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Exhibit 10.55    
    

Vertex Employee Compensation Plan  

        On an annual basis in the first quarter of the fiscal year the Management Development and Compensation Committee of our Board of Directors adopts an employee
compensation plan for our officers and other employees, including our named executive officers together with performance goals for that fiscal year. The plan addresses three components of employee
compensation—base salary, performance bonus which serve as short-term incentives and equity grants which serve as long-term incentive—that are designed
to motivate, reward and retain employees by aligning compensation with the achievement of strategic corporate goals as well as individual performance objectives. 

        Upon
completion of each performance period (usually a calendar year), our Board of Directors assigns us a performance rating on the basis of achievement of goals for the company set by
the Board early in the performance period. The amount available for payment of performance bonuses is established on the basis of this performance rating, and is allocated to employees on the basis of
salary tier and individual performance rating. The base salary of the executive officers are set based on market and other competitive factors. Merit increases to base salaries for other employees are
made on the basis of individual performance rating. Annual equity grants, made in the form of stock options, restricted stock grants, or a combination of both are made on the basis of salary tier and
individual performance. 

        The
Management Development and Compensation Committee retains broad discretion to determine the appropriate form and level of compensation, particularly for our executives, on the basis
of its assessment of our executives, the demand for talent, our performance and other factors. Key corporate performance factors generally include, among other things, achievement of specific
financial objectives, research productivity, development progression with respect to both internal development efforts and collaborative development, and other aspects of our performance. We reserve
the right to modify the plan, and the key corporate performance factors and criteria under the plan, at any time. 

        On
February 7, 2008, we determined the cash bonus awards related to the fiscal year ended December 31, 2007. The cash bonus awards for the following executive officers were: 

	Name
 
	 	2007 Cash Bonus

	Joshua S. Boger	 	$318,888
	John J. Alam	 	$141,728
	Kurt C. Graves	 	$104,490 (partial year)
	Peter Mueller	 	$229,804
	Ian F. Smith	 	$141,907
	Kenneth S. Boger	 	$116,952

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Exhibit 10.55Exhibit 4.1

 

INDENTURE

 

BETWEEN

 

VERTEX PHARMACEUTICALS INCORPORATED,

 

AS ISSUER

 

AND

 

U.S. BANK NATIONAL ASSOCIATION,

 

AS TRUSTEE

 

[ ]% CONVERTIBLE SENIOR SUBORDINATED NOTES
DUE 2013

 

DATED AS OF FEBRUARY [ ], 2008

 

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  Article 1

  	
  Definitions
  and Incorporation by Reference

  	
  1

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 1.01

  	
  Definitions

  	
  1

  
	
   

  	
  Section 1.02

  	
  Other
  Definitions

  	
  10

  
	
   

  	
   

  	
   

  	
   

  
	
  Article 2

  	
   

  	
  The
  Securities

  	
  11

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 2.01

  	
  Designation,
  Form and Dating

  	
  11

  
	
   

  	
  Section 2.02

  	
  Final
  Maturity Date; Interest

  	
  11

  
	
   

  	
  Section 2.03

  	
  Execution
  and Authentication

  	
  12

  
	
   

  	
  Section 2.04

  	
  Registrar,
  Paying Agent, Conversion Agent and Trustee

  	
  12

  
	
   

  	
  Section 2.05

  	
  Paying Agent
  To Hold Money in Trust

  	
  14

  
	
   

  	
  Section 2.06

  	
  Conversion
  Agent to Hold Shares in Trust

  	
  14

  
	
   

  	
  Section 2.07

  	
  Global
  Securities

  	
  15

  
	
   

  	
  Section 2.08

  	
  Holder Lists

  	
  16

  
	
   

  	
  Section 2.09

  	
  Transfer and
  Exchange

  	
  17

  
	
   

  	
  Section 2.10

  	
  Mutilated,
  Destroyed, Lost and Stolen Securities

  	
  17

  
	
   

  	
  Section 2.11

  	
  Outstanding
  Securities

  	
  18

  
	
   

  	
  Section 2.12

  	
  Treasury
  Securities

  	
  18

  
	
   

  	
  Section 2.13

  	
  Temporary
  Securities

  	
  18

  
	
   

  	
  Section 2.14

  	
  Cancellation

  	
  19

  
	
   

  	
  Section 2.15

  	
  Defaulted
  Interest

  	
  19

  
	
   

  	
  Section 2.16

  	
  CUSIP
  Numbers

  	
  19

  
	
   

  	
   

  	
   

  	
   

  
	
  Article 3

  	
  Redemption
  and Repurchase of Securities

  	
  20

  
	
   

  	
   

  	
   

  
	
   

  	
  Section 3.01

  	
  Company’s
  right to Redeem

  	
  20

  
	
   

  	
  Section 3.02

  	
  Notices to
  Trustee

  	
  20

  
	
   

  	
  Section 3.03

  	
  Selection of
  Securities to be Redeemed

  	
  20

  
	
   

  	
  Section 3.04

  	
  Notice of
  Redemption

  	
  21

  
	
   

  	
  Section 3.05

  	
  Effect of
  Notice of Redemption

  	
  22

  
	
   

  	
  Section 3.06

  	
  Deposit of
  Redemption Price

  	
  22

  
	
   

  	
  Section 3.07

  	
  Securities
  Redeemed in Part

  	
  23

  
	
   

  	
  Section 3.08

  	
  Repurchase
  of Securities at Option of the Holder upon a Fundamental Change

  	
  23

  
	
   

  	
  Section 3.09

  	
  Effect of
  Fundamental Change Repurchase Notice

  	
  25

  
	
   

  	
  Section 3.10

  	
  Deposit of
  Fundamental Change Repurchase Price

  	
  25

  
	
   

  	
  Section 3.11

  	
  Repayment to
  the Company

  	
  26

  
	
   

  	
  Section 3.12

  	
  [Reserved]

  	
  26

  
	
   

  	
  Section 3.13

  	
  Securities
  Purchased in Part

  	
  26

  
	
   

  	
  Section 3.14

  	
  Compliance
  with Securities Laws upon Purchase of Securities

  	
  26

  
	
   

  	
  Section 3.15

  	
  Purchase of
  Securities in Open Market

  	
  27

  
	
   

  	
   

  	
   

  	
   

  
	
  Article 4

  	
  Conversion

  	
  27

  
	
   

  	
   

  	
   

  
	
   

  	
  Section 4.01

  	
  Conversion
  Privilege and Conversion Rate

  	
  27

  
	
   

  	
   

  	
   

  	
   

  
							

 

i

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
   

  	
  Section 4.02

  	
  Conversion
  Procedure

  	
  29

  
	
   

  	
  Section 4.03

  	
  Fractional
  Shares

  	
  31

  
	
   

  	
  Section 4.04

  	
  Taxes on
  Conversion

  	
  31

  
	
   

  	
  Section 4.05

  	
  [Reserved]

  	
  31

  
	
   

  	
  Section 4.06

  	
  Company to Provide
  Common Stock

  	
  31

  
	
   

  	
  Section 4.07

  	
  Adjustment
  of Conversion Rate

  	
  32

  
	
   

  	
  Section 4.08

  	
  No
  Adjustment

  	
  40

  
	
   

  	
  Section 4.09

  	
  Notice of
  Adjustment

  	
  40

  
	
   

  	
  Section 4.10

  	
  Notice of
  Certain Transactions

  	
  40

  
	
   

  	
  Section 4.11

  	
  Effect of
  Reclassification, Consolidation, Merger or Sale on Conversion Privilege

  	
  41

  
	
   

  	
  Section 4.12

  	
  Trustee’s
  Disclaimer

  	
  42

  
	
   

  	
  Section 4.13

  	
  Voluntary
  Increase

  	
  42

  
	
   

  	
   

  	
   

  	
   

  
	
  Article 5

  	
  Subordination

  	
  43

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 5.01

  	
  Securities
  Subordinated to Senior Debt

  	
  43

  
	
   

  	
  Section 5.02

  	
  Subrogation

  	
  44

  
	
   

  	
  Section 5.03

  	
  Obligation
  of the Company is Absolute and Unconditional

  	
  44

  
	
   

  	
  Section 5.04

  	
  Maturity of
  or Default on Senior Debt

  	
  45

  
	
   

  	
  Section 5.05

  	
  Payments on
  Securities Permitted

  	
  45

  
	
   

  	
  Section 5.06

  	
  Effectuation
  of Subordination by Trustee

  	
  45

  
	
   

  	
  Section 5.07

  	
  Knowledge of
  Trustee

  	
  45

  
	
   

  	
  Section 5.08

  	
  Trustee’s
  Relation to Senior Debt

  	
  46

  
	
   

  	
  Section 5.09

  	
  Rights of
  Holders of Senior Debt Not Impaired

  	
  46

  
	
   

  	
  Section 5.10

  	
  Modification
  of Terms of Senior Debt

  	
  46

  
	
   

  	
  Section 5.11

  	
  Certain
  Conversions Not Deemed Payment

  	
  47

  
	
   

  	
  Section 5.12

  	
  No Layering
  of Debt

  	
  47

  
	
   

  	
   

  	
   

  	
   

  
	
  Article 6

  	
  Covenants

  	
  47

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 6.01

  	
  Payment of
  Securities

  	
  47

  
	
   

  	
  Section 6.02

  	
  Corporate
  Existence

  	
  48

  
	
   

  	
  Section 6.03

  	
  Maintenance
  of Properties

  	
  48

  
	
   

  	
  Section 6.04

  	
  Payment of
  Taxes and Other Claims

  	
  49

  
	
   

  	
  Section 6.05

  	
  Reports

  	
  49

  
	
   

  	
  Section 6.06

  	
  Compliance
  Certificate

  	
  49

  
	
   

  	
   

  	
   

  	
   

  
	
  Article 7

  	
  Consolidation;
  Merger; Conveyance; Transfer or Lease

  	
  50

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 7.01

  	
  Company
  May Consolidate, Etc., Only on Certain Terms

  	
  50

  
	
   

  	
  Section 7.02

  	
  Successor
  Substituted

  	
  51

  
	
   

  	
   

  	
   

  	
   

  
	
  Article 8

  	
  Default and
  Remedies

  	
  51

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 8.01

  	
  Events of
  Default

  	
  51

  
	
   

  	
  Section 8.02

  	
  Acceleration
  of Maturity; Rescission and Annulment

  	
  53

  
											

 

ii

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
   

  	
  Section 8.03

  	
  Other
  Remedies

  	
  54

  
	
   

  	
  Section 8.04

  	
  Waiver of
  Past Defaults

  	
  54

  
	
   

  	
  Section 8.05

  	
  Control by
  Majority

  	
  54

  
	
   

  	
  Section 8.06

  	
  Limitation
  on Suit

  	
  55

  
	
   

  	
  Section 8.07

  	
  Unconditional
  Rights of Holders to Receive Payment and to Convert

  	
  55

  
	
   

  	
  Section 8.08

  	
  Collection
  of Indebtedness and Suits for Enforcement by the Trustee

  	
  56

  
	
   

  	
  Section 8.09

  	
  Trustee
  May File Proofs of Claim

  	
  56

  
	
   

  	
  Section 8.10

  	
  Restoration
  of Rights and Remedies

  	
  57

  
	
   

  	
  Section 8.11

  	
  Rights and
  Remedies Cumulative

  	
  57

  
	
   

  	
  Section 8.12

  	
  Delay or
  Omission Not Waiver

  	
  57

  
	
   

  	
  Section 8.13

  	
  Application
  of Money Collected

  	
  57

  
	
   

  	
  Section 8.14

  	
  Undertaking
  for Costs

  	
  58

  
	
   

  	
  Section 8.15

  	
  Waiver of
  Stay or Extension Laws

  	
  58

  
	
   

  	
   

  	
   

  	
   

  
	
  Article 9

  	
  The Trustee

  	
  59

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 9.01

  	
  Certain
  Duties and Responsibilities

  	
  59

  
	
   

  	
  Section 9.02

  	
  Certain
  rights of Trustees

  	
  60

  
	
   

  	
  Section 9.03

  	
  Individual
  Rights of Trustee

  	
  61

  
	
   

  	
  Section 9.04

  	
  Money Held
  in Trust

  	
  61

  
	
   

  	
  Section 9.05

  	
  Trustee’s
  Disclaimer

  	
  61

  
	
   

  	
  Section 9.06

  	
  Notice of
  Default

  	
  62

  
	
   

  	
  Section 9.07

  	
  Reports by
  Trustee to Holders

  	
  62

  
	
   

  	
  Section 9.08

  	
  Compensation
  and Indemnification

  	
  62

  
	
   

  	
  Section 9.09

  	
  Replacement
  of Trustee

  	
  63

  
	
   

  	
  Section 9.10

  	
  Successor
  Trustee by Merger, Etc.

  	
  64

  
	
   

  	
  Section 9.11

  	
  Corporate
  Trustee Required: Eligibility

  	
  64

  
	
   

  	
  Section 9.12

  	
  Collection
  of Claims Against the Company

  	
  64

  
	
   

  	
   

  	
   

  	
   

  
	
  Article 10

  	
  Amendments;
  Supplements and Waivers

  	
  64

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 10.01

  	
  Without
  Consent of Holders

  	
  64

  
	
   

  	
  Section 10.02

  	
  With Consent
  of Holders

  	
  65

  
	
   

  	
  Section 10.03

  	
  Compliance
  With Trust Indenture Act

  	
  66

  
	
   

  	
  Section 10.04

  	
  Revocation
  of Consents and Effect of Consents or Votes

  	
  67

  
	
   

  	
  Section 10.05

  	
  Notation on
  or Exchange of Securities

  	
  67

  
	
   

  	
  Section 10.06

  	
  Trustee
  Protected

  	
  67

  
	
   

  	
   

  	
   

  	
   

  
	
  Article 11

  	
  Satisfaction
  and Discharge

  	
  67

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 11.01

  	
  Satisfaction
  and Discharge of Indenture

  	
  68

  
	
   

  	
  Section 11.02

  	
  Deposited
  Monies To Be Held in Trust

  	
  69

  
	
   

  	
  Section 11.03

  	
  Return of
  Unclaimed Monies

  	
  69

  
									

 

iii

 

	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  Article 12

  	
  Meeting of
  Holders of Securities

  	
  69

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 12.01

  	
  Purposes for
  Which Meetings May Be Called

  	
  69

  
	
   

  	
  Section 12.02

  	
  Call Notice
  and Place of Meetings

  	
  69

  
	
   

  	
  Section 12.03

  	
  Persons
  Entitled to Vote at Meetings

  	
  70

  
	
   

  	
  Section 12.04

  	
  Quorum;
  Action

  	
  70

  
	
   

  	
  Section 12.05

  	
  Determination
  of Voting Rights; Conduct and Adjournment of Meetings

  	
  70

  
	
   

  	
  Section 12.06

  	
  Counting
  Votes and Recording Action of Meetings

  	
  71

  
	
   

  	
   

  	
   

  	
   

  
	
  Article 13

  	
  Miscellaneous

  	
  71

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 13.01

  	
  Trust
  Indenture Act Controls

  	
  72

  
	
   

  	
  Section 13.02

  	
  Notices

  	
  72

  
	
   

  	
  Section 13.03

  	
  Communication
  by Holders With Other Holders

  	
  72

  
	
   

  	
  Section 13.04

  	
  Acts of
  Holders of Securities

  	
  72

  
	
   

  	
  Section 13.05

  	
  Certificate
  and Opinion as to Conditions Precedent

  	
  73

  
	
   

  	
  Section 13.06

  	
  Statements
  Required in Certificate or Opinion

  	
  74

  
	
   

  	
  Section 13.07

  	
  Effect of
  Headings and Table of Contents

  	
  74

  
	
   

  	
  Section 13.08

  	
  Successors
  and Assigns

  	
  74

  
	
   

  	
  Section 13.09

  	
  Separability
  Clause

  	
  75

  
	
   

  	
  Section 13.10

  	
  Benefits of
  Indenture

  	
  75

  
	
   

  	
  Section 13.11

  	
  Governing
  Law

  	
  75

  
	
   

  	
  Section 13.12

  	
  Counterparts

  	
  75

  
	
   

  	
  Section 13.13

  	
  Legal
  Holidays

  	
  75

  
	
   

  	
  Section 13.14

  	
  Recourse
  Against Others

  	
  75

  
	
   

  	
  Section 13.15

  	
  Calculation
  in Respect of Securities

  	
  76

  
	
   

  	
  Section 13.16

  	
  No Security
  Interest Created

  	
  76

  
								

 

iv

 

CROSS-REFERENCE TABLE*

 

	
  Trust Indenture Act Section

  	
   

  	
  Indenture
  Section

  
	
   

  	
   

  
	
  310(a)(1)

  	
  9.11

  
	
  (a)(2)

  	
  9.11

  
	
  (a)(3)

  	
  n/a

  
	
  (a)(4)

  	
  n/a

  
	
  (a)(5)

  	
  9.11

  
	
  (b)

  	
  9.03; 9.11

  
	
  (c)

  	
  n/a

  
	
  311(a)

  	
  9.12

  
	
  (b)

  	
  9.12

  
	
  (c)

  	
  n/a

  
	
  312(a)

  	
  2.08

  
	
  (b)

  	
  13.03

  
	
  (c)

  	
  13.03

  
	
  313(a)

  	
  5.7

  
	
  (b)(1)

  	
  n/a

  
	
  (b)(2)

  	
  9.07

  
	
  (c)

  	
  9.07; 13.02

  
	
  (d)

  	
  9.07

  
	
  314(a)(1),
  (2), (3).

  	
  6.06; 13.06

  
	
  (a)(4)

  	
  6.06; 6.07; 13.06

  
	
  (b)

  	
  n/a

  
	
  (c)(1)

  	
  13.05

  
	
  (c)(2)

  	
  13.05

  
	
  (c)(3)

  	
  n/a

  
	
  (d)

  	
  n/a

  
	
  (e)

  	
  13.06

  
	
  (f)

  	
  n/a

  
	
  315(a)

  	
  9.01(a)

  
	
  (b)

  	
  9.06; 13.02

  
	
  (c)

  	
  9.01(b)

  
	
  (d)

  	
  9.01(c)

  
	
  (e)

  	
  8.14

  
	
  316(a)(last
  sentence)

  	
  2.12

  
	
  (a)(1)(A)

  	
  8.05

  
	
  (a)(1)(B)

  	
  8.04

  
	
  (a)(2)

  	
  n/a

  
	
  (b)

  	
  8.07

  
	
  (c)

  	
  10.04

  
	
  317(a)(1).

  	
  8.08

  
	
  (a)(2)

  	
  8.09

  

 

i

 

	
  Trust Indenture Act Section

  	
   

  	
  Indenture
  Section

  
	
   

  	
   

  
	
  (b)

  	
  2.04

  
	
  318(a)

  	
  13.01

  
	
  (b)

  	
  n/a

  
	
  (c)

  	
  13.01

  

 

“n/a” means
not applicable.

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

 

ii

 

INDENTURE,
dated as of February [ ], 2008, between VERTEX PHARMACEUTICALS
INCORPORATED, a corporation duly organized and existing under the laws of the
Commonwealth of Massachusetts, having its principal office at 130 Waverly
Street, Cambridge, Massachusetts 02139 (the “Company”), and U.S. BANK NATIONAL
ASSOCIATION, as trustee (the “Trustee”), having its principal corporate trust
office at One Federal Street, Boston, Massachusetts 02110.

 

RECITALS

 

The Company
has duly authorized the creation of an issue of its [ ]% Convertible Senior
Subordinated Notes due [ ], 2013 (herein called the “Securities”) of
substantially the tenor and amount hereinafter set forth, and to provide
therefor the Company has duly authorized the execution and delivery of this
Indenture.

 

All things
necessary to make the Securities, when the Securities are executed by the
Company and authenticated and delivered hereunder and duly issued by the
Company, the valid obligations of the Company, and to make this Indenture a
valid agreement of the Company, in accordance with their and its terms, have
been done.

 

NOW, THEREFORE, THIS INDENTURE WITNESSETH:

 

For and in
consideration of the premises and the purchase of the Securities by the Holders
thereof, it is mutually covenanted and agreed, for the equal and proportionate
benefit of all Holders of the Securities, as follows:

 

Article 1

Definitions and Incorporation by Reference

 

Section 1.01                   Definitions.

 

For all
purposes of this Indenture and the Securities, the following terms are defined
as follows:

 

 

“Affiliate” of any specified person
means any other person directly or indirectly controlling or controlled by or
under direct or indirect common control with such specified person. For the
purposes of this definition, “control” (including, with correlative meanings,
the terms “controlled by” and “under common control with”), as used with
respect to any person, shall mean the possession, directly or indirectly, of
the power to direct or cause the direction of the management or policies of
such person, whether through the ownership of voting securities or by agreement
or otherwise.

 

“Agent” means any Registrar, Paying
Agent, co-agent, co-registrar or Service Agent.

 

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

 

“Board of Directors” means the board of
directors of the Company.

 

“Board Resolution” means a copy of a
resolution certified by the Secretary or an Assistant Secretary of the Company
to have been adopted by the Board of Directors or pursuant to authorization by
the Board of Directors and to be in full force and effect on the date of the
certificate and delivered to the Trustee.

 

“Business Day” means, unless otherwise
provided by Board Resolution, Officers’ Certificate or supplemental indenture
hereto, any day except a Saturday, Sunday or a legal holiday in The City of New
York or the City of Boston, Massachusetts on which banking institutions are
authorized or required by law, regulation or executive order to close.

 

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

 

“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 as Exhibit A but that does not
include the information called for by footnote 1 thereof or the attached
schedule of exchanges.

 

“Change in Control” means the occurrence
of any of the following events from and after the Issue Date:

 

(i) any “person”
or “group” (as such terms are used in Section 13(d)(3) of the
Exchange Act or any successor provision to the foregoing), including any group
acting for the purpose of acquiring, holding or disposing of securities within
the meaning of Rule 13d—5(b)(1) under the Exchange Act, other than
the Company, any of its Subsidiaries or any of its employee benefit plans, is
or becomes the “beneficial owner” (as defined in Rule 13d—3 under the
Exchange Act), directly or indirectly, through a purchase, merger or other
acquisition transaction

 

2

 

or series of
transactions, of 50% or more of the total voting power of all classes of the
Company’s Voting Stock;

 

(ii) the
Company consolidates with, or merges with or into, another person (as such term
is used in Sections 13(d)(3) of the Exchange Act) or any person
consolidates or merges with or into the Company, or the Company conveys,
transfers, leases or otherwise disposes of all or substantially all of its
assets to any person, other than (x) any transaction that (A) does
not result in any reclassification, conversion, exchange or cancellation of
outstanding shares of the Company’s Capital Stock, and (B) pursuant to
which holders of the Company’s Capital 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 Voting Stock of the
continuing or surviving entity of such transaction; or (y) any merger
solely for the purpose of changing the Company’s jurisdiction of formation and
resulting in a reclassification, conversion or exchange of outstanding shares
of Common Stock solely into shares of common stock of the surviving entity;
notwithstanding anything to the contrary set forth herein, a Change in Control
will be deemed not to have occurred if, in the case of a merger or
consolidation, at least 90% of the consideration (excluding cash payments for
fractional shares and cash payments made in respect of dissenters’ appraisal
rights) in a transaction or transactions otherwise constituting a Change in
Control consists of shares of common stock traded on a U.S. national securities
exchange, or which will be so traded when issued or exchanged in connection
with the transaction or transactions, and as a result of the transaction or
transactions the Securities become convertible solely into such common stock.

 

(iii) during
any consecutive two-year period, individuals who at the beginning of that two-year
period constituted the Board of Directors (together with any new directors
whose election to such Board of Directors, or whose nomination for election by
stockholders of the Company, was approved by a vote of a majority of the
directors then still in office who were either directors at the beginning of
such period or whose election or nomination for election was previously so
approved) cease for any reason (other than death) to constitute a majority of
the Board of Directors then in office; or

 

(iv) the
Company’s stockholders approve a plan of liquidation or dissolution.

