened.

                  Section 2.09 Quorum. The presence in person of a majority of
the directors currently holding office shall be necessary to constitute a quorum
for the transaction of business. In the absence of a quorum, a majority of the
directors present may adjourn a meeting from time to time without further notice
until a quorum is present. If a quorum is present when a duly called or held
meeting is convened, the directors present may continue to transact business
until adjournment, even though the withdrawal of a number of the directors
originally present leaves less than the proportion or number otherwise required
for a quorum.

                  Section 2.10 Acts of Board. Except as otherwise required by
law or specified in the Articles of Incorporation of the Corporation, the Board
shall take action by the affirmative vote of the greater of (a) a majority of
the directors present at a duly held meeting at the time the action is taken or
(b) a majority of the minimum proportion or number of directors that would
constitute a quorum for the transaction of business at the meeting.

                  Section 2.11 Participation by Electronic Communications. A
director may participate in a Board meeting by any means of communication
through which the director, other directors so participating and all directors
physically present at the meeting may simultaneously hear each other during the
meeting. A director so participating shall be deemed present in person at the
meeting.

                  Section 2.12 Absent Directors. A director of the Corporation
may give advance written consent or opposition to a proposal to be acted on at a
Board meeting. If the director is not present at the meeting, consent or
opposition to a proposal does not constitute presence for purposes of
determining the existence of a quorum, but consent or opposition shall be
counted as the vote of a director present at the meeting in favor of or against
the proposal and shall be entered in the minutes or other record of action at
the meeting, if the proposal acted on at the meeting is substantially the same
or has substantially the same effect as the proposal to which the director has
consented or objected.

                  Section 2.13 Action Without a Meeting. An action required or
permitted to be taken at a Board meeting may be taken without a meeting by
written action signed by all of the directors. If the Articles of Incorporation
so provide, any action, other than an action requiring shareholder approval, may
be taken by written action signed by the number of directors that would be
required to take the same action at a meeting of the Board at which all
directors were present. The written action is effective when signed by the
required number of directors, unless a different effective time is provided in
the written action. When written action is permitted to be taken by less than
all directors, all directors shall be notified immediately of its text and
effective date.

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                  Section 2.14 Committees. Subdivision 1. A resolution approved
by the affirmative vote of a majority of the Board may establish committees
having the authority of the Board in the management of the business of the
Corporation only to the extent provided in the resolution. Committees shall be
subject at all times to the direction and control of the Board, except as
provided in Section 2.15 or otherwise provided by law.

                  Subdivision 2. A committee shall consist of one or more
natural persons, who need not be directors, appointed by affirmative vote of a
majority of the directors present at a duly held Board meeting.

                  Subdivision 3. Section 2.05 and Sections 2.07 to 2.13 hereof
shall apply to committees and members of committees to the same extent as those
sections apply to the Board and directors.

                  Subdivision 4. Minutes, if any, of committee meetings shall be
made available upon request to members of the committee and to any director.

                  Section 2.15 Special Litigation Committee. Pursuant to the
procedure set forth in Section 2.14, the Board may establish a committee
composed of one or more independent directors or other independent persons to
determine whether it is in the best interests of the Corporation to consider
legal rights or remedies of the Corporation and whether those rights and
remedies should be pursued. The committee, once established, is not subject to
the direction or control of, or (unless required by law) termination by, the
Board. To the extent permitted by law, a vacancy on the committee may be filled
by a majority vote of the remaining committee members. The good faith
determinations of the committee are binding upon the Corporation and its
directors, officers and shareholders to the extent permitted by law. The
committee terminates when it issues a written report of its determinations to
the Board.

                  Section 2.16 Compensation. The Board may fix the compensation,
if any, of directors.

                  Section 2.17 Nomination of Director Candidates. Only persons
who are nominated in accordance with the procedures set forth in this Section
2.17 shall be eligible for election as directors. Nominations of persons for
election to the Board may be made at a meeting of shareholders (i) by or at the
direction of the Board, or (ii) by any shareholder of the Corporation entitled
to vote for the election of directors at the meeting who complies with the
notice procedures hereinafter set forth in this Section.

                           (a) Timing of Notice. Nominations by shareholders
                  shall be made pursuant to timely notice in writing to the
                  Secretary of the Corporation. To be timely, a shareholder's
                  notice of nominations to be made at an annual meeting of
                  shareholders must be delivered to the Secretary of the
                  Corporation, or mailed and received at the principal executive
                  office of the Corporation, not less than 90 days before the
                  first anniversary of the date of the preceding year's annual
                  meeting of shareholders. If, however, the date of the annual
                  meeting of shareholders is more than 30 days before or after
                  such anniversary date, notice by a shareholder shall be timely
                  only if so delivered or so mailed and received not less than
                  90 days before such annual meeting or, if later, within 10
                  days after the first public announcement of the date of such
                  annual meeting. If a special meeting of

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                  shareholders of the Corporation is called in accordance with
                  Section 1.03 for the purpose of electing one or more directors
                  to the Board or if a regular meeting other than an annual
                  meeting is held, for a shareholder's notice of nominations to
                  be timely it must be delivered to the Secretary of the
                  Corporation, or mailed and received at the principal executive
                  office of the Corporation, not less than 90 days before such
                  special meeting or such regular meeting or, if later, within
                  10 days after the first public announcement of the date of
                  such special meeting or such regular meeting. Except to the
                  extent otherwise required by law, the adjournment of a regular
                  or special meeting of shareholders shall not commence a new
                  time period for the giving of a shareholder's notice as
                  described above.

                           (b) Content of Notice. A shareholder's notice to the
                  Corporation of nominations for a regular or special meeting of
                  shareholders shall set forth (x) as to each person whom the
                  shareholder proposes to nominate for election or re-election
                  as a director: (i) such person's name, age, business address
                  and residence address and principal occupation or employment,
                  (ii) all other information relating to such person that is
                  required to be disclosed in solicitations of proxies for
                  election of directors, or that is otherwise required, pursuant
                  to Regulation 14A under the Securities Exchange Act of 1934,
                  as amended, and (iii) such person's written consent to being
                  named in the proxy statement as a nominee and to serving as a
                  director if elected; and (y) as to the shareholder giving the
                  notice: (i) the name and address, as they appear on the
                  Corporation's books, of such shareholder, (ii) the class or
                  series (if any) and number of shares of the Corporation that
                  are beneficially owned by such shareholder, and (iii) a
                  representation that the shareholder is a holder of record of
                  shares of the Corporation entitled to vote for the election of
                  directors and intends to appear in person or by proxy at the
                  meeting to nominate the person or persons specified in the
                  notice. At the request of the Board, any person nominated by
                  the Board for election as a director shall furnish to the
                  Secretary of the Corporation the information required to be
                  set forth in a shareholder's notice of nomination that
                  pertains to a nominee.

                           (c) Consequences of Failure to Give Timely Notice.
                  Notwithstanding anything in these By-Laws to the contrary, no
                  person shall be eligible for election as a director of the
                  Corporation unless nominated in accordance with the procedures
                  set forth in this Section. The officer of the Corporation
                  chairing the meeting shall, if the facts warrant, determine
                  and declare to the meeting that a nomination was not made in
                  accordance with the procedures described in this Section and,
                  if such officer should so determine, such officer shall so
                  declare to the meeting, and the defective nomination shall be
                  disregarded.

                                    OFFICERS

                  Section 3.01 Number and Designation. The Corporation shall
have one or more natural persons exercising the functions of the offices of
Chief Executive Officer and Chief Financial Officer. The Board may elect or
appoint such other officers or agents as it deems necessary for the operation
and management of the Corporation, with such powers, rights, duties and
responsibilities as may be determined by the Board, including, without
limitation, a Chairman of the Board, a President, one or more Vice Presidents, a
Secretary and a Treasurer,

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each of whom shall have the powers, rights, duties and responsibilities set
forth in these By-Laws unless otherwise determined by the Board. Any of the
offices or functions of those offices may be held by the same person.

                  Section 3.02 Chairman of the Board. Unless provided otherwise
by a resolution adopted by the Board, the Chairman of the Board (a) shall, when
present, preside at all meetings of the Board, (b) may maintain records of and
certify proceedings of the Board, and (c) shall perform such other duties as may
from time to time be assigned by the Board.

                  Section 3.03 Chief Executive Officer. Unless provided
otherwise by a resolution adopted by the Board, the Chief Executive Officer (a)
shall have general active management of the business of the Corporation; (b)
shall, when present, preside at all meetings of the shareholders; (c) shall see
that all orders and resolutions of the Board are carried into effect; (d) may
maintain records of and certify proceedings of the shareholders; and (e) shall
perform such other duties as may from time to time be assigned by the Board.

                  Section 3.04 Chief Financial Officer. Unless provided
otherwise by a resolution adopted by the Board, the Chief Financial Officer (a)
shall keep accurate financial records for the Corporation; (b) shall deposit all
monies, drafts and checks in the name of and to the credit of the Corporation in
such banks and depositories as the Board shall designate from time to time; (c)
shall endorse for deposit all notes, checks and drafts received by the
Corporation as ordered by the Board, making proper vouchers therefor; (d) shall
disburse corporate funds and issue checks and drafts in the name of the
Corporation, as ordered by the Board; (e) shall render to the Chief Executive
Officer and the Board, whenever requested, an account of all of such officer's
transactions as Chief Financial Officer and of the financial condition of the
Corporation; and (f) shall perform such other duties as may be prescribed by the
Board or the Chief Executive Officer from time to time.

                  Section 3.05 President, Vice Presidents. The President, if
any, and each Vice President, if any, designated by the Board shall perform such
functions as are specified by the Board in designating such President or Vice
President or which are assigned or delegated to such officer or officers by the
Chief Executive Officer. Any one or more of the Vice Presidents may be
designated by the Board as Executive Vice Presidents or Senior Vice Presidents.

                  During the absence or disability of the Chairman of the Board,
the duties of the Chairman of the Board shall be assumed by the Chief Executive
Officer, if any; in the event of the Chief Executive Officer's absence or
disability, the duties of the Chief Executive Officer shall be assumed by the
President, if any, or in the event of the President's absence or disability (or
if there is no President) by the highest ranking Executive Vice President, or in
the absence of any such Vice President, the highest ranking Senior Vice
President or other Vice President. The determination of who is the highest
ranking of two or more persons holding the same office shall, in the absence of
specific designation of order of rank by the Board, be made on the basis of the
earliest date of appointment or election, or, in the event of simultaneous
appointment or election, on the basis of the longest continuous employment by
the Corporation.

                  Section 3.06 Secretary. The Secretary, unless otherwise
determined by the Board, shall attend all meetings of the shareholders and all
meetings of the Board, shall record or cause to be recorded all proceedings
thereof in a book to be kept for that purpose, and may

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certify such proceedings. Except as otherwise required or permitted by law or by
these By-Laws, the Secretary shall give or cause to be given notice of all
meetings of the shareholders and all meetings of the Board.

                  Section 3.07 Treasurer. During the absence or disability of
the Chief Financial Officer, duties of the Chief Financial Officer shall be
assumed by the Treasurer of the Corporation, except to the extent otherwise
assigned by the Board. The Treasurer shall perform such other duties as may from
time to time be assigned by the Board.

                  Section 3.08 Authority and Duties. In addition to the
foregoing authority and duties, all officers of the Corporation shall
respectively have such authority and perform such duties in the management of
the business of the Corporation as may be designated from time to time by the
Board. Unless prohibited by a resolution approved by the affirmative vote of a
majority of the directors present, an officer elected or appointed by the Board
may, without the approval of the Board, delegate some or all of the duties and
powers of an office to other persons.

                  Section 3.09 Term. Subdivision 1. All officers of the
Corporation shall hold office until their respective successors are chosen and
have qualified or until their earlier death, resignation or removal.

                  Subdivision 2. An officer may resign at any time by giving
written notice to the Corporation. The resignation is effective without
acceptance when the notice is given to the Corporation, unless a later effective
date is specified in the notice.

                  Subdivision 3. An officer may be removed at any time, with or
without cause, by a resolution approved by the affirmative vote of a majority of
the directors present at a duly held Board meeting.

                  Subdivision 4. A vacancy in an office because of death,
resignation, removal, disqualification or other cause may, or in the case of a
vacancy in the office of Chief Executive Officer or Chief Financial Officer
shall, be filled for the unexpired portion of the term by the Board.

                  Section 3.10 Salaries. The salaries of all officers of the
Corporation shall be fixed by the Board or by the Chief Executive Officer if
authorized by the Board.

                                 INDEMNIFICATION

                  Section 4.01 Indemnification. The Corporation shall indemnify
its officers and directors and other persons entitled to mandatory
indemnification under Minnesota Statutes, Section 302A.521, as amended from time
to time, for such expenses and liabilities, in such manner, under such
circumstances, and to such extent, as required or permitted by Minnesota
Statutes, Section 302A.521, as amended from time to time, or as required or
permitted by other provisions of law.

                  Section 4.02 Insurance. The Corporation may purchase and
maintain insurance on behalf of any person in such person's official capacity
against any liability asserted against

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and incurred by such person in or arising from that capacity, whether or not the
Corporation would otherwise be required to indemnify the person against the
liability.

                                     SHARES

                  Section 5.01 Certificated and Uncertificated Shares.
Subdivision 1. The shares of the Corporation shall be either certificated shares
or uncertificated shares. Each holder of duly issued certificated shares is
entitled to a certificate of shares.

                  Subdivision 2. Each certificate of shares of the Corporation
shall bear the corporate seal, if any, and shall be signed by the Chief
Executive Officer, or the President or any Vice President, and the Chief
Financial Officer, or the Secretary or any Assistant Secretary, but when a
certificate is signed by a transfer agent or a registrar, the signature of any
such officer and the corporate seal upon such certificate may be facsimiles,
engraved or printed. If a person signs or has a facsimile signature placed upon
a certificate while an officer, transfer agent or registrar of the Corporation,
the certificate may be issued by the Corporation, even if the person has ceased
to serve in that capacity before the certificate is issued, with the same effect
as if the person had that capacity at the date of its issue.

                  Subdivision 3. A certificate representing shares issued by the
Corporation shall, if the Corporation is authorized to issue shares of more than
one class or series, set forth upon the face or back of the certificate, or
shall state that the Corporation will furnish to any shareholder upon request
and without charge, a full statement of the designations, preferences,
limitations and relative rights of the shares of each class or series authorized
to be issued, so far as they have been determined, and the authority of the
Board to determine the relative rights and preferences of subsequent classes or
series.

                  Subdivision 4. A resolution approved by the affirmative vote
of a majority of the directors present at a duly held meeting of the Board may
provide that some or all of any or all classes and series of the shares of the
Corporation will be uncertificated shares. Any such resolution shall not apply
to shares represented by a certificate until the certificate is surrendered to
the Corporation.

                  Section 5.02 Declaration of Dividends and Other Distributions.
The Board shall have the authority to declare dividends and other distributions
upon the shares of the Corporation to the extent permitted by law.

                  Section 5.03 Transfer of Shares. Shares of the Corporation may
be transferred only on the books of the Corporation by the holder thereof, in
person or by such person's attorney. In the case of certificated shares, shares
shall be transferred only upon surrender and cancellation of certificates for a
like number of shares. The Board, however, may appoint one or more transfer
agents and registrars to maintain the share records of the Corporation and to
effect transfers of shares.

                  Section 5.04 Record Date. The Board may fix a time, not
exceeding 60 days preceding the date fixed for the payment of any dividend or
other distribution, as a record date for the determination of the shareholders
entitled to receive payment of such dividend or other distribution, and in such
case only shareholders of record on the date so fixed shall be entitled to

                                       11

<PAGE>

receive payment of such dividend or other distribution, notwithstanding any
transfer of any shares on the books of the Corporation after any record date so
fixed.

                                  MISCELLANEOUS

                  Section 6.01 Execution of Instruments. Subdivision 1. All
deeds, mortgages, bonds, checks, contracts and other instruments pertaining to
the business and affairs of the Corporation shall be signed on behalf of the
Corporation by the Chief Executive Officer, or the President, or any Vice
President, or by such other person or persons as may be designated from time to
time by the Board.

                  Subdivision 2. If a document must be executed by persons
holding different offices or functions and one person holds such offices or
exercises such functions, that person may execute the document in more than one
capacity if the document indicates each such capacity.

                  Section 6.02 Advances. The Corporation may, without a vote of
the directors, advance money to its directors, officers or employees to cover
expenses that can reasonably be anticipated to be incurred by them in the
performance of their duties and for which they would be entitled to
reimbursement in the absence of an advance.

                  Section 6.03 Expenses and Unreasonable Compensation. In the
event any expenses authorized to be reimbursed to an officer by this Corporation
shall be disallowed as a deduction to this Corporation, such expenses shall be
deemed to be additional compensation to such officers for the period in which
received; provided further that in the event the treatment of such expenses as
additional compensation, or any other payments of salaries, bonuses, medical
reimbursements or other benefits paid to an officer of the Corporation shall be
deemed unreasonable compensation and disallowed as a deduction to this
Corporation, then such officer shall be obligated to immediately repay to the
Corporation the full amount of any such disallowance and the Board of Directors
shall take whatever action as, in the opinion of counsel to the Corporation, may
be deemed necessary to collect such disallowance.

                  Section 6.04 Fiscal Year. The fiscal year of the Corporation
shall begin on the first Monday after the last Sunday in September and end on
the last Sunday in September.

                  Section 6.05 Amendments. The Board shall have the power to
adopt, amend or repeal the By-Laws of the Corporation, subject to the power of
the shareholders to change or repeal the same, provided, however, that the Board
shall not adopt, amend or repeal any By-Law fixing a quorum for meetings of
shareholders, prescribing procedures for removing directors or filling vacancies
in the Board, or fixing the number of directors or their classifications,
qualifications or terms of office, but may adopt or amend a By-Law that
increases the number of directors.

                                       12<PAGE>

                                                                     EXHIBIT 4.5
                                                                  EXECUTION COPY

                                    INDENTURE

                                     between

                       HUTCHINSON TECHNOLOGY INCORPORATED

                                       and

                        LASALLE BANK NATIONAL ASSOCIATION

                                   as Trustee

                                  $130,000,000

                 2.25% Convertible Subordinated Notes due 2010*

                                 ---------------

                          Dated as of February 24, 2003

--------------------
*        Plus an over-allotment option to purchase up to $20,000,000 principal
         amount of 2.25% Convertible Subordinated Notes due 2010.

<PAGE>

                                TABLE OF CONTENTS

<Table>
<Caption>
                                                                                                                Page
                                                                                                                ----
                                                      ARTICLE I

                                                     Definitions

<S>               <C>                                                                                            <C>
   SECTION 1.01.  Definitions.....................................................................................1
   SECTION 1.02.  Certain Other Definitions.......................................................................8
   SECTION 1.03.  Incorporation by Reference of Trust Indenture Act...............................................9
   SECTION 1.04.  Rules of Construction...........................................................................9

                                                     ARTICLE II

                                         The Convertible Subordinated Notes

   SECTION 2.01.  Form and Dating.................................................................................9
   SECTION 2.02.  Execution and Authentication...................................................................11
   SECTION 2.03.  Registrar, Paying Agent and Conversion Agent...................................................11
   SECTION 2.04.  Paying Agent To Hold Money in Trust............................................................12
   SECTION 2.05.  Holder Lists...................................................................................12
   SECTION 2.06.  Transfer and Exchange..........................................................................12
   SECTION 2.07.  Replacement Convertible Subordinated Notes.....................................................14
   SECTION 2.08.  Outstanding Convertible Subordinated Notes.....................................................15
   SECTION 2.09.  When Treasury Convertible Subordinated Notes Disregarded.......................................16
   SECTION 2.10.  Temporary Convertible Subordinated Notes.......................................................16
   SECTION 2.11.  Cancellation...................................................................................17
   SECTION 2.12.  Defaulted Interest.............................................................................17
   SECTION 2.13.  CUSIP Number...................................................................................17
   SECTION 2.14.  Regulation S...................................................................................17

                                                     ARTICLE III

                                                     Redemption

   SECTION 3.01.  Optional Redemption............................................................................18
   SECTION 3.02.  Notices to Trustee.............................................................................18
   SECTION 3.03.  Selection of Convertible Subordinated Notes To Be Redeemed.....................................18
   SECTION 3.04.  Notice of Redemption...........................................................................19
   SECTION 3.05.  Effect of Notice of Redemption.................................................................20
   SECTION 3.06.  Deposit of Redemption Price....................................................................20
   SECTION 3.07.  Convertible Subordinated Notes Redeemed in Part................................................21
   SECTION 3.08.  Conversion Arrangement on Call for Redemption..................................................21
</Table>

                                                         ii

<PAGE>

<Table>
<Caption>
                                                     ARTICLE IV

                                                      Covenants

<S>               <C>                                                                                            <C>
   SECTION 4.01.  Payment of Convertible Subordinated Notes......................................................22
   SECTION 4.02.  Commission Reports.............................................................................22
   SECTION 4.03.  Compliance Certificate.........................................................................22
   SECTION 4.04.  Maintenance of Office or Agency................................................................23
   SECTION 4.05.  Continued Existence............................................................................23
   SECTION 4.06.  Repurchase Upon Designated Event...............................................................23
   SECTION 4.07.  Appointments to Fill Vacancies in Trustee's Office.............................................25
   SECTION 4.08.  Stay, Extension and Usury Laws.................................................................26
   SECTION 4.09.  Taxes..........................................................................................26
   SECTION 4.10.  Investment Company Act.........................................................................26

                                                      ARTICLE V

                                                     Successors

   SECTION 5.01.  When the Company May Merge, Etc................................................................26
   SECTION 5.02.  Successor Corporation Substituted..............................................................27
   SECTION 5.03.  Purchase Option on Change of Control...........................................................27

                                                     ARTICLE VI

                                                Defaults and Remedies

   SECTION 6.01.  Events of Default..............................................................................28
   SECTION 6.02.  Acceleration...................................................................................30
   SECTION 6.03.  Other Remedies.................................................................................30
   SECTION 6.04.  Waiver of Past Defaults........................................................................30
   SECTION 6.05.  Control by Majority............................................................................31
   SECTION 6.06.  Limitation on Suits............................................................................31
   SECTION 6.07.  Rights of Holders To Receive Payment...........................................................31
   SECTION 6.08.  Collection Suit by Trustee.....................................................................32
   SECTION 6.09.  Trustee May File Proofs of Claim...............................................................32
   SECTION 6.10.  Priorities.....................................................................................32
   SECTION 6.11.  Undertaking for Costs..........................................................................33

                                                     ARTICLE VII

                                                     The Trustee

   SECTION 7.01.  Duties of the Trustee..........................................................................33
   SECTION 7.02.  Rights of the Trustee..........................................................................34
   SECTION 7.03.  Individual Rights of the Trustee...............................................................35
   SECTION 7.04.  Trustee's Disclaimer...........................................................................35
</Table>

                                                      iii
<PAGE>

<Table>
<Caption>

<S>               <C>                                                                                            <C>
   SECTION 7.05.  Notice of Defaults.............................................................................36
   SECTION 7.06.  Reports by the Trustee to Holders..............................................................36
   SECTION 7.07.  Compensation and Indemnity.....................................................................36
   SECTION 7.08.  Replacement of the Trustee.....................................................................37
   SECTION 7.09.  Successor Trustee by Merger, etc...............................................................38
   SECTION 7.10.  Eligibility, Disqualification..................................................................38
   SECTION 7.11.  Preferential Collection of Claims Against Company..............................................38

                                                    ARTICLE VIII

                                       Satisfaction and Discharge of Indenture

   SECTION 8.01.  Discharge of Indenture.........................................................................39
   SECTION 8.02.  Deposited Moneys to be Held in Trust by Trustee................................................39
   SECTION 8.03.  Paying Agent to Repay Moneys Held..............................................................40
   SECTION 8.04.  Return of Unclaimed Moneys.....................................................................40
   SECTION 8.05.  Reinstatement..................................................................................40

                                                     ARTICLE IX

                                                     Amendments

   SECTION 9.01.  Without the Consent of Holders.................................................................40
   SECTION 9.02.  With the Consent of Holders....................................................................41
   SECTION 9.03.  Compliance with the Trust Indenture Act........................................................43
   SECTION 9.04.  Revocation and Effect of Consents..............................................................43
   SECTION 9.05.  Notation on or Exchange of Convertible Subordinated Notes......................................43
   SECTION 9.06.  Trustee Protected..............................................................................43

                                                      ARTICLE X

                                                 General Provisions

   SECTION 10.01.  Trust Indenture Act Controls..................................................................44
   SECTION 10.02.  Notices.......................................................................................44
   SECTION 10.03.  Communication by Holders with Other Holders...................................................45
   SECTION 10.04.  Certificate and Opinion as to Conditions Precedent............................................45
   SECTION 10.05.  Statements Required in Certificate or Opinion.................................................45
   SECTION 10.06.  Rules by Trustee and Agents...................................................................46
   SECTION 10.07.  Legal Holidays................................................................................46
   SECTION 10.08.  No Recourse Against Others....................................................................46
   SECTION 10.09.  Counterparts..................................................................................46
   SECTION 10.10.  Other Provisions..............................................................................46
   SECTION 10.11.  Governing Law.................................................................................47
   SECTION 10.12.  No Adverse Interpretation of Other Agreements.................................................47
   SECTION 10.13.  Successors....................................................................................47
   SECTION 10.14.  Severability..................................................................................47
   SECTION 10.15.  Table of Contents, Headings, etc..............................................................47
</Table>

                                                         iv

<PAGE>

<Table>
<Caption>
                                                     ARTICLE XI

                                                    Subordination

<S>                <C>                                                                                           <C>
   SECTION 11.01.  Agreement to Subordinate......................................................................47
   SECTION 11.02.  Liquidation; Dissolution; Bankruptcy..........................................................48
   SECTION 11.03.  Default on Designated Senior Debt.............................................................48
   SECTION 11.04.  Acceleration of Convertible Subordinated Notes................................................49
   SECTION 11.05.  When Distribution Must Be Paid Over...........................................................49
   SECTION 11.06.  Notice by Company.............................................................................50
   SECTION 11.07.  Subrogation...................................................................................50
   SECTION 11.08.  Relative Rights...............................................................................50
   SECTION 11.09.  Subordination May Not Be Impaired by Company..................................................51
   SECTION 11.10.  Distribution or Notice to Representative......................................................51
   SECTION 11.11.  Rights of Trustee and Paying Agent............................................................51
   SECTION 11.12.  Authorization to Effect Subordination.........................................................51
   SECTION 11.13.  Article Applicable to Paying Agents...........................................................52
   SECTION 11.14.  Senior Debt Entitled to Rely..................................................................52
   SECTION 11.15.  Permitted Payments............................................................................52
   SECTION 11.16.  Pari Passu Indebtedness.......................................................................52

                                                     ARTICLE XII

                                    Conversion of Convertible Subordinated Notes

   SECTION 12.01.  Right To Convert..............................................................................52
   SECTION 12.02.  Exercise of Conversion Privilege; Issuance of Common Stock on Conversion; No Adjustment for
                         Interest or Dividends...................................................................53
   SECTION 12.03.  Cash Payments in Lieu of Fractional Shares....................................................54
   SECTION 12.04.  Conversion Price..............................................................................55
   SECTION 12.05.  Adjustment of Conversion Price................................................................55
   SECTION 12.06.  Effect of Reclassification, Consolidation, Merger or Sale.....................................63
   SECTION 12.07.  Taxes on Shares Issued........................................................................64
   SECTION 12.08.  Reservation of Shares; Shares to Be Fully Paid; Listing of Common Stock.......................65
   SECTION 12.09.  Responsibility of Trustee.....................................................................65
   SECTION 12.10.  Notice to Holders Prior to Certain Actions....................................................66
   SECTION 12.11.  Restriction on Common Stock Issuable Upon Conversion..........................................66
</Table>

                                                         v

<PAGE>

                             Cross-Reference Table*

<Table>
<Caption>
Trust Indenture                                                     Indenture
Act Section                                                         Section
-----------                                                         -------
<S>                                                                 <C>
  310(a)(1).....................................................    7.10
     (a)(2).....................................................    7.10, 10.10
     (a)(3).....................................................    n/a
     (a)(4).....................................................    n/a
     (a)(5).....................................................    n/a
     (b)........................................................    7.08, 7.10
     (c)........................................................    n/a

  311(a)........................................................    7.11
     (b)........................................................    7.11
     (c)........................................................    n/a

  312(a)........................................................    2.05
     (b)........................................................    10.03
     (c)........................................................    10.03

  313(a)........................................................    7.06
     (b)(1).....................................................    n/a
     (b)(2).....................................................    7.06
     (c)........................................................    7.06, 10.02
     (d)........................................................    7.06

  314(a)........................................................    4.02, 10.02
     (b)........................................................    n/a
     (c)(1).....................................................    10.04
     (c)(2).....................................................    10.04
     (c)(3).....................................................    n/a
     (d)........................................................    n/a
     (e)........................................................    10.05
     (f)........................................................    n/a

  315(a)........................................................    7.01 (b)
     (b)........................................................    7.05, 10.02
     (c)........................................................    7.01(a)
     (d)........................................................    7.01(c)
     (e)........................................................    6.11

  316(a)(last sentence).........................................    2.09
     (a)(1)(A)..................................................    6.05
</Table>

                                     vi
<PAGE>

<Table>
<Caption>
<S>                                                                                  <C>
     (a)(1)(B)...................................................................    6.04
     (a)(2)......................................................................    n/a
     (b).........................................................................    6.02
     (c).........................................................................    9.04

  317(a)(1)......................................................................    6.08
     (a)(2)......................................................................    6.09
     (b).........................................................................    2.04

  318(a).........................................................................    10.01
     (b).........................................................................    n/a
     (c).........................................................................    10.01
</Table>

"n/a" means not applicable.
*This Cross-Reference Table shall not, for any purpose, be deemed to be a part
of the Indenture.

