Document:

Exhibit 4.1

 

 

 

 

PROTEIN
DESIGN LABS, INC.

 

2.00%
CONVERTIBLE SENIOR NOTES DUE FEBRUARY 15, 2012

 

 

INDENTURE

DATED
AS OF FEBRUARY 14, 2005

 

 

J.P.
Morgan Trust Company, 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

  	
   

  
	
  SECTION 11.15.

  	
  DESIGNATED SENIOR INDEBTEDNESS

  	
   

  
	
  TABLE
  OF CONTENTS, HEADINGS, ETC

  	
   

  

 

iii

 

THIS INDENTURE dated as of February 14, 2005 is
between Protein Design Labs, Inc., a corporation duly organized under the laws
of the State of Delaware (the “Company”), and J.P. Morgan Trust Company,
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 2.00% Convertible Senior Notes due February 15, 2012.

 

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, 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 and 3 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, $0.01 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
Director” 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 600 Travis Avenue, Houston,
Texas  77002, Attention:  Institutional Trust Services (Protein Design
Labs, Inc. — 2.00% Convertible Senior Notes Due February 15, 2012) 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 February 15, 2012.

 

“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 or
American Depository Shares representing such common stock) 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 42.219 shares of Common Stock per $1,000 principal amount of Securities.

 

“Initial Purchasers” means Goldman, Sachs
& Co, Citibank Global Markets Inc. and UBS Securities LLC.

 

“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
(or American Depository Shares representing such 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 definition means
having “beneficial 

 

4

 

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 (or American Depository Shares
representing such 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 February 14, 2005,
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 2.00%
Convertible Senior Notes due February 15, 2012 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 10.3,
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.

 

5

 

“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.

 

“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

 

7

 

(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.

 

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 February
8, 2005 (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, 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.

 

8

 

(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 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 $250,000,000 (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 Transfer 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 

 

9

 

all of the benefits of this Indenture. 
Such additional Securities will be deemed Securities for all purposes
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 JP
Morgan Chase Bank, an Affiliate of the Trustee, as agent of the Trustee located
at 4 New York Plaza, 1st Floor, New York, New York 10004-2413,
Attention:  Institutional Trust Services
(Protein Design Labs, Inc. – 2.00% Convertible Senior Notes due February 15, 2012)),
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) 

 

10

 

in making any such payment.  If
the Company or an Affiliate of the Company acts as Paying Agent, it shall,
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 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.  The Company may not issue any new Securities
to replace any Securities that any Holder has converted pursuant to
Article 4.  Without limitation to
the foregoing, any Securities acquired by any investment bankers or other
purchasers pursuant to Section 3.8 shall be surrendered for conversion and
thereafter cancelled, and may not be reoffered, sold or otherwise transferred.

 

13

 

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 or that such Securities are not “restricted”
within the meaning of Rule 144; 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 Transfer Restricted Global Security.  Whenever any Transfer Restricted Security
other than a Transfer 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 (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 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 

 

14

 

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

 

15

 

(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 February 19, 2010.  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
  February 19, 2010 through February 14, 2011

  	
   

  	
  100.57

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Beginning
  February 15, 2011 through February 14, 2012

  	
   

  	
  100.29

  	
  %

  

 

(b)  Any redemption pursuant to this Section 3.1
shall be made pursuant to the provisions of Section 3.2 through 3.8
hereof.

 

16

 

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;

 

(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 10 of the Securities;

 

17

 

(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, up to
but not including 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, upon reasonable prior notice, 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.

 

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.

 

18

 

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 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), (c) or
(d) in the definition of 

 

19

 

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 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 or a change in the board of directors under
clause (d) of the definition of Fundamental Change, equals or exceeds 105%
of the quotient of $1,000 divided by the Applicable Conversion Rate 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’ or
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
(or American Depository Shares representing such 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 (or American Depository Shares representing 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 and availability of Additional Shares, if and to the extent applicable;

 

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 this
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 

 

21

 

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 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 sufficient to pay the Fundamental
Change Repurchase Price of the Securities on or prior to 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 Securities are 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’ or appraisal rights) in
such Fundamental Change transaction consists of shares of Capital Stock (or
American Depository Shares representing such 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 to 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 Applicable Conversion Rate is adjusted, as described
in Section 4.6.  The adjusted Stock
Prices will equal (i) the Stock Prices applicable immediately prior to such 

 

22

 

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 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 $18.22 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
54.8845 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 to 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)(1), 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:

 

23

 

(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 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 10 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.