 

“Closing Price” means, on any Trading
Day, the reported last sale price per share of the Company’s Common Stock (or
if no last sale price is reported, the average of the bid and ask prices per
share or, if more than one in either case, the average of the average bid and
the average ask prices per share) on such date reported by the Nasdaq Global
Market or, if the Company’s Common Stock (or the applicable security) is not
quoted on the Nasdaq Global Market, as reported by the principal national
securities exchange on which the Company’s Common Stock (or such other
security) is listed, or if no such prices are available, the Closing Price per
share shall be the fair value of a share of Common Stock (or such other
security) as reasonably determined by the Board of Directors (which
determination shall be conclusive and shall be evidenced by an Officers’
Certificate delivered to the Trustee).

 

“Common Stock” means the common stock of
the Company, par value $0.01 per share, 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, or,
in the event of a 

 

3

 

merger,
consolidation or other similar transaction involving the Company that is
otherwise permitted hereunder in which the Company is not the surviving
corporation the common stock, common equity interests, ordinary shares or
depositary shares or other certificates representing common equity interests of
such surviving corporation or its direct or indirect parent corporation, 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 the Indenture, and thereafter “Company” shall
mean such successor Company.

 

“Company Order” means a written order
signed in the name of the Company by two Officers, one of whom must be the
Company’s principal executive officer, principal financial officer or principal
accounting officer.

 

 “Conversion
Agent” means any Person authorized by the Company to convert
Securities in accordance with Article 4 hereof.

 

“Conversion Price” per share of Common
Stock as of any day means the result obtained by dividing (i) $1,000 by (ii) the
then applicable Conversion Rate.

 

“Conversion Rate” means the rate at
which shares of Common Stock shall be delivered upon conversion, which rate
shall be initially [ ] shares of Common Stock for each $1,000 principal amount
of Securities, as adjusted from time to time pursuant to the provisions of this
Indenture.

 

“Corporate Trust Office” means the
office of the Trustee at the address specified in Section 13.02 hereof or
such other address as to which the Trustee may give notice to the Company.

 

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

 

“Defaulted Interest” has the meaning
specified in Section 2.15 hereof.

 

“Depositary” means The Depository Trust
Company, its nominees and their respective assigns.

 

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

 

“Final Maturity Date” means [ ], 2013.

 

4

 

“Final Prospectus” means the prospectus
of the Company, dated as of February 14, 2008, with respect to the Securities,
including the base prospectus attached thereto.

 

“Fundamental Change” means the
occurrence of either a Change in Control or a Termination of Trading.

 

“Fundamental Change Effective Date”
means the date on which any Fundamental Change becomes effective.

 

“Fundamental Change Repurchase Price” of
any Security means 100% of the principal amount of the Security to be
repurchased plus unpaid interest, including Special Interest, if any, accrued
and unpaid to, but excluding, the Fundamental Change Repurchase Date.

 

“GAAP” means generally accepted
accounting principles in the United States of America as in effect from time to
time, 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, and (3) such other statements by such other
entity as approved by a significant segment of the accounting profession.

 

“Global Security” means a Security in
global form that is in substantially the form attached as Exhibit A and
that includes the information called for in footnote 1 thereof and the schedule
of exchanges and which is deposited with the Depositary or its custodian and
registered in the name of the Depositary or its nominee.

 

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

 

“Indebtedness,” when used with respect
to any Person, and without duplication means:

 

(i) all
indebtedness, obligations and other liabilities (contingent or otherwise) of
such Person for borrowed money (including obligations of such person in respect
of overdrafts and any loans or advances from banks, whether or not evidenced by
notes or similar instruments) or evidenced by bonds, notes or other instruments
for the payment of money, or incurred in connection with the acquisition of any
property, services or assets (whether or not the recourse of the lender is to
the whole of the assets of such Person or to only a portion thereof), other
than any account payable or other accrued current liability or obligation to
trade creditors incurred in the ordinary course of business in connection with
the obtaining of materials or services;

 

(ii) all
reimbursement obligations and other liabilities (contingent or otherwise) of
such Person with respect to letters of credit, bank guarantees, bankers’
acceptances, surety bonds, performance bonds or other guaranty of contractual
performance;

 

(iii) all
obligations and liabilities (contingent or otherwise) in respect of (a) leases
of such Person required, in conformity with GAAP, to be accounted for as
capitalized lease obligations on the balance sheet of such Person and (b) any
lease or related documents, including a purchase agreement, in connection with
the lease of real property which provides that such Person is contractually
obligated to purchase or cause a third party to purchase the leased 

 

5

 

property and
thereby guarantee a minimum residual value of the leased property to the
landlord and the obligations of such Person under such lease or related
document to purchase or to cause a third party to purchase the leased property;

 

(iv) all
obligations of such Person (contingent or otherwise) with respect to an
interest rate or other swap, cap or collar agreement or other similar
instrument or agreement or foreign currency hedge, exchange, purchase or
similar instrument or agreement;

 

(v) all
direct or indirect guaranties or similar agreements by such Person in respect
of, and obligations or liabilities (contingent or otherwise) of such Person to
purchase or otherwise acquire or otherwise assure a creditor against loss in
respect of, indebtedness, obligations or liabilities of another Person of the
kind described in clauses (i) through (iv);

 

(vi) any
indebtedness or other obligations described in clauses (i) through (iv) secured
by any mortgage, pledge, lien or other encumbrance existing on property which
is owned or held by such Person, regardless of whether the indebtedness or
other obligation secured thereby shall have been assumed by such Person; and

 

(vii) any
and all deferrals, renewals, extensions, refinancings, replacements,
restatements and refundings of, or amendments, modifications or supplements to,
any indebtedness, obligation or liability of the kind described in clauses (i)
through (vi).

 

“Interest Payment Date” means [ ] and [
]of each year, commencing [ ], 2008.

 

“Issue Date” of any Security means the date
on which the Security was originally issued or deemed issued as set forth on
the face of the Security.

 

“Maturity” means the date on which the
principal of such Security becomes due and payable as therein or herein
provided, whether at the Final Maturity Date or by acceleration, conversion,
exercise of a repurchase right or otherwise.

 

“Officer” means the Chairman of the
Board, any President, any Vice-President, the Treasurer, the Secretary, any
Assistant Treasurer or any Assistant Secretary of the Company.

 

“Officers’ Certificate” means a
certificate signed by two Officers, one of whom must be the Company’s principal
executive officer, principal financial officer or principal accounting officer.

 

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

 

“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 syndicate or
group that would be deemed to be a “person” under Section 13(d)(3) of
the Exchange Act or any other entity.

 

“Regular Record Date” means, with
respect to each Interest Payment Date, the April 8 or October 8, as
the case may be, next preceding such Interest Payment Date.

 

6

 

“Responsible Officer” means any officer
of the Trustee in its Corporate Trust Office and also means, with respect to a
particular corporate trust matter, any other officer to whom any corporate
trust matter is referred because of his or her knowledge of and familiarity
with a particular subject.

 

“Rights” means any common stock or
preferred stock purchase right or warrant, as the case may be, that all or
substantially all shares of Common Stock are entitled to receive under a Rights
Plan.

 

“Rights Plan” means the Company’s
preferred shares rights plan in connection with the Rights Agreement, dated as
of July 1, 1991, and any preferred shares rights plan or any similar plan
adopted by the Company after the date hereof.

 

“SEC” means the Securities and Exchange
Commission.

 

“Securities” means the up to $28,750,000
aggregate principal amount of [ ]% Senior Subordinated Convertible Notes due
2013, 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.

 

“Senior Debt” means the principal of,
premium, if any, interest (including interest, to the extent allowable,
accruing subsequent to the filing of a petition initiating any proceeding under
any state, federal or foreign bankruptcy law, whether or not a claim for
post-petition interest is allowable as a claim in any such proceeding) and rent
payable on or termination payments with respect to or in connection with, and
all fees, costs, expenses and other amounts accrued or due on or in connection
with, Indebtedness of the Company, whether outstanding on the date of this
Indenture or thereafter created, incurred, assumed, guaranteed or in effect
guaranteed by the Company (including all deferrals, renewals, extensions or
refundings of, or amendments, modifications or supplements to, the foregoing),
except for:

 

(i) Indebtedness
that by its terms expressly provides that it shall not be senior in right of
payment to the Securities or expressly provides that such Indebtedness is equal
with or junior to the Securities; and

 

(ii) Indebtedness
between or among the Company or any of the Subsidiaries of the Company.

 

“Significant Subsidiary” means (i) any
direct or indirect Subsidiary of the Company that would be a “significant
subsidiary” as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Securities Act, as such regulation is in effect on
the date hereof, or (ii) any group of direct or indirect Subsidiaries of
the Company that, taken together as a group, would be a “significant subsidiary”
as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated
pursuant to the Securities Act, as such regulation is in effect on the date
hereof.

 

7

 

“Special Record Date” for the payment of
any Defaulted Interest means a date fixed by the Company pursuant to Section 2.15
hereof.

 

“Stated Maturity” when used with respect
to any Security or any installment of principal thereof or interest thereon,
means the date specified in such Security as the fixed date on which the
principal of such Security or such installment of principal or interest is due
and payable.

 

“Stock Price” means the price paid per
share of the Company’s Common Stock in connection with a Fundamental Change as
determined pursuant to Section 4.01(i).

 

“Subsidiary” means a corporation or other
entity more than 50% of the outstanding Voting Stock of which is owned,
directly or indirectly, by the Company or by one or more other Subsidiaries of
the Company, or by the Company and one or more other Subsidiaries of the
Company.

 

“Termination of Trading” means the
occurrence of the Company’s Common Stock (or other common stock for which the
Securities are then convertible) not being listed for trading on a United
States national securities exchange nor approved for on any United States
system of automated dissemination of quotations of securities prices or
approved for trading on an established automated over-the-counter trading
market in the United States.

 

“TIA” means the Trust Indenture Act of
1939 (15 U.S. Code §§ 77aaa-77bbbb) as in effect on the date of this Indenture;
provided, however, that in the event the Trust Indenture Act of 1939 is amended
after such date, “TIA” means, to the extent required by any such amendment, the
Trust Indenture Act as so amended.

 

“Trading Day” means any day on which the
Nasdaq Global Market or, if the Company’s Common Stock is not traded on the
Nasdaq Global Select Market, the principal national securities exchange on
which the Company’s Common Stock is listed, is open for trading or, if the
Company’s Common Stock is listed on the New York Stock Exchange, a day on which
trades may be made on such market or, if the applicable Security is not so
listed, admitted for trading or quoted, any Business Day. A Trading Day only
includes those days that have a scheduled closing time of 4:00 p.m. (New
York City time) or the then-standard closing time for regular trading on the
relevant exchange or trading system.

 

“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.

 

“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 the Indenture, and thereafter means the
successor.

 

“Underwriters” means underwriters named
in Schedule A of the Underwriting Agreement.

 

8

 

“U.S. Government Obligations” means
securities which are (i) direct obligations of The United States of
America for the payment of which its full faith and credit is pledged or (ii) obligations
of a person controlled or supervised by and acting as an agency or instrumentality
of The United States of America the payment of which is unconditionally
guaranteed as a full faith and credit obligation by The United States of
America, and which in the case of (i) and (ii) are not callable or
redeemable at the option of the issuer thereof, and shall also include a
depository receipt issued by a bank or trust company as custodian with respect
to any such U.S. Government Obligation or a specific payment of interest on or
principal of any such U.S. Government Obligation.

 

“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 within the control of such person to satisfy) to
vote in the election of directors, managers or trustees thereof.

 

9

 

Section 1.02                   Other
Definitions.

 

	
  Term

  	
   

  	
  Defined in Section

  
	
   

  	
   

  	
   

  
	
  “Agent Members”

  	
   

  	
  2.07(g)

  
	
  “Bankruptcy Law”

  	
   

  	
  8.01

  
	
  “Conversion Agent”

  	
   

  	
  2.04

  
	
  “Conversion Date”

  	
   

  	
  4.02(a)

  
	
  “Current Market Price”

  	
   

  	
  4.07(a)(9)

  
	
  “Drop Agent’s Office”

  	
   

  	
  2.04

  
	
  “Event of Default”

  	
   

  	
  8.01

  
	
  “Expiration Time”

  	
   

  	
  4.07(a)(7)

  
	
  “Fundamental Change Company Notice”

  	
   

  	
  3.08(b)

  
	
  “Fundamental Change Repurchase Date”

  	
   

  	
  3.08(a)

  
	
  “Fundamental Change Repurchase Notice”

  	
   

  	
  3.08(c)

  
	
  “Indenture”

  	
   

  	
  Recitals

  
	
  “Make-Whole Premium”

  	
   

  	
  4.01(e)

  
	
  “Measurement Period”

  	
   

  	
  4.07(a)(4)

  
	
  “Paying Agent”

  	
   

  	
  2.04

  
	
  “Purchased Shares”

  	
   

  	
  4.07(a)(7)(i)

  
	
  “record date”

  	
   

  	
  4.07(a)(9)(C)

  
	
  “Receiver”

  	
   

  	
  8.01

  
	
  “Redemption Price”

  	
   

  	
  3.01

  
	
  “Redemption Date”

  	
   

  	
  3.01

  
	
  “Registrar”

  	
   

  	
  2.04

  
	
  “Special Interest”

  	
   

  	
  8.02

  
	
  “Service Agent”

  	
   

  	
  2.04

  
	
  “Spin-off”

  	
   

  	
  4.07(a)(4)

  
	
  “Trigger Event”

  	
   

  	
  4.07(a)(4)

  
	
  “Trustee”

  	
   

  	
  Preamble

  
	
  “Underwriting Agreement”

  	
   

  	
  2.01

  

 

10

 

Article 2

The Securities

 

Section 2.01                   Designation,
Form and Dating.

 

There is
hereby authorized a series of senior subordinated unsecured Securities
designated as “[ ]% Senior Subordinated Convertible Notes due 2013.” The
Securities are being offered and sold pursuant to an Underwriting Agreement,
dated February 11, 2008 (the “Underwriting
Agreement”), between the Company and the Underwriters.

 

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

 

Any of the
Securities may have such letters, numbers or other marks of identification and
such notations, legends, endorsements or changes as the Officers executing the
same may approve (execution thereof to be conclusive evidence of such approval)
and as are not inconsistent with the provisions of this Indenture, or as may be
required by the Trustee, the Depositary, or as may be required to comply with
any applicable law or with any rule or regulation made pursuant thereto or
with any rule or regulation of any securities exchange or automated
quotation system on which the Securities may be listed, or to conform to usage,
or to indicate any special limitations or restrictions to which any particular
Securities are subject.

 

Subject to Section 2.07
hereof, so long as the Securities are eligible for book-entry settlement with
the Depositary, or unless otherwise required by law, all of the Securities will
be represented by one or more Global Securities. The transfer and exchange of
beneficial interests in any such Global Security shall be effected through the
Depositary in accordance with this Indenture and the Applicable Procedures.

 

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
principal amount of outstanding Securities from time to time endorsed thereon
and that the aggregate principal 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.

 

Section 2.02                   Final
Maturity Date; Interest.

 

The Final
Maturity Date of the Securities shall be [ ], 2013.

 

The rate or
rates at which the Securities shall bear interest, including Special Interest,
if any, the date or dates from which such interest shall accrue, the Interest
Payment Dates on which such interest shall be payable and the Regular Record
Date for any interest payable on any Interest Payment Date, in each case, shall
be as set forth in the form of Security set forth as Exhibit A hereto.

 

11

 

Section 2.03.                  Execution
and Authentication.

 

Two Officers
shall sign the Securities for the Company by manual or facsimile signature.

 

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

 

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

 

The Trustee
shall authenticate Securities for original issue in the aggregate principal
amount up to $250,000,000 aggregate principal amount ($287,500,000 aggregate
principal amount if the Underwriters exercise their over-allotment option in
full by executing an over-allotment exercise notice and delivering such
executed over-allotment exercise notice to the Trustee and the Company), upon
receipt by the Trustee of a Company Order. Such Company Order may authorize
authentication and delivery pursuant to oral or electronic instructions from
the Company or its duly authorized agent or agents, which oral instructions
shall be promptly confirmed in writing. Each Security shall be dated the date
of its authentication unless otherwise provided by a Board Resolution, a
supplemental indenture hereto or an Officers’ Certificate.

 

Prior to the
issuance of Securities of any Series, the Trustee shall have received and
(subject to Section 9.02) shall be fully protected in relying on: (a) the
Board Resolution or Officers’ Certificate establishing the form of the
Securities and the terms of the Securities, (b) an Officers’ Certificate
complying with Section 13.05, and (c) an Opinion of Counsel complying
with Section 13.05.

 

The Trustee
shall have the right to decline to authenticate and deliver any Securities of
such Series: (a) if the Trustee, being advised by counsel, determines that
such action may not lawfully be taken; or (b) if the Trustee in good faith
shall determine that such action would expose the Trustee to personal liability
to Holders of any then outstanding Securities.

 

The Trustee
may appoint an authenticating agent reasonably 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 has the same rights as an Agent to deal with the Company
or an Affiliate.

 

Section 2.04                   Registrar,
Paying Agent, Conversion Agent and Trustee.

 

The Company
shall maintain an office or agency where Securities of such Series may be
presented or surrendered for payment (“Paying
Agent”), where the Securities may be surrendered for
registration of transfer or exchange (“Registrar”)
and where notices and demands to or upon the Company in respect of the
Securities and this Indenture may be served (“Service Agent”). The Registrar shall keep a register with
respect to the Securities and to their transfer and exchange. The Company will
give prompt written notice to the Trustee of the name and address, and any
change in the name or address, of each Registrar, Paying Agent or Service 

 

12

 

Agent. If at
any time the Company shall fail to maintain any such required Registrar, Paying
Agent or Service Agent or shall fail to furnish the Trustee with the name and
address thereof, such presentations, surrenders, notices and demands may be
made or served at the Corporate Trust Office of the Trustee, and the Company
hereby appoints the Trustee as its agent to receive all such presentations,
surrenders, notices and demands.

 

The Company
may also from time to time designate one or more co-registrars, additional
paying agents or additional service agents and may from time to time rescind
such designations; provided, however,
that no such designation or rescission shall in any manner relieve the Company
of its obligations to maintain a Registrar, Paying Agent and Service Agent in
each place for the Securities for such purposes. The Company will give prompt
written notice to the Trustee of any such designation or rescission and of any
change in the name or address of any such co-registrar, additional paying agent
or additional service agent. The term “Registrar” includes any co-registrar;
the term “Paying Agent” includes any additional paying agent; and the term “Service
Agent” includes any additional service agent.

 

The Company
hereby appoints the Trustee the initial Registrar, Paying Agent and Service
Agent for the Securities unless another Registrar, Paying Agent or Service
Agent, as the case may be, is appointed prior to the time the Securities are
first issued.

 

The rights,
privileges, protections, immunities and benefits given to the Trustee under
this Indenture including, without limitation, its right to be indemnified, are
extended to, and shall be enforceable by, the Trustee in each of its capacities
hereunder, and each Agent acting hereunder.

 

The Company
shall maintain an office or agency where Securities may be presented for
conversion (the “Conversion Agent”).
The Company hereby initially designates the Trustee as the Conversion Agent.
The Company further designates the office of the Trustee’s drop agent in New
York City (U.S. Bank National Association, 100 Wall Street, New York, New York
10005) (the “Drop Agent’s Office”)
as its office in The City of New York where Securities may be:

 

(1) presented
or surrendered for payment;

 

(2) surrendered
for registration of transfer or exchange; or

 

(3) surrendered
for conversion;

 

and where
notices and demands to or upon the Company in respect of the Securities and
this Indenture may be served.

 

The Company
may at any time and from time to time vary or terminate the appointment of any
such office or appoint any additional offices for any or all of such purposes; provided, however, that until all of the
Securities have been delivered to the Trustee for cancellation, or moneys
sufficient to pay the principal of and premium, if any, and interest, including
Special Interest, if any, on the Securities have been made available for
payment and either paid or returned to the Company pursuant to the provisions
of Section 11.02 hereof, the Company will maintain in The City of New York
an office or agency where Securities may be presented or surrendered for
payment, where Securities may be surrendered for registration of transfer or 

 

13

 

exchange, where Securities may
be surrendered for conversion and where notices and demands to or upon the
Company in respect of the Securities and this Indenture may be served. The
Company will give prompt written notice to the Trustee, and notice to the Holders,
of the appointment or termination of any such agents and of the location and
any change in the location of any such office or agency.

 

If at any time
the Company shall fail to maintain any such required office or agency in The
City of New York, or shall fail to furnish the Trustee with the address
thereof, presentations and surrenders may be made at, and notices and demands
may be served on, the Drop Agent’s Office.

 

The Company
may also from time to time designate one or more Conversion Agents and from
time to time rescind such designations. The Company will give prompt written
notice to the Trustee of any such designation or rescission and of any change
in the name or address of such Conversion Agent.

 

The rights,
privileges, protections, immunities and benefits given to the Trustee under the
Indenture and this Indenture, including, without limitation, its right to be
indemnified, are extended to, and shall be enforceable by, the Trustee in each
of its capacities hereunder, and each Conversion Agent or other Agent acting
hereunder.

 

Section 2.05
          Paying Agent to Hold Money in
Trust.

 

The Company
shall require each Paying Agent other than the Trustee to agree in writing that
the Paying Agent will hold in trust, for the benefit of Holders of Securities,
or the Trustee, all money held by the Paying Agent for the payment of principal
of or interest on the Securities, and will notify the Trustee of any default by
the Company in making any such payment. While any such default continues, the
Trustee may require a Paying Agent to pay all money held by it to the Trustee.
The Company at any time may require a Paying Agent to pay all money held by it
to the Trustee. Upon payment over to the Trustee, the Paying Agent (if other
than the Company or a Subsidiary) shall have no further liability for the
money. If the Company or a Subsidiary acts as Paying Agent, it shall segregate
and hold in a separate trust fund for the benefit of Holders of the Securities
all money held by it as Paying Agent.

 

Section 2.06           Conversion Agent to Hold Shares in
Trust.

 

The Company
shall require each Conversion Agent other than the Trustee to agree in writing
that the Conversion Agent will hold in trust for the benefit of Holders or the
Trustee all shares of Common Stock held by the Conversion Agent for the
delivery of Common Stock when due upon conversion, and will notify the Trustee
in writing of any default by the Company in making any such delivery. While any
such default continues, the Trustee may require a Conversion Agent to deliver
all shares of Common Stock held by it to the Trustee. The Company at any time
may require a Conversion Agent to pay all money held by it to the Trustee. Upon
such acknowledgement by the Trustee of its receipt of any such payment, the
Conversion Agent (if other than the Company or a Subsidiary) shall have no
further liability for such money. If the Company or a Subsidiary acts as
Conversion Agent, it shall segregate and hold in a separate trust fund for the
benefit of the Holders all shares held by it as Conversion Agent. Upon any

 

14

 

bankruptcy or reorganization
proceedings relating to the Company, the Trustee shall serve as Conversion
Agent for the Securities.

 

Section 2.07           Global Securities.

 

(a)  Each
Global Security authenticated under this Indenture shall be registered in the
name of the Depositary or a nominee thereof and delivered to such Depositary or
a nominee thereof or custodian therefor, and each such Global Security shall
constitute a single Security for purposes of this Indenture.

 

(b) 
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 Sections 2.09 and this Section 2.07. 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 this clause (b) 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 unless and until such Security has been registered in the
name of such Person.

 

(c) 
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 (i) the Depositary
has notified the Company that it is unwilling or unable to continue as
depositary for such Global Security or the Depositary ceases to be a clearing
agency registered under the Exchange Act and a successor depositary is not
appointed by the Company within 90 days, (ii) the Company by written
notice to the Trustee elects to issue the Securities in definitive registered
form in exchange for all or any part of the Securities represented by the
Global Security, or (iii) there is or continues to be an Event of Default
and the Registrar receives notice from the Depositary for the issuance of definitively
registered Securities in exchange for the Global Security. Any Global Security
exchanged pursuant to clause (a) above shall be so exchanged in whole and
not in part. 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.