                                    vii
<PAGE>

                             THIS INDENTURE, dated as of February 24, 2003, is
                  between HUTCHINSON TECHNOLOGY INCORPORATED, a Minnesota
                  corporation (the "Company"), and LASALLE BANK NATIONAL
                  ASSOCIATION, as trustee (the "Trustee"). The Company has duly
                  authorized the creation of its 2.25% Convertible Subordinated
                  Notes due 2010 (the "Convertible Subordinated Notes"), and to
                  provide therefor the Company and the Trustee have duly
                  authorized the execution and delivery of this Indenture. Each
                  party agrees as follows for the benefit of the other party and
                  for the equal and ratable benefit of the holders from time to
                  time of the Convertible Subordinated Notes:

                                    ARTICLE I

                                   Definitions

                  SECTION 1.01. Definitions.

         "Affiliate" means, when used with reference to any person, any other
person directly or indirectly controlling, controlled by, or under direct or
indirect common control of, the referent 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 management or policies of the referent
person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise. The terms "controlling" and "controlled"
have meanings correlative of the foregoing.

         "Agent" means any Registrar, Paying Agent, Conversion Agent or
co-registrar.

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

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

         "Board of Directors" means the Board of Directors of the Company or any
authorized committee of the Board of Directors.

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

         "Change of Control" means the occurrence of one or more of the
following events: (a) any "person" or "group" (as such terms are used in
Sections 13(d) and 14(d) of the Exchange Act) is or becomes the "beneficial
owner" (as defined in Rules 13d-3 and 13d-5 under the Exchange Act) of shares
representing more than 50% of the combined voting power of the then outstanding
Voting Stock of the Company, (b) the Company consolidates with or merges into
any other corporation, any other corporation merges into the Company, or the
Company effects a share exchange, and, in the case of any such transaction, the
outstanding Common Stock of the Company is reclassified into or exchanged for
any other property or securities, unless the shareholders of the Company
immediately before such transaction own, directly or indirectly immediately
following such transaction, at least a majority of the combined voting

<PAGE>
                                                                               2

power of the then outstanding Voting Stock of the corporation resulting from
such transaction in substantially the same respective proportions as their
ownership of the Voting Stock of the Company immediately before such
transaction, (c) the Company, or the Company and its subsidiaries taken as a
whole, sells, assigns, conveys, transfers or leases all or substantially all
assets of the Company, or of the Company and its subsidiaries taken as a whole,
as applicable (other than to one or more wholly-owned subsidiaries of the
Company), (d) any time the Continuing Directors do not constitute a majority of
the Board of Directors (or, if applicable, a successor corporation to the
Company), or (e) the Company undertakes a liquidation, dissolution or winding
up; provided, however, that a Change of Control under (a), (b) and (c) above
shall not be deemed to have occurred if either (y) the Daily Market Price per
share of Common Stock for any five Trading Days within the period of 10
consecutive Trading Days ending immediately after the later of the Change of
Control or the public announcement of the Change of Control (in the case of a
Change of Control under clause (a) above) or the period of 10 consecutive
trading days ending immediately before the Change of Control (in the case of a
Change of Control under clause (b) or (c) above) shall equal or exceed 105% of
the Conversion Price in effect on the date of such Change of Control or the
public announcement of such Change of Control, as applicable (provided that for
purposes of the foregoing, the Conversion Price shall be determined without
regard to temporary reductions thereof pursuant to Section 12.05(h)) or (z) at
least 95% of the consideration (excluding cash payments for fractional shares)
in the transaction or transactions constituting the Change of Control consists
of shares of common stock that are, or upon issuance will be, traded on the New
York Stock Exchange or quoted on the Nasdaq National Market.

         "Commission" means the Securities and Exchange Commission.

         "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 12.06, however, shares issuable on conversion of Convertible
Subordinated Notes shall include only shares of the class designated as Common
Stock of the Company at the date of this Indenture 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.

<PAGE>
                                                                               3

         "Company" means the party named as such above until a successor
replaces it in accordance with Article V and thereafter means the successor.
References to the Company shall not include any Subsidiary.

         "Consolidated Subsidiary" means, with respect to any person, a
Subsidiary which for financial reporting purposes is or, in accordance with
GAAP, should be, accounted for by such person as a consolidated subsidiary.

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

         "Convertible Subordinated Notes" means the 2.25% Convertible
Subordinated Notes due 2010 issued, authenticated and delivered under this
Indenture.

         "Conversion Price" means the initial conversion price specified in the
form of Convertible Subordinated Note in Paragraph 16 of such form, as adjusted
in accordance with the provisions of Article XII.

         "Corporate Trust Office" means the corporate trust office of the
Trustee at which at any particular time the trust created by this Indenture
shall principally be administered; as of the date hereof, the Corporate Trust
Office is located at 135 South LaSalle Street, Chicago, Illinois 60603.

         "Daily Market Price" means the price of a share of Common Stock on the
relevant date, determined on the basis of the last reported sale price regular
way of the Common Stock as quoted on the Nasdaq National Market, or if the
Common Stock is not then quoted on the Nasdaq National Market, as reported on
the principal national securities exchange upon which the Common Stock is
listed.

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

         "Depositary" means, with respect to any Global Securities, a clearing
agency that is registered as such under the Exchange Act and is designated by
the Company to act as Depositary for such Global Securities (or any successor
securities clearing agency so registered), which shall initially be DTC.

         "Designated Event" means the occurrence of a Change of Control or a
Termination of Trading.

         "Designated Senior Debt" means (a) indebtedness outstanding under the
Company's variable rate demand note (and related letter of credit) with the City
of Hutchinson, Minnesota and (ii) any particular Senior Debt which has at the
time of a payment event of default or the giving of a Payment Blockage Notice,
as the case may be, an aggregate outstanding principal amount in excess of $5
million, if the instrument creating or

<PAGE>
                                                                               4

evidencing the same or the assumption or guarantee thereof (or related
agreements or documents to which the Company is a party) expressly provides that
such Indebtedness shall be "Designated Senior Debt" for purposes of this
Indenture (provided that such instrument, agreement or other document may place
limitations and conditions on the right of such Senior Debt to exercise the
rights of Designated Senior Debt.)

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

         "Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.

         "GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as may be approved by a significant segment of the accounting
profession of the United States, which are in effect from time to time.

         "Global Securities Legend" means the legend labeled as such and that is
set forth in Exhibit A hereto.

         "Indebtedness" means, with respect to any person, all obligations,
whether or not contingent, of such person:

                           (i) (a) for borrowed money (including, but not
                  limited to, any indebtedness secured by a security interest,
                  mortgage or other lien on the assets of such person that is
                  (1) given to secure all or part of the purchase price of
                  property subject thereto, whether given to the vendor of such
                  property or to another, or (2) existing on property at the
                  time of acquisition thereof),

                           (b) evidenced by a note, debenture, bond or other
                  similar written instrument,

                           (c) under a lease required to be capitalized on the
                  balance sheet of the lessee under GAAP, or under any lease or
                  related document (including a purchase agreement) that
                  provides that such person is contractually obligated to
                  purchase or cause a third party to purchase and thereby
                  guarantee a minimum residual value of the lease property to
                  the lessor and such person's obligations under such lease or
                  related document to purchase or to cause a third party to
                  purchase such leased property,

                           (d) in respect of letters of credit, bank guarantees
                  or bankers' acceptances (including reimbursement obligations
                  with respect to any of the foregoing),

                           (e) Obligations secured by a mortgage, pledge, lien,
                  charge, or similar encumbrance to which the property or assets
                  of such person are subject,

<PAGE>
                                                                               5

                  whether or not the obligation secured thereby shall have been
                  assumed by or shall otherwise be such person's legal
                  liability,

                           (f) in respect of the balance of deferred and unpaid
                  purchase price of any property or assets, and

                           (g) under interest rate or currency swap agreements,
                  cap, floor and collar agreements, spot and forward contracts
                  and similar agreements and arrangements;

                  (ii) with respect to any obligation of others of the type
         described in the preceding clause (i) or under clause (iii) below
         assumed by or guaranteed in any manner by such person (including,
         without limitation, through "take or pay" and similar arrangements),
         contingent or otherwise (and the obligations of such person under any
         such assumptions, guarantees or other such arrangements); and

                  (iii) any and all deferrals, renewals, extensions,
         refinancings and refundings of, or amendments, modifications or
         supplements to, any of the foregoing.

         "Indenture" means this Indenture as amended or supplemented from time
to time.

         "Initial Purchasers" means Salomon Smith Barney Inc. and Needham &
Company, Inc.

         "Interest Payment Date" means March 15 and September 15 of each year,
commencing with September 15, 2003.

         "Issue Date" means the date on which Convertible Subordinated Notes are
first issued and authenticated under this Indenture.

         "Liquidated Damages" has the meaning specified in paragraph 17 of the
form of Convertible Subordinated Note which is attached as Exhibit A hereto.

         "Material Subsidiary" means any Subsidiary of the Company which at the
date of determination is a "significant subsidiary" as defined in Rule 1-02(w)
of Regulation S-X under the Securities Act and the Exchange Act.

         "Maturity Date" means March 15, 2010.

         "Note Custodian" means LaSalle Bank National Association, as custodian
with respect to any Global Security, or any successor entity thereto.

         "Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.

<PAGE>
                                                                               6

         "Offering Memorandum" means the final offering memorandum dated
February 18, 2003, relating to the Convertible Subordinated Notes, including all
amendments thereto.

         "Officer" means the Chairman of the Board, the Chief Executive Officer,
the President, the Chief Financial Officer, the Chief Accounting Officer, any
Executive Vice President, Senior Vice President or Vice President (whether or
not designated by a number or numbers or word or words before or after the title
"Vice President"), the Treasurer, the Secretary, any Assistant Treasurer or any
Assistant Secretary of the Company.

         "Officers' Certificate" means a certificate signed by two Officers, one
of whom is the Chairman of the Board, the Chief Executive Officer, the
President, the Chief Financial Officer, the Treasurer or the Controller of the
Company.

         "Opinion of Counsel" means a written opinion from legal counsel who may
be an employee of or counsel to the Company or the Trustee except to the extent
otherwise indicated in this Indenture.

         A "person" means any individual, corporation, partnership, joint
venture, trust, estate, unincorporated organization, limited liability company
or government or any agency or political subdivision thereof.

         "Redemption Date" when used with respect to any of the Convertible
Subordinated Notes to be redeemed, means the date fixed by the Company for such
redemption pursuant to Article III of this Indenture and the Convertible
Subordinated Notes.

         "Redemption Price" when used with respect to any of the Convertible
Subordinated Notes to be redeemed, means the price fixed for such redemption
pursuant to Article III of this Indenture and the Convertible Subordinated
Notes.

         "Registration Rights Agreement" means the Registration Rights Agreement
relating to the Convertible Subordinated Notes and Common Stock issuable upon
conversion of such Convertible Subordinated Notes dated February 24, 2003,
between the Company and the Initial Purchasers, as such agreement may be
amended, modified or supplemented from time to time.

         "Regular Record Date" means the March 1 or September 1 immediately
preceding each Interest Payment Date.

         "Representative" means (a) the indenture trustee or other trustee,
agent or representative for any Senior Debt or (b) with respect to any Senior
Debt that does not have any such trustee, agent or other representative, (i) in
the case of such Senior Debt issued pursuant to an agreement providing for
voting arrangements as among the holders or owners of such Senior Debt, any
holder or owner of such Senior Debt acting with the consent of the required
persons necessary to bind such holders or owners of such Senior Debt and (ii) in
the case of all other such Senior Debt, the holder or owner of such Senior Debt.

<PAGE>
                                                                               7

         "Restricted Common Stock Legend" means the legend labeled as such and
that is set forth in Exhibit B hereto.

         "Restricted Securities Legend" means the legend labeled as such and
that is set forth in Exhibit A hereto.

         "Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.

         "Senior Debt" means the principal of, premium, if any, and interest on,
rent under, and any other amounts payable on or in respect of any Indebtedness
of the Company (including, without limitation, any Obligations in respect of
such Indebtedness and any interest accruing after the filing of a petition by or
against the Company under any Bankruptcy Law, whether or not allowed as a claim
after such filing in any proceeding under such Bankruptcy Law), whether
outstanding on the date of this Indenture or thereafter created, incurred,
assumed, guaranteed or in effect guaranteed by the Company (including all
deferrals, renewals, extensions, refinancings or refundings of, or amendments,
modifications or supplements to the foregoing); provided, however, that Senior
Debt does not include (i) Indebtedness evidenced by the Convertible Subordinated
Notes or the Company's 6% Convertible Subordinated Notes due 2005, (ii) any
liability for Federal, state, local or other taxes owed or owing by the Company,
(iii) Indebtedness of the Company to any Subsidiary of the Company, (iv) trade
payables and accrued expenses (including, without limitation, accrued
compensation) of the Company for goods, services or materials purchased or
provided in the ordinary course of business, and (v) any particular Indebtedness
in which the instrument creating or evidencing the same expressly provides that
such Indebtedness shall not be senior in right of payment to, or is pari passu
with, or is subordinated or junior to, the Convertible Subordinated Notes.

         "Shelf Registration Statement" shall have the meaning set forth in the
Registration Rights Agreement.

         "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 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" will be deemed to have occurred if the Common
Stock (or other common stock into which the Convertible Subordinated Notes are
then convertible) is neither listed for trading on a U.S. national securities
exchange nor approved for trading on the Nasdaq National Market.

<PAGE>
                                                                               8

         "TIA" means the Trust Indenture Act of 1939 as in effect on the date of
execution of this Indenture, except as provided in Sections 9.03 and 12.06.

         "Trustee" means the party named as such above until a successor
replaces it in accordance with the applicable provisions of this Indenture and
thereafter means the successor.

         "Trust Officer" means an officer in the Corporate Trust Office of the
Trustee and having direct responsibility for the administration of this
Indenture.

         "U.S. Government Obligations" means direct obligation of the United
States of America for the payment of which the full faith and credit of the
United States of America is pledged. In order to have money available on a
payment date to pay principal or interest on the Convertible Subordinated Notes,
the U.S. Government Obligations shall be payable as to principal or interest on
or before such payment date in such amounts as will provide the necessary money.
U.S. Government Obligations shall not be callable at the issuer's option.

         "Voting Stock" of a corporation means all classes of Capital Stock of
such corporation then outstanding and normally entitled to vote in the election
of directors.

                    SECTION 1.02. Certain Other Definitions.

<Table>
<Caption>
                                                                                                Defined
                                                                                                in Section
                                                                                                ----------
<S>                                                                                             <C>
"Bankruptcy Law"........................................................................        6.01
"Business Day"..........................................................................        10.07
"Closing Price".........................................................................        12.05
"Conversion Agent"......................................................................        2.03
"Current Market Price"..................................................................        12.05
"Custodian".............................................................................        6.01
"Designated Event Date".................................................................        4.06
"Designated Event Offer"................................................................        4.06
"Designated Event Payment"..............................................................        4.06
"Designated Event Payment Date".........................................................        4.06
"Event of Default"......................................................................        6.01
"Expiration Time".......................................................................        12.05
"Fair Market Value".....................................................................        12.05
"Global Security".......................................................................        2.01
"Legal Holiday".........................................................................        10.07
"Non-electing Share"....................................................................        12.06
"Paying Agent"..........................................................................        2.03
"Payment Blockage Notice"...............................................................        11.03
"Purchased Shares"......................................................................        12.05
"Record Date"...........................................................................        12.05
"Registrar".............................................................................        2.03
"Securities"............................................................................        12.05
"Trading Day"...........................................................................        12.05
"Trigger Event".........................................................................        12.05
</Table>

<PAGE>
                                                                               9

         SECTION 1.03. Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture.

         The following TIA terms used in this Indenture have the following
meanings:

         "Commission" means the Commission;

         "indenture securities" means the Convertible Subordinated Notes;

         "indenture security holder" means a holder of a Convertible
Subordinated Note;

         "indenture to be qualified" means this Indenture;

         "indenture trustee" or "institutional trustee" means the Trustee; and

         "obligor" on the Convertible Subordinated Notes means the Company or
any other obligor on the Convertible Subordinated Notes.

         All other terms in this Indenture that are defined by the TIA, defined
by TIA reference to another statute or defined by Commission rule under the TIA
have the meanings so assigned to them.

         SECTION 1.04. Rules of Construction. Unless the context otherwise
requires:

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

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

         (3) "or" is not exclusive;

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

         (5) the male, female and neuter genders include one another.

                                   ARTICLE II

                       The Convertible Subordinated Notes

         SECTION 2.01. Form and Dating. (a) Global Securities. The Convertible
Subordinated Notes are being offered and sold by the Company pursuant to a
Purchase

<PAGE>
                                                                              10

Agreement relating to the Convertible Subordinated Notes, dated February 18,
2003, among the Company and the Initial Purchasers (the "Purchase Agreement").

         The Convertible Subordinated Notes are being offered and sold (i) in
reliance on Regulation S under the Securities Act ("Regulation S") or (ii) to
"qualified institutional buyers" as defined in Rule 144A ("QIBs") in reliance on
Rule 144A under the Securities Act ("Rule 144A"), each as provided in the
Purchase Agreement, and shall be issued in the form of one or more permanent
global securities in definitive, fully registered form without interest coupons
with the Global Securities Legend and Restricted Securities Legend set forth in
Exhibit A hereto (each, a "Global Security"). Any Global Security shall be
deposited on behalf of the purchasers of the Convertible Subordinated Notes
represented thereby with the Trustee, as custodian for the Depositary, and
registered in the name of the Depositary or a nominee of the Depositary for the
accounts of participants in the Depositary (and, in the case of Convertible
Subordinated Notes held in accordance with Regulation S, registered with the
Depositary for the accounts of designated agents holding on behalf of the
Euroclear System ("Euroclear") or Clearstream Banking, societe anonyme
("Clearstream")), duly executed by the Company and authenticated by the Trustee
as hereinafter provided. The aggregate principal amount of a Global Security may
from time to time be increased or decreased by adjustments made on the records
of the Trustee and the Depositary or its nominee as hereinafter provided.

         (b) Book-Entry Provisions. This Section 2.01(b) shall apply only to a
Global Security deposited with or on behalf of the Depositary.

         The Company shall execute and the Trustee shall, in accordance with
this Section 2.01(b) and the written order of the Company, authenticate and
deliver initially one or more Global Securities that (i) shall be registered in
the name of Cede & Co. or other nominee of such Depositary and (ii) shall be
delivered by the Trustee to such Depositary or pursuant to such Depositary's
instructions or held by the Trustee as custodian for the Depositary pursuant to
a FAST Balance Certificate Agreement between the Depositary and the Trustee.

         Members of, or participants in, the Depositary ("Agent Members") shall
have no rights under this Indenture with respect to any Global Security held on
their behalf by the Depositary or by the Trustee as the custodian of the
Depositary or under such Global Security, and the Depositary may be treated by
the Company, the Trustee and any agent of the Company or the Trustee as the
absolute owner of such Global Security for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall prevent the Company, the
Trustee or any agent of the Company or the Trustee from giving effect to any
written certification, proxy or other authorization furnished by the Depositary
or impair, as between the Depositary and its Agent Members, the operation of
customary practices of such Depositary governing the exercise of the rights of a
holder of a beneficial interest in any Global Security.

         The provisions of the "Operating Procedures of the Euroclear System"
and "Terms and Conditions Governing Use of Euroclear" and the "Management
Regulations and Instructions to Participants" of Clearstream shall be applicable
to interests in any Global

<PAGE>
                                                                              11

Securities that are held by participants through Euroclear or Clearstream. The
Trustee shall have no obligation to notify holders of any such procedures or to
monitor or enforce compliance with the same.

         (c) Definitive Securities. Except as provided in Section 2.10, owners
of beneficial interests in Global Securities will not be entitled to receive
physical delivery of certificated Convertible Subordinated Notes in definitive
form. If applicable, certificated Convertible Subordinated Notes in definitive
form will bear the Restricted Securities Legend set forth on Exhibit A unless
removed in accordance with Section 2.06(b).

         SECTION 2.02. Execution and Authentication. One Officer shall sign the
Convertible Subordinated Notes for the Company by manual or facsimile signature.

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

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

         Upon a written order of the Company signed by an Officer of the
Company, the Trustee shall authenticate Convertible Subordinated Notes for
original issue up to an aggregate principal amount of $130,000,000 (plus up to
$20,000,000 aggregate principal amount of Convertible Subordinated Notes that
may be sold by the Company pursuant to the over-allotment option granted
pursuant to the Purchase Agreement) to the Initial Purchasers. The aggregate
principal amount of Convertible Subordinated Notes outstanding at any time may
not exceed that amount except as provided in Section 2.07.

         The Convertible Subordinated Notes shall be issuable only in registered
form without coupons and only in denominations of $1,000 or any integral
multiple thereof.

         The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Convertible Subordinated Notes. An authenticating agent
may authenticate Convertible Subordinated Notes whenever the Trustee may do so.

         Each reference in this Indenture to authentication by the Trustee
includes authentication by such agent. An authenticating agent has the same
right as an Agent to deal with the Company or an Affiliate of the Company.

         SECTION 2.03. Registrar, Paying Agent and Conversion Agent. The Company
shall maintain or cause to be maintained in the City of New York, New York or
Chicago, Illinois, an office or agency: (i) where securities may be presented
for registration of transfer or for exchange ("Registrar"); (ii) where
Convertible Subordinated Notes may be presented for payment ("Paying Agent");
(iii) where Convertible Subordinated Notes may be presented for conversion (the
"Conversion Agent"); and (iv) where notices and demands to or upon the Company
in respect of Convertible Subordinated Notes and this Indenture may be served by
the holders of the Convertible Subordinated Notes. The Registrar shall

<PAGE>

                                                                              12

keep a Register ("Register") of the Convertible Subordinated Notes and of their
transfer and exchange. The Company may appoint one or more co-registrars, one or
more additional paying agents and one or more additional conversion agents. The
term "Paying Agent" includes any additional paying agent, and the term
"Conversion Agent" includes any additional Conversion Agent. The Company may
change any Paying Agent, Registrar, Conversion Agent or co-registrar without
prior notice. The Company shall notify the Trustee of the name and address of
any Agent not a party to this Indenture and shall enter into an appropriate
agency agreement with any Registrar, Paying Agent, Conversion Agent or
coregistrar not a party to this Indenture. The agreement shall implement the
provisions of this Indenture that relate to such Agent. The Company or any of
its subsidiaries may act as Paying Agent, Registrar, Conversion Agent or
coregistrar, except that for purposes of Articles III and VIII and Section 4.06,
neither the Company nor any of its subsidiaries shall act as Paying Agent. If
the Company fails to appoint or maintain another entity as Registrar, or Paying
Agent or Conversion Agent, the Trustee shall act as such, and the Trustee shall
initially act as such.

         SECTION 2.04. Paying Agent To Hold Money in Trust. The Company shall
require each Paying Agent (other than the Trustee, who hereby so agrees), to
agree in writing that the Paying Agent will hold in trust for the benefit of
holders of the Convertible Subordinated Notes or the Trustee all money held by
the Paying Agent for the payment of principal, interest or Liquidated Damages on
the Convertible Subordinated Notes, and will notify the Trustee of any default
by the Company in respect of making any such payment. While any such default
continues, the Trustee may require a Paying Agent to pay all money held by it to
the Trustee. The Company at any time may require a Paying Agent to pay all money
held by it to the Trustee. Upon payment over to the Trustee, the Paying Agent
(if other than the Company or a Subsidiary of the Company) shall have no further
liability for the money. If the Company or a Subsidiary of the Company acts as
Paying Agent, it shall segregate and hold in a separate trust fund for the
benefit of the holders of the Convertible Subordinated Notes all money held by
it as Paying Agent.

         SECTION 2.05. Holder Lists. The Trustee shall preserve in as current a
form as is reasonably practicable the most recent list available to it of the
names and addresses of holders of Convertible Subordinated Notes and shall
otherwise comply with TIA Section 312(a). If the Trustee is not the Registrar,
the Company shall furnish to the Trustee at least seven Business Days before
each Interest Payment Date, and as the Trustee may request in writing within 15
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 and as of such date
as the Trustee may reasonably require of the names and addresses of holders of
Convertible Subordinated Notes.

         SECTION 2.06. Transfer and Exchange. (a) When Convertible Subordinated
Notes are presented to the Registrar or a co-registrar with a request to
register a transfer or to exchange them for an equal principal amount of
Convertible Subordinated Notes of other denominations, the Registrar shall
register the transfer or make the exchange if its requirements for such
transactions are met. To permit registrations of transfers and exchanges, the
Company shall issue and the Trustee shall authenticate Convertible

<PAGE>
                                                                              13

Subordinated Notes at the Registrar's request, bearing registration numbers not
contemporaneously outstanding. No service charge shall be made to a holder for
any registration of transfer or exchange (except as otherwise expressly
permitted herein), but the Company and the Registrar may require payment of a
sum sufficient to cover any transfer tax or other governmental charge payable
upon exchanges pursuant to Sections 2.10, 3.07, 4.06, 9.05 or 12.02.

         The Company or the Registrar shall not be required (i) to issue,
register the transfer of or exchange Convertible Subordinated Notes during a
period beginning at the opening of business 15 days before the day of any
selection of Convertible Subordinated Notes for redemption under Section 3.03
and ending at the close of business on the day of selection, (ii) to register
the transfer or exchange of any Convertible Subordinated Note so selected for
redemption in whole or in part, except the unredeemed portion of any Convertible
Subordinated Note being redeemed in part, (iii) to register the transfer of any
Convertible Subordinated Notes surrendered for repurchase pursuant to Section
4.06 or (iv) to register the transfer of any Convertible Subordinated Notes
surrendered for conversion.