 

24

 

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

 

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 

 

25

 

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 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, in which event, the conversion rate in effect immediately before the
close of business on the record date fixed for determination of stockholders
entitled to receive that dividend will be increased by multiplying:  (x) the Applicable Conversion Rate; by (y) a
fraction, (1) the numerator of which is the sum of the number of shares of
Common Stock outstanding before the close of business on such record date and
the total number of shares constituting such dividend or other distribution, and
(2) the denominator of which shall be the number of shares of Common Stock
outstanding before the close of business on such record date;

 

(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; provided that the Applicable Conversion Rate will be readjusted to the
extent that the rights or warrants are not exercised prior to their expiration
and as a result no additional shares are delivered or issued pursuant to such
rights or warrants;

 

(c)  the Company:

 

(1)  subdivides or splits the outstanding shares
of Common Stock into a greater number of shares, in which event the Applicable
Conversion Rate shall be proportionally increased immediately after the
effective date of such subdivision or split;

 

(2)  combines or reclassifies the outstanding
shares of Common Stock into a smaller number of shares, in which event the
Applicable Conversion Rate shall be proportionally reduced immediately after
the effective date of such combination or reclassification; or

 

27

 

(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 (provided, however, that
if these rights are only exercisable upon the occurrence of specified
triggering events, then the Applicable Conversion Rate will not be adjusted
until the triggering events occur), but excluding:

 

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

 

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

 

(3)  dividends or distributions paid exclusively
in cash described in paragraph (f), (g) or (h) 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 earlier of the record date or 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.

 

(e)  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

 

28

 

(y)  an adjustment factor equal to the sum of the
daily adjustments for each of the ten consecutive Trading Days beginning on the
effective day of the spin-off.

 

For
purposes of this paragraph (e) (unless otherwise stated), the “daily adjustment”
for any given Trading Day is equal to a fraction, the numerator of which is the
closing price of the Common Stock on that Trading Day plus the closing price of
the portion of those shares of Capital Stock or similar equity interests so
distributed applicable to one share of the Common Stock on that Trading Day,
and the denominator of which is the product of 10 and the closing price of the Common
Stock on that Trading Day.  The
adjustment to the Applicable Conversion Rate in the event of a spin-off will
occur on the tenth Trading Day from, and including, the effective date of the
spin-off.

 

(f)  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 (f), 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.

 

(g)  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 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 

 

29

 

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.

 

(h)  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 (h). For purposes of
this paragraph (h), (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 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. 
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.

 

31

 

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 (including premium, if any) or interest or Additional
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 office or agency of the Trustee in New
York City), in Cash; 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 and the Trustee 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.

 

 

32

 

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.

 

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 or beneficial 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 reclassification, consolidation,
merger, sale or transfer of assets or other transactions pursuant to which all
or substantially all of the Common Stock would be converted into other
securities, cash or property, the right to convert Securities into Common Stock
will be changed into a right to convert Securities into the kind and amount of other
securities, cash or property that the Holder would have received had the Holder
converted such Securities immediately prior to the transaction, except that if
the Company has exercised its option under Section 3.11(a)(1), the right to
convert Securities into Common Stock will instead be changed into a right to
convert Securities into Public Acquiror Common Stock in accordance with
Section 3.11.

 

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, there shall be an adjustment to the Applicable
Conversion Rate and the successor Person formed by such consolidation or into
which the Company is merged or to which such

 

34

 

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.

 

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 $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;

 

35

 

(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

 

(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 

 

36

 

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 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 Securities 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;

 

37

 

(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;

 

(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 

 

38

 

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 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 (including premium, if any) and
interest (including Additional Interest, if any), respectively;

 

Third, to such other Person or Persons, if any, to the
extent entitled thereto; and

 

Fourth, 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:

 

39

 

(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 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 of Counsel.

