Document:

Exhibit
4.1

 

 

 

ABGENIX,
INC.

 

1.75%
CONVERTIBLE SENIOR NOTES DUE DECEMBER 15, 2011

 

 

INDENTURE

 

DATED
AS OF DECEMBER 21, 2004

 

 

U.S.
BANK NATIONAL ASSOCIATION,

AS
TRUSTEE

 

 

 

 

TABLE OF CONTENTS

 

	
  ARTICLE 1 DEFINITIONS AND INCORPORATION BY
  REFERENCE

  	
   

  
	
   

  	
   

  
	
  SECTION 1.1.

  	
  DEFINITIONS

  	
   

  
	
  SECTION 1.2.

  	
  OTHER DEFINITIONS

  	
   

  
	
  SECTION 1.3.

  	
  TRUST INDENTURE ACT PROVISIONS

  	
   

  
	
  SECTION 1.4.

  	
  RULES OF CONSTRUCTION

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 2 THE SECURITIES

  	
   

  
	
   

  	
   

  
	
  SECTION 2.1.

  	
  FORM AND DATING

  	
   

  
	
  SECTION 2.2.

  	
  EXECUTION AND AUTHENTICATION

  	
   

  
	
  SECTION 2.3.

  	
  REGISTRAR, PAYING AGENT AND
  CONVERSION AGENT

  	
   

  
	
  SECTION 2.4.

  	
  PAYING AGENT TO HOLD MONEY IN TRUST

  	
   

  
	
  SECTION 2.5.

  	
  SECURITYHOLDER LISTS

  	
   

  
	
  SECTION 2.6.

  	
  TRANSFER AND EXCHANGE

  	
   

  
	
  SECTION 2.7.

  	
  REPLACEMENT SECURITIES

  	
   

  
	
  SECTION 2.8.

  	
  OUTSTANDING SECURITIES

  	
   

  
	
  SECTION 2.9.

  	
  TREASURY SECURITIES

  	
   

  
	
  SECTION 2.10.

  	
  TEMPORARY SECURITIES

  	
   

  
	
  SECTION 2.11.

  	
  CANCELLATION

  	
   

  
	
  SECTION 2.12.

  	
  LEGEND; ADDITIONAL TRANSFER AND
  EXCHANGE REQUIREMENTS

  	
   

  
	
  SECTION 2.13.

  	
  CUSIP NUMBERS

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 3 REDEMPTION AND PURCHASES

  	
   

  
	
   

  	
   

  
	
  SECTION 3.1.

  	
  OPTIONAL REDEMPTION

  	
   

  
	
  SECTION 3.2.

  	
  RIGHT TO REDEEM; NOTICE TO TRUSTEE

  	
   

  
	
  SECTION 3.3.

  	
  SELECTION OF SECURITIES TO BE
  REDEEMED

  	
   

  
	
  SECTION 3.4.

  	
  NOTICE OF REDEMPTION

  	
   

  
	
  SECTION 3.5.

  	
  EFFECT OF NOTICE OF REDEMPTION

  	
   

  
	
  SECTION 3.6.

  	
  DEPOSIT OF REDEMPTION PRICE

  	
   

  
	
  SECTION 3.7.

  	
  SECURITIES REDEEMED IN PART

  	
   

  
	
  SECTION 3.8.

  	
  CONVERSION ARRANGEMENT ON CALL FOR
  REDEMPTION

  	
   

  
	
  SECTION 3.9.

  	
  REPURCHASE AT OPTION OF THE HOLDER
  UPON A FUNDAMENTAL CHANGE.

  	
   

  
	
  SECTION 3.10.

  	
  ADJUSTMENT
  TO APPLICABLE CONVERSION RATE UPON A FUNDAMENTAL CHANGE.

  	
   

  
	
  SECTION 3.11.

  	
  PUBLIC
  ACQUIRER CHANGE OF CONTROL.

  	
   

  
	
  SECTION 3.12.

  	
  COMPLIANCE
  WITH SECURITIES LAWS UPON PURCHASE OF SECURITIES

  	
   

  
	
  SECTION 3.13.

  	
  REPAYMENT
  TO THE COMPANY

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 4 CONVERSION

  	
   

  
	
   

  	
   

  
	
  SECTION 4.1.

  	
  CONVERSION
  PRIVILEGE

  	
   

  
	
  SECTION 4.2.

  	
  CONVERSION
  PROCEDURE

  	
   

  

 

i

 

	
  SECTION 4.3.

  	
  FRACTIONAL
  SHARES

  	
   

  
	
  SECTION 4.4.

  	
  TAXES
  ON CONVERSION

  	
   

  
	
  SECTION 4.5.

  	
  COMPANY
  TO PROVIDE STOCK

  	
   

  
	
  SECTION 4.6.

  	
  ANTI-DILUTION
  ADJUSTMENTS.

  	
   

  
	
  SECTION 4.7.

  	
  TRUSTEE’S
  DISCLAIMER

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 5 COVENANTS

  	
   

  
	
   

  	
   

  
	
  SECTION 5.1.

  	
  PAYMENT
  OF SECURITIES

  	
   

  
	
  SECTION 5.2.

  	
  SEC
  REPORTS

  	
   

  
	
  SECTION 5.3.

  	
  COMPLIANCE
  CERTIFICATES

  	
   

  
	
  SECTION 5.4.

  	
  FURTHER
  INSTRUMENTS AND ACTS

  	
   

  
	
  SECTION 5.5.

  	
  MAINTENANCE
  OF CORPORATE EXISTENCE

  	
   

  
	
  SECTION 5.6.

  	
  RULE
  144A INFORMATION REQUIREMENT

  	
   

  
	
  SECTION 5.7.

  	
  STAY,
  EXTENSION AND USURY LAWS

  	
   

  
	
  SECTION 5.8.

  	
  PAYMENT
  OF ADDITIONAL INTEREST

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 6 CONSOLIDATION, MERGER, CONVEYANCE,
  TRANSFER OR LEASE

  	
   

  
	
   

  	
   

  
	
  SECTION 6.1.

  	
  COMPANY
  MAY CONSOLIDATE, ETC, ONLY ON CERTAIN TERMS

  	
   

  
	
  SECTION 6.2.

  	
  SUCCESSOR
  SUBSTITUTED

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 7 DEFAULT AND REMEDIES

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 7.1.

  	
  EVENTS
  OF DEFAULT

  	
   

  
	
  SECTION 7.2.

  	
  ACCELERATION

  	
   

  
	
  SECTION 7.3.

  	
  OTHER
  REMEDIES

  	
   

  
	
  SECTION 7.4.

  	
  WAIVER
  OF DEFAULTS AND EVENTS OF DEFAULT

  	
   

  
	
  SECTION 7.5.

  	
  CONTROL
  BY MAJORITY

  	
   

  
	
  SECTION 7.6.

  	
  LIMITATIONS
  ON SUITS

  	
   

  
	
  SECTION 7.7.

  	
  RIGHTS
  OF HOLDERS TO RECEIVE PAYMENT AND TO CONVERT

  	
   

  
	
  SECTION 7.8.

  	
  COLLECTION
  SUIT BY TRUSTEE

  	
   

  
	
  SECTION 7.9.

  	
  TRUSTEE
  MAY FILE PROOFS OF CLAIM

  	
   

  
	
  SECTION 7.10.

  	
  PRIORITIES

  	
   

  
	
  SECTION 7.11.

  	
  UNDERTAKING
  FOR COSTS

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 8 TRUSTEE

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 8.1.

  	
  DUTIES
  OF TRUSTEE

  	
   

  
	
  SECTION 8.2.

  	
  RIGHTS
  OF TRUSTEE

  	
   

  
	
  SECTION 8.3.

  	
  INDIVIDUAL
  RIGHTS OF TRUSTEE

  	
   

  
	
  SECTION 8.4.

  	
  TRUSTEE’S
  DISCLAIMER

  	
   

  
	
  SECTION 8.5.

  	
  NOTICE
  OF DEFAULT OR EVENTS OF DEFAULT

  	
   

  
	
  SECTION 8.6.

  	
  REPORTS
  BY TRUSTEE TO HOLDERS

  	
   

  
	
  SECTION 8.7.

  	
  COMPENSATION
  AND INDEMNITY

  	
   

  
	
  SECTION 8.8.

  	
  REPLACEMENT
  OF TRUSTEE

  	
   

  
	
  SECTION 8.9.

  	
  SUCCESSOR
  TRUSTEE BY MERGER, ETC

  	
   

  
	
  SECTION 8.10.

  	
  ELIGIBILITY;
  DISQUALIFICATION

  	
   

  
	
  SECTION 8.11.

  	
  PREFERENTIAL
  COLLECTION OF CLAIMS AGAINST COMPANY

  	
   

  

 

ii

 

	
  ARTICLE 9 SATISFACTION AND DISCHARGE OF
  INDENTURE

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 9.1.

  	
  SATISFACTION
  AND DISCHARGE OF INDENTURE

  	
   

  
	
  SECTION 9.2.

  	
  APPLICATION
  OF TRUST MONEY

  	
   

  
	
  SECTION 9.3.

  	
  REPAYMENT
  TO COMPANY

  	
   

  
	
  SECTION 9.4.

  	
  REINSTATEMENT

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  10 AMENDMENTS, SUPPLEMENTS AND WAIVERS

  	
   

  
	
   

  	
   

  
	
  SECTION 10.1.

  	
  WITHOUT
  CONSENT OF HOLDERS

  	
   

  
	
  SECTION 10.2.

  	
  WITH
  CONSENT OF HOLDERS

  	
   

  
	
  SECTION 10.3.

  	
  COMPLIANCE
  WITH TRUST INDENTURE ACT

  	
   

  
	
  SECTION 10.4.

  	
  REVOCATION
  AND EFFECT OF CONSENTS

  	
   

  
	
  SECTION 10.5.

  	
  NOTATION
  ON OR EXCHANGE OF SECURITIES

  	
   

  
	
  SECTION 10.6.

  	
  TRUSTEE
  TO SIGN AMENDMENTS, ETC

  	
   

  
	
  SECTION 10.7.

  	
  EFFECT
  OF SUPPLEMENTAL INDENTURES

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  11 MISCELLANEOUS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 11.1.

  	
  TRUST
  INDENTURE ACT CONTROLS

  	
   

  
	
  SECTION 11.2.

  	
  NOTICES

  	
   

  
	
  SECTION 11.3.

  	
  COMMUNICATIONS
  BY HOLDERS WITH OTHER HOLDERS

  	
   

  
	
  SECTION 11.4.

  	
  CERTIFICATE
  AND OPINION AS TO CONDITIONS PRECEDENT

  	
   

  
	
  SECTION 11.5.

  	
  RECORD
  DATE FOR VOTE OR CONSENT OF SECURITYHOLDERS

  	
   

  
	
  SECTION 11.6.

  	
  RULES
  BY TRUSTEE, PAYING AGENT, REGISTRAR AND CONVERSION AGENT

  	
   

  
	
  SECTION 11.7.

  	
  LEGAL
  HOLIDAYS

  	
   

  
	
  SECTION 11.8.

  	
  GOVERNING
  LAW

  	
   

  
	
  SECTION 11.9.

  	
  NO
  ADVERSE INTERPRETATION OF OTHER AGREEMENTS

  	
   

  
	
  SECTION 11.10.

  	
  NO
  RECOURSE AGAINST OTHERS

  	
   

  
	
  SECTION 11.11.

  	
  SUCCESSORS

  	
   

  
	
  SECTION 11.12.

  	
  MULTIPLE
  COUNTERPARTS

  	
   

  
	
  SECTION 11.13.

  	
  SEPARABILITY

  	
   

  
	
  SECTION 11.14.

  	
  TAX
  TREATMENT

  	
   

  
	
  TABLE OF CONTENTS,
  HEADINGS, ETC

  	
   

  

 

iii

 

THIS INDENTURE dated as
of December 21, 2004 is between Abgenix, Inc., a corporation duly organized
under the laws of the State of Delaware (the “Company”), and U.S. Bank National
Association, a national banking association organized and existing under the
laws of the United States, as Trustee (the “Trustee”).

 

In consideration of the
premises and the purchase of the Securities by the Holders thereof, both parties
agree as follows for the benefit of the other and for the equal and ratable
benefit of the registered Holders of the Company’s 1.75% Convertible Senior
Notes due December 15, 2011.

 

ARTICLE
1

DEFINITIONS AND INCORPORATION BY REFERENCE

 

SECTION 1.1.      DEFINITIONS.

 

“Additional Interest” has
the meaning specified in paragraph 2 of the Security.

 

“Additional Shares Table”
means the table set forth in Schedule I hereto.

 

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

 

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

 

“Applicable Conversion
Rate” means, at the time any determination thereof is to be made, the Initial
Conversion Rate as adjusted pursuant to Sections 3.10 and 4.6.

 

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

 

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

 

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

 

“Capital Stock” means (a)
in the case of a corporation, corporate stock, (b) in the case of an
association or business entity, any and all shares, interests, participations,
rights or other equivalents (however designated) of corporate stock, (c) in the
case of a partnership or limited liability company, partnership or membership
interests (whether general or limited) and (d) any other interest or
participation that confers on a person the right to receive a share of the
profits and losses of, or distribution of the assets of, the issuing person.

 

 

 

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

 

“Certificated Security”
means a Security that is in substantially the form attached hereto as Exhibit A
and that does not include the information or the schedule called for by
footnotes 1, 3 and 4 thereof.

 

“Closing Price” of the
Common Stock on any date means the last reported sales price or, in case no
such reported sale takes place on such date, the average of the reported
closing bid and ask prices in either case on the Nasdaq National Market or, if
the Common Stock is not listed or admitted to trading or, if not listed or
admitted to trading on the Nasdaq National Market or any national securities
exchange, the last reported sales price of the Common Stock as quoted on NASDAQ
or, in case no reported sales take place, the average of the closing bid and
ask prices as quoted on NASDAQ or any comparable system, the closing sales
price or, in case no reported sale takes place, the average of the closing bid
and ask prices, as furnished by any two members of the National Association of
Securities Dealers, Inc. selected from time to time by the Company for that
purpose.  If no such prices are
available, the current market price per share shall be the fair value of a
share of Common Stock as determined in good faith by the Board of Directors.

 

“Common Stock” means the
common stock of the Company, $0.0001 par value, as it exists on the date of
this Indenture and any shares of any class or classes of capital stock of the
Company resulting from any reclassification or reclassifications thereof and
which have no preference in respect of dividends or of amounts payable in the
event of any voluntary or involuntary liquidation, dissolution or winding-up of
the Company and which are not subject to redemption by the Company; provided,
however, that if at any time there shall be more than one such resulting
class, the shares of each such class then so issuable on conversion of
Securities shall be substantially in the proportion which the total number of
shares of such class resulting from all such reclassifications bears to the
total number of shares of all such classes resulting from all such
reclassifications.

 

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

 

“Continuing Directors”
means, as of any date of determination, any member of the Board of Directors
who (a) was a member of the Board of Directors on the date of this Indenture or
(b) becomes a member of the Board of Directors subsequent to the date of this
Indenture and was appointed, nominated for election or elected to the Board of
Directors with the approval of a majority of the Continuing Directors who were
members of the Board of Directors at the time of such appointment, nomination
or election.

 

“Corporate Trust Office”
means the office of the Trustee at which at any particular time the trust
created by this Indenture shall be administered which office at the date of the
execution of this Indenture is located at 633 West Fifth Street, 24th
Floor, Los Angeles, CA  90071,
Attention:  Corporate Trust
Administration (Abgenix, Inc. —  1.75%
Convertible Senior Notes Due December 15, 2011) or at any other time at such
other address as the Trustee may designate from time to time by notice to the
Company.

 

“Default” or “default”
means, when used with respect to the Securities, any event which is or, after
notice or passage of time or both, would be an Event of Default.

 

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

 

2

 

“Final Maturity Date”
means December 15, 2011.

 

“Fundamental Change”
means the occurrence of any of the following at a time after the Securities are
originally issued:

 

(a)           the
Common Stock (or other common stock into which the Securities are convertible)
is neither traded on the New York Stock Exchange or another United States
national securities exchange nor quoted on The Nasdaq Stock Market or another
established automated over-the-counter trading market in the United States; or

 

(b)           any
Person acquires beneficial ownership, directly or indirectly, through a
purchase, merger or other acquisition transaction or series of transactions, of
shares of the Company’s Capital Stock entitling the Person to exercise 50% or
more of the total voting power of all shares of the Company’s Capital Stock
entitled to vote generally in elections of directors, other than an acquisition
by the Company, any of its Subsidiaries or any of its employee benefit plans;
or

 

(c)           the
Company merges or consolidates with or into any other Person (other than a
Subsidiary of the Company), another Person merges with or into the Company, or
the Company conveys, sells, transfers or leases all or substantially all of its
assets to another Person, other than any transaction:

 

(i)                                     that
does not result in a reclassification, conversion, exchange or cancellation of
any outstanding Common Stock;

 

(ii)                                  pursuant
to which the holders of Common Stock immediately prior to the transaction have
the entitlement to exercise, directly or indirectly, 50% or more of the total
voting power of all shares of the Capital Stock entitled to vote generally in
the election of directors of the continuing or surviving corporation
immediately after the transaction; or

 

(iii)                               that
is effected solely to change the Company’s jurisdiction of incorporation and
results in a reclassification, conversion or exchange of outstanding shares of
Common Stock solely into shares of common stock of the surviving entity; or

 

(d)           at
any time the Continuing Directors do not constitute a majority of the Board of
Directors (or, if applicable, the board of directors of a successor Person to
the Company).

 

For purposes of this definition, whether a Person is a
“beneficial owner” will be determined in accordance with Rule 13d-3 under the Exchange
Act and “Person” includes any syndicate or group that would be deemed to be a “person”
under Section 13(d)(3) of the Exchange Act.

 

“Fundamental Change
Repurchase Date” means the date specified as such in the notice delivered to
Holders pursuant to Section 3.9(c) hereof.

 

“GAAP” means generally
accepted accounting principles in the United States of America as in effect as
of the date of this Indenture, including those set forth in (1) the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants, (2) the statements and
pronouncements of the Financial Accounting Standards Board, (3) such other
statements by such other entity as approved by a significant segment of the
accounting profession and (4) the rules and regulations of the SEC
governing the inclusion of financial statements (including pro forma financial
statements) in registration 

 

3

 

statements filed under the Securities Act and periodic
reports required to be filed pursuant to Section 13 of the Exchange Act,
including opinions and pronouncements in staff accounting bulletins and similar
written statements from the accounting staff of the SEC.

 

“Global Security” means a
permanent Global Security that is in substantially the form attached hereto as Exhibit A
and that includes the information and schedule called for by footnotes 1,
3 and 4 thereof and which is deposited with the Depositary or its custodian and
registered in the name of the Depositary or its nominee.

 

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

 

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

 

“Initial Conversion Rate”
means 78.0153 shares of Common Stock per $1,000 principal amount of Securities.

 

“Initial Purchasers”
means Goldman, Sachs & Co. and Merrill Lynch, Pierce, Fenner & Smith
Incorporated.

 

“Issuance Date” means the
date on which the Securities are first authenticated and issued.

 

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

 

“Officers’ Certificate”
means a certificate signed by two Officers; provided, however,
that for purposes of Sections 4.7 and 5.3, “Officers’ Certificate” means a
certificate signed by the principal executive officer, principal financial
officer or principal accounting officer of the Company and by one other
Officer.

 

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

 

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

 

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

 

“Public Acquirer Change
of Control” means any event constituting a Fundamental Change that would
otherwise give Holders the right to cause the Company to repurchase the
Securities under Section 3.9 where either (a) the acquirer or (b) if not the
acquirer, a direct or indirect majority-owned Subsidiary of the acquirer or (c)
if not the acquirer or any direct or indirect majority-owned Subsidiary of the
acquirer, a corporation by which the acquirer is majority-owned has a class of
common stock traded on a U.S. national securities exchange or quoted on the
Nasdaq Stock Market or which will be so traded or quoted when issued or
exchanged in connection with such Fundamental Change. “Majority-owned” for the
purposes of this 

 

4

 

definition means having “beneficial ownership” (as
defined in Rule 13d-3 under the Exchange Act) of more than 50% of the total
voting power of the respective Person’s Voting Stock.

 

“Public Acquirer Common
Stock” means the class of common stock of an entity referred to in sections
(a), (b) or (c) of the first sentence of the definition of “Public Acquirer
Change of Control.”

 

“Redemption Date” when
used with respect to any Security to be redeemed, means the date fixed for such
redemption pursuant to this Indenture.

 

“Redemption Price” when
used with respect to any Security to be redeemed, means the price fixed for
such redemption pursuant to this Indenture, as set forth in the form of
Security annexed as Exhibit A hereto.

 

“Registration Rights
Agreement” means the Registration Rights Agreement dated as of
December 21, 2004, between the Company and the Initial Purchasers.

 

 “Rule 144” means Rule 144 under the
Securities Act or any successor to such Rule.

 

“Rule 144A” means
Rule 144A under the Securities Act or any successor to such Rule.

 

“SEC” means the
Securities and Exchange Commission.

 

“Securities” means the
1.75% Convertible Senior Notes due December 15, 2011 or any of them (each, a “Security”),
as amended or supplemented from time to time, that are issued under this
Indenture.

 

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

 

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

 

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

 

“Subsidiary” means, in
respect of any Person, any corporation, association, partnership or other
business entity of which more than 50% of the total voting power of shares of
Capital Stock or other interests (including partnership interests) entitled
(without regard to the occurrence of any contingency) to vote in the election
of directors, managers, general partners or trustees thereof is at the time
owned or controlled, directly or indirectly, by (i) such Person;
(ii) such Person and one or more Subsidiaries of such Person; or
(iii) one or more Subsidiaries of such Person.

 

“TIA” means the Trust
Indenture Act of 1939, as amended, and the rules and regulations thereunder as
in effect on the date of this Indenture, except as provided in Section 11.3,
and except to the extent any amendment to the Trust Indenture Act expressly
provides for application of the Trust Indenture Act as in effect on another
date.

 

“Trading Day” means, with
respect to any security, each Monday, Tuesday, Wednesday, Thursday and Friday,
other than any day on which securities are not generally traded on the
principal exchange or market in which such security is traded.

 

5

 

“Transfer Restricted
Global Security” means a Global Security that is a Transfer Restricted
Security.

 

“Transfer Restricted
Security” means a Security required to bear the restricted legend set forth in
the form of Security set forth in Exhibit A of this Indenture.

 

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

 

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

 

“Unrestricted
Certificated Security” means a Certificated Security that is not a Transfer
Restricted Security.

 

“Unrestricted Global
Security” means a Global Security that is not a Transfer Restricted Security.

 

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

 

“Voting Stock” of a
Person means all classes of Capital Stock or other interests (including
partnership interests) of such Person then outstanding and normally entitled
(without regard to the occurrence of any contingency) to vote in the election
of directors, managers or trustees thereof.

 

SECTION 1.2.      OTHER DEFINITIONS.

 

	
  Term

  	
   

  	
  Defined in Section

  
	
   

  	
   

  	
   

  
	
  “Additional
  Shares”

  	
   

  	
  3.

  	
  10

  
	
  “Agent Members”

  	
   

  	
  2.

  	
  1(b)

  
	
  “Bankruptcy Law”

  	
   

  	
  7.

  	
  1

  
	
  “Company Order”

  	
   

  	
  2.

  	
  2

  
	
  “Conversion Agent”

  	
   

  	
  2.

  	
  3

  
	
  “Conversion Date”

  	
   

  	
  4.

  	
  2

  
	
  “Custodian”

  	
   

  	
  7.

  	
  1

  
	
  “DTC”

  	
   

  	
  2.

  	
  1

  
	
  “Depositary”

  	
   

  	
  2.

  	
  1

  
	
  “Event of Default”

  	
   

  	
  7.

  	
  1

  
	
  “Fundamental Change
  Repurchase Price”

  	
   

  	
  3.

  	
  9(a)

  
	
  “Legal Holiday”

  	
   

  	
  11.

  	
  7

  
	
  “Legend”

  	
   

  	
  2.

  	
  12

  
	
  “Paying Agent”

  	
   

  	
  2.

  	
  3

  
	
  “Primary Registrar”

  	
   

  	
  2.

  	
  3

  
	
  “Public Acquisition
  Notice”

  	
   

  	
  3.

  	
  11

  
	
  “Purchase Agreement”

  	
   

  	
  2.

  	
  1

  
	
  “QIB”

  	
   

  	
  2.

  	
  1

  
	
  “Registrar”

  	
   

  	
  2.

  	
  3

  
	
  “Stock Price”

  	
   

  	
  3.

  	
  10(b)

  

 

6

 

SECTION 1.3.      TRUST INDENTURE ACT PROVISIONS.

 

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

 

“indenture securities”
means the Securities;

 

“indenture security
holder” means a Securityholder;

 

“indenture to be
qualified” means this Indenture;

 

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

 

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

 

SECTION 1.4.      RULES OF CONSTRUCTION.