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

         (b) Notwithstanding any provision to the contrary herein, so long as a
Global Security remains outstanding and is held by or on behalf of the
Depositary, transfers of a Global Security, in whole or in part, or of any
beneficial interest therein, shall only be made in accordance with Sections
2.01(b) and 2.10; provided, however, that beneficial interests in a Global
Security may only be transferred to persons who take delivery thereof in the
form of a beneficial interest in the Global Security in accordance with the
transfer restrictions set forth under the heading "Notice to Investors" in the
Offering Memorandum and, if applicable, in the Restricted Securities Legend.

         Except for transfers or exchanges made in accordance with Section 2.10,
transfers of a Global Security shall be limited to transfers of such Global
Security in whole, but not in part, to nominees of the Depositary or to a
successor of the Depositary or such successor's nominee.

         In the event that a Global Security is exchanged for Convertible
Subordinated Notes in definitive form pursuant to Section 2.10 prior to the
effectiveness of a Shelf Registration Statement with respect to such Convertible
Subordinated Notes, such exchange may occur, and such Convertible Subordinated
Notes may be further exchanged or transferred, only upon receipt by the
Registrar of (1) such Global Security or such Convertible Subordinated Notes in
definitive form, duly endorsed as provided herein, as applicable, (2)
instructions from the holder directing the Trustee to authenticate and deliver
one or more Convertible Subordinated Notes in definitive

<PAGE>
                                                                              14

form of the same aggregate principal amount as the Global Security or the
Convertible Subordinated Notes in definitive form (or portion thereof), as
applicable, to be transferred, such instructions to contain the name or names of
the designated transferee or transferees, the authorized denomination or
denominations of the Convertible Subordinated Notes in definitive form to be so
issued and appropriate delivery instructions, and (3) such certifications or
other information and, in the case of transfers pursuant to Rule 144 under the
Securities Act, legal opinions as the Company may reasonably require to confirm
that such transfer is being made pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the Securities Act
(including the certification requirements intended to ensure that such transfers
comply with Rule 144A or Regulation S under the Securities Act, as the case may
be), and upon compliance with such other procedures as may from time to time be
adopted by the Company and the Registrar.

         (c) Except in connection with a Shelf Registration Statement
contemplated by and in accordance with the terms of the Registration Rights
Agreement, if Convertible Subordinated Notes are issued upon the registration of
transfer, exchange or replacement of Convertible Subordinated Notes bearing a
Restricted Securities Legend, or if a request is made to remove such a
Restrictive Securities Legend on Convertible Subordinated Notes, the Convertible
Subordinated Notes so issued shall bear the Restricted Securities Legend, or a
Restricted Securities Legend shall not be removed, as the case may be, unless
there is delivered to the Company such satisfactory evidence, which, in the case
of a transfer made pursuant to Rule 144 under the Securities Act, may include an
opinion of counsel given in accordance with the laws in the State of New York,
as may be reasonably required by the Company, that neither the legend nor the
restrictions on transfer set forth therein are required to ensure that transfers
thereof comply with the provisions of Rule 144A, Rule 144 or Regulation S under
the Securities Act or that such Convertible Subordinated Notes are not
"restricted" within the meaning of Rule 144 under the Securities Act. Upon
provision to the Company of such satisfactory evidence, the Trustee, at the
written direction of the Company, shall authenticate and deliver Convertible
Subordinated Notes that do not bear the legend. The Company shall not otherwise
be entitled to require the delivery of a legal opinion in connection with any
transfer or exchange of Securities.

         (d) Neither the Trustee nor any Agent shall have any responsibility for
any actions taken or not taken by the Depositary.

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

         SECTION 2.07. Replacement Convertible Subordinated Notes. If the holder
of a Convertible Subordinated Note claims that its Convertible Subordinated Note
has been lost, destroyed or wrongfully taken, the Company shall issue and the
Trustee shall authenticate a replacement Convertible Subordinated Note if the
Trustee's and the

<PAGE>
                                                                              15

Company's requirements are met. If required by the Trustee or the Company as a
condition of receiving a replacement Convertible Subordinated Note, the holder
of a Convertible Subordinated Note must provide a certificate of loss and an
indemnity or an indemnity bond sufficient, in the judgment of both the Company
and the Trustee, to fully protect the Company, the Trustee, any Agent and any
authenticating agent from any loss, liability, cost or expense which any of them
may suffer or incur if the Convertible Subordinated Note is replaced. The
Company and the Trustee may charge the relevant holder for their expenses in
replacing any Convertible Subordinated Note.

         The Trustee or any authenticating agent may authenticate any such
substituted Convertible Subordinated Note, and deliver the same upon the receipt
of such security or indemnity as the Trustee, the Company and, if applicable,
such authenticating agent may require. Upon the issuance of any substituted
Convertible Subordinated Note, the Company and the Trustee may require the
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in relation thereto and any other expenses connected therewith.
In case any Convertible Subordinated Note which has matured or is about to
mature, or has been called for redemption pursuant to Article III, submitted for
repurchase pursuant to Section 4.06 or is about to be converted into Common
Stock pursuant to Article XII, shall become mutilated or be destroyed, lost or
stolen, the Company may, instead of issuing a substitute Convertible
Subordinated 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 Convertible Subordinated 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 the 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 case of
destruction, loss or theft, evidence satisfactory to the Company, the Trustee
and, if applicable, any paying agent or conversion agent of the destruction,
loss or theft of such Convertible Subordinated Note and of the ownership
thereof.

         Every replacement Convertible Subordinated Note is an additional
obligation of the Company and shall be entitled to all the benefits provided
under this Indenture equally and proportionately with all other Convertible
Subordinated Notes duly issued, authenticated and delivered hereunder.

         SECTION 2.08. Outstanding Convertible Subordinated Notes. The
Convertible Subordinated Notes outstanding at any time are all the Convertible
Subordinated Notes properly authenticated by the Trustee except for those
canceled by the Trustee, those delivered to it for cancellation, and those
described in this Section 2.08 as not outstanding.

         If a Convertible Subordinated Note is replaced pursuant to Section
2.07, it ceases to be outstanding unless the Trustee receives proof satisfactory
to it that the replaced Convertible Subordinated Note is held by a bona fide
purchaser.

<PAGE>
                                                                              16

         If Convertible Subordinated Notes are considered paid under Section
4.01 or converted under Article XII, they cease to be outstanding, and interest
(and Liquidated Damages, if any) on them ceases to accrue.

         Subject to Section 2.09 hereof, a Convertible Subordinated Note does
not cease to be outstanding because the Company or an Affiliate of the Company
holds the Convertible Subordinated Note.

         SECTION 2.09. When Treasury Convertible Subordinated Notes Disregarded.
In determining whether the holders of the required principal amount of
Convertible Subordinated Notes have concurred in any direction, waiver or
consent, Convertible Subordinated Notes owned by the Company or an Affiliate of
the Company shall be considered as though they are not outstanding except that
for the purposes of determining whether the Trustee shall be protected in
relying on any such direction, waiver or consent, only Convertible Subordinated
Notes which a Trust Officer of the Trustee actually knows are so owned shall be
so disregarded.

         SECTION 2.10. Temporary Convertible Subordinated Notes. (a) Until
definitive Convertible Subordinated Notes are ready for delivery, the Company
may prepare and the Trustee shall authenticate temporary Convertible
Subordinated Notes. Temporary Convertible Subordinated Notes shall be
substantially in the form of definitive Convertible Subordinated Notes but may
have variations that the Company considers appropriate for temporary Convertible
Subordinated Notes and shall be reasonably acceptable to the Trustee. Without
unreasonable delay, the Company shall prepare and the Trustee shall authenticate
definitive Convertible Subordinated Notes in exchange for temporary Convertible
Subordinated Notes.

         (b) A Global Security deposited with the Depositary or with the Trustee
as custodian for the Depositary pursuant to Section 2.01 shall be transferred to
the beneficial owners thereof in the form of certificated Convertible
Subordinated Notes in definitive form only if such transfer complies with
Section 2.06 and (i) the Depositary notifies the Company that it is unwilling or
unable to continue as Depositary for such Global Security or if at any time such
Depositary ceases to be a "clearing agency" registered under the Exchange Act
and in either case a successor Depositary is not appointed by the Company within
90 days of such notice, or (ii) an Event of Default has occurred and is
continuing.

         (c) Any Global Security or interest thereon that is transferable to the
beneficial owners thereof in the form of certificated Convertible Subordinated
Notes in definitive form shall, if held by the Depositary, be surrendered by the
Depositary to the Trustee, without charge, and the Trustee shall authenticate
and deliver, upon such transfer of each portion of such Global Security, an
equal aggregate principal amount of Convertible Subordinated Notes of authorized
denominations in the form of certificated Convertible Subordinated Notes in
definitive form. Any portion of a Global Security transferred pursuant to this
Section shall be executed, authenticated and delivered only in denominations of
$1,000 and any integral multiple thereof and registered in such names as the
Depositary shall direct. Any Convertible Subordinated Notes in the form of
certificated Convertible Subordinated Notes in definitive form delivered in
exchange for an interest in

<PAGE>
                                                                              17

the Global Security shall, except as otherwise provided by Section 2.06(c), bear
the Restricted Securities Legend set forth in Exhibit A hereto.

         (d) Prior to any transfer pursuant to Section 2.10(b), the registered
holder of a Global Security may grant proxies and otherwise authorize any
person, including Agent Members and persons that may hold interests through
Agent Members, to take any action which a holder is entitled to take under this
Indenture or the Convertible Subordinated Notes.

         SECTION 2.11. Cancellation. The Company at any time may deliver
Convertible Subordinated Notes to the Trustee for cancellation. The Registrar
and Paying Agent shall forward to the Trustee any Convertible Subordinated Notes
surrendered to them for registration of transfer, exchange or payment. The
Trustee and no one else may cancel Convertible Subordinated Notes surrendered
for registration of transfer, exchange, payment, replacement, conversion,
redemption, repurchase or cancellation. Upon written instructions of the
Company, the Trustee shall destroy and dispose of canceled Convertible
Subordinated Notes as the Company directs and, after such destruction, shall
deliver a certificate of destruction to the Company. The Company may not issue
new Convertible Subordinated Notes to replace Convertible Subordinated Notes
that it has paid, redeemed or repurchased or that have been delivered to the
Trustee for cancellation or that any holder has (i) converted pursuant to
Article XII hereof, (ii) submitted for redemption pursuant to Article III hereof
or (iii) submitted for repurchase pursuant to Section 4.06 hereof (unless
revoked).

         SECTION 2.12. Defaulted Interest. If the Company fails to make a
payment of interest on the Convertible Subordinated Notes, it shall pay such
defaulted interest plus, to the extent lawful, any interest payable on the
defaulted interest. It may pay such defaulted interest, plus any such interest
payable on it, to the persons who are holders of Convertible Subordinated Notes
on a subsequent special record date. The Company shall fix any such record date
and payment date. At least 15 days before any such record date, the Company
shall mail to holders of the Convertible Subordinated Notes a notice that states
the record date, payment date and amount of such interest to be paid.

         SECTION 2.13. CUSIP Number. The Company in issuing the Convertible
Subordinated Notes may use a "CUSIP" number, and if so, such CUSIP number shall
be included in notices of redemption, repurchase or exchange as a convenience to
holders of Convertible Subordinated Notes; provided, however, that any such
notice may state that no representation is made as to the correctness or
accuracy of the CUSIP number printed in the notice or on the Convertible
Subordinated Notes and that reliance may be placed only on the other
identification numbers printed on the Convertible Subordinated Notes. The
Company will promptly notify the Trustee of any change in the CUSIP number.

         SECTION 2.14. Regulation S. The Company agrees that it will refuse to
register any transfer of Convertible Subordinated Notes or any shares of Common
Stock issued upon conversion of Convertible Subordinated Notes that is not made
in accordance with the provisions of Regulation S under the Securities Act,
pursuant to a registration statement which has been declared effective under the
Securities Act or pursuant to an available exemption from the registration
requirements of the Securities Act; provided,

<PAGE>
                                                                              18

however, that the provisions of this Section 2.14 shall not be applicable to any
Convertible Subordinated Notes which do not bear a Restricted Securities Legend
or to any shares of Common Stock evidenced by certificates which do not bear a
Restricted Common Stock Legend.

                                   ARTICLE III

                                   Redemption

         SECTION 3.01. Optional Redemption. The Company may redeem all or any
portion of the Convertible Subordinated Notes upon the terms and at the
Redemption Prices set forth in each of the Convertible Subordinated Notes. Any
redemption shall be made pursuant to Paragraph 5 of the Convertible Subordinated
Notes and this Article III.

         SECTION 3.02. Notices to Trustee. If the Company elects to redeem
Convertible Subordinated Notes pursuant to the optional redemption provisions of
paragraph 5 of the Convertible Subordinated Notes, it shall furnish to the
Trustee, at least 30 days but not more than 60 days before a Redemption Date
(unless a shorter period shall be satisfactory to the Trustee), an Officers'
Certificate setting forth (i) the Section of this Indenture pursuant to which
the redemption shall occur, (ii) the Redemption Date, (iii) the principal amount
of Convertible Subordinated Notes (if less than all) to be redeemed, (iv) the
Redemption Price and (v) the CUSIP number of the Convertible Subordinated Notes
being redeemed.

         SECTION 3.03. Selection of Convertible Subordinated Notes To Be
Redeemed. If less than all the Convertible Subordinated Notes are to be
redeemed, the Trustee shall select the Convertible Subordinated Notes to be
redeemed by a method that complies with the requirements of the principal
national securities exchange, if any, on which the Convertible Subordinated
Notes are listed or quoted or, if the Convertible Subordinated Notes are not so
listed, on a pro rata basis by lot or by any other method that the Trustee
considers fair and appropriate. The Trustee shall make the selection not more
than 60 days and not less than 30 days before the Redemption Date from
Convertible Subordinated Notes outstanding and not previously called for
redemption. The Trustee may select for redemption a portion of the principal of
any Convertible Subordinated Notes that has a denomination larger than $1,000.
Convertible Subordinated Notes and portions thereof will be redeemed in the
amount of $1,000 or integral multiples of $1,000.

         Provisions of this Indenture that apply to Convertible Subordinated
Notes called for redemption also apply to portions of Convertible Subordinated
Notes called for redemption. The Trustee shall notify the Company promptly of
the Convertible Subordinated Notes or portions of Convertible Subordinated Notes
to be called for redemption.

         If any Convertible Subordinated Note selected for partial redemption is
converted in part after such selection, the converted portion of such
Convertible Subordinated Note shall be deemed (so far as possible) to be the
portion to be selected for redemption. The Convertible Subordinated Notes (or
portion thereof) so selected shall be

<PAGE>
                                                                              19

deemed duly selected for redemption for all purposes hereof, notwithstanding
that any such Convertible Subordinated Note is converted in whole or in part
before the mailing of the notice of redemption. Upon any redemption of less than
all the Convertible Subordinated Notes, the Company and the Trustee may treat as
outstanding any Convertible Subordinated Notes surrendered for conversion during
the period of 15 days next preceding the mailing of a notice of redemption and
need not treat as outstanding any Convertible Subordinated Note authenticated
and delivered during such period in exchange for the unconverted portion of any
Convertible Subordinated Note converted in part during such period.

         SECTION 3.04. Notice of Redemption. At least 30 days but not more than
60 days before a Redemption Date, the Company shall mail by first class mail a
notice of redemption to each holder whose Convertible Subordinated Notes are to
be redeemed, at such holder's registered address.

         The notice shall identify the Convertible Subordinated Notes to be
redeemed and shall state:

          (1) the Redemption Date;

          (2) the Redemption Price;

          (3) if any Convertible Subordinated Note is being redeemed in part,
     the portion of the principal amount of such Convertible Subordinated Note
     to be redeemed and that, after the Redemption Date, upon surrender of such
     Convertible Subordinated Note, a new Convertible Subordinated Note or
     Convertible Subordinated Notes in principal amount equal to the unredeemed
     portion will be issued in the name of the holder thereof;

          (4) that Convertible Subordinated Notes called for redemption
     must be surrendered to the Paying Agent to collect the Redemption Price;

          (5) that interest and Liquidated Damages, if applicable, on
     Convertible Subordinated Notes called for redemption and for which funds
     have been set apart for payment, ceases to accrue on and after the
     Redemption Date (unless the Company defaults in the payment of the
     Redemption Price or the Paying Agent is prohibited from making such payment
     pursuant to the terms of this Indenture);

          (6) the paragraph of the Convertible Subordinated Notes pursuant to
     which the Convertible Subordinated Notes called for redemption are being
     redeemed; (7) the aggregate principal amount of Convertible Subordinated
     Notes (if less than all) that are being redeemed;

          (8) the CUSIP number of the Convertible Subordinated Notes (provided
     that the disclaimer permitted by Section 2.13 may be made);

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

<PAGE>
                                                                              20

          (10) that Convertible Subordinated Notes called for redemption may be
     converted at any time prior to the close of business on the last Trading
     Day immediately preceding the Redemption Date and if not converted prior to
     the close of business on such date, the right of conversion will be lost;
     and

          (11) that in the case of Convertible Subordinated Notes or portions
     thereof called for redemption on a date that is also an Interest Payment
     Date, the interest payment and Liquidated Damages, if any, due on such date
     shall be paid to the person in whose name the Convertible Subordinated Note
     is registered at the close of business on the relevant Regular Record Date.

         The notice if mailed in the manner herein provided shall be
conclusively presumed to have been 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 Convertible Subordinated Note designated for
redemption as a whole or in part shall not affect the validity of the
proceedings for the redemption of any Convertible Subordinated Note.

         At the Company's request, the Trustee shall give notice of redemption
in the Company's name and at the Company's expense.

         SECTION 3.05. Effect of Notice of Redemption. Once notice of redemption
is mailed, Convertible Subordinated Notes called for redemption become due and
payable on the Redemption Date at the Redemption Price set forth in the
Convertible Subordinated Note.

         SECTION 3.06. Deposit of Redemption Price. On or before the Redemption
Date, the Company shall deposit with the Trustee or with the Paying Agent money
in immediately available funds sufficient to pay the Redemption Price of and
accrued interest (together with Liquidated Damages, if any) on all Convertible
Subordinated Notes to be redeemed on that date. The Trustee or the Paying Agent
shall return to the Company any money not required for that purpose.

         On and after the Redemption Date, unless the Company shall default in
the payment of the Redemption Price, interest and Liquidated Damages, if
applicable, will cease to accrue on the principal amount of the Convertible
Subordinated Notes or portions thereof called for redemption and for which funds
have been set apart for payment, and such Convertible Subordinated Notes, or
portions thereof, shall cease after the close of business on the Business Day
immediately preceding the Redemption Date to be convertible into Common Stock
and, except as provided in this Section 3.06 and Section 8.04, to be entitled to
any benefit or security under this Indenture, and the holders thereof shall have
no right in respect of such Convertible Subordinated Notes, or portions thereof,
except the right to receive the Redemption Price thereof and unpaid interest and
Liquidated Damages, if any, to (but excluding) the Redemption Date. In the case
of Convertible Subordinated Notes or portions thereof redeemed on a Redemption
Date which is also an Interest Payment Date, the interest payment and Liquidated
Damages, if any, due on such date shall be paid to the

<PAGE>
                                                                              21

person in whose name the Convertible Subordinated Note is registered at the
close of business on the relevant Regular Record Date.

         SECTION 3.07. Convertible Subordinated Notes Redeemed in Part. Upon
surrender of a Convertible Subordinated Note that is redeemed in part only, the
Company shall issue and the Trustee shall authenticate and deliver to the holder
of a Convertible Subordinated Note a new Convertible Subordinated Note equal in
principal amount to the unredeemed portion of the Convertible Subordinated Note
surrendered, at the expense of the Company, except as specified in Section 2.06.

         SECTION 3.08. Conversion Arrangement on Call for Redemption. In
connection with any redemption of Convertible Subordinated Notes, the Company
may arrange for the purchase and conversion of any Convertible Subordinated
Notes by an arrangement with one or more investment bankers or other purchasers
to purchase such Convertible Subordinated Notes by paying to the Trustee in
trust for the holders, on or before the date fixed for redemption, an amount not
less than the applicable Redemption Price, together with interest and Liquidated
Damages, if any, accrued to the date fixed for redemption, of such Convertible
Subordinated Notes. Notwithstanding anything to the contrary contained in this
Article III, the obligation of the Company to pay the Redemption Price of such
Convertible Subordinated Notes, together with interest and Liquidated Damages,
if any, accrued to the date fixed for redemption, shall be deemed to be
satisfied and discharged to the extent such amount is so paid by the purchasers.
If such an agreement is entered into, a copy shall be filed with the Trustee
prior to the date fixed for redemption. Any Convertible Subordinated 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 XII) 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 Convertible Subordinated Notes shall be
deemed to have been 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 moneys
deposited with it by the Company for the redemption of Convertible Subordinated
Notes. Without the Trustee's prior written consent, no arrangement between the
Company and such purchasers for the purchase and conversion of any Convertible
Subordinated Notes shall increase or otherwise affect any of the powers, duties,
responsibilities or obligations of the Trustee as set forth in this Indenture,
and the Company agrees to indemnify the Trustee from, and defend and hold it
harmless against, any loss, liability or expense arising out of or in connection
with any such arrangement for the purchase and conversion of any Convertible
Subordinated Notes between the Company and such purchasers to which the Trustee
has not consented in writing, including the costs and expenses incurred by the
Trustee in the defense of any claim or liability arising out of or in connection
with the exercise or performance of any of its powers, duties, responsibilities
or obligations under this Indenture.

<PAGE>
                                                                              22

                                   ARTICLE IV

                                    Covenants

         SECTION 4.01. Payment of Convertible Subordinated Notes. The Company
shall pay the principal of and interest (and Liquidated Damages, if any) on the
Convertible Subordinated Notes on the dates and in the manner provided in the
Convertible Subordinated Notes. Principal, interest, Liquidated Damages, the
Redemption Price and the Designated Event Payment shall be considered paid on
the date due if the Trustee or Paying Agent (other than the Company or a
Subsidiary of the Company) holds as of 10:00 a.m., New York City time, on that
date immediately available funds designated for and sufficient to pay all
principal, interest (and Liquidated Damages, if any), the Redemption Price or
the Designated Event Payment then due; provided, however, that money held by the
Agent for the benefit of holders of Senior Debt pursuant to the provisions of
Article XI or the payment of which to the holders of the Convertible
Subordinated Notes is prohibited by Article XI shall not be considered to be
designated for the payment of any principal of or interest (or Liquidated
Damages, if any) on the Convertible Subordinated Notes within the meaning of
this Section 4.01.

         To the extent lawful, the Company shall pay interest (including
post-petition interest in any proceeding under any Bankruptcy Law) on (i)
overdue principal, at the rate borne by Convertible Subordinated Notes,
compounded semiannually; and (ii) overdue installments of interest (without
regard to any applicable grace period) at the same rate, compounded
semiannually.

         SECTION 4.02. Commission Reports. The Company shall comply with Section
314(a) of the TIA.

         SECTION 4.03. Compliance Certificate. The Company shall deliver to the
Trustee within 120 days after the end of each fiscal year of the Company, an
Officers' Certificate stating that a review of the activities of the Company and
its subsidiaries during the preceding fiscal year has been made under the
supervision of the signing Officers with a view to determining whether the
Company has fully performed its obligations under this Indenture and further
stating, as to each such Officer signing such certificate, that to the best of
his or her knowledge, the Company is not in default in the performance or
observance of any of the terms and conditions hereof (or, if any Default or
Event of Default shall have occurred, describing all such Defaults or Events of
Default of which he or she may have knowledge) and, that to the best of his or
her knowledge, no event has occurred and remains in existence by reason of which
payments on account of the principal of or interest (or Liquidated Damages, if
any) on the Convertible Subordinated Notes are prohibited.

         The Company shall, so long as any of the Convertible Subordinated Notes
are outstanding, deliver to the Trustee, forthwith upon becoming aware of any
Default or Event of Default, an Officers' Certificate specifying such Default or
Event of Default and what action the Company is taking or proposes to take with
respect thereto.

<PAGE>
                                                                              23

         SECTION 4.04. Maintenance of Office or Agency. The Company shall
maintain or cause to be maintained the office or agency required under Section
2.03. The Company shall give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency not
maintained 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, presentations, surrenders, notices and demands with respect to
the Convertible Subordinated Notes may be made or served at the Corporate Trust
Office of the Trustee.

         The Company may also from time to time designate one or more other
offices or agencies where the Convertible Subordinated Notes may be presented or
surrendered for any or all such purposes and may from time to time rescind such
designation.

         SECTION 4.05. Continued Existence. Subject to Article V, the Company
shall do or cause to be done all things necessary to preserve and keep in full
force and effect its corporate existence.

         SECTION 4.06. Repurchase Upon Designated Event. Following a Designated
Event (the date of each such occurrence being the "Designated Event Date"), the
Company shall notify the holders of Convertible Subordinated Notes in writing of
such occurrence and shall make an offer (the "Designated Event Offer") to
repurchase all Convertible Subordinated Notes then outstanding at a repurchase
price in cash (the "Designated Event Payment") equal to 100% of the principal
amount thereof, plus accrued and unpaid interest and Liquidated Damages, if any,
to, but excluding, the Designated Event Payment Date (as defined below).

         Notice of a Designated Event shall be mailed by or at the direction of
the Company to the holders of Convertible Subordinated Notes as shown on the
Register of such holders maintained by the Registrar not more than 20 days after
the applicable Designated Event Date at the addresses as shown on the Register
of holders maintained by the Registrar, with a copy to the Trustee and the
Paying Agent. The Designated Event Offer shall remain open until a specified
date (the "Designated Event Offer Termination Date") which is at least 20
Business Days from the date such notice is mailed. During the period specified
in such notice, holders of Convertible Subordinated Notes may elect to tender
their Convertible Subordinated Notes in whole or in part in integral multiples
of $1,000 in exchange for cash. Payment shall be made by the Company in respect
of Convertible Subordinated Notes properly tendered pursuant to this Section
4.06 on a specified Business Day (the "Designated Event Payment Date") which
shall be no later than 60 days after the applicable Designated Event.

         The notice, which shall govern the terms of the Designated Event Offer,
shall include such disclosures as are required by law and shall state:

         (a) that a Designated Event Offer is being made pursuant to this
     Section 4.06 and that all Convertible Subordinated Notes will be accepted
     for payment;

<PAGE>
                                                                              24

         (b) the event, transaction or transactions that constitute the
     Designated Event;

         (c) the Designated Event Payment for each Convertible Subordinated
     Note, the Designated Event Offer Termination Date and the Designated Event
     Payment Date;

         (d) that any Convertible Subordinated Note not accepted for payment
     will continue to accrue interest and Liquidated Damages, if applicable, in
     accordance with the terms thereof;

         (e) that, unless the Company defaults on making the Designated Event
     Payment, any Convertible Subordinated Note accepted for payment pursuant to
     the Designated Event Offer shall cease to accrue interest and Liquidated
     Damages, if applicable, on the Designated Event Payment Date and no further
     interest or Liquidated Damages shall accrue on or after such date;

         (f) that holders electing to have Convertible Subordinated Notes
     repurchased pursuant to a Designated Event Offer will be required to
     surrender their Convertible Subordinated Notes to the Paying Agent at the
     address specified in the notice prior to 5:00 p.m., New York City time, on
     the Designated Event Offer Termination Date and must complete any form
     letter of transmittal proposed by the Company and acceptable to the Trustee
     and the Paying Agent;

         (g) that holders of Convertible Subordinated Notes will be entitled to
     withdraw their election if the Paying Agent receives, not later than 5:00
     p.m., New York City time, on the Designated Event Offer Termination Date, a
     facsimile transmission or letter setting forth the name of the holder, the
     principal amount of Convertible Subordinated Notes the holder delivered for
     purchase, the Convertible Subordinated Note certificate number (if any) and
     a statement that such holder is withdrawing his election to have such
     Convertible Subordinated Notes purchased;

         (h) that holders whose Convertible Subordinated Notes are repurchased
     only in part will be issued Convertible Subordinated Notes equal in
     principal amount to the unpurchased portion of the Convertible Subordinated
     Notes surrendered;

         (i) the instructions that holders must follow in order to tender their
     Convertible Subordinated Notes; and

         (j) that in the case of a Designated Event Payment Date that is also
     an interest payment date, the interest payment and Liquidated Damages, if
     any, due on such date shall be paid to the person in whose name the
     Convertible Subordinated Note is registered at the close of business on the
     relevant Designated Event Offer Termination Date.