 

(d) 
Securities issued in exchange for a Global Security or any portion thereof
shall be issued in definitive, fully registered form, without interest coupons,
shall have a principal amount equal to that of such Global Security or portion
thereof to be so exchanged, and shall be registered in such names and be in
such authorized denominations as the Depositary shall designate. Any Global
Security to be exchanged in whole shall be surrendered by the Depositary to the
Trustee or the 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

 

15

 

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.

 

(e) 
Subject to the provisions of Section 2.07(g) below, the registered
Holder may grant proxies and otherwise authorize any Person, including Agent
Members (as defined below) 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.

 

(f)  In
the event of the occurrence of any of the events specified in Section 2.07(c) above,
the Company will promptly make available to the Trustee a reasonable supply of
certificated Securities in definitive, fully registered form, without interest
coupons.

 

(g) 
Neither any members of, or participants in, the Depositary (collectively, the “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 or 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.

 

(h)  At
such time as all interests in a Global Security have been repurchased,
converted, cancelled or exchanged for Securities in certificated form, such
Global Security shall, upon receipt thereof, be cancelled by the Trustee in
accordance with standing procedures and instructions existing between the
Depositary and the Securities Custodian, subject to Section 2.14 of the
Indenture. At any time prior to such cancellation, if any interest in a Global
Security is repurchased, converted, cancelled or exchanged for Securities in
certificated form, the principal amount of such Global Security shall, in
accordance with the standing procedures and instructions existing between the
Depositary and the Securities Custodian, be appropriately reduced, and an
endorsement shall be made on such Global Security, by the Trustee or the
Securities Custodian, at the direction of the Trustee, to reflect such
reduction.

 

Section 2.08                Holder Lists.

 

The Trustee
shall preserve in as current a form as is reasonably practicable the most
recent list available to it of the names and addresses of Holders of the
Securities and shall otherwise comply with TIA § 312(a). If the Trustee is not
the Registrar, the Company shall furnish to the Trustee at least ten days
before each interest payment date and at such other times as the Trustee may
request in writing a list, in such form and as of such date as the Trustee may
reasonably require, of the names and addresses of Holders of the Securities
which list may be conclusively relied upon by the Trustee.

 

16

 

Section 2.09                Transfer and Exchange.

 

Where the
Securities are presented to the Registrar or a co-registrar with a request to
register a transfer or to exchange them for an equal principal amount of
Securities of the same series, the Registrar shall register the transfer or
make the exchange if its requirements for such transactions are met. To permit
registrations of transfers and exchanges, the Trustee shall authenticate
Securities at the Registrar’s request. No service charge shall be made for any
registration of transfer or exchange (except as otherwise expressly permitted
herein), but the Company may require payment of a sum sufficient to cover any
transfer tax or similar governmental charge payable in connection therewith (other
than any such transfer tax or similar governmental charge payable upon
exchanges pursuant to Sections 2.12, 3.07 or 10.05).

 

Neither the
Company nor the Registrar shall be required (a) to issue, register the
transfer of, or exchange the Securities for the period beginning at the opening
of business fifteen days immediately preceding the mailing of a notice of
redemption of the Securities selected for redemption and ending at the close of
business on the day of such mailing, or (b) to register the transfer of or
exchange the Securities selected, called or being called for redemption as a
whole or the portion being redeemed of any such Securities selected, called or
being called for redemption in part.

 

Section 2.10                Mutilated, Destroyed, Lost
and Stolen Securities.

 

If any
mutilated Security is surrendered to the Trustee, the Company shall execute and
the Trustee shall authenticate and deliver in exchange therefor a new Security
and of like tenor and principal amount and bearing a number not
contemporaneously outstanding.

 

If there shall
be delivered to the Company and the Trustee (i) evidence to their
satisfaction of the destruction, loss or theft of any Security and (ii) such
security or indemnity as may be required by them to save each of them and any
agent of either of them harmless, then, in the absence of notice to the Company
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 make available for delivery, in lieu of any such destroyed,
lost or stolen Security, a new Security and of like tenor and principal amount
and 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, the Company in its discretion may, instead of issuing a
new Security, pay such Security.

 

Upon the
issuance of any new Security under this Section, 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 expenses (including the fees
and expenses of the Trustee) connected therewith.

 

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

 

17

 

The provisions
of this Section are 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 2.11                Outstanding Securities.

 

The Securities
outstanding at any time are all the Securities authenticated by the Trustee
except for those canceled by it, those delivered to it for cancellation, those
reductions in the interest on a Global Security effected by the Trustee in
accordance with the provisions hereof and those described in this Section as
not outstanding.

 

If a Security
is replaced pursuant to Section 2.10, it ceases to be outstanding until
the Trustee receives proof satisfactory to it that the replaced Security is
held by a bona fide purchaser.

 

If the Paying
Agent (other than the Company, a Subsidiary or an Affiliate of any thereof)
holds on the Maturity of the Securities money sufficient to pay such Securities
payable on that date, then on and after that date such Securities cease to be
outstanding and interest on them ceases to accrue.

 

A Security
does not cease to be outstanding because the Company or an Affiliate holds the
Security.

 

In determining
whether the Holders of the requisite principal amount of outstanding Securities
have given any request, demand, authorization, direction, notice, consent or
waiver hereunder, the principal amount of a Security that shall be deemed to be
outstanding for such purposes shall be the amount of the principal thereof that
would be due and payable as of the date of such determination upon a
declaration of acceleration of the Maturity thereof pursuant to Section 8.02.

 

Section 2.12                Treasury Securities.

 

In determining
whether the Holders of the required principal amount of the Securities have
concurred in any request, demand, authorization, direction, notice, consent or
waiver the Securities owned by the Company or an Affiliate shall be
disregarded, except that for the purposes of determining whether the Trustee
shall be protected in relying on any such request, demand, authorization,
direction, notice, consent or waiver only Securities that the Trustee knows are
so owned shall be so disregarded.

 

Section 2.13                Temporary Securities.

 

Until
definitive Securities are ready for delivery, the Company may prepare and the
Trustee shall authenticate temporary Securities upon a Company Order. Temporary
Securities shall be substantially in the form of definitive Securities but may
have variations that the Company considers appropriate for temporary
Securities. Without unreasonable delay, the Company shall prepare and the
Trustee upon request shall authenticate definitive Securities and date of
maturity in exchange for temporary Securities. Until so exchanged, temporary
securities shall have the same rights under this Indenture as the definitive
Securities.

 

18

 

Section 2.14                Cancellation.

 

The Company at
any time may deliver Securities to the Trustee for cancellation. The Registrar
and the Paying Agent shall forward to the Trustee any Securities surrendered to
them for registration of transfer, exchange or payment. The Trustee shall cancel
all Securities surrendered for transfer, exchange, payment, replacement or
cancellation in accordance with its customary procedure. The Company may not
issue new Securities to replace Securities that it has paid or delivered to the
Trustee for cancellation.

 

Section 2.15                Defaulted Interest.

 

If the Company
defaults in a payment of interest on the Securities, it shall pay the defaulted
interest, plus, to the extent permitted by law, any interest payable on the
defaulted interest (the “Defaulted Interest”),
to the persons who are Holders of the Securities on a subsequent Special Record
Date. The Company shall fix the Special Record Date and payment date. At least
30 days before the record date, the Company shall mail to the Trustee and to
each Holder of the Securities a notice that states the record date, the payment
date and the amount of interest to be paid. The Company may pay defaulted
interest in any other lawful manner.

 

Section 2.16                CUSIP Numbers.

 

The Company in
issuing the Securities may use “CUSIP” numbers (if then generally in use), and,
if so, the Trustee shall use “CUSIP” numbers in notices of redemption 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 and that reliance may be placed only on the other
elements of identification printed on the Securities, and any such redemption
shall not be affected by any defect in or omission of such numbers.

 

19

 

Article 3

Redemption and Repurchase of Securities

 

Section 3.01                   Company’s
Right to Redeem. The Securities will be subject to redemption at the option
of the Company, in whole or in part, on the terms and at the redemption prices
(expressed as percentages of principal amount) set forth in paragraph 5 on
the reverse of the form of Security (each a “Redemption Price”), plus accrued and unpaid interest
thereon (if any) to the date of redemption (the “Redemption Date”). However, if a Redemption Date occurs
after a Regular Record Date or a Special Record Date but on or prior to the
corresponding Interest Payment Date or Defaulted Interest payment date, the
Company will instead pay the applicable interest payment to the record Holder
on the Regular Record Date or Special Record Date corresponding to such
Interest Payment Date or Defaulted Interest payment date.

 

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

 

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

 

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

 

If any
Security selected for partial redemption is converted in part after such
selection, the converted portion of such Security shall be deemed (so far as
possible) to be the portion to be selected for redemption. The Securities (or
portion thereof) so selected shall be deemed duly selected for redemption for
all purposes hereof, notwithstanding that any such Security is converted in
whole or in part before the mailing of the notice of redemption. Upon any
redemption of less than all the Securities, the Company and the Trustee may
treat as outstanding any Securities surrendered for conversion during the
period of 15 days immediately preceding 

 

20

 

the mailing of a notice of
redemption and need not treat as outstanding any Security authenticated and
delivered during such period in exchange for the unconverted portion of any
Security converted in part during such period.

 

In the event
of any redemption of less than all the Securities, the Company will not be
required to (i) issue or register the transfer or exchange of any Security
during a period of 15 days immediately preceding the mailing of a notice of
redemption for such Securities for redemption, or (ii) register the
transfer or exchange of any Security so selected for redemption, in whole or in
part, except the unredeemed portion of any Security being redeemed in part, in
which case the Company will execute and the Trustee will authenticate and
deliver to the Holder a new Security or Securities equal in principal amount to
the unredeemed portion of the Security surrendered.

 

Section 3.04                   Notice
of Redemption. At least 30 days but not more than 60 days before a
Redemption Date, the Company shall mail by first class mail a notice of
redemption to each Holder whose Securities are to be redeemed, at such Holder’s
registered address.

 

The notice
shall identify the Securities to be redeemed and shall state:

 

(1) the
Redemption Date;

 

(2) the
Redemption Price and any accrued and unpaid interest payable on the Redemption
Date;

 

(3) 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
surrender of such Security, a new Security or Securities in principal amount
equal to the unredeemed portion will be issued in the name of the Holder
thereof;

 

(4) that
Securities called for redemption must be surrendered to the Paying Agent to
collect the Redemption Price and any accrued and unpaid interest;

 

(5) that
interest on Securities called for redemption and for which funds have been set
apart for payment, ceases to accrue on and after the Redemption Date (unless
the Company defaults in the payment of the Redemption Price or any accrued and
unpaid interest);

 

(6) the
aggregate principal amount of Securities (if less than all) that are being
redeemed;

 

(7) the
CUSIP number of the Securities (provided
that any such notice may state that no representation is made as to the
correctness or accuracy of the CUSIP numbers printed in the notice or on the
Securities and that reliance may be placed only on the other identification
numbers printed on the Securities);

 

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

 

21

 

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

 

(10) that
in the case of Securities or portions thereof called for redemption on a date
that is also an Interest Payment Date or a Defaulted Interest payment date, the
interest due on such date shall be paid to the Holder of such Security at the
close of business on the relevant Regular Record Date or Special Record Date.

 

The notice, if
mailed in the manner herein provided, shall be conclusively presumed to have
been given, whether or not the Holder receives such notice. In any case,
failure to give such notice by mail or any defect in the notice to any Holder
designated for redemption as a whole or in part shall not affect the validity
of the proceedings for the redemption of any Security.

 

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

 

Section 3.05                   Effect
of Notice of Redemption. Once notice of redemption is mailed, Securities
called for redemption become due and payable on the Redemption Date at the
Redemption Price set forth in the Security.

 

Section 3.06                   Deposit
of Redemption Price. On or before 11:00 a.m. New York City time on the
Redemption Date, the Company shall deposit with the Trustee or with the Paying
Agent money in immediately available funds sufficient to pay the Redemption
Price of and accrued interest, if any, on all Securities to be redeemed on that
date. The Trustee or the Paying Agent shall return to the Company any money not
required for that purpose.

 

On and after
the Redemption Date, unless the Company shall default in the payment of the
Redemption Price or any accrued and unpaid interest, interest will cease to
accrue on the principal amount of the Securities or portions thereof called for
redemption and for which funds have been set apart for payment, and such
Securities, or portions thereof, shall cease after the close of business on the
Business Day immediately preceding the Redemption Date to be convertible into
Common Stock and, except as provided in this Section 3.06, to be entitled
to any benefit or security under the Indenture, and the Holders thereof shall
have no right in respect of such Securities, or portions thereof, except the
right to receive the Redemption Price thereof and unpaid interest to (but
excluding) the Redemption Date. In the case of Securities or portions thereof
redeemed on a Redemption Date which is after a Regular Record Date or a Special
Record Date and on or prior to the corresponding Interest Payment Date or
Defaulted Interest payment date, the interest due on such date shall be paid to
the Person in whose name the Security is registered at the close of business on
the relevant Regular Record Date or Special Record Date.

 

22

 

Section 3.07                   Securities
Redeemed in Part. Upon surrender of a Security that is redeemed in part
only, the Company shall issue and the Trustee shall authenticate and deliver to
the Holder of such Security a new Security or Securities equal in principal
amount to the unredeemed portion of the Security surrendered, at the expense of
the Company.

 

Section 3.08                   Repurchase
of Securities at Option of the Holder upon a Fundamental Change.

 

(a)   If a Fundamental Change occurs prior to
the Final Maturity Date, each Holder of a Security shall have the right, at the
option of the Holder, to require the Company to repurchase for cash all or any
portion of the Securities of such Holder equal to $1,000 principal amount (or
an integral multiple thereof) at the Fundamental Change Repurchase Price, on
the date specified by the Company that is 45 days after the date of the Fundamental
Change Company Notice pursuant to subsection 3.08(b) (the “Fundamental Change Repurchase Date”).

 

(b)  As
promptly as practicable following the date on which the Company publicly
announces a Fundamental Change, but in no event less than 20 days prior to the
anticipated effective date of a Fundamental Change, the Company shall mail a
written notice of the Fundamental Change and of the resulting repurchase right
to the Trustee, Paying Agent and to each Holder (and to beneficial owners as
required by applicable law) (the “Fundamental
Change Company Notice”). The Fundamental Change Company Notice
shall include the form of a Fundamental Change Repurchase Notice to be
completed by the Holder and shall state:

 

(1) the
events causing such Fundamental Change;

 

(2) the
date (or expected date) of such Fundamental Change;

 

(3) the
last date by which the Fundamental Change Repurchase Notice must be delivered
to elect the repurchase option pursuant to this Section 3.08;

 

(4) the
Fundamental Change Repurchase Date;

 

(5) the
Fundamental Change Repurchase Price;

 

(6) the
Holder’s right to require the Company to purchase the Securities;

 

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

 

(8) the
then-effective Conversion Rate and any adjustments to the Conversion Rate
resulting from such Fundamental Change;

 

(9) whether
a Make-Whole Premium shall be payable by the Company upon conversion;

 

(10) the
procedures that the Holder must follow to exercise rights under Article 4;

 

(11) the
procedures that the Holder must follow to exercise rights under this Section 3.08;

 

23

 

(12) that,
unless the Company fails to pay such Fundamental Change Repurchase Price,
Securities covered by any Fundamental Change Repurchase Notice will cease to be
outstanding and interest, including Special Interest, if any, will cease to
accrue on and after the Fundamental Change Repurchase Date, subject to Section 3.10
hereof; and

 

(13) the CUSIP
number of the Securities.

 

At the Company’s
written request, the Trustee shall give such Fundamental Change Company Notice
in the Company’s name and at the Company’s expense; provided that, in all cases, the Company makes such request
at least three (3) Business Days prior to the date by which such Fundamental
Change Company Notice must be given to the Holders in accordance with this Section 3.08;
provided, further, that the text
of such Fundamental Change Company Notice shall be prepared by the Company. In
connection with the delivery of the Fundamental Change Company Notice to the
Holders, the Company shall disseminate a press release through Dow Jones &
Company, Inc. or Bloomberg Business News, or publish a notice containing
substantially the same information that is required in the Fundamental Change Company
Notice in a newspaper of general circulation in The City of New York, or
publish information on a website of the Company or through such other public
medium the Company may use at that time. If any of the Securities is in the
form of a Global Security, then the Company shall modify such notice to the
extent necessary to accord with the Applicable Procedures relating to the
purchase of Global Securities.

 

No failure of
the Company to give the foregoing notices or defect therein shall limit any
Holder’s right to exercise its right to cause the Company to repurchase such
Holder’s Securities pursuant to this Section 3.08.

 

(c)  A
Holder may exercise its rights specified in Section 3.08(a) upon
delivery of a written notice (which shall be in substantially the form attached
as Exhibit A under the heading “Fundamental Change Repurchase Notice” and
which may be delivered by letter, overnight courier, hand delivery, facsimile
transmission or in any other written form and, in the case of Global
Securities, may be delivered electronically or by other means in accordance
with the Depositary’s Applicable Procedures) of the exercise of such rights (a “Fundamental Change Repurchase Notice”)
to the Paying Agent at any time prior to the close of business on the 30th day
following the date of the Fundamental Change Company Notice, subject to
extension to comply with applicable law.

 

(1) The
Fundamental Change Repurchase Notice shall state: (A) the certificate
number (if such Security is held other than in global form) of the Security
which the Holder will deliver to be repurchased (or, if the Security is held in
global form, any other items required to comply with the Applicable
Procedures), (B) the portion of the principal amount of the Security which
the Holder will deliver to be repurchased and, (C) that such Security
shall be repurchased as of the Fundamental Change Repurchase Date pursuant to
the terms and conditions specified in the Securities and in this Indenture.

 

(2) The
delivery of a Security for which a Fundamental Change Repurchase Notice has
been timely delivered to any Paying Agent on or after the Fundamental Change
Repurchase Date

 

24

 

(together with all necessary
endorsements) at the office of such Paying Agent shall be a condition to the
receipt by the Holder of the Fundamental Change Repurchase Price therefor.

 

(3) The
Company shall only be obliged to purchase, pursuant to this Section 3.08,
a portion of a Security if the principal amount of such portion is $1,000 or an
integral multiple of $1,000 (provisions of this Indenture that apply to the
purchase of all of a Security also apply to the purchase of such portion of
such Security).

 

(4) A
Paying Agent shall promptly notify the Company of the receipt by it of any
Fundamental Change Repurchase Notice.

 

(5) Anything
herein to the contrary notwithstanding, in the case of Global Securities, any
Fundamental Change Repurchase Notice may be delivered and such Securities may
be surrendered or delivered for purchase in accordance with the Applicable
Procedures as in effect from time to time.

 

(6) A
Fundamental Change Repurchase Notice shall be irrevocable, except that the
right of the Holder to convert the Securities that are the subject of the
Fundamental Change Repurchase Notice shall continue until the close of business
on the second Business Day immediately preceding the Fundamental Change
Repurchase Date.

 

(d)  The
Company shall deposit cash, at the time and in the manner as provided in Section 3.10,
sufficient to pay the aggregate Fundamental Change Repurchase Price of all
Securities to be purchased pursuant to this Section 3.08.

 

Section 3.09                   Effect
of Fundamental Change Repurchase Notice.

 

Upon receipt
by any Paying Agent of a properly completed Fundamental Change Repurchase
Notice from a Holder, the Holder of the Security in respect of which such
Fundamental Change Repurchase Notice was given shall thereafter be entitled to
receive the Fundamental Change Repurchase Price with respect to such Security,
subject to the occurrence of the Fundamental Change Effective Date. Such
Fundamental Change Repurchase Price shall be paid to such Holder promptly, but
no later than two Business Days, following the later of (1) the
Fundamental Change Repurchase Date (provided
that the conditions in Section 3.08 have been satisfied), and (2) the
time of delivery of such Security to a Paying Agent by the Holder thereof in
the manner required by Section 3.08(c).

 

Section 3.10                   Deposit
of Fundamental Change Repurchase Price.

 

(a)  On
or before 10:00 a.m. New York City time on the Business Day following the
applicable Fundamental Change Repurchase Date, the Company shall deposit with
the Paying Agent (or, if the Company or an Affiliate of the Company is acting
as the Paying Agent, shall segregate and hold in trust as provided in Section 2.05
of this Indenture) an amount of money (in immediately available funds if
deposited on or after such Fundamental Change Repurchase Date) sufficient to
pay the aggregate Fundamental Change Repurchase Price of all the Securities or
portions thereof that are to be purchased as of the Fundamental Change
Repurchase Date.

 

25

 

(b)  If a
Paying Agent holds on the Business Day following the Fundamental Change Repurchase
Date, in accordance with the terms hereof, money sufficient to pay the
Fundamental Change Repurchase Price of any Security for which a Fundamental
Change Repurchase Notice has been tendered and not withdrawn in accordance with
this Indenture then, immediately following the applicable Fundamental Change
Repurchase Date, whether or not the Security is delivered to the Paying Agent,
each such Security will cease to be outstanding, interest, including Special
Interest, if any, shall cease to accrue, and the rights of the Holder in
respect of the Security shall terminate (other than the right to receive the
Fundamental Change Repurchase Price upon delivery of the Security as
aforesaid).

 

(c)  If a
Fundamental Change Repurchase Date falls after a Regular Record Date and on or
before the related Interest Payment Date, then interest on the Securities
payable on such Interest Payment Date will be payable to the Holders in whose
names the Securities are registered at the close of business on such Regular
Record Date.

 

Section 3.11                   Repayment
to the Company.

 

To the extent
that the aggregate amount of cash deposited by the Company pursuant to Section 3.10
exceeds the aggregate Fundamental Change Repurchase Price of the Securities or
portions thereof that the Company is obligated to purchase, then promptly after
the Fundamental Change Repurchase Date the Paying Agent shall return any such
excess cash to the Company.

 

Section 3.12                   [Reserved].

 

Section 3.13                   Securities
Purchased in Part.

 

Any Security
that is to be purchased only in part shall be surrendered at the office of a
Paying Agent, and, promptly after the Fundamental Change Repurchase Date, the
Company shall execute and the Trustee shall authenticate and deliver to the
Holder of such Security, without service charge, a new Security or Securities,
of such authorized denomination or denominations as may be requested by such
Holder (which must be equal to $1,000 principal amount or any integral
thereof), in aggregate principal amount equal to, and in exchange for, the portion
of the principal amount of the Security so surrendered that is not purchased.

 

Section 3.14                   Compliance
with Securities Laws upon Purchase of Securities.

 

In connection
with any offer to purchase Securities under Section 3.08, the Company
shall (a) comply with Rule 13e-4 and Rule 14e-1 (or any
successor to either such Rule), and any other tender offer rules, 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 3.08 through 3.11 to be exercised in the time and in
the manner specified therein. To the extent that compliance with any such laws,
rules and regulations would result in a conflict with any of the terms
hereof, this Indenture is hereby modified to the extent required for the
Company to comply with such laws, rules and regulations.

 

26

 

Section 3.15                   Purchase
of Securities in Open Market.

 

The Company
shall surrender any Security repurchased by the Company pursuant to this Article 3
to the Trustee for cancellation. Any Securities surrendered to the Trustee for
cancellation may not be reissued or resold by the Company and will be cancelled
promptly in accordance with Section 2.14 of this Indenture. The Company
may purchase Securities in the open market, by tender at any price or pursuant
to private agreements.

 

Article 4

Conversion

 

Section 4.01                   Conversion
Privilege and Conversion Rate.

 

(a)  The
conversion rights pursuant to this Article 4 shall commence on the Issue
Date of the Securities and expire at the close of business on the second
Business Day immediately preceding the Final Maturity Date, subject, in the
case of conversion of any Global Security, to any Applicable Procedures. If a
Security is submitted or presented for purchase or redemption pursuant to Article 3,
such conversion right shall terminate at the close of business on the second
Business Day immediately preceding the Fundamental Change Repurchase Date or
Redemption Date for such Security (unless the Company shall fail to make the
Fundamental Change Repurchase Price or Redemption Price payment when due in
accordance with Article 3, in which case the conversion right shall
terminate at the close of business on the date such failure is cured and such
Security is purchased or redeemed).