 

Unless the context
otherwise requires:

 

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

 

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

 

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

 

(D)          provisions apply to successive events
and transactions;

 

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

 

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

 

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

 

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

 

7

 

ARTICLE
2

THE SECURITIES

 

SECTION 2.1.      FORM AND DATING.

 

The Securities and the
Trustee’s certificate of authentication shall be substantially in the
respective forms set forth in Exhibit A, which Exhibit is
incorporated in and made part of this Indenture.  The Securities may have notations, legends or
endorsements required by law, stock exchange rule or usage.  The Company shall provide any such notations,
legends or endorsements to the Trustee in writing.  Each Security shall be dated the date of its
authentication.  The Securities are being
offered and sold by the Company pursuant to a Purchase Agreement, dated
December 15, 2004 (the “Purchase Agreement”), between the Company and the
Initial Purchasers, in transactions exempt from, or not subject to, the
registration requirements of the Securities Act.

 

(a)           Restricted Global Securities.  All of the Securities are initially being
offered and sold to qualified institutional buyers as defined in Rule 144A
(collectively, “QIBs” or individually, each a “QIB”) in reliance on
Rule 144A under the Securities Act and to certain non-U.S. persons under
Regulation S under the Securities Act, shall be issued initially in the form of
one or more Restricted Global Securities, which shall be deposited on behalf of
the purchasers of the Securities represented thereby with the Trustee, at its
Corporate Trust Office, as custodian for the depositary, The Depository Trust
Company (“DTC”) (such depositary, or any successor thereto, being hereinafter
referred to as the “Depositary”), and registered in the name of its nominee,
Cede & Co., duly executed by the Company and authenticated by the
Trustee as hereinafter provided.  The
aggregate principal amount of the Restricted Global Securities may from time to
time be increased or decreased by adjustments made on the records of the
Securities Custodian as hereinafter provided, subject in each case to
compliance with the Applicable Procedures.

 

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

 

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

 

(c)           Book Entry Provisions. The
Company shall execute and the Trustee shall, in accordance with this Section
2.1(c), authenticate and deliver initially one or more Global Securities that
(i) shall be registered in 

 

8

 

the name
of the Depositary, (ii) shall be delivered by the Trustee to the
Depositary or pursuant to the Depositary’s instructions and (iii) shall
bear legends substantially to the following effect:

 

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

 

SECTION 2.2.      EXECUTION AND AUTHENTICATION.

 

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

 

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

 

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

 

The Trustee shall authenticate and make available for delivery
Securities for original issue in the aggregate principal amount of up to
$225,000,000 (or such greater amount necessary to reflect the exercise by the
Initial Purchasers of their option to purchase additional Securities in
compliance with the Purchase Agreement, but not to exceed $300,000,000 in
aggregate principal amount) upon receipt of a written order or orders of the
Company signed by two Officers of the Company (a “Company Order”).  The Company Order shall specify the amount of
Securities to be authenticated, shall provide that all such Securities will be
represented by a Restricted Global Security and the date on which each original
issue of Securities is to be authenticated. 
The Company at any time or from time to time may, without the consent of
any Holder, issue additional Securities having the same terms as the Securities
initially issued hereunder, and entitled to all of the benefits of this
Indenture.  Such additional Securities
will be deemed Securities for all purposes 

 

9

 

hereunder, including without limitation in determining
the necessary Holders who may take the actions or consent to the taking of
actions as specified in this Indenture.

 

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

 

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

 

SECTION 2.3.      REGISTRAR, PAYING AGENT AND CONVERSION
AGENT.

 

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

 

The Company shall enter
into an appropriate agency agreement with any Agent not a party to this
Indenture.  The agreement shall implement
the provisions of this Indenture that relate to such Agent.  The Company shall notify the Trustee of the
name and address of any Agent not a party to this Indenture.  If the Company fails to maintain a Registrar,
Paying Agent, Conversion Agent or agent for service of notices and demands in
any place required by this Indenture, or fails to give the foregoing notice,
the Trustee shall act as such.  The
Company or any Affiliate of the Company may act as Paying Agent (except for the
purposes of Section 5.1 and Article 9).

 

The Company hereby
initially designates the Trustee as Paying Agent, Registrar, Custodian and
Conversion Agent, and each of the Corporate Trust Office of the Trustee and the
office or agency of the Trustee in the Borough of Manhattan, The City of New
York (which shall initially be U.S. Bank Trust National Association., an
Affiliate of the Trustee, as agent of the Trustee located at 100 Wall Street,
Suite 1600, EX-NY-WALL, New York, NY 
10005, Attention: Corporate Trust Administration (Abgenix, Inc. — 1.75%
Convertible Senior Notes due December 15, 2011)), one such office or
agency of the Company for each of the aforesaid purposes.

 

SECTION 2.4.      PAYING AGENT TO HOLD MONEY IN TRUST.

 

Prior to 11:00 a.m., New
York City time, on each due date of the principal of or interest, if any, on
any Securities, the Company shall deposit with a Paying Agent a sum sufficient
to pay such principal or interest, if any, so becoming due.  A Paying Agent shall hold in trust for the
benefit of Securityholders or the Trustee all money held by the Paying Agent
for the payment of principal of or interest, if any, on the Securities, and
shall notify the Trustee of any default by the Company (or any other obligor on
the Securities) in making any such payment. 
If the Company or an Affiliate of the Company acts as Paying Agent, it
shall, 

 

10

 

before 11:00 a.m., New York City time, on each due
date of the principal of or interest on any Securities, segregate the money and
hold it as a separate trust fund.  The
Company at any time may require a Paying Agent to pay all money held by it to
the Trustee, and the Trustee may at any time during the continuance of any
default, upon written request to a Paying Agent, require such Paying Agent to
pay forthwith to the Trustee all sums so held in trust by such Paying
Agent.  Upon doing so, the Paying Agent
(other than the Company) shall have no further liability for the money.

 

SECTION 2.5.      SECURITYHOLDER LISTS.

 

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

 

SECTION 2.6.      TRANSFER AND EXCHANGE.

 

(a)           Subject to compliance with any
applicable additional requirements contained in Section 2.12, when a
Security is presented to a Registrar with a request to register a transfer
thereof or to exchange such Security for an equal principal amount of
Securities of other authorized denominations, the Registrar shall register the
transfer or make the exchange as requested; provided, however,
that every Security presented or surrendered for registration of transfer or
exchange shall be duly endorsed or accompanied by an assignment form and, if
applicable, a transfer certificate each in the form included in Exhibit A,
and in form satisfactory to the Registrar duly executed by the Holder thereof
or its attorney duly authorized in writing. 
To permit registration of transfers and exchanges, upon surrender of any
Security for registration of transfer or exchange at an office or agency
maintained pursuant to Section 2.3, the Company shall execute and the
Trustee shall authenticate Securities of a like aggregate principal amount at
the Registrar’s request.  Any exchange or
transfer shall be without charge, except that the Company or the Registrar may
require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto, and provided,  that
this sentence shall not apply to any exchange pursuant to Section 2.10,
2.12(a), 3.6, 3.11, 4.2 (last paragraph) or 11.5.

 

Neither the Company, any
Registrar nor the Trustee shall be required to exchange or register a transfer
of (i) any Securities for a period of 15 days next preceding any mailing
of a notice of Securities to be redeemed, (ii) any Securities or portions
thereof selected or called for redemption (except, in the case of redemption of
a Security in part, the portion thereof not to be redeemed) or (iii) any
Securities or portions thereof in respect of which a notice pursuant to Section
3.9(d) hereof has been delivered and not withdrawn by the Holder thereof
(except, in the case of the purchase of a Security in part, the portion thereof
not to be purchased).

 

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

 

(b)           Any Registrar appointed pursuant to
Section 2.3 hereof shall provide to the Trustee such information as the
Trustee may reasonably require in connection with the delivery by such
Registrar of Securities upon transfer or exchange of Securities.

 

11

 

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

 

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

 

SECTION 2.7.      REPLACEMENT SECURITIES.

 

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

 

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

 

Upon the issuance of any
new Securities under this Section 2.7, the Company may require the payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto and any other reasonable expenses (including the
reasonable fees and expenses of the Trustee or the Registrar) in connection
therewith.

 

Every new Security issued
pursuant to this Section 2.7 in lieu of any mutilated, destroyed, lost or
stolen Security shall constitute an original additional contractual obligation
of the Company, whether or not the mutilated, destroyed, lost or stolen
Security shall be at any time enforceable by anyone, and shall be entitled to
all benefits of this Indenture equally and proportionately with any and all
other Securities duly issued hereunder.

 

The provisions of this
Section 2.7 are (to the extent lawful) exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Securities.

 

SECTION 2.8.      OUTSTANDING SECURITIES.

 

Securities outstanding at
any time are all Securities authenticated by the Trustee, except for those
canceled by it, those converted pursuant to Article 4, those delivered to it
for cancellation or surrendered for transfer or exchange and those described in
this Section 2.8 as not outstanding.

 

12

 

If a Security is replaced
pursuant to Section 2.7, it ceases to be outstanding unless the Company
receives proof satisfactory to it that the replaced Security is held by a bona
fide purchaser.

 

If a Paying Agent (other
than the Company or an Affiliate of the Company) holds on a Redemption Date, a
Fundamental Change Repurchase Date or the Final Maturity Date money sufficient
to pay the principal of (including premium, if any) and accrued interest on
Securities (or portions thereof) payable on that date, then on and after such
Redemption Date, Fundamental Change Repurchase Date or the Final Maturity Date,
as the case may be, such Securities (or portions thereof, as the case may be)
shall cease to be outstanding and interest on them shall cease to accrue; provided,
that if such Securities are to be redeemed, notice of such redemption has been
duly given pursuant to this Indenture or provision therefore satisfactory to
the Trustee has been made.

 

Subject to the
restrictions contained in Section 2.9, a Security does not cease to be
outstanding because the Company or an Affiliate of the Company holds the
Security.

 

SECTION 2.9.      TREASURY SECURITIES.

 

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

 

SECTION 2.10.    TEMPORARY SECURITIES.

 

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

 

SECTION 2.11.    CANCELLATION.

 

The Company at any time
may deliver Securities to the Trustee for cancellation.  The Registrar, the Paying Agent and the
Conversion Agent shall forward to the Trustee or its agent any Securities
surrendered to them for transfer, exchange, redemption, payment or
conversion.  The Trustee and no one else
shall cancel, in accordance with its standard procedures, all Securities
surrendered for transfer, exchange, redemption, payment, conversion or
cancellation and shall deliver the canceled Securities to the Company.  All Securities which are redeemed, purchased
or otherwise acquired by the Company or any of its Subsidiaries prior to the
Final Maturity Date shall be delivered to the Trustee for cancellation, and the
Company may not hold or resell such Securities or issue any new Securities to
replace any such Securities or any Securities that any Holder has converted
pursuant to Article 4.  Without
limitation to the foregoing, any Securities acquired by any 

 

13

 

investment bankers or other purchasers pursuant to
Section 3.7 shall be surrendered for conversion and thereafter cancelled,
and may not be reoffered, sold or otherwise transferred.

 

SECTION 2.12.    LEGEND; ADDITIONAL TRANSFER
AND EXCHANGE REQUIREMENTS.

 

(a)           If Securities are issued upon the
transfer, exchange or replacement of Securities subject to restrictions on
transfer and bearing the legends set forth on the forms of Securities attached
hereto as Exhibit A (collectively, the “Legend”), or if a request
is made to remove the Legend on a Security, the Securities so issued shall bear
the Legend, or the Legend shall not be removed, as the case may be, unless
there is delivered to the Company and the Registrar such satisfactory evidence,
which shall include an opinion of counsel if requested by the Company or such
Registrar, as may be reasonably required by the Company and the Registrar, 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 or Rule 144 under the Securities Act or that such Securities are not “restricted”
within the meaning of Rule 144 under the Securities Act; provided  that
no such evidence need be supplied in connection with the sale of such Security
pursuant to a registration statement that is effective at the time of such
sale.  Upon (i) provision of such
satisfactory evidence if requested, or (ii) notification by the Company to
the Trustee and Registrar of the sale of such Security pursuant to a
registration statement that is effective at the time of such sale, the Trustee,
at the written direction of the Company, shall authenticate and deliver a
Security that does not bear the Legend. 
If the Legend is removed from the face of a Security and the Security is
subsequently held by an Affiliate of the Company, the Legend shall be reinstated.

 

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

 

(c)           Subject to the succeeding paragraph,
every Security shall be subject to the restrictions on transfer provided in the
Legend other than a Restricted Global Security. 
Whenever any Transfer Restricted Security other than a Restricted Global
Security is presented or surrendered for registration of transfer or for
exchange for a Security registered in a name other than that of the Holder,
such Security must be accompanied by a certificate in substantially the form
set forth in Exhibit B, dated the date of such surrender and signed by
the Holder of such Security, as to compliance with such restrictions on
transfer.  The Registrar shall not be
required to accept for such registration of transfer or exchange any Security
not so accompanied by a properly completed certificate.

 

(d)           The restrictions imposed by the
Legend upon the transferability of any Security shall cease and terminate when
such Security has been sold pursuant to an effective registration statement
under the Securities Act or transferred in compliance with Rule 144 under the
Securities Act (or any successor provision thereto) or, if earlier, upon the
expiration of the holding period applicable to sales thereof under
Rule 144(k) under the Securities Act (or any successor provision).  Any Security as to which such restrictions on
transfer shall have expired in accordance with their terms or shall have
terminated may, upon a surrender of such Security for exchange to the Registrar
in accordance with the provisions of this Section 2.12 (accompanied, in the
event that such restrictions on transfer have terminated by reason of a
transfer in 

 

14

 

compliance
with Rule 144 or any successor provision, by, if requested, an opinion of
counsel reasonably acceptable to the Company, addressed to the Company and in
form acceptable to the Company, to the effect that the transfer of such
Security has been made in compliance with Rule 144 or such successor
provision), be exchanged for a new Security, of like tenor and aggregate
principal amount, which shall not bear the restrictive Legend.  The Company shall inform the Trustee of the
effective date of any registration statement registering the Securities under
the Securities Act.  The Trustee shall
not be liable for any action taken or omitted to be taken by it in good faith
in accordance with the aforementioned opinion of counsel or registration
statement.

 

(e)           As used in the preceding two
paragraphs of this Section 2.12, the term “transfer” encompasses any sale,
pledge, transfer, hypothecation or other disposition of any Security.

 

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

 

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

 

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

 

(iii)          Subject to the provisions of
clause (v) below, the registered Holder may grant proxies and otherwise
authorize any Person, including Agent Members and persons that may 

 

15

 

hold interests through
Agent Members, to take any action which a Holder is entitled to take under this
Indenture or the Securities.

 

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

 

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

 

SECTION 2.13.    CUSIP NUMBERS.

 

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

 

ARTICLE
3

REDEMPTION AND PURCHASES

 

SECTION 3.1.      OPTIONAL REDEMPTION

 

(a)           The Company shall not have the option
to redeem the Securities pursuant to this Section 3.1 prior to December 20,
2009.  Thereafter, the Company shall have
the option to redeem the Securities, in whole or in part, at the redemption
prices (expressed as percentages of principal amount) set forth below plus
accrued and unpaid interest and Additional Interest thereon, if any, to the
applicable Redemption Date, if redeemed during the periods set forth below:

 

	
  Period

  	
   

  	
  Percentage

  	
   

  
	
  Beginning
  December 20, 2009 through December 14, 2010

  	
   

  	
  100.50

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Beginning
  December 15, 2010 through December 14, 2011

  	
   

  	
  100.25

  	
  %

  

 

16

 

(b)           Any redemption pursuant to this
Section 3.1 shall be made pursuant to the provisions of Section 3.2 through
3.12 hereof.

 

SECTION 3.2.      RIGHT TO REDEEM; NOTICE TO
TRUSTEE.

 

If the Company elects to
redeem Securities pursuant to Section 3.1 and paragraph 6 of the
Securities, it shall notify the Trustee at least 45 days prior to the
Redemption Date as fixed by the Company (unless a shorter notice shall be
satisfactory to the Trustee) of the Redemption Date and the principal amount of
Securities to be redeemed.  If fewer than
all of the Securities are to be redeemed, the record date relating to such
redemption shall be selected by the Company and given to the Trustee, which
record date shall not be less than ten days after the date of notice to the
Trustee.

 

SECTION 3.3.      SELECTION OF SECURITIES TO
BE REDEEMED.

 

If less than all of the
Securities are to be redeemed, unless the procedures of the Depositary provide
otherwise, the Trustee shall, at least 10 days but not more than 60 days
prior to the Redemption Date, select the Securities to be redeemed.  The Trustee shall make the selection from the
Securities outstanding and not previously called for redemption, by lot, or in
its discretion, on a pro rata basis. 
Securities in denominations of $1,000 may only be redeemed in
whole.  The Trustee may select for
redemption portions (equal to $1,000 or any integral multiple thereof) of the
principal of Securities that have denominations larger than $1,000.  Provisions of this Indenture that apply to
Securities called for redemption also apply to portions of Securities called
for redemption.

 

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

 

SECTION 3.4.      NOTICE OF REDEMPTION.

 

At least 10 days but not
more than 60 days before a Redemption Date, the Company shall mail or cause to
be mailed a notice of redemption to each Holder of Securities to be redeemed at
such Holder’s address as it appears on the Primary Registrar’s books.

 

The notice shall identify
the Securities (including CUSIP numbers) to be redeemed and shall state:

 

(1)           the Redemption Date;

 

(2)           the Redemption Price;

 

(3)           the Applicable Conversion Rate;

 

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

 

(5)           that Securities called for redemption
must be presented and surrendered to a Paying Agent to collect the Redemption
Price;

 

17

 

(6)           that Holders who wish to convert
Securities must surrender such Securities for conversion no later than the
close of business on the Business Day immediately preceding the Redemption Date
and must satisfy the other requirements set forth in paragraph 9 of the
Securities;

 

(7)           that, unless the Company defaults in
making the payment of the Redemption Price, interest on Securities called for
redemption shall cease accruing on and after the Redemption Date and the only
remaining right of the Holder shall be to receive payment of the Redemption
Price plus accrued interest, if any, to the Redemption Date, upon presentation
and surrender to a Paying Agent of the Securities; and

 

(8)           if any Security is being redeemed in
part, the portion of the principal amount of such Security to be redeemed and
that, after the Redemption Date, upon presentation and surrender of such
Security, a new Security or Securities in aggregate principal amount equal to
the unredeemed portion thereof will be issued.

 

If any of the Securities
to be redeemed is in the form of a Global Security, then the Company shall
modify such notice to the extent necessary to accord with the procedures of the
Depositary applicable to redemptions.  At
the Company’s written request to the Trustee at least 25 days prior to the
Redemption Date, which request shall (i) be irrevocable once given and
(ii) set forth all relevant information required by clauses (1)
through (8) of the preceding paragraph, the Trustee shall give the notice of
redemption in the Company’s name and at the Company’s expense.

 

SECTION 3.5.      EFFECT OF NOTICE OF
REDEMPTION.

 

Once notice of redemption
is mailed, Securities called for redemption become due and payable on the
Redemption Date and at the Redemption Price stated in the notice, together with
accrued interest, if any, except for Securities that are converted in
accordance with the provisions of Article 4.  Upon presentation and surrender to a Paying
Agent, Securities called for redemption shall be paid at the Redemption Price,
plus accrued interest up to but not including the Redemption Date; provided
that if the Redemption Date falls after an interest payment record date
and on or before an interest payment date, then the interest will be payable to
the Holders in whose name the Securities are registered at the close of
business on the interest payment record date.

 

SECTION 3.6.      DEPOSIT OF REDEMPTION PRICE.

 

Prior to 11:00 a.m. New
York City time, on the Redemption Date, the Company shall deposit with a Paying
Agent (or, if the Company acts as Paying Agent, shall segregate and hold in
trust) an amount of money (in immediately available funds if deposited on such
Redemption Date) sufficient to pay the Redemption Price of and accrued interest
on all Securities to be redeemed on that date, other than Securities or
portions thereof called for redemption on that date which have been delivered
by the Company to the Trustee for cancellation or have been converted.  The Paying Agent shall as promptly as
practicable return to the Company any money not required for that purpose
because of the conversion of Securities pursuant to Article 4 or, if such
money is then held by the Company in trust and is not required for such
purpose, it shall be discharged from the trust.

 

18

 

SECTION 3.7.      SECURITIES REDEEMED IN PART.

 

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

 

SECTION 3.8.      CONVERSION ARRANGEMENT ON
CALL FOR REDEMPTION.

 

In connection with any
redemption of Securities, the Company may arrange for the purchase and
conversion of any Securities called for redemption by an agreement with one or
more investment bankers or other purchasers to purchase such Securities by
paying to a Paying Agent (other than the Company or any of its Affiliates) in
trust for the Holders, on or before 11:00 a.m. New York City time on the
Redemption Date, an amount that, together with any amounts deposited with such
Paying Agent by the Company for the redemption of such Securities, is not less
than the Redemption Price, together with interest accrued to, but not
including, the Redemption Date, of such Securities.  Notwithstanding anything to the contrary
contained in this Article 3, the obligation of the Company to pay the
Redemption Price of such Securities, including all accrued interest, shall be
deemed to be satisfied and discharged to the extent such amount is so paid by
such purchasers; provided, however, that nothing in this
Section 3.8 shall relieve the Company of its obligation to pay the
Redemption Price, plus accrued interest to but excluding the relevant
Redemption Date, on Securities called for redemption.  If such an agreement with one or more
investment banks or other purchasers is entered into, any Securities called for
redemption and not surrendered for conversion by the Holders thereof prior to
the relevant Redemption Date may, at the option of the Company upon written
notice to the Trustee, 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 4) surrendered by such purchasers for
conversion, all as of 11:00 a.m. New York City time on the Redemption Date,
subject to payment of the above amount as aforesaid.  The Paying Agent shall hold and pay to the
Holders whose Securities are selected for redemption any such amount paid to it
for purchase in the same manner as it would money deposited with it by the
Company for the redemption of Securities. 
Without the Paying Agent’s prior written consent, no arrangement between
the Company and such purchasers for the purchase and conversion of any
Securities shall increase or otherwise affect any of the powers, duties,
responsibilities or obligations of the Paying Agent as set forth in this
Indenture, and the Company agrees to indemnify the Paying Agent from, 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
Securities between the Company and such purchasers, including the costs and
expenses incurred by the Paying Agent 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.

 

SECTION 3.9.      REPURCHASE AT OPTION OF THE
HOLDER UPON A FUNDAMENTAL CHANGE.

 

(a)           Subject to the satisfaction of the
requirements of this Section 3.9, if a Fundamental Change occurs at any time
prior to the Final Maturity Date, each Holder will, upon receipt of the notice
of the occurrence of a Fundamental Change described in Section 3.9(c), have the
right (subject to the Company’s rights upon delivery of a Public Acquisition
Notice as defined in Section 3.11) to require the Company to repurchase any or
all of such Holder’s Securities for cash in an amount equal to 100% of the
principal amount of the Securities to be repurchased plus accrued and unpaid
interest, if any, to (but not including) the Fundamental Change Repurchase Date
(the “Fundamental Change Repurchase Price”), unless such Fundamental Change
Repurchase Date falls after an interest payment record date and on or prior to
the 

 

19

 

corresponding
interest payment date, in which case the Fundamental Change Repurchase Price
will include the full amount of accrued and unpaid Interest payable on such
interest payment date to the Holder of record at the close of business on the
corresponding interest payment record date.

 

(b)           Notwithstanding the foregoing,
Holders will not have the right to require the Company to repurchase any
Securities if a Fundamental Change described in clause (b) or (c) in the
definition of Fundamental Change occurs (and the Company will not be required
to deliver the notice described in Section 3.9(c)), if either:

 

(1)           the Closing Price of the Common Stock
for any five Trading Days within the period of 10 consecutive Trading Days
ending immediately after the later of the effective date of the Fundamental
Change or the date of the public announcement of the Fundamental Change, in the
case of a Fundamental Change relating to an acquisition of Capital Stock under
clause (b) of the definition of Fundamental Change, or the period of ten
consecutive Trading Days ending immediately before the effective date of the
Fundamental Change, in the case of a Fundamental Change relating to a merger,
consolidation, asset sale or otherwise under clause (c) of the definition of
Fundamental Change, equals or exceeds 105% of the quotient of $1,000 divided by
the Applicable Conversion Rate of the Securities in effect on each of those
five Trading Days; or

 

(2)           at least 95% of the consideration
paid for the Common Stock (excluding cash payments for fractional shares and
cash payments made pursuant to dissenters’ appraisal rights) in a merger or
consolidation or a conveyance, sale, transfer or lease otherwise constituting a
Fundamental Change under clause (b) and/or (c) of the definition of Fundamental
Change consists of shares of Capital Stock traded on the New York Stock
Exchange or another United States national securities exchange or quoted on the
Nasdaq Stock Market or another established automated over-the-counter trading
market in the United States (or will be so traded or quoted immediately
following the merger or consolidation) and as a result of the merger or
consolidation the Securities become convertible into shares of such Capital
Stock.