 

(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.

 

40

 

(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.

 

(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,
priority 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.

 

41

 

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).

 

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.

 

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 obligations of the Company
under this Section 8.7 shall survive the termination or satisfaction and
discharge of this Indenture or the resignation or removal of the Trustee for
any reason.

 

42

 

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:

 

(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, by
sale or otherwise, 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.

 

43

 

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
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 Securities which have been destroyed, lost or stolen and
which have been replaced or paid as provided in Section 2.7) 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 (including premium, if any) 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;

 

44

 

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

 

(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. 
In the absence of a written request from the Company to return unclaimed
funds to the Company, the Trustee shall from time to time deliver all unclaimed
funds to or as directed by applicable escheat authorities, as determined by the
Trustee in its sole discretion, in accordance with the customary practices and
procedures of the Trustee.  Any unclaimed
funds held by the Trustee pursuant to this Section 9.3 shall be held uninvested
and without any liability for interest.

 

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 

 

45

 

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

 

(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. 
In the absence of a written request from the Company to return unclaimed
funds to the Company, the Trustee shall from time to time deliver all unclaimed
funds to or as directed by applicable escheat authorities, as determined by the
Trustee in its sole discretion, in accordance with the customary practices and
procedures of the Trustee.  Any unclaimed
funds held by the Trustee pursuant to this Section 9.3 shall be held uninvested
and without any liability for interest.

 

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

 

45

 

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.

 

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;

 

(f)            to
secure the Company’s obligations with respect to the Securities; or

 

(g)           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;

 

46

 

(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;

 

(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.

 

47

 

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 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:

 

Protein
Design Labs, Inc.

34801 Campus Drive

 

48

 

Fremont, California  94555

Attention:  Chief Financial Officer or
General Counsel

Facsimile No.:  (510) 574-1500

Phone No.:  (510) 574-1400

 

If to the Trustee, to:

 

J.P.
Morgan Trust Company, National Association

600 Travis Avenue, Suite 1150

Houston, Texas  77002

Attention:  Institutional Trust Services
(Protein Design Labs, Inc. – 2.00% Convertible Senior Notes due February 15, 2012)

Facsimile No.:  (713) 216-6815

Phone No.:  (713) 216-6590

 

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 or by other electronic means 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.

 

SECTION 11.15. DESIGNATED SENIOR
INDEBTEDNESS.

 

The Company’s indebtedness under the Securities is “designated
senior indebtedness” for purposes of the Indenture, dated as of July 14, 2003,
between the Company and J.P. Morgan Trust Company, National Association.

 

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.

 

 

	
   

  	
  Protein
  Design Labs, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mark McDade

  	
   

  
	
   

  	
  Name:

  	
  Mark McDade

  
	
   

  	
  Title:

  	
  Chief Executive
  Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  J.P.
  Morgan Trust Company, National

  Association, as Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Carol Logan

  	
   

  
	
   

  	
  Name:

  	
  Carol Logan

  
	
   

  	
  Title:

  	
  Vice President

  
					

 

 

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:

 

 

	
  Effective
  Date

  	
   

  	
   

  	
   

  
	
  of Fundamental

  	
   

  	
  Stock
  Price

  	
   

  
	
  Change

  	
   

  	
  $18.22

  	
   

  	
  $20.00

  	
   

  	
  $22.50

  	
   

  	
  $25.00

  	
   

  	
  $27.50

  	
   

  	
  $30.00

  	
   

  	
  $35.00

  	
   

  	
  $40.00

  	
   

  	
  $45.00

  	
   

  	
  $50.00

  	
   

  	
  $75.00

  	
   

  	
  $100.00

  	
   

  
	
  February
  14, 2005

  	
   

  	
  12.66

  	
   

  	
  10.63

  	
   

  	
  8.43

  	
   

  	
  6.87

  	
   

  	
  5.68

  	
   

  	
  4.76

  	
   

  	
  3.48

  	
   

  	
  2.66

  	
   

  	
  2.08

  	
   

  	
  1.69

  	
   

  	
  0.73

  	
   