 

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

 

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

 

(d)  The
Conversion Rate shall be adjusted in certain instances as provided in Section 4.01(e) and
Section 4.07.

 

(e)  If
there shall have occurred a transaction described in clause (i) or (ii) of
the definition of a Change in Control, the Company shall pay a “Make-Whole Premium” to the Holders of
the Securities who convert their Securities during the period beginning 20 days
before the anticipated Fundamental Change Effective Date until the close of
business on the Business Day immediately preceding the Fundamental Change
Repurchase Date by increasing the Conversion Rate for such Securities. The
number of additional shares of Common Stock per $1,000 principal amount of
Securities constituting the Make-Whole Premium shall be determined by reference
to the table below, based on the Fundamental Change Effective Date of such
Fundamental Change and the Stock Price; provided
that if the Stock Price or Fundamental Change Effective Date are not
set forth on the table: (i) if the actual Stock Price on the Fundamental
Change Effective Date is between two Stock Prices on the table or the actual
Fundamental Change Effective Date is between two Fundamental Change Effective
Dates on the table, the Make-Whole Premium will be determined by a
straight-line interpolation between the Make-Whole Premiums set forth for the
two Stock Prices and the two Fundamental Change

 

27

 

Effective Dates on the table
based on a 365-day year, as applicable, (ii) if the Stock Price on the
Fundamental Change Effective Date exceeds $[ ] per share, subject to adjustment
as set forth herein, no Make-Whole Premium will be paid, and (iii) if the
Stock Price on the Fundamental Change Effective Date is less than $[ ] per
share, subject to adjustment as set forth herein, no Make-Whole Premium will be
paid. If Holders of the Company’s Common Stock receive only cash in the
transaction, the Stock Price shall be the cash amount paid per share of the
Company’s Common Stock in connection with the Fundamental Change. Otherwise,
the Stock Price shall be equal to the average Closing Price of the Company’s
Common Stock over the 15 Trading Day period ending on the Trading Day
immediately preceding, and excluding, the applicable Fundamental Change
Effective Date.

 

Make-Whole Premium Upon a Fundamental Change
(Number of Additional Shares)

 

	
  Stock Price
  on Effective Date

  	
   

  	
  Effective
  Date

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

28

 

The Stock
Prices set forth in the first column of the table above will be adjusted as of
any date on which the Conversion Rate of the Securities is adjusted other than
an adjustment pursuant to the Make-Whole Premium described above. The adjusted
Stock Prices will equal the Stock Prices applicable immediately prior to such
adjustment multiplied by a fraction, the numerator of which is the Conversion
Rate immediately prior to the adjustment giving rise to the Stock Price
adjustment and the denominator of which is the Conversion Rate as so adjusted.
The number of additional shares set forth in the table above will be adjusted
in the same manner as the Conversion Rate as set forth in Section 4.07
hereof.

 

Notwithstanding
the foregoing paragraph, in no event will the total number of shares of Common
Stock issuable upon conversion of a Security exceed [ ] per $1,000 principal
amount, subject to proportional adjustment in the same manner as the Conversion
Rate as set forth in clauses (1) through (7) of Section 4.07(a) hereof.

 

(f)  By
delivering the number of shares of Common Stock issuable on conversion to the
Trustee plus a cash payment for a fractional share, the Company will be deemed
to have satisfied its obligation to pay the principal amount of the Securities
so converted and its obligation to pay accrued and unpaid interest, including
Special Interest, if any, attributable to the period from the most recent
Interest Payment Date through the Conversion Date (which amount will be deemed
cancelled, extinguished and forfeited).

 

(g)  A
conversion of the Securities by a Holder will be deemed for purposes of Section 4.01(e) to
be “in connection with” certain Fundamental Change transactions if the
conversion notice is received by the Conversion Agent on or subsequent to the
date 20 calendar days prior to the date announced by the Company as the
anticipated Fundamental Change Effective Date of the related Fundamental Change
but before the close of business on the Business Day immediately preceding the
related Fundamental Repurchase Date. The Company will notify Holders of
Securities of the anticipated Fundamental Change Date as promptly as
practicable following the date the Company publicly announces such Fundamental
Change, but in no event less than 20 days prior to such date.

 

Section 4.02                   Conversion
Procedure.

 

(a)  To
convert a Security, a Holder must (1) complete and manually sign the
conversion notice on the back of the Security and deliver such notice to the
Conversion Agent, (2) surrender the Security to the Conversion Agent,
which shall become irrevocable upon receipt by the Conversion Agent, (3) furnish
appropriate endorsements and transfer documents if required by the Registrar or
the Conversion Agent, (4) pay an amount equal to the interest, including
Special Interest, if any, as required by Section 4.02(c), and (5) pay
all transfer or similar taxes, if required pursuant to Section 4.04. The
date on which the Holder satisfies all of those requirements is the “Conversion Date.” Upon the conversion
of a Security, the Company will deliver the shares of Common Stock, without
service charge, as promptly as practicable after the Conversion Date, but in no
event later than third Business Days after the Conversion Date. 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 clauses (3), (4) and (5) of this Section 4.02(a) and
the Applicable Procedures as in effect from time to time.

 

29

 

(b)  The
person in whose name the shares of Common Stock are issuable upon conversion
shall be deemed to be a holder of record of such Common Stock on the Conversion
Date; provided, however, that no
surrender of a Security on any Conversion 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 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 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. Except as set forth in this Indenture, no payment or
adjustment will be made for dividends or distributions declared or made on
shares of Common Stock issued upon conversion of a Security prior to the
issuance of such shares.

 

(c) 
Holders of Securities 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 will receive the
semi-annual interest and Special Interest, if any, payable on the principal
amount of such Securities being surrendered for conversion on the corresponding
Interest Payment Date notwithstanding the conversion. Upon surrender of any
such Securities for conversion, such Securities shall also be accompanied by
payment in funds to the Conversion Agent acceptable to the Company of an amount
equal to the interest, including Special Interest, if any, payable on such
corresponding Interest Payment Date (but excluding any overdue interest on the
principal amount of such Security so converted that exists at the time such
Holder surrenders such Security for conversion). Notwithstanding the foregoing,
any such Holder which surrenders for conversion any Security (a) with
respect to which the Company has specified a Fundamental Change Repurchase Date
or a Redemption Date, in either case, that is after such Regular Record Date
and on or prior to the next succeeding Interest Payment Date, or (b) after
the last Regular Record Date prior to the Final Maturity Date, in either case,
need not pay the Company an amount equal to the interest, including Special Interest,
if any, on the principal amount of such Security so converted at the time such
Holder surrenders such Security for conversion. Except as otherwise provided in
this Section 4.02(c), no payment or adjustment will be made for accrued
interest, including Special Interest, if any, on a converted Security.

 

(d) 
Subject to Section 4.02(c), 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 Regular 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
(and the amount of any cash in lieu of fractional shares pursuant to Section 4.03)
shall be based on the aggregate principal amount of all Securities so
converted.

 

(e)  In
the case of any Security which is converted in part only, upon such conversion
the Company shall execute and the Trustee shall authenticate and deliver to the
Holder thereof, without service charge, a new Security or Securities of
authorized denominations in an aggregate principal amount equal to, and in
exchange for, the unconverted portion of the principal amount of such Security.
A Security may be converted in part, but only if the principal amount of such

 

30

 

part is an integral multiple of
$1,000 and the principal amount of such Security to remain outstanding after
such conversion is equal to $1,000 or any integral multiple of $1,000 in excess
thereof.

 

Section 4.03                   Fractional
Shares.

 

No fractional
shares of Common Stock shall be issued upon conversion of any Security or
Securities. If more than one Security shall be surrendered for conversion at
one time by the same Holder, the number of full shares which shall be issued
upon conversion thereof shall be computed on the basis of the aggregate
principal amount of the Securities (or specified portions thereof) so
surrendered. Instead of any fractional share of Common Stock which would
otherwise be issued upon conversion of any Security or Securities (or specified
portions thereof), the Company shall pay a cash adjustment in respect of such
fraction (calculated to the nearest one-100th of a share) in an amount equal to
the same fraction of the Closing Price of the Common Stock as of the Trading
Day preceding the date of conversion.

 

Section 4.04                   Taxes
on Conversion.

 

Except as
provided in the next sentence, the Company will pay any and all taxes (other
than taxes on income) and duties that may be payable in respect of the issue or
delivery of shares of Common Stock on conversion of Securities pursuant hereto.
A Holder delivering a Security for conversion shall be liable for and will be
required to pay any tax or duty which may be payable in respect of any transfer
involved in the issue and delivery of shares of Common Stock in a name other
than that of the Holder of the Security or Securities to be converted, and no
such issue or delivery shall be made unless the Person requesting such issue
has paid to the Company the amount of any such tax or duty, or has established
to the satisfaction of the Company that such tax or duty has been paid.

 

Section 4.05                   [Reserved].

 

Section 4.06                   Company
to Provide Common Stock.

 

(a)  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.

 

(b)  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 or similar rights and free of
any lien or adverse claim as the result of any action by the Company.

 

(c)  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.

 

(d)  The
Company will use its best efforts to ensure that the shares of Common Stock to
be issued upon conversion of the Securities will be registered under the
Securities Act of 1933, as amended. In the event that despite the Company’s
best efforts it is unable to deliver shares that

 

31

 

have been so registered, upon
conversion of the Securities, the Company may deliver shares of Common Stock
that have not been registered.

 

Section 4.07                   Adjustment
of Conversion Rate.

 

(a)  The
Conversion Rate shall be adjusted from time to time by the Company, without
duplication, as follows:

 

(1) If
the Company shall pay a dividend or make a distribution to all holders of
outstanding Common Stock in shares of Common Stock, the Conversion Rate in
effect immediately prior to the record date for the determination of
shareholders entitled to receive such dividend or other distribution shall be
increased so that the same shall equal the rate determined by multiplying the
Conversion Rate in effect immediately prior to such record date by a fraction
of which the numerator shall be the sum of the number of shares of Common Stock
outstanding at the close of business on such record date plus the total number
of shares of Common Stock constituting such dividend or other distribution and
of which the denominator shall be the number of shares of Common Stock
outstanding at the close of business on such record date. Such adjustment shall
be made successively whenever any such dividend or distribution is made and
shall become effective immediately after such record date. For the purpose of
this clause (1), the number of shares of Common Stock at any time outstanding
shall not include shares held in the treasury of the Company. The Company will
not pay any dividend or make any distribution on Common Stock held in the
treasury of the Company. If any dividend or distribution of the type described
in this clause is declared but not so paid or made, the Conversion Rate shall
again be adjusted to the Conversion Rate that would then be in effect as if
such dividend or distribution had not been declared.

 

(2) If
the Company shall subdivide its outstanding Common Stock into a greater number
of shares, or combine its outstanding Common Stock into a smaller number of
shares, the Conversion Rate in effect immediately prior to the day upon which
such subdivision or combination becomes effective shall be, in the case of a
subdivision of Common Stock, proportionately increased and, in the case of a
combination of Common Stock, proportionately reduced. Such adjustment shall be
made successively whenever any such subdivision or combination of the Common Stock
occurs and shall become effective immediately after the date upon which such
subdivision or combination becomes effective.

 

(3) If
the Company shall issue any rights or warrants (other than rights or warrants
referred to in Section 4.07(a)(4)) to all or substantially all holders of
its outstanding Common Stock entitling them to subscribe for or purchase shares
of Common Stock (or securities convertible into or exchangeable for Common
Stock) at a price per share (or having a Conversion Price per share) less than
the Current Market Price per share of Common Stock (as determined in accordance
with clause (9) of this Section 4.07(a)) on the record date for the
determination of shareholders entitled to receive such rights or warrants, the
Conversion Rate in effect immediately prior thereto shall be increased so that
the same shall equal the rate determined by multiplying the Conversion Rate in
effect at the opening of business on the date immediately prior to such record
date by a fraction of which the numerator shall be the number of shares of
Common Stock outstanding at the close of business on such record date plus the
number of additional shares of Common Stock so offered for subscription or
purchase (or into or

 

32

 

for which the convertible or
exchangeable securities so offered are convertible or exchangeable) and of
which the denominator shall be the number of shares of Common Stock outstanding
at the close of business on such record date plus the number of shares which
the aggregate offering price of the total number of shares of Common Stock so
offered for subscription or purchase (or the aggregate conversion price of the
convertible or exchangeable securities so offered for subscription or purchase,
which shall be determined by multiplying the number of shares of Common Stock
issuable upon conversion or exchange of such convertible or exchangeable
securities by the conversion price per share of Common Stock pursuant to the
terms of such convertible or exchangeable securities) would purchase at the
Current Market Price per share of Common Stock on such record date. Such
adjustment shall be made successively whenever any such rights or warrants are
issued, and shall become effective immediately after such record date. To the
extent that shares of Common Stock (or securities convertible into or
exchangeable for Common Stock) are not delivered pursuant to such rights or
warrants, upon the expiration or termination of such rights or warrants, the
Conversion Rate shall be readjusted to the Conversion Rate that would then be
in effect had the adjustments made upon the issuance of such rights or warrants
been made on the basis of delivery of only the number of shares of Common Stock
(or securities convertible into or exchangeable for Common Stock) actually
delivered. If such rights or warrants are not so issued, the Conversion Rate
shall again be adjusted to be the Conversion Rate that would then be in effect
if the record date for the determination of shareholders entitled to receive
such rights or warrants had not been fixed. In determining whether any rights
or warrants entitle the shareholders to subscribe for or purchase shares of
Common Stock at a price less than the Current Market Price per share of Common
Stock and in determining the aggregate offering price of the total number of
shares of Common Stock so offered, there shall be taken into account any
consideration received by the Company for such rights or warrants and any
amount payable on exercise or conversion thereof, the value of such
consideration, if other than cash, to be determined by the Board of Directors.

 

(4) In
case the Company shall, by dividend or otherwise, distribute to all or
substantially all holders of its Common Stock shares of any class of Capital
Stock of the Company (other than any dividends or distributions to which Section 4.07(a)(1) applies)
or evidences of its indebtedness, cash or other assets, including securities,
but excluding (x) any rights or warrants referred to in Section 4.07(a)(3),
(y) any stock, securities or other property or assets (including cash)
distributed in connection with a reclassification, change, merger,
consolidation, statutory share exchange, combination, sale, conveyance or lease
to which Section 4.11 hereof applies, and (z) dividends and
distributions paid exclusively in cash (the securities described in foregoing
clauses (x), (y) and (z) hereinafter in this Section 4.07(a)(4) called
the “securities”), then, in each such case, subject to the third succeeding paragraph
of this Section 4.07(a)(4), the Conversion Rate shall be increased so that
the same shall be equal to the rate determined by multiplying the Conversion
Rate in effect immediately prior to the close of business on the record date
(as defined in Section 4.07(a)(9)(C)) with respect to such distribution by
a fraction, the numerator of which shall be the Current Market Price
(determined as provided in Section 4.07(a)(9)) on such date, and the
denominator of which shall be such Current Market Price on such date less the
fair market value (as determined by the Board of Directors (except as described
below), whose determination shall be conclusive and set forth in a Board
Resolution) on such date of the portion of the shares of capital stock,
evidences of indebtedness, cash or other assets, including securities, so
distributed applicable to one share of Common Stock (determined on the basis of
the number of shares of the Common Stock outstanding on the record date).

 

33

 

Such increase
shall become effective immediately prior to the opening of business on the day
following the record date, or in the case of a Spin-off (as described below),
immediately prior to the opening of business on the day following the last
Trading Day of the Measurement Period. However, in the event that the then fair
market value (as so determined) of the portion of the securities so distributed
applicable to one share of Common Stock is equal to or greater than the Current
Market Price on the record date, in lieu of the foregoing adjustment, adequate
provision shall be made so that each Holder shall have the right to receive
upon conversion of a Security (or any portion thereof) the amount of shares of
capital stock, evidences of indebtedness, cash or other assets, including
securities, such Holder would have received had such Holder converted such
Security (or portion thereof) immediately prior to such record date. In the
event that such dividend or distribution is not so paid or made, the Conversion
Rate shall again be adjusted to be the Conversion Rate which would then be in
effect as if such dividend or distribution had not been declared.

 

If the Board
of Directors determines the fair market value of any distribution for purposes
of this Section 4.07(a)(4) by reference to the actual or when issued
trading market for any securities comprising all or part of such distribution,
it must in doing so consider the prices in such market over the same period
(the “Reference Period”)
used in computing the Current Market Price pursuant to Section 4.07(a)(9) to
the extent possible, unless the Board of Directors in a Board Resolution
determines in good faith that determining the fair market value during the
Reference Period would not be in the best interest of the Holder.

 

In the event
the Company distributes shares of capital stock of a Subsidiary or other
business unit of the Company, the Conversion Rate will be adjusted, if at all,
so that the same shall be equal to the rate determined by multiplying the Conversion
Rate in effect immediately prior to the close of business on the record date
(as defined in Section 4.07(a)(9)) with respect to such distribution by a
fraction, (i) the numerator of which shall be the Current Market Price
(determined as described below) on such date plus the fair market value on such
date of the portion of the shares of capital stock of such Subsidiary or other
business unit of the Company so distributed applicable to one share of Common
Stock (determined on the basis of the number of shares of the Common Stock
outstanding on the record date), and (ii) the denominator of which shall
be such Current Market Price on such date (determined as described below).

 

In respect of
a dividend or other distribution of shares of capital stock of a class or
series, or similar equity interest, of or relating to a Subsidiary or other
business unit of the Company which has a Subsidiary Closing Price (a “Spin-off”), the fair market value of
the securities to be distributed shall equal the average of the daily
Subsidiary Closing Price of such securities for the 10 consecutive Trading Days
commencing on and including the fifth Trading Day of such securities after the
effectiveness of the Spin-off (the “Measurement
Period”) and the Current Market Price shall be calculated over
the same Measurement Period; provided,
however, that in the event that an underwritten initial public
offering of the securities in the Spin-off occurs simultaneously with the
Spin-off, the fair market value of the securities distributed in the Spin-off
shall be the initial public offering price of such securities and the market
price per share of the Common Stock shall mean the Closing Price for the Common
Stock on the same Trading Day.

 

34

 

Rights or
warrants distributed by the Company to all holders of Common Stock entitling
the holders thereof to subscribe for or purchase shares of the Company’s
capital stock (either initially or under certain circumstances), which rights
or warrants, until the occurrence of a specified event or events (“Trigger Event”):

 

(i) are
deemed to be transferred with such shares of Common Stock,

 

(ii) are
not exercisable, and

 

(iii) are
also issued in respect of future issuances of Common Stock

 

shall be deemed
not to have been distributed for purposes of this Section 4.07(a)(4) (and
no adjustment to the Conversion Rate under this Section 4.07(a)(4) will
be required) until the occurrence of the earliest Trigger Event. If such right
or warrant is subject to subsequent events, upon the occurrence of which such
right or warrant shall become exercisable to purchase different securities,
evidences of indebtedness or other assets or entitle the holder to purchase a
different number or amount of the foregoing or to purchase any of the foregoing
at a different purchase price, then the occurrence of each such event shall be
deemed to be the date of issuance and record date with respect to a new right
or warrant (and a termination or expiration of the existing right or warrant
without exercise by the holder thereof). In addition, in the event of any
distribution (or deemed distribution) of rights or warrants, or any Trigger
Event or other event (of the type described in the preceding sentence) with
respect thereto, that resulted in an adjustment to the Conversion Rate under
this Section 4.07(a)(4):

 

(A) in the case of any such rights or warrants which shall all
have been redeemed or repurchased without exercise by any holders thereof, the
Conversion Rate shall be readjusted upon such final redemption or repurchase to
give effect to such distribution or Trigger Event, as the case may be, as
though it were a cash distribution, equal to the per share redemption or
repurchase price received by a holder of Common Stock with respect to such
rights or warrants (assuming such holder had retained such rights or warrants),
made to all holders of Common Stock as of the date of such redemption or
repurchase; and

 

(B) in the case of such rights or warrants all of which shall have
expired or been terminated without exercise, the Conversion Rate shall be
readjusted as if such rights and warrants had never been issued.

 

For purposes
of this Section 4.07(a)(4) and Sections 4.07(a)(1), 4.07(a)(2) and
4.07(a)(3), any dividend or distribution to which this Section 4.07(a)(4) is
applicable that also includes shares of Common Stock, a subdivision or
combination of Common Stock to which Section 4.07(a)(2) applies, or
rights or warrants to subscribe for or purchase shares of Common Stock to which
Section 4.07(a)(3) applies (or any combination thereof), shall be
deemed instead to be:

 

(A) a dividend or distribution of the evidences of indebtedness,
assets, shares of capital stock, rights or warrants other than such shares of
Common Stock, such subdivision or combination or such rights or warrants to
which Sections 4.07(a)(1), 4.07(a)2 and 4.07(a)(3) apply, respectively
(and any Conversion Rate increase required 

 

35

 

by this Section 4.07(a)(4) with
respect to such dividend or distribution shall then be made); immediately
followed by

 

(B) a dividend or distribution of such shares of Common Stock,
such subdivision or combination or such rights or warrants (and any further
Conversion Rate increase required by Sections 4.07(a)(1), 4.07(a)(2) and
4.07(a)(3) with respect to such dividend or distribution shall then be
made); except:

 

(i) the record date of such dividend or distribution shall be
substituted as (x) “the date fixed for the determination of stockholders
entitled to receive such dividend or other distribution”, “record date fixed
for such determination” and “record date” within the meaning of Section 4.07(a)(1),
(y) “the day upon which such subdivision becomes effective” and “the day
upon which such combination becomes effective” within the meaning of Section 4.07(a)(2),
and (z) “the record date fixed for the determination of stockholders
entitled to receive such rights or warrants,” such “record date,” “the record
date fixed for the determination of stockholders entitled to receive such
rights or warrants” and “such date fixed for the determination of stockholders
entitled to receive such rights or warrants” within the meaning of Section 4.07(a)(3);
and

 

(ii) any shares of Common Stock included in such dividend or
distribution shall not be deemed “outstanding at the close of business on the
record date fixed for such determination” within the meaning of Section 4.07(a)(1) and
any reduction or increase in the number of shares of Common Stock resulting
from such subdivision or combination shall be disregarded in connection with
such dividend or distribution.

 

(5) To
the extent the Company has a Rights Plan in effect upon conversion of the
Securities pursuant to this Article 4: (i) if such Rights have not
separated from the Common Stock prior to the conversion of the Securities, each
share of Common Stock issued upon conversion of the Securities pursuant to this
Article 4 shall be entitled to receive the appropriate number of Rights,
if any, and the certificates representing the Common Stock issued upon such
conversion shall bear such legends, if any, in each case as may be provided by
the terms of any Rights Plan; or (ii) if such Rights have separated from
the Common Stock prior to the conversion of the Securities, the Conversion Rate
will be adjusted as though the Rights were being distributed to all holders of
Common Stock on the date of such separation. If such an adjustment is made and
the Rights are later redeemed, invalidated or terminated, then a corresponding
reversing adjustment will be made to the Conversion Rate on an equitable basis.

 

(6) In
case the Company shall, by dividend or otherwise, distribute to all or
substantially all holders of its Common Stock cash (excluding any cash that is
distributed upon a reclassification, change, merger, consolidation, statutory
share exchange, combination, sale, conveyance or lease to which Section 4.11
hereof applies or as part of a distribution referred to in Section 4.07(a)(4) hereof),
then, and in each such case, immediately after the close of business on such
date, the Conversion Rate shall be increased so that the same shall equal the
rate determined by multiplying the Conversion Rate in effect immediately prior
to the close of business on such record date by a fraction:

 

36

 

(i)                         the numerator of which shall
be equal to the Current Market Price on the record date, and

 

(ii)                      the denominator of which shall be
equal to the Current Market Price on such date less an amount equal to the
quotient of (x) the sum of the aggregate amount of cash so distributed,
and (y) the number of shares of Common Stock outstanding on the record
date.