 

(c)           Subject to Sections 3.9(b) and 3.11,
on or before the 15th day after the effective date of a Fundamental Change
(which Fundamental Change results in the Holders of such Securities having the
right to cause the Company to repurchase their Securities), the Company will
provide to all Holders of the Securities, the Trustee and the Paying Agent a
notice of the occurrence of the Fundamental Change and of the resulting
repurchase right. Such notice shall state:

 

(1)           the events causing the Fundamental
Change;

 

(2)           whether the Fundamental Change falls
under clause (b), (c) or (d) of the definition of Fundamental Change, in which
case the conversion adjustments described in Section 3.10 will be applicable;

 

(3)           the effective date of the Fundamental
Change;

 

(4)           the last date on which a Holder may
exercise its repurchase right;

 

(5)           the Fundamental Change Repurchase
Price;

 

(6)           the Fundamental Change Repurchase
Date;

 

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

 

(8)           the Applicable Conversion Rate and
any adjustments to the Applicable Conversion Rate;

 

20

 

(9)           that the Securities with respect to
which a Fundamental Change repurchase notice has been given by the Holder may
be converted only if the Holder withdraws the Fundamental Change repurchase
notice as described in clause (d) below; and

 

(10)         the procedures that Holders must follow
to require the Company to repurchase their Securities and to withdraw any
repurchase notice.

 

Substantially
simultaneously with providing such notice, the Company will issue a press
release and publish the information through a public medium customary for such
press releases.

 

(d)           To exercise the repurchase right in
connection with a Fundamental Change, a Holder must, before the close of
business on the second Business Day immediately preceding the Fundamental
Change Repurchase Date, deliver the Securities to be purchased to the Paying
Agent, duly endorsed for transfer, or effect book-entry transfer of the
Securities to the Paying Agent, and must deliver the Fundamental Change
repurchase notice duly completed to the Paying Agent. The Fundamental Change
repurchase notice must state:

 

(1)           if the Securities are certificated,
the certificate numbers of the Securities to be delivered for repurchase;

 

(2)           the portion of the principal amount
of the Securities to be repurchased, which must be equal to $1,000 or an
integral multiple thereof; and

 

(3)           that the Securities are to be
repurchased by the Company pursuant to the applicable provisions of the
Securities and the Indenture.

 

If the
Securities are not in certificated form, the repurchase notice must comply with
the Applicable Procedures.

 

A
Holder may withdraw any Fundamental Change repurchase notice (in whole or in
part) by a written notice of withdrawal delivered to the Paying Agent prior to
the close of business on the Business Day prior to the Fundamental Change
Repurchase Date. The notice of withdrawal must state:

 

(1)           the principal amount of the
Securities for which the repurchase notice has been withdrawn;

 

(2)           if certificated Securities have been
issued, the certificate numbers of the withdrawn Securities; and

 

(3)           the principal amount, if any, that
remains subject to the repurchase notice.

 

If the
Securities are not in certificated form, the withdrawal notice must comply with
the Applicable Procedures.

 

(e)           The Company must repurchase the
Securities for which a Fundamental Change repurchase notice has been delivered
and not withdrawn no less than 20 and no more than 35 days after the date of
the Company’s notice of the occurrence of the relevant Fundamental Change,
subject to extension to comply with applicable law. To receive payment of the
Fundamental Change Repurchase Price, a Holder must either effect book-entry
transfer or deliver the Securities, together with necessary endorsements, to
the office of the Paying 

 

21

 

Agent
after delivery of the repurchase notice. Holders will receive payment of the
Fundamental Change Repurchase Price promptly following the later of the
Fundamental Change Repurchase Date or the time of book-entry transfer or the
delivery of the Securities. If the Paying Agent holds money or securities
sufficient to pay the Fundamental Change Repurchase Price of the Securities on
the Business Day following the Fundamental Change Repurchase Date, then:

 

(1)           the Securities will cease to be
outstanding and Interest, if any, will cease to accrue (whether or not
book-entry transfer of the Securities is made or whether or not the Note is
delivered to the Paying Agent); and

 

(2)           all other rights of the Holder will
terminate (other than the right to receive the Fundamental Change Repurchase
Price upon delivery or transfer of the Securities).

 

SECTION 3.10.    ADJUSTMENT TO APPLICABLE
CONVERSION RATE UPON A FUNDAMENTAL CHANGE.

 

(a)           If and only to the extent that a
Holder converts Securities in connection with a Fundamental Change described in
clause (b), (c) or (d) of the definition of Fundamental Change (and subject to
the Company’s rights upon delivery of a Public Acquisition Notice as defined in
Section 3.11), the Company will increase the Applicable Conversion Rate for the
Securities surrendered for conversion by a number of additional shares (the “Additional
Shares”) as described in this Section 3.10; provided, however, that no increase
will be made in the case of a Fundamental Change if at least 95% of the
consideration paid for the Common Stock (excluding cash payments for fractional
shares and cash payments made pursuant to dissenters’ appraisal rights) in such
Fundamental Change transaction consists of shares of Capital Stock traded on
the New York Stock Exchange or another United States national securities
exchange or quoted on the Nasdaq Stock Market or another established automated
over-the-counter trading market in the United States (or that will be so traded
or quoted immediately following the transaction).

 

(b)           The number of Additional Shares will
be determined by reference to the Additional Shares Table, based on the
effective date of the Fundamental Change transaction and the price (the “Stock
Price”) paid per share of Common Stock in such Fundamental Change transaction.
If holders of Common Stock receive only cash in such Fundamental Change
transaction, the Stock Price will be the cash amount paid per share of Common
Stock. Otherwise, the Stock Price will be the average of the Closing Prices of
the Common Stock on each of the five consecutive Trading Days prior to but not
including the effective date of the Fundamental Change.

 

(c)           A conversion of Securities by a
Holder will be deemed for these purposes to be “in connection with” a
Fundamental Change if the conversion notice is received by the Conversion Agent
on or subsequent to the effective date of the Fundamental Change and prior to
the 45th day following the effective date of the Fundamental Change (or, if
earlier and the extent applicable, the close of business on the second Business
Day immediately preceding the Fundamental Change Repurchase Date).

 

(d)           The Stock Prices set forth in the
first row of the Additional Shares Table (i.e., the column headers) will be
adjusted as of any date on which the conversion rate of the Securities is
adjusted, as described in Section 4.6. 
The adjusted Stock Prices will equal (i) the Stock Prices applicable
immediately prior to such adjustment, multiplied by (ii) a fraction, (A) the
numerator of which is the Applicable Conversion Rate immediately prior to the
adjustment giving rise to the Stock Price adjustment and (B) the denominator of
which is the Applicable Conversion Rate as so adjusted. The number of
Additional Shares 

 

22

 

will be
adjusted in the same manner and for the same events as the Applicable
Conversion Rate as set forth in Section 4.6.

 

(e)           The exact Stock Price and effective
date of the Fundamental Change may not be set forth on the Additional Shares
Table; in which case, if the Stock Price is:

 

(1)           between two Stock Price amounts on
the Additional Shares Table or the effective date of the Fundamental Change is
between two dates on the Additional Shares Table, the number of Additional
Shares will be determined by straight-line interpolation between the number of
Additional Shares set forth for the higher and lower Stock Price amounts and
the two dates, as applicable, based on a 365-day year;

 

(2)           more than $100.00 per share (subject
to adjustment), no Additional Shares will be issued upon conversion; and

 

(3)           less than $9.86 per share (subject to
adjustment), no Additional Shares will be issued upon conversion.

 

(f)            Notwithstanding the foregoing, in no
event will the total number of shares of Common Stock issuable upon conversion
exceed 101.4199 per $1,000 principal amount of Securities, subject to
adjustment in the same manner and for the same events as the Applicable
Conversion Rate as set forth in Section 4.6.

 

SECTION 3.11.    PUBLIC ACQUIRER CHANGE OF
CONTROL.

 

(a)           Within 15 Trading Days prior to but
not including the expected effective date of a Public Acquirer Change of
Control, the Company will provide a notice (a “Public Acquisition Notice”) to
all Holders, the Trustee, any Paying Agent and any Conversion Agent describing
the anticipated Public Acquirer Change of Control and stating whether the
Company will:

 

(1)           elect to adjust the Applicable
Conversion Rate and related conversion obligation as described in this Section
3.11, in which case the Holders will not have the right to require the Company
repurchase their Securities as described in Section 3.9 and will not have the
right to the Applicable Conversion Rate adjustment described in Section 3.10;
or

 

(2)           not elect to adjust the Applicable
Conversion Rate and related conversion obligation as described in this Section
3.11, in which case the Holders will have the right (if applicable) to require
the Company to repurchase their Securities as described in Section 3.9 and/or
the right (if applicable) to an Applicable Conversion Rate adjustment as
described in Section 3.10, in each case in accordance with the respective
provisions of those Sections.

 

(b)           If the Public Acquisition Notice
indicates that the Company is making the election described in Section
3.11(a)(i), then the Applicable Conversion Rate and the related conversion
obligation shall be adjusted such that from and after the effective date of the
Public Acquirer Change of Control, Holders of the Securities will be entitled
to convert their Securities into a number of shares of Public Acquirer Common
Stock and the Applicable Conversion Rate will be adjusted by multiplying the
Applicable Conversion Rate in effect immediately before the Public Acquirer
Change of Control by a fraction:

 

(1)           the numerator of which will be (A) in
the case of a consolidation, merger or binding share exchange, pursuant to
which Common Stock is converted into cash, securities or other property, the
average value of all cash and any other consideration (as determined by the
Board of Directors) paid or payable per 

 

23

 

share of
Common Stock or (B) in the case of any other Public Acquirer Change of Control,
the average of the Closing Price of the Common Stock for the five consecutive
Trading Days prior to but excluding the effective date of such Public Acquirer
Change of Control; and

 

(2)           the denominator of which will be the
average of the Closing Price of the Public Acquirer Common Stock for the five
consecutive Trading Days prior to but excluding the effective date of such
Public Acquirer Change of Control.

 

SECTION 3.12.    COMPLIANCE WITH SECURITIES
LAWS UPON PURCHASE OF SECURITIES.

 

In connection with any
offer to purchase or purchase of Securities under Section 3.9, the Company
shall (a) comply with Rule 13e-4 and Rule 14e-1 (or any successor to
either such Rule), if applicable, under the Exchange Act, (b) file the
related Schedule TO (or any successor or similar schedule, form or report) if required
under the Exchange Act, and (c) otherwise comply with all federal and
state securities laws in connection with such offer to purchase or purchase of
Securities, all so as to permit the rights of the Holders and obligations of
the Company under Sections 3.9 through 3.12 to be exercised in the time and in
the manner specified therein.

 

SECTION 3.13.    REPAYMENT TO THE COMPANY.

 

To the extent that the
aggregate amount of cash deposited by the Company pursuant to Section 3.9
exceeds the aggregate Fundamental Change Repurchase Price together with
interest, if any, thereon of the Securities or portions thereof that the
Company is obligated to purchase, then promptly after the Fundamental Change
Repurchase Date, the Trustee or a Paying Agent, as the case may be, shall
return any such excess cash to the Company.

 

ARTICLE
4

CONVERSION

 

SECTION 4.1.      CONVERSION PRIVILEGE.

 

Subject to the further
provisions of this Article 4 and paragraph 9 of the Securities, a Holder of a
Security may convert the principal amount of such Security (or any portion
thereof equal to $1,000 or any integral multiple of $1,000 in excess thereof)
into Common Stock at any time prior to the close of business on the last
Business Date prior to the Final Maturity Date, at the Applicable Conversion
Rate in effect on the Conversion Date; provided, however, that,
if such Security is called for redemption or submitted or presented for
purchase pursuant to Article 3, such conversion right shall terminate at
the close of business on the Business Day immediately preceding the Redemption
Date or Fundamental Change Repurchase Date, as the case may be, for such
Security or such earlier date as the Holder presents such Security for
redemption or for purchase (unless the Company shall default in making the redemption
payment or Fundamental Change Repurchase Price payment when due, in which case
the conversion right shall terminate at the close of business on the date such
default is cured and such Security is redeemed or purchased, as the case may
be).  The Initial Conversion Rate is
subject to adjustment as provided in this Article 4.

 

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

 

24

 

A Security in respect of
which a Holder has delivered a notice pursuant to Section 3.9 exercising
the option of such Holder to require the Company to purchase such Security may
be converted only if such notice is withdrawn by a written notice of withdrawal
delivered to a Paying Agent prior to the close of business on the Business Day
immediately preceding the Fundamental Change Repurchase Date in accordance with
Section 3.9.

 

A Holder of Securities is
not entitled to any rights of a holder of Common Stock until such Holder has
converted its Securities to Common Stock, and only to the extent such
Securities are deemed to have been converted into Common Stock pursuant to this
Article 4.

 

SECTION 4.2.      CONVERSION PROCEDURE.

 

To convert a Security, a
Holder must (a) complete and manually sign the conversion notice on the
back of the Security and deliver such notice to a Conversion Agent,
(b) surrender the Security to a Conversion Agent, (c) furnish
appropriate endorsements and transfer documents if required by a Registrar or a
Conversion Agent, and (d) pay any transfer or similar tax, if
required.  The date on which the Holder
satisfies all of those requirements is the “Conversion Date.”  As soon as practicable after the Conversion
Date, the Company shall deliver to the Holder through a Conversion Agent a
certificate for the number of whole shares of Common Stock issuable upon the
conversion and cash in lieu of any fractional shares pursuant to
Section 4.3.  Anything herein to the
contrary notwithstanding, in the case of Global Securities, conversion notices
may be delivered and such Securities may be surrendered for conversion in
accordance with the Applicable Procedures as in effect from time to time.

 

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

 

Securities so surrendered
for conversion (in whole or in part) during the period from the close of
business on any regular record date to the opening of business on the next
succeeding interest payment date (excluding Securities or portions thereof
called for redemption or presented for purchase upon a Fundamental Change on a
Redemption Date or Fundamental Change Repurchase Date, as the case may be,
during the period beginning at the close of business on a regular record date
and ending at the opening of business on the first Business Day after the next
succeeding interest payment date, or if such interest payment date is not a
Business Day, the second such Business Day) shall also be accompanied by
payment in funds acceptable to the Company of an amount equal to the interest
payable on such interest payment date on the principal amount of such Security
then being converted, and such interest shall be payable to such registered
Holder notwithstanding the conversion of such Security, subject to the
provisions of this Indenture relating to the payment of defaulted interest by
the Company.  Except as otherwise
provided in this Section 4.2, no payment or adjustment will be made for
accrued interest on a converted Security. 
If the Company defaults in the 

 

25

 

payment of interest payable on such interest payment
date, the Company shall promptly repay such funds to such Holder.

 

Except as otherwise
provided in this Section 4.2, the Company’s delivery to the Holder of the full
number of shares of Common Stock into which the Security is convertible,
together with any cash payment for such Holder’s fractional shares pursuant to
Section 4.3, will be deemed to satisfy the Company’s obligation to pay the
principal amount of the Security and accrued but unpaid interest attributable
to the period from the most recent interest payment date to the conversion
date.  As a result, accrued but unpaid interest
to the conversion date is deemed to be paid in full rather than cancelled,
extinguished or forfeited.

 

Nothing in this
Section shall affect the right of a Holder in whose name any Security is
registered at the close of business on a record date to receive the interest
payable on such Security on the related interest payment date in accordance
with the terms of this Indenture and the Securities. If a Holder converts more
than one Security at the same time, the number of shares of Common Stock
issuable upon the conversion shall be based on the aggregate principal amount
of Securities converted.

 

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

 

SECTION 4.3.      FRACTIONAL SHARES.

 

The Company will not
issue fractional shares of Common Stock upon conversion of Securities.  In lieu thereof, the Company will pay an
amount in cash for the current market value of the fractional shares.  The current market value of a fractional
share shall be determined, (calculated to the nearest 1/1000th of a
share) by multiplying the Closing Price of the Common Stock on the Trading Day
immediately prior to the Conversion Date by such fractional share and rounding
the product to the nearest whole cent.

 

SECTION 4.4.      TAXES ON CONVERSION.

 

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

 

SECTION 4.5.      COMPANY TO PROVIDE STOCK.

 

The Company shall, prior
to issuance of any Securities hereunder, and from time to time as may be
necessary, reserve, out of its authorized but unissued Common Stock, a
sufficient number of shares of Common Stock to permit the conversion of all
outstanding Securities into shares of Common Stock.

 

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

 

26

 

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

 

In no event will the
Company take any action that would require adjustment to the Applicable
Conversion Rate, nor will the Company adjust the Applicable Conversion Rate, if
such Applicable Conversion Rate adjustment would require the Company to issue,
upon conversion of the Securities, a number of shares of Common Stock that
would require the Company to obtain prior shareholder approval under the rules
and regulations of the Nasdaq National Market, and, if applicable, the rules of
the exchange or quotation system on which the Common Stock is then traded,
without obtaining such prior shareholder approval.

 

SECTION 4.6.      ANTI-DILUTION ADJUSTMENTS.

 

The
Applicable Conversion Rate will be subject to adjustment, without duplication,
upon the occurrence of any of the following events:

 

(a)           the Company pays a dividend or makes
a distribution on the Common Stock, payable exclusively in shares of Common
Stock or other Capital Stock of the Company;

 

(b)           the Company issues to all or
substantially all holders of Common Stock rights or warrants that allow such
holders to purchase shares of Common Stock for a period expiring within 60 days
from the date of issuance of the rights or warrants at less than the current
market price;

 

(c)           the Company:

 

(1)           subdivides or splits the outstanding
shares of Common Stock into a greater number of shares;

 

(2)           combines or reclassifies the
outstanding shares of Common Stock into a smaller number of shares; or

 

(3)           issues by reclassification of the
shares of Common Stock any  shares of the
Capital Stock of the Company;

 

(d)           the Company distributes to all or
substantially all holders of Common Stock evidences of indebtedness, securities
or assets or certain rights to purchase its securities, but excluding:

 

(1)           dividends or distributions described
in paragraph (a) above;

 

(2)           rights or warrants described in
paragraph (b) above;

 

27

 

(3)           dividends or distributions paid
exclusively in cash described in paragraph (e), (f) or (g) below

 

(the “distributed assets”),
in which event (other than in the case of a spin-off as described below), the
conversion rate in effect immediately before the close of business on the
record date fixed for determination of stockholders entitled to receive that
distribution will be increased by multiplying:

 

(x)           the Applicable
Conversion Rate; by

 

(y)         a fraction, (1) the
numerator of which is the current market price of the Common Stock and (2) the
denominator of which is the current market price of the Common Stock minus the
fair market value, as determined by the Board of Directors, whose determination
in good faith will be conclusive, of the portion of those distributed assets
applicable to one share of Common Stock.

 

For
purposes of this paragraph (d) (unless otherwise stated), the “current market
price” of the Common Stock means the average of the Closing Prices of the
Common Stock for the five consecutive Trading Days ending on the Trading Day
prior to the ex-dividend Trading Day for such distribution, and the new
Applicable Conversion Rate shall take effect immediately after the record date
fixed for determination of the stockholders entitled to receive such
distribution.

 

Notwithstanding
the foregoing, in cases where (x) the fair market value per share of Common
Stock of the distributed assets equals or exceeds the current market price of
the Common Stock, or (y) the current market price of the Common Stock exceeds
the fair market value per share of Common Stock of the distributed assets by
less than $1.00, in lieu of the foregoing adjustment, the Holder will have the
right to receive upon conversion, in addition to shares of Common Stock, the
distributed assets the Holder would have received if the Holder had converted
the Securities immediately prior to the record date.

 

In
respect of a dividend or other distribution of shares of Capital Stock of any
class or series, or similar equity interests, of or relating to a Subsidiary of
the Company or other business unit, referred to herein as a “spin-off,” the
Applicable Conversion Rate in effect immediately before the close of business
on the record date fixed for determination of stockholders entitled to receive
that distribution will be increased by multiplying:

 

(x)           the Applicable
Conversion Rate; by

 

(y)         a fraction, (1) the
numerator of which is (A) the current market price of the Common Stock plus (B)
the fair market value of the Common Stock, determined as described below, of
the portion of those shares of Capital Stock or similar equity interests so
distributed applicable to one share of Common Stock, and (2) the denominator of
which is the current market price of the Common Stock.

 

The adjustment to the
Applicable Conversion Rate in the event of a spin-off will occur at the earlier
of:

 

(x)           the tenth Trading Day
from, and including, the effective date of the spin-off; and

 

(y)         the date of the initial
public offering of the securities being distributed in the spin-off, if that
initial public offering is effected simultaneously with the spin-off.

 

28

 

For
purposes of this paragraph (d), “initial public offering” means the first time
securities of the same class or type as the securities being distributed in the
spin-off are bona fide offered to the public for cash.

 

In the
event of a spin-off that is not effected simultaneously with an initial public
offering of the securities being distributed in the spin-off, the “fair market
value” of the securities to be distributed to holders of Common Stock means the
average of the Closing Prices of those securities over the ten consecutive
Trading Days following the effective date of the spin-off. For the purpose of
this paragraph (d), the “current market price” of the Common Stock means the
average of the Closing Prices of the Common Stock over the ten consecutive
Trading Days following the effective date of the spin-off.

 

If,
however, an initial public offering of the securities being distributed in the
spin-off is to be effected simultaneously with the spin-off, the “fair market
value” of the securities being distributed in the spin-off means the initial
public offering price, while the current market price of the Common Stock means
the Closing Price of the Common Stock on the Trading Day on which the initial
public offering price of the securities being distributed in the spin-off is
determined.

 

(e)           the Company makes a distribution
consisting exclusively of cash to all or substantially all holders of
outstanding shares of Common Stock, in which event the Applicable Conversion
Rate will be adjusted by multiplying:

 

(1)           the Applicable Conversion Rate; by

 

(2)           a fraction, (A) the numerator of
which is the current market price of the Common Stock, and (B) the denominator
of which is the current market price of the Common Stock, minus the amount per
share of such distribution.

 

Notwithstanding
the foregoing, in cases where (i) the amount per share of Common Stock of such
distribution equals or exceeds the current market price of the Common Stock or
(ii) the current market price of the Common Stock exceeds the amount per share
of Common Stock of such distribution by less than $1.00, in lieu of the
foregoing adjustment, the Holder will have the right to receive upon
conversion, in addition to shares of Common Stock, such distribution the Holder
would have received if the Holder had converted the Securities immediately
prior to the record date. For purposes of this paragraph (e), the “current
market price” of the Common Stock means the average of the Closing Prices of
the Common Stock for the five consecutive Trading Days ending on the Trading
Day prior to the ex-dividend Trading Day for such cash distribution, and the
new Applicable Conversion Rate shall take effect immediately after the record
date fixed for determination of the stockholders entitled to receive such distribution.

 

(f)            the Company or one of its
Subsidiaries makes a payment in respect of a tender offer or exchange offer for
the Common Stock, in which event, to the extent the cash and value of any other
consideration included in the payment per share of the Common Stock exceeds the
Closing Price of the Common Stock on the Trading Day next succeeding the last
date on which tenders or exchanges may be made pursuant to such tender offer or
exchange offer, as the case may be, the Applicable Conversion Rate will be
adjusted by multiplying:

 

(1)           the Applicable Conversion Rate; by

 

(2)           a fraction, (A) the numerator of
which will be the sum of (1) the fair market value, as determined by the Board
of Directors, of the aggregate consideration payable for all shares of Common
Stock 

 

29

 

the
Company or any such Subsidiary purchases in the tender or exchange offer and
(2) the product of (x) the number of shares of Common Stock outstanding less
any such purchased shares and (y) the Closing Price of the Common Stock on the
Trading Day next succeeding the date of the expiration of the tender or
exchange offer, and (B) the denominator of which will be the product of (1) the
number of shares of Common Stock outstanding, including any such purchased
shares, and (2) the Closing Price of the Common Stock on the Trading Day next
succeeding the date of expiration of the tender or exchange offer.