         On the Designated Event Offer Termination Date, the Company shall (i)
accept for payment all Convertible Subordinated Notes or portions thereof
properly tendered pursuant to the Designated Event Offer, (ii) deposit with the
Paying Agent money sufficient

<PAGE>
                                                                              25

to pay the Designated Event Payment with respect to all Convertible Subordinated
Notes or portions thereof so tendered and accepted and (iii) deliver or cause to
be delivered to the Trustee the Convertible Subordinated Notes so accepted
together with an Officers' Certificate setting forth the aggregate principal
amount of Convertible Subordinated Notes or portions thereof tendered to and
accepted for payment by the Company. On the Designated Event Payment Date, the
Paying Agent shall mail or deliver the Designated Event Payment to the holders
of Convertible Subordinated Notes so accepted and the Trustee shall promptly
authenticate and mail or cause to be transferred by book entry to such holders a
new Convertible Subordinated Note equal in principal amount to any unpurchased
portion of the Convertible Subordinated Note surrendered, if any; provided,
however, that such new Convertible Subordinate Notes will be in a principal
amount of $1,000 or an integral multiple thereof. Any Convertible Subordinated
Notes not so accepted shall be promptly mailed or delivered by the Company to
the holder thereof.

         In the case of any reclassification, change, consolidation, merger,
share exchange, combination or sale or conveyance to which Section 12.06 applies
in which the Common Stock of the Company is changed or 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 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 other property and 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 share exchange or which acquires such assets, as
the case may be, shall execute and deliver to the Trustee a supplemental
indenture (which shall comply with the TIA 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 Convertible Subordinated Notes to cause the
Company to repurchase Convertible Subordinated Notes following a Designated
Event, including the applicable provisions of this Section 4.06 and the
definitions of Designated Event, Change of Control and Termination of Trading,
as appropriate, as determined in good faith by the Company (which determination
shall be conclusive and binding), to make such provision apply to such common
stock and the issuer thereof if different from the Company and Common Stock of
the Company (in lieu of the Company and the Common Stock of the Company).

         The Designated Event Offer shall be made by the Company in compliance
with all applicable provisions of the Exchange Act, and all applicable tender
offer rules promulgated thereunder, to the extent such laws and regulations are
then applicable and shall include all instructions and materials that the
Company shall reasonably deem necessary to enable such holders of Convertible
Subordinated Notes to tender their Convertible Subordinated Notes.

         SECTION 4.07. 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 7.08, a Trustee, so that there
shall at all times be a Trustee hereunder.

<PAGE>
                                                                              26

         SECTION 4.08. 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 wherever enacted, now or at any time
hereafter enforced, that may affect the Company's obligation to pay the
Convertible Subordinated Notes; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
insofar as such law applies to the Convertible Subordinated Notes, and covenants
that it shall not, by resort to any such law, hinder, delay or impede the
execution of any power herein granted to the Trustee, but will suffer and permit
the execution of every such power as though no such law has been enacted.

         SECTION 4.09. Taxes. The Company shall, and shall cause each of its
subsidiaries to, pay prior to delinquency all taxes, assessments and government
levies; provided, however, that the Company shall not be required to pay or
cause to be paid any such tax, assessment or levy (i) if the failure to do so
will not, in the aggregate, have a material adverse impact on the Company and
its subsidiaries taken as a whole, or (ii) if the amount, applicability or
validity is being contested in good faith by appropriate proceedings.

         SECTION 4.10. Investment Company Act. As long as any Convertible
Subordinated Notes are outstanding, the Company will conduct its business and
operations so as not to become an "investment company" within the meaning of the
Investment Company Act of 1940, as amended (the "Investment Company Act"), and
will take all steps required in order for it to continue not to be an
"investment company" and not to be required to be registered under the
Investment Company Act, including, if necessary, redeployment of the assets of
the Company.

                                    ARTICLE V

                                   Successors

         SECTION 5.01. When the Company May Merge, Etc. The Company may not, in
a single transaction or series of related transactions, consolidate or merge
with or into or effect a share exchange with (whether or not the Company is the
surviving corporation), or sell, assign, transfer, lease, convey or otherwise
dispose of all or substantially all of its properties or assets to, any person
as an entirety or substantially as an entirety unless:

         (a) either

                  (i) the Company shall be the surviving or continuing
         corporation, or

                  (ii) the person formed by or surviving any such consolidation,
         merger or share exchange (if other than the Company) or the person
         which acquires by sale, assignment, transfer, lease, conveyance or
         other disposition the properties and assets of the Company
         substantially as an entirety

                  (1) shall be a corporation organized and validly existing
         under the laws of the United States or any State thereof or the
         District of Columbia and

<PAGE>
                                                                              27

                  (2) shall expressly assume, by supplemental indenture in form
         reasonably satisfactory to the Trustee, executed and delivered to the
         Trustee, the due and punctual payment of the principal of, and premium,
         if any, and interest and Liquidated Damages, if any, on all of the
         Convertible Subordinated Notes and the performance of every covenant of
         the Convertible Subordinated Notes and this Indenture and the
         Registration Rights Agreement on the part of the Company to be
         performed or observed, including, without limitation, modifications to
         rights of holders to cause the repurchase of Convertible Subordinated
         Notes upon a Designated Event in accordance with the penultimate
         paragraph of Section 4.06 and conversion rights in accordance with
         Section 12.06 to the extent required by such Sections;

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

         (c) the Company or such successor person shall have delivered to the
     Trustee an Officers' Certificate and an Opinion of Counsel each stating
     that such consolidation, merger, share exchange, conveyance, transfer or
     lease and, if a supplemental indenture is required in connection with such
     transaction, such supplemental indenture, comply with this provision of
     this Indenture and that all conditions precedent in this Indenture relating
     to such transaction have been satisfied.

         For purposes of this Section 5.01, the transfer (by lease, assignment,
sale or otherwise, in a single transaction or series of transactions) of all or
substantially all of the properties or assets of one or more subsidiaries of the
Company, the capital stock of which individually or in the aggregate constitutes
all or substantially all of the properties and assets of the Company, shall be
deemed to be the transfer of all or substantially all of the properties and
assets of the Company.

         SECTION 5.02. Successor Corporation Substituted. Upon any such
consolidation, merger, share exchange, sale, assignment, conveyance, lease,
transfer or other disposition in accordance with Section 5.01, the successor
person formed by such consolidation or share exchange or into which the Company
is merged or to which such sale, assignment, conveyance, lease, transfer or
other disposition is made will succeed to, and be substituted for, and may
exercise every right and power of, the Company under this Indenture with the
same effect as if such successor had been named as the Company herein, and
thereafter (except in the case of a lease) the predecessor corporation will be
relieved of all further obligations and covenants under this Indenture and the
Convertible Subordinated Notes.

         SECTION 5.03. Purchase Option on Change of Control. This Article V does
not affect the obligations of the Company (including without limitation any
successor to the Company) under Section 4.06.

<PAGE>
                                                                              28

                                   ARTICLE VI

                              Defaults and Remedies

         SECTION 6.01. Events of Default. An "Event of Default" with respect to
any Convertible Subordinated Notes occurs if:

         (a) the Company defaults in the payment (whether or not such payment is
     prohibited by the subordination provisions set forth in Article XI of this
     Indenture) of principal of, or premium, if any, on the Convertible
     Subordinated Notes when due at maturity, upon repurchase, upon acceleration
     or otherwise, including, without limitation, failure of the Company to make
     any optional redemption payment when required pursuant to Article III; or

         (b) the Company defaults in the payment (whether or not such payment
     is prohibited by the subordination provisions set forth in Article XI of
     this Indenture) of any installment of interest or Liquidated Damages on the
     Convertible Subordinated Notes when due (including any interest or
     Liquidated Damages payable in connection with a repurchase pursuant to
     Section 4.06 or in connection with any optional redemption payment pursuant
     to Article III) and continuance of such default for 30 days or more; or

         (c) the Company defaults in the payment of the Designated Event
     Payment in respect of the Convertible Subordinated Notes on the date
     therefor, whether or not such payment is prohibited by the subordination
     provisions set forth in Article XI of this Indenture; or

         (d) the Company fails to provide timely notice of any Designated Event
     in accordance with Section 4.06; or

         (e) the Company defaults (other than a default set forth in clauses
     (a), (b), (c) or (d) above) in the performance of, or breaches, any other
     covenant or warranty of the Company set forth in this Indenture or the
     Convertible Subordinated Notes and fails to remedy such default or breach
     within a period of 60 days after the receipt of written notice from the
     Trustee or the holders of at least 25% in aggregate principal amount of the
     then outstanding Convertible Subordinated Notes; or

         (f) a default under any credit agreement, mortgage, indenture or
     instrument under which there may be issued or by which there may be secured
     or evidenced any Indebtedness for money borrowed by the Company or any
     Subsidiary of the Company (or the payment of which is guaranteed or secured
     by the Company or any of its subsidiaries), whether such Indebtedness or
     guarantee exists on the date of this Indenture or is created thereafter,
     which default (i) is caused by a failure to pay when due any principal of
     such Indebtedness within the grace period provided for in such Indebtedness
     (which failure continues beyond any applicable grace period) (a "Payment
     Default") or (ii) results in the acceleration of such Indebtedness prior to
     its express maturity (without such acceleration being rescinded or
     annulled) and, in each

<PAGE>
                                                                              29

     case, the principal amount of such Indebtedness, together with the
     principal amount of any other such Indebtedness under which there is a
     Payment Default or the maturity of which has been so accelerated,
     aggregates $10,000,000 or more and such Payment Default is not cured or
     such acceleration is not annulled within 30 days after receipt of written
     notice by the Company from the Trustee or by the Company and the Trustee
     from any holder of Convertible Subordinated Notes; or

           (g) failure to pay a final, nonappealable judgment or final,
     nonappealable judgments (other than any judgment as to which a reputable
     insurance company has accepted full liability) for the payment of money
     entered by a court or courts of competent jurisdiction against the Company
     or any Material Subsidiaries of the Company, which judgments remain
     unstayed, unbonded or undischarged for a period of 60 days, provided that
     the aggregate amount of all such judgments exceeds $10,000,000; or

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

               (i) commences a voluntary case,

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

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

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

               (v) makes the admission in writing that it generally is unable to
          pay its debts as the same become due; or

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

               (i) is for relief against the Company or any Material Subsidiary
          in an involuntary case, and the order or decree remains unstayed and
          in effect for 90 days,

               (ii) appoints a Custodian of the Company or any Material
          Subsidiary, and the order or decree remains unstayed and in effect for
          90 days, or

               (iii) orders the liquidation of the Company or any Material
          Subsidiary, and the order or decree remains unstayed and in effect for
          90 days.

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

<PAGE>
                                                                              30

         SECTION 6.02. Acceleration. If an Event of Default (other than an Event
of Default with respect to the Company specified in clauses (h) and (i) of
Section 6.01) occurs and is continuing, then and in every such case the Trustee,
by written notice to the Company, or the holders of at least 25% in aggregate
principal amount of the then outstanding Convertible Subordinated Notes, by
written notice to the Company and the Trustee, may declare the unpaid principal
of, premium, if any, and accrued and unpaid interest and Liquidated Damages, if
any, on all the Convertible Subordinated Notes to be due and payable. Upon such
declaration, such principal amount, premium, if any, and accrued and unpaid
interest and Liquidated Damages, if any, shall become immediately due and
payable, notwithstanding anything contained in this Indenture or the Convertible
Subordinated Notes to the contrary, but subject to the provisions of Article XI.
If any Event of Default with respect to the Company specified in clauses (h) or
(i) of Section 6.01 occurs, all unpaid principal of, and premium, if any, and
accrued and unpaid interest and Liquidated Damages, if any, on the Convertible
Subordinated Notes then outstanding shall become automatically due and payable
subject to the provisions of Article XI, without any declaration or other act on
the part of the Trustee or any holder of Convertible Subordinated Notes.

         The holders of a majority in aggregate principal amount of the then
outstanding Convertible Subordinated Notes by notice to the Trustee may rescind
an acceleration of the Convertible Subordinated Notes and its consequences if
all existing Events of Default (other than nonpayment of principal of and
premium, if any, and interest and Liquidated Damages, if any, on the Convertible
Subordinated Notes which has become due solely by virtue of such acceleration)
have been cured or waived and if the rescission would not conflict with any
judgment or decree of any court of competent jurisdiction. No such rescission
shall affect any subsequent Default or Event of Default or impair any right
consequent thereto.

         SECTION 6.03. Other Remedies. If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy by proceeding at law or
in equity to collect the payment of principal of or interest or Liquidated
Damages, if applicable, on the Convertible Subordinated Notes or to enforce the
performance of any provision of the Convertible Subordinated Notes or this
Indenture. The Trustee may maintain a proceeding even if it does not possess any
of the Convertible Subordinated Notes or does not produce any of them in the
proceeding. A delay or omission by the Trustee or any holder of a Convertible
Subordinated Note in exercising any right or remedy occurring upon an Event of
Default shall not impair the right or remedy or constitute a waiver of or
acquiescence in the Event of Default. All remedies are cumulative to the extent
permitted by law.

         SECTION 6.04. Waiver of Past Defaults. The holders of a majority in
aggregate principal amount of the Convertible Subordinated Notes then
outstanding may, on behalf of the holders of all the Convertible Subordinated
Notes, waive an existing Default or Event of Default and its consequences,
except a Default or Event of Default in the payment of the principal of, and
premium, if any, or interest or Liquidated Damages, if applicable, on the
Convertible Subordinated Notes (other than the non-payment of principal of, and
premium, if any, and interest and Liquidated Damages, if any, on the Convertible
Subordinated Notes which has become due solely by virtue of an acceleration
which has

<PAGE>
                                                                              31

been duly rescinded as provided above), or in respect of a covenant or provision
of this Indenture which cannot be modified or amended without the consent of all
holders of Convertible Subordinated Notes; provided, however, that in order to
waive any provisions of Article XI, holders of at least 75% in aggregate
principal amount of Convertible Subordinated Notes then outstanding must consent
to such waiver if such waiver would adversely affect the rights of holders of
Convertible Subordinated Notes. When a Default or Event of Default is waived, it
is cured and stops continuing. No waiver shall extend to any subsequent or other
Default or Event of Default or impair any right consequent thereon.

         SECTION 6.05. Control by Majority. The holders of a majority in
aggregate principal amount of the then outstanding Convertible Subordinated
Notes may direct the time, method and place of conducting any proceeding for any
remedy available to the Trustee or exercising any trust or power conferred on
it. However, the Trustee may refuse to follow any direction that conflicts with
law or this Indenture that the Trustee determines may be unduly prejudicial to
the rights of other holders of Convertible Subordinated Notes or that may
involve the Trustee in personal liability; provided, however, that the Trustee
shall have no duty or obligation (subject to Section 7.01) to ascertain whether
or not such actions or forebearances are unduly prejudicial to such holders;
provided further, however that the Trustee may take any other action the Trustee
deems proper that is not inconsistent with such directions.

         SECTION 6.06. Limitation on Suits. A holder of a Convertible
Subordinated Note may not pursue any remedy with respect to this Indenture or
the Convertible Subordinated Notes unless:

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

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

         (c) such holder or holders offer and, if requested, provide to
     the Trustee indemnity satisfactory to the Trustee against any loss,
     liability or expense;

         (d) the Trustee does not comply with the request within 30
     days after receipt of the request and the offer and, if requested, the
     provision of indemnity; and

         (e) during such 30-day period the holders of a majority in
     aggregate principal amount of the then outstanding Convertible Subordinated
     Notes do not give the Trustee a direction inconsistent with the request.

         A holder of a Convertible Subordinated Note may not use this Indenture
to prejudice the rights of another holder or to obtain a preference or priority
over another holder.

         SECTION 6.07. Rights of Holders To Receive Payment. Subject to the
provisions of Article XI hereof, notwithstanding any other provision of this
Indenture, the right of any holder of a Convertible Subordinated Note to receive
payment of principal,

<PAGE>
                                                                              32

premium, if any, and interest and Liquidated Damages, if any, on the Convertible
Subordinated Note, on or after the respective due dates expressed in the
Convertible Subordinated Note, or to bring suit for the enforcement of any such
payment on or after such respective dates, or to bring suit for the enforcement
of the right to convert the Convertible Subordinated Note shall not be impaired
or affected without the consent of the holder of a Convertible Subordinated
Note.

         SECTION 6.08. Collection Suit by Trustee. If an Event of Default
specified in Section 6.01(a), (b) or (c) occurs and is continuing, the Trustee
may recover judgment in its own name and as trustee of an express trust against
the Company for the whole amount of principal, premium, if any, and interest and
Liquidated Damages, if any, remaining unpaid on the Convertible Subordinated
Notes and interest on overdue principal, premium, if any, and interest and
Liquidated Damages, if any, and such further amount as shall be sufficient to
cover the costs and, to the extent lawful, expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel.

         SECTION 6.09. Trustee May File Proofs of Claim. The Trustee may file
such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee and the holders of
Convertible Subordinated Notes allowed in any judicial proceedings relative to
the Company, its creditors or its property. Nothing contained herein shall be
deemed to authorize the Trustee to authorize or consent to or accept or adopt on
behalf of any holder of a Convertible Subordinated Note any plan of
reorganization, arrangement, adjustment or composition affecting the Convertible
Subordinated Notes or the rights of any holder thereof, or to authorize the
Trustee to vote in respect of the claim of any holder in any such proceeding.

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

         First: to the Trustee for amounts due under Section 7.07, including
     payment of all compensation, expenses and liabilities incurred, and all
     advances made, by the Trustee, and the costs and expenses of collection;

         Second: to holders of Senior Debt to the extent required by Article XI;

         Third: to holders of Convertible Subordinated Notes for
     amounts due and unpaid on the Convertible Subordinated Notes for principal,
     premium, if any, and interest and Liquidated Damages, if any, ratably,
     without preference or priority of any kind, according to the amounts due
     and payable on the Convertible Subordinated Notes for principal, premium,
     if any, and interest and Liquidated Damages, if any, respectively; and

         Fourth: to the Company.

         Except as otherwise provided in Section 2.12, the Trustee may fix a
record date and payment date for any payment to holders of Convertible
Subordinated Notes.

<PAGE>
                                                                              33

         SECTION 6.11. Undertaking for Costs. In any suit for the enforcement of
any right or remedy under this Indenture or in any suit against the Trustee for
any action taken or omitted by it as a Trustee, a court in its discretion may
require the filing by any party litigant in the suit, other than the Trustee, of
an undertaking to pay the costs of the suit, and the court in its discretion may
assess reasonable costs, including reasonable attorneys fees, against any party
litigant in the suit, having due regard to the merits and good faith of the
claims or defenses made by the party litigant. This Section does not apply to a
suit by the Trustee, a suit by a holder pursuant to Section 6.07 or a suit by
holders of more than 10% in principal amount of the then outstanding Convertible
Subordinated Notes.

                                   ARTICLE VII

                                   The Trustee

         The Trustee hereby accepts the trust imposed upon it by this Indenture
and covenants and agrees to perform the same, as herein expressed. Whether or
not herein expressly so provided, every provision of this Indenture relating to
the conduct or affecting the liability of or affording protection to the Trustee
shall be subject to the provisions of this Article VII.

         SECTION 7.01. Duties of the Trustee. (a) If an Event of Default known
to a Trust Officer of the Trustee has occurred and is continuing, the Trustee
shall exercise such of the rights and powers vested in it by this Indenture and
use the same degree of care and skill in their exercise as a prudent person
would exercise or use under the circumstances in the conduct of his or her own
affairs.

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

         (1) the duties of the Trustee shall be determined solely by
     the express provisions of this Indenture, and the Trustee need perform only
     those duties that are specifically set forth in this Indenture and no
     others, and no implied covenants or obligations shall be read into this
     Indenture against the Trustee; and

         (2) in the absence of bad faith on its part, the Trustee may
     conclusively rely, as to the truth of the statements and the correctness of
     the opinions expressed therein, upon any statements, certificates or
     opinions furnished to the Trustee and conforming to the requirements of
     this Indenture. However, the Trustee shall examine the certificates and
     opinions to determine whether or not they conform to the form required by
     this Indenture.

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

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

<PAGE>
                                                                              34

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

         (3) the Trustee shall not be liable with respect to any action
     it takes or omits to take in good faith in accordance with a direction
     received by it pursuant to Section 6.05.

         (d) Whether or not therein expressly so provided, every provision of
this Indenture that is in any way related to the Trustee is subject to
paragraphs (a), (b) and (c) of this Section 7.01.

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

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

         SECTION 7.02. Rights of the Trustee. (a) The Trustee may rely on and
shall be protected in acting or refraining from acting upon any resolution,
Officers' Certificate, or any other certificate, statement, instrument, opinion,
report, notice, request, consent, order, security or other document believed by
it to be genuine and to have been signed or presented by the proper person. The
Trustee need not investigate any fact or matter contained therein.

         (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 is herein specifically prescribed). In addition,
before the Trustee acts or refrains from acting, it may require an Officers'
Certificate, an opinion of Counsel or both. The Trustee shall not be liable for
any action it takes or omits to take in good faith in reliance on such Officers'
Certificate or Opinion of Counsel. The Trustee may consult with counsel and the
written advice of such counsel or any Opinion of Counsel shall be full and
complete authorization and protection from liability in respect of any action
taken, suffered or omitted by it hereunder in good faith and in reliance
thereon.

         (c) The Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through its attorneys and
agents and other persons not regularly in its employ and shall not be
responsible for the misconduct or negligence of any attorney or agent appointed
with due care.

         (d) The Trustee shall not be liable for any action it takes or omits to
take in good faith without negligence or willful misconduct which it believes to
be authorized or within its discretion, rights or powers.

<PAGE>
                                                                              35

         (e) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Company shall be sufficient if
signed by an Officer of the Company.

         (f) The Trustee shall not be required to give any bond or surety in
respect of the performance of its powers and duties hereunder.

         (g) 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
discretion of any of the holders of Convertible Subordinated Notes pursuant to
the provisions of this Indenture, unless such holders have offered to the
Trustee security or indemnity satisfactory to it against the costs, expenses and
liabilities which might be incurred therein or thereby.

         (h) The Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, security or other document
unless requested in writing to do so by the holders of not less than a majority
in aggregate principal amount of the Convertible Subordinated Notes then
outstanding, provided that if the Trustee determines in its discretion to make
any such investigation, then it shall be entitled, upon reasonable prior notice
and during normal business hours, to examine the books and records and the
premises of the Company, personally or by agent or attorney, and the reasonable
expenses of every such examination shall be paid by the Company or, if paid by
the Trustee or any predecessor Trustee, shall be reimbursed by the Company upon
demand.

         (i) The permissive rights of the Trustee to do things enumerated in
this Indenture shall not be construed as a duty, and the Trustee shall not be
answerable for other than its negligence or willful misconduct.

         (j) The Trustee shall not be responsible for the computation of any
adjustment to the Conversion Price or for any determination as to whether an
adjustment is required and shall not be deemed to have knowledge of any
adjustment unless and until it shall have received the notice from the Company
contemplated by Section 12.05(j).

         SECTION 7.03. Individual Rights of the Trustee. Subject to Sections
7.10 and 7.11, the Trustee in its individual or any other capacity may become
the owner or pledgee of Convertible Subordinated Notes with the same rights it
would have if it were not the Trustee and may otherwise deal with the Company or
an Affiliate of the Company and receive, collect, hold and retain collections
from the Company with the same rights it would have if it were not Trustee. Any
Agent may do the same with like rights.

         SECTION 7.04. Trustee's Disclaimer. The Trustee shall not be
responsible for and makes no representation as to the validity or adequacy of
this Indenture or the Convertible Subordinated Notes. It shall not be
accountable for the Company's use of the proceeds from the Convertible
Subordinated Notes or any money paid to the Company or upon the Company's
direction under any provision of this Indenture. It shall not be responsible for
the use or application of any money received by any Paying Agent other than the
Trustee, and it shall not be responsible for any statement or recital herein or
any

<PAGE>
                                                                              36

statement in the Convertible Subordinated Notes or any other document in
connection with the sale of the Convertible Subordinated Notes or pursuant to
this Indenture other than its certificate of authentication.

         SECTION 7.05. Notice of Defaults. If a Default or Event of Default
occurs and is continuing and if it is known to a Trust Officer of the Trustee,
the Trustee shall mail to each holder of a Convertible Subordinated Note a
notice of the Default or Event of Default within 60 days after it occurs. A
Default or an Event of Default shall not be considered known to a Trust Officer
of the Trustee unless it is a Default or Event of Default in the payment of
principal, premium, if any, or interest or Liquidated Damages, if any, when due
under Section 6.01(a), (b) or (c) or a Trust Officer of the Trustee shall have
received notice thereof, in accordance with this Indenture, from the Company or
from the holders of a majority in principal amount of the outstanding
Convertible Subordinated Notes. Except in the case of a Default or Event of
Default in payment of principal of, premium, if any, or interest or Liquidated
Damages, if any, on any Convertible Subordinated Note, the Trustee may withhold
the notice if and so long as a committee of its Trust Officers in good faith
determines that withholding the notice is in the interest of the holders of the
Convertible Subordinated Notes.

         SECTION 7.06. Reports by the Trustee to Holders. Within 60 days after
the reporting date stated in Section 10.10, the Trustee shall mail to holders of
Convertible Subordinated Notes a brief report dated as of such reporting date
that complies with TIA Section 313(a) (but if no event described in TIA Section
313(a) has occurred within twelve months preceding the reporting date, no report
need be transmitted). The Trustee also shall comply with TIA Section 313(b)(2).
The Trustee shall also transmit by mail all reports as required by TIA Section
313(c).

         A copy of each report at the time of its mailing to holders of
Convertible Subordinated Notes shall be filed, at the expense of the Company, by
the Trustee with the Commission and each stock exchange or securities market, if
any, on which the Convertible Subordinated Notes are listed. The Company shall
timely notify the Trustee when the Convertible Subordinated Notes are listed or
quoted on any stock exchange or securities market.

         SECTION 7.07. Compensation and Indemnity. The Company shall pay to the
Trustee from time to time, and the Trustee shall be entitled to, reasonable
compensation for its acceptance of this Indenture and its services hereunder.
The Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Company shall reimburse the Trustee promptly
upon request for all reasonable disbursements, advances and expenses incurred or
made by or on behalf of it in addition to the compensation for its services.
Such expenses may include the reasonable compensation, disbursements and
expenses of the Trustee's agents, counsel and other persons not regularly in its
employ.