 

In the event
that such dividend or distribution is not so paid or made, the Conversion Rate
shall again be adjusted to be the Conversion Rate which would then be in effect
as if such dividend or distribution had not been declared.

 

(7) In
case a tender or exchange offer made by the Company or any of its subsidiaries
for all or any portion of the Common Stock shall expire, to the extent that the
cash and value of any other consideration included in the payment per share of
Common Stock in such offer exceeds Closing Price per share of Common Stock
on the day after the date of the last time (the “Expiration Time”) tenders could have
been made pursuant to such tender or exchange offer, the Conversion Rate shall
be adjusted so that the same shall equal the rate determined by multiplying the
Conversion Rate in effect immediately prior to close of business on the date of
the Expiration Time by a fraction:

 

(i)                         the numerator of which shall
be the sum of (x) the fair market value (determined as set forth in Section 4.07(a)(9))
of the aggregate consideration payable to stockholders based on the acceptance (up
to any maximum specified in the terms of the tender or exchange offer) of all
shares validly tendered or exchanged and not withdrawn as of the Expiration
Time (the shares deemed so accepted, up to any such maximum, being referred to
as the “Purchased Shares”)
and (y) the product of the number of shares of Common Stock outstanding
(less any Purchased Shares) at the Expiration Time and the Current Market Price
of the Common Stock on the Trading Day next succeeding the Expiration Time, and

 

(ii)                      the denominator shall be (x) the
number of shares of Common Stock outstanding (including any tendered or
exchanged shares) at the Expiration Time multiplied by (y) the Current
Market Price of the Common Stock on the Trading Day next succeeding the
Expiration Time.

 

Such increase
(if any) shall become effective immediately prior to the opening of business on
the day following the Expiration Time. In the event that the Company is
obligated to purchase shares pursuant to any such tender offer, but the Company
is permanently prevented by applicable law from effecting any such purchases or
all such purchases are rescinded, the Conversion Rate shall again be adjusted
to be the Conversion Rate which would then be in effect as if such tender or
exchange offer had not been made. If the application of this Section 4.07(a)(7) to
any tender or exchange offer would result in a decrease in the Conversion Rate,
no adjustment shall be made for such tender or exchange offer under this Section 4.07(a)(7).

 

(8) [Reserved].

 

37

 

(9) For
purposes of this Section 4.07(a), the following terms shall have the
meanings indicated:

 

(A) “Current Market Price” shall mean the
average of the daily Closing Prices per share of Common Stock for the 10 consecutive
Trading Days immediately prior to the date in question; provided, however, that if:

 

(i) the “ex”
date (as hereinafter defined) for any event (other than the issuance or
distribution requiring such computation) that requires an adjustment to the Conversion
Rate pursuant to Section 4.07(a)(1), (2), (3), (4), (6) or (7) occurs
during such 10 consecutive Trading Days, the Closing Price for each Trading Day
prior to the “ex” date for such other event shall be adjusted by dividing such
Closing Price by the same fraction by which the Conversion Rate is so required
to be adjusted as a result of such other event;

 

(ii) the “ex”
date for any event (other than the issuance or distribution requiring such
computation) that requires an adjustment to the Conversion Rate pursuant to Section 4.07(a)(1),
(2), (3), (4), (6) or (7) occurs on or after the “ex” date for the
issuance or distribution requiring such computation and prior to the day in
question, the Closing Price for each Trading Day on and after the “ex” date for
such other event shall be adjusted by dividing such Closing Price by the
reciprocal of the fraction by which the Conversion Rate is so required to be
adjusted as a result of such other event; and

 

(iii) the
“ex” date for the issuance or distribution requiring such computation is prior
to the day in question, after taking into account any adjustment required
pursuant to clause (i) or (ii) of this proviso, the Closing Price for
each Trading Day on or after such “ex” date shall be adjusted by adding thereto
the amount of any cash and the fair market value (as determined by the Board of
Directors in a manner consistent with any determination of such value for
purposes of Section 4.07(a)(4) or (7), whose determination shall be
conclusive and set forth in a Board Resolution) of the evidences of
indebtedness, shares of capital stock or assets being distributed applicable to
one share of Common Stock as of the close of business on the day before such “ex”
date.

 

For purposes
of any computation under Section 4.07(a)(7), the Current Market Price of
the Common Stock on any date shall be deemed to be the average of the daily
Closing Prices per share of Common Stock for such day and the next two
succeeding Trading Days; provided, however,
that if the “ex” date for any event (other than the tender offer requiring such
computation) that requires an adjustment to the Conversion Rate pursuant to Section 4.07(a)(1),
(2), (3), (4), (6) or (7) occurs on or after the Expiration Time for
the tender or exchange offer requiring such computation and prior to the day in
question, the Closing Price for each Trading Day on and after the “ex” date for
such other event shall be adjusted by dividing such Closing Price by the
reciprocal of the fraction by which the Conversion Rate is so required to be
adjusted as a result of such other event. For purposes of this paragraph, the
term “ex” date, when used:

 

(x) with respect to any issuance or distribution, means the first
date on which the Common Stock trades regular way on the relevant exchange or
in the relevant market from which the Closing Price was obtained without the
right to receive such issuance or distribution;

 

38

 

(y) with respect to any subdivision or combination of shares of
Common Stock, means the first date on which the Common Stock trades regular way
on such exchange or in such market after the time at which such subdivision or
combination becomes effective; and

 

(z) with respect to any tender or exchange offer, means the first date
on which the Common Stock trades regular way on such exchange or in such market
after the Expiration Time of such offer.

 

Notwithstanding
the foregoing, whenever successive adjustments to the Conversion Rate are
called for pursuant to this Section 4.07(a), such adjustments shall be
made to the Current Market Price as may be necessary or appropriate to
effectuate the intent of this Section 4.07(a) and to avoid unjust or
inequitable results as determined in good faith by the Board of Directors.

 

(B) “fair
market value” shall mean the amount which a willing buyer would pay a willing
seller in an arm’s length transaction.

 

(C) For
purposes of this Section 4.07, “record
date” shall mean, with respect to any dividend, distribution or
other transaction or event in which the holders of Common Stock have the right
to receive any cash, securities or other property or in which the Common Stock
(or other applicable security) is exchanged or converted into any combination
of cash, securities or other property, the date fixed for determination of
shareholders entitled to receive such cash, security or other property (whether
or not such date is fixed by the Board of Directors or by statute, contract or
otherwise).

 

(b)  In
any case in which this Section 4.07 shall require that an adjustment be
made following a record date or Expiration Time, as the case may be,
established for the purposes specified in this Section 4.07, the Company
may elect to defer (but only until five Business Days following the filing by
the Company with the Trustee of the certificate described in Section 4.09)
issuing to the Holder of any Security converted after such record date or
Expiration Time the shares of Common Stock and other Capital Stock of the
Company issuable upon such conversion over and above the shares of Common Stock
and other Capital Stock of the Company (or other cash, property or securities,
as applicable) issuable upon such conversion only on the basis of the
Conversion Rate prior to adjustment; and, in lieu of any cash, property or
securities the issuance of which is so deferred, the Company shall issue or
cause its transfer agents to issue due bills or other appropriate evidence
prepared by the Company of the right to receive such cash, property or
securities. If any distribution in respect of which an adjustment to the
Conversion Rate is required to be made as of the record date or Expiration Time
therefore is not thereafter made or paid by the Company for any reason, the
Conversion Rate shall be readjusted to the Conversion Rate which would then be
in effect if such record date had not been fixed or such record date or
Expiration Time had not occurred.

 

(c)  If
one or more events occur requiring an adjustment be made to the Conversion Rate
for a particular period, adjustments to the Conversion Rate shall be determined
by the Company’s Board of Directors to reflect the combined impact of such
Conversion Rate adjustment events, as set out in this Section 4.07, during
such period.

 

39

 

(d) In no
event shall the total number of shares of Common Stock issuable upon conversion
of a Security exceed [ ] shares per $1,000 principal amount of Securities,
other than adjustments to Conversion Rate as set forth in clauses (1) through
(7) of Section 4.07(a).

 

Section 4.08                   No
Adjustment.

 

(a)  No
adjustment in the Conversion Rate shall be required if Holders may participate
in the transactions set forth in Section 4.07 above (to the same extent as
if the Securities had been converted into Common Stock immediately prior to
such transactions) without converting the Securities held by such Holders.

 

(b)  No
adjustment in the Conversion Rate shall be required unless such adjustment
would require an increase or decrease of at least 1% in the Conversion Rate as
last adjusted; provided, however, that any adjustments which would
be required to be made but for this Section 4.08(b) shall be carried
forward and taken into account in any subsequent adjustment; provided, further,
that any carry forward amount shall be paid to a Holder of Securities upon
conversion of such Securities, regardless of the 1% threshold. All calculations
under this Article 4 shall be made to the nearest cent or to the nearest
one-ten thousandth of a share, as the case may be, with one half cent and
0.00005 of a share, respectively, being rounded upward.

 

(c)  No
adjustment in the Conversion Rate shall be required for issuances of Common
Stock pursuant to a Company plan for reinvestment of dividends or interest or
for a change in the par value or a change to no par value of the Common Stock.

 

(d)  To
the extent that the Securities become convertible into the right to receive
cash, no adjustment need be made thereafter as to the cash.

 

(e)  No
adjustment in the Conversion Rate shall be required with respect to accrued and
unpaid interest, including Special Interest, on the Securities.

 

Section 4.09                   Notice
of Adjustment.

 

Whenever the
Conversion Rate or conversion privilege is required to be adjusted pursuant to
this Indenture, the Company shall promptly mail to Holders a notice of the
adjustment and file with the Trustee an Officers’ Certificate briefly stating
the facts requiring the adjustment, the adjusted Conversion Rate and the manner
of computing it. Failure to mail such notice or any defect therein shall not
affect the validity of any such adjustment. Unless and until the Trustee shall
receive an Officers’ Certificate setting forth an adjustment of the Conversion
Rate, the Trustee may assume without inquiry that the Conversion Rate has not
been adjusted and that the last Conversion Rate of which it has knowledge
remains in effect.

 

Section 4.10                   Notice
of Certain Transactions.

 

In the event
that there is a dissolution or liquidation of the Company, the Company shall
mail to Holders and file with the Trustee a notice stating the proposed
effective date. The Company shall mail such notice at least 20 days before such
proposed effective date. Failure to mail such notice or any defect therein
shall not affect the validity of any transaction referred to in this Section 4.10.

 

40

 

Section 4.11                   Effect
of Reclassification, Consolidation, Merger or Sale on Conversion Privilege.

 

If any of the
following events occur:

 

(i) any
recapitalization, reclassification or change of the outstanding shares of
Common Stock (other than a change in par value, or from par value to no par
value, or from no par value to par value, or as a result of a subdivision or
combination);

 

(ii) any
merger, consolidation, statutory share exchange or combination of the Company
with another corporation as a result of which holders of Common Stock shall be
entitled to receive stock, securities or other property or assets (including
cash) with respect to or in exchange for such Common Stock;

 

(iii) any
sale, conveyance or lease of the properties and assets of the Company as, or
substantially as, an entirety to any other corporation; or

 

(iv) any
statutory share exchange,

 

in each case,
as a result of which holders of Common Stock shall be entitled to receive
stock, securities or other property or assets (including cash) with respect to
or in exchange for such Common Stock, the Company or the successor or
purchasing corporation, as the case may be, shall execute with the Trustee a
supplemental indenture (which shall comply with the TIA as in force at the date
of execution of such supplemental indenture if such supplemental indenture is
then required to so comply) providing that each Security shall be convertible
into the kind and amount of shares of stock and other securities or property or
assets (including cash) which such Holder would have been entitled to receive
upon such recapitalization, reclassification, change, merger, consolidation,
statutory share exchange, combination, sale, conveyance or lease. In the event
holders of the Common Stock have the opportunity to elect the form of
consideration to be received in such business combination, the Securities will
be convertible into the weighted average of the kind and amount of consideration
received by the holders of the Common Stock that affirmatively make such an
election. The Company may not become a party to any such transaction unless its
terms are consistent with the preceding. None of the foregoing provisions shall
affect the right of a Holder of Securities to convert its Securities into
shares of the Common Stock prior to the effective date of the business
combination.

 

Such
supplemental indenture shall provide for adjustments which shall be as nearly
equivalent as may be practicable to the adjustments provided for in this Article 4.
If, in the case of any such recapitalization, reclassification, change, merger,
consolidation, statutory share exchange, combination, sale, conveyance or
lease, the stock or other securities and assets receivable thereupon by a
holder of shares of Common Stock includes shares of stock or other securities
and assets of a corporation other than the successor or purchasing corporation,
as the case may be, in such recapitalization, reclassification, change, merger,
consolidation, statutory share exchange, combination, sale or conveyance, then
such supplemental indenture shall also be executed by such other corporation
and shall contain such additional provisions to protect the interests of the
Holders of the Securities as the Board of Directors shall reasonably consider

 

41

 

necessary by reason of the foregoing,
including to the extent practicable the provisions providing for the repurchase
rights set forth in Article 3 hereof.

 

In the event
the Company shall execute a supplemental indenture pursuant to this Section 4.11,
the Company shall promptly file with the Trustee an Officers’ Certificate
briefly stating the reasons therefor, the kind or amount of shares of stock or
other securities or property (including cash) that a holder of shares of Common
Stock equal to the Conversion Rate immediately prior to such transaction would
have owned or been entitled to receive after any such transaction, and any
adjustment to be made with respect thereto. The Company shall cause notice of
the execution of such supplemental indenture to be mailed to each Holder, at
the address of such Holder as it appears on the register of the Securities,
within 20 days after execution thereof. Failure to deliver such notice shall
not affect the legality or validity of such supplemental indenture.

 

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

 

If this Section 4.11
applies to any event or occurrence, Section 4.07(a) hereof shall not
apply.

 

Section 4.12                   Trustee’s
Disclaimer.

 

(a)  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
and Opinion of Counsel, including the Officers’ Certificate with respect
thereto which the Company is obligated to file with the Trustee pursuant to Section 4.09.
Unless and until the Trustee receives such Officers’ Certificate delivered
pursuant to Section 4.09, the Trustee may assume without inquiry that no
such adjustment has been made and the last Conversion Rate of which the Trustee
has knowledge remains in effect. 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.

 

(b)  The
Trustee shall not be under any responsibility to determine the correctness of
any provisions contained in any supplemental indenture executed pursuant to Section 4.11,
but may accept as conclusive evidence of the correctness thereof, and shall be
fully protected in relying upon, the Officers’ Certificate and Opinion of
Counsel with respect thereto which the Company is obligated to file with the
Trustee pursuant to Section 4.11 and Section 9.01, respectively.

 

Section 4.13                   Voluntary
Increase.

 

The Company
from time to time may increase the Conversion Rate, to the extent permitted by
law, by any amount for any period of time if the period is at least 20 days,
the increase is irrevocable during the period and the Board of Directors
determines that such increase would be in the best interests of the Company or
to avoid or diminish income tax to holders of shares of Common Stock in
connection with a dividend or distribution of stock, or rights to

 

42

 

acquire stock, or similar event, and the
Company provides 15 days’ prior written notice of any increase in the
Conversion Rate to the Trustee and the Holders; provided, however,
that in no event may the Company increase the Conversion Rate such that it
causes the Conversion Price to be less than the par value of a share of Common
Stock.

 

Article 5

Subordination

 

Section 5.01                   Securities
Subordinated to Senior Debt.

 

The Company
covenants and agrees, and each Holder of Securities, by such Holder’s
acceptance thereof, likewise covenants and agrees, that the Indebtedness
represented by the Securities and the payment of the principal of and premium,
if any, and interest, including Special Interest, if any, on each and all of
the Securities is hereby expressly subordinated and junior, to the extent and
in the manner set forth in this Section 5.01, in right of payment to the
prior payment in full of all Senior Debt; provided,
however, that the Securities, the
Indebtedness represented thereby and the payment of the principal of and
premium, if any, and interest, including Special Interest, if any, on the
Securities in all respects shall rank equally with, or prior to, all existing
and future Indebtedness of the Company that is expressly subordinated to any
Senior Debt.

 

(a)  In
the event of any payment or distribution of assets of the Company upon any
dissolution, winding-up, liquidation or reorganization of the Company, whether
in bankruptcy, insolvency, reorganization or receivership proceedings or upon
an assignment for the benefit of creditors or any other marshalling of the
assets and liabilities of the Company or otherwise, the holders of all Senior
Debt shall first be entitled to receive payment of the full amount due thereon
in respect of all such Senior Debt and all other amounts due or provision shall
be made for such amount in cash, or other payments satisfactory to the holders
of Senior Debt, before the Holders of any of the Securities are entitled to
receive any payment or distribution of any character, whether in cash,
securities or other property, on account of the principal of or premium, if
any, or interest, including Special Interest, if any, on the Securities.

 

(b)  In
the event of any acceleration of Maturity of the Securities because of an Event
of Default, unless the full amount due in respect of all Senior Debt is paid in
cash or other form of payment satisfactory to the holders of Senior Debt, no
payment shall be made by the Company with respect to the principal of, premium,
if any, or interest, including Special Interest, if any, on the Securities or
to acquire any of the Securities (including any conversion, redemption or cash
repurchase pursuant to the exercise of the Fundamental Change Repurchase Right
or otherwise), and the Company shall give prompt written notice of such
acceleration to such holders of Senior Debt.

 

(c)  In
the event of and during the continuance of any default in payment of the
principal of or premium, if any, or interest on, rent or other payment
obligations in respect of, any Senior Debt, unless all such payments due in
respect of such Senior Debt have been paid in full in cash or other payments
satisfactory to the holders of Senior Debt, no payment shall be made by the
Company with respect to the principal of, premium, if any, or interest,
including Special Interest, if any, on the Securities or to acquire any of the
Securities (including any conversion,

 

43

 

redemption, or cash repurchase pursuant to
the exercise of the Fundamental Change Repurchase Right). The Company shall
give prompt written notice to the Trustee of any default under any Senior Debt
or under any agreement pursuant to which Senior Debt may have been issued.

 

(d)  In
the event that, notwithstanding the foregoing provisions of Sections 5.01(a),
5.01(b) and 5.01(c), any payment on account of principal, premium, if any,
or interest, including Special Interest, if any, on the Securities shall be
made by or on behalf of the Company and received by the Trustee, by any Holder
or by any Paying Agent (or, if the Company is acting as its own Paying Agent,
money for any such payment shall be segregated and held in trust):

 

(1) after
the occurrence of an event specified in Section 5.01(a) or 5.01(b),
then, unless all Senior Debt is paid in full in cash, or provision shall be
made therefor; or

 

(2) after
the happening of an event of default of the type specified in Section 5.01(c) above,
then, unless the amount of such Senior Debt then due shall have been paid in
full, or provision made therefor or such event of default shall have been cured
or waived, such payment (subject, in each case, to the provisions of Section 5.07
hereof) shall be held in trust for the benefit of, and shall be immediately
paid over to, the holders of Senior Debt or their representative or
representatives or the trustee or trustees under any indenture under which any
instruments evidencing any of the Senior Debt may have been issued, as their
interests may appear.

 

Section 5.02                   Subrogation.

 

Subject to the
payment in full of all Senior Debt to which the Indebtedness evidenced by the
Securities is in the circumstances subordinated as provided in Section 5.01
hereof, the Holders of the Securities shall be subrogated to the rights of the
holders of such Senior Debt to receive payments or distributions of cash,
property or securities of the Company applicable to such Senior Debt until all
amounts owing on the Securities shall be paid in full, and, as between the
Company, its creditors other than holders of such Senior Debt, and the Holders
of the Securities, no such payment or distribution made to the holders of Senior
Debt by virtue of this Article which otherwise would have been made to the
holders of the Securities shall be deemed to be a payment by the Company on
account of such Senior Debt; provided,
however, that the provisions of this Article are and are intended
solely for the purpose of defining the relative rights of the Holders of the
Securities, on the one hand, and the holders of Senior Debt, on the other hand.

 

Section 5.03                   Obligation
of the Company Is Absolute and Unconditional.

 

Nothing
contained in this Article or elsewhere in the Indenture or in the
Securities is intended to or shall impair, as between the Company, its
creditors other than the holders of Senior Debt, and the Holders of the
Securities, the obligation of the Company, which is absolute and unconditional,
to pay to the Holders of the Securities the principal of and premium, if any,
and interest, including Special Interest, if any, on the Securities as and when
the same shall become due and payable in accordance with their terms, or is intended
to or shall affect the relative rights of the Holders of the Securities and
creditors of the Company other than the holders of Senior Debt, nor shall
anything contained herein or therein prevent the Trustee or the

 

44

 

Holder of any Security from exercising all
remedies otherwise permitted by applicable law upon default under the
Indenture, subject to the rights, if any, under this Article of the
holders of Senior Debt in respect of cash, property or securities of the
Company received upon the exercise of any such remedy.

 

Section 5.04                   Maturity
of or Default on Senior Debt.

 

Upon the
maturity of any Senior Debt by lapse of time, acceleration or otherwise, all
principal of or premium, if any, or interest on, rent or other payment
obligations in respect of all such matured Senior Debt shall first be paid in
full, or such payment shall have been duly provided for, before any payment on
account of principal, or premium, if any, or interest, including Special Interest,
if any, is made upon the Securities.

 

Section 5.05                   Payments
on Securities Permitted.

 

Except as
expressly provided in this Article, nothing contained in this Article shall
affect the obligation of the Company to make, or prevent the Company from making,
payments of the principal of, or premium, if any, or interest, including
Special Interest, if any, on the Securities in accordance with the provisions
hereof and thereof, or shall prevent the Trustee or any Paying Agent from
applying any moneys deposited with it hereunder to the payment of the principal
of, or premium, if any, or interest, including Special Interest, if any, on the
Securities.

 

Section 5.06                   Effectuation
of Subordination by Trustee.

 

Each Holder of
Securities, by such Holder’s acceptance thereof, authorizes and directs the
Trustee on such Holder’s behalf to take such action as may be necessary or
appropriate to effectuate the subordination provided in this Article and
appoints the Trustee such Holder’s attorney-in-fact for any and all such
purposes. Upon any payment or distribution of assets of the Company referred to
in this Article, the Trustee and the Holders of the Securities shall be
entitled to rely upon any order or decree made by any court of competent
jurisdiction in which any such dissolution, winding-up, liquidation or
reorganization proceeding affecting the affairs of the Company is pending or
upon a certificate of the trustee in bankruptcy, receiver, assignee for the
benefit of creditors, liquidating trustee or agent or other Person making any
payment or distribution, delivered to the Trustee or to the Holders of the
Securities, for the purpose of ascertaining the Persons entitled to participate
in such payment or distribution, and as to other facts pertinent to the right
of such Persons under this Article, and, if such evidence is not furnished, the
Trustee may defer any payment to such Persons pending judicial determination as
to the right of such Persons to receive such payment.

 

Section 5.07                   Knowledge
of Trustee.

 

Notwithstanding
the provisions of this Article or any other provisions of this Indenture,
the Trustee shall not be charged with knowledge of the existence of any facts
that would prohibit the making of any payment or distribution by the Trustee,
and the Trustee and Paying Agent may continue to make payments on the
Securities, unless a Responsible Officer of the Trustee having responsibility
for the administration of the trust established by the Indenture shall have
received written notice thereof from the Company expressly directing the
Trustee that such payment cannot be made and, prior to the receipt of any such
written notice, the Trustee shall be entitled

 

45

 

in all respects to assume that no such
default or facts exist; provided,
however, that unless on the third
Business Day prior to the date upon which by the terms hereof any such moneys
may become payable for any purpose the Trustee shall have received the notice
provided for in this Section 5.07, then, anything herein contained to the
contrary notwithstanding, the Trustee shall have full power and authority to
receive such moneys and apply the same to the purpose for which they were
received, and shall not be affected by any notice to the contrary which may be received
by it on or after such date.