 

(g)           the Company or one of its
Subsidiaries makes a payment in respect of a repurchase of the Common Stock,
the consideration for which exceeded the then-prevailing market price of the
Common Stock (such amount being the “repurchase premium”), and that repurchase,
together with any other repurchases of Common Stock by the Company or a
Subsidiary involving a repurchase premium concluded within the preceding 12
months, resulted in the payment by the Company and its Subsidiaries of an
aggregate consideration exceeding an amount equal to 10% of the market
capitalization of the Common Stock, the Applicable Conversion Rate will be
adjusted by multiplying:

 

(1)           the Applicable Conversion Rate; by

 

(2)           a fraction, (A) the numerator of
which is the current market price of the Common Stock and (B) the denominator
of which is (1) the current market price of the Common Stock, minus (2) the
quotient of (x) the aggregate amount of all of the repurchase premiums paid in
connection with such repurchases and (y) the number of shares of Common Stock
outstanding on the day next succeeding the date of the repurchase triggering
the adjustment, as determined by the Board of Directors;

 

provided that no
adjustment to the Applicable Conversion Rate shall be made to the extent the
Applicable Conversion Rate is not increased as a result of the above
calculation; and provided further that the repurchases of Common Stock effected
by the Company, its Subsidiaries or their respective agents in conformity with
Rule 10b-18 under the Exchange Act will not be included in any adjustment to
the Applicable Conversion Rate made under this paragraph (g). For purposes of
this paragraph (g), (i) the market capitalization will be calculated by
multiplying (A) the current market price of the Common Stock by (B) the number
of shares of Common Stock then outstanding on the date of the repurchase triggering
the adjustment, and (ii) the current market price will be the average of the
Closing Prices of the Common Stock for the five consecutive Trading Days
beginning on the Trading Day next succeeding the date of the repurchase
triggering the adjustment, and (iii) in determining the repurchase premium, the
“then-prevailing market price” of the Common Stock will be the average of the
Closing Prices of the Common Stock for the five consecutive Trading Days ending
on the relevant repurchase date.

 

In
addition to the adjustments set forth above, the Company may increase the
Applicable Conversion Rate as the Board of Directors considers 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 Capital
Stock (or rights to acquire Capital Stock) or from any event treated as such
for income tax purposes. The Company may also, from time to time, to the extent
permitted by applicable law, increase the Applicable Conversion Rate by any
amount for any period of at least 20 days if the Board of Directors has
determined that such increase would be in the Company’s best interests. If the
Board of Directors makes such a determination, it will be conclusive. The
Company will give Holders at least 15 days’ notice of such an increase in the
Applicable Conversion Rate.

 

No
adjustment to the Applicable Conversion Rate or a Holder’s ability to convert
its Securities will be made if the Holder otherwise participated in the
distribution without conversion or in certain other cases.

 

30

 

The
Applicable Conversion Rate will not be adjusted:

 

(1)  upon the issuance of any shares of Common
Stock pursuant to any present or future plan providing for the reinvestment of
dividends or interest payable on the Company’s securities and the investment of
additional optional amounts in shares of Common Stock under any plan;

 

(2)  upon the issuance of any shares of Common
Stock or options or rights to purchase those shares pursuant to any present or
future employee, director or consultant benefit plan or program of or assumed
by the Company or any of its Subsidiaries;

 

(3)           upon the issuance of any shares of
Common Stock pursuant to any option, warrant, right or exercisable,
exchangeable or convertible security not described in the preceding clause (2)
and outstanding as of the date the Securities were first issued;

 

(4)           for a change in the par value of the
Common Stock; or

 

(5)           for accrued and unpaid interest, if
any.

 

If a
Holder will receive shares of Common Stock upon conversion of Securities, then
the Holder will also receive any associated rights under any stockholder rights
plan the Company has adopted or may adopt, whether or not the rights have separated
from the Common Stock at the time of conversion unless, prior to conversion,
the rights have expired, terminated or been redeemed or exchanged.

 

Substantially
simultaneously with an adjustment of the Applicable Conversion Rate, the
Company will disseminate a press release detailing the new Applicable
Conversion Rate and other relevant information.

 

SECTION 4.7.      TRUSTEE’S DISCLAIMER.

 

The Trustee shall have no
duty to determine when an adjustment under this Article 4 should be made,
how it should be made or what such adjustment should be, but may accept as
conclusive evidence of that fact or the correctness of any such adjustment, and
shall be protected in relying upon, an Officers’ Certificate including the
Officers’ Certificate with respect thereto which the Company is obligated to
file with the Trustee pursuant to Section 4.9.  The Trustee makes no representation as to the
validity or value of any securities or assets issued upon conversion of
Securities, and the Trustee shall not be responsible for the Company’s failure
to comply with any provisions of this Article 4.

 

The Trustee shall not be
under any responsibility to determine the correctness of any provisions
contained in any supplemental indenture executed pursuant to Section 6.1,
but may accept as conclusive evidence of the correctness thereof, and shall be
fully protected in relying upon, the Officers’ Certificate with respect thereto
which the Company is obligated to file with the Trustee pursuant to
Section 6.1.

 

ARTICLE
5

COVENANTS

 

SECTION 5.1.      PAYMENT OF SECURITIES.

 

The Company shall
promptly make all payments in respect of the Securities on the dates and in the
manner provided in the Securities and this Indenture.  An installment of principal or interest or
Additional 

 

31

 

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

 

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

 

SECTION 5.2.      SEC REPORTS.

 

The Company shall file
all reports and other information and documents which it is required to file
with the SEC pursuant to Section 13 or 15(d) of the Exchange Act, and
within 15 days after it files them with the SEC, the Company shall file copies
of all such reports, information and other documents with the Trustee.  It is agreed that the filing of such reports
via the SEC’s EDGAR system shall constitute “filing” of such reports with the
Trustee for purposes of this Section 5.2.

 

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

 

SECTION 5.3.      COMPLIANCE CERTIFICATES.

 

The Company shall deliver
to the Trustee, within 90 days after the end of each fiscal year of the Company
(beginning with the fiscal year ending December 31, 2004), an Officers’
Certificate as to the signer’s knowledge of the Company’s compliance with all
conditions and covenants on its part contained in this Indenture and stating
whether or not the signer knows of any default or Event of Default.  If such signer knows of such a default or
Event of Default, the Officers’ Certificate shall describe the default or Event
of Default and the efforts to remedy the same. 
For the purposes of this Section 5.3, compliance shall be
determined without regard to any grace period or requirement of notice provided
pursuant to the terms of this Indenture.

 

SECTION 5.4.      FURTHER INSTRUMENTS AND
ACTS.

 

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

 

32

 

SECTION 5.5.      MAINTENANCE OF CORPORATE
EXISTENCE.

 

Subject to
Article 6, the Company will do or cause to be done all things necessary to
preserve and keep in full force and effect its corporate existence.

 

SECTION 5.6.      RULE 144A INFORMATION
REQUIREMENT.

 

Within the period prior
to the expiration of the holding period applicable to sales thereof under
Rule 144(k) under the Securities Act (or any successor provision), the
Company covenants and agrees that it shall, during any period in which it is
not subject to Section 13 or 15(d) under the Exchange Act, upon the
request of any Holder or beneficial holder of the Securities make available to
such Holder or beneficial holder of Securities or any Common Stock issued upon
conversion thereof which continue to be Transfer Restricted Securities in
connection with any sale thereof and any prospective purchaser of Securities or
such Common Stock designated by such Holder or beneficial holder, the
information required pursuant to Rule 144A(d)(4) under the Securities Act
or such Common Stock and it will take such further action as any Holder or
beneficial holder of such Securities or such Common Stock may reasonably
request, all to the extent required from time to time to enable such Holder or
beneficial holder to sell its Securities or Common Stock without registration
under the Securities Act within the limitation of the exemption provided by
Rule 144A, as such Rule may be amended from time to time.  Upon the request of any Holder or any
beneficial holder of the Securities or such Common Stock, the Company will deliver
to such Holder a written statement as to whether it has complied with such
requirements.

 

SECTION 5.7.      STAY, EXTENSION AND USURY
LAWS.

 

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

 

SECTION 5.8.      PAYMENT OF ADDITIONAL
INTEREST.

 

If Additional Interest is
payable by the Company pursuant to the Registration Rights Agreement, the
Company shall deliver to the Trustee a certificate to that effect stating
(i) the amount of such Additional Interest that is payable and
(ii) the date on which such Additional Interest is payable.  Unless and until a Trust Officer of the
Trustee receives such a certificate, the Trustee may assume without inquiry
that no such Additional Interest is payable. 
If the Company has paid Additional Interest directly to the Persons
entitled to it, the Company shall deliver to the Trustee a certificate setting
forth the particulars of such payment.

 

33

 

ARTICLE
6

CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

 

SECTION 6.1.      COMPANY MAY CONSOLIDATE,
ETC, ONLY ON CERTAIN TERMS.

 

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

 

(1)           in case the Company shall consolidate
with or merge into another Person (in a transaction in which the Company is not
the surviving corporation) or convey, transfer or lease its properties and
assets substantially as an entirety to any Person, the Person formed by such
consolidation or into which the Company is merged or the Person which acquires
by conveyance or transfer, or which leases, the properties and assets of the
Company substantially as an entirety shall be a corporation organized and
validly existing  under the laws of the
United States of America, any State thereof or the District of Columbia and
shall expressly assume, by an indenture supplemental hereto, executed and
delivered to the Trustee, in form satisfactory to the Trustee, the due and
punctual payment of the principal of and any premium and interest on all the
Securities and the performance or observance of every covenant of this Indenture
on the part of the Company to be performed or observed and the conversion
rights shall be provided for in accordance with Article 4, by supplemental
indenture satisfactory in form to the Trustee, executed and delivered to the
Trustee, by the Person (if other than the Company) formed by such consolidation
or into which the Company shall have been merged or by the Person which shall
have acquired the Company’s assets;

 

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

 

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

 

In the case of a merger
or consolidation pursuant to which all or substantially all of the Common Stock
would be converted into cash, securities or other property, the right to
convert Securities into Common Stock will be changed into a right to convert
Securities into the kind and amount of cash, securities or other property that
the Holder would have received had the Holder converted such Securities
immediately prior to the transaction.

 

SECTION 6.2.      SUCCESSOR SUBSTITUTED.

 

Upon any consolidation of
the Company with, or merger of the Company into, any other Person or any
conveyance, transfer or lease of the properties and assets of the Company
substantially as an entirety in accordance with Section 6.1, the successor Person
formed by such consolidation or into which the Company is merged or to which
such conveyance, transfer or lease is made shall succeed to, and be substituted
for, and may exercise every right and power of, the Company under this
Indenture with the same effect as if such successor Person had been named as
the Company herein, and thereafter, except in the case of a lease, the
predecessor Person shall be relieved of all obligations and covenants under
this Indenture and the Securities.

 

34

 

ARTICLE
7

DEFAULT AND REMEDIES

 

SECTION 7.1.      EVENTS OF DEFAULT.

 

An “Event of Default”
shall occur if:

 

(1)           the Company defaults in the payment
of any interest or Additional Interest, if any, on any Security when the same
becomes due and payable and the default continues for a period of 30 days;

 

(2)           the Company defaults in the payment
of any principal of (including, without limitation, any premium, if any, on)
any Security when the same becomes due and payable (whether at maturity, upon
redemption, on a Fundamental Change Repurchase Date or otherwise);

 

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

 

(4)           the Company defaults in the payment
of the purchase price of any Security when the same becomes due and payable;

 

(5)           the Company fails to provide notice
of a Fundamental Change to the Trustee and to each Holder if required by
Section 3.9 for a period of 30 days after notice of failure to do so; or

 

(6)           any indebtedness under any bond,
debenture, note or other evidence of indebtedness for money borrowed by the
Company or any Significant Subsidiary (all or substantially all of the outstanding
voting securities of which are owned, directly or indirectly, by the Company)
or under any mortgage, indenture or instrument under which there may be issued
or by which there may be secured or evidenced any indebtedness for money
borrowed by the Company or any Significant Subsidiary (all or substantially all
of the outstanding voting securities of which are owned, directly or
indirectly, by the Company) (an “Instrument”) with an aggregate outstanding
principal amount then outstanding in excess of U.S. $25,000,000, whether such
indebtedness now exists or shall hereafter be created, is not paid at final
maturity of the Instrument (either at its stated maturity or upon acceleration
thereof), and such indebtedness is not discharged, or such acceleration is not
rescinded or annulled, within a period of 30 days after there shall have been
given, by registered or certified mail, to the Company by the Trustee or to the
Company and the Trustee by the Holders of at least 25% in aggregate principal
amount of the outstanding Securities a written notice specifying such default
and requiring the Company to cause such indebtedness to be discharged or cause
such default to be cured or waived or such acceleration to be rescinded or
annulled and stating that such notice is a “Notice of Default” hereunder; or

 

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

 

(A)                              commences
a voluntary case or proceeding;

 

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

 

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

 

35

 

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

 

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

 

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

 

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

 

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

 

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

 

The term “Bankruptcy Law”
means Title 11 of the United States Code (or any successor thereto) or any
similar federal or state law for the relief of debtors.  The term “Custodian” means any receiver,
trustee, assignee, liquidator, sequestrator or similar official under any
Bankruptcy Law.

 

A default under
clause (3) above is not an Event of Default until the Trustee notifies the
Company, or the Holders of at least 25% in aggregate principal amount of the
Securities then outstanding notify the Company and the Trustee, in writing of
the default, and the Company does not cure the default within 60 days after
receipt of such notice.  The notice given
pursuant to this Section 7.1 must specify the default, demand that it be
remedied and state that the notice is a “Notice of Default.”  When any default under this Section 7.1
is cured, it ceases.

 

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

 

SECTION 7.2.      ACCELERATION.

 

If an Event of Default
(other than an Event of Default specified in clause (7) or (8) of
Section 7.1) occurs and is continuing, the Trustee may, by notice to the
Company, or the Holders of at least 25% in aggregate principal amount of the
Securities then outstanding may, by notice to the Company and the Trustee,
declare all unpaid principal to the date of acceleration on the Securities then
outstanding (if not then due and payable) to be due and payable upon any such
declaration, and the same shall become and be immediately due and payable.  If an Event of Default specified in
clause (7) or (8) of Section 7.1 occurs, all unpaid principal of the
Securities then outstanding shall ipso facto become and be immediately due and
payable without any declaration or other act on the part of the Trustee or any
Holder.  The Holders of a majority in
aggregate principal amount of the Securities then outstanding by notice to the
Trustee may rescind an acceleration and its consequences if (a) all
existing Events of Default, other than the nonpayment of the principal of the
Securities which has become due solely by such declaration of acceleration,
have been cured or waived; (b) to the extent the payment of such interest
is lawful, interest (calculated at the rate per annum borne by the Securities)
on overdue installments of interest and overdue principal, which has become due
otherwise than by such declaration of acceleration, has been paid; (c) the
rescission would not conflict with any judgment or decree of a court of
competent jurisdiction; and (d) all payments due to the Trustee and any
predecessor 

 

36

 

Trustee under Section 8.7 have been made.  No such rescission shall affect any
subsequent default or impair any right consequent thereto.

 

SECTION 7.3.      OTHER REMEDIES.

 

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

 

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

 

SECTION 7.4.      WAIVER OF DEFAULTS AND
EVENTS OF DEFAULT.

 

Subject to
Sections 7.7 and 10.2, the Holders of a majority in aggregate principal
amount of the Securities then outstanding by notice to the Trustee may waive an
existing default or Event of Default and its consequence, except a default or
Event of Default in the payment of the principal of, premium, if any, or
interest on any Security, a failure by the Company to convert any Securities
into Common Stock in accordance with the provisions of the Note and this
Indenture or any default or Event of Default in respect of any provision of
this Indenture or the Securities which, under Section 10.2, cannot be
modified or amended without the consent of the Holder of each Security
affected.  When a default or Event of
Default is waived, it is cured and ceases.

 

SECTION 7.5.      CONTROL BY MAJORITY.

 

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

 

SECTION 7.6.      LIMITATIONS ON SUITS.

 

A Holder may not pursue
any remedy with respect to this Indenture or the Securities (except actions for
payment of overdue principal or interest or for the conversion of the
Securities pursuant to Article 4) unless:

 

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

 

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

 

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

 

37

 

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

 

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

 

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

 

SECTION 7.7.      RIGHTS OF HOLDERS TO
RECEIVE PAYMENT AND TO CONVERT.

 

Notwithstanding any other
provision of this Indenture, the right of any Holder of a Security to receive
payment of the principal of and interest on the Security, on or after the
respective due dates expressed in the Security and this Indenture, to convert
such Security in accordance with Article 4 and to bring suit for the
enforcement of any such payment on or after such respective dates or the right
to convert, is absolute and unconditional and shall not be impaired or affected
without the consent of the Holder.

 

SECTION 7.8.      COLLECTION SUIT BY TRUSTEE.

 

If an Event of Default in
the payment of principal or interest specified in clause (1) or (2) of
Section 7.1 occurs and is continuing, the Trustee may recover judgment in
its own name and as trustee of an express trust against the Company or another
obligor on the Securities for the whole amount of principal and accrued
interest remaining unpaid, together with, to the extent that payment of such
interest is lawful, interest on overdue principal and on overdue installments
of interest, in each case at the rate per annum borne by the Securities and
such further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel.

 

SECTION 7.9.      TRUSTEE MAY FILE PROOFS OF
CLAIM.

 

The Trustee may file such
proofs of claim and other papers or documents as may be necessary or advisable
in order to have the claims of the Trustee (including any claim for the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel) and the Holders allowed in any judicial proceedings
relative to the Company (or any other obligor on the Securities), its creditors
or its property and shall be entitled and empowered to collect and receive any
money or other property payable or deliverable on any such claims and to
distribute the same, and any Custodian in any such judicial proceeding is
hereby authorized by each Holder to make such payments to the Trustee and, in
the event that the Trustee shall consent to the making of such payments
directly to the Holders, to pay to the Trustee any amount due to it for the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel, and any other amounts due the Trustee under
Section 8.7, and to the extent that such payment of the reasonable
compensation, expenses, disbursements and advances in any such proceedings
shall be denied for any reason, payment of the same shall be secured by a lien
on, and shall be paid out of, any and all distributions, dividends, money,
securities and other property which the Holders may be entitled to receive in
such proceedings, whether in liquidation or under any plan of reorganization or
arrangement or otherwise.  Nothing herein
contained shall be deemed to authorize the Trustee to authorize or consent to,
or, on behalf of any Holder, to authorize, accept or adopt any plan of
reorganization, arrangement, adjustment or composition 

 

38

 

affecting the Securities or the rights of any Holder
thereof, or to authorize the Trustee to vote in respect of the claim of any
Holder in any such proceeding.

 

SECTION 7.10.    PRIORITIES.

 

If the Trustee collects
any money pursuant to this Article 7, it shall pay out the money in the
following order:

 

First, to the Trustee for
amounts due under Section 8.7;

 

Second, to Holders for
amounts due and unpaid on the Securities for principal and interest (including
Additional Interest, if any), ratably, without preference or priority of any
kind, according to the amounts due and payable on the Securities for principal
and interest (including Additional Interest, if any), respectively; and

 

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

 

The Trustee may fix a
record date and payment date for any payment to Holders pursuant to this
Section 7.10.

 

SECTION 7.11.    UNDERTAKING FOR COSTS.

 

In any suit for the
enforcement of any right or remedy under this Indenture or in any suit against
the Trustee for any action taken or omitted by it as Trustee, a court in its
discretion may require the filing by any party litigant in the suit of an
undertaking to pay the costs of the suit, and the court in its discretion may
assess reasonable costs, including reasonable attorneys’ fees and expenses,
against any party litigant in the suit, having due regard to the merits and
good faith of the claims or defenses made by the party litigant.  This Section 7.11 does not apply to a
suit made by the Trustee, a suit by a Holder pursuant to Section 7.7, or a
suit by Holders of more than 10% in aggregate principal amount of the
Securities then outstanding.

 

ARTICLE
8

TRUSTEE

 

SECTION 8.1.      DUTIES OF TRUSTEE.

 

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

 

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

 

(1)           the Trustee need perform only those
duties as are specifically set forth in this Indenture and no others; 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 certificates or
opinions furnished to the Trustee and conforming to the requirements of this
Indenture.  The Trustee, however, shall
examine any 

 

39

 

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

 

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

 

(1)           this paragraph does not limit the
effect of subsection (b) of this Section 8.1;

 

(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 7.5.

 

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

 

(e)           Every provision of this Indenture
that in any way relates to the Trustee is subject to subsections (a), (b),
(c) and (d) of this Section 8.1.

 

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

 

SECTION 8.2.      RIGHTS OF TRUSTEE.

 

Subject to
Section 8.1:

 

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

 

(b)           Before the Trustee acts or refrains
from acting, it may require an Officers’ Certificate or an Opinion of Counsel,
which shall conform to Section 11.4(b). 
The Trustee shall not be liable for any action it takes or omits to take
in good faith in reliance on such Officers’ Certificate or Opinion.

 

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

 

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

 

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

 

40

 

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

 

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

 

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

 

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

 

SECTION 8.3.      INDIVIDUAL RIGHTS OF
TRUSTEE.

 

The Trustee in its
individual or any other capacity may become the owner or pledgee of Securities
and may otherwise deal with the Company or an Affiliate of the Company with the
same rights it would have if it were not Trustee.  Any Agent may do the same with like
rights.  However, the Trustee is subject
to Sections 8.10 and 8.11.

 

SECTION 8.4.      TRUSTEE’S DISCLAIMER.

 

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

 

SECTION 8.5.      NOTICE OF DEFAULT OR EVENTS
OF DEFAULT.

 

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

 

SECTION 8.6.      REPORTS BY TRUSTEE TO
HOLDERS.

 

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

 

41

 

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

 

SECTION 8.7.      COMPENSATION AND INDEMNITY.

 

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

 

The Company shall
indemnify the Trustee or any predecessor Trustee (which for purposes of this
Section 8.7 shall include its officers, directors, employees and agents)
for, and hold it harmless against, any and all loss, liability or expense
including taxes (other than taxes based upon, measured by or determined by the
income of the Trustee), (including reasonable legal fees and expenses) incurred
by it in connection with the acceptance or administration of its duties under
this Indenture or any action or failure to act as authorized or within the
discretion or rights or powers conferred upon the Trustee hereunder including
the reasonable costs and expenses of the Trustee and its counsel in defending
itself against any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder.  The Trustee shall notify the Company promptly
of any claim asserted against the Trustee for which it may seek indemnity.  The Company need not pay for any settlement
without its written consent, which shall not be unreasonably withheld.

 

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

 

To secure the Company’s
payment obligations in this Section 8.7, the Trustee shall have a senior
claim to which the Securities are hereby made subordinate on all money or
property held or collected by the Trustee, except such money or property held
in trust to pay the principal of and interest on the Securities.  The obligations of the Company under this
Section 8.7 shall survive the satisfaction and discharge of this Indenture
or the resignation or removal of the Trustee.

 

When the Trustee incurs
expenses or renders services after an Event of Default specified in
clause (7) or (8) of Section 7.1 occurs, the expenses and the
compensation for the services are intended to constitute expenses of administration
under any Bankruptcy Law.  The provisions
of this Section shall survive the termination of this Indenture.

 

SECTION 8.8.      REPLACEMENT OF TRUSTEE.

 

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

 

42

 

(1)           the Trustee fails to comply with
Section 8.10;

 

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

 

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

 

(4)           the Trustee becomes incapable of
acting.

 

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

 

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

 

If the Trustee fails to
comply with Section 8.10, any Holder may petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
Trustee.

 

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

 

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

 

Notwithstanding
replacement of the Trustee pursuant to this Section 8.8, the Company’s
obligations under Section 8.7 shall continue for the benefit of the
retiring Trustee.

 

SECTION 8.9.      SUCCESSOR TRUSTEE BY
MERGER, ETC.

 

If the Trustee
consolidates with, merges or converts into, or transfers all or substantially
all of its corporate trust assets (including the administration of this
Indenture) to, another corporation, the resulting, surviving or transferee
corporation, without any further act, shall be the successor Trustee, provided
such transferee corporation shall qualify and be eligible under
Section 8.10.  Such successor
Trustee shall promptly mail notice of its succession to the Company and each
Holder.

 

SECTION 8.10.    ELIGIBILITY; DISQUALIFICATION.

 

The Trustee shall always
satisfy the requirements of paragraphs (1), (2) and (5) of TIA
Section 310(a).  The Trustee (or its
parent holding company) shall have a combined capital and surplus of at least
$50,000,000.  If at any time the Trustee
shall cease to satisfy any such requirements, it shall resign immediately in
the manner and with the effect specified in this Article 8.  The Trustee shall be subject to the 

 

43

 

provisions of TIA Section 310(b).  Nothing herein shall prevent the Trustee from
filing with the SEC the application referred to in the penultimate paragraph of
TIA Section 310(b).

 

SECTION 8.11.    PREFERENTIAL COLLECTION OF CLAIMS
AGAINST COMPANY.

 

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

 

ARTICLE
9

SATISFACTION AND DISCHARGE OF INDENTURE

 

SECTION 9.1.      SATISFACTION AND DISCHARGE
OF INDENTURE.