         The Company shall indemnify the Trustee against, and defend and hold
the Trustee harmless from, any loss, liability or expense incurred by it arising
out of or in connection with the acceptance or administration of its duties
under this Indenture and the

<PAGE>
                                                                              37

trusts hereunder, including the costs and expenses of defending itself against
or investigating any claim of liability in the premises, except as set forth in
the next paragraph. The Trustee shall notify the Company promptly of any claim
for which it may seek indemnity. Failure by the Trustee to so notify the Company
shall not relieve the Company of its obligations hereunder. The Company shall
defend the claim with counsel designated by the Company, who may be outside
counsel to the Company but shall in all events be reasonably satisfactory to the
Trustee, and the Trustee shall cooperate in the defense. In addition, the
Trustee may retain one separate counsel and, if deemed advisable by such
counsel, local counsel, and the Company shall pay the reasonable fees and
expenses of such separate counsel and local counsel. The indemnification herein
extends to any settlement; provided, however, that the Company will not be
liable for any settlement made without its consent; provided further, however,
that such consent will not be unreasonably withheld.

         The Company need not reimburse any expense or indemnify against any
loss or liability incurred by the Trustee through its own negligence or willful
misconduct.

         The Trustee shall have a lien prior to the Convertible Subordinated
Notes on all money or property held or collected by the Trustee to secure the
Company's payment obligations in this Section 7.07, except that held in trust to
pay principal, premium, if any, and interest and Liquidated Damages, if any, on
Convertible Subordinated Notes. Such liens and the Company's obligations under
this Section 7.07 shall survive the satisfaction and discharge of this
Indenture.

         When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(h) or (i) occurs, the expenses and the
compensation for the services (including the fees and expenses of its agents and
counsel) are intended to constitute expenses of administration under any
Bankruptcy Law.

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

         The Trustee may resign at any time and be discharged from the trust
hereby created by so notifying the Company. The holders of a majority in
principal amount of the then outstanding Convertible Subordinated Notes may
remove the Trustee by so notifying the Trustee and the Company in writing and
may appoint a successor Trustee. The Company may remove the Trustee if:

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

         (b) the Trustee is adjudged a bankrupt or an insolvent or an
     order for relief is entered with respect to the Trustee under any
     Bankruptcy Law;

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

         (d) the Trustee becomes incapable of acting.

<PAGE>
                                                                              38

         If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the holders
of a majority in principal amount of the then outstanding Convertible
Subordinated Notes may appoint a successor Trustee to replace the successor
Trustee appointed by the Company.

         If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
holders of at least 10% in principal amount of the then outstanding Convertible
Subordinated Notes may petition any court of competent jurisdiction for the
appointment of a successor Trustee.

         If the Trustee after written request by any holder of a Convertible
Subordinated Note who has been a holder for at least six months fails to comply
with Section 7.10, such holder may petition any court of competent jurisdiction
for the removal of the Trustee and the appointment of a successor Trustee.

         A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to holders of Convertible Subordinated Notes. The retiring Trustee
shall promptly transfer all property held by it as Trustee to the successor
Trustee, provided that all sums owing to the retiring Trustee hereunder have
been paid and subject to the lien provided for in Section 7.07. Notwithstanding
the replacement of the Trustee pursuant to this Section 7.08, the Company's
obligations under Section 7.07 shall continue for the benefit of the retiring
Trustee with respect to expenses and liabilities incurred by it prior to such
replacement.

         Upon request of any such successor Trustee, the Company shall execute
any and all instruments for more fully and certainly vesting in and confirming
to such successor Trustee all such rights, powers and trusts referred to in the
preceding paragraph.

         SECTION 7.09. Successor Trustee by Merger, etc. If the Trustee
consolidates with, merges or converts into, or transfers all or substantially
all of its corporate trust business (including the trust created by this
Indenture) to, another corporation or national banking association, the
resulting, surviving or transferee corporation or national banking association
without any further act shall be the successor Trustee with the same effect as
if the successor Trustee had been named as the Trustee herein.

         SECTION 7.10. Eligibility, Disqualification. This Indenture shall
always have a Trustee who satisfies the requirements of TIA Section 310 (a) (1).
The Trustee shall always have a combined capital and surplus as stated in
Section 10.10. The Trustee is subject to TIA Section 310(b) regarding the
disqualification of a trustee upon acquiring a conflicting interest.

         SECTION 7.11. Preferential Collection of Claims Against Company. The
Trustee shall comply with TIA Section 311(a), excluding any creditor
relationship set forth in TIA

<PAGE>
                                                                              39

Section 311(b). A Trustee who has resigned or been removed shall be subject to
TIA Section 311(a) to the extent indicated therein.

                                  ARTICLE VIII

                     Satisfaction and Discharge of Indenture

         SECTION 8.01. Discharge of Indenture. When (a) the Company delivers to
the Trustee for cancellation all Convertible Subordinated Notes theretofore
authenticated (other than any Convertible Subordinated Notes which have been
destroyed, lost or stolen and in lieu of or in substitution for which other
Convertible Subordinated Notes have been authenticated and delivered) and not
theretofore canceled, or (b) all the Convertible Subordinated Notes not
theretofore canceled or delivered to the Trustee for cancellation have become
due and payable, or by their terms will 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, or are
delivered to the Trustee for conversion in accordance with this Indenture, and
the Company deposits with the Trustee, in trust, amounts sufficient to pay at
maturity or upon redemption of all of the Convertible Subordinated Notes (other
than any Convertible Subordinated Notes which have been mutilated, destroyed,
lost or stolen and in lieu of or in substitution for which other Convertible
Subordinated Notes have been authenticated and delivered) not theretofore
canceled or delivered to the Trustee for cancellation, including principal and
premium, if any, and interest and Liquidated Damages, if any, due or to become
due to such date of maturity or Redemption Date, as the case may be, and if in
either case the Company also pays, or causes 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) rights of registration of transfer, substitution,
replacement and exchange and conversion of Convertible Subordinated Notes, (ii)
rights hereunder of holders of Convertible Subordinated Notes to receive
payments of principal of and premium, if any, and interest, and Liquidated
Damages, if any, on, the Convertible Subordinated Notes, (iii) the obligations
under Sections 2.03 and 8.05 hereof and (iv) the rights, obligations and
immunities of the Trustee hereunder), and the Trustee, on demand of the Company
accompanied by an Officers' Certificate and an Opinion of Counsel as required by
Section 10.04 and at the Company's cost and expense, 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 Convertible
Subordinated Notes.

         SECTION 8.02. Deposited Moneys to be Held in Trust by Trustee. Subject
to Section 8.04, all moneys deposited with the Trustee pursuant to Section 8.01
shall be held in trust and applied by it to the payment, notwithstanding the
provisions of Article XI, either directly or through the Paying Agent, to the
holders of the particular Convertible Subordinated Notes for the payment or
redemption of which such moneys have been deposited with the Trustee, of all
sums due and to become due thereon for principal and

<PAGE>
                                                                              40

interest, and Liquidated Damages, if any, and premium, if any.

         SECTION 8.03. Paying Agent to Repay Moneys Held. Upon the satisfaction
and discharge of this Indenture, all moneys then held by any Paying Agent (other
than the Trustee) shall, upon the Company's demand, 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 moneys.

         SECTION 8.04. Return of Unclaimed Moneys. Subject to the requirements
of applicable law, any moneys deposited with or paid to the Trustee for payment
of the principal of, premium, if any, or interest or Liquidated Damages, if any,
on Convertible Subordinated Notes and not applied but remaining unclaimed by the
holders thereof for two years after the date upon which the principal of,
premium, if any, or interest, or Liquidated Damages, if any, on such Convertible
Subordinated Notes, as the case may be, have become due and payable, shall be
repaid to the Company by the Trustee on demand; provided, however, that the
Company, or the Trustee at the request of the Company, shall have first caused
notice of such payment to the Company to be mailed to each holder of a
Convertible Subordinated Note entitled thereto no less than 30 days prior to
such payment and all liability of the Trustee shall thereupon cease with respect
to such moneys; and the holder of any of the Convertible Subordinated Notes
shall thereafter look only to the Company for any payment which such holder may
be entitled to collect unless an applicable abandoned property law designates
another person.

         SECTION 8.05. Reinstatement. If the Trustee or the Paying Agent is
unable to apply any money in accordance with Section 8.02 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 Convertible Subordinated Notes shall be revived and reinstated
as though no deposit had occurred pursuant to Section 8.01 until such time as
the Trustee or the Paying Agent is permitted to apply all such money in
accordance with Section 8.02; provided, however, that if the Company makes any
payment of interest, Liquidated Damages, if any, on or principal or premium, if
any, of any Convertible Subordinated Note following the reinstatement of its
obligations, the Company shall be subrogated to the rights of the holders
thereof to receive such payment from the money held by the Trustee or Paying
Agent.

                                   ARTICLE IX

                                   Amendments

         SECTION 9.01. Without the Consent of Holders. The Company and the
Trustee may amend this Indenture or the Convertible Subordinated Notes without
notice to or the consent of any holder of a Convertible Subordinated Note for
the purposes of:

         (a) curing any ambiguity or correcting or supplementing any
     defective or inconsistent provision contained in this Indenture or making
     any other changes in the

<PAGE>
                                                                              41

     provisions of this Indenture which the Company and the Trustee may deem
     necessary or desirable, provided such amendment does not materially and
     adversely affect the legal rights under this Indenture of the holders of
     Convertible Subordinated Notes;

         (b) providing for uncertificated Convertible Subordinated Notes in
     addition to or in place of certificated Convertible Subordinated Notes;

         (c) evidencing the succession of another person to the Company
     and providing for the assumption by such successor of the covenants and
     obligations of the Company thereunder and in the Convertible Subordinated
     Notes as permitted by Section 5.01;

         (d) providing for conversion rights or repurchase rights of
     holders of Convertible Subordinated Notes in the event of consolidation,
     merger, share exchange or sale of all or substantially all of the assets of
     the Company as required to comply with Sections 5.01 or 12.06;

         (e) reducing the Conversion Price;

         (f) evidencing and providing for the acceptance of appointment under
     this Indenture of a successor Trustee;

         (g) making any changes that would provide the holders of the
     Convertible Subordinated Notes with any additional rights or benefits or
     that do not adversely affect the legal rights under this Indenture of any
     such holder; or

         (h) complying with the requirements of the Commission in order
     to effect or maintain the qualification of the Indenture under the TIA.

         SECTION 9.02. With the Consent of Holders. Subject to Section 6.07, the
Company and the Trustee may amend this Indenture or the Convertible Subordinated
Notes with the written consent of the holders of at least a majority in
principal amount of the then outstanding Convertible Subordinated Notes
(including consents obtained in connection with a tender offer or exchange offer
for Convertible Subordinated Notes).

         Subject to Sections 6.04 and 6.07, the holders of a majority in
principal amount of the Convertible Subordinated Notes then outstanding
(including consents obtained in connection with a tender offer or exchange offer
for Convertible Subordinated Notes) may also waive compliance in a particular
instance by the Company with any provision of this Indenture or the Convertible
Subordinated Notes.

         However, without the consent of each holder of a Convertible
Subordinated Note affected, an amendment or waiver under this Section may not
(with respect to any Convertible Subordinated Notes held by a non-consenting
holder):

         (a) reduce the principal amount of Convertible Subordinated Notes whose
     holders must consent to an amendment, supplement or waiver;

<PAGE>

                                                                              42

         (b) reduce the principal of or premium on or change the fixed
     maturity of any Convertible Subordinated Note or alter the redemption or
     mandatory repurchase provisions with respect thereto;

         (c) reduce the rate of, or change the time for payment of,
     interest, including defaulted interest, or Liquidated Damages on any
     Convertible Subordinated Note;

         (d) waive a Default or Event of Default in the payment of
     principal of or premium, if any, or interest or Liquidated Damages, if any,
     on the Convertible Subordinated Notes (except a rescission of acceleration
     of the Convertible Subordinated Notes by the holders of at least a majority
     in aggregate principal amount of the Convertible Subordinated Notes then
     outstanding and a waiver of the payment default that resulted from such
     acceleration);

         (e) make the principal of, or premium, if any, or interest or
     Liquidated Damages, if any, on, any Convertible Subordinated Note payable
     in money other than as provided for herein and in the Convertible
     Subordinated Notes;

         (f) make any change in the provisions of this Indenture
     relating to waivers of past Defaults or Events of Default or the rights of
     holders of Convertible Subordinated Notes to receive payments of principal
     of, premium, if any, or interest or Liquidated Damages on the Convertible
     Subordinated Notes;

         (g) waive a redemption or mandatory repurchase payment with respect to
     any Convertible Subordinated Notes;

         (h) except as permitted herein (including Section 9.01(a)),
     increase the Conversion Price or modify the provisions contained herein
     relating to conversion of the Convertible Subordinated Notes in a manner
     adverse to the holders thereof; or

         (i) make any change to the abilities of holders of Convertible
     Subordinated Notes to enforce their rights under this Indenture.

         To secure a consent of the holders of Convertible Subordinated Notes
under this Section 9.02, it shall not be necessary for such holders to approve
the particular form of any proposed amendment or waiver, but it shall be
sufficient if such consent approves the substance thereof.

         After an amendment or waiver under this Section 9.02 becomes effective,
the Company shall mail to holders of Convertible Subordinated Notes a notice
briefly describing the amendment or waiver.

         In order to amend any provisions of Article XI, holders of at least 75%
in aggregate principal amount of Convertible Subordinated Notes then outstanding
must consent to such amendment if such amendment would adversely affect the
rights of holders of Convertible Subordinated Notes.

<PAGE>
                                                                              43

         SECTION 9.03. Compliance with the Trust Indenture Act. Every amendment
to this Indenture or the Convertible Subordinated Notes shall be set forth in a
supplemental indenture that complies with the TIA as then in effect.

         SECTION 9.04. Revocation and Effect of Consents. Until an amendment or
waiver becomes effective, a consent to it by a holder of a Convertible
Subordinated Note is a continuing consent by the holder and every subsequent
holder of a Convertible Subordinated Note or portion of a Convertible
Subordinated Note that evidences the same debt as the consenting holder's
Convertible Subordinated Note, even if notation of the consent is not made on
any Convertible Subordinated Note. However, any such holder or subsequent holder
may revoke the consent as to his or her Convertible Subordinated Note or portion
of a Convertible Subordinated Note if the Trustee receives the notice of
revocation before the date on which the Trustee receives an Officers'
Certificate certifying that the holders of the requisite principal amount of
Convertible Subordinated Notes have consented to the amendment or waiver.

         The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the holders of Convertible Subordinated Notes
entitled to consent to any amendment or waiver. If a record date is fixed, then
notwithstanding the provisions of the immediately preceding paragraph, those
persons who were holders of Convertible Subordinated Notes at such record date
(or their duly designated proxies), and only those persons, shall be entitled to
consent to such amendment or waiver or to revoke any consent previously given,
whether or not such persons continue to be holders after such record date.

         After an amendment or waiver becomes effective it shall bind every
holder of a Convertible Subordinated Note, unless it is of the type described in
clauses (a) - (i) of Section 9.02. In such case, the amendment or waiver shall
bind each holder of a Convertible Subordinated Note who has consented to it and
every subsequent holder of a Convertible Subordinated Note or portion of a
Convertible Subordinated Note that evidences the same debt as the consenting
holder's Convertible Subordinated Note.

         SECTION 9.05. Notation on or Exchange of Convertible Subordinated
Notes. Convertible Subordinated Notes authenticated and delivered after the
execution of any supplemental indenture pursuant to this Article IX may, and
shall if required by the Trustee, bear a notation in the form approved by the
Trustee as to any matter provided for in such supplemental indenture. If the
Company shall so determine, new Convertible Subordinated Notes so modified as to
conform, in the opinion of the Company and the Trustee, to any such supplemental
indenture may be prepared and executed by the Company and authenticated and
delivered by the Trustee in exchange for outstanding Convertible Subordinated
Notes without charge to the holders of the Convertible Subordinated Notes,
except as specified in Section 2.06.

         SECTION 9.06. Trustee Protected. The Trustee shall sign any amendment
or supplemental indenture authorized pursuant to this Article IX if such
amendment or supplemental indenture does not adversely affect the rights,
duties, liabilities or immunities of the Trustee.

<PAGE>
                                                                              44

         If such amendment or supplemental indenture does adversely affect the
rights, duties, liabilities or immunities of the Trustee, the Trustee may, but
need not, sign it. In signing such amendment or supplemental indenture, the
Trustee shall be entitled to receive, and shall be fully protected in relying
upon, an Officers' Certificate and an opinion of Counsel as conclusive evidence
that such amendment or supplemental indenture is authorized or permitted by this
Indenture, that it is not inconsistent herewith, and that it will be valid and
binding upon the Company in accordance with its terms.

                                    ARTICLE X

                               General Provisions

         SECTION 10.01. Trust Indenture Act Controls. If any provision of this
Indenture limits, qualifies or conflicts with the duties imposed by TIA Section
318(c), such duties imposed by such section of the TIA shall control. If any
provision of this Indenture expressly modifies or excludes any provision of the
TIA that may be so modified or excluded, the Indenture provision so modifying or
excluding such provision of the TIA shall be deemed to apply.

         SECTION 10.02. Notices. Any notice or communication by the Company or
the Trustee to the other is duly given if in writing and delivered in person or
mailed by first-class mail, with postage prepaid (registered or certified,
return receipt requested), or sent by facsimile or overnight air couriers
guaranteeing next day delivery, to the other's address as stated in Section
10.10. The Company or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.

         All notices and communications (other than those sent to holders of
Convertible Subordinated Notes) shall be deemed to have been duly given at the
time delivered by hand, if personally delivered; five Business Days after being
deposited in the mail, postage prepaid, if mailed; when transmission is
confirmed, if transmitted by facsimile; and the next Business Day after timely
delivery to the courier, if sent by overnight air courier guaranteeing next day
delivery. Notwithstanding the foregoing, all notices to the Trustee shall be
effective only upon receipt by a Trust Officer.

         Any notice or communication to a holder of a Convertible Subordinated
Note shall be mailed by first-class mail, with postage prepaid, to his or her
address shown on the Register kept by the Registrar. Failure to mail a notice or
communication to a holder or any defect in it shall not affect its sufficiency
with respect to other holders.

         If a notice or communication to a holder of a Convertible Subordinated
Note is sent in the manner provided above within the time prescribed, it is duly
given, whether or not the addressee receives it.

         If the Company sends a notice or communication to holders of
Convertible Subordinated Notes, it shall send a copy to the Trustee and each
Agent at the same time.

         All notices or communications shall be in writing.

<PAGE>
                                                                              45

         SECTION 10.03. Communication by Holders with Other Holders. Holders may
communicate pursuant to TIA Section 312(b) with other holders with respect to
their rights under this Indenture or the Convertible Subordinated Notes. The
Company, the Trustee, the Registrar and the paying agent shall have the
protection of TIA Section 312(c).

         SECTION 10.04. Certificate and Opinion as to Conditions Precedent. Upon
any request or application by the Company to the Trustee to take any action
under this Indenture, the Company shall furnish to the Trustee:

                  (a) an Officers' Certificate in form and substance reasonably
     satisfactory to the Trustee (which shall include the statements set forth
     in Section 10.05) stating that, in the opinion of such person, all
     conditions precedent and covenants, if any, provided for in this Indenture
     relating to the proposed action have been complied with; and

                  (b) an Opinion of Counsel in form and substance reasonably
     satisfactory to the Trustee (which shall include the statements set forth
     in Section 10.05) stating that, in the opinion of such counsel, all such
     conditions precedent and covenants have been complied with.

         SECTION 10.05. Statements Required in Certificate or Opinion. Each
certificate or opinion with respect to compliance with a condition or covenant
provided for in this Indenture (other than a certificate provided pursuant to
TIA Section 314(a)(4)) shall include:

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

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

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

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

         Any Officers' Certificate may be based, insofar as it relates to legal
matters, upon an Opinion of Counsel, unless such Officer knows that the opinion
with respect to the matters upon which his or her certificate may be based as
aforesaid is erroneous. Any Opinion of Counsel may be based, insofar as it
relates to factual matters, upon certificates, statements or opinions of, or
representations by an officer or officers of the Company, or other persons or
firms deemed appropriate by such counsel, unless such counsel knows that the
certificates, statements or opinions or representations with respect to the
matters upon which his or her opinion may be based as aforesaid are erroneous.

<PAGE>
                                                                              46

         Any Officers' Certificate, statement or Opinion of Counsel may be
based, insofar as it relates to accounting matters, upon a certificate or
opinion of or representation by an accountant (who may be an employee of the
Company), or firm of accountants, unless such Officer or counsel, as the case
may be, knows that the certificate or opinion or representation with respect to
the accounting matters upon which his or her certificate, statement or opinion
may be based as aforesaid is erroneous.

         SECTION 10.06. Rules by Trustee and Agents. The Trustee may make
reasonable rules for action by, or a meeting of, holders of Convertible
Subordinated Notes. The Registrar or Paying Agent may make reasonable rules and
set reasonable requirements for its functions.

         SECTION 10.07. Legal Holidays. A "Legal Holiday" is a Saturday, a
Sunday or a day on which banking institutions in the City of New York or
Chicago, Illinois are not required to be open, and a "Business Day" is any day
that is not a Legal Holiday. If a payment date is a Legal Holiday at a place of
payment, payment may be made at that place on the next succeeding day that is
not a Legal Holiday, and no interest shall accrue for the intervening period. If
any date specified in this Indenture, including, without limitation, a
Redemption Date under Paragraph 5 of the Convertible Subordinated Notes, is a
Legal Holiday, then such date shall be the next succeeding Business Day.

         SECTION 10.08. No Recourse Against Others. No director, officer,
employee, shareholder or Affiliate, as such, of the Company from time to time
shall have any liability for any obligations of the Company under the
Convertible Subordinated Notes or this Indenture or for any claim based on, in
respect of, or by reason of such obligations or their creation. Each holder by
accepting a Convertible Subordinated Note waives and releases all such
liability. This waiver and release are part of the consideration for the
Convertible Subordinated Notes. Each of such directors, officers, employees,
shareholders and Affiliates of the Company is a third party beneficiary of this
Section 10.08.

         SECTION 10.09. Counterparts. This Indenture may be executed in any
number of counterparts and by the parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement.

         SECTION 10.10. Other Provisions. The Company initially appoints the
Trustee as Paying Agent, Registrar and authenticating agent.

         The reporting date for Section 7.06 is May 15 of each year. The first
reporting date is the May 15 following the issuance of Convertible Subordinated
Notes hereunder.

         The Trustee shall always have, or shall be a Subsidiary of a bank or
bank holding company which has, a combined capital and surplus of at least
$50,000,000 as set forth in its most recent published annual report of
condition.

         The Company's address is:

<PAGE>
                                                                              47

                           Hutchinson Technology Incorporated
                           40 West Highland Park
                           Hutchinson, Minnesota 55350
                           Attention: Chief Financial Officer
                           Facsimile:  (320) 587-1645
                           Telephone: (320) 587-3797

                  The Trustee's address is:

                           LaSalle Bank National Association
                           135 South LaSalle Street
                           Chicago, Illinois 60603
                           Attention: Wayne M. Evans
                           Facsimile:  (312) 904-2236
                           Telephone: (312) 904-2442

         SECTION 10.11. Governing Law. The internal laws of the State of New
York shall govern this Indenture and the Convertible Subordinated Notes, without
regard to the conflict of laws provisions thereof.

         SECTION 10.12. No Adverse Interpretation of Other Agreements. This
Indenture may not be used to interpret another indenture, loan or debt agreement
of the Company or a Subsidiary. Any such other indenture, loan or debt agreement
may not be used to interpret this Indenture.

         SECTION 10.13. Successors. All agreements of the Company in this
Indenture and the Convertible Subordinated Notes shall bind its successor. All
agreements of the Trustee in this Indenture shall bind its successor.

         SECTION 10.14. Severability. In case any provision in this Indenture or
in the Convertible Subordinated Notes shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.

         SECTION 10.15. Table of Contents, Headings, etc. The Table of Contents,
Cross-Reference Table and headings of the Articles and Sections of this
Indenture have been inserted for convenience of reference only, are not to be
considered a part hereof and shall in no way modify or restrict any of the terms
or provisions hereof.

                                   ARTICLE XI

                                  Subordination

         SECTION 11.01. Agreement to Subordinate. The Company agrees, and each
holder of Convertible Subordinated Notes by accepting a Convertible Subordinated
Note agrees, that the indebtedness evidenced by the Convertible Subordinated
Note is subordinated in right of payment, to the extent and in the manner
provided in this Article XI,

<PAGE>
                                                                              48

to the prior payment in full in cash or payment satisfactory to holders of
Senior Debt of all Senior Debt (whether outstanding on the date hereof or
hereafter created, incurred, assumed or guaranteed), and that the subordination
is for the benefit of the holders of Senior Debt.

         SECTION 11.02. Liquidation; Dissolution; Bankruptcy. Upon any
distribution to creditors of the Company in a liquidation or dissolution of the
Company or in a bankruptcy, reorganization, insolvency, receivership or similar
proceeding relating to the Company or its property, in an assignment for the
benefit of creditors or any marshaling of the Company's assets and liabilities:

         (a) holders of Senior Debt shall be entitled to receive payment in full
     of all Obligations due in respect of such Senior Debt (including interest
     after the commencement of any such proceeding at the rate specified in the
     applicable Senior Debt) in cash or other payment satisfactory to the
     holders of the Senior Debt before holders of Convertible Subordinated Notes
     shall be entitled to receive any payment with respect to the Convertible
     Subordinated Notes; and

         (b) until all Senior Debt is paid in full in cash or other payment
     satisfactory to the holders of the Senior Debt, any distribution to which
     holders of Convertible Subordinated Notes would be entitled but for this
     Article XI shall be made to holders of Senior Debt, as their interests may
     appear.

         SECTION 11.03. Default on Designated Senior Debt. Anything in this
Indenture to the contrary notwithstanding, no payment on account of principal of
or premium, if any, interest or Liquidated Damages, if any, on or other amounts
due on the Convertible Subordinated Notes (including without limitation the
making of a deposit pursuant to Section 3.06 or 4.06), and no redemption,
repurchase, or other acquisition of the Convertible Subordinated Notes, shall be
made by or on behalf of the Company unless:

         (a) full payment of all amounts then due for principal of and interest
     on, and of all other amounts then due on, all Designated Senior Debt has
     been made or duly provided for pursuant to the terms of the instruments
     governing such Designated Senior Debt; and

         (b) at the time for, and immediately after giving effect to, any such
     payment, redemption, repurchase or other acquisition, there shall not exist
     under any Designated Senior Debt, or any agreement pursuant to which any
     Designated Senior Debt is issued, any default which shall not have been
     cured or waived and which default shall have resulted in the full amount of
     such Designated Senior Debt being declared due and payable.

         In addition, if the Trustee shall receive written notice from the
holders of Designated Senior Debt or their Representative (a "Payment Blockage
Notice") that there has occurred and is continuing under such Designated Senior
Debt, or any agreement pursuant to which such Designated Senior Debt is issued,
any non-payment default, which default shall not have been cured or waived,
giving the holders of such Designated Senior Debt the right to declare such
Designated Senior Debt immediately due and payable, then,

<PAGE>
                                                                              49

anything in this Indenture to the contrary notwithstanding, no payment on
account of the principal of or premium, if any, interest or Liquidated Damages,
if any, on or any other amounts due on the Convertible Subordinated Notes
(including without limitation the making of a deposit pursuant to Section 3.06
or 4.06), and no redemption, repurchase or other acquisition of the Convertible
Subordinated Notes, shall be made by or on behalf of the Company during the
period (the "Payment Blockage Period") commencing on the date of receipt of the
Payment Blockage Notice and ending on the earliest of (i) the date on which such
default shall have been cured or waived, (ii) 179 days from the receipt of the
Payment Blockage Notice and (iii) the date the Payment Blockage Notice is
withdrawn by the holders of such Designated Senior Debt. Notwithstanding the
provisions described in the immediately preceding sentence (but subject to the
provisions contained in Section 11.02 and the first sentence of this Section
11.03), unless the holders of such Designated Senior Debt or the Representative
of such holders shall have accelerated the maturity of such Designated Senior
Debt, the Company may resume payments on the Convertible Subordinated Notes
after the end of such Payment Blockage Period. Not more than one Payment
Blockage Notice may be given in any consecutive 365-day period, irrespective of
the number of defaults with respect to one or more issues of Designated Senior
Debt during such period.