 

Section 5.08                   Trustee’s
Relation to Senior Debt.

 

The Trustee
shall be entitled to all the rights set forth in this Article with respect
to any Senior Debt at the time held by it, to the same extent as any other
holder of Senior Debt and nothing in the Indenture shall deprive the Trustee of
any of its rights as such holder. Nothing contained in this Article shall
apply to claims of or payments to the Trustee under or pursuant to Section 9.08
of this Indenture. With respect to the holders of Senior Debt, the Trustee
undertakes to perform or to observe only such of its covenants and obligations
as are specifically set forth in this Article (which covenant and
obligation is limited solely to withhold payment to the Holders if the Trustee
has actually received the written notice from the Company described in Section 5.07
above to the effect that a payment should not be made to the Holders), and no
implied covenants or obligations with respect to the holders of Senior Debt
shall be read into the Indenture against the Trustee. The Trustee shall not be
deemed to owe any duties (including, without limitation, any fiduciary duty) to
the holders of Senior Debt and the Trustee shall not be liable to any holder of
Senior Debt if it shall pay over or deliver to Holders, the Company or any
other Person moneys or assets to which any holder of Senior Debt shall be
entitled by virtue of this Article or otherwise.

 

Section 5.09                   Rights
of Holders of Senior Debt Not Impaired.

 

No right of
any present or future holder of any Senior Debt to enforce the subordination
herein shall at any time or in any way be prejudiced or impaired by any act or
failure to act on the part of the Company or by any noncompliance by the
Company with the terms, provisions and covenants of the Indenture, regardless
of any knowledge thereof any such holder may have or be otherwise charged with.

 

Section 5.10                   Modification
of Terms of Senior Debt.

 

Any renewal or
extension of the time of payment of any Senior Debt or the exercise by the
holders of Senior Debt of any of their rights under any instrument creating or
evidencing Senior Debt, including, without limitation, the waiver of default
thereunder, may be made or done all without notice to or assent from the
Holders of the Securities or the Trustee. No compromise, alteration, amendment,
modification, extension, renewal or other change of, or waiver, consent or
other action in respect of, any liability or obligation under or in respect of,
or of any of the terms, covenants or conditions of any indenture or other
instrument under which any Senior Debt is outstanding or of such Senior Debt,
whether or not such compromise, alteration, amendment, modification, extension,
renewal or other change of, or waiver, consent or other action is in accordance
with the provisions or any applicable document, shall in any way

 

46

 

alter or affect any of the provisions of this
Article or of the Securities relating to the subordination thereof.

 

Section 5.11                   Certain
Conversions Not Deemed Payment.

 

For the
purposes of this Article 5 only:

 

(a) the
issuance and delivery of junior securities upon conversion of Securities in
accordance with Article 4 hereof shall not be deemed to constitute a
payment or distribution on account of the principal of, premium, if any, or
interest, including Special Interest, if any, on Securities or on account of
the purchase or other acquisition of Securities; and

 

(b) the
payment, issuance or delivery of cash (except in satisfaction of fractional
shares pursuant to Section 4.03 hereof), property or securities (other
than junior securities) upon conversion of a Security shall be deemed to
constitute payment on account of the principal, premium, if any, or interest,
including Special Interest, if any, of such Security. For the purposes of this Section 5.11,
the term “junior securities” means:

 

(1)          shares of any Company Common Stock; or

 

(2)          other securities of the Company that are
subordinated in right of payment to all Senior Debt that may be outstanding at
the time of issuance or delivery of such securities to substantially the same
extent as, or to a greater extent than, the Securities are so subordinated as
provided in this Article. Nothing contained in this Article 5 or elsewhere
in the Indenture or in the Securities is intended to or shall impair, as among
the Company, its creditors (other than holders of Senior Debt) and the Holders
of Securities, the right, which is absolute and unconditional, of the Holder of
any Security to convert such Security in accordance with Article 4 hereof.

 

Section 5.12                   No
Layering of Debt.  The Company will
not incur, create, issue, assume, guarantee or otherwise become liable for any
Indebtedness that is contractually subordinate or junior in right of payment to
any Senior Debt of the Company and senior in right of payment to the
Securities.

 

Article 6

Covenants

 

Section 6.01                   Payment
of Securities.

 

(a)  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. A
payment of principal or interest, including Special Interest, if any, shall be
considered paid on the date it is due if the Paying Agent (other than the
Company) holds by 10:00 a.m., New York City time, on that date money,
deposited by or on behalf of the Company, sufficient to make the payment.
Subject to

 

47

 

Section 4.02 and Section 3.11,
accrued and unpaid interest, including Special Interest, if any, on any
Security that is payable, and is punctually paid or duly provided for, on any
Interest Payment Date shall be paid to the Person in whose name that Security
is registered at the close of business on the Regular Record Date for such
interest at the office or agency of the Company maintained for such purpose.
Principal, Redemption Price, Fundamental Change Repurchase Price, interest and
Special Interest, in each case if payable, shall be considered paid on the
applicable date due if on such date (or, in the case of Fundamental Change
Repurchase Price, on the Business Day following the applicable Fundamental
Change Repurchase Date) the Trustee or the Paying Agent holds, in accordance
with this Indenture, money sufficient to pay all such amounts then due. The
Company shall, to the fullest extent permitted by law, pay interest in
immediately available funds on overdue principal amount and interest, including
Special Interest, if any, at the annual rate borne by the Securities compounded
semi-annually, which interest shall accrue from the date such overdue amount
was originally due to the date payment of such amount, including interest
thereon, has been made or duly provided for. All such interest shall be payable
on demand.

 

(b) 
Payment of the principal of and interest, including Special Interest, if any,
on the Securities shall be made at the office or agency of the Company
maintained for that purpose, which shall initially be at the Drop Agent’s
Office, in such coin or currency of the United States of America as at the time
of payment is legal tender for payment of public and private debts; provided, however,
that the Company may pay principal, interest and Special Interest, in respect
of any Certificated Security by check or wire transfer payable in such money; provided, further, that at the option of
the Company payment of interest and Special Interest may be made by check
mailed to the address of the Person entitled thereto as such address appears in
the register of the Securities; provided,
further, that a Holder with an aggregate principal amount in excess
of $5,000,000 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 Trustee at least 10 Business Days prior to the payment
date. Any wire transfer instructions received by the Trustee will remain in
effect until revoked by the Holder. Notwithstanding the foregoing, so long as
the Securities are registered in the name of a Depositary or its nominee, all
payments thereon shall be made by wire transfer of immediately available funds
to the account of the Depositary or its nominee.

 

Section 6.02                   Corporate
Existence.

 

Subject to Article 7
hereof, the Company will do or cause to be done all things necessary to
preserve and keep in full force and effect its corporate existence, rights
(charter and statutory) and franchises; provided,
however, that the Company shall
not be required to preserve any such right or franchise if the Company
determines that the preservation thereof is no longer desirable in the conduct
of the business of the Company and that the loss thereof is not disadvantageous
in any material respect to the Holders.

 

Section 6.03                   Maintenance
of Properties.

 

The Company
will maintain and keep its properties and every part thereof in such repair,
working order and condition, and make or cause to be made all such needful and
proper repairs, renewals and replacements thereof, as in the judgment of the
Company are necessary in the interests of the Company; provided, however,
that nothing contained in this Section shall prevent

 

48

 

the Company from selling, abandoning or
otherwise disposing of any of its properties or discontinuing a part of its
business from time to time if, in the judgment of the Company, such sale,
abandonment, disposition or discontinuance is advisable and does not materially
adversely affect the interests or business of the Company.

 

Section 6.04                   Payment
of Taxes and Other Claims.

 

The Company
will, and will cause any Significant Subsidiary to, promptly pay and discharge
or cause to be paid and discharged all material taxes, assessments and
governmental charges or levies lawfully imposed upon it or upon its income or
profits or upon any of its property, real or personal, or upon any part
thereof, as well as all material claims for labor, materials and supplies
which, if unpaid, might by law become a lien or charge upon its property; provided, however,
that neither the Company nor any Significant Subsidiary shall be required to
pay or discharge or cause to be paid or discharged any such tax, assessment,
charge, levy or claim if the amount, applicability or validity thereof shall
currently be contested in good faith by appropriate proceedings and if the
Company or such Significant Subsidiary, as the case may be, shall have set
aside on its books reserves deemed by it adequate with respect thereto.

 

Section 6.05                   Reports.

 

The Company
shall timely 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 is required to file them with the
SEC, the Company shall file copies of all such reports, information and other
documents with the Trustee; provided
that any such reports, information and documents filed with the SEC pursuant to
its Electronic Data Gathering, Analysis and Retrieval (or EDGAR) system shall
be deemed to be filed with the Trustee. The Company shall inform the Trustee by
electronic mail or other written means that it has filed with the SEC an annual
report on Form 10-K or quarterly report on Form 10-Q. The Company
also shall at all times comply with the provisions of Section 314(a) of
the TIA. In the event the Company is no longer subject to the reporting
requirements of Section 13 or 15(d) of the Exchange Act, the Company
shall, if required to do so under rules and regulations prescribed by the
SEC, provide the trustee with such reports containing such information as would
have been required to be filed with the SEC had we continued to have been
subject to such reporting requirements, as may be prescribed in such rules and
regulations. 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 6.06                   Compliance
Certificate.

 

The Company
shall deliver to the Trustee, within 90 days after the end of each fiscal year
of the Company, an Officers’ Certificate stating whether or not to the
knowledge of the signer thereof the Company is in default in the performance
and observance of any of the terms, provisions and conditions of this Indenture
(without regard to any period of grace or requirement of notice provided
hereunder) and, if the Company shall be in Default, specifying all such

 

49

 

Defaults and the nature and the status
thereof of which the signer may have knowledge. Within five Business Days of an
Officer of the Company coming to have actual knowledge of a Default, regardless
of the date, the Company shall deliver an Officers’ Certificate to the Trustee
specifying such Default and the nature and status thereof.

 

Article 7

Consolidation; Merger; Conveyance; Transfer or Lease

 

Section 7.01                   Company
May Consolidate, Etc., Only on Certain Terms.

 

(a)  The
Company may not, without the consent of the Holders, consolidate with, merge
into or convey, transfer or lease all or substantially all of the property and
assets of the Company and its Subsidiaries, taken as a whole, to another Person
unless:

 

(1) either
(A) the Company shall be the resulting or surviving corporation, or (B) the
Person (if other than the Company) formed by such consolidation or into which
the Company is merged, or the Person which acquires by transfer or lease all or
substantially all of the properties and assets of the Company, shall (i) be
a corporation incorporated and existing under the laws of the United States of
America or any State thereof or the District of Columbia, and (ii) expressly
assume, by an indenture supplemental hereto, executed and delivered to the
Trustee, in form satisfactory to the Trustee, the obligations of the Company
under the Securities, this Indenture and the performance or observance of every
covenant and provision of this Indenture and the Securities required 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) 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 occurred and be continuing;

 

(3) if,
as a result of such transaction, the Securities became convertible into Common
Stock or other securities issued by a third party, such third party agrees to
deliver such common stock or other securities upon conversion under the
Securities and the Indenture; and

 

(4) if
the Company will not be the resulting or surviving corporation, the Company
shall have, at or prior to the effective date of such consolidation, merger or
transfer, delivered to the Trustee an Officers’ Certificate and an Opinion of
Counsel, each stating that such consolidation, merger or transfer complies with
this Article and, if a supplemental indenture is required in connection
with such transaction, such supplemental indenture complies with this Article,
and that all conditions precedent herein provided for relating to such transaction
have been complied with.

 

(b)  For
purposes of the foregoing, the transfer (by lease, assignment, sale or
otherwise) of the properties and assets of one or more Subsidiaries of the
Company (other than to the

 

50

 

Company or another Subsidiary of the
Company), which, if such assets were owned by the Company, would constitute all
or substantially all of the properties and assets of the Company and its
Subsidiaries, taken as a whole, shall be deemed to be the transfer of all or
substantially all of the properties and assets of the Company.

 

Section 7.02                   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 all or substantially all of the
properties and assets of the Company and its Subsidiaries, taken as a whole, in
accordance with Section 7.01, the successor Person formed by such
consolidation or into which the Company is merged or to which such conveyance, transfer
or lease is made shall succeed to, and be substituted for, and may exercise
every right and power of, the Company under this Indenture with the same effect
as if such successor Person had been named as the Company herein, and
thereafter, except in the case of a lease, and except for obligations the
predecessor Person may have under a supplemental indenture, the predecessor
Person shall be relieved of all obligations and covenants under the Indenture
and the Securities.

 

Article 8

Default and Remedies

 

Section 8.01                   Events
of Default.

 

An “Event of Default” shall occur when any
of the following occurs (whatever the reason for such Event of Default and
whether it shall be occasioned by the provisions of Article 5 hereof or be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment, decree or order of any court or any order, rule or regulation of
any administrative or governmental body):

 

(a)  the
Company shall fail to pay when due the principal, Redemption Price or any Fundamental
Change Repurchase Price of any Security, including any Make-Whole Premium, when
the same becomes due and payable whether at the Final Maturity Date, upon
redemption, repurchase, acceleration or otherwise whether or not such payment
is prohibited by Article 5 hereof; or

 

(b)  the
Company shall fail to pay an installment of interest, including Special
Interest, if any, on any of the Securities, which failure continues for 30 days
after the date when due whether or not such payment is prohibited by Article 5
hereof; or

 

(c)  the
Company shall fail to deliver when due all shares of Common Stock, together
with cash instead of fractional shares deliverable upon conversion of the
Securities, which failure continues for 10 days; or

 

(d)  the
Company fails to perform or observe any other term, covenant or agreement
contained in the Securities, this Indenture and the failure continues for a
period of 60 days after written notice of such failure, requiring the Company
to remedy the same, shall have been given 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 then-outstanding Securities; or

 

51

 

(e)  (i) the
Company fails to make any payment by the end of the applicable grace period, if
any, after the maturity of any Indebtedness for borrowed money in an amount in
excess of $5,000,000, or (ii) there is an acceleration of any Indebtedness
for borrowed money in an amount in excess of $5,000,000 because of a default
with respect to such Indebtedness without such Indebtedness having been
discharged or such acceleration having been cured, waived, rescinded or
annulled, in the case of either (i) or (ii) above, for a period of 30
days after written notice to the Company by the Trustee or to the Company and
the Trustee by Holders of at least 25% in aggregate principal amount of the
then-outstanding Securities; or

 

(f)  the
Company fails to provide a Fundamental Change Company Notice in accordance with
Section 3.08; or

 

(g)  a
court having jurisdiction enters (i) a decree or order for relief in
respect of the Company in an involuntary case or proceeding under any
Bankruptcy Law, or (ii) a decree or order adjudging the Company a bankrupt
or insolvent, or approves as properly filed a petition seeking reorganization,
arrangement, adjustment or composition of or in respect of the Company under
any applicable U.S. federal or state law, or appoints a Receiver of the Company
or of any substantial part of its property, or orders the winding-up or
liquidation of its affairs, and the continuance of any such decree or order for
relief or any such other decree or order unstayed and in effect for a period of
60 consecutive days; or

 

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

 

(1) commences
as a debtor a voluntary case or proceeding;

 

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

 

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

 

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

 

(5) files
a petition in bankruptcy or answer or consent seeking reorganization or relief;
or

 

(6) consents
to the filing of such a petition or the appointment of or taking possession by
a Receiver;

 

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 “Receiver”
means any receiver, trustee, assignee, liquidator, sequestrator or similar
official under any Bankruptcy Law.

 

52

 

Section 8.02                   Acceleration
of Maturity; Rescission and Annulment.

 

If an Event of
Default with respect to outstanding Securities (other than an Event of Default
specified in Section 8.01(g) or 8.01(h) hereof) occurs and is
continuing, the Trustee or the Holders of at least 25% in aggregate principal
amount of the then-outstanding Securities, by written notice to the Company and
the Trustee, may declare due and payable 100% of the principal amount of all
outstanding Securities plus any accrued and unpaid interest, including Special
Interest, if any, to the date of payment. Upon a declaration of acceleration,
such principal and accrued and unpaid interest to the date of payment shall be
immediately due and payable.

 

If an Event of
Default specified in Section 8.01(g) or 8.01(h) hereof occurs,
all unpaid principal of and accrued and unpaid interest, including Special
Interest, if any, on the outstanding Securities shall become and be immediately
due and payable, without any declaration or other act on the part of the
Trustee or any Holder.

 

Notwithstanding
the foregoing or anything to the contrary set forth in this Indenture, to the
extent elected by the Company, the sole remedy for an Event of Default relating
to the failure to comply with the reporting obligations set forth in Section 6.05
herein, and for any failure to comply with the requirements of Section 314(a)(1) of
the Trust Indenture Act, will for the first 180 days after the occurrence of
such an Event of Default consist exclusively of the right to receive special
interest on the Securities at an annual rate equal to 1.0% of the principal
amount of the Securities (“Special
Interest”). The Special Interest will accrue on all outstanding
Securities from and including the date on which an Event of Default relating to
a failure to comply with the reporting obligations set forth in Section 6.05
herein first occurs to but not including the 180th day thereafter (or such
earlier date on which the Event of Default shall have been cured or waived). On
such 180th day (or earlier, if the Event of Default relating to the reporting
obligations is cured or waived prior to such 180th day), such Special Interest
will cease to accrue and, if the Event of Default relating to reporting
obligations has not been cured or waived prior to such 180th day, the
Securities will be subject to acceleration as provided above in this Section 8.02.
In the event the Company does not elect to pay Special Interest upon an Event
of Default in accordance with this paragraph, the Securities will be subject to
acceleration as provided above. If the Company elects to pay Special Interest
as the sole remedy for an Event of Default relating to the failure to comply
with the reporting obligations in Section 6.05 or for any failure to
comply with the requirements of Section 314(a)(1) of the TIA, the
Company will notify all Holders, the Trustee and Paying Agent of such election
on or before the close of business on the date on which such Event of Default
first occurs.

 

The Holders of
a majority in aggregate principal amount of the then-outstanding Securities by
written notice to the Trustee may rescind and annul an acceleration and its
consequences if:

 

(1) all
existing Events of Default, other than the nonpayment of principal of or
interest, including Special Interest, if any, on the Securities which has
become due solely because of the acceleration, have been remedied, cured or
waived; and

 

(2) the
rescission would not conflict with any judgment or decree of a court of
competent jurisdiction;

 

53

 

provided, however, that in the event such
declaration of acceleration has been made based on the existence of an Event of
Default under Section 8.01(e) hereof and such Event of Default has
been remedied, cured or waived in accordance with Section 8.01(e) hereof,
then, without any further action by the Holders, such declaration of
acceleration shall be rescinded automatically and the consequences of such
declaration shall be annulled. No such rescission or annulment shall affect any
subsequent Default or impair any right consequent thereon.

 

Section 8.03                   Other Remedies.

 

If an Event of Default with
respect to outstanding Securities occurs and is continuing, the Trustee may
pursue any available remedy by proceeding at law or in equity to collect the
payment of principal of or interest, including Special Interest, if any, on the
Securities or to enforce the performance of any provision of the Securities.

 

Section 8.04                   Waiver of Past
Defaults.

 

The Holders, either (a) through
the written consent of not less than a majority in aggregate principal amount
of the then-outstanding Securities, or (b) by the adoption of a
resolution, at a meeting of Holders of the then-outstanding Securities at which
a quorum is present, by the Holders of at least a majority in aggregate
principal amount of the outstanding Securities represented at such meeting,
may, on behalf of the Holders of all of the Securities, waive an existing
Default or Event of Default, except a Default or Event of Default:

 

(1) in the payment of
the principal of or premium, if any, or interest, including Special Interest,
if any, on any Security (provided,
however, that subject to Section 8.07
hereof, the Holders of a majority in aggregate principal amount of the
then-outstanding Securities may rescind an acceleration and its consequences,
including any related payment default that resulted from such acceleration);

 

(2) in respect of the
right to convert any Security in accordance with Article 4; or

 

(3) in respect of a
covenant or provision hereof which, under Section 10.02 hereof, cannot be
modified or amended without the consent of the Holder of each outstanding
Security affected.

 

Upon any such waiver, such
Default shall cease to exist, and any Event of Default arising therefrom shall
be deemed to have been cured, for every purpose of this Indenture; provided, however, that no such waiver
shall extend to any subsequent or other Default or impair any right consequent
thereon.

 

Section 8.05                   Control by
Majority.

 

The Holders, either (a) through
the written consent of not less than a majority in aggregate principal amount
of the Securities then outstanding, or (b) by the adoption of a
resolution, at a meeting of Holders of the Securities then outstanding at which
a quorum is present, by the Holders of at least a majority in aggregate
principal amount of the outstanding Securities represented at such meeting,
shall have the right to direct the time, method and place

 

54

 

of conducting any proceeding
for any remedy available to the Trustee or exercising any trust or power
conferred on the Trustee. However, the Trustee may refuse to follow any
direction that:

 

(a)  conflicts with any
law or with this Indenture;

 

(b)  the Trustee
determines may be unduly prejudicial to the rights of the Holders not joining
therein; or

 

(c)  in the Trustee’s
reasonable judgment may expose the Trustee to personal liability.

 

The Trustee may take any
other action deemed proper by the Trustee which is not inconsistent with such
direction.

 

Section 8.06                   Limitation on
Suit.

 

No Holder of any Security
shall have any right to pursue any remedy with respect to this Indenture or the
Securities (including instituting any proceeding, judicial or otherwise, with
respect to this Indenture or for the appointment of a receiver or trustee)
unless:

 

(a)  such Holder has
previously given written notice to the Trustee of an Event of Default that is
continuing;

 

(b)  the Holders of at
least 25% in aggregate principal amount of the Securities then outstanding shall
have made written request to the Trustee to pursue the remedy;

 

(c)  such Holder or
Holders have offered to the Trustee indemnity satisfactory to it against any
costs, expenses and liabilities incurred in complying with such request;

 

(d)  the Trustee has
failed to comply with the request for 60 days after its receipt of such notice,
request and offer of indemnity; and

 

(e)  during such 60-day
period, no direction inconsistent with such written request has been given to
the Trustee by the Holders of a majority in aggregate principal amount of the
Securities then outstanding (or such amount as shall have acted at a meeting
pursuant to the provisions of this Indenture).

 

Section 8.07                   Unconditional
Rights of Holders to Receive Payment and to Convert.

 

Notwithstanding any other
provision in this Indenture, the Holder of any Security shall have the right,
which is absolute and unconditional, to receive payment of the principal
amount, Redemption Price, Fundamental Change Repurchase Price, interest,
including Special Interest, if any, or Make-Whole Premium, if any, in respect
of the Securities held by such Holder, on or after the respective due dates
expressed in the Securities and this Indenture, and 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 due dates or for the right to convert
in accordance with Article 4, and shall not be impaired or affected
without the consent of such Holder.

 

55

 

Section 8.08                   Collection of
Indebtedness and Suits for Enforcement by the Trustee.

 

The Company covenants that
if:

 

(a)  a Default or Event
of Default occurs in the payment of any interest, including Special Interest,
on any Security when such interest becomes due and payable and such Default or
Event of Default continues for a period of 30 days; or

 

(b)  a Default or Event
of Default occurs in the payment of the principal of or premium, if any, on any
Security at the Maturity thereof, the Company shall, upon demand of the
Trustee, pay to it, for the benefit of the Holders of such Securities, the
whole amount then due and payable (as expressed therein or as a result of any
acceleration effected pursuant to Section 8.02 hereof) on such Securities
for principal and premium, if any, and interest, including Special Interest,
and, to the extent that payment of such interest shall be legally enforceable,
interest on any overdue principal and premium, if any, and on any overdue
interest, including Special Interest, in each case at the Interest Rate, and,
in addition thereto, 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.