 

This Indenture shall
cease to be of further effect (except as to any surviving rights of conversion,
registration of transfer or exchange of Securities herein expressly provided
for and except as further provided below), and the Trustee, on demand of and at
the expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture, when

 

(1)           either

 

(A)          all Securities theretofore
authenticated and delivered (other than (i) Securities which have been
destroyed, lost or stolen and which have been replaced or paid as provided in
Section 2.7 and (ii) Securities for whose payment money has theretofore
been deposited in trust and thereafter repaid to the Company as provided in
Section 9.3) have been delivered to the Trustee for cancellation; or

 

(B)           all such Securities not theretofore
delivered to the Trustee for cancellation

 

(i)    have become due and payable, or

 

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

 

(iii)  are to be called for redemption within one
year under arrangements satisfactory to the Trustee for the giving of notice of
redemption by the Trustee in the name, and at the expense, of the Company,

 

and the Company, in the
case of clause (i), (ii) or (iii) above, has irrevocably deposited or
caused to be irrevocably deposited with the Trustee or a Paying Agent (other
than the Company or any of its Affiliates) as trust funds in trust for the
purpose cash in an amount sufficient to pay and discharge the entire
indebtedness on such Securities not theretofore delivered to the Trustee for
cancellation, for principal and interest (including Additional Interest, if
any) to the date of such deposit (in the case of Securities which have become
due and payable) or to the Final Maturity Date or Redemption Date, as the case
may be;

 

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

 

44

 

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

 

Notwithstanding the
satisfaction and discharge of this Indenture, the obligations of the Company to
the Trustee under Section 8.7 shall survive and, if money shall have been
deposited with the Trustee pursuant to subclause (B) of clause (1) of
this Section, the provisions of Sections 2.3, 2.4, 2.5, 2.6, 2.7, 2.12,
3.9, 3.10, 3.11, 3.12 and 11.5, Article 4, the last paragraph of
Section 5.2 and this Article 9, shall survive until the Securities
have been paid in full.

 

SECTION 9.2.      APPLICATION OF TRUST MONEY.

 

Subject to the provisions
of Section 9.3, the Trustee or a Paying Agent shall hold in trust, for the
benefit of the Holders, all money deposited with it pursuant to
Section 9.1 and shall apply the deposited money in accordance with this
Indenture and the Securities to the payment of the principal of and interest on
the Securities.

 

SECTION 9.3.      REPAYMENT TO COMPANY.

 

The Trustee and each
Paying Agent shall promptly pay to the Company upon request any excess money
(i) deposited with them pursuant to Section 9.1 and (ii) held by
them at any time.

 

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

 

SECTION 9.4.      REINSTATEMENT.

 

If the Trustee or any
Paying Agent is unable to apply any money in accordance with Section 9.2
by reason of any legal proceeding or by reason of any order or judgment of any
court or governmental authority enjoining, restraining or otherwise prohibiting
such application, then the Company’s obligations under this Indenture and the
Securities shall be revived and reinstated as though no deposit had occurred
pursuant to Section 9.1 until such time as the Trustee or such Paying
Agent is permitted to apply all such money in accordance with Section 9.2;
provided, however, that if the Company has made any payment of
the principal of or interest on any Securities because of the reinstatement of
its obligations, the Company shall be subrogated to the rights of the Holders
of such Securities to receive any such payment from the money held by the
Trustee or such Paying Agent.

 

45

 

ARTICLE 10

AMENDMENTS, SUPPLEMENTS AND WAIVERS

 

SECTION 10.1.    WITHOUT CONSENT OF HOLDERS.

 

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

 

(a)           to comply with Section 6.1;

 

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

 

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

 

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

 

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

 

(f)            to appoint a successor Trustee.

 

SECTION 10.2.    WITH CONSENT OF HOLDERS.

 

The Company and the
Trustee may amend or supplement this Indenture or the Securities with the
written consent of the Holders of at least a majority in aggregate principal
amount of the Securities then outstanding. 
The Holders of at least a majority in aggregate principal amount of the
Securities then outstanding may waive compliance in a particular instance by
the Company with any provision of this Indenture or the Securities without
notice to any Securityholder.  However,
notwithstanding the foregoing but subject to Section 10.4, without the
written consent of each Securityholder affected, an amendment, supplement or
waiver, including a waiver pursuant to Section 7.4, may not:

 

(a)           change the stated maturity of the
principal of, or interest on, any Security;

 

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

 

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

 

(d)           change the place or currency of
payment of principal of, or any premium or interest on, any Security;

 

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

 

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

 

(g)           adversely affect the right of Holders
to convert Securities other than as provided in or under Article 4 of this
Indenture;

 

46

 

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

 

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

 

(j)            modify any of the provisions of this
Section or Section 7.4, except to increase any such percentage or to provide
that certain provisions of this Indenture cannot be modified or waived without
the consent of the Holder of each outstanding Security affected thereby.

 

It shall not be necessary
for the consent of the Holders under this Section 10.2 to approve the
particular form of any proposed amendment, supplement or waiver, but it shall
be sufficient if such consent approves the substance thereof.

 

After an amendment,
supplement or waiver under this Section 10.2 becomes effective, the
Company shall mail to the Holders affected thereby a notice briefly describing
the amendment, supplement or waiver.  Any
failure of the Company to mail such notice, or any defect therein, shall not,
however, in any way impair or affect the validity of any such amendment,
supplement or waiver.

 

To the extent that the
Company or any of the Subsidiaries hold any Securities, such Securities shall
be disregarded for purposes of voting in connection with any notice, waiver,
consent or direction requiring the vote or concurrence of Securityholders.

 

SECTION 10.3.    COMPLIANCE WITH TRUST INDENTURE ACT.

 

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

 

SECTION 10.4.    REVOCATION AND EFFECT OF CONSENTS.

 

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

 

After an
amendment, supplement or waiver becomes effective, it shall bind every
Securityholder, unless it makes a change described in any of clauses (a)
through (j) of Section 10.2.  In
that case the amendment, supplement or waiver shall bind each Holder of a
Security who has consented to it and every subsequent Holder of a Security or
portion of a Security that evidences the same debt as the consenting Holder’s
Security.

 

SECTION 10.5.    NOTATION ON OR EXCHANGE OF SECURITIES.

 

If an amendment,
supplement or waiver changes the terms of a Security, the Trustee may require
the Holder of the Security to deliver it to the Trustee.  The Trustee may place an appropriate notation
on the Security about the changed terms and return it to the Holder.  Alternatively, if the Company or the Trustee
so

 

47

 

determines, the Company in exchange for the Security
shall issue and the Trustee shall authenticate a new Security that reflects the
changed terms.

 

SECTION 10.6.    TRUSTEE TO SIGN AMENDMENTS, ETC.

 

The Trustee shall sign
any amendment or supplemental indenture authorized pursuant to this
Article 10 if the amendment or supplemental indenture does not adversely
affect the rights, duties, liabilities or immunities of the Trustee.  If it does, the Trustee may, in its sole
discretion, but need not sign it.  In
signing or refusing to sign such amendment or supplemental indenture, the
Trustee shall be entitled to receive and, subject to Section 8.1, shall be
fully protected in relying upon, an Opinion of Counsel stating that such
amendment or supplemental indenture is authorized or permitted by this
Indenture.  The Company may not sign an
amendment or supplement indenture until the Board of Directors approves it.

 

SECTION 10.7.    EFFECT OF SUPPLEMENTAL INDENTURES.

 

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

 

ARTICLE 11

MISCELLANEOUS

 

SECTION 11.1.    TRUST INDENTURE ACT CONTROLS.

 

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

 

SECTION 11.2.    NOTICES.

 

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

 

If to
the Company, to:

Abgenix, Inc.

6701 Kaiser Drive

Fremont, California  94555

Attention: Chief Financial Officer

Facsimile No.: (510) 608-6547

Phone No. (510) 608-6500

 

48

 

with a copy to:

Abgenix, Inc.

6701 Kaiser Drive

Fremont, California  94555

Attention: General Counsel

Facsimile No.: (510) 790-5102

Phone No.  (510) 608-6500

 

if to
the Trustee, to:

U.S.
Bank National Association

633 West Fifth Street, 24th Floor

Los Angeles, California  90071

Attention:  Corporate Trust Department
(Abgenix — 1.75% Convertible Senior Notes due December 15, 2011)

Facsimile No.: (213) 615-6197

Phone
No.: (213) 615-6047

 

Such notices or
communications shall be effective when received.

 

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

 

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

 

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

 

SECTION 11.3.    COMMUNICATIONS BY HOLDERS WITH OTHER HOLDERS.

 

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

 

SECTION 11.4.    CERTIFICATE AND OPINION AS TO CONDITIONS
PRECEDENT.

 

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

 

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

 

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

 

49

 

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

 

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

 

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

 

(3)           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

 

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

 

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

 

SECTION 11.5.    RECORD DATE FOR VOTE OR CONSENT OF
SECURITYHOLDERS.

 

The Company (or, in the
event deposits have been made pursuant to Section 9.1, the Trustee) may
set a record date for purposes of determining the identity of Holders entitled
to vote or consent to any action by vote or consent authorized or permitted
under this Indenture, which record date shall not be more than thirty (30) days
prior to the date of the commencement of solicitation of such action.  Notwithstanding the provisions of
Section 10.4, if a record date is fixed, those persons who were Holders of
Securities at the close of business on such record date (or their duly
designated proxies), and only those persons, shall be entitled to take such
action by vote or consent or to revoke any vote or consent previously given,
whether or not such persons continue to be Holders after such record date.

 

SECTION 11.6.    RULES BY TRUSTEE, PAYING AGENT, REGISTRAR
AND CONVERSION AGENT.

 

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

 

SECTION 11.7.    LEGAL HOLIDAYS.

 

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

 

SECTION 11.8.    GOVERNING LAW.

 

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

 

50

 

SECTION 11.9.    NO ADVERSE INTERPRETATION OF OTHER
AGREEMENTS.

 

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

 

SECTION 11.10. NO RECOURSE AGAINST OTHERS.

 

All liability described
in paragraph 19 of the Securities of any director, officer, employee or
shareholder, as such, of the Company is waived and released.

 

SECTION 11.11. SUCCESSORS.

 

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

 

SECTION 11.12. MULTIPLE COUNTERPARTS.

 

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

 

SECTION 11.13. SEPARABILITY.

 

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

 

SECTION 11.14. TAX TREATMENT.

 

The Company agrees, and
by acceptance of beneficial ownership in the Securities each beneficial holder
of the Securities will be deemed to have agreed, for United States federal
income tax purposes to treat the Securities as indebtedness that is not subject
to the contingent payment debt instrument regulations under Treas. Reg. Sec.
1.1275-4.

 

TABLE OF CONTENTS, HEADINGS, ETC.

 

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

 

[SIGNATURE PAGE FOLLOWS]

 

51

 

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

 

	
   

  	
  Abgenix, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ William R. Ringo

  	
   

  
	
   

  	
  Name:  William
  R. Ringo

  
	
   

  	
  Title: 
  President and Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  U.S. Bank National Association,
  as Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Bradley Scarborough

  	
   

  
	
   

  	
  Name:  Bradley
  Scarborough

  
	
   

  	
  Title:

  	
   

  
					

 

52

 

Schedule I

 

Additional Shares Table

 

The following table sets
forth the hypothetical Stock Price and number of Additional Shares per $1,000
principal amount of Securities:

 

	
  Stock Price

  
	
  Effective
  Date of Fundamental Change

  	
   

  	
  $

  	
  9.86

  	
   

  	
  $

  	
  10.00

  	
   

  	
  $

  	
  12.50

  	
   

  	
  $

  	
  15.00

  	
   

  	
  $

  	
  17.50

  	
   

  	
  $

  	
  20.00

  	
   

  	
  $

  	
  25.00

  	
   

  	
  $

  	
  50.00

  	
   

  	
  $

  	
  75.00

  	
   

  	
  $

  	
  100.00

  
	
  December 21, 2004

  	
   

  	
  23.37

  	
   

  	
  22.79

  	
   

  	
  15.02

  	
   

  	
  10.57

  	
   

  	
  7.76

  	
   

  	
  5.93

  	
   

  	
  3.72

  	
   

  	
  0.77

  	
   

  	
  0.23

  	
   

  	
  0.06

  
	
  December 15, 2005

  	
   

  	
  22.79

  	
   

  	
  22.16

  	
   

  	
  14.22

  	
   

  	
  9.67

  	
   

  	
  6.94

  	
   

  	
  5.18

  	
   

  	
  3.11

  	
   

  	
  0.60

  	
   

  	
  0.17

  	
   

  	
  0.04

  
	
  December 15, 2006

  	
   

  	
  21.86

  	
   

  	
  21.16

  	
   

  	
  12.90

  	
   

  	
  8.47

  	
   

  	
  5.85

  	
   

  	
  4.20

  	
   

  	
  2.40

  	
   

  	
  0.43

  	
   

  	
  0.12

  	
   

  	
  0.02

  
	
  December 15, 2007

  	
   

  	
  20.56

  	
   

  	
  19.85

  	
   

  	
  11.19

  	
   

  	
  6.77

  	
   

  	
  4.34

  	
   

  	
  2.94

  	
   

  	
  1.57

  	
   

  	
  0.27

  	
   

  	
  0.07

  	
   

  	
  0.01

  
	
  December 15, 2008

  	
   

  	
  18.67

  	
   

  	
  17.88

  	
   

  	
  8.62

  	
   

  	
  4.37

  	
   

  	
  2.37

  	
   

  	
  1.42

  	
   

  	
  0.65

  	
   

  	
  0.14

  	
   

  	
  0.03

  	
   

  	
  0.00

  
	
  December 15, 2009 and
  thereafter

  	
   

  	
  0.00

  	
   

  	
  0.00

  	
   

  	
  0.00

  	
   

  	
  0.00

  	
   

  	
  0.00

  	
   

  	
  0.00

  	
   

  	
  0.00

  	
   

  	
  0.00

  	
   

  	
  0.00

  	
   

  	
  0.00

  

 

 

EXHIBIT A

[FORM OF FACE OF SECURITY]

 

[UNLESS THIS CERTIFICATE
IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO
THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND
ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO.
OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE
OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF,
CEDE & CO., HAS AN INTEREST HEREIN. THIS NOTE IS A GLOBAL SECURITY WITHIN
THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE
NAME OF A DEPOSITARY OR A NOMINEE THEREOF. 
THIS NOTE IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A
PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE AND, UNLESS AND UNTIL IT IS EXCHANGED
IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE FORM, THIS NOTE 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.](1)

 

[THIS NOTE AND ANY COMMON STOCK ISSUABLE UPON THE CONVERSION OF THIS
NOTE HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED
(THE “SECURITIES ACT”), AND MAY NOT BE SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR ANY APPLICABLE EXEMPTION THEREFROM.  EACH PURCHASER OF THIS NOTE IS HEREBY
NOTIFIED THAT THE SELLER OF THIS NOTE MAY BE RELYING ON THE EXEMPTION FROM THE
PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER]
(2)

 

[THIS NOTE AND ANY COMMON STOCK ISSUABLE UPON THE CONVERSION OF THIS
NOTE MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A) (1)
TO A PERSON WHO THE TRANSFEROR REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL
BUYER WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT ACQUIRING FOR
ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (2) PURSUANT TO AN EXEMPTION
FROM REGISTRATION RIGHTS UNDER THE SECURITIES ACT PROVIDED BY RULE 144
THEREUNDER (IF AVAILABLE), (3) TO AN INSTITUTIONAL INVESTOR THAT IS AN
ACCREDITED INVESTOR WITHIN THE MEANING OF RULE 501(a)(1), (2), (3) OR (7) OF
REGULATION D UNDER THE SECURITIES ACT (IF AVAILABLE) OR (4) PURSUANT

 

(1) These paragraphs should be included only if the
Security is a Global Security.

(2) These paragraphs to be included only if the
Security is a Transfer Restricted Security.

 

A-1

 

TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT, AND (B) IN ACCORDANCE WITH ALL
APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED STATES AND OTHER
JURISDICTIONS.](2)

 

[THIS NOTE, ANY SHARES OF
COMMON STOCK ISSUABLE UPON ITS CONVERSION AND ANY RELATED DOCUMENTATION MAY BE
AMENDED OR SUPPLEMENTED FROM TIME TO TIME TO MODIFY THE RESTRICTIONS ON RESALES
AND OTHER TRANSFERS OF THIS NOTE AND ANY SUCH SHARES TO REFLECT ANY CHANGE IN
APPLICABLE LAW OR REGULATION (OR THE INTERPRETATION THEREOF) OR IN PRACTICES
RELATING TO THE RESALE OR TRANSFER OF RESTRICTED SECURITIES GENERALLY.  THE HOLDER OF THIS NOTE AND SUCH SHARES SHALL
BE DEEMED BY THE ACCEPTANCE OF THIS NOTE AND ANY SUCH SHARES TO HAVE AGREED TO
ANY SUCH AMENDMENT OR SUPPLEMENT.](2)

 

[THE HOLDER OF THIS SECURITY IS ENTITLED TO THE
BENEFITS OF A REGISTRATION RIGHTS AGREEMENT (AS SUCH TERM IS DEFINED IN THE
INDENTURE REFERRED TO ON THE REVERSE HEREOF) AND, BY ITS ACCEPTANCE HEREOF,
AGREES TO BE BOUND BY AND TO COMPLY WITH THE PROVISIONS OF SUCH REGISTRATION
RIGHTS AGREEMENT.](2)

 

A-2

 

ABGENIX,
INC.

 

CUSIP No.: 
00339BAC

 

1.75% CONVERTIBLE
SENIOR NOTES DUE DECEMBER 15, 2011

 

Abgenix, Inc., a Delaware
corporation (the “Company”, which term shall include any successor corporation
under the Indenture referred to on the reverse hereof), promises to pay to Cede
& Co., or registered assigns, the principal sum of                                 
Dollars ($                                )
on December 15, 2011, or such greater or lesser amount as is indicated on the
Schedule of Exchanges of Notes on the other side of this Note.

 

	
   

  	
  Interest Payment Dates:

  	
  December 15 and June
  15, commencing June 15, 2005

  
	
   

  	
   

  	
   

  
	
   

  	
  Record Dates:

  	
  December 1 and June 1

  
	
   

  	
   

  	
   

  

 

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

 

SIGNATURE PAGE
FOLLOWS

 

A-3

 

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

 

	
   

  	
  ABGENIX,
  INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
  Attest:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:

  	
   

  
	
  Title:

  	
   

  
	
  Dated:

  	
   

  
	
   

  	
   

  
	
  TRUSTEE’S
  CERTIFICATE OF AUTHENTICATION

  	
   

  
	
  This is one of the
  Securities referred to

  	
   

  
	
  in the within-mentioned
  Indenture.

  	
   

  
	
   

  	
   

  
	
  U.S.
  Bank National Association, as Trustee

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Authorized Signatory

  	
   

  
						

 

A-4

 

[FORM
OF REVERSE SIDE OF SECURITY]

 

ABGENIX,
INC.

1.75% CONVERTIBLE SENIOR NOTES DUE DECEMBER 15, 2011

 

1.             INTEREST

 

Abgenix, Inc., a Delaware
corporation (the “Company”, which term shall include any successor corporation
under the Indenture hereinafter referred to), promises to pay interest on the
principal amount of this Note at the rate of 1.75% per annum.  The Company shall pay interest semiannually
on December 15 and June 15 of each year, commencing on June 15, 2005.  Interest on the Notes shall accrue from the
most recent date to which interest has been paid or, if no interest has been
paid, from December 21, 2004; provided, however, that if there is
not an existing default in the payment of interest and if this Note is
authenticated between a record date referred to on the face hereof and the next
succeeding interest payment date, interest shall accrue from such interest
payment date.  Interest will be computed
on the basis of a 360-day year of twelve 30-day months.

 

2.             REGISTRATION RIGHTS AGREEMENT

 

The holder of this Note
is entitled to the benefits of a Registration Rights Agreement, dated as of
December 21, 2004, among 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 Notes, that (i) it will, at its cost, within 90 days after the
closing of the sale of the Notes (the “Closing”), file a shelf registration
statement (the “Shelf Registration Statement”) with the Securities and Exchange
Commission (the “Commission”) with respect to resales of the Notes and the
Common Stock issuable upon conversion thereof, (ii) it will use commercially
reasonable efforts to cause such Shelf Registration Statement to be declared
effective within 180 days after the Closing, and (iii) it will use commercially
reasonable efforts to keep such Shelf Registration Statement continuously
effective under the Securities Act, subject to certain exceptions specified in
the Registration Rights Agreement, until the second anniversary of its
effective date.  If (a) the Company fails
to file the Shelf Registration Statement required by the Registration Rights
Agreement on or before the date specified above for such filing, (b) such Shelf
Registration Statement is not declared effective by the Commission on or prior
to the date specified above for such effectiveness, or (c) the Shelf
Registration Statement is declared effective but thereafter ceases to be
effective or useable, other than for a permitted suspension as described in
this Section 2, during the periods specified in the Registration Rights
Agreement (each such event referred to in clauses (a) through (c) above a “Registration
Default”), then the Company will pay Additional Interest to each Holder of
Registrable Securities (as defined in the Registration Rights Agreement), in an
amount equal to an increase in the annual interest rate on the Notes as
specified in the Registration Rights Agreement (“Additional Interest”) until
all Registration Defaults have been cured. 
All accrued Additional Interest shall be paid by the Company on each
interest payment date for which Additional Interest is owed to the holders of
Global Notes by wire transfer of immediately available funds or by federal
funds check and to holders of certificated Notes registered as such as of the
preceding Record Date by mailing checks to their registered addresses.  The Company will be permitted to suspend the
effectiveness of the Shelf Registration Statement for up to 30 consecutive days
in any 90-day period, and for up to a total of 90 days in any 365-day period,
without being required to pay Additional Interest.  Following the cure of all Registration
Defaults, the application of Additional Interest will cease.

 

B-1

 

3.             METHOD OF PAYMENT

 

The Company shall pay
interest on this Note (except defaulted interest) to the person who is the
Holder of this Note at the close of business on December 1 or June 1, as the
case may be, next preceding the related interest payment date.  The Holder must surrender this Note to a
Paying Agent to collect payment of principal. 
The Company will pay principal and interest in money of the United
States that at the time of payment is legal tender for payment of public and
private debts.  The Company may, however,
pay principal and interest in respect of any Certificated Security by check or
wire payable in such money; provided, however, that a Holder with
an aggregate principal amount in excess of $2,000,000 will be paid by wire
transfer in immediately available funds at the election of such Holder if such
Holder has provided wire transfer instructions to the Company at least 10
Business Days prior to the payment date.

 

4.             PAYING AGENT, REGISTRAR AND
CONVERSION AGENT

 

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

 

5.             INDENTURE, LIMITATIONS

 

This Note is one of a
duly authorized issue of Securities of the Company designated as its 1.75%
Convertible Senior Notes due December 15, 2011 (the “Notes”), issued under an
Indenture dated as of December 21, 2004 (together with any supplemental
indentures thereto, the “Indenture”), between the Company and the Trustee.  The terms of this Note include those stated
in the Indenture and those required by or made part of the Indenture by
reference to the Trust Indenture Act of 1939, as amended, as in effect on the
date of the Indenture.  This Note is
subject to all such terms, and the Holder of this Note is referred to the
Indenture and said Act for a statement of them. 
The Notes are unsecured obligations of the Company limited to
$225,000,000 aggregate principal amount (or such greater amount necessary to
reflect the exercise by the Initial Purchasers of their option to purchase
additional Securities in compliance with the Purchase Agreement), except that
the Company at any time or from time to time may, without the consent of any
Holder, issue additional Securities having the same terms as the Securities
initially issued under the Indenture, and entitled to all of the benefits of
the Indenture.  The Indenture does not
limit other debt of the Company, secured or unsecured.

 

6.             OPTIONAL REDEMPTION

 

The Notes are subject to redemption, at any time on or after December 20, 2009 and prior to December 15, 2011, on at least 10 days and no more than 60 days notice, in whole or in part, at the election of the Company.  The Redemption Prices (expressed as percentages of the principal amount) are as follows for Notes redeemed during the periods set forth below:

 

	
  Period

  	
   

  	
  Redemption Price

  	
   

  
	
  December 20, 2009 through December 14, 2010

  	
   

  	
  100.50

  	
  %

  
	
  December 15, 2010 through December 14, 2011

  	
   

  	
  100.25

  	
  %

  

 

B-2

 

in each case together with accrued interest up to but not including the Redemption Date; provided that if the redemption date falls after an interest payment record date and on or before an interest payment date, interest will be payable to the Holders in whose names the Notes are registered at the close of business on the relevant record dates.
 

No sinking fund is
provided for the Notes.

 

7.             NOTICE OF REDEMPTION

 

Notice of redemption will
be mailed by first-class mail at least 10 days but not more than 60 days before
the Redemption Date to each Holder of Notes to be redeemed at its registered
address.  Notes in denominations larger
than $1,000 may be redeemed in part, but only in whole multiples of
$1,000.  On and after the Redemption
Date, subject to the deposit with the Paying Agent of funds sufficient to pay
the Redemption Price plus accrued interest, if any, accrued to, but excluding,
the Redemption Date, interest shall cease to accrue on Notes or portions of
them called for redemption.