         SECTION 11.04. Acceleration of Convertible Subordinated Notes. In the
event of the acceleration of the Convertible Subordinated Notes because of an
Event of Default, the Company may not make any payment or distribution to the
Trustee or any holder of Convertible Subordinated Notes in respect of
Obligations with respect to Convertible Subordinated Notes and may not acquire
or purchase from the Trustee or any holder of Convertible Subordinated Notes any
Convertible Subordinated Notes until all Senior Debt has been paid in full in
cash or other payment satisfactory to the holders of Senior Debt or such
acceleration is rescinded in accordance with the terms of this Indenture.

         If payment of the Convertible Subordinated Notes is accelerated because
of an Event of Default, the Company shall promptly notify holders of Senior Debt
or trustees of such Senior Debt of the acceleration.

         SECTION 11.05. When Distribution Must Be Paid Over. In the event that
the Trustee, any holder of Convertible Subordinated Notes or any other person
receives any payment or distributions of assets of the Company of any kind with
respect to the Convertible Subordinated Notes in contravention of any
subordination terms contained in this Indenture, whether in cash, property or
securities, including, without limitation, by way of set-off or otherwise, then
such payment shall be held by the recipient in trust for the benefit of holders
of Senior Debt, and shall be immediately paid over and delivered to the holders
of Senior Debt or their Representative, to the extent necessary to make payment
in full of all Senior Debt remaining unpaid, after giving effect to any
concurrent payment or distribution or provision therefor, to or for the holders
of Senior Debt; provided, however, that the foregoing shall apply to the Trustee
only if a Trust Officer of the Trustee has actual knowledge (as determined in
accordance with Section 11.11) that such payment or distribution is prohibited
by this Indenture.

<PAGE>
                                                                              50

         With respect to the holders of Senior Debt, the Trustee undertakes to
perform only such obligations on the part of the Trustee as are specifically set
forth in this Article XI, and no implied covenants or obligations with respect
to the holders of Senior Debt shall be read into this Indenture against the
Trustee. The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Debt, and shall not be liable to any such holders if the
Trustee shall pay over or distribute to or on behalf of holders of Convertible
Subordinated Notes or the Company or any other person money or assets to which
any holders of Senior Debt shall be entitled by virtue of this Article XI,
except if such payment is made as a result of the willful misconduct or gross
negligence of the Trustee.

         SECTION 11.06. Notice by Company. The Company shall promptly notify the
Trustee of any facts known to the Company that would cause a payment of any
Obligations with respect to the Convertible Subordinated Notes or the purchase
of any Convertible Subordinated Notes by the Company to violate this Article XI,
but failure to give such notice shall not affect the subordination of the
Convertible Subordinated Notes to the Senior Debt as provided in this Article
XI.

         SECTION 11.07. Subrogation. After all Senior Debt is paid in full and
until the Convertible Subordinated Notes are paid in full, holders of
Convertible Subordinated Notes shall be subrogated (equally and ratably with all
other indebtedness pari passu with the Convertible Subordinated Notes) to the
rights of holders of Senior Debt to receive distributions applicable to Senior
Debt to the extent that distributions otherwise payable to the holders of
Convertible Subordinated Notes have been applied to the payment of Senior Debt.
A distribution made under this Article XI to holders of Senior Debt that
otherwise would have been made to holders of Convertible Subordinated Notes is
not, as between the Company and holders of Convertible Subordinated Notes, a
payment by the Company on the Convertible Subordinated Notes.

         SECTION 11.08. Relative Rights. This Article XI defines the relative
rights of holders of Convertible Subordinated Notes and holders of Senior Debt.
Nothing in this Indenture shall:

         (a) impair, as between the Company and holders of Convertible
     Subordinated Notes, the obligation of the Company, which is absolute and
     unconditional, to pay principal of, premium, if any, and interest and
     Liquidated Damages, if any, on the Convertible Subordinated Notes in
     accordance with their terms;

         (b) affect the relative rights of holders of Convertible Subordinated
     Notes and creditors (other than with respect to Senior Debt) of the
     Company, other than their rights in relation to holders of Senior Debt; or

         (c) prevent the Trustee or any holder of Convertible Subordinated Notes
     from exercising its available remedies upon a Default or Event of Default,
     subject to the rights of holders and owners of Senior Debt to receive
     distributions and payments otherwise payable to holders of Convertible
     Subordinated Notes.

<PAGE>
                                                                              51

         If the Company fails because of this Article XI to pay principal of,
premium, if any, or interest or Liquidated Damages, if any, on a Convertible
Subordinated Note on the due date, the failure is still a Default or Event of
Default.

         SECTION 11.09. Subordination May Not Be Impaired by Company. No right
of any holder of Senior Debt to enforce the subordination of the indebtedness
evidenced by the Convertible Subordinated Notes shall be impaired by any act or
failure to act by the Company or any holder of Convertible Subordinated Notes or
by the failure of the Company or any such holder to comply with this Indenture.

         SECTION 11.10. Distribution or Notice to Representative. Whenever a
distribution is to be made or a notice given to holders of Senior Debt, the
distribution may be made and the notice given to their Representative.

         Upon any payment or distribution of assets of the Company referred to
in this Article XI, the Trustee and the holders of Convertible Subordinated
Notes shall be entitled to rely upon any order or decree made by any court of
competent jurisdiction or upon any certificate of such Representative or of the
liquidating trustee or agent or other person making any distribution to the
Trustee or to the holders of Convertible Subordinated Notes for the purpose of
ascertaining the persons entitled to participate in such distribution, the
holders of the Senior Debt and other indebtedness of the Company, the amount
thereof or payable thereon, the amount or amounts paid or distributed thereon
and all other facts pertinent thereto or to this Article XI.

         SECTION 11.11. Rights of Trustee and Paying Agent. Notwithstanding the
provisions of this Article XI or any other provision of this Indenture, the
Trustee shall not be charged with knowledge of the existence of any facts that
would prohibit the making of any payment or distribution by the Trustee, and the
Trustee may continue to make payments on the Convertible Subordinated Notes,
unless a Trust Officer shall have received at least two Business Days prior to
the date of such payment or distribution written notice of facts that would
cause such payment or distribution with respect to the Convertible Subordinated
Notes to violate this Article XI. Only the Company or a Representative may give
the notice.

         Nothing in this Article XI shall impair the claims of, or payments to,
the Trustee under or pursuant to Section 7.07 hereof.

         The Trustee in its individual or any other capacity may hold Senior
Debt with the same rights it would have if it were not Trustee. Any Agent may do
the same with like rights.

         SECTION 11.12. Authorization to Effect Subordination. Each holder of a
Convertible Subordinated Note by the holder's acceptance thereof authorizes and
directs the Trustee on the holder's behalf to take such action as may be
necessary or appropriate to effectuate the subordination as provided in this
Article XI, and appoints the Trustee to act as the holder's attorney-in-fact for
any and all such purposes. If the Trustee does not file a proper proof of claim
or proof of debt in the form required in any proceeding referred to in Section
6.09 hereof at least 30 days before the expiration of the time to file such
claim, the

<PAGE>
                                                                              52

holders of any Senior Debt or their Representatives are hereby authorized to
file an appropriate claim for and on behalf of the holders of the Convertible
Subordinated Notes.

         SECTION 11.13. Article Applicable to Paying Agents. In case at any time
any Paying Agent other than the Trustee shall have been appointed by the Company
and be then acting hereunder, the term "Trustee" as used in this Article XI
shall in such case (unless the context otherwise requires) be construed as
extending to and including such Paying Agent within its meaning as fully for all
intents and purposes as if such Paying Agent were named in this Article XI in
addition to or in place of the Trustee; provided, however, that the second and
third paragraphs of Section 11.11 shall not apply to the Company or any
Subsidiary of the Company if it or such Subsidiary acts as Paying Agent.

         SECTION 11.14. Senior Debt Entitled to Rely. The holders of Senior Debt
shall have the right to rely upon this Article XI, and no amendment or
modification of the provisions contained herein shall diminish the rights of
such holders unless the holders affected thereby shall have agreed in writing
thereto.

         SECTION 11.15. Permitted Payments. Notwithstanding anything to the
contrary in this Article XI, the holders of Convertible Subordinated Notes may
receive and retain at any time on or prior to the Maturity Date (i) securities
that are subordinated to at least the same extent as the Convertible
Subordinated Notes to (a) Senior Debt and (b) any securities issued in exchange
for Senior Debt and (ii) payments and other distributions made from any trust
created pursuant to Section 8.01.

         SECTION 11.16. Pari Passu Indebtedness. The Company's 6% Convertible
Subordinated Notes due 2005 issued under the Indenture dated as of March 18,
1998, between the Company and U.S. Bank National Association, is pari passu with
the Convertible Subordinated Notes.

                                   ARTICLE XII

                  Conversion of Convertible Subordinated Notes

         SECTION 12.01. Right To Convert. Subject to and upon compliance with
the provisions of this Indenture, each holder of Convertible Subordinated Notes
shall have the right, at his or her option, at any time on or before the close
of business on the last Trading Day prior to the Maturity Date (except that, (a)
with respect to any Convertible Subordinated Note or portion thereof which is
called for redemption prior to such date, such right shall terminate, except as
provided in the fourth paragraph of Section 12.02, at the close of business on
the last Trading Day preceding the date fixed for redemption (unless the Company
defaults in payment of the Redemption Price in which case the conversion right
will terminate at the close of business on the date such default is cured) and
(b) with respect to any Convertible Subordinated Note or portion thereof subject
to a duly completed election for repurchase, such right shall terminate at the
close of business on the Designated Event Offer Termination Date (unless the
Company defaults in the payment due upon repurchase or such holder elects to
withdraw the submission of such election to repurchase in accordance with
section 4.06)) to convert the principal amount of any Convertible

<PAGE>
                                                                              53

Subordinated Note held by such holder, 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 dividing the principal amount of the Convertible
Subordinated Note or portion thereof to be converted by the Conversion Price in
effect at such time, by surrender of the Convertible Subordinated Note so to be
converted in whole or in part in the manner provided in Section 12.02. A holder
of Convertible Subordinated Notes is not entitled to any rights of a holder of
Common Stock until such holder of Convertible Subordinated Notes has converted
his or her Convertible Subordinated Notes to Common Stock, and then only to the
extent such Convertible Subordinated Notes are deemed to have been converted to
Common Stock under this Article XII.

         SECTION 12.02. Exercise of Conversion Privilege; Issuance of Common
Stock on Conversion; No Adjustment for Interest or Dividends. To exercise, in
whole or in part, the conversion privilege with respect to any Convertible
Subordinated Note, the holder of such Convertible Subordinated Note shall
surrender such Convertible Subordinated Note, duly endorsed, at an office or
agency maintained by the Company pursuant to Section 4.04, accompanied by the
funds, if any, required by the last paragraph of this Section 12.02, and shall
give written notice of conversion in the form provided on the Convertible
Subordinated Notes (or such other notice which is acceptable to the Company) to
the office or agency that the holder of Convertible Subordinated Notes elects to
convert such Convertible Subordinated Note or such 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 are issuable on such conversion shall be issued, and shall be accompanied
by transfer taxes, if required pursuant to Section 12.07. Each such Convertible
Subordinated Note surrendered for conversion shall, unless the shares issuable
on conversion are to be issued in the same name as the registration of such
Convertible Subordinated Note, be duly endorsed by, or be accompanied by
instruments of transfer in form satisfactory to the Company duly executed by,
the holder of Convertible Subordinated Notes or his or her duly authorized
attorney. The holder of such Convertible Subordinated Notes will not be required
to pay any tax or duty which may be payable in respect of the issue or delivery
of Common Stock on conversion, but will be required to pay any tax or duty which
may be payable in respect of any transfer involved in the issue or delivery of
Common Stock in a name other than the same name as the registration of such
Convertible Subordinated Note.

         As promptly as practicable after satisfaction of the requirements for
conversion set forth above, the Company shall issue and shall deliver to such
holder at the office or agency maintained by the Company for such purpose
pursuant to Section 4.04, a certificate or certificates for the number of full
shares of Common Stock issuable upon the conversion of such Convertible
Subordinated Note or portion thereof in accordance with the provisions of this
Article XII and a check or cash in respect of any fractional interest in respect
of a share of Common Stock arising upon such conversion, as provided in Section
12.03 (which payment, if any, shall be paid no later than five Business Days
after satisfaction of the requirements for conversion set forth above).
Certificates representing shares of Common Stock will not be issued or delivered
unless all taxes and duties, if any, payable by the holder have been paid. In
case any Convertible Subordinated Note of a

<PAGE>
                                                                              54

denomination of an integral multiple greater than $1,000 is surrendered for
partial conversion, and subject to Section 2.02, the Company shall execute, and
the Trustee shall authenticate and deliver to the holder of the Convertible
Subordinated Note so surrendered, without charge to him or her, a new
Convertible Subordinated Note or Convertible Subordinated Notes in authorized
denominations in an aggregate principal amount equal to the unconverted portion
of the surrendered Convertible Subordinated Note.

         Each conversion shall be deemed to have been effected as to any such
Convertible Subordinated Note (or portion thereof) on the date on which the
requirements set forth above in this Section 12.02 have been satisfied as to
such Convertible Subordinated Note (or portion thereof), and the person in whose
name any certificate or certificates for shares of Common Stock are issuable
upon such conversion shall be deemed to have become on said date the holder of
record of the shares represented thereby; provided, however, that any such
surrender on any date when the Company's stock transfer books are 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
Price in effect on the date upon which such Convertible Subordinated Note is
surrendered.

         Any Convertible Subordinated Note or portion thereof surrendered for
conversion during the period from the close of business on the record date for
any interest payment through the close of business on the last Trading Day
immediately preceding such interest payment date shall (unless such Convertible
Subordinated Note or portion thereof being converted has been called for
redemption on a date during the period from the close of business on such record
date to the close of business on the last Trading Day immediately preceding the
corresponding interest payment date pursuant to a notice of redemption mailed by
the Company to the holders in accordance with the provisions of Section 3.04) be
accompanied by payment, in funds acceptable to the Company, of an amount equal
to the interest and Liquidated Damages, if any, otherwise payable on such
interest payment date on the principal amount being converted; provided,
however, that such payment may be reduced by the amount of any existing payment
default in respect of such Convertible Subordinated Notes. An amount equal to
such payment shall be paid by the Company on such interest payment date to the
holder of such Convertible Subordinated Note at the close of business on such
record date. Except as provided above in this Section 12.02, no adjustment shall
be made for interest and Liquidated Damages, if any, accrued on any Convertible
Subordinated Note converted or for dividends on any shares issued upon the
conversion of such Convertible Subordinated Note as provided in this Article
XII. If any Convertible Subordinated Note is converted after a record date for
the payment of interest and prior to the next succeeding interest payment date,
interest payable on such interest payment date shall be payable notwithstanding
such conversion, and such interest shall be paid to the holder of such
Convertible Subordinated Note on the applicable record date.

         SECTION 12.03. Cash Payments in Lieu of Fractional Shares. No
fractional shares of Common Stock or scrip representing fractional shares shall
be issued upon conversion of Convertible Subordinated Notes. If more than one
Convertible Subordinated Note shall be surrendered for conversion at one time by
the same holder, the number of full shares which shall be issuable upon
conversion shall be computed on the basis of the

<PAGE>
                                                                              55

aggregate principal amount of the Convertible Subordinated Notes (or specified
portions thereof to the extent permitted hereby) so surrendered for conversion.
If any fractional share of stock otherwise would be issuable upon the conversion
of any Convertible Subordinated Note or Convertible Subordinated Notes, the
Company shall make an adjustment therefor in cash based upon the Current Market
Price of the Common Stock on the last Trading Day prior to the date of
conversion.

         SECTION 12.04. Conversion Price. The conversion price shall be as
specified in the form of Convertible Subordinated Note attached as Exhibit A
hereto, subject to adjustment as provided in this Article XII.

         SECTION 12.05. Adjustment of Conversion Price. The Conversion Price
shall be adjusted from time to time by the Company as follows:

         (a) If 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 Price in effect at the opening of business on
     the date following the date fixed for the determination of shareholders
     entitled to receive such dividend or other distribution shall be reduced by
     multiplying such Conversion Price by a fraction of which the numerator
     shall be the number of shares of Common Stock outstanding at the close of
     business on the Record Date (as defined in Section 12.05(g)) fixed for such
     determination and the denominator shall be the sum of such number of shares
     and the total number of shares constituting such dividend or other
     distribution, such reduction to become effective immediately after the
     opening of business on the day following the Record Date. If any dividend
     or distribution of the type described in this Section 12.05(a) is declared
     but not so paid or made, the Conversion Price shall again be adjusted to
     the Conversion Price which would then be in effect if such dividend or
     distribution had not been declared.

         (b) If the outstanding shares of Common Stock shall be subdivided into
     a greater number of shares of Common Stock, the Conversion Price in effect
     at the opening of business on the day following the day upon which such
     subdivision becomes effective shall be proportionately reduced, and,
     conversely, if the outstanding shares of Common Stock shall be combined
     into a smaller number of shares of Common Stock, the Conversion Price in
     effect at the opening of business on the day following the day upon which
     such combination becomes effective shall be proportionately increased, 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.

         (c) If the Company shall issue rights or warrants to all or
     substantially all holders of its outstanding shares of Common Stock
     entitling them to subscribe for or purchase shares of Common Stock at a
     price per share less than the Current Market Price (as defined in Section
     12.05(g)) on the Record Date fixed for the determination of shareholders
     entitled to receive such rights or warrants, the Conversion Price shall be
     adjusted so that the same shall equal the price determined by multiplying
     the Conversion Price in effect at the opening of business on the date after
     such Record

<PAGE>
                                                                              56

     Date by a fraction of which the numerator shall be the number of shares of
     Common Stock outstanding at the close of business on the Record Date plus
     the number of shares which the aggregate offering price of the total number
     of shares so offered would purchase at such Current Market Price, and of
     which the denominator shall be the number of shares of Common Stock
     outstanding on the close of business on the Record Date plus the total
     number of additional shares of Common Stock so offered for subscription or
     purchase. Such adjustment shall become effective immediately after the
     opening of business on the day following the Record Date fixed for
     determination of shareholders entitled to receive such rights or warrants.
     To the extent that shares of Common Stock are not delivered pursuant to
     such rights or warrants, upon the expiration or termination of such rights
     or warrants the Conversion Price shall be readjusted to be the Conversion
     Price which 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. If such
     rights or warrants are not so issued, the Conversion Price shall again be
     adjusted to be the Conversion Price which would then be in effect if such
     date fixed for the determination of shareholders entitled to receive such
     rights or warrants had not been fixed. In determining whether any rights or
     warrants entitle the holders to subscribe for or purchase shares of Common
     Stock at less than such Current Market Price, and in determining the
     aggregate offering price of such shares of Common Stock, there shall be
     taken into account any consideration received for such rights or warrants,
     with the value of such consideration, if other than cash, to be determined
     by the Board of Directors.

         (d) If 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
     12.05(a) applies) or evidences of its indebtedness, cash or other assets
     (including securities, but excluding (i) any rights or warrants of a type
     referred to in Section 12.05(c) and (ii) dividends and distributions paid
     exclusively in cash) (the foregoing hereinafter in this Section 12.05(d)
     called the "Securities"), then, in each such case, the Conversion Price
     shall be reduced so that the same shall be equal to the price determined by
     multiplying the Conversion Price in effect immediately prior to the close
     of business on the Record Date (as defined in Section 12.05(g)) with
     respect to such distribution by a fraction of which the numerator shall be
     the Current Market Price (determined as provided in Section 12.05(g)) on
     such date less the 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) on such date of the portion of the
     Securities so distributed applicable to one share of Common Stock and the
     denominator shall be such Current Market Price, such reduction to become
     effective immediately prior to the opening of business on the day following
     the Record Date. If such dividend or distribution is not so paid or made,
     the Conversion Price shall again be adjusted to be the Conversion Price
     which would then be in effect if such dividend or distribution had not been
     declared. If the Board of Directors determines the Fair Market Value of any
     distribution for purposes of this Section 12.05(d) by reference to the
     actual or when issued trading market for any securities comprising all or
     part of such distribution, it must in doing so consider the prices in such
     market over the same

<PAGE>
                                                                              57

period used in computing the Current Market Price pursuant to Section 12.05(g)
to the extent possible.

         Notwithstanding any other provision of Section 12.05(c) or this Section
12.05(d) to the contrary, rights, warrants, evidences of indebtedness, other
securities, cash or other assets (including, without limitation, any rights
distributed pursuant to any shareholder rights plan) shall be deemed not to have
been distributed for purposes of Section 12.05(c) or this Section 12.05(d), as
applicable, if the Company makes proper provision so that each holder of
Convertible Subordinated Notes who converts a Convertible Subordinated Note (or
any portion thereof) after the date fixed for determination of shareholders
entitled to receive such distribution shall be entitled to receive upon such
conversion, in addition to the shares of Common Stock issuable upon such
conversion, the amount and kind of such distributions that such holder would
have been entitled to receive if such holder had, immediately prior to such
determination date, converted such Convertible Subordinated Note into Common
Stock, and, in the case of this Section 12.05(d), interest accrued as a
consequence of the investment, in U.S. Government Obligations with a maturity of
not more than three months, of the cash amount that such holder would have been
so entitled to receive.

         Rights or warrants distributed by the Company to all or substantially
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 12.05(d) (and no adjustment
to the Conversion Price under this Section 12.05(d) shall 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 to the
Conversion Price under this Section 12.05(d) shall be made. If any such rights
or warrants, including any such existing rights or warrants distributed prior to
the date of this Indenture, are subject to subsequent events, upon the
occurrence of each of which such rights or warrants shall become exercisable to
purchase different securities, evidences of indebtedness or other assets, then
the occurrence of each such event shall be deemed to be such date of issuance
and record date with respect to new rights or warrants (and a termination or
expiration of the existing rights or warrants without exercise by the holder
thereof). In addition, in the event of any distribution (or deemed distribution)
of rights or warrants, or any Trigger Event with respect thereto, that was
counted for purposes of calculating a distribution amount for which an
adjustment to the Conversion Price under this Section 12.05(d) was made, (1) in
the case of any such rights or warrants which shall all have been redeemed or
repurchased without exercise by any holders thereof, the Conversion Price shall
be readjusted upon such final redemption or repurchase to give effect to such
distribution or Trigger Event, as the case may be, as though it were a cash
distribution, equal to the per share redemption or repurchase price received by
a holder or holders of Common Stock with respect to such rights or

<PAGE>
                                                                              58

warrants (assuming such holder had retained such rights or warrants), made to
all holders of Common Stock as of the date of such redemption or repurchase, and
(2) in the case of such rights or warrants which shall have expired or been
terminated without exercise by any holders thereof, the Conversion Price shall
be readjusted as if such rights and warrants had not been issued.

         For purposes of this Section 12.05(d) and Sections 12.05(a) and (c),
any dividend or distribution to which this Section 12.05(d) is applicable that
also includes shares of Common Stock to which Section 12.05(a) applies, or
rights or warrants to subscribe for or purchase shares of Common Stock to which
Section 12.05(c) applies (or both), shall be deemed instead to be (1) a dividend
or distribution of the evidences of indebtedness, assets, shares of capital
stock, rights or warrants other than such shares of Common Stock or rights or
warrants to which Section 12.05(a) or (c) applies (and any Conversion Price
reduction required by this Section 12.05(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 Price reduction required by Sections 12.05(a) and (c) with
respect to such dividend or distribution shall then be made, except that (A) the
Record Date of such dividend or distribution shall be substituted as "the date
fixed for the determination of shareholders entitled to receive such dividend or
other distribution", "Record Date fixed for such determination" and "Record
Date" within the meaning of Section 12.05(a) and as "the date fixed for the
determination of shareholders entitled to receive such rights or warrants", "the
Record Date fixed for the determination of the shareholders entitled to receive
such rights or warrants" and "such Record Date" within the meaning of Section
12.05(c) 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 12.05(a)).

         (e) If the Company shall, by dividend or otherwise, distribute cash to
all holders of its Common Stock (excluding any cash that is distributed upon a
merger, share exchange or consolidation to which Section 12.06 applies or as
part of a distribution referred to in Section 12.05(d)) in an aggregate amount
that, combined together with (1) the aggregate amount of any other such all cash
distributions to all holders of its Common Stock within the 12 months preceding
the date of payment of such distribution, and in respect of which no adjustment
pursuant to this Section 12.05(e) has been made, and (2) the aggregate of any
cash plus the 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) of consideration payable in respect of any tender offer by the
Company or any of its subsidiaries for all or any portion of the Common Stock
concluded within the 12 months preceding the date of payment of such
distribution, and in respect of which no adjustment pursuant to Section 12.05(f)
has been made, exceeds 10% of the product of the Current Market Price
(determined as provided in Section 12.05(g)) on the Record Date with respect to
such distribution times the number of shares of Common Stock outstanding on such
date, then, and in each such case, immediately after the close of business on
such date, the Conversion Price shall be reduced so that the same shall

<PAGE>
                                                                              59

equal the price determined by multiplying the Conversion Price in effect
immediately prior to the close of business on such Record Date by a fraction (i)
the numerator of which shall be equal to the Current Market Price on the Record
Date less an amount equal to the quotient of (x) the excess of such combined
amount over such 10% and (y) the number of shares of Common Stock outstanding on
the Record Date and (ii) the denominator of which shall be equal to the Current
Market Price on such Record Date; provided, however, that if the portion of the
cash so distributed applicable to one share of Common Stock is equal to or
greater than the Current Market Price of the Common Stock on the Record Date, in
lieu of the foregoing adjustment, adequate provision shall be made so that each
holder of Convertible Subordinated Notes shall have the right to receive upon
conversion of a Convertible Subordinated Note (or any portion thereof) the
Common Stock issuable upon such conversion and the amount of cash such holder
would have received had such holder converted such Convertible Subordinated Note
(or portion thereof) immediately prior to such Record Date. If such dividend or
distribution is not so paid or made, the Conversion Price shall again be
adjusted to be the Conversion Price which would then be in effect if such
dividend or distribution had not been declared.