 

If the Company fails to pay
such amounts forthwith upon such demand, the Trustee, in its own name and as
trustee of an express trust, may institute a judicial proceeding for the
collection of the sums so due and unpaid, may prosecute such proceeding to
judgment or final decree and may enforce the same against the Company and
collect the moneys adjudged or decreed to be payable in the manner provided by
law out of the property of the Company, wherever situated.

 

If an Event of Default
occurs and is continuing, the Trustee may in its discretion proceed to protect
and enforce its rights and the rights of the Holders of Securities by such
appropriate judicial proceedings as the Trustee shall deem most effectual to
protect and enforce any such rights, whether for the specific enforcement of
any covenant or agreement in this Indenture or in aid of the exercise of any
power granted herein, or to enforce any other proper remedy.

 

Section 8.09                   Trustee May File
Proofs of Claim.

 

In case of the pendency of
any receivership, insolvency, liquidation, bankruptcy, reorganization,
arrangement, adjustment, composition or other judicial proceeding relative to
the Company or the property of the Company or its creditors, the Trustee
(irrespective of whether the principal of the Securities shall then be due and
payable as therein expressed or by declaration or otherwise and irrespective of
whether the Trustee shall have made any demand on the Company for the payment
of overdue principal or interest, including Special Interest, if any) shall be
entitled and empowered, by intervention in such proceeding or otherwise, (1) to
file and prove a claim for the whole amount of principal and premium, if any,
and interest, including Special Interest, if any, owing and unpaid in respect
of the Securities and to file such 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 any other amounts due to the
Trustee hereunder) and of the Holders of Securities allowed in such judicial
proceeding, and (2) to collect and receive any moneys or other property
payable or deliverable on any such claim and to distribute the same;

 

56

 

and any custodian, receiver,
assignee, trustee, liquidator, sequestrator or other similar official in any
such judicial proceedings is hereby authorized by each Holder of Securities 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 of Securities,
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 9.08 of this Indenture.

 

Nothing contained herein
shall be deemed to authorize the Trustee to authorize or consent to or accept,
or adopt on behalf of any Holder of a Security, 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 of a Security in any such proceeding.

 

Section 8.10                   Restoration of
Rights and Remedies.

 

If the Trustee or any Holder
of a Security has instituted any proceeding to enforce any right or remedy
under this Indenture and such proceeding has been discontinued or abandoned for
any reason, or has been determined adversely to the Trustee or to such Holder,
then, and in every such case, subject to any determination in such proceeding,
the Company, the Trustee and the Holders of Securities shall be restored
severally and respectively to their former positions hereunder and thereafter
all rights and remedies of the Trustee and the Holders shall continue as though
no such proceeding had been instituted.

 

Section 8.11                   Rights and
Remedies Cumulative.

 

Except as otherwise provided
with respect to the replacement or payment of mutilated, destroyed, lost or
stolen Securities in the last paragraph of Section 2.11 of this Indenture,
no right or remedy conferred in this Indenture upon or reserved to the Trustee
or to the Holders of Securities is intended to be exclusive of any other right
or remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent
the concurrent assertion or employment of any other appropriate right or
remedy.

 

Section 8.12                   Delay or
Omission Not Waiver.

 

No delay or omission of the
Trustee or of any Holder of any Security to exercise any right or remedy
accruing upon any Event of Default shall impair any such right or remedy or
constitute a waiver of any such Event of Default or any acquiescence therein.
Every right and remedy given by this Article or by law to the Trustee or
to the Holders of Securities may be exercised from time to time, and as often
as may be deemed expedient, by the Trustee or by the Holders of Securities, as
the case may be.

 

Section 8.13                   Application of
Money Collected.

 

Subject to Article 5,
any money and property collected by the Trustee pursuant to this Article shall
be applied in the following order, at the date or dates fixed by the Trustee
and, in case of the distribution of such money and property on account of principal
or premium, if any,

 

57

 

or interest, including
Special Interest, if any, upon presentation of the Securities and the notation
thereon of the payment if only partially paid and upon surrender thereof if
fully paid:

 

FIRST: To the payment of all
amounts due the Trustee;

 

SECOND: To the payment of
the amounts then due and unpaid for principal of and premium, if any, and
interest, including Special Interest, if any, on the Securities and coupons in
respect of which or for the benefit of which such money has been collected,
ratably, without preference or priority of any kind, according to the amounts
due and payable on such Securities for principal and premium, if any, and
interest, including Special Interest, if any, respectively; and

 

THIRD: Any remaining amounts
shall be repaid to the Company.

 

Section 8.14                   Undertaking for
Costs.

 

All parties to this
Indenture agree, and each Holder of any Security by such Holder’s acceptance
thereof shall be deemed to have agreed, that any court may in its discretion
require, in any suit for the enforcement of any right or remedy under this
Indenture, or in any suit against the Trustee for any action taken, suffered or
omitted by it as Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys’ fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to any suit instituted by the
Company, to any suit instituted by the Trustee, to any suit instituted by any
Holder, or group of Holders, holding in the aggregate more than 10% in
aggregate principal amount of the Securities then outstanding, or to any suit
instituted by any Holder of any Security for the enforcement of the payment of
the principal of or premium, if any, or interest, including Special Interest,
if any, on any Security on or after the Stated Maturity expressed in such
Security (or, in the case of exercise of a repurchase right in connection with
a Fundamental Change, on or after the Fundamental Change Repurchase Date) or
for the enforcement of the right to convert any Security in accordance with Article 4.

 

Section 8.15                   Waiver of Stay
or Extension Laws.

 

The Company covenants (to
the extent that it may lawfully do so) that it will not at any time insist
upon, or plead, or in any manner whatsoever claim to take the benefit or
advantage of, any stay or extension law wherever enacted, now or at any time
hereafter in force, which may affect the covenants or the performance of this
Indenture; and the Company (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law and covenants that it
will not 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.

 

58

 

Article 9

The Trustee

 

Section 9.01                   Certain Duties
and Responsibilities.

 

(a)           Except during the
continuance of an Event of Default,

 

(1)           The Trustee undertakes to
perform such duties and only such duties as are specifically set forth in this
Indenture or the TIA, and no implied covenants or obligations shall be read
into this Indenture against the Trustee; and

 

(2)           In the absence of bad faith
on its part, the Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Trustee and conforming to the
requirements of this Indenture; provided, however, that in the case of any such
certificates or opinions which by any provision hereof are specifically
required to be furnished to the Trustee, the Trustee shall examine the
certificates or opinions to determine whether or not, on their face, they
conform to the requirements to this Indenture (but need not investigate or
confirm the accuracy of any facts stated therein).

 

(b)           In case an Event of Default
actually known to a Responsible Officer of the Trustee has occurred and is
continuing, the Trustee shall exercise such of the rights and powers vested in
it by this Indenture, and use the same degree of care and skill in their
exercise, as a prudent person would exercise or use under the circumstances in
the conduct of such person’s own affairs.

 

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

 

(1)           This paragraph (c) shall
not be construed to limit the effect of paragraph (a) of this Section 9.01;

 

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

 

(3)           The Trustee shall not be
liable with respect to any action taken or omitted to be taken by it in good
faith in accordance with a direction received by it of the Holders of a
majority in principal amount of the outstanding Securities (or such lesser
amount as shall have acted at a meeting pursuant to the provisions of this
Indenture) relating to the time, method and place of conducting any proceeding
for any remedy available to the

 

Trustee, or exercising any
trust or power conferred upon the Trustee, under this Indenture.

 

59

 

(d)           Whether or not herein
expressly so provided, every provision of this Indenture relating to the
conduct or affecting the liability of or affording protection to the Trustee
shall be subject to the provisions of this Section 9.01.

 

(e)           No provision of this
Indenture shall require the Trustee to expend or risk its own funds or
otherwise incur any liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers.  The Trustee may refuse to perform any duty or
exercise any right or power unless it receives indemnity satisfactory to it
against any loss, liability, cost or expense (including, without limitation,
reasonable fees of counsel).

 

(f)            The Trustee shall not be
obligated to pay interest on any money or other assets received by it unless
otherwise agreed in writing with the Company. 
Assets held in trust by the Trustee need not be segregated from other
funds except to the extent required by law.

 

(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, Security, coupon, 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 or actual knowledge of any Event of Default unless a
Responsible Officer of the Trustee has actual knowledge thereof or unless
written notice of any event which is in fact a Default is received by the
Trustee pursuant to Section 13.02 hereof, and such notice references the
Securities and this Indenture.

 

(i)            The rights, privileges,
protections, immunities and benefits given to the Trustee hereunder, including,
without limitation, its right to be indemnified, are extended to, and shall be
enforceable by, the Trustee in each of its capacities hereunder, and each
Paying Agent, authenticating agent, Conversion Agent or Registrar acting
hereunder.

 

Section 9.02                   Certain Rights
of Trustee.

 

Subject to the provisions of
Section 9.01 hereof and subject to Sections 315(a) through (d) of
the TIA:

 

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

 

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

 

60

 

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

 

(4)           The Trustee shall not be
liable for any action taken or omitted to be taken by it in good faith, which
it believed to be authorized or within the discretion or rights or powers
conferred upon it by this Indenture, unless the Trustee’s conduct constitutes negligence.

 

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

 

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

 

(7)           The permissive rights of the
Trustee to do things enumerated in this Indenture shall not be construed as a
duty unless so specified herein.

 

Section 9.03                   Individual
Rights of Trustee.

 

The Trustee in its
individual or any other capacity may become the owner or pledgee of Securities
and may otherwise deal with the Company or any Affiliate of the Company with
the same rights it would have if it were not Trustee.  However, in the event that the Trustee
acquires any conflicting interest (as such term is defined in Section 310(b) of
the TIA), it must eliminate such conflict within 90 days, apply to the SEC for
permission to continue as trustee (to the extent permitted under Section 310(b) of
the TIA) or resign.  Any agent may do the
same with like rights and duties.  The
Trustee is also subject to Sections 9.11 and 9.12 hereof.

 

Section 9.04                   Money Held in
Trust.

 

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

 

Section 9.05                   Trustee’s
Disclaimer.

 

The recitals contained
herein and in the Securities (except for those in the certificate of
authentication) shall be taken as the statements of the Company, and the
Trustee assumes no responsibility for their correctness.  The Trustee makes no representations as to
the validity, sufficiency or priority of this Indenture or of the
Securities.  The Trustee shall not be
accountable for the use or application by the Company of Securities or the
proceeds thereof.

 

61

 

Section 9.06                   Notice of
Defaults.

 

Within 90 days after the
occurrence of any Default or Event of Default hereunder of which the Trustee
has received written notice, the Trustee shall give notice to Holders pursuant
to Section 13.02 hereof, unless such Default or Event of Default shall
have been cured or waived; provided, however, that, except in the case of a
Default or Event of Default in the payment of the principal of or premium, if
any, or interest, or in the payment of any redemption or repurchase obligation
on any Security, the Trustee shall be protected in withholding such notice if
and so long as Responsible Officers of the Trustee in good faith determine that
the withholding of such notice is in the interest of the Holders.

 

Section 9.07                   Reports by
Trustee to Holders.

 

The Trustee shall transmit
to holders as provided in Section 313 of the TIA such reports concerning
the Trustee and its actions under this Indenture as may be required by Section 313
of the TIA at the times and in the manner provided by the TIA.

 

A copy of each report at the
time of its mailing to Holders shall be filed with the SEC, if required by Section 313
of the TIA, and each stock exchange, if any, on which the Securities are
listed.  The Company shall promptly
notify the Trustee when the Securities become listed on any stock exchange.

 

Section 9.08                   Compensation
and Indemnification.

 

The Company covenants and
agrees to pay to the Trustee from time to time, and the Trustee shall be
entitled to, reasonable compensation (which shall not be limited by any
provision of law in regard to the compensation of a trustee of an express
trust) and the Company covenants and agrees to pay or reimburse the Trustee
upon its request for all reasonable expenses, disbursements and advances
incurred or made by or on behalf of it in accordance with any of the provisions
of this Indenture (including the reasonable compensation and the expenses and
disbursements of its counsel and of all agents and other persons not regularly
in its employ), except to the extent that any such expense, disbursement or
advance is due to its negligence or bad faith. 
When the Trustee incurs expenses or renders services in connection with
an Event of Default specified in Section 8.01 hereof, the expenses
(including the reasonable charges and expenses of its counsel) and the
compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law. 
The Company also covenants to indemnify the Trustee and its officers,
directors, employees and agents for, and to hold such Persons harmless against,
any loss, liability or expense incurred by them, arising out of or in
connection with the acceptance or administration of this Indenture or the
trusts hereunder or the performance of their duties hereunder, including the
costs and expenses of defending themselves against or investigating any claim
of liability in the premises, except to the extent that any such loss,
liability or expense was due to the negligence or willful misconduct of such
Persons.  The obligations of the Company
under this Section 9.08 to compensate and indemnify the Trustee and its officers,
directors, employees and agents and to pay or reimburse such Persons for
expenses, disbursements and advances shall constitute additional indebtedness
hereunder and shall survive the satisfaction and discharge of this Indenture or
the earlier resignation or removal of the Trustee.  Such additional indebtedness shall be a
senior claim to that of the Securities upon all property and funds held or
collected by the Trustee as such, except funds held in trust for the benefit of
the Holders of particular Securities, and the Securities are hereby
subordinated to such

 

62

 

senior claim.  “Trustee” for purposes of this Section 9.08
shall include any predecessor Trustee, but the negligence or willful misconduct
of any Trustee shall not affect the indemnification of any other Trustee.

 

Section 9.09                   Replacement of
Trustee.

 

A resignation or removal of
the Trustee and appointment of a successor Trustee shall become effective only
upon the successor Trustee’s acceptance of appointment as provided in this Section 9.09.

 

The Trustee may resign and
be discharged from the trust hereby created by so notifying the Company in
writing.  The Holders of at least a
majority in aggregate principal amount of Outstanding Securities may remove the
Trustee by so notifying the Trustee and the Company in writing.  The Company must remove the Trustee if:

 

(a)          the Trustee
fails to comply with Section 9.11 hereof or Section 310 of the TIA;

 

(b)         the Trustee
becomes incapable of acting.

 

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

 

(d)         a custodian or
public officer takes charge of the Trustee or its property.

 

If the Trustee resigns or is
removed or if a vacancy exists in the office of the Trustee for any reason, the
Company shall promptly appoint a successor Trustee.  The Trustee shall be entitled to payment of
its fees and reimbursement of its expenses while acting as Trustee.  Within one year after the successor Trustee
takes office, the Holders of at least a majority in aggregate principal amount
of outstanding Securities may appoint a successor Trustee to replace the
successor Trustee appointed by the Company.

 

Any Holder may petition any court
of competent jurisdiction for the removal of the Trustee and the appointment of
a successor Trustee if the Trustee fails to comply with Section 9.11
hereof.

 

If an instrument of
acceptance by a successor Trustee shall not have been delivered to the Trustee
within 30 days after the giving of such notice of resignation or removal, the
resigning or removed Trustee, as the case may be, may petition, at the expense
of the Company, any court of competent jurisdiction for the appointment of a
successor Trustee.

 

A successor Trustee shall
deliver a written acceptance of its appointment to the retiring Trustee and to
the Company.  Thereupon the resignation
or removal of the retiring Trustee shall become effective, and the successor
Trustee shall have all the rights, powers and duties of the Trustee under this
Indenture.  The Company shall mail a
notice of the successor Trustee’s succession to the Holders.  The retiring Trustee shall promptly transfer
all property held by it as Trustee to the successor Trustee.  Notwithstanding replacement of the Trustee
pursuant to this Section 9.09, the Company’s obligations under Section 9.08
hereof shall continue for the benefit

 

63

 

of the retiring Trustee with
respect to expenses, losses and liabilities incurred by it prior to such
replacement.

 

Section 9.10                   Successor
Trustee by Merger, Etc.

 

Subject to Section 9.11
hereof, if the Trustee consolidates with, merges or converts into, or transfers
or sells all or substantially all of its corporate trust business to, another
corporation or national banking association, the successor entity without any
further act shall be the successor Trustee as to the Securities.

 

Section 9.11                   Corporate
Trustee Required; Eligibility.

 

The Trustee shall at all
times satisfy the requirements of Sections 310(a)(1), (2) and (5) of
the TIA.  The Trustee shall at all times
have (or, in the case of a corporation included in a bank holding company
system, the related bank holding company shall at all times have), a combined
capital and surplus of at least $100 million as set forth in its (or its
related bank holding company’s) most recent published annual report of
condition.  The Trustee is subject to Section 310(b) of
the TIA.

 

Section 9.12                   Collection of Claims
Against the Company.

 

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

 

Article 10

 

Amendments; Supplements and Waivers

 

Section 10.01                 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 Holder of a Security for any of the following purposes:

 

(a)  add to the
covenants of the Company for the benefit of the Holders of Securities;

 

(b)  surrender any
right or power herein conferred upon the Company;

 

(c)  make provision
with respect to the conversion rights of Holders of Securities pursuant to Section 4.11
hereof;

 

(d)  provide for the
assumption of the Company’s obligations to the Holders of Securities in the
case of a merger, consolidation, conveyance, transfer or lease pursuant to Article 7
hereof;

 

(e)  increase the
Conversion Rate; provided, however, that such increase in the
Conversion Rate shall not adversely affect the interest of the Holders of
Securities (after taking into account tax and other consequences of such
increase) in any material respect;

 

64

 

(f)  comply with the
requirements of the SEC in order to effect or maintain the qualification of
this Indenture under the TIA;

 

(g)  cure any
ambiguity, correct or supplement any provision herein which may be inconsistent
with any other provision herein or which is otherwise defective; provided, however,
that such action pursuant to this clause (g) does not, in the good faith
opinion of the Board of Directors and the Trustee, adversely affect the
interests of the Holders of Securities in any material respect; and provided, further,
that no modification or amendment made to conform this Indenture or the
Securities to the section of the Final Prospectus entitled “Description of the
Notes” shall be deemed to adversely affect the interests of the Holders of the
Securities;

 

(h)  add or modify any
other provisions with respect to matters or questions arising under this
Indenture which the Company and the Trustee may deem necessary or desirable and
which shall not be inconsistent with the provisions of this Indenture, provided, however;
that such action pursuant to this clause (h) does not adversely affect the
interests of the Holders of Securities in any material respect;

 

(i) to comply with Article 7;

 

(j) to provide for
uncertificated Securities in addition to or in place of Certificated
Securities;

 

(k) to provide for the
issuance of and establish the form and terms and conditions of additional
series of Securities;

 

(l) to evidence and
provide for the acceptance of appointment hereunder by a successor Trustee with
respect to the Securities and to add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the administration
of the trusts hereunder by more than one Trustee; or

 

(m) to provide for the
addition of a guaranty of the notes by any other entity.

 

Section 10.02                 With Consent of Holders.

 

Except as provided below in
this Section 10.02, this Indenture or the Securities may be amended or
supplemented, and noncompliance by the Company in any particular instance with
any provision of this Indenture or the Securities may be waived, in each case (i) with
the written consent of the Holders of at least a majority in aggregate
principal amount of the then-outstanding Securities, or (ii) by the
adoption of a resolution, at a meeting of Holders of the Securities then
outstanding at which a quorum is present, by the Holders of a majority in
aggregate principal amount of the then-outstanding Securities represented at
such meeting.

 

Without the written consent
or the affirmative vote of each Holder of Securities affected, an amendment or
waiver under this Section 10.02 may not:

 

(a)          change the
Stated Maturity of the principal of, or any installment of interest, including
Special Interest, on, any Security;

 

65

 

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

 

(c)          reduce the
interest rate or interest, including Special Interest, on any Security;

 

(d)         change the
currency of payment of principal of, premium, if any, or interest, including
Special Interest, on any Security;

 

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

 

(f)            modify the
obligation of the Company to maintain an office or agency in The City of New
York pursuant to Section 2.04 hereof;

 

(g)         except as
permitted by Section 4.11 hereof, adversely affect the right to convert
any Security as provided in Article 4 hereof;

 

(h)         adversely
affect the right of Holders to require the Company to repurchase the Securities
in the event of a Fundamental Change;

 

(i)             modify the
subordination provisions of the Securities in a manner adverse to the Holders
of Securities;

 

(j)             modify any of
the provisions of this Section, Section 8.04 or Section 8.11, except
to increase any percentage contained herein or therein or to provide that
certain other provisions of this Indenture cannot be modified or waived without
the consent of the Holder of each outstanding Security affected thereby; or

 

(k)          reduce the
requirements of Section 12.04 hereof for quorum or voting, or reduce the
percentage in aggregate principal amount of the outstanding Securities the
consent of whose Holders is required for any such amendment or the consent of
whose Holders is required for any waiver provided for in this Indenture.

 

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

 

After an amendment,
supplement or waiver under this Section 9.02 becomes effective, the
Company shall promptly 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.

 

Section 10.03.                Compliance with Trust
Indenture Act.

 

Every amendment to this
Indenture or the Securities of one or more Series shall be set forth in a
supplemental indenture hereto that complies with the TIA as then in effect.

 

66

 

Section 10.04.                Revocation and Effect of
Consents.

 

Until an amendment or waiver
becomes effective, a consent to it by a Holder of a Security 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 his Security or
portion of a Security if the Trustee receives the notice of revocation before
the date the amendment or waiver becomes effective.

 

Any amendment or waiver once
effective shall bind every Holder of each Series affected by such
amendment or waiver unless it is of the type described in any of clauses (a) through
(g) of Section 9.3. In that case, the amendment 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.

 

The Company may, but shall
not be obligated to, fix a record date for the purpose of determining the
Holders entitled to give their consent or take any other action described above
or required or permitted to be taken pursuant to this Indenture. If a record
date is fixed, then notwithstanding the immediately preceding paragraph, those
Persons who were Holders at such record date (or their duly designated
proxies), and only those persons, shall be entitled to give such consent or to
revoke any consent previously given or to take any such action, whether or not
such Persons continue to be Holders after such record date.

 

Section 10.05.                Notation on or Exchange of
Securities.

 

The Trustee may place an
appropriate notation about an amendment or waiver on any Security of any Series thereafter
authenticated. The Company in exchange for Securities of that Series may
issue and the Trustee shall authenticate upon written request new Securities of
that Series that reflect the amendment or waiver.

 

Section 10.06.                Trustee Protected.

 

In executing, or accepting
the additional trusts created by, any supplemental indenture permitted by this Article or
the modifications thereby of the trusts created by this Indenture, the Trustee
shall be entitled to receive, and (subject to Section 7.1) shall be fully
protected in relying upon, an Opinion of Counsel stating that the execution of
such supplemental indenture is authorized or permitted by this Indenture. The
Trustee shall sign all supplemental indentures, except that the Trustee need
not sign any supplemental indenture that adversely affects its rights.

 

Article 11

Satisfaction and Discharge

 

Section 11.01                 Satisfaction and Discharge
of Indenture.

 

When:

 

(a)          The Company
shall deliver to the Trustee for cancellation all Securities previously
authenticated (other than any Securities which have been destroyed, lost or
stolen and in

 

67

 

lieu
of or in substitution for which other Securities shall have been authenticated
and delivered) and not previously cancelled; or

 

(b)         (1) All
the Securities not previously canceled or delivered to the Trustee for
cancellation shall have become due and payable, or are by their terms to become
due and payable within one year; and

 

     (2) The Company shall deposit with
the Trustee, in trust, cash in U.S. dollars and/or U.S. Government Obligations
which through the payment of interest, including Special Interest, if any, and
principal in respect thereof, in accordance with their terms, will provide (and
without reinvestment), not later than one day before the due date of any
payment of money, an amount in cash, sufficient, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee, to pay principal of, premium,
if any, or interest, including Special Interest, if any, on all of the
Securities (other than any securities which shall have been mutilated,
destroyed, lost or stolen and in lieu of or in substitution for which other
Securities shall have been authenticated and delivered) not previously
cancelled or delivered to the Trustee for cancellation, on the dates such
payments of principal, premium, if any, or interest are due to such date of
maturity, redemption or repurchase, as the case may be, and if, in the case of
either clause (a) or (b), the Company shall also pay or cause to be paid
all other sums payable hereunder by the Company, then this Indenture shall
cease to be of further effect (except as to: (i) remaining rights of
registration of transfer, substitution and exchange and conversion of
Securities, (ii) rights hereunder of Holders to receive payments of
principal of and premium, if any, and interest, including Special Interest, if
any, on the Securities and the other rights, duties and obligations of Holders,
as beneficiaries hereof with respect to the amounts, if any, so deposited with
the Trustee, and (iii) the rights, obligations and immunities of the
Trustee hereunder), and the Trustee, on demand of the Company accompanied by an
Officers’ Certificate and an Opinion of Counsel and at the cost and expense of
the Company, shall execute proper instruments acknowledging satisfaction of and
discharging this Indenture; provided,
however, that the Company shall
promptly reimburse the Trustee for all amounts due the Trustee under Section 9.08
of this Indenture and for any costs or expenses thereafter reasonably and
properly incurred by the Trustee and to compensate the Trustee for any services
thereafter reasonably and properly rendered by the Trustee in connection with
this Indenture or the Securities.