  	
  0.38

  	
   

  
	
  February
  15, 2006

  	
   

  	
  12.17

  	
   

  	
  10.04

  	
   

  	
  7.86

  	
   

  	
  6.25

  	
   

  	
  5.07

  	
   

  	
  4.21

  	
   

  	
  2.99

  	
   

  	
  2.23

  	
   

  	
  1.72

  	
   

  	
  1.37

  	
   

  	
  0.58

  	
   

  	
  0.30

  	
   

  
	
  February
  15, 2007

  	
   

  	
  11.69

  	
   

  	
  9.44

  	
   

  	
  7.18

  	
   

  	
  5.56

  	
   

  	
  4.41

  	
   

  	
  3.54

  	
   

  	
  2.43

  	
   

  	
  1.76

  	
   

  	
  1.33

  	
   

  	
  1.04

  	
   

  	
  0.43

  	
   

  	
  0.23

  	
   

  
	
  February
  15, 2008

  	
   

  	
  10.99

  	
   

  	
  8.65

  	
   

  	
  6.27

  	
   

  	
  4.66

  	
   

  	
  3.50

  	
   

  	
  2.72

  	
   

  	
  1.73

  	
   

  	
  1.19

  	
   

  	
  0.87

  	
   

  	
  0.67

  	
   

  	
  0.29

  	
   

  	
  0.16

  	
   

  
	
  February
  15, 2009

  	
   

  	
  10.13

  	
   

  	
  7.45

  	
   

  	
  4.94

  	
   

  	
  3.30

  	
   

  	
  2.25

  	
   

  	
  1.55

  	
   

  	
  0.84

  	
   

  	
  0.53

  	
   

  	
  0.38

  	
   

  	
  0.30

  	
   

  	
  0.15

  	
   

  	
  0.08

  	
   

  
	
  February
  15, 2010

  and thereafter

  	
   

  	
  0.00

  	
   

  	
  0.00

  	
   

  	
  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),

 

(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

 

(3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT (IF AVAILABLE) OR
(4) PURSUANT 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

 

PROTEIN
DESIGN LABS, INC.

 

CUSIP No.:  74369L
AE 3

 

2.00%
CONVERTIBLE SENIOR NOTES DUE FEBRUARY 15, 2012

 

Protein Design Labs, 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 February 15, 2012, 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:

  	
   

  	
  February 15 and August
  15, commencing

  August 15, 2005

  
	
   

  	
   

  	
   

  
	
  Record Dates:

  	
   

  	
  February 1 and August 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.

 

 

	
   

  	
  PROTEIN
  DESIGN LABS, 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.

 

	
  J.P. Morgan Trust Company,
  National Association, as Trustee

  
	
   

  
	
   

  
	
   

  	
   

  
	
  Authorized Signatory

  

 

A-4

 

[FORM
OF REVERSE SIDE OF SECURITY]

 

PROTEIN
DESIGN LABS, INC.

2.00% CONVERTIBLE SENIOR NOTES DUE FEBRUARY 15, 2012

 

1.             INTEREST

 

Protein Design Labs, 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 2.00% per annum.  The Company shall pay interest semiannually
on February 15 and August 15 of each year, commencing on August 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 February 14, 2005; 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 February 14, 2005, 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 February 1 or August 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 and the Trustee at least 10
Business Days prior to the payment date.

 

4.             PAYING
AGENT, REGISTRAR AND CONVERSION AGENT

 

Initially, J.P. Morgan Trust Company, 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 Notes
of the Company designated as its 2.00% Convertible Senior Notes due February 15,
2012 (the “Notes”), issued under an Indenture, dated as of February 14, 2005
(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 $250,000,000 aggregate
principal amount (or such greater amount necessary to reflect the exercise by
the Initial Purchasers of their option to purchase additional Notes 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 Notes
having the same terms as the Notes 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 February 19, 2010, and prior to February 15, 2012, 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
	 

	 
	 
	 
	 

	February 19, 2010 through February 14, 2011
	 
	100.57
	%

	February 15, 2011 through February 14, 2012
	 
	100.29
	%

 

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 at 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.