 

8.             REPURCHASE OF NOTES AT OPTION OF
HOLDER UPON A FUNDAMENTAL CHANGE

 

Subject to the terms and
conditions of the Indenture (including the rights of the Company upon delivery
of a Public Acquisition Notice as described in Section 3.11 of the Indenture
and Section 9 hereof), if a Fundamental Change occurs of any time prior to the
Final Maturity Date, each Holder will, upon receipt of the notice of the
occurrence of a Fundamental Change, have the right to require the Company to
repurchase any or all of such Holder’s Notes for cash in an amount equal to
100% of the Principal Amount of the Notes to be purchased plus accrued and
unpaid interest, if any, to (but not including) the Fundamental Change
Repurchase Date, unless such Fundamental Change Repurchase Date falls after an
interest payment record date and on or prior to the corresponding interest
payment date, in which case the Fundamental Change Repurchase Price will
include the full amount of accrued and unpaid interest payable on such interest
payment date to the Holder of record at the close of business on the
corresponding interest payment record date. 
Subject to Sections 3.9(b) and 3.11 of the Indenture, on or before the
15th day after the effective date of a Fundamental Change, the
Company will provide to all Holders of the Notes and the Trustee and Paying
Agent a notice of the occurrence of the Fundamental Change and of the resulting
repurchase right.  To exercise the
repurchase right, a Holder must deliver the Fundamental Change repurchase
notice duly completed to the Paying Agent as described in the Indenture.

 

Holders have the right to
withdraw any Fundamental Change repurchase notice, in whole or in part, by
delivering to the Paying Agent a written notice of withdrawal in accordance
with the provisions of the Indenture.

 

If cash sufficient to pay
the Fundamental Change Repurchase Price of all Notes or portions thereof to be
purchased as of the Fundamental Change Repurchase Date, has been deposited with
the Paying Agent on or prior to the Business Day following the Fundamental
Change Repurchase Date, all interest shall cease to accrue on such Notes (or
portions thereof) immediately after such Fundamental Change Repurchase Date and
the Holder thereof shall have no other rights as such other than the right to
receive the Fundamental Change Repurchase Price, upon surrender of such Notes.

 

B-3

 

9.             PUBLIC ACQUIRER CHANGE OF CONTROL

 

Within fifteen Trading
Days prior to but not including the expected effective date of a Fundamental
Change that is also a Public Acquirer Change of Control, the Company will
provide a Public Acquisition Notice to all Holders, the Trustee, any Paying
Agent and any Conversion Agent describing the anticipated Public Acquirer
Change of Control and stating whether the Company will:

 

(i)            elect the adjust the Applicable
Conversion Rate and related conversion obligation as described in Section 3.11
of the Indenture, in which case the Holders will not have the right to require
the Company repurchase their Notes as described in Section 3.9 of the Indenture
and will not have the right to the Applicable Conversion Rate adjustment
described in Section 3.10 of the Indenture; or

 

(ii)           not elect to adjust the Applicable
Conversion Rate and related conversion obligation as described in Section 3.11
of the Indenture, in which case the Holders will have the right to require the
Company to repurchase their Notes as described in Section 3.9 of the Indenture
and/or the right to an Applicable Conversion Rate adjustment as described in
Section 3.10 of the Indenture, in each case in accordance with the respective
provisions of those Sections.

 

If the Public Acquisition
Notice indicates that the Company is making the election described in clause
(i) above, then the Applicable Conversion Rate and the related conversion
obligation shall be adjusted such that from and after the effective date of the
Public Acquirer Change of Control, Holders of the Notes will be entitled to
convert their Notes into a number of shares of Public Acquirer Common Stock
pursuant to Section 3.11 of the Indenture.

 

10.           CONVERSION

 

A Holder of a Note may
convert the principal amount of such Note (or any portion thereof equal to
$1,000 or any integral multiple of $1,000 in excess thereof) into Common Stock
at any time prior to the close of business on the Final Maturity Date, at the
Applicable Conversion Rate in effect on the Conversion Date; provided,
however, that, if such Note is called for redemption or submitted or
presented for purchase pursuant to Article 3 of the Indenture, such
conversion right shall terminate at the close of business on the Business Day
immediately preceding the Redemption Date or Fundamental Change Repurchase
Date, as the case may be, for such Note or such earlier date as the Holder
presents such Security for redemption or for purchase (unless the Company shall
default in making the redemption payment or Fundamental Change Repurchase Price
payment when due, in which case the conversion right shall terminate at the
close of business on the date such default is cured and such Note is redeemed
or purchased, as the case may be).

 

The Initial
Conversion Rate means 78.0153 shares of Common Stock per $1,000 principal
amount of Notes, subject to adjustment under certain circumstances as provided
in the Indenture.  No fractional shares
will be issued upon conversion; in lieu thereof, an amount will be paid in cash
based upon the Closing Price (as defined in the Indenture) of the Common Stock
on the Trading Day immediately prior to the Conversion Date.

 

To convert a Note, a
Holder must (a) complete and manually sign the conversion notice set forth
below and deliver such notice to a Conversion Agent, (b) surrender the
Note to a Conversion Agent, (c) furnish appropriate endorsements and
transfer documents if required by a Registrar or a Conversion Agent, and (d) pay
any transfer or similar tax, if required. 
Notes so surrendered for conversion (in whole or in part) during the
period from the close of business on any regular record date to the opening of
business on the

 

B-4

 

next succeeding interest payment date (excluding Notes
or portions thereof called for redemption or subject to purchase upon a
Fundamental Change on a Redemption Date or Fundamental Change Repurchase Date,
as the case may be, during the period beginning at the close of business on a
regular record date and ending at the opening of business on the first Business
Day after the next succeeding interest payment date, or if such interest
payment date is not a Business Day, the second such Business Day) shall also be
accompanied by payment in funds acceptable to the Company of an amount equal to
the interest payable on such interest payment date on the principal amount of
such Note then being converted, and such interest shall be payable to such
registered Holder notwithstanding the conversion of such Note, subject to the
provisions of this Indenture relating to the payment of defaulted interest by
the Company.  If the Company defaults in
the payment of interest payable on such interest payment date, the Company
shall promptly repay such funds to such Holder.  A Holder may convert a portion of a Note equal
to $1,000 or any integral multiple thereof.

 

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

 

11.           CONVERSION ARRANGEMENT ON CALL FOR
REDEMPTION

 

Any Notes called for
redemption, unless surrendered for conversion before the close of business on
the Business Day immediately preceding the Redemption Date, may be deemed to be
purchased from the Holders of such Notes at an amount not less than the
Redemption Price, together with accrued interest, if any, to, but not including,
the Redemption Date, by one or more investment bankers or other purchasers who
may agree with the Company to purchase such Notes from the Holders, to convert
them into Common Stock of the Company and to make payment for such Notes to the
Paying Agent in trust for such Holders.

 

12.           DENOMINATIONS, TRANSFER, EXCHANGE

 

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

 

13.           PERSONS DEEMED OWNERS

 

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

 

14.           UNCLAIMED MONEY

 

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

 

15.           AMENDMENT, SUPPLEMENT AND WAIVER

 

Subject to certain
exceptions, the Indenture or the Notes may be amended or supplemented with the
consent of the Holders of at least a majority in aggregate principal amount of
the Notes then outstanding, and an existing default or Event of Default and its
consequence or compliance with any provision of the Indenture

 

B-5

 

or the Notes may be waived in a particular instance
with the consent of the Holders of a majority in aggregate principal amount of
the Notes then outstanding.  Without the
consent of or notice to any Holder, the Company and the Trustee may amend or
supplement the Indenture or the Notes to, among other things, cure any
ambiguity, defect or inconsistency or make any other change that does not adversely
affect the rights of any Holder.

 

16.           SUCCESSOR ENTITY

 

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

 

17.           DEFAULTS AND REMEDIES

 

Under the Indenture, an
Event of Default includes: 
(i) default for 30 days in payment of any interest or Additional
Interest on any Notes; (ii) default in payment of any principal
(including, without limitation, any premium, if any) on the Notes when due;
(iii) failure by the Company for 60 days after notice to it to comply with
any of its other agreements contained in the Indenture or the Notes; (iv)
default in the payment of certain indebtedness of the Company or a Significant
Subsidiary; (v) the Company fails to provide a notice of a Fundamental Change
within 30 days after notice of failure to timely deliver the same; and
(vi) certain events of bankruptcy, insolvency or reorganization of the
Company or any Significant Subsidiary. 
If an Event of Default (other than as a result of certain events of
bankruptcy, insolvency or reorganization of the Company) occurs and is continuing,
the Trustee or the Holders of at least 25% in aggregate principal amount of the
Notes then outstanding may declare all unpaid principal to the date of
acceleration on the Notes then outstanding to be due and payable immediately,
all as and to the extent provided in the Indenture.  If an Event of Default occurs as a result of
certain events of bankruptcy, insolvency or reorganization of the Company,
unpaid principal of the Notes then outstanding shall become due and payable
immediately without any declaration or other act on the part of the Trustee or
any Holder, all as and to the extent provided in the Indenture.  Holders may not enforce the Indenture or the
Notes except as provided in the Indenture. 
The Trustee may require indemnity satisfactory to it before it enforces
the Indenture or the Notes.  Subject to
certain limitations, Holders of a majority in aggregate principal amount of the
Notes then outstanding may direct the Trustee in its exercise of any trust or
power.  The Trustee may withhold from
Holders notice of any continuing default (except a default in payment of
principal or interest) if it determines that withholding notice is in their
interests.  The Company is required to
file periodic reports with the Trustee as to the absence of default.

 

18.           TRUSTEE DEALINGS WITH THE COMPANY

 

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

 

19.           NO RECOURSE AGAINST OTHERS

 

A director, officer,
employee or shareholder, as such, of the Company shall not have any liability
for any obligations of the Company under the Notes or the Indenture nor for any
claim based on, in respect of or

 

B-6

 

by reason of such obligations or their creation.  The Holder of this Note by accepting this
Note waives and releases all such liability. 
The waiver and release are part of the consideration for the issuance of
this Note.

 

20.           AUTHENTICATION

 

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

 

21.           ABBREVIATIONS AND DEFINITIONS

 

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

 

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

 

22.           INDENTURE TO CONTROL; GOVERNING LAW

 

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

 

The Company will furnish
to any Holder, upon written request and without charge, a copy of the
Indenture.  Requests may be made to:  Abgenix, Inc., 6701 Kaiser Drive Fremont,
California 94555, Attention:  Investor
Relations.

 

B-7

 

ASSIGNMENT
FORM

 

To assign this Note, fill
in the form below:

 

I or we assign and
transfer this Note to

 

 

	
   

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

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

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

  

 

and irrevocably appoint

 

	
   

  

 

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

 

	
   

  	
  Your Signature:

  
	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
   

  
	
   

  	
  (Sign exactly as your
  name appears on the

  other side of this Note)

  
				

 

*Signature guaranteed by:

 

	
  By:

  	
   

  	
   

  	
   

  

 

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

 

B-8

 

CONVERSION
NOTICE

 

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

 

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

 

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

 

	
   

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

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

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

  

 

 

	
   

  	
  Your Signature:

  
	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
   

  
	
   

  	
  (Sign exactly as your
  name appears on the

  other side of this Note)

  
				

 

*Signature guaranteed by:

 

	
  By:

  	
   

  	
   

  	
   

  

 

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

 

B-9

 

OPTION
TO ELECT REPURCHASE

UPON
A FUNDAMENTAL CHANGE

 

To:          Abgenix, Inc.

 

The undersigned
registered owner of this Note hereby irrevocably acknowledges receipt of a
notice from Abgenix, Inc. (the “Company”) as to the occurrence of a Fundamental
Change with respect to the Company and requests and instructs the Company to
redeem the entire principal amount of this Note, or the portion thereof (which
is $1,000 or an integral multiple thereof) below designated, in accordance with
the terms of the Indenture referred to in this Note at the Fundamental Change
Repurchase Price, together with accrued interest to, but excluding, such date,
to the registered Holder hereof.

 

	
  Dated:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Signature(s)

  
	
   

  	
   

  
	
   

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

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Signature Guaranty

  
	
   

  	
   

  
	
  Principal amount to be
  redeemed

  	
   

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

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
						

 

 

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

 

B-10

 

SCHEDULE
OF EXCHANGES OF NOTES(3)

 

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

 

	
  Principal Amount

  of this Global Note

  Following Such

  Decrease Date

  of Exchange (or Increase)

  	
   

  	
  Authorized

  Signatory of

  Securities

  Custodian

  	
   

  	
  Amount
  of Decrease in

  Principal Amount

  of this Global Note

  	
   

  	
  Amount
  of

  Increase in

  Principal Amount

  of this Global Note

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

(3) This schedule should be included only if the
Security is a Global Security.

 

B-11

 

EXHIBIT
B

 

CERTIFICATE
TO BE DELIVERED UPON EXCHANGE OR REGISTRATION

OF TRANSFER OF TRANSFER RESTRICTED SECURITIES(4)

 

Re:          1.75% Convertible Senior Notes due
December 15, 2011 (the “Notes”) of Abgenix, Inc.

 

This certificate relates
to $               principal
amount of Notes owned in (check applicable box)

 

o  
book-entry or   o  definitive
form by                                (the
“Transferor”).

 

The Transferor has
requested a Registrar or the Trustee to exchange or register the transfer of
such Notes.

 

In connection with such
request and in respect of each such Note, the Transferor does hereby certify
that the Transferor is familiar with transfer restrictions relating to the
Notes as provided in Section 2.12 of the Indenture dated as of December 21,
2004 between Abgenix, Inc. and U.S. Bank National Association, as trustee (the “Indenture”),
and the transfer of such Note is being made pursuant to an effective
registration statement under the Securities Act of 1933, as amended (the “Securities
Act”) (check applicable box) or the transfer or exchange, as the case may be,
of such Note does not require registration under the Securities Act because
(check applicable box):

 

o            Such
Note is being transferred pursuant to an effective registration statement under
the Securities Act.

 

o            Such
Note is being transferred outside the United States in an offshore transaction
in accordance with Rule 904 under the Securities Act.

 

o            Such
Note is being acquired for the Transferor’s own account, without transfer.

 

o            Such
Note is being transferred to the Company or a Subsidiary (as defined in the
Indenture) of the Company.

 

o            Such
Note is being transferred to a person the Transferor reasonably believes is a “qualified
institutional buyer” (as defined in Rule 144A or any successor provision
thereto (“Rule 144A”) under the Securities Act) that is purchasing for its
own account or for the account of a “qualified institutional buyer”, in each
case to whom notice has been given that the transfer is being made in reliance
on such Rule 144A, and in each case in reliance on Rule 144A.

 

o            Such
Note is being transferred pursuant to and in compliance with an exemption from
the registration requirements under the Securities Act in accordance with
Rule 144 (or any successor thereto) (“Rule 144”) under the Securities
Act.

 

(4) This certificate
should only be included if this Security is a Transfer Restricted Security.

 

B-1

 

Such Note is being
transferred pursuant to and in compliance with an exemption from the
registration requirements of the Securities Act (other than an exemption
referred to above) and as a result of which such Note will, upon such transfer,
cease to be a “restricted security” within the meaning of Rule 144 under
the Securities Act.

 

The Transferor
acknowledges and agrees that, if the transferee will hold any such Notes in the
form of beneficial interests in a global Note which is a “restricted security”
within the meaning of Rule 144 under the Securities Act, then such
transfer can only be made pursuant to Rule 144A under the Securities Act
and such transferee must be a “qualified institutional buyer” (as defined in
Rule 144A).

 

	
  Dated:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (Insert Name of
  Transferor)

  	
   

  

 

B-2Exhibit 4.2

 

ABGENIX,
INC.

 

1.75% Convertible Senior Notes
due 2011

 

Registration
Rights Agreement

 

December 21, 2004

 

Goldman, Sachs & Co.,

Merrill
Lynch, Pierce, Fenner & Smith Incorporated

c/o Goldman, Sachs & Co.

85 Broad Street

New York, New York 10004

 

Ladies and Gentlemen:

 

Abgenix, Inc., a Delaware corporation (the “Company”),
proposes to issue and sell to the Purchasers (as defined herein) upon the terms
set forth in the Purchase Agreement (as defined herein) its 1.75% Convertible
Senior Notes due 2011 (the “Securities”). 
As an inducement to the Purchasers to enter into the Purchase Agreement
and in satisfaction of a condition to the obligations of the Purchasers
thereunder, the Company agrees with the Purchasers for the benefit of Holders
(as defined herein) from time to time of the Registrable Securities (as defined
herein) as follows:

 

1.             Definitions.

 

(a)           Capitalized
terms used herein without definition shall have the meanings ascribed to them
in the Purchase Agreement.  As used in
this Agreement, the following defined terms shall have the following meanings:

 

“Additional Interest” has the meaning assigned thereto in Section 7(a) hereof.

 

“Affiliate” of any specified person means any other person which,
directly or indirectly, is in control of, is controlled by, or is under common
control with such specified person.  For
purposes of this definition, control of a person means the power, direct or
indirect, to direct or cause the direction of the management and policies of
such person whether by contract or otherwise; and the terms “controlling” and “controlled”
have meanings correlative to the foregoing.

 

1

 

“Closing Date” means the First Time of Delivery as defined in the
Purchase Agreement.

 

“Commission” means the United States Securities and Exchange
Commission, or any other federal agency at the time administering the Exchange
Act or the Securities Act, whichever is the relevant statute for the particular
purpose.

 

“Common Stock” means the Company’s common stock, par value $0.0001 per
share, together with any associated preferred share purchase rights.

 

“DTC” means The Depository Trust Company.

 

“Effective Date” has the meaning assigned thereto in Section 2(b)(i) hereof.

 

“Effective Failure” has the meaning assigned thereto in Section 7(b) hereof.

 

“Effectiveness Period” has the meaning assigned thereto in Section 2(b)(i) hereof.

 

“Effective Time” means the time at which the Commission declares the Shelf
Registration Statement effective or at which the Shelf Registration Statement
otherwise becomes effective.

 

“Electing Holder” has the meaning assigned thereto in Section 3(a)(iii) hereof.

 

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

 

“Holder” means any person that is the record owner of Registrable
Securities (and includes any person that has a beneficial interest in any
Registrable Security in book-entry form).

 

“Indenture” means the Indenture, dated as of December 21, 2004,
between the Company and U.S. Bank National Association, as amended and
supplemented from time to time in accordance with its terms.

 

“Managing Underwriters” means the investment banker or investment bankers and
manager or managers that shall administer an underwritten offering, if any,
conducted pursuant to Section 6 hereof.

 

“NASD Rules”  means the Rules of the National
Association of Securities Dealers, Inc., as amended from time to time.

 

“Notice and Questionnaire” means a Notice of Registration Statement and Selling
Securityholder Questionnaire substantially in the form of Appendix A hereto.

 

The term “person” means
an individual, partnership, corporation, trust or unincorporated organization,
or a government or agency or political subdivision thereof.

 

“Prospectus” means the prospectus (including, without limitation, any
preliminary prospectus, any final prospectus and any prospectus that discloses
information previously 

 

2

 

omitted from a
prospectus filed as part of an effective registration statement in reliance
upon Rule 430A under the Securities Act) included in the Shelf
Registration Statement, as amended or supplemented by any prospectus supplement
with respect to the terms of the offering of any portion of the Registrable
Securities covered by the Shelf Registration Statement and by all other
amendments and supplements to such prospectus, including all material
incorporated by reference in such prospectus and all documents filed after the
date of such prospectus by the Company under the Exchange Act and incorporated
by reference therein.

 

“Purchase Agreement” means the purchase agreement, dated as of December 15,
2004, between the Purchasers and the Company relating to the Securities.

 

“Purchasers” means the Purchasers named in Schedule I to the Purchase
Agreement.

 

“Registrable Securities” means all or any portion of the Securities issued from
time to time under the Indenture in registered form and the shares of Common
Stock issuable upon conversion, repurchase or redemption of such Securities; provided,
however, that a security ceases to be a Registrable Security when it is
no longer a Restricted Security.

 

“Registration Default” has the meaning assigned thereto in Section 7(a) hereof.

 

“Restricted Security” means any Security or share of Common Stock issuable
upon conversion thereof except any such Security or share of Common Stock that
(i) has been effectively registered under the Securities Act and sold in a
manner contemplated by the Shelf Registration Statement, (ii) has been
transferred in compliance with Rule 144 under the Securities Act (or any
successor provision thereto) or is transferable pursuant to paragraph (k)
of such Rule 144 (or any successor provision thereto) or (iii) has
otherwise been transferred and a new Security or share of Common Stock not
subject to transfer restrictions under the Securities Act has been delivered by
or on behalf of the Company in accordance with Section 2.12 of the Indenture.

 

“Rules and Regulations” means the published rules and regulations of the
Commission promulgated under the Securities Act or the Exchange Act, as in
effect at any relevant time.

 

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

 

“Shelf Registration” means a registration effected pursuant to Section 2
hereof.

 

“Shelf Registration Statement” means a “shelf” registration statement filed under the
Securities Act providing for the registration of, and the sale on a continuous
or delayed basis by the Holders of, all of the Registrable Securities pursuant
to Rule 415 under the Securities Act and/or any similar rule that may be
adopted by the Commission, filed by the Company pursuant to the provisions of
Section 2 of this Agreement, including the Prospectus contained therein,
any amendments and supplements to such registration statement, including
post-effective amendments, and all exhibits and all material incorporated by
reference in such registration statement.

 

3

 

“Trust Indenture Act” means the Trust Indenture Act of 1939, or any successor
thereto, and the rules, regulations and forms promulgated thereunder, as the
same shall be amended from time to time.

 

The term “underwriter”
means any underwriter of Registrable Securities in connection with an offering
thereof under a Shelf Registration Statement.

 

(b)           Wherever
there is a reference in this Agreement to a percentage of the “principal amount”
of Registrable Securities or to a percentage of Registrable Securities, Common
Stock shall be treated as representing the principal amount of Securities that
was surrendered for conversion or exchange in order to receive such number of
shares of Common Stock.

 

2.             Shelf Registration.

 

(a)           The
Company shall, no later than 90 calendar days following the Closing Date, file
with the Commission a Shelf Registration Statement relating to the offer and
sale of the Registrable Securities by the Holders from time to time in
accordance with the methods of distribution elected by such Holders and set
forth in such Shelf Registration Statement and, thereafter, shall use its
commercially reasonable efforts to cause such Shelf Registration Statement to
be declared effective under the Securities Act no later than 180 calendar days
following the Closing Date; provided, however,
that the Company may, upon written notice to all Holders, postpone having the
Shelf Registration Statement declared effective for a reasonable period not to
exceed 90 days if the Company possesses material non-public information, the
disclosure of which would have a material adverse effect on the Company and its
subsidiaries taken as a whole; provided, further, however, that no Holder shall
be entitled to be named as a selling securityholder in the Shelf Registration
Statement or to use the Prospectus forming a part thereof for resales of
Registrable Securities unless such Holder is an Electing Holder.

 

(b)           The
Company shall use its commercially reasonable efforts:

 

(i)            to keep the Shelf Registration
Statement continuously effective under the Securities Act in order to permit
the Prospectus forming a part thereof to be usable by Holders until the
earliest of (1) the sale of all Registrable Securities registered under the
Shelf Registration Statement; (2) the expiration of the period referred to in
Rule 144(k) of the Securities with respect to all Registrable Securities held
by Persons that are not Affiliates of the Company; and (3) two years from the
date (the “Effective Date”) such Shelf Registration Statement is declared
effective (such period being referred to herein as the “Effectiveness Period”);

 

(ii)           after the Effective Time of the Shelf
Registration Statement, upon the request of any Holder of Registrable
Securities that is not then an Electing Holder, to use its commercially
reasonable efforts to enable such Holder to use the Prospectus forming a part
thereof for resales of Registrable Securities, including, without limitation,
any action reasonably necessary to identify such Holder as a selling
securityholder in the Shelf Registration Statement; provided,
however, that nothing in this subparagraph shall relieve such Holder
of the obligation to return a completed and signed Notice and Questionnaire to
the Company in accordance with Section 3(a)(ii) hereof; and provided, 

 

4

 

further,
that the Company will be under no obligation to file a post-effective amendment
to add any Holder of Registrable Securities to the Shelf Registration Statement
more than one time per calendar quarter for all such Holders; and

 

(iii)          if at any time during the
Effectiveness Period the Securities, pursuant to Articles 3, 4 and 6 of the
Indenture, are convertible into securities other than Common Stock, to cause,
or to cause any successor under the Indenture to cause, such securities to be
included in the Shelf Registration Statement no later than the date on which
the Securities may then be convertible into such securities.

 

The
Company shall be deemed not to have used its commercially reasonable efforts to
keep the Shelf Registration Statement effective during the requisite period if
the Company voluntarily takes any action that would result in Holders of
Registrable Securities covered thereby not being able to offer and sell any of
such Registrable Securities during that period, unless such action is (A)
required by applicable law and the Company thereafter promptly complies with
the requirements of paragraph 3(j) below or (B) permitted pursuant to Section
2(c) below.