         (f) If a tender offer made by the Company or any of its subsidiaries
for all or any portion of the Common Stock expires and such tender offer (as
amended upon the expiration thereof) requires the payment to shareholders (based
on the acceptance (up to any maximum specified in the terms of the tender offer)
of Purchased Shares (as defined below)) of an aggregate consideration 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, combined together with (1) the aggregate of the cash plus the 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), as of the
expiration of such tender offer, of consideration payable in respect of any
other tender offers, by the Company or any of its subsidiaries for all or any
portion of the Common Stock, expiring within the 12 months preceding the
expiration of such tender offer and in respect of which no adjustment pursuant
to this Section 12.05(f) has been made and (2) the aggregate amount of any
all-cash distributions to all holders of the Common Stock within the 12 months
preceding the expiration of such tender offer and in respect of which no
adjustment pursuant to Section 12.05(e) has been made, exceeds 10% of the
product of the Current Market Price (determined as provided in Section 12.05(g))
as of the last time (the "Expiration Time") tenders could have been made
pursuant to such tender offer (as it may be amended) times the number of shares
of Common Stock outstanding (including any tendered shares) on the Expiration
Time, then, and in each such case, immediately prior to the opening of business
on the day after the date of the Expiration Time, the Conversion Price shall be
adjusted so that the same shall equal the price determined by multiplying the
Conversion Price in effect immediately prior to close of business on the date of
the Expiration Time by a fraction of which the numerator shall be the number of
shares of Common Stock outstanding (including any tendered shares) on the
Expiration Time multiplied by the Current Market Price of the Common Stock on
the Trading Day next succeeding the Expiration Time and the denominator shall be
the sum of (x) the amount of cash plus

<PAGE>
                                                                              60

the Fair Market Value (determined as aforesaid) of the aggregate consideration
payable to shareholders based on the acceptance (up to any maximum specified in
the terms of the tender offer) of all shares validly tendered and not withdrawn
as of the Expiration Time (the shares deemed so accepted, up to any such
maximum, being referred to as the "Purchased Shares") and (y) the product of the
number of shares of Common Stock outstanding (less any Purchased Shares) on the
Expiration Time and the Current Market Price of the Common Stock on the Trading
Day next succeeding the Expiration Time, such reduction (if any) to become
effective immediately prior to the opening of business on the day following the
Expiration Time. If the Company is obligated to purchase shares pursuant to any
such tender offer, but the Company is permanently prevented by applicable law
from effecting any such purchases or all such purchases are rescinded, the
Conversion Price shall again be adjusted to be the Conversion Price which would
then be in effect if such tender offer had not been made. If the application of
this Section 12.05(f) to any tender offer would result in an increase in the
Conversion Price, no adjustment shall be made for such tender offer under this
Section 12.05(f).

         (g) For purposes of this Section 12.05, the following terms shall have
the meanings indicated:

                  (1) "Closing Price" with respect to any securities on any day
         means the closing price on such day or, if no closing price is
         available, the average of the reported high and low prices on such day,
         in each case on the Nasdaq National Market or New York Stock Exchange,
         as applicable, or, if such security is not listed or admitted to
         trading on such national market or exchange, on the principal national
         securities exchange or quotation system on which such security is
         quoted or listed or admitted to trading, or, if not quoted or listed or
         admitted to trading on any national securities exchange or quotation
         system, the average of the high and low prices of such security on the
         over-the-counter market on the day in question as reported by the
         National Quotation Bureau Incorporated, or a similar generally accepted
         reporting service, or, if not so available, in such manner as furnished
         by any New York Stock Exchange member firm selected from time to time
         by the Board of Directors for that purpose, or a price determined in
         good faith by the Board of Directors, whose determination shall be
         conclusive and described in a resolution of the Board of Directors.

                  (2) "Current Market Price" means the average of the daily
         Closing Prices per share of Common Stock for the 10 consecutive Trading
         Days immediately prior to the date in question; provided, however, that
         (1) if the "ex" date (as hereinafter defined) for any event (other than
         the issuance or distribution requiring such computation) that requires
         an adjustment to the Conversion Price pursuant to Sections 12.05(a),
         (b), (c), (d), (e) or (f) occurs during such 10 consecutive Trading
         Days, the Closing Price for each Trading Day prior to the "ex" date for
         such other event shall be adjusted by multiplying such Closing Price by
         the same fraction by which the Conversion Price is so required to be
         adjusted as a result of such other event, (2) if the

<PAGE>
                                                                              61

         "ex" date for any event (other than the issuance or distribution
         requiring such computation) that requires an adjustment to the
         Conversion Price pursuant to Section 12.05(a), (b), (c), (d), (e) or
         (f) occurs on or after the "ex" date for the issuance or distribution
         requiring such computation and prior to the day in question, the
         Closing Price for each Trading Day on and after the "ex" date for such
         other event shall be adjusted by multiplying such Closing Price by the
         reciprocal of the fraction by which the Conversion Price is so required
         to be adjusted as a result of such other event, and (3) if the "ex"
         date for the issuance or distribution requiring such computation is
         prior to the day in question, after taking into account any adjustment
         required pursuant to clause (1) or (2) of this proviso, the Closing
         Price for each Trading Day on or after such "ex" date shall be adjusted
         by adding thereto the amount of any cash and the Fair Market Value (as
         determined by the Board of Directors in a manner consistent with any
         determination of such value for purposes of Sections 12.05(d) or (f),
         whose determination shall be conclusive and described in a resolution
         of the Board of Directors) of the evidences of indebtedness, shares of
         capital stock or assets being distributed applicable to one share of
         Common Stock as of the close of business on the day before such "ex"
         date. For purposes of any computation under Section 12.05(f), the
         Current Market Price on any date shall be deemed to be the average of
         the daily Closing Prices per share of Common Stock for such day and the
         next two succeeding Trading Days; provided, however, that if the "ex"
         date for any event (other than the tender offer requiring such
         computation) that requires an adjustment to the Conversion Price
         pursuant to Section 12.05(a), (b), (c), (d), (e) or (f) occurs on or
         after the Expiration Time for the tender or exchange offer requiring
         such computation and prior to the day in question, the Closing Price
         for each Trading Day on and after the "ex" date for such other event
         shall be adjusted by multiplying such Closing Price by the reciprocal
         of the fraction by which the Conversion Price is so required to be
         adjusted as a result of such other event. 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 Price was obtained without the right to
         receive such issuance or distribution, (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, and (3) when used with respect to any
         tender or exchange offer means the first date on which the Common Stock
         trades regular way on such exchange or in such market after the
         Expiration Time of such offer. Notwithstanding the foregoing, whenever
         successive adjustments to the Conversion Price are called for pursuant
         to this Section 12.05, such adjustments shall be made to the Current
         Market Price as may be necessary or appropriate to effectuate the
         intent of this Section 12.05 and to avoid unjust or inequitable results
         as determined in good faith by the Board of Directors.

<PAGE>
                                                                              62

                  (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 shareholders
         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 (x) if the applicable security is
         listed or admitted for trading on the New York Stock Exchange or
         another national securities exchange, a day on which the New York Stock
         Exchange or such other national securities exchange is open for
         business or (y) if the applicable security is quoted on the Nasdaq
         National Market, a day on which trades may be made thereon or (z) if
         the applicable security is not so listed, admitted for trading or
         quoted, any day other than a Saturday or Sunday or a day on which
         banking institutions in the State of New York are authorized or
         obligated by law or executive order to close.

         (h) The Company may make such reductions in the Conversion
     Price, in addition to those required by Sections 12.05(a), (b), (c), (d),
     (e) and (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.

         The Company from time to time may, to the extent permitted by law,
     reduce the Conversion Price by any amount for any period of at least 20
     days, if the Board of Directors has made a determination that such
     reduction would be in the Company's best interests, which determination
     shall be conclusive and described in a resolution of the Board of
     Directors. The reduction in Conversion Price shall be irrevocable during
     this period. Whenever the Conversion Price is reduced pursuant to the
     preceding sentence, the Company shall mail to the holders of Convertible
     Subordinated Notes at his or her last address appearing on the Register of
     holders maintained for that purpose a notice of the reduction at least 15
     days prior to the date the reduced Conversion Price takes effect, and such
     notice shall state the reduced Conversion Price and the period during which
     it will be in effect.

         (i) No adjustment in the Conversion Price shall be required unless such
     adjustment would require an increase or decrease of at least 1% in such
     price; provided, however, that any adjustments which by reason of this
     Section 12.05(i) are not required to be made shall be carried forward and
     taken into account in any subsequent adjustment. All calculations under
     this Article XII shall be made by the

<PAGE>
                                                                              63

     Company and shall be made to the nearest cent or to the nearest one
     hundredth of a share, as the case may be.

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

         (j) Whenever the Conversion Price 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
     Price after such adjustment and setting forth a brief statement of the
     facts requiring such adjustment. Promptly after delivery of such
     certificate, the Company shall prepare a notice of such adjustment of the
     Conversion Price setting forth the adjusted Conversion Price and the date
     on which each adjustment becomes effective and shall mail such notice of
     such adjustment of the Conversion Price to each holder of Convertible
     Subordinated Notes at his or her last address appearing on the Register of
     holders maintained for that purpose within 20 days of the effective date of
     such adjustment. Failure to deliver such notice shall not affect the
     legality or validity of any such adjustment.

         (k) In any case in which this Section 12.05 provides that an adjustment
     shall become effective immediately after a Record Date for an event, the
     Company may defer until the occurrence of such event issuing to the holder
     of any Convertible Subordinated Note converted after such Record Date and
     before the occurrence of such event the additional shares of Common Stock
     issuable upon such conversion by reason of the adjustment required by such
     event over and above the Common Stock issuable upon such conversion before
     giving effect to such adjustment.

         (l) For purposes of this Section 12.05, 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 shall not pay any dividend or make any distribution on shares of
     Common Stock held in the treasury of the Company.

         SECTION 12.06. Effect of Reclassification, Consolidation, Merger or
Sale. If any of the following events occur: (i) any reclassification or change
of the outstanding shares of Common Stock (other than a change in par value, or
from par value to no par value, or from no par value to par value, or as a
result of a subdivision or combination), (ii) any consolidation, merger, share
exchange or combination of the Company with another person, or (iii) any sale or
conveyance of the properties and assets of the Company as an entirety or
substantially as an entirety, in each case as a result of which holders of
Common Stock shall receive stock, 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 TIA as in
force at the date of execution of such supplemental indenture if such
supplemental indenture is then required to so comply) providing that the
Convertible Subordinated Notes shall be convertible into the kind and amount of
shares of

<PAGE>
                                                                              64

stock and other securities or property or assets (including cash) receivable
upon such reclassification, change, consolidation, merger, share exchange,
combination, sale or conveyance by a holder of a number of shares of Common
Stock issuable upon conversion of the Convertible Subordinated Notes (assuming,
for such purposes, a sufficient number of authorized shares of Common Stock
available to convert all such Convertible Subordinated Notes) immediately prior
to such reclassification, change, consolidation, merger, share exchange,
combination, sale or conveyance assuming such holder of Common Stock did not
exercise his or her rights of election, if any, as to the kind or amount of
securities, cash or other property receivable upon such consolidation, merger,
share exchange, sale or conveyance (provided that, if the kind or amount of
securities, cash or other property receivable upon such consolidation, merger,
share exchange, sale or conveyance is not the same for each share of Common
Stock in respect of which such rights of election have not been exercised
("Non-electing Share"), then, for the purposes of this Section 12.06, the kind
and amount of securities, cash or other property receivable upon such
consolidation, merger, share exchange, 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 XII. If, in the case of any such
reclassification, change, consolidation, merger, share exchange, combination,
sale or conveyance, the stock or other securities and assets receivable
thereupon by a holder of shares of Common Stock includes shares of stock or
other securities and assets of a person other than the successor or purchasing
person, as the case may be, in such reclassification, change, consolidation,
merger, share exchange, combination, sale or conveyance, then such supplemental
indenture shall also be executed by such other person and shall contain such
additional provisions to protect the interests of the holders of the Convertible
Subordinated Notes as the Board of Directors shall reasonably consider necessary
by reason of the foregoing.

         The Company shall cause notice of the execution of such supplemental
indenture to be mailed to each holder of Convertible Subordinated Notes at his
or her address appearing on the Register of holders for that purpose within 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 12.06 shall similarly apply to
successive reclassifications, changes, consolidations, mergers, share exchanges,
combinations, sales and conveyances.

         If this Section 12.06 applies to any event or occurrence, Section 12.05
shall not apply.

         SECTION 12.07. Taxes on Shares Issued. The issue of stock certificates
on conversions of Convertible Subordinated Notes shall be made without charge to
the converting holder for any tax in respect of the issue thereof. The Company
shall not, however, be required to pay any 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 Convertible Subordinated Note converted, and the
Company shall not be required to issue or

<PAGE>
                                                                              65

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 12.08. Reservation of Shares; Shares to Be Fully Paid; 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
to provide for the conversion of the Convertible Subordinated Notes from time to
time as such Convertible Subordinated Notes are presented for conversion. Before
taking any action which would cause an adjustment reducing the Conversion Price
below the then par value, if any, of the shares of Common Stock issuable upon
conversion of the Convertible Subordinated Notes, the Company shall 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 Price.

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

         The Company further covenants that as long as the Common Stock is
quoted on the Nasdaq National Market, or its successor, the Company shall cause
all Common Stock issuable upon conversion of the Convertible Subordinated Notes
to be eligible for such quotation in accordance with, and at the times required
under, the requirements of such market, and if at any time the Common Stock
becomes listed on the New York Stock Exchange or any other national securities
exchange, the Company shall cause all Common Stock issuable upon conversion of
the Convertible Subordinated Notes to be so listed and remain listed.

         SECTION 12.09. Responsibility of Trustee. The Trustee shall not at any
time be under any duty of responsibility to any holders of Convertible
Subordinated Notes to determine whether any facts exist which may require any
adjustment of the Conversion Price, 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 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 Convertible Subordinated Note; and the Trustee makes no
representations with respect thereto. Subject to the provisions of Section 7.01,
the Trustee shall not 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 Convertible
Subordinated Note for the purpose of conversion or to comply with any of the
duties, responsibilities or covenants of the Company contained in this Article
XII. Without limiting the generality of the foregoing, the Trustee shall not
have any responsibility to determine the correctness of any provisions contained
in any supplemental indenture entered into pursuant to Section 12.06 relating
either to the kind or amount of shares of stock or securities or property
(including cash) receivable by holders of Convertible Subordinated Notes upon
the conversion of their Convertible Subordinated

<PAGE>
                                                                              66

Notes after any event referred to in such Section 12.06 or to any adjustment to
be made with respect thereto, but, subject to the provisions of Section 7.01,
may accept as conclusive evidence of the correctness of any such provisions, and
shall be protected in relying upon, the Officers' Certificate and Opinion of
Counsel (which the Company shall be obligated to file with the Trustee prior to
the execution of any such supplemental indenture) with respect thereto.

         SECTION 12.10. Notice to Holders Prior to Certain Actions. If

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

         (b) the Company authorizes the granting to the holders of its Common
     Stock of rights or warrants to subscribe for or purchase any share of any
     class of Common Stock or any other rights or warrants (other than rights or
     warrants referred to in the second paragraph of Section 12.05(d));

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

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

then the Company shall cause to be filed with the Trustee and to be mailed to
each holder of Convertible Subordinated Notes at his or her address appearing on
the Register maintained for that purpose as promptly as possible but in any
event at least 15 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 or distribution of 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 or distribution are to be determined, or (y) the date
on which such reclassification, consolidation, merger, share exchange, sale,
transfer, dissolution, liquidation or winding-up is expected to become effective
or occur, and the date as of which it is expected that holders of Common Stock
of record shall be entitled to exchange their Common Stock for securities or
other property deliverable upon such reclassification, consolidation, merger,
share exchange, sale, transfer, dissolution, liquidation or winding-up. Failure
to give such notice, or any defect therein, shall not affect the legality or
validity of such dividend, distribution, reclassification, consolidation,
merger, share exchange, sale, transfer, dissolution, liquidation or winding-up.

                  SECTION 12.11. Restriction on Common Stock Issuable Upon
Conversion. (a) Shares of Common Stock to be issued upon conversion of
Convertible Subordinated Notes prior to the effectiveness of a Shelf
Registration Statement shall be physically delivered in certificated form to the
holders converting such Securities, and the certificate

<PAGE>
                                                                              67

representing such shares of Common Stock shall bear the Restricted Common Stock
Legend unless removed in accordance with Section 12.11(c).

         (b) If (i) shares of Common Stock to be issued upon conversion of a
Convertible Subordinated Note prior to the effectiveness of a Shelf Registration
Statement are to be registered in a name other than that of the holder of such
Convertible Subordinated Note or (ii) shares of Common Stock represented by a
certificate bearing the Restricted Common Stock Legend are transferred
subsequently by such holder, then, unless the Shelf Registration Statement has
become effective and such shares are being transferred pursuant to the Shelf
Registration Statement, the holder must deliver to the transfer agent for the
Common Stock a certificate in substantially the form of Exhibit C as to
compliance with the restrictions on transfer applicable to such shares of Common
Stock, and neither the transfer agent nor the registrar for the Common Stock
shall be required to register any transfer of such Common Stock not so
accompanied by a properly completed certificate.

         (c) Except in connection with a Shelf Registration Statement, if
certificates representing shares of Common Stock are issued upon the
registration of transfer, exchange or replacement of any other certificate
representing shares of Common Stock bearing the Restricted Common Stock Legend,
or if a request is made to remove such Restricted Common Stock Legend from
certificates representing shares of Common Stock, the certificates so issued
shall bear the Restricted Common Stock Legend, or the Restricted Common Stock
Legend shall not be removed, as the case may be, unless there is delivered to
the Company such satisfactory evidence, which, in the case of a transfer made
pursuant to Rule 144 under the Securities Act, may include an opinion of counsel
as may be reasonably required by the Company, that neither the legend nor the
restrictions on transfer set forth therein are required to ensure that transfers
thereof comply with the provisions of Rule 144A, Rule 144 or Regulation S under
the Securities Act or that such shares of Common Stock are securities that are
not "restricted" within the meaning of Rule 144 under the Securities Act. Upon
provision to the Company of such reasonably satisfactory evidence, the Company
shall cause the transfer agent for the Common Stock to countersign and deliver
certificates representing shares of Common Stock that do not bear the legend.

<PAGE>

         IN WITNESS WHEREOF, the parties have caused this Indenture to be duly
executed and attested, all as of the date first above written, signifying their
agreements contained in this Indenture.

                                HUTCHINSON TECHNOLOGY INCORPORATED

                                By   /s/ Ruth N. Bauer
                                  --------------------------------------------
                                  Name: Ruth N. Bauer
                                  Title: Treasurer

                                LASALLE BANK NATIONAL ASSOCIATION

                                By   /s/ Wayne M. Evans
                                  --------------------------------------------
                                  Name: Wayne M. Evans
                                  Title: First Vice President

<PAGE>
                                    EXHIBIT A
                               (Face of Security)

                           [Global Securities Legend]

         [The following legend shall appear on the face of each Global Security:
THIS CONVERTIBLE SUBORDINATED NOTE IS A GLOBAL SECURITY WITHIN THE MEANING OF
THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE
DEPOSITARY OR A NOMINEE OF THE DEPOSITARY, WHICH MAY BE TREATED BY THE COMPANY,
THE TRUSTEE AND ANY AGENT THEREOF AS OWNER AND HOLDER OF THIS CONVERTIBLE
SUBORDINATED NOTE FOR ALL PURPOSES.]

         [The following legend shall appear on the face of each Global Security
for which The Depository Trust Company is to be the Depositary:

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

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

                         [Restricted Securities Legend]

         THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"). THE HOLDER HEREOF, BY PURCHASING THIS
SECURITY, AGREES FOR THE BENEFIT OF THE COMPANY THAT THIS SECURITY MAY NOT BE
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED (X) PRIOR TO THE SECOND ANNIVERSARY OF
THE ISSUE HEREOF (OR ANY PREDECESSOR SECURITY HERETO) OR (Y) BY ANY HOLDER THAT
WAS AN "AFFILIATE" (WITHIN THE

                                      A-1

<PAGE>

MEANING OF RULE 144 UNDER THE SECURITIES ACT) OF THE COMPANY AT ANY TIME DURING
THE THREE MONTHS PRECEDING THE DATE OF SUCH TRANSFER, IN EITHER CASE OTHER THAN
(1) TO THE COMPANY, (2) SO LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT
TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"), IN A TRANSACTION MEETING
THE REQUIREMENTS OF RULE 144A TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS
A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A, PURCHASING FOR
ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM
NOTICE IS GIVEN THAT THE RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN
RELIANCE ON RULE 144A, (3) IN AN OFFSHORE TRANSACTION (AS DEFINED IN REGULATION
S UNDER THE SECURITIES ACT) IN ACCORDANCE WITH REGULATION S UNDER THE SECURITIES
ACT, (4) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT
PROVIDED BY RULE 144 (IF APPLICABLE) UNDER THE SECURITIES ACT OR (5) PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH CASE IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES. THE HOLDER HEREOF, BY PURCHASING THIS SECURITY, REPRESENTS AND AGREES
FOR THE BENEFIT OF THE COMPANY THAT IT IS (1) A QUALIFIED INSTITUTIONAL BUYER OR
(2) NOT A U.S. PERSON AND IS OUTSIDE THE UNITED STATES WITHIN THE MEANING OF (OR
AN ACCOUNT SATISFYING THE REQUIREMENTS OF PARAGRAPH (k) (2) OF RULE 902 UNDER)
REGULATION S UNDER THE SECURITIES ACT. IN ANY CASE THE HOLDER HEREOF WILL NOT,
DIRECTLY OR INDIRECTLY, ENGAGE IN ANY HEDGING TRANSACTION WITH REGARD TO THIS
SECURITY OR ANY COMMON STOCK ISSUABLE UPON CONVERSION OF THIS SECURITY EXCEPT AS
PERMITTED BY THE SECURITIES ACT.

                                      A-2

<PAGE>

No.
   -------
 $                                                            CUSIP 448407 AD 8
 ------------

                       HUTCHINSON TECHNOLOGY INCORPORATED
                  2.25% CONVERTIBLE SUBORDINATED NOTE DUE 2010

promises to pay to [ ] or registered assigns, the principal sum of ______
Dollars on March 15, 2010
Interest Payment Dates:    March 15 and September 15, commencing September 15,
2003
Regular Record Dates:      March 1 and September 1

                                  HUTCHINSON TECHNOLOGY INCORPORATED,

                                  By
                                    -----------------------------------
                                    Name:
                                    Title:

                          Certificate of Authentication

This is one of the Convertible Subordinated Notes described in the within
mentioned Indenture.

                                  LASALLE BANK NATIONAL
                                  ASSOCIATION, as Trustee

                                  By
                                    --------------------------------
                                         Authorized Signatory
                                         Dated:

                                      A-3

<PAGE>

                               (Back of Security)

                                      A-4

<PAGE>

                       HUTCHINSON TECHNOLOGY INCORPORATED
                  2.25% CONVERTIBLE SUBORDINATED NOTE DUE 2010

1.       INTEREST. Hutchinson Technology Incorporated, a Minnesota corporation
         (the "Company"), promises to pay interest on the principal amount of
         this Convertible Subordinated Note at the rate per annum shown above.
         The Company will pay interest semi-annually in arrears on March 15 and
         September 15 of each year, beginning September 15, 2003. Interest on
         the Convertible Subordinated Notes will accrue from the most recent
         interest payment date to which interest has been paid or, if no
         interest has been paid, from February 24, 2003. Interest (and
         Liquidated Damages, if any) will be computed on the basis of a 360-day
         year composed of twelve 30-day months.

2.       METHOD OF PAYMENT. The Company will pay interest (and Liquidated
         Damages, if any) on the Convertible Subordinated Notes (except
         defaulted interest) to the person in whose name each Convertible
         Subordinated Note is registered at the close of business on the March 1
         or September 1 immediately preceding the relevant interest payment date
         (each a "Regular Record Date") (other than with respect to a
         Convertible Subordinated Note or portion thereof called for redemption
         on a Redemption Date, or repurchased in connection with a Designated
         Event on a repurchase date, during the period from the close of
         business on a Regular Record Date to (but excluding) the next
         succeeding interest payment date, in which case accrued interest (and
         Liquidated Damages, if any) shall be payable (unless such Convertible
         Subordinated Note or portion thereof is converted) to the holder of the
         Convertible Subordinated Note or portion thereof redeemed or
         repurchased in accordance with the applicable redemption or repurchase
         provisions of the Indenture). The holder must surrender Convertible
         Subordinated Notes to a Paying Agent to collect principal payments. The
         Company will pay the principal of, premium, if any, and interest and
         Liquidated Damages, if any, on the Convertible Subordinated Notes at
         the office or agency of the Company maintained for such purpose, in
         money of the United States that at the time of payment is legal tender
         for payment of public and private debts. Until otherwise designated by
         the Company, the Company's office or agency maintained for such purpose
         will be the principal Corporate Trust Office of the Trustee (as defined
         below). However, the Company may pay principal, premium, if any, and
         interest and Liquidated Damages, if any, by check payable in such
         money, and may mail such check to the holders of the Convertible
         Subordinated Notes their respective addresses as set forth in the
         Register of holders of Convertible Subordinated Notes.

3.       PAYING AGENT AND REGISTRAR. LaSalle Bank National Association (together
         with any successor Trustee under the Indenture referred to below, the
         "Trustee"), will act as Paying Agent and Registrar. The Company may
         change the Paying Agent, Registrar or co-registrar without prior
         notice. Subject to certain limitations in the Indenture, the Company or
         any of its subsidiaries may act in any such capacity.

                                      A-5

<PAGE>

4.       INDENTURE. The Company issued the Convertible Subordinated Notes under
         an Indenture dated as of February 24, 2003 (the "Indenture") between
         the Company and the Trustee. The terms of the Convertible Subordinated
         Notes include those stated in the Indenture and those made part of the
         Indenture by reference to the Trust Indenture Act of 1939 (the "TIA")
         as in effect on the date of the Indenture. The Convertible Subordinated
         Notes are subject to, and qualified by, all such terms, certain of
         which are summarized hereon, and holders are referred to the Indenture
         and the TIA for a statement of such terms. The Convertible Subordinated
         Notes are unsecured subordinated obligations of the Company limited to
         (except as otherwise provided in the Indenture) up to $130,000,000 in
         aggregate principal amount, unless an election has been made as set
         forth in Article II of the Indenture to increase such aggregate
         principal amount to an amount not to exceed $150,000,000. Capitalized
         terms not defined below have the same meaning as is given to them in
         the Indenture.

5.       OPTIONAL REDEMPTION. On or after March 20, 2008, the Company shall have
         the option to redeem the Convertible Subordinated Notes, in whole or
         from time to time in part, at the following Redemption Prices
         (expressed as percentages of principal amount), if redeemed during the
         twelve month period beginning March 15 of each year indicated (March 20
         with respect to 2008) plus accrued and unpaid interest (and Liquidated
         Damages, if any) to, but excluding, the date fixed for redemption:

         Redemption

<Table>
<Caption>
        Year                                         Redemption Price
        ----                                         ----------------
<S>                                                  <C>
        2008......................................     100.64%
        2009......................................     100.32%
</Table>

                  Notice of redemption will be mailed by first class mail at
         least 30 days but not more than 60 days before the date fixed for
         redemption to each holder of Convertible Subordinated Notes to be
         redeemed at his or her registered address. Convertible Subordinated
         Notes in denominations larger than $1,000 may be redeemed in part but
         only in integral multiples of $1,000. If less than all the Convertible
         Subordinated Notes are to be redeemed, the Trustee shall select the
         Convertible Subordinated Notes to be redeemed by a method that complies
         with the requirements of the principal national securities exchange, if
         any, on which the Convertible Subordinated Notes are listed or quoted,
         or, if the Convertible Subordinated Notes are not so listed, on a pro
         rata basis by lot or by any other method that the Trustee considers
         fair and appropriate. On and after the Redemption Date, interest (and
         Liquidated Damages, if any) ceases to accrue on Convertible
         Subordinated Notes or portions thereof called for redemption (unless
         the Company defaults in the payment of the Redemption Price). If this
         Convertible Subordinated Note is redeemed on a date which is also an
         Interest Payment Date, the interest payment (and Liquidated Damages, if
         any) due on such date will be paid to the person in whose name this
         Convertible Subordinated Note is registered at the close of business on
         the relevant Regular Record Date.