 

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

 

(1)           the
Closing Price 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 or a change in the Board of Directors under
clause (d) of the definition

 

B-3

 

of Fundamental Change, equals or exceeds 105% of the
quotient of $1,000 divided by the Applicable Conversion Rate 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’
or 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 (or American Depository Shares representing such 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 (or American Depository Shares representing such
Capital Stock).

 

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.

 

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.

 

B-4

 

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 last Business Day prior to 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 Note 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 42.219 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 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

 

B-5

 

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 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,
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)

 

B-6

 

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

 

J.P. Morgan Trust Company, 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 stockholder, 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
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.

 

B-7

 

The Company will furnish to any Holder, upon written
request and without charge, a copy of the Indenture.  Requests may be made to:  Protein Design Labs, Inc., 34801 Campus Drive, Fremont, California
94555, Attention:  Investor
Relations.

 

B-8

 

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-9

 

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-10

 

OPTION
TO ELECT REPURCHASE

UPON
A FUNDAMENTAL CHANGE

 

To:          Protein
Design Labs, Inc.

 

The undersigned
registered owner of this Note hereby irrevocably acknowledges receipt of a
notice from Protein Design Labs, 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-11

 

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-12

 

EXHIBIT
B

 

CERTIFICATE
TO BE DELIVERED UPON EXCHANGE OR REGISTRATION

OF TRANSFER OF TRANSFER RESTRICTED SECURITIES(4)

 

Re:          2.00%
Convertible Senior Notes due February 15, 2012 (the “Notes”) of Protein Design
Labs, 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 February 14, 2005 between Protein
Design Labs, Inc. and J.P. Morgan Trust Company, 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.

 

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

 

B-1

 

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.

 

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).

 

	
  Date:

  	
   

  	
   

  	
   

  
	
   

  	
  (Insert Name of
  Transferor)

  

 

B-2Exhibit 4.2

 

Protein Design Labs, Inc.

2.00% Convertible Senior Notes
due 2012

Registration
Rights Agreement

 

	
   

  	
  February 14, 2005

  
	
  Goldman, Sachs & Co.

  	
   

  
	
  Citigroup Global Markets
  Inc.

  	
   

  
	
  UBS Securities LLC

  	
   

  
	
  c/o Goldman, Sachs &
  Co.

  	
   

  
	
  85 Broad Street

  	
   

  
	
  New York, New York 10004

  	
   

  

 

Ladies and Gentlemen:

 

Protein Design Labs, 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 2.00% Convertible
Senior Notes due 2012 (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.

 

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

 

1

 

“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 $0.01 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 February 14, 2005,
between the Company and J.P. Morgan Trust Company, 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 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

 

2

 

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 February 8,
2005, 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.

 

“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.

 

3

 

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 commercially reasonably 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; provided 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

 

4

 

(iii)          if at any time during the Effective 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 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.

 

5

 

(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 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 filed with
the Commission and when a Shelf Registration Statement or any post-effective
amendment thereto has become effective, in each case making a public
announcement thereof by release made to Reuters Economic Services and 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 regarding the Electing Holder;

 

(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;

 

(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

 

6

 

(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 in writing; 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 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

 

7

 

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 Effective
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 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 commercially
reasonable efforts to cause the 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

 

8

 

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, shall use commercially reasonable
efforts to 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,
no person shall be granted the rights 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 primary underwritten offerings of equity and
convertible debt securities and covering matters including, but not limited to,
those set forth in the Purchase Agreement;

 

9

 

(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 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,
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

 

10

 

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 commercially reasonable 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 (in an amount not to exceed $25,000) of a
single counsel selected by a plurality of all Electing Holders who own an
aggregate of not less than 25% 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 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

 

11

 

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 or any of its officers or directors for any legal or other expenses
reasonably incurred by the Company or any of its officers or directors 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 indemnifying party shall, without the prior 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

 

12

 

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 underwriter, selling agent or other securities professional with respect
to the Registrable Securities underwritten by it and distributed to the public.  Notwithstanding the foregoing, in the event a
party hereto is found guilty of fraudulent misrepresentation within the meaning
of

 

13

 

Section
11(f) of the Act, the parties agree that such fact must be considered when
determining the relative fault of the parties.