 

(c)           The
Company may suspend the use of the Prospectus for a period not to exceed 30
days in any 90-day period or an aggregate of 90 days in any 12-month period if
the Board of Directors of the Company shall have determined in good faith that
because of valid business reasons (not including avoidance of the Company’s
obligations hereunder), including the acquisition or divestiture of assets,
pending corporate developments and similar events , (including, without
limitation, review by the Commission of the Company’s periodic reports filed
under the Exchange Act), it is appropriate to suspend such use, and prior to
suspending such use the Company provides the Holders with written notice of
such suspension, which notice need not specify the nature of the event giving
rise to such suspension.

 

3.             Registration Procedures. 
In connection with the Shelf Registration Statement, the following
provisions shall apply:

 

(a) (i)       Not less than 30 calendar days prior to the Effective Time of
the Shelf Registration Statement, the Company shall mail the Notice and
Questionnaire to the Holders of Registrable Securities.  No Holder shall be entitled to be named as a
selling securityholder in the Shelf Registration Statement as of the Effective
Time, and no Holder shall be entitled to use the Prospectus forming a part
thereof for resales of Registrable Securities at any time, unless such Holder
has returned a completed and signed Notice and Questionnaire to the Company by
the deadline for response set forth therein; provided,
however, Holders of Registrable Securities shall have at least 28
calendar days from the date on which the Notice and Questionnaire is first
mailed to such Holders to return a completed and signed Notice and
Questionnaire to the Company.

 

(ii)           After the Effective Time of the Shelf
Registration Statement, the Company shall, upon the request of any Holder of
Registrable Securities that is not then an Electing Holder, promptly send a
Notice and Questionnaire to such Holder. 
The Company shall not be required to take any action to name such Holder
as a selling securityholder in the Shelf Registration Statement or to enable
such Holder to use the Prospectus forming a part thereof for resales of
Registrable Securities until such Holder 

 

5

 

has returned a completed and signed Notice and Questionnaire
to the Company.  Notwithstanding the
foregoing, the Company will be under no obligation to file a post-effective
amendment to add any Holder of Registrable Securities to the Shelf Registration
Statement more than one time per calendar quarter for all such Holders.

 

(iii)          The term “Electing Holder” shall mean
any Holder of Registrable Securities that has returned a completed and signed
Notice and Questionnaire to the Company in accordance with Section 3(a)(i) or
3(a)(ii) hereof.

 

(b)           The
Company shall furnish to each Electing Holder upon request, prior to the
Effective Time, a copy of the Shelf Registration Statement initially filed with
the Commission, and shall furnish to such Holders upon request, prior to the
filing thereof with the Commission, copies of each amendment thereto and each
amendment or supplement, if any, to the Prospectus included therein, and shall
use its commercially reasonable efforts to reflect in each such document, at
the Effective Time or when so filed with the Commission, as the case may be,
such  comments as such Holders and their
respective counsel reasonably may propose.

 

(c)           The
Company shall promptly take such action as may be necessary so that (i) each of
the Shelf Registration Statement and any amendment thereto and the Prospectus
forming a part thereof and any amendment or supplement thereto (and each report
or other document incorporated therein by reference in each case) complies in
all material respects with the Securities Act and the Exchange Act and the
respective rules and regulations thereunder, (ii) each of the Shelf
Registration Statement and any amendment thereto does not, when it becomes
effective, contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading and (iii) each of the Prospectus forming a part of the
Shelf Registration Statement, and any amendment or supplement to such
Prospectus, does not at any time during the Effectiveness Period include an untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading.

 

(d)           The
Company shall promptly advise each Electing Holder, and shall confirm such
advice in writing if so requested by any such Electing Holder:

 

(i)            when a
Shelf Registration Statement has been initially filed with the Commission,
making a public announcement thereof by release made to Reuters Economic
Services, Bloomberg Business News or a similar medium of public dissemination;

 

(ii)           of any
request by the Commission for amendments or supplements to the Shelf
Registration Statement or the Prospectus included therein or for additional
information;

 

(iii)          of the issuance
by the Commission of any stop order suspending the effectiveness of the Shelf
Registration Statement or the initiation of any proceedings for such purpose;

 

6

 

(iv)          of the receipt by the Company of any
notification with respect to the suspension of the qualification of the
securities included in the Shelf Registration Statement for sale in any
jurisdiction or the initiation of any proceeding for such purpose; and

 

(v)           of the occurrence of any event or the
existence of any state of facts that requires the making of any changes in the
Shelf Registration Statement or the Prospectus included therein so that, as of
such date, such Shelf Registration Statement and Prospectus do not contain an
untrue statement of a material fact and do not omit to state a material fact
required to be stated therein or necessary to make the statements therein (in
the case of the Prospectus, in light of the circumstances under which they were
made) not misleading (which advice shall be accompanied by an instruction to
such Holders to suspend the use of the Prospectus until the requisite changes
have been made).

 

(e)           The
Company shall use its commercially reasonable efforts to prevent the issuance,
and if issued to obtain the withdrawal at the earliest possible time, of any
order suspending the effectiveness of the Shelf Registration Statement.

 

(f)            The
Company shall furnish to each Electing Holder, if such Electing Holder so
requests in writing, without charge, at least one copy of the Shelf
Registration Statement and all post-effective amendments thereto, including
financial statements and schedules, and, if such Electing Holder so requests in
writing, all reports, other documents and exhibits that are filed with or
incorporated by reference in the Shelf Registration Statement.

 

(g)           The
Company shall, during the Effectiveness Period, deliver to each Electing
Holder, without charge, as many copies of the Prospectus (including each
preliminary Prospectus) included in the Shelf Registration Statement and any
amendment or supplement thereto as such Electing Holder may reasonably request;
and the Company consents (except during the periods specified in Section 2(c)
above or during the continuance of any event or the existence of any state of
facts described in Section 3(d)(v) above) to the use of the Prospectus and any
amendment or supplement thereto by each of the Electing Holders in connection
with the offering and sale of the Registrable Securities covered by the
Prospectus and any amendment or supplement thereto during the Effectiveness
Period.

 

(h)           Prior
to any offering of Registrable Securities pursuant to the Shelf Registration
Statement, the Company shall (i) register or qualify or cooperate with the
Electing Holders and their respective counsel in connection with the
registration or qualification of such Registrable Securities for offer and sale
under the securities or “blue sky” laws of such jurisdictions within the United
States as any Electing Holder may reasonably request in writing, (ii) keep such
registrations or qualifications in effect and comply with such laws so as to
permit the continuance of offers and sales in such jurisdictions for so long as
may be necessary to enable any Electing Holder or underwriter, if any, to complete
its distribution of Registrable Securities pursuant to the Shelf Registration
Statement, and (iii) take any and all other actions necessary or advisable to
enable the  disposition in such
jurisdictions of such Registrable Securities; provided,
however, that in no event shall the
Company be obligated to (A) qualify as a foreign corporation or as a dealer in
securities in any jurisdiction where it would not otherwise be 

 

7

 

required to so
qualify but for this Section 3(h) or (B) file any general consent to service of
process in any jurisdiction where it is not as of the date hereof so subject.

 

(i)            Unless
any Registrable Securities shall be in book-entry only form, the Company shall
cooperate with the Electing Holders to facilitate the timely preparation and
delivery of certificates representing Registrable Securities to be sold
pursuant to the Shelf Registration Statement, which certificates, if so
required by any securities exchange upon which any Registrable Securities are
listed, shall be penned, lithographed or engraved, or produced by any
combination of such methods, on steel engraved borders, and which certificates
shall be free of any restrictive legends and in such permitted denominations
and registered in such names as Electing Holders may request in connection with
the sale of Registrable Securities pursuant to the Shelf Registration
Statement.

 

(j)            Upon
the occurrence of any event or the existence of any state of facts contemplated
by paragraph 3(d)(v) above during the Effectiveness Period, the Company shall
(subject to its rights to suspend the use of the Prospectus pursuant to Section
2(c))promptly prepare a post-effective amendment to any Shelf Registration
Statement or an amendment or supplement to the related Prospectus or file any
other required document so that, as thereafter delivered to purchasers of the
Registrable Securities included therein, the Prospectus will not include an
untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading. 
If the Company notifies the Electing Holders of the occurrence of any
event or the existence of any state of facts contemplated by paragraph 3(d)(v) above, the Electing Holder shall suspend the use of the
Prospectus until the requisite changes to the Prospectus have been made (or, in
the event that the Company exercises its suspension rights under Section 2(c),
until the end of such suspension period).

 

(k)           Not
later than the Effective Time of the Shelf Registration Statement, the Company
shall provide a CUSIP number for the Registrable Securities that are debt
securities.

 

(l)            The
Company shall use its commercially reasonable efforts to comply with all
applicable Rules and Regulations, and to make generally available to its
securityholders as soon as practicable, but in any event not later than
eighteen months after (i) the effective date (as defined in Rule 158(c) under
the Securities Act) of the Shelf Registration Statement, (ii) the
effective date of each post-effective amendment to the Shelf Registration
Statement, and (iii) the date of each filing by the Company with the Commission
of an Annual Report on Form 10-K that is incorporated by reference in the Shelf
Registration Statement, an earning statement of the Company and its
subsidiaries complying with Section 11(a) of the Securities Act and the
rules and regulations of the Commission thereunder (including, at the option of
the Company, Rule 158).

 

(m)          Not
later than the Effective Time of the Shelf Registration Statement, the Company
shall cause the Indenture to be qualified under the Trust Indenture Act; in
connection with such qualification, the Company shall cooperate with the
Trustee under the Indenture and the Holders (as defined in the Indenture) to
effect such changes to the Indenture as may be required for such Indenture to
be so qualified in accordance with the terms of the Trust Indenture Act; and
the Company shall execute, and shall use all reasonable efforts to cause the 

 

8

 

Trustee to execute,
all documents that may be required to effect such changes and all other forms
and documents required to be filed with the Commission to enable such Indenture
to be so qualified in a timely manner. 
In the event that any such amendment or modification referred to in this
Section 3(m) involves the appointment of a new trustee under the Indenture,
the Company shall appoint a new trustee thereunder pursuant to the applicable
provisions of the Indenture.

 

(n)           In the
event of an underwritten offering conducted pursuant to Section 6 hereof, the
Company shall, if requested, promptly include or incorporate in a Prospectus
supplement or post-effective amendment to the Shelf Registration Statement such
information as the Managing Underwriters reasonably agree should be included
therein and to which the Company does not reasonably object and shall make all
required filings of such Prospectus supplement or post-effective amendment as
soon as practicable after it is notified of the matters to be included or
incorporated in such Prospectus supplement or post-effective amendment.

 

(o)           The
Company shall enter into such customary agreements (including an underwriting
agreement in customary form in the event of an underwritten offering conducted
pursuant to Section 6 hereof) and take all other appropriate action in order to
expedite and facilitate the registration and disposition of the Registrable Securities,
and in connection therewith, if an underwriting agreement is entered into,
cause the same to contain indemnification provisions and procedures
substantially identical to those set forth in Section 5 hereof with respect to
all parties to be indemnified pursuant to Section 5 hereof.

 

(p)           The
Company shall:

 

(i)(A)  make reasonably
available for inspection by the Electing Holders, any underwriter participating
in any disposition pursuant to the Shelf Registration Statement, and any
attorney, accountant or other agent retained by such Electing Holders or any
such underwriter all relevant financial and other records, pertinent corporate
documents and properties of the Company and its subsidiaries, and (B) cause the
Company’s officers, directors and employees to supply all information
reasonably requested by such Electing Holders or any such underwriter,
attorney, accountant or agent in connection with the Shelf Registration
Statement, in each case, as is customary for similar due diligence
examinations; provided, however,
that no person shall be granted the rights set forth in (A) and (B) above
unless and until such person shall have executed and delivered a
confidentiality agreement in favor of the Company with respect to any
information received pursuant to the exercise of such rights in a customary
form reasonably acceptable to the Company; and provided
further that, the foregoing inspection and information gathering
shall, to the greatest extent possible, be coordinated on behalf of the
Electing Holders and the other parties entitled thereto by one counsel
designated by and on behalf of the Electing Holders and other parties;

 

(ii)              in
connection with any underwritten offering conducted pursuant to Section 6
hereof, make such representations and warranties to the Electing Holders
participating in such underwritten offering and to the Managing Underwriters,
in form, substance and scope as are customarily made by the Company to
underwriters in 

 

9

 

primary
underwritten offerings of equity and convertible debt securities and covering
matters including, but not limited to, those set forth in the Purchase
Agreement;

 

(iii)             in
connection with any underwritten offering conducted pursuant to Section 6
hereof, obtain opinions of counsel to the Company (which counsel and opinions
(in form, scope and substance) shall be reasonably satisfactory to the Managing
Underwriters) addressed to each Electing Holder participating in such
underwritten offering and the underwriters, covering such matters as are
customarily covered in opinions requested in primary underwritten offerings of
equity and convertible debt securities and such other matters as may be
reasonably requested by such Electing Holders and underwriters (it being agreed
that the matters to be covered by such opinions shall include, without
limitation, as of the date of the opinion and as of the Effective Time of the
Shelf Registration Statement or most recent post-effective amendment thereto,
as the case may be, the absence from the Shelf Registration Statement and the
Prospectus, including the documents incorporated by reference therein, of an
untrue statement of a material fact or the omission of a material fact required
to be stated therein or necessary to make the statements therein not
misleading;

 

(iv)           in
connection with any underwritten offering conducted pursuant to Section 6
hereof, obtain “cold comfort” letters and updates thereof from the independent
public accountants of the Company (and, if necessary, from the independent
public accountants of any subsidiary of the Company or of any business acquired
by the Company for which financial statements and financial data are, or are
required to be, included in the Shelf Registration Statement), addressed to
each Electing Holder participating in such underwritten offering (if such
Electing Holder has provided such letter, representations or documentation, if
any, required for such cold comfort letter to be so addressed) and the
underwriters, in customary form and covering matters of the type customarily
covered in “cold comfort” letters in connection with primary underwritten
offerings;

 

(v)             in
connection with any underwritten offering conducted pursuant to Section 6
hereof, deliver such documents and certificates as may be reasonably requested
by any Electing Holders participating in such underwritten offering and the
Managing Underwriters, if any, including, without limitation, certificates to
evidence compliance with Section 3(j) hereof and with any conditions
contained in the underwriting agreement or other agreements entered into by the
Company.

 

(q)           The
Company will use its commercially reasonable efforts to cause the Common Stock
issuable upon conversion of the Securities to be listed for quotation on the
Nasdaq National Market System or other stock exchange or trading system on
which the Common Stock primarily trades on or prior to the Effective Time of
the Shelf Registration Statement hereunder.

 

(r)            In
the event that any broker-dealer registered under the Exchange Act shall be an “affiliate”
(as defined in Rule 2720(b)(1) of the NASD Rules
(or any successor provision thereto)) of the Company or has a “conflict of
interest” (as defined in Rule 2720(b)(7) of the NASD Rules (or any
successor provision thereto)) and such broker-dealer shall underwrite, 

 

10

 

participate as a
member of an underwriting syndicate or selling group or assist in the
distribution of any Registrable Securities covered by the Shelf Registration
Statement, whether as a Holder of such Registrable Securities or as an
underwriter, a placement or sales agent or a broker or dealer in respect
thereof, or otherwise, the Company shall assist such broker-dealer in complying
with the requirements of the NASD Rules, including, without limitation, by (A)
engaging a “qualified independent underwriter” (as defined in
Rule 2720(b)(15) of the NASD Rules (or any successor provision thereto))
to participate in the preparation of the registration statement relating to
such Registrable Securities, to exercise usual standards of due diligence in
respect thereto and to recommend the public offering price of such Registrable
Securities, (B) indemnifying such qualified independent underwriter to the
extent of the indemnification of underwriters provided in Section 5 hereof, and
(C) providing such information to such broker-dealer as may be required in
order for such broker-dealer to comply with the requirements of the NASD Rules.

 

(s)           The
Company shall use its reasonable best efforts to take all other steps necessary
to effect the registration, offering and sale of the
Registrable Securities covered by the Shelf Registration Statement contemplated
hereby.

 

4.             Registration Expenses. 
Except as otherwise provided in Section 3, the Company shall bear all
fees and expenses incurred in connection with the performance of its
obligations under Sections 2, 3 and 6 hereof and shall bear or reimburse the
Electing Holders for the reasonable fees and disbursements of a single counsel
selected by a plurality of all Electing Holders who own an aggregate of not
less than 50% of the Registrable Securities covered by the Shelf Registration
Statement to act as counsel therefore in connection therewith.  Each Electing Holder shall pay all
underwriting discounts and commissions and transfer taxes, if any, relating to
the sale or disposition of such Electing Holder’s Registrable Securities
pursuant to the Shelf Registration Statement.

 

5.             Indemnification and Contribution.

 

(a)           Indemnification by the Company. Upon the registration of the
Registrable Securities pursuant to Section 2 hereof, the Company shall 
indemnify and hold harmless each Electing Holder and each underwriter, selling
agent or other securities professional, if any, which facilitates the
disposition of Registrable Securities, and each of their respective officers
and directors and each person who controls such Electing Holder, underwriter,
selling agent or other securities professional within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act (each such person being
sometimes referred to as an “Indemnified Person”) against any losses, claims,
damages or liabilities, joint or several, to which such Indemnified Person may
become subject under the Securities Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon an untrue statement or alleged untrue statement of a material fact
contained in any Shelf Registration Statement under which such Registrable
Securities are to be registered under the Securities Act, or any Prospectus
contained therein or furnished by the Company to any Indemnified Person, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and the
Company hereby agrees to reimburse such Indemnified Person for any legal or
other expenses reasonably 

 

11

 

incurred by them in
connection with investigating or defending any such action or claim as such
expenses are incurred; provided, however, that the Company shall not be liable to any such
Indemnified Person in any such case to the extent that any such loss, claim,
damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in such Shelf
Registration Statement or Prospectus, or amendment or supplement, in reliance
upon and in conformity with written information furnished to the Company by
such Indemnified Person expressly for use therein.

 

(b)           Indemnification by the Electing Holders and any Agents and Underwriters.  Each Electing Holder agrees, as a consequence
of the inclusion of any of such Electing Holder’s Registrable Securities in
such Shelf Registration Statement, and each underwriter, selling agent or other
securities professional, if any, which facilitates the disposition of
Registrable Securities shall agree, as a consequence of facilitating such
disposition of Registrable Securities, severally and not jointly, to (i)
indemnify and hold harmless the Company, its directors, officers who sign any
Shelf Registration Statement and each person, if any, who controls the Company
within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act, against any losses, claims, damages or liabilities to which
the Company or such other persons may become subject, under the Securities Act
or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon an untrue statement
or alleged untrue statement of a material fact contained in such Shelf
Registration Statement or Prospectus, or any amendment or supplement, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, in each case to the extent, but only to the extent,
that such untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with written information
furnished to the Company by such Electing Holder, underwriter, selling agent or
other securities professional expressly for use therein, and (ii) reimburse the
Company for any legal or other expenses reasonably incurred by the Company or
any such director or officer in connection with investigating or defending any
such action or claim as such expenses are incurred.

 

(c)           Notices of Claims, Etc. 
Promptly after receipt by an indemnified party under subsection (a) or
(b) above of notice of the commencement of any action or proceeding (including
a governmental investigation), such indemnified party shall, if a claim in
respect thereof is to be made against an indemnifying party under this Section
5, notify such indemnifying party in writing of the commencement thereof; but
the omission so to notify the indemnifying party shall not relieve it from any
liability which it may have to any indemnified party otherwise than under the
indemnification provisions of or contemplated by subsection (a) or (b) above.  In case any such action shall be brought
against any indemnified party and it shall notify an indemnifying party of the
commencement thereof, such indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party), and,
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, such indemnifying party shall not be
liable to such indemnified party under this Section 5 for any legal expenses of
other counsel or any other expenses, in each case subsequently incurred by such
indemnified party, in connection with the defense thereof other than reasonable
costs of investigation. No 

 

12

 

indemnifying party
shall, without the written consent of the indemnified party, effect the
settlement or compromise of, or consent to the entry of any judgment with
respect to, any pending or threatened action or claim in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified party is an actual or potential party to such action or claim)
unless such settlement, compromise or judgment (i) includes an unconditional
release of the indemnified party from all liability arising out of such action
or claim and (ii) does not include a statement as to, or an admission of,
fault, culpability or a failure to act, by or on behalf of any indemnified
party.

 

(d)           Contribution.  If the
indemnification provided for in this Section 5 is unavailable to or
insufficient to hold harmless an indemnified party under subsection (a) or
(b) above in respect of any losses, claims, damages or liabilities (or actions
in respect thereof) referred to therein, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities (or actions in respect thereof)
in such proportion as is appropriate to reflect the relative fault of the
indemnifying party and the indemnified party in connection with the statements
or omissions which resulted in such losses, claims, damages or liabilities (or
actions in respect thereof), as well as any other relevant equitable
considerations.  The relative fault of
such indemnifying party and indemnified party shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by such indemnifying party or by such indemnified
party, and the parties’ relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.  The parties hereto agree that it would not be
just and equitable if contribution pursuant to this Section 5(d) were determined
by pro rata allocation (even if the Electing Holders or any underwriters,
selling agents or other securities professionals or all of them were treated as
one entity for such purpose) or by any other method of allocation which does
not take account of the equitable considerations referred to in this Section
5(d).  The amount paid or payable by an
indemnified party as a result of the losses, claims, damages or liabilities (or
actions in respect thereof) referred to above shall be deemed to include any
legal or other fees or expenses reasonably incurred by such indemnified party
in connection with investigating or defending any such action or claim.  No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.  The
obligations of the Electing Holders and any underwriters, selling agents or
other securities professionals in this Section 5(d) to contribute shall be
several in proportion to the percentage of principal amount of Registrable
Securities registered or underwritten, as the case may be, by them and not
joint.

 

(e)           Notwithstanding
any other provision of this Section 5, in no event will any (i) Electing
Holder be required to undertake liability to any person under this Section 5
for any amounts in excess of the dollar amount of the proceeds to be received
by such Holder from the sale of such Holder’s Registrable Securities (after
deducting any fees, discounts and commissions applicable thereto) pursuant to
any Shelf Registration Statement under which such Registrable Securities are to
be registered under the Securities Act and (ii) underwriter, selling agent
or other securities professional be required to undertake liability to any
person hereunder for any amounts in excess of the discount, commission or other
compensation payable to such 

 

13

 

underwriter, selling agent or other securities professional with
respect to the Registrable Securities underwritten by it and distributed to the
public.

 

(f)            The
obligations of the Company under this Section 5 shall be in addition to any
liability which the Company may otherwise have to any Indemnified Person and
the obligations of any Indemnified Person under this Section 5 shall be in
addition to any liability which such Indemnified Person may otherwise have to
the Company.  The remedies provided in
this Section 5 are not exclusive and shall not limit any rights or remedies
which may otherwise be available to an indemnified party at law or in equity.

 

6.             Underwritten Offering. 
Any Holder of Registrable Securities who desires to do so may sell
Registrable Securities (in whole or in part) in an underwritten offering; provided that (i) the Electing Holders of at least 50% in
aggregate principal amount of the Registrable Securities then covered by the
Shelf Registration Statement shall request such an offering; and (ii) at least
such aggregate principal amount of such Registrable Securities shall be
included in such offering; and provided further
that the Company shall not be obligated to cooperate with more than one
underwritten offering during the Effectiveness Period.  Upon receipt of such a request, the Company
shall provide all Holders of Registrable Securities written notice of the
request, which notice shall inform such Holders that they have the opportunity
to participate in the offering.  In any
such underwritten offering, the investment banker or bankers and manager or
managers that will administer the offering will be selected by, and the
underwriting arrangements with respect thereto (including the size of the
offering) will be approved by, the holders of a majority of the Registrable
Securities to be included in such offering; provided, however, that such investment bankers and managers and
underwriting arrangements must be reasonably satisfactory to the Company.  No Holder may participate in any underwritten
offering contemplated hereby unless (a) such Holder agrees to sell such Holder’s
Registrable Securities to be included in the underwritten offering in
accordance with any approved underwriting arrangements, (b) such Holder
completes and executes all reasonable questionnaires, powers of attorney,
indemnities, underwriting agreements, lock-up letters and other documents
required under the terms of such approved underwriting arrangements, and (c) if
such Holder is not then an Electing Holder, such Holder returns a completed and
signed Notice and Questionnaire to the Company in accordance with Section
3(a)(ii) hereof within a reasonable amount of time before such underwritten
offering.  The Holders participating in
any underwritten offering shall be responsible for any underwriting discounts
and commissions and fees and, subject to Section 4 hereof, expenses of their
own counsel.  The Company shall pay all
expenses customarily borne by issuers in an underwritten offering, including
but not limited to filing fees, the fees and disbursements of its counsel and
independent public accountants and any printing expenses incurred in connection
with such underwritten offering. 
Notwithstanding the foregoing or the provisions of Section 3(n) hereof,
upon receipt of a request from the Managing Underwriter or a representative of
holders of a majority of the Registrable Securities to be included in an
underwritten offering to prepare and file an amendment or supplement to the
Shelf Registration Statement and Prospectus in connection with an underwritten
offering, the Company may delay the filing of any such amendment or supplement
for up to 90 days if the Board of Directors of the Company shall have
determined in good faith that the Company has a bona fide business reason for
such delay.