                                      A-6

<PAGE>

6.       DESIGNATED EVENT. Upon the occurrence of a Designated Event, the
         Company shall make a Designated Event Offer to repurchase all
         outstanding Convertible Subordinated Notes at a price equal to 100% of
         the aggregate principal amount of the Convertible Subordinated Notes,
         plus accrued and unpaid interest (and Liquidated Damages, if any) to,
         but excluding, the date of repurchase, such offer to be made as
         provided in the Indenture. To accept the Designated Event Offer, the
         holder hereof must comply with the terms thereof, including
         surrendering this Convertible Subordinated Note, with the "Option of
         Holder to Elect Repurchase" portion hereof completed, to the Company, a
         depositary, if appointed by the Company, or a Paying Agent, at the
         address specified in the notice of the Designated Event Offer mailed to
         holders as provided in the Indenture, prior to the Designated Event
         Offer Termination Date.

7.       SUBORDINATION. The Company's payment of the principal of, premium, if
         any, and interest and Liquidated Damages, if any, on the Convertible
         Subordinated Notes is subordinated to the prior payment in full of the
         Company's Senior Debt as set forth in the Indenture. Each holder of
         Convertible Subordinated Notes by his or her acceptance hereof
         covenants and agrees that all payments of the principal of, premium, if
         any, and interest and Liquidated Damages, if any, on the Convertible
         Subordinated Notes by the Company shall be subordinated in accordance
         with the provisions of Article XI of the Indenture, and each holder of
         Convertible Subordinated Notes accepts and agrees to be bound by such
         provisions.

8.       DENOMINATIONS, TRANSFER, EXCHANGE. The Convertible Subordinated Notes
         are in registered form without coupons in denominations of $1,000 and
         integral multiples of $1,000. The transfer of Convertible Subordinated
         Notes may be registered and Convertible Subordinated Notes may be
         exchanged as provided in the Indenture. As a condition of transfer, the
         Registrar and the Trustee may require a holder, among other things, to
         furnish appropriate endorsements and transfer documents, and the
         Company and the Registrar may require a holder to pay any taxes and
         fees required by law or permitted by the Indenture. The Company or the
         Registrar need not exchange or register the transfer of any Convertible
         Subordinated Note or portion of a Convertible Subordinated Note
         selected for redemption or submitted for repurchase or surrendered for
         conversion. Also, the Company or the Registrar need not exchange or
         register the transfer of any Convertible Subordinated Note for a period
         of 15 days before a selection of Convertible Subordinated Notes to be
         redeemed.

9.       PERSONS DEEMED OWNERS. The registered holder of a Convertible
         Subordinated Note shall be treated as its owner for all purposes.

10.      AMENDMENTS AND WAIVERS. Subject to certain exceptions, the Indenture or
         the Convertible Subordinated Notes may be amended or supplemented with
         the consent of the holders of at least a majority in principal amount
         of the then outstanding Convertible Subordinated Notes, and any
         existing default may be waived with the consent of the holders of a
         majority in principal amount of the then outstanding Convertible
         Subordinated Notes.

                                      A-7

<PAGE>

                  Without the consent of any holder, the Indenture or the
         Convertible Subordinated Notes may be amended to: (a) cure any
         ambiguity or correct or supplement any defective or inconsistent
         provision contained in the Indenture, or make any other changes in the
         provisions of the Indenture which the Company and the Trustee may deem
         necessary or desirable provided such amendment does not materially and
         adversely affect the legal rights under the Indenture of the holders of
         Convertible Subordinated Notes; (b) provide for uncertificated
         Convertible Subordinated Notes in addition to or in place of
         certificated Convertible Subordinated Notes; (c) evidence the
         succession of another person to the Company and provide for the
         assumption by such successor of the covenants and obligations of the
         Company thereunder and in the Convertible Subordinated Notes as
         permitted by Section 5.01 of the Indenture; (d) provide for conversion
         rights or repurchase rights of holders of Convertible Subordinated
         Notes in the event of consolidation, merger, share exchange or sale of
         all or substantially all of the assets of the Company as required to
         comply with Sections 5.01 or 12.06 of the Indenture; (e) reduce the
         Conversion Price; (f) evidence and provide for the acceptance of the
         appointment under the Indenture of a successor Trustee; (g) make any
         change that would provide any additional rights or benefits to the
         holders of Convertible Subordinated Notes or that does not adversely
         affect the legal rights under the Indenture of any such holder; or (h)
         comply with the requirements of the Commission in order to effect or
         maintain the qualification of the Indenture under the TIA.

                  Without the consent of each holder affected, an amendment or
         waiver may not (with respect to any Convertible Subordinated Notes held
         by a nonconsenting holder): (a) reduce the principal amount of
         Convertible Subordinated Notes whose holders must consent to an
         amendment, supplement or waiver; (b) reduce the principal of, or
         premium on, or change the fixed maturity of any Convertible
         Subordinated Note or alter the provisions with respect to the
         redemption or mandatory repurchase of the Convertible Subordinated
         Notes; (c) reduce the rate of or change the time for payment of
         interest, including defaulted interest, or Liquidated Damages, if any,
         on any Convertible Subordinated Notes; (d) waive a Default or Event of
         Default in the payment of principal of or premium, if any, or interest
         or Liquidated Damages, if any, on the Convertible Subordinated Notes
         (except a rescission of acceleration of the Convertible Subordinated
         Notes by the holders of at least a majority in aggregate principal
         amount of the Convertible Subordinated Notes and a waiver of the
         payment default that resulted from such acceleration); (e) make the
         principal of, or premium, if any, or interest or Liquidated Damages, if
         any, on, any Convertible Subordinated Note payable in money other than
         as provided for in the Indenture and in the Convertible Subordinated
         Notes; (f) make any change in the provisions of the Indenture relating
         to waivers of past Defaults or the rights of holders of Convertible
         Subordinated Notes to receive payments of principal of, premium, if
         any, or interest or Liquidated Damages, if any, on the Convertible
         Subordinated Notes; (g) waive a redemption or mandatory repurchase
         payment with respect to any Convertible Subordinated Note; (h) except
         as permitted by the Indenture (including Section 9.01(a)), increase the
         Conversion Price or modify the provisions of the Indenture relating to
         conversion of the Convertible Subordinated Notes in a manner adverse to
         the holders thereof or (i) make any change to the ability

                                      A-8

<PAGE>

         of holder of Convertible Subordinated Notes to enforce their rights
         under the Indenture. In addition, any amendment to the provisions of
         Article XI of the Indenture (which relate to subordination) will
         require (1) the consent of the holders of at least 75% in aggregate
         principal amount of the Convertible Subordinated Notes then outstanding
         if such amendment would adversely affect the rights of holders of
         Convertible Subordinated Notes and (2) the consent of each holder of
         Senior Debt if such amendment would diminish the rights of such holder
         of Senior Debt.

11.      DEFAULTS AND REMEDIES. An Event of Default is: (a) default in payment
         of the principal of, or premium, if any, on the Convertible
         Subordinated Notes, when due at maturity, upon repurchase, upon
         acceleration or otherwise, whether or not such payment is prohibited by
         the subordination provisions of the Indenture; (b) default for 30 days
         or more in payment of any installment of interest or Liquidated Damages
         on the Convertible Subordinated Notes, whether or not such payment is
         prohibited by the subordination provisions of the Indenture; (c)
         default in the payment of the Designated Event Payment in respect of
         the Convertible Subordinated Notes on the date therefor, whether or not
         such payment is prohibited by the subordination provisions of the
         Indenture; (d) failure to provide timely notice of a Designated Event;
         (e) default by the Company (other than a default set forth in clauses
         (a), (b), (c) or (d) above) for 60 days or more after notice in the
         observance or performance of any other covenants in the Indenture; (f)
         default under any credit agreement, mortgage, indenture or instrument
         under which there may be issued or by which there may be secured or
         evidenced any Indebtedness for money borrowed by the Company or any of
         its subsidiaries (or the payment of which is guaranteed or secured by
         the Company or any of its subsidiaries), whether such Indebtedness or
         guarantee exists on the date of the Indenture or is created thereafter,
         which default (i) is caused by a failure to pay when due any principal
         of such Indebtedness within the grace period provided for in such
         Indebtedness (which failure continues beyond any applicable grace
         period) (a "Payment Default") or (ii) results in the acceleration of
         such Indebtedness prior to its express maturity (without such
         acceleration being rescinded or annulled) and, in each case, the
         principal amount of such Indebtedness, together with the principal
         amount of any other such Indebtedness under which there is a Payment
         Default or the maturity of which has been so accelerated, aggregates
         $10,000,000 or more and such Payment Default is not cured or such
         acceleration is not annulled within 30 days after notice; or (g)
         failure by the Company or any Material Subsidiary of the Company to pay
         final, nonappealable judgments (other than any judgment as to which a
         reputable insurance company has accepted full liability) aggregating in
         excess of $10,000,000, which judgments are not stayed, bonded or
         discharged within 60 days after their entry; or (h) certain events
         involving bankruptcy, insolvency or reorganization of the Company or
         any Material Subsidiary. If an Event of Default occurs and is
         continuing, the Trustee or the holders of at least 25% in principal
         amount of the then outstanding Convertible Subordinated Notes may
         declare the unpaid principal of, premium, if any, and accrued and
         unpaid interest and Liquidated Damages, if any, on all Convertible
         Subordinated Notes then outstanding to be due and payable immediately,
         except that in the case of an Event of Default arising from certain
         events of bankruptcy, insolvency, or reorganization with respect to the
         Company, all outstanding

                                      A-9

<PAGE>

         Convertible Subordinated Notes become due and payable without further
         action or notice. Holders of Convertible Subordinated Notes may not
         enforce the Indenture or the Convertible Subordinated Notes except as
         provided in the Indenture. The Trustee may require an indemnity
         satisfactory to it before it enforces the Indenture or the Convertible
         Subordinated Notes. Subject to certain limitations, holders of a
         majority in principal amount of the then outstanding Convertible
         Subordinated Notes may direct the Trustee in its exercise of any trust
         or power. The Trustee may withhold from holders notice of any
         continuing default (except a default in payment of principal, premium,
         if any, or interest or Liquidated Damages, if applicable) if it
         determines that withholding notice is in their interests. The Company
         must furnish annual compliance certificates to the Trustee.

12.      TRUSTEE DEALINGS WITH THE COMPANY. The Trustee or any of its
         Affiliates, in their individual or any other capacities, may make or
         continue loans to or guaranteed by, accept deposits from and perform
         services for the Company or its Affiliates and may otherwise deal with
         the Company or its Affiliates as if it were not Trustee.

13.      NO RECOURSE AGAINST OTHERS. No director, officer, employee, shareholder
         or Affiliate, as such, of the Company shall have any liability for any
         obligations of the Company under the Convertible Subordinated Notes or
         the Indenture or for any claim based on, in respect of or by reason of
         such obligations or their creation. Each holder by accepting a
         Convertible Subordinated Note waives and releases all such liability.
         The waiver and release are part of the consideration for the
         Convertible Subordinated Notes.

14.      AUTHENTICATION. This Convertible Subordinated Note shall not be valid
         until authenticated by the manual signature of the Trustee or an
         authenticating agent.

15.      ABBREVIATIONS. Customary abbreviations may be used in the name of a
         holder or an assignee, such as: TEN CO = tenants in common, TEN ENT =
         tenants by the entireties, JT TEN = joint tenants with right of
         survivorship and not as tenants in common, CUST = Custodian and U/G/M/A
         = Uniform Gifts to Minors Act.

16.      CONVERSION. Subject to and upon compliance with the provisions of the
         Indenture, the registered holder of this Convertible Subordinated Note
         has the right at any time on or before the close of business on the
         last Trading Day prior to the Maturity Date (or in case this
         Convertible Subordinated Note or any portion hereof is (a) called for
         redemption prior to such date, before the close of business on the last
         Trading Day preceding the date fixed for redemption (unless the Company
         defaults in payment of the Redemption Price in which case the
         conversion right will terminate at the close of business on the date
         such default is cured) or (b) subject to a duly completed election for
         repurchase, on or before the close of business on the Designated Event
         Offer Termination Date (unless the Company defaults in payment due upon
         repurchase or such holder elects to withdraw the submission of such
         election to repurchase ) to convert the principal amount hereof, or any
         portion of such principal amount which is $1,000 or an integral
         multiple thereof, into that

                                    A-10

<PAGE>

         number of fully paid and non-assessable shares of common stock of the
         Company ("Common Stock") obtained by dividing the principal amount of
         the Convertible Subordinated Note or portion thereof to be converted by
         the conversion price of $29.84 per share, as adjusted from time to time
         as provided in the Indenture (the "Conversion Price"), upon surrender
         of this Convertible Subordinated Note to the Company at the office or
         agency maintained for such purpose (and at such other offices or
         agencies designated for such purpose by the Company), accompanied by
         written notice of conversion duly executed (and if the shares of Common
         Stock to be issued on conversion are to be issued in any name other
         than that of the registered holder of this Convertible Subordinated
         Note by instruments of transfer, in form satisfactory to the Company,
         duly executed by the registered holder or its duly authorized attorney)
         and, in case such surrender shall be made during the period from the
         close of business on the Regular Record Date immediately preceding any
         Interest Payment Date through the close of business on the last Trading
         Day immediately preceding such Interest Payment Date (unless this
         Convertible Subordinated Note or the portion thereof being converted
         has been called for redemption on a date in such period), also
         accompanied by payment, in funds acceptable to the Company, of an
         amount equal to the interest and Liquidated Damages, if any, otherwise
         payable on such Interest Payment Date on the principal amount of this
         Convertible Subordinated Note then being converted. Subject to the
         aforesaid requirement for a payment in the event of conversion after
         the close of business on a Regular Record Date immediately preceding an
         Interest Payment Date, no adjustment shall be made on conversion for
         interest or Liquidated Damages accrued hereon or for dividends on
         Common Stock delivered on conversion. The right to convert this
         Convertible Subordinated Note is subject to the provisions of the
         Indenture relating to conversion rights in the case of certain
         consolidations, mergers, share exchanges or sales or transfers of
         substantially all the Company's assets.

                  The Company shall not issue fractional shares or scrip
         representing fractions of shares of Common Stock upon any such
         conversion, but shall make an adjustment therefor in cash based upon
         the current market price of the Common Stock on the last Trading Day
         prior to the date of conversion.

17.      REGISTRATION RIGHTS AGREEMENT. The holder of this Convertible
         Subordinated Note is entitled to the benefits of a Registration Rights
         Agreement, dated February 24, 2003, between the Company and the Initial
         Purchasers (the "Registration Rights Agreement"). Pursuant to the
         Registration Rights Agreement the Company has agreed for the benefit of
         the holders of the Convertible Subordinated Notes and the Common Stock
         issued and issuable upon conversion of the Convertible Subordinated
         Notes, that (i) it will, at its cost, within 90 days after the Issue
         Date, file a shelf registration statement (the "Shelf Registration
         Statement") with the Securities and Exchange Commission (the
         "Commission") with respect to resales of the Convertible Subordinated
         Notes and the Common Stock issuable upon conversion thereof, (ii) the
         Company will use its reasonable best efforts to cause such Shelf
         Registration Statement to be declared effective by the Commission under
         the Securities Act within 180 days after the Issue Date and (iii) the
         Company will use its reasonable best efforts to keep such Shelf
         Registration Statement continuously

                                      A-11

<PAGE>

         effective under the Securities Act until the earliest of (a) the second
         anniversary of the Issue Date or, if later, the second anniversary of
         the last date on which any Convertible Subordinated Notes are issued
         upon exercise of the Initial Purchasers' over-allotment option, (b) the
         date on which all the Convertible Subordinated Notes and the Common
         Stock issuable upon conversion thereof may be sold to persons who are
         not "affiliates" (as defined in Rule 144) of the Company pursuant to
         paragraph (k) of Rule 144 (or any successor provision) promulgated by
         the Commission under the Securities Act and (c) the date as of which
         the Convertible Subordinated Notes or the Common Stock issuable upon
         conversion thereof have been transferred pursuant to Rule 144 under the
         Securities Act (or any similar provision then in force) or sold
         pursuant to such Shelf Registration Statement.

                  If the Shelf Registration Statement (i) is not filed with the
         Commission on or prior to 90 days, or has not been declared effective
         by the Commission within 180 days, after the Issue Date or (ii) is
         filed and declared effective but shall thereafter cease to be effective
         (without being succeeded immediately by a replacement shelf
         registration statement filed and declared effective) or cease to be
         usable (including, without limitation, as a result of a Suspension
         Period as defined below) for the offer and sale of Transfer Restricted
         Securities (as defined below) for a period of time (including any
         Suspension Period) which shall exceed 60 days in the aggregate in any
         12-month period during the period the Company is required to keep the
         Shelf Registration Statement continuously effective (each such event
         referred to in clauses (i) and (ii) being referred to herein as a
         "Registration Default"), the Company will pay liquidated damages
         ("Liquidated Damages") to each holder of Transfer Restricted Securities
         which has complied with its obligations under the Registration Rights
         Agreement. The amount of Liquidated Damages payable during any period
         in which a Registration Default shall have occurred and be continuing
         is that amount which is equal to one-quarter of one percent (25 basis
         points) per annum per $1,000 principal amount of Securities and $2.50
         per annum per 33.5121 shares of Common Stock (subject to adjustment
         from time to time in the event of a stock split, stock recombination,
         stock dividend and the like) constituting Transfer Restricted
         Securities for the first 90 days during which a Registration Default
         has occurred and is continuing and one-half of one percent (50 basis
         points) per annum per $1,000 principal amount of Securities and $5.00
         per annum per 33.5121 shares of Common Stock (subject to adjustment as
         set forth above) constituting Transfer Restricted Securities for any
         additional days during which such Registration Default has occurred and
         is continuing. The Company will pay all accrued Liquidated Damages by
         wire transfer of immediately available funds or by Federal funds check
         on each date specified in the Registration Rights Agreement, and
         Liquidated Damages will be calculated on the basis of a 360-day year
         consisting of twelve 30-day months. Following the cure of a
         Registration Default, Liquidated Damages will cease to accrue with
         respect to such Registration Default.

                  "Transfer Restricted Securities" means each Convertible
         Subordinated Note and each share of Common Stock issued on conversion
         thereof until the date on which such Convertible Subordinated Note or
         share, as the case may be, (i) has been transferred pursuant to the
         Shelf Registration Statement or another registration

                                      A-12

<PAGE>

         statement covering such Convertible Subordinated Note or share which
         has been filed with the Commission pursuant to the Securities Act, in
         either case after such registration statement has become and while such
         registration statement is effective under the Securities Act, (ii) has
         been transferred pursuant to Rule 144 under the Securities Act (or any
         similar provision then in force), or (iii) may be sold or transferred
         pursuant to Rule 144(k) under the Securities Act (or any similar
         provision then in force).

                  Pursuant to the Registration Rights Agreement, the Company may
         suspend the use of the prospectus which is a part of the Shelf
         Registration Statement for not more than 60 days (whether or not
         consecutive) in any twelve-month period under certain circumstances (a
         "Suspension Period"); provided, however, that the existence of a
         Suspension Period will not prevent the occurrence of a Registration
         Default or otherwise limit the obligation of the Company to pay
         Liquidated Damages.

                  The above description of certain provisions of the
         Registration Rights Agreement is qualified by reference to, and is
         subject in its entirety to, the more complete description thereof
         contained in the Registration Rights Agreement.

                  The Company will furnish to any holder upon written request
         and without charge a copy of the Indenture and the Registration Rights
         Agreement. Requests may be made to: Hutchinson Technology Incorporated,
         40 West Highland Park Drive N.E., Hutchinson, Minnesota 55350-9784,
         Attention: Secretary.

                                      A-13

<PAGE>

                            FORM OF CONVERSION NOTICE

To:  HUTCHINSON TECHNOLOGY INCORPORATED

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

<Table>
<Caption>
<S>                                                     <C>
Dated:
Fill in for registration of shares if to be             ----------------------------------
delivered, and Convertible Subordinated Notes if to
be issued, other than to and in the name of the owner   ----------------------------------
(Please Print):
                                                        ----------------------------------
                                                        Signature

          ----------------------------------            Principal amount to be converted (if less than all):
                        (Name)
                                                        ---------------------------------------

                                                                          $____,000
          ----------------------------------
                     (Street Address)                   --------------------------------------
                                                        Social Security or other Taxpayer Identification
                                                        Number
          ----------------------------------
              (City, State and Zip Code)

</Table>
Signature Guarantee:

-------------------------------------
Signatures must be guaranteed by an eligible Guarantor Institution (banks,
brokers, dealers, savings and loan associations and credit unions) with
membership in an approved signature guarantee medallion program pursuant to
Securities and Exchange Commission Rule 17Ad-15 if shares are to be issued, or
Convertible Subordinated Notes are to be delivered, other than to and in the
name of the registered holder.

                                      A-14

<PAGE>

                                 ASSIGNMENT FORM

      To assign this Convertible Subordinated Note, fill in the form below:

      (I) or (we) assign and transfer this Convertible Subordinated Note to

-------------------------------------------------------------------------------
               (Insert assignee's social security or tax I.D. no.)

-------------------------------------------------------------------------------

-------------------------------------------------------------------------------

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

and irrevocably appoint _______________________________ agent to transfer this
Convertible Subordinated Note on the books of the Company. The agent may
substitute another to act for him.

      Your Signature:
                     ----------------------------------------------------------
                     (Sign exactly as your name appears on the other side of
                            this Convertible Subordinated Note)

     Date:
          -----------------------------

Medallion Signature Guarantee:
                              -------------------------------------

[FOR INCLUSION ONLY IF THIS CONVERTIBLE SUBORDINATED NOTE BEARS A RESTRICTED
SECURITIES LEGEND] In connection with any transfer of any of the Convertible
Subordinated Notes evidenced by this certificate which are "restricted
securities" (as defined in Rule 144 (or any successor thereto) under the
Securities Act), the undersigned confirms that such Convertible Subordinated
Notes are being transferred:

CHECK ONE BOX BELOW

(1)      [_] to the Company; or

(2)      [_] pursuant to and in compliance with Rule 144A under the Securities
         Act of 1933; or

(3)      [_] pursuant to and in compliance with Regulation S under the
         Securities Act of 1933; or

(4)      [_] pursuant to an exemption from registration under the Securities Act
         of 1933 provided by Rule 144 thereunder.

Unless one of the boxes is checked, the Registrar will refuse to register any of
the Convertible Subordinated Notes evidenced by this certificate in the name of
any person

                                      A-15
<PAGE>

other than the registered holder thereof; provided, however, that if box (3) or
(4) is checked, the Trustee may require, prior to registering any such transfer
of the Convertible Subordinated Notes, such certifications and other
information, and if box (4) is checked such legal opinions, as the Company has
reasonably requested in writing, by delivery to the Trustee of a standing letter
of instruction, to confirm that such transfer is being made pursuant to an
exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act of 1933.

Your Signature:
               ----------------------------------------------------------------
                  (Sign exactly as your name appears on the other side of this
                            Convertible Subordinated Note)

Date:
     ---------------------------------

Medallion Signature Guarantee:
                              ------------------------------------------

                                      A-16

<PAGE>

                      OPTION OF HOLDER TO ELECT REPURCHASE

         If you wish to have this Convertible Subordinated Note repurchased by
the Company pursuant to Section 4.06 of the Indenture, check the Box: [_]

         If you wish to have a portion of this Convertible Subordinated Note
purchased by the Company pursuant to Section 4.06 of the Indenture, state the
amount (in multiples of $1,000): $_____.

Date:              Your Signature:
     --------                    ----------------------------------------------
                                 (Sign exactly as your name appears on the other
                                   side of this Convertible Subordinated Note)

Medallion Signature Guarantee:
                              -------------------------------------------------

                                      A-17

<PAGE>

                                    EXHIBIT B

                     FORM OF RESTRICTED COMMON STOCK LEGEND

"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"). THE HOLDER HEREOF, BY PURCHASING THIS SECURITY,
AGREES FOR THE BENEFIT OF THE COMPANY THAT THIS SECURITY MAY NOT BE RESOLD,
PLEDGED OR OTHERWISE TRANSFERRED (X) PRIOR TO THE SECOND ANNIVERSARY OF THE
ISSUANCE HEREOF (OR ANY PREDECESSOR SECURITY HERETO) OR (Y) BY ANY HOLDER THAT
WAS AN "AFFILIATE" (WITHIN THE MEANING OF RULE 144 UNDER THE SECURITIES ACT) OF
THE COMPANY AT ANY TIME DURING THE THREE MONTHS PRECEDING THE DATE OF SUCH
TRANSFER, IN EITHER CASE OTHER THAN (1) TO THE COMPANY, (2) SO LONG AS THIS
SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT
("RULE 144A"), IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A TO A
PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER
WITHIN THE MEANING OF RULE 144A, PURCHASING FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE
RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (3) IN
AN OFFSHORE TRANSACTION (AS DEFINED IN REGULATION S UNDER THE SECURITIES ACT) IN
ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT, (4) PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 (IF
APPLICABLE) UNDER THE SECURITIES ACT OR (5) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH
ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. THE HOLDER
HEREOF, BY PURCHASING THIS SECURITY, REPRESENTS AND AGREES FOR THE BENEFIT OF
THE COMPANY THAT IT IS (1) A QUALIFIED INSTITUTIONAL BUYER OR (2) NOT A U.S.
PERSON AND IS OUTSIDE THE UNITED STATES WITHIN THE MEANING OF (OR AN ACCOUNT
SATISFYING THE REQUIREMENTS OF PARAGRAPH (k)(2) OF RULE 902 UNDER) REGULATION S
UNDER THE SECURITIES ACT. IN ANY CASE THE HOLDER HEREOF WILL NOT, DIRECTLY OR
INDIRECTLY, ENGAGE IN ANY HEDGING TRANSACTION WITH REGARD TO THIS SECURITY
EXCEPT AS PERMITTED BY THE SECURITIES ACT."

                                      B-1

<PAGE>

                                    EXHIBIT C

      FORM OF TRANSFER CERTIFICATE FOR TRANSFER OF RESTRICTED COMMON STOCK

         (Transfers pursuant to Section 12.11(c) of the Indenture) [NAME AND
ADDRESS OF COMMON STOCK TRANSFER AGENT]

Re:      Hutchinson Technology Incorporated 2.25% Convertible Subordinated Notes
         due 2010 (the "Convertible Subordinated Notes")

         Reference is hereby made to the Indenture dated as of February 24, 2003
(the "Indenture") between Hutchinson Technology Incorporated and LaSalle Bank
National Association, as Trustee. Capitalized terms used but not defined herein
shall have the meanings given them in the Indenture.

         This letter relates to ______ shares of Common Stock represented by the
accompanying certificates that were issued upon conversion of Convertible
Subordinated Notes and which are held in the name of [name of transferor] (the
"Transferor") to effect the transfer of such Common Stock.

         In connection with the transfer of such shares of Common Stock, the
undersigned confirms that such shares of Common Stock are being transferred:

CHECK ONE BOX BELOW

(1)      [ ] to the Company; or

(2)      [_] pursuant to and in compliance with Rule 144A under the Securities
         Act of 1933; or

(3)      [_] pursuant to and in compliance with Regulation S under the
         Securities Act of 1933; or

(4)      [_] pursuant to an exemption from registration under the Securities Act
         of 1933 provided by Rule 144 thereunder.

         Unless one of the boxes is checked, the transfer agent will refuse to
register any of the Common Stock evidenced by this certificate in the name of
any person other than the registered holder thereof; provided, however, that if
box (3) or (4) is checked, the transfer agent may require, prior to registering
any such transfer of the Common Stock such certifications and other information,
and if box (4) is checked such legal opinions, as the Company has reasonably
requested in writing, by delivery to the transfer agent of a standing letter of
instruction, to confirm that such transfer is being made pursuant to an
exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act of 1933.

                                      C-1

<PAGE>

                                  (Name of Transferor],

                                  By
                                     -----------------------------------------
                                     Name:
                                     Title:

Dated:

                                      C-2

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