 

(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, in writing, 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 written 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
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,

  
	
   

  	
   

  
	
   

  	
  Protein Design Labs, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mark McDade

  
	
   

  	
   

  	
  Name: Mark McDade

  
	
   

  	
   

  	
  Title: Chief Executive Officer

  
	
   

  	
   

  
	
  Accepted as of the date hereof:

  	
   

  
	
  Goldman, Sachs & Co.

  	
   

  
	
  Citigroup Global Markets
  Inc.

  	
   

  
	
  UBS Securities LLC

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  Goldman, Sachs &
  Co.

  	
   

  
	
   

  	
  (Goldman, Sachs &
  Co.)

  	
   

  
	
   

  	
   

  
	
   

  	
  On behalf of
  each of the Purchasers

  	
   

  
					

 

18

 

Appendix A

 

 

Protein Design
Labs, 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 Protein Design
Labs, Inc. (the “Company”) 2.00% Convertible Senior Notes due 2012 (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 James Schumacher, Esq. at DLA Piper Rudnick Gray Cary US LLP,
2000 University Avenue, East Palo Alto, CA 94303, (650) 833-2000.

 

19

 

Protein Design Labs, Inc.

 

Notice of Registration
Statement

and

Selling Securityholder Questionnaire

 

[Date]

 

Protein Design Labs, 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 2.00% Convertible Senior
Notes due 2012 (the “Securities”)
and the shares of common stock, par value $0.01 per share (the “Common Stock”), issuable upon conversion thereof, in
accordance with the Registration Rights Agreement, dated as of February 14,
2005 (the “Registration Rights Agreement”), between
the Company and the purchasers named therein. 
A copy of the Registration Rights Agreement is attached hereto.  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:                     

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

 

22

 

(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)

 

	
   

  

 

(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.)

 

	
   

  

 

 

23

 

(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 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.

 

24

 

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 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:

 

25

 

	
   

  	
  Protein
  Design Labs, Inc.

  
	
   

  	
  34801
  Campus Drive

  
	
   

  	
  Fremont,
  CA 94555

  
	
   

  	
  Attention:
  General Counsel

  
	
   

  	
  phone:
  (510) 574-1400

  
	
   

  	
   

  
	
  (ii)  With a
  copy to:

  	
   

  
	
   

  	
   

  
	
   

  	
  DLA
  Piper Rudnick Gray Cary US LLP

  
	
   

  	
  153
  Townsend Street

  
	
   

  	
  Suite
  800

  
	
   

  	
  San
  Francisco, CA 94107-1907

  
	
   

  	
  Telephone:
  415-836-2500

  
	
   

  	
  Facsimile:
  415-836-2501

  
	
   

  	
  Attention:
  Josh Rosenfeld, Esq.

  

 

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:

 

	
   

  	
  Protein
  Design Labs, Inc.

  
	
   

  	
  34801
  Campus Drive

  
	
   

  	
  Fremont,
  CA 94555

  
	
   

  	
  Attention:
  Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  With
  a copy to:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  DLA
  Piper Rudnick Gray Cary US LLP

  
	
   

  	
  153
  Townsend Street

  
	
   

  	
  Suite
  800

  
	
   

  	
  San
  Francisco, CA 94107-1907

  
	
   

  	
  Telephone:
  415-836-2500

  
	
   

  	
  Facsimile:
  415-836-2501

  
	
   

  	
  Attention:
  Josh Rosenfeld, Esq.

  

 

27

 

Exhibit 1

to Appendix A

 

NOTICE
OF TRANSFER PURSUANT TO REGISTRATION STATEMENT

 

Protein
Design Labs, Inc.

34801
Campus Drive

Fremont, CA  94555

Attention:  Chief Financial Officer or General
Counsel

 

J.P.
Morgan Trust Company, National Association

600 Travis Avenue

Houston, Texas  77002

 

Re:          Protein Design Labs, Inc. (the “Company”)

2.00% Convertible Senior Notes due 2012 (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                           ,
2005, 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

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00078-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00078-of-00352.parquet"}]]