 

14

 

7.                                      Additional Interest.

 

(a)           Notwithstanding
any postponement of effectiveness permitted by Section 2(a) hereof, if (i) on
or prior to the 90th day following the Closing Date, a Shelf Registration
Statement has not been filed with the Commission or (ii) on or prior to the
180th day following the Closing Date, such Shelf Registration Statement is not
declared effective by the Commission (each, a “Registration Default”), the
Company shall be required to pay additional interest  (“Additional Interest”), from and including
the day following such Registration Default until such Shelf Registration
Statement is either so filed or so filed and subsequently declared effective,
as applicable, at a rate per annum equal to an additional one-quarter of one
percent (0.25%) of the principal amount of Registrable Securities, to and
including the 90th day following such Registration Default and one-half of one
percent (0.50%) thereof from and after the 91st day following such Registration
Default.

 

(b)           In the
event that (i) the Shelf Registration Statement ceases to be effective, (ii)
the Company suspends the use of the Prospectus pursuant to Section 2(c) or 3(j)
hereof, (iii) the Holders are not authorized to use the Prospectus pursuant to
Section 3(g) hereto or (iv) the Holders are otherwise prevented or restricted
by the Company from effecting sales pursuant to the Shelf Registration
Statement (an “Effective Failure”) for more than 30 days, whether or not
consecutive, in any 90-day period, or for more than 90 days, whether or not
consecutive, during any 12-month period, then the Company shall pay Additional
Interest at a rate per annum equal to an additional one-half of one percent
(0.50%) of the principal amount of Registrable Securities from the 31st
day of the applicable 90-day period or the 91st day of the applicable 12-month
period, as the case may be, that any such Effective Failure has existed until
the earlier of (1) the time the Holders of Registrable Securities are again
able to make sales under the Shelf Registration Statement or (2) the expiration
of the Effectiveness Period.

 

(c)           Any
amounts to be paid as Additional Interest pursuant to paragraphs (a) or (b) of
this Section 7 shall be paid in cash semi-annually in arrears, with the first
semi-annual payment due on the first interest payment date, as applicable,
following the date of such Registration Default or Effective Failure, as
applicable.  Such Additional Interest
will accrue in respect of the Securities at the rates set forth in paragraphs
(a) or (b) of this Section 7, as applicable, on the principal amount of the
Securities.  In no event will Additional
Interest accrue on any Securities that have been converted into shares of
Common Stock.

 

(d)           Except
as provided in Section 8(b) hereof, the Additional Interest as set forth
in this Section 7 shall be the exclusive monetary remedy available to the
Holders of Registrable Securities for such Registration Default or Effective
Failure. In no event shall the Company be required to pay Additional Interest in
excess of the applicable maximum amount of one-half of one percent (0.50%) set
forth above, regardless of whether one or multiple Registration Defaults or
Effective Failures exist.

 

8.                                       Miscellaneous.

 

(a)           Other Registration Rights. 
The Company may grant registration rights that would permit any person
that is a third party the right to piggy-back on any Shelf Registration  Statement, provided
that if the Managing Underwriter of any underwritten offering conducted
pursuant to Section 6 hereof notifies the Company and the Electing Holders
that the total amount of securities which the Electing Holders and the holders
of such piggy-back rights intend 

 

15

 

to include in any
Shelf Registration Statement is so large as to materially threaten the success
of such offering (including the price at which such securities can be sold),
then the amount, number or kind of securities to be offered for the account of
holders of such piggy-back rights will be reduced to the extent necessary to
reduce the total amount of securities to be included in such offering to the
amount, number and kind recommended by the Managing Underwriter prior to any
reduction in the amount of Registrable Securities to be included in such Shelf
Registration Statement.

 

(b)           Specific Performance. 
The parties hereto acknowledge that there would be no adequate remedy at
law if the Company fails to perform any of its obligations hereunder and that
the Purchasers and the Holders from time to time may be irreparably harmed by
any such failure, and accordingly agree that the Purchasers and such Holders,
in addition to any other remedy to which they may be entitled at law or in
equity and without limiting the remedies available to the Electing Holders
under Section 7 hereof, shall be entitled to compel specific performance of the
obligations of the Company under this Registration Rights Agreement in
accordance with the terms and conditions of this Registration Rights Agreement,
in any court of the United States or any State thereof having jurisdiction.

 

(c)           Amendments and Waivers. 
This Agreement, including this Section 8(c), may be amended, and waivers
or consents to departures from the provisions hereof may be given, only by a
written instrument duly executed by the Company and the holders of a majority
in aggregate principal amount of Registrable Securities then outstanding.  Each Holder of Registrable Securities
outstanding at the time of any such amendment, waiver or consent or thereafter
shall be bound by any amendment, waiver or consent
effected pursuant to this Section 8(c), whether or not any notice, writing or
marking indicating such amendment, waiver or consent appears on the Registrable
Securities or is delivered to such Holder.

 

(d)           Notices.  All notices
and other communications provided for or permitted hereunder shall be given as
provided in the Indenture.

 

(e)           Parties in Interest. 
The parties to this Agreement intend that all Holders of Registrable
Securities shall be entitled to receive the benefits of this Agreement and that
any Electing Holder shall be bound by the terms and provisions of this
Agreement by reason of such election with respect to the Registrable Securities
which are included in a Shelf Registration Statement.  All the terms and provisions of this
Agreement shall be binding upon, shall inure to the benefit of and shall be
enforceable by the respective successors and assigns of the parties hereto and
any Holder from time to time of the Registrable Securities to the aforesaid
extent.  In the event that any transferee
of any Holder of Registrable Securities shall acquire Registrable Securities,
in any manner, whether by gift, bequest, purchase, operation of law or
otherwise, such transferee shall, without any further writing or action of any
kind, be entitled to receive the benefits of and, if an Electing Holder, be
conclusively deemed to have agreed to be bound by and to perform all of the
terms and provisions of this Agreement to the aforesaid extent.

 

(f)            Counterparts.  This
Agreement 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.

 

16

 

(g)           Headings.  The
headings in this Agreement are for convenience of reference only and shall not
limit or otherwise affect the meaning hereof.

 

(h)           Governing
Law.  This Agreement shall be
governed by and construed in accordance with the laws of the State of New York.

 

(i)            Severability.  In the
event that any one or more of the provisions contained herein, or the
application thereof in any circumstances, is held invalid, illegal or
unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision in every other respect and of the
remaining provisions hereof shall not be in any way impaired or affected
thereby, it being intended that all of the rights and privileges of the parties
hereto shall be enforceable to the fullest extent permitted by law.

 

(j)            Survival.  The
respective indemnities, agreements, representations, warranties and other
provisions set forth in this Agreement or made pursuant hereto shall remain in
full force and effect, regardless of any investigation (or any statement as to
the results thereof) made by or on behalf of any Electing Holder, any director,
officer or partner of such Holder, any agent or underwriter, any director,
officer or partner of such agent or underwriter, or any controlling person of
any of the foregoing, and shall survive the transfer and registration of the
Registrable Securities of such Holder.

 

17

 

Please
confirm that the foregoing correctly sets forth the agreement between the
Company and you.

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  ABGENIX, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ William R. Ringo

  	
   

  
	
   

  	
   

  	
  Name: William R. Ringo

  
	
   

  	
   

  	
  Title: President and Chief Executive

  Officer

  
	
   

  	
   

  
	
  Accepted as of the date hereof:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Goldman, Sachs & Co.

  	
   

  
	
  Merrill
  Lynch, Pierce, Fenner & Smith Incorporated

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Goldman, Sachs & Co.

  	
   

  	
   

  
	
   

  	
  (Goldman, Sachs &
  Co.)

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  On behalf of each of
  the Purchasers

  	
   

  	
   

  

 

18

 

Appendix A

 

ABGENIX, INC.

 

INSTRUCTION TO DTC
PARTICIPANTS

 

(Date of Mailing)

 

URGENT - IMMEDIATE ATTENTION
REQUESTED

 

DEADLINE
FOR RESPONSE:  [DATE]

 

The Depository Trust Company (“DTC”) has identified you
as a DTC Participant through which beneficial interests in the Abgenix, Inc.
(the “Company”) 1.75% Convertible Senior Notes due 2011 (the “Securities”) are
held.

 

The Company is in the process of registering the
Securities under the Securities Act of 1933 for resale by the beneficial owners
thereof.  In order to have their
Securities included in the registration statement, beneficial owners must
complete and return the enclosed Notice of Registration Statement and Selling
Securityholder Questionnaire.

 

It is important that beneficial owners of the Securities
receive a copy of the enclosed materials as soon as possible as their rights to have the Securities included in the
registration statement depend upon their returning the Notice and Questionnaire
by [Deadline for response].  Please forward a copy of the enclosed
documents to each beneficial owner that holds interests in the Securities
through you.  If you require more copies
of the enclosed materials or have any questions pertaining to this matter,
please contact William H. Hinman, Jr. at Simpson Thacher
& Bartlett LLP, 3330 Hillview Avenue, Palo Alto, California 94304,
telephone: (650) 251-5000.

 

19

 

Abgenix, Inc.

 

Notice of Registration
Statement

and

Selling Securityholder
Questionnaire

 

               ,
2005

 

Abgenix, Inc. (the “Company”)
intends to file with the United States Securities and Exchange Commission (the “Commission”)
a registration statement on Form S-3 (the “Shelf Registration
Statement”) for the registration and resale under Rule 415 of
the United States Securities Act of 1933, as amended (the “Securities
Act”), of the Company’s 1.75% Convertible Senior Notes due 2011 (the
“Securities”) and the shares of common
stock, par value $.0001 per share (the “Common Stock”),
issuable upon conversion thereof, in accordance with the Registration Rights
Agreement, dated as of December 21, 2004 (the “Registration
Rights Agreement”), between the Company and the purchasers named
therein.  All capitalized terms not
otherwise defined herein shall have the meanings ascribed thereto in the Registration
Rights Agreement.

 

In order to have Registrable Securities included in the
Shelf Registration Statement (or a supplement or amendment thereto), this
Notice of Registration Statement and Selling Securityholder Questionnaire (“Notice and Questionnaire”) must be completed, executed and
delivered to the Company at the address set forth herein for receipt ON OR
BEFORE                       ,
2005.  Beneficial owners of Registrable Securities who do not complete, execute and return this
Notice and Questionnaire by such date (i) will not be named as selling
securityholders in the Shelf Registration Statement and (ii) may not use
the Prospectus forming a part thereof for resales of Registrable Securities.

 

Certain legal consequences arise from being named as a
selling securityholder in the Shelf Registration Statement and related
Prospectus.  Accordingly, holders and
beneficial owners of Registrable Securities are advised to consult their own
securities law counsel regarding the consequences of being named or not being
named as a selling securityholder in the Shelf Registration Statement and
related Prospectus.

 

20

 

The
term “Registrable Securities” is defined in
the Registration Rights Agreement to mean all or any portion of the Securities
issued from time to time under the Indenture in registered form and the shares
of Common Stock issuable upon conversion of such Securities; provided, however,
that a security ceases to be a Registrable Security when it is no longer a
Restricted Security.

 

The term “Restricted
Security” is defined in the Registration Rights Agreement to mean
any Security or share of Common Stock issuable upon conversion thereof except
any such Security or share of Common Stock which (i) has been effectively
registered under the Securities Act and sold in a manner contemplated by the
Shelf Registration Statement, (ii) has been transferred in compliance with
Rule 144 under the Securities Act (or any successor provision thereto) or is
transferable pursuant to paragraph (k) of such Rule 144 (or any successor
provision thereto), or (iii) has otherwise been transferred and a new
Security or share of Common Stock not subject to transfer restrictions under
the Securities Act has been delivered by or on behalf of the Company in  accordance with the Indenture.

 

ELECTION

 

The undersigned holder (the “Selling Securityholder”) of
Registrable Securities hereby elects to include in the Shelf Registration
Statement the Registrable Securities beneficially owned by it and listed below
in Item (3).  The undersigned, by
signing and returning this Notice and Questionnaire, agrees to be bound with
respect to such Registrable Securities by the terms and conditions of this Notice
and Questionnaire and the Registration Rights Agreement, including, without
limitation, Section 5 of the Registration Rights Agreement, as if the
undersigned Selling Securityholder were an original party thereto.

 

Upon any sale of Registrable Securities pursuant to the
Shelf Registration Statement, the Selling Securityholder will be required to
deliver to the Company and the Trustee the Notice of Transfer (completed and
signed) set forth in Exhibit 1 to this Notice and Questionnaire.

 

The Selling Securityholder hereby provides the following
information to the Company and represents and warrants that such information is
accurate and complete:

 

21

 

QUESTIONNAIRE

 

	
  (1)

  	
  (a)

  	
  Full
  Legal Name of Selling Securityholder:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (b)

  	
  Full
  Legal Name of Registered Holder (if not the same as in (a) above) of
  Registrable Securities Listed in Item (3) Below:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (c)

  	
  Full
  Legal Name of DTC Participant (if applicable and if not the same as (b)
  above) Through Which Registrable Securities Listed in Item (3) below are
  Held:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (2)

  	
   

  	
  Address
  for Notices to Selling Securityholder:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Telephone:

  	
   

  	
   

  
	
   

  	
   

  	
  Fax:

  	
   

  	
   

  
	
   

  	
   

  	
  Contact
  Person:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (3)

  	
   

  	
  Beneficial
  Ownership of Securities:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Except as
  set forth below in this Item (3), the undersigned Selling Securityholder
  does not beneficially own any Securities or shares of Common Stock issued
  upon conversion, repurchase or redemption of any Securities.

  
	
   

  	
   

  	
   

  
	
   

  	
  (a)

  	
  Principal
  amount of Registrable Securities (as defined in the Registration Rights
  Agreement) beneficially

  
	
   

  	
   

  	
  owned:

  	
   

  
	
   

  	
   

  	
  CUSIP
  No(s). of such Registrable Securities:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Number
  of shares of Common Stock (if any) issued upon conversion, repurchase or
  redemption of Registrable

  
	
   

  	
   

  	
  Securities:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (b)

  	
  Principal
  amount of Securities other than Registrable Securities beneficially owned:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  CUSIP
  No(s). of such other Securities:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Number
  of shares of Common Stock (if any) issued upon conversion of such other
  Securities:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (c)

  	
  Principal
  amount of Registrable Securities which the undersigned wishes to be included
  in the Shelf Registration

  
	
   

  	
   

  	
  Statement:

  	
   

  
	
   

  	
   

  	
  CUSIP
  No(s). of such Registrable Securities to be included in the Shelf
  Registration Statement:

  	
   

  
												

 

22

 

	
   

  	
   

  	
  Number
  of shares of Common Stock (if any) issued upon conversion of Registrable
  Securities which are to be included in 

  
	
   

  	
   

  	
  the
  Shelf Registration Statement:

  	
   

  
	
   

  	
   

  	
   

  
	
  (4)

  	
   

  	
   

  	
  Beneficial
  Ownership of Other Securities of the Company:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Except as
  set forth below in this Item (4), the undersigned Selling Securityholder
  is not the beneficial or registered owner of any shares of Common Stock or
  any other securities of the Company, other than the Securities and shares of
  Common Stock listed above in Item (3).

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  State
  any exceptions here:

  
	
   

  	
   

  	
   

  
	
  (5)

  	
   

  	
  Disclose
  the individual or individuals who exercise dispositive powers with respect to
  the Securities, and the voting and/or dispositive powers with respect to the
  common stock underlying the Securities, for all entities that are not
  SEC-reporting companies.  Selling
  Securityholders should disclose the name of beneficial holders, not nominee
  holders or other such holders of record. 
  In addition, the SEC has provided guidance that Rule 13d-3 of the
  Securities Exchange Act of 1934  should be used by analogy when
  determining the person or persons sharing voting and/or dispositive powers
  with respect to the Registrable Securities.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (a)

  	
  Is
  the holder an SEC-reporting company?

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  If YES, please proceed to Question 6.  If NO, please answer Item 5(b).

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (b)

  	
  List
  below the individual or individuals who exercise dispositive powers with
  respect to the Securities, and the voting and/or dispositive powers with
  respect to the Common Stock underlying the Securities:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Please note that the names of the
  persons listed in (b) above will be included in the  Shelf Registration
  Statement and the prospectus.

  
	
   

  	
   

  	
   

  	
   

  
	
  (6)

  	
   

  	
  The
  SEC requires that all Selling Securityholders that are registered
  broker-dealers or affiliates of registered broker-dealers be so identified in
  the Shelf Registration Statement.  In addition, the SEC requires that all Selling
  Securityholders that are registered broker-dealers be named as underwriters
  in the Shelf Registration Statement and related Prospectus.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (a)

  	
  Is
  the Selling Securityholder a registered broker-dealer?  (Answer YES or NO)

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
						

 

23

 

	
   

  	
   

  	
  (b)

  	
  Is
  the Selling Securityholder an affiliate of a registered broker-dealer?  (Answer YES or NO.  If YES, please provide the name of the
  broker-dealer.)

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (c)

  	
  If
  the answer to (b) is YES, you must answer BOTH of (i) and (ii) below.  Your
  answers to (i) and (ii) below will be included in the Shelf Registration
  Statement and the related Prospectus.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (i)

  	
  Were
  the Securities and the Common Stock underlying the Securities acquired in the
  ordinary course of business?  (Answer
  YES or NO.  If NO, please provide a
  brief explanation of the circumstances surrounding the acquisition of the
  Securities.)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (ii)

  	
  At
  the time of the acquisition of the Securities and the Common Stock underlying
  the Securities, did the Selling Securityholder have any agreements,
  understandings or arrangements with any other persons, either directly or
  indirectly, to dispose of the Securities and/or the Common Stock underlying
  the Securities?  (Answer YES or
  NO.  If YES, please provide a brief
  explanation of such agreements, understandings or arrangements.)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7)

  	
   

  	
  Relationships
  with the Company:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Except as
  set forth below, neither the Selling Securityholder nor any of its
  affiliates, officers, directors or principal equity holders (5% or more) has
  held any position or office or has had any other material relationship with
  the Company (or its predecessors or affiliates) during the past three years.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  State
  any exceptions here:

  
	
   

  	
   

  	
   

  
	
  (8)

  	
   

  	
  Plan
  of Distribution:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Except as
  set forth below, the undersigned Selling Securityholder intends to distribute
  the Registrable Securities listed above in Item (3) only as follows (if at
  all):  Such Registrable Securities may
  be sold from time to time directly by the undersigned Selling Securityholder
  or, alternatively, through underwriters, broker-dealers or agents.  Such Registrable Securities may be sold in
  one or more transactions at fixed prices, at prevailing market prices at the
  time of sale, at varying prices determined at the time of sale, or at
  negotiated prices.  Such sales may be
  effected in transactions (which may involve crosses or block transactions)
  (i) on any national securities exchange or quotation service on which the
  Registrable Securities may be listed or quoted at the time of sale, (ii) in
  the over-the-counter market, (iii) in transactions otherwise than on such
  exchanges or services or in the over-the-counter market, or (iv) through the

  

 

24

 

	
   

  	
   

  	
  writing of options.  In connection with sales of the Registrable
  Securities or otherwise, the Selling Securityholder may enter into hedging
  transactions with broker-dealers, which may in turn engage in short sales of
  the Registrable Securities in the course of hedging the positions they
  assume.  The Selling Securityholder may
  also sell Registrable Securities short and deliver Registrable Securities to
  close out such short positions, or loan or pledge Registrable Securities to
  broker-dealers that in turn may sell such securities.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  State
  any exceptions here:

  

 

Note:  In no event
may such method(s) of distribution take the form of an underwritten offering of
the Registrable Securities without the prior agreement of the Company.

 

9.             Set
forth below is Interpretation A.65 of the July 1997 SEC Manual of Publicly
Available Telephone Interpretations regarding short selling:

 

“An issuer filed a
Form S-3 registration statement for a secondary offering of common stock which
is not yet effective. One of the selling shareholders wanted to do a short sale
of common stock “against the box” and cover the short sale with registered
shares after the effective date. The issuer was advised that the short sale
could not be made before the registration statement becomes effective, because
the shares underlying the short sale are deemed to be sold at the time such
sale is made. There would, therefore, be a violation of Section 5 if the shares
were effectively sold prior to the effective date.”

 

By
returning this Notice and Questionnaire, selling security holders will be
deemed to be aware of the foregoing interpretation.

 

By
signing below, the Selling Securityholder acknowledges that it understands its
obligation to comply, and agrees that it will comply, with the prospectus
delivery and other provisions of the Securities Act and the Exchange Act and
the rules and regulations thereunder, particularly Regulation M.

 

In the event that the Selling Securityholder transfers
all or any portion of the Registrable Securities listed in Item (3) above
after the date on which such information is provided to the Company, the
Selling Securityholder agrees to notify the transferee(s) at the time of the
transfer of its rights and obligations under this Notice and Questionnaire and
the Registration Rights Agreement.

 

By signing below, the Selling Securityholder consents to
the disclosure of the information contained herein in its answers to
Items (1) through (8) above and the inclusion of such information in the
Shelf Registration Statement and related Prospectus.  The Selling Securityholder understands that
such information will be relied upon by the Company in connection with the
preparation of the Shelf Registration Statement and related Prospectus.

 

In accordance with the Selling Securityholder’s
obligation under Section 3(a) of the Registration Rights Agreement to
provide such information as may be required by law for inclusion in the Shelf
Registration Statement, the Selling Securityholder agrees to promptly notify
the Company of any inaccuracies or changes in the information provided herein
which may occur subsequent to the date hereof at any time while the Shelf
Registration Statement 

 

25

 

remains in effect.  All
notices hereunder and pursuant to the Registration Rights Agreement shall be
made in writing, by hand-delivery, first-class mail, or air courier
guaranteeing overnight delivery as follows:

 

(i)       To the Company:

 

Abgenix, Inc.

6701 Kaiser Drive

Fremont, CA 94555

Telephone: (510) 608-6500

Facsimile:  (510)
790-5102

Attention:  General
Counsel

 

(ii)      With a copy to:

 

Simpson, Thacher
& Bartlett LLP

3330 Hillview
Avenue

Palo Alto, CA 94303

Telephone:
650-251-5000

Facsimile:  650-251-5002

Attention: William H. Hinman, Jr.

 

Once this Notice and Questionnaire is executed by the
Selling Securityholder and received by the Company, the terms of this Notice
and Questionnaire, and the representations and warranties contained herein,
shall be binding on, shall inure to the benefit of and shall be enforceable by
the respective successors, heirs, personal representatives, and assigns of the
Company and the Selling Securityholder (with respect to the Registrable
Securities beneficially owned by such Selling Securityholder and listed in Item
(3) above).  This Agreement shall be
governed in all respects by the laws of the State of New York.

 

26

 

IN WITNESS
WHEREOF, the undersigned, by authority duly given, has caused this Notice and
Questionnaire to be executed and delivered either in person or by its duly
authorized agent.

 

	
  Dated:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Selling
  Securityholder

  
	
   

  	
  (Print/type
  full legal name of beneficial owner of Registrable Securities)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
					

 

 

PLEASE
RETURN THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE FOR RECEIPT ON OR
BEFORE                        ,
2005 TO THE COMPANY AT:

6701
Kaiser Drive

Fremont,
CA 94555

Attention:  General Counsel

Telephone:
(510) 608-6500

Facsimile:  (510) 790-5102

 

With a copy to:

 

Simpson, Thacher & Bartlett LLP

3330 Hillview Avenue

Palo Alto, CA 94303

Telephone: 650-251-5000

Facsimile: 
650-251-5002

Attention:
William H. Hinman, Jr.

 

27

 

Exhibit 1

to Appendix A

 

NOTICE
OF TRANSFER PURSUANT TO REGISTRATION STATEMENT

 

Abgenix,
Inc.

6701 Kaiser Drive

Fremont, CA 94555

Attention:  General Counsel

 

U.S.
Bank National Association

633
W. 5th Street, 24th Floor

Los
Angeles, California 90071

Attention:
Corporate Trust Services

 

Re:          Abgenix,
Inc. (the “Company”)

1.75% Convertible Senior Notes due 2011 (the “Notes”)

 

Dear
Sirs:

 

Please be advised that                                                  has
transferred $                     aggregate
principal amount of the above-referenced Notes or shares of the Company’s
common stock, issued upon conversion, repurchase or redemption of Notes,
pursuant to an effective Registration Statement on Form S-3 (File No. 333-          )
filed by the Company.

 

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

 

	
  Dated:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  Very
  truly yours,

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (Name)

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  (Authorized
  Signature)

  	
   

  

 

28

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