 

Section 11.02                 Deposited Monies To Be Held
in Trust.

 

Subject to Section 11.03
hereof, all monies deposited with the Trustee pursuant to Section 11.01
hereof shall be held in trust and applied by it to the payment, notwithstanding
the provisions of Article 5 hereof, either directly or through any Paying
Agent (including the Company if acting as its own Paying Agent), to the Holders
of the particular Securities for the payment, redemption or repurchase of which
such monies have been deposited with the Trustee, of all sums due and to become
due thereon for principal, premium, if any, and interest, including Special
Interest, if any. All monies deposited with the Trustee pursuant to Section 11.01
hereof (and held by it or any Paying Agent) for the payment of Securities
subsequently converted shall be returned to the Company upon request of the
Company.

 

68

 

Section 11.03                 Return of Unclaimed Monies.

 

The Trustee and the Paying
Agent shall pay to the Company upon written request any money held by them for
the payment of principal or premium, if any, or interest that remains unclaimed
for two years after the date upon which such payment shall have become due.
Notwithstanding the foregoing, the Trustee and Paying Agent shall have the
right to withhold payment of such money to the Company until the Trustee or
Paying Agent at the expense of the Company publishes in a newspaper of general
circulation in New York City, or mails to each Holder, a notice stating that
such money shall be repaid to the Company if unclaimed after a date no less
than 30 days from the publication of such press release or mailing of such
notice. After payment to the Company, all liability of the Trustee and the
Paying Agent with respect to such money shall cease, and Holders entitled to
the money must look to the Company for payment as general creditors unless an
applicable abandoned property law designates another Person.

 

Article 12

Meeting of Holders of Securities

 

Section 12.01                 Purposes for Which Meetings May Be
Called.

 

A meeting of Holders of
Securities may be called at any time and from time to time pursuant to this Article to
make, give or take any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be made, given or
taken by Holders of Securities.

 

Notwithstanding anything
contained in this Article 12, the Trustee may, during the pendency of a
Default or an Event of Default, call a meeting of Holders of Securities in
accordance with its standard practices.

 

Section 12.02                 Call Notice and Place of
Meetings.

 

The Trustee may at any time
call a meeting of Holders of Securities for any purpose specified in Section 11.02
hereof, to be held at such time and at such place in The City of New York.
Notice of every meeting of Holders of Securities, setting forth the time and
the place of such meeting, in general terms the action proposed to be taken at
such meeting and the percentage of the principal amount of the then-outstanding
Securities which shall constitute a quorum at such meeting, shall be given, in
the manner provided in the Indenture hereof, not less than 21 nor more than 180
days prior to the date fixed for the meeting.

 

In case at any time the
Company, pursuant to a resolution of the Board of Directors, or the Holders of
at least 10% in principal amount of the Securities then outstanding shall have
requested the Trustee to call a meeting of the Holders of Securities for any
purpose specified in Section 12.01 hereof, by written request setting
forth in reasonable detail the action proposed to be taken at the meeting, and
the Trustee shall not have made the first publication of the notice of such meeting
within 21 days after receipt of such request or shall not thereafter proceed to
cause the meeting to be held as provided herein, then the Company or the
Holders of Securities in the amount specified, as the case may be, may
determine the time and the place in The City of New York for such meeting and
may call such meeting for such purposes by giving notice thereof as provided in
paragraph (a) of this Section.

 

69

 

Section 12.03                 Persons Entitled to Vote at
Meetings.

 

To be entitled to vote at
any meeting of Holders of Securities, a Person shall be (a) a Holder of
one or more outstanding Securities, or (b) a Person appointed by an
instrument in writing as proxy for a Holder or Holders of one or more outstanding
Securities by such Holder or Holders. The only Persons who shall be entitled to
be present or to speak at any meeting of Holders shall be the Persons entitled
to vote at such meeting and their counsel, any representatives of the Trustee
and its counsel and any representatives of the Company and its counsel.

 

Section 12.04                 Quorum; Action.

 

The Persons entitled to vote
a majority in principal amount of the then-outstanding Securities shall
constitute a quorum. In the absence of a quorum within 30 minutes of the time
appointed for any such meeting, the meeting shall, if convened at the request
of Holders of Securities, be dissolved. In any other case, the meeting may be
adjourned for a period of not less than 10 days as determined by the chairman
of the meeting prior to the adjournment of such meeting. In the absence of a
quorum at any such adjourned meeting, such adjourned meeting may be further
adjourned for a period of not less than 10 days as determined by the chairman
of the meeting prior to the adjournment of such adjourned meeting. Notice of
the reconvening of any adjourned meeting shall be given as provided in Section 12.02(a) hereof,
except that such notice need be given only once and not less than five days
prior to the date on which the meeting is scheduled to be reconvened.

 

At a meeting or an adjourned
meeting duly reconvened and at which a quorum is present as aforesaid, any
resolution and all matters (except as limited by the third paragraph of Section 9.02
hereof) shall be effectively passed and decided if passed or decided by the
Persons entitled to vote not less than a majority in principal amount of
Securities then outstanding represented and voting at such meeting.

 

Any resolution passed or
decisions taken at any meeting of Holders of Securities duly held in accordance
with this Section shall be binding on all the Holders of Securities,
whether or not present or represented at the meeting.

 

Section 12.05                 Determination of Voting
Rights; Conduct and Adjournment of Meetings.

 

Notwithstanding any other
provisions of this Indenture, the Trustee may make such reasonable regulations
as it may deem advisable for any meeting of Holders of Securities in regard to
proof of the holding of Securities and of the appointment of proxies and in
regard to the appointment and duties of inspectors of votes, the submission and
examination of proxies, certificates and other evidence of the right to vote,
and such other matters concerning the conduct of the meeting as it shall deem
appropriate.

 

The Trustee shall, by an
instrument in writing, appoint a temporary chairman (which may be the Trustee)
of the meeting, unless the meeting shall have been called by the Company or by
Holders of Securities as provided in Section 12.02(b) hereof, in
which case the Company or the Holders of Securities calling the meeting, as the
case may be, shall in like manner appoint a

 

70

 

temporary chairman. A
permanent chairman and a permanent secretary of the meeting shall be elected by
vote of the Persons entitled to vote a majority in principal amount of the
outstanding Securities represented at the meeting.

 

At any meeting, each Holder
of a Security or proxy shall be entitled to one vote for each $1,000 principal
amount of Securities held or represented by him; provided, however,
that no vote shall be cast or counted at any meeting in respect of any Security
challenged as not outstanding and ruled by the chairman of the meeting to be
not outstanding. The chairman of the meeting shall have no right to vote,
except as a Holder of a Security or proxy.

 

Any meeting of Holders of
Securities duly called pursuant to Section 12.02 hereof at which a quorum
is present may be adjourned from time to time by Persons entitled to vote a
majority in principal amount of the then-outstanding Securities represented at
the meeting, and the meeting may be held as so adjourned without further
notice.

 

Section 12.07                 Counting Votes and Recording
Action of Meetings.

 

The vote upon any resolution
submitted to any meeting of Holders of Securities shall be by written ballots
on which shall be subscribed the signatures of the Holders of Securities or of
their representatives by proxy and the principal amounts and serial numbers of
the outstanding Securities held or represented by them. The permanent chairman
of the meeting shall appoint two inspectors of votes who shall count all votes
cast at the meeting for or against any resolution and who shall make and file
with the secretary of the meeting their verified written reports in duplicate
of all votes cast at the meeting. A record, at least in duplicate, of the
proceedings of each meeting of Holders of Securities shall be prepared by the
secretary of the meeting and there shall be attached to said record the
original reports of the inspectors of votes on any vote by ballot taken thereat
and affidavits by one or more Persons having knowledge of the facts setting
forth a copy of the notice of the meeting and showing that said notice was
given as provided in Section 12.02 hereof and, if applicable, Section 12.04
hereof. Each copy shall be signed and verified by the affidavits of the
permanent chairman and secretary of the meeting and one such copy shall be
delivered to the Company and another to the Trustee to be preserved by the
Trustee, the latter to have attached thereto the ballots voted at the meeting.
Any record so signed and verified shall be conclusive evidence of the matters
therein stated.

 

Article 13

Miscellaneous

 

Section 13.01                 Trust Indenture Act Controls.

 

This Indenture is subject to
the provisions of the TIA which are required to be part of this Indenture, and
shall, to the extent applicable, be governed by such provisions.

 

Section 13.02                 Notices.

 

Any notice or communication
to the Company or the Trustee is duly given if in writing and delivered in
person or mailed by first-class mail to the address set forth below:

 

71

 

if to the Company:

 

Vertex Pharmaceuticals
Incorporated

130 Waverly Street

Cambridge, MA  02139

Attention:  Investor Relations

 

with a copy to:

 

Mintz, Levin, Cohn, Ferris,
Glovsky

and Popeo, P.C.

One
Financial Center

Boston,
MA  02111

Attention:  Michael L. Fantozzi, Esq.

 

if to the Trustee:

 

U.S. Bank National
Association

Corporate Trust Department

One Federal Street, Boston,
MA 02110

Attention: Andrew M. Sinasky

 

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

 

Any notice or communication
to a Holder shall be mailed by first-class mail to his address shown on the
Register kept by the Registrar.  Failure
to mail a notice or communication to a Holder or any defect in such notice or
communication shall not affect its sufficiency with respect to other Holders.

 

If a notice or communication
is mailed or sent in the manner provided above within the time prescribed, it
is duly given as of the date it is mailed, whether or not the addressee
receives it, except that notice to the Trustee shall only be effective upon receipt
thereof by the Trustee.

 

If the Company mails a
notice or communication to Holders, it shall mail a copy to the Trustee at the
same time.

 

Section 13.03                 Communication by Holders
With Other Holders.

 

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

 

Section 13.04                 Acts of Holders of
Securities.

 

(a)          Any request,
demand, authorization, direction, notice, consent, waiver or other action
provided by this Indenture to be given or taken by Holders of Securities may be
embodied in and evidenced by:

 

72

 

(1)          one or more
instruments of substantially similar tenor signed by such Holders in person or
by agent or proxy duly appointed in writing;

 

(2)          the record of
Holders of Securities voting in favor thereof, either in person or by proxies
duly appointed in writing, at any meeting of Holders of Securities duly called
and held in accordance with the provisions of Article 12; or

 

(3)          a combination
of such instruments and any such record.

 

Except as herein otherwise
expressly provided, such action shall become effective when such instrument or
instruments or record or both are delivered to the Trustee and, where it is
hereby expressly required, to the Company. 
Such instrument or instruments and record (and the action embodied
therein and evidenced thereby) are herein sometimes referred to as the “Act” of
the Holders of Securities signing such instrument or instruments and so voting
at such meeting.  Proof of execution of
any such instrument or of a writing appointing any such agent or proxy, or of
the holding by any Person of a Security, shall be sufficient for any purpose of
this Indenture and (subject to Section 9.01 hereof) conclusive in favor of
the Trustee and the Company if made in the manner provided in this
Section.  The record of any meeting of
Holders of Securities shall be proved in the manner provided in Section 12.06
hereof.

 

(b)         The fact and
date of the execution by any Person of any such instrument or writing may be
provided in any manner which the Trustee reasonably deems sufficient.

 

(c)          The principal
amount and serial numbers of Securities held by any Person, and the date of
such Person holding the same, shall be proved by the Register.

 

(d)         Any request,
demand, authorization, direction, notice, consent, election, waiver or other
Act of the Holders of any Security shall bind every future Holder of the same
Security and the Holder of every Security issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done, omitted or suffered to be done by the Trustee or the Company in
reliance thereon, whether or not notation of such action is made upon such
Security.

 

Section 13.05                 Certificate and Opinion as
to Conditions Precedent.

 

In any case where several
matters are required to be certified by, or covered by an opinion of, any
specified Person, it is not necessary that all such matters be certified by, or
covered by the opinion of, only one such Person, or that they be so certified
or covered by only one document, but one such Person may certify or give an
opinion with respect to some matters and one or more other such Persons as to
other matters, and any such Person may certify or give an opinion as to such
matters in one or several documents.

 

Any certificate or opinion
of an officer of the Company may be based, insofar as it relates to legal
matters, upon an Opinion of Counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the Opinion of Counsel with
respect to the matters upon which such certificate or opinion is based is
erroneous.  Any such Opinion of Counsel
may be based, insofar as it relates to factual matters, upon a certificate or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the 

 

73

 

possession of the Company,
unless such counsel knows, or in the exercise of reasonable care should know,
that the certificate or representations with respect to such matters are
erroneous.

 

Where any Person is required
to make, give or execute two or more applications, requests, consents,
certificates, statements, opinions or other instruments under this Indenture,
they may, but need not, be consolidated and form one instrument.

 

Upon any application or
request by the Company to the Trustee to take any action under any provision of
this Indenture, the Company shall furnish to the Trustee an Officers’
Certificate stating that all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with and an Opinion
of Counsel stating that in the opinion of such Counsel all such conditions
precedent, if any, have been complied with, except that in the case of any such
application or request as to which the furnishing of such documents is
specifically required by any provision of this Indenture relating to such
particular application or request, no additional certificate or opinion need be
furnished.

 

Section 13.06                 Statements Required in
Certificate or Opinion.

 

Each certificate or opinion
with respect to compliance with a condition or covenant provided for in this
Indenture shall include:

 

(a)          a statement
that each individual signing such certificate or opinion on behalf of the
Company has read such covenant or condition and the definitions herein relating
thereto;

 

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

 

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

 

(d)         a statement as
to whether, in the opinion of each such individual, such condition or covenant
has been complied with.

 

Section 13.07                 Effect of Headings and Table
of Contents.

 

The Article and Section headings
herein and the Table of Contents are for convenience only and shall not affect
the construction hereof.

 

Section 13.08                 Successors and Assigns.

 

All covenants and agreements
in this Indenture by the Company shall bind its successors and assigns, whether
so expressed or not.

 

74

 

Section 13.09                 Separability Clause.

 

In case any provision in
this Indenture or 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 13.10                 Benefits of Indenture.

 

Nothing contained in this
Indenture or in the Securities, express or implied, shall give to any Person,
other than the parties hereto and their successors hereunder, the holders of
Senior Debt and the Holders of Securities, any benefit or legal or equitable
right, remedy or claim under this Indenture.

 

Section 13.11                 Governing Law.

 

THIS INDENTURE AND THE
SECURITIES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK.

 

Section 13.12                 Counterparts.

 

This instrument may be
executed in any number of counterparts, each of which when so executed shall be
deemed to be an original but all such counterparts shall together constitute
but one and the same instrument.

 

Section 13.13                 Legal Holidays.

 

In any case where any
Interest Payment Date, Redemption Date or Stated Maturity of any Security or
the last day on which a Holder of a Security has a right to convert such
Security shall not be a Business Day at any place of payment or place of
conversion, then (notwithstanding any other provision of this Indenture or of
the Securities) payment of interest or principal or premium, if any, or
conversion of the Securities, need not be made at such place of payment or
place of conversion on such day, but may be made on the next succeeding
Business Day at such place of payment or place of conversion with the same
force and effect as if made on the Interest Payment Date or redemption date or
at the Stated Maturity or on such last day for conversion, provided, that in
the case that payment is made on such succeeding Business Day, no interest
shall accrue on the amount so payable for the period from and after such
Interest Payment Date, Redemption Date or Stated Maturity, as the case may be.

 

Section 13.14                 Recourse Against Others.

 

No recourse for the payment
of the principal of or premium, if any, or interest on any Security, or for any
claim based thereon or otherwise in respect thereof, shall be had against any
incorporator, shareholder, officer or director, as such, past, present or
future, of the Company or of any successor corporation, whether by virtue of
any constitution, statute or rule of law or by the enforcement of any
assessment or penalty or otherwise, all such liability being, by the acceptance
thereof and as part of the consideration for the issue thereof, expressly
waived and released.

 

75

 

Section 13.15                 Calculations in Respect of
Securities.

 

Except as explicitly stated
herein, the Company will be responsible for making all calculations required
pursuant to this Indenture, including, without limitation, calculations with
respect to determinations of the Conversion Price and Conversion Rate. The
Company shall make all such calculations in good faith and, absent manifest
error, the Company’s calculations shall be binding on the Holders. The Company
shall provide a written schedule of such calculations to the Trustee, and the
Trustee shall be entitled to rely upon the accuracy of the Company’s
calculations without responsibility for independent verification thereof. The
Trustee shall forward a copy of such calculations to any Holder upon such
Holder’s written request.

 

Section 13.16                 No Security Interest Created.

 

Nothing in this Indenture or
in the Securities, express or implied, shall be construed to constitute a
security interest under the Uniform Commercial Code or similar legislation, now
in effect or hereafter enacted and made effective, in any jurisdiction.

 

[SIGNATURE PAGE FOLLOWS]

 

76

 

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

 

	
   

  	
  VERTEX
  PHARMACEUTICALS 

  
	
   

  	
   

  	
  INCORPORATED

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  U.S. BANK
  NATIONAL 

  
	
   

  	
   

  	
  ASSOCIATION,AS
  TRUSTEE

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  

 

 

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 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.(1)

 

(1)           This paragraph should be included only if the Security is
a Global Security.

 

A-1

 

VERTEX PHARMACEUTICALS INCORPORATED

 

[  ]
Convertible Senior Subordinated Notes due 2013

 

CUSIP NO. [  ]

 

	
  No.

  	
  $

  

 

VERTEX PHARMACEUTICALS
INCORPORATED, a Massachusetts corporation (the “Company”, which term includes
any successor corporation under the Indenture hereinafter referred to), for
value received, hereby promises to pay to Cede & Co., or its
registered assigns, the principal sum of 
U.S. Dollars ($  ) on [  ],
2013.

 

Interest
Payment Dates:  [  ] and [  ],
commencing [  ], 2008.

 

Regular
Record Dates:  [  ] and [  ].

 

Reference is hereby made to
the further provisions of this Security set forth on the reverse hereof, which
further provisions shall for all purposes have the same effect as if set forth
at this place.

 

 [SIGNATURE PAGE
FOLLOWS]

 

1

 

IN WITNESS WHEREOF, the
Company has caused this Security to be duly executed manually or by facsimile
by its duly authorized officers.

 

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  VERTEX PHARMACEUTICALS
  INCORPORATED

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  

 

Trustee’s Certificate of
Authentication

 

This is one of the [  ]%
Convertible Senior Subordinated Notes due 2013 described in the within-named
Indenture.

 

U.S. BANK NATIONAL ASSOCIATION,

as Trustee

 

	
  By:

  	
   

  	
   

  
	
   

  	
  Authorized Signatory

  	
   

  
	
   

  
	
  Dated:

  

 

2

 

[FORM OF REVERSE SIDE OF SECURITY]

 

VERTEX PHARMACEUTICALS INCORPORATED

 

[  ]
Convertible Senior Subordinated Notes due 2013

 

1.             INTEREST

 

The Company promises to pay
interest on the principal amount of this Security at the rate of [  ]%
per annum. The Company shall pay interest semi-annually in arrears on [  ]
and [  ] of each year (each, an “Interest
Payment Date”), commencing on [  ], 2008. Interest on
the Securities shall accrue from the most recent date to which interest has
been paid or, if no interest has been paid, from [  ], 2008. Interest
will be computed on the basis of a 360-day year composed of twelve 30-day
months.

 

If the Company redeems this
Security pursuant to Section 5 of this Security, on a date that is after
the Regular Record Date and prior to the corresponding Interest Payment Date,
interest, including Special Interest, if any, accrued and unpaid hereon to, but
not including, the applicable Redemption Date, will be paid to the Holder in
whose name the Securities are registered as of the close of business on the
Regular Record Date immediately preceding the applicable Redemption Date.

 

If the Holder elects to
require the Company to repurchase this Security pursuant to Section 6 of
this Security, on a date that is after the Regular Record Date and prior to the
corresponding Interest Payment Date, interest, including Special Interest, if
any, accrued and unpaid hereon to, but not including, the applicable
Fundamental Change Repurchase Date, will be paid to the Holder in whose name
the Securities are registered as of the close of business on the Regular Record
Date immediately preceding the applicable Fundamental Change Repurchase Date.

 

A Holder of any Security at
the close of business on a Regular Record Date shall be entitled to receive
interest, including Special Interest, if any, on such Security on the
corresponding Interest Payment Date. A Holder of any Security which is
converted after the close of business on a Regular Record Date and prior to the
corresponding Interest Payment Date (other than any Security whose Maturity is
prior to such Interest Payment Date) shall be entitled to receive interest,
including Special Interest, if any, on the principal amount of such Security,
notwithstanding the conversion of such Security prior to such Interest Payment
Date. However, any such Holder which surrenders any such Security for
conversion during the period between the close of business on such Regular
Record Date and ending with the opening of business on the corresponding
Interest Payment Date shall be required to pay the Company an amount equal to the
interest, including Special Interest, if any, on the principal amount of such
Security so converted (but excluding any overdue interest, including Special
Interest, if any, on the principal amount of such Security so converted that
exists at the time such Holder surrenders such Security for conversion), which
is payable by the Company to such Holder on such Interest Payment Date, at the
time such Holder surrenders such Security for conversion. Notwithstanding the
foregoing, any such Holder which surrenders for conversion any Security (a) with
respect to

 

1

 

which the Company has
specified a Fundamental Change Repurchase Date or a Redemption Date, in either
case, that is after such Regular Record Date and on or prior to the next
succeeding Interest Payment Date, or (b) after the last Regular Record
Date prior to the Final Maturity Date, in either case, shall be entitled to
receive (and retain) such interest, including Special Interest, if any, and
need not pay the Company an amount equal to the interest, including Special
Interest, if any, on the principal amount of such Security so converted at the
time such Holder surrenders such Security for conversion.

 

2.             METHOD OF PAYMENT

 

The Company shall pay interest,
including Special Interest, if any, on this Security (except defaulted
interest) to the person who is the Holder of this Security at the close of
business on [  ] and [  ], as the case may be (each, a “Regular Record Date”) immediately
preceding the related Interest Payment Date. The Holder must surrender this
Security to a Paying Agent to collect payment of principal. The Company will
pay principal and interest and Special Interest, if any, 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 pay principal and interest, including Special
Interest, if any, in respect of any Certificated Security by check or wire
transfer payable in such money; provided,
however, that a Holder with an
aggregate principal amount in excess of $5,000,000 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 Trustee at least 10
Business Days prior to the Interest Payment Date. The Company may mail an
interest check to the Holder’s registered address. Notwithstanding the
foregoing, so long as this Security is registered in the name of a Depositary
or its nominee, all payments hereon shall be made by wire transfer of
immediately available funds to the account of the Depositary or its nominee.

 

Any wire transfer
instructions received by the Trustee will remain in effect until revoked by the
Holder.

 

3.             PAYING AGENT, REGISTRAR AND CONVERSION AGENT

 

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

 

4.             INDENTURE, LIMITATIONS

 

This Security is one of a
duly authorized issue of Securities of the Company designated as its [  ]%
Senior Subordinated Convertible Notes Due 2013 (the “Securities”), issued under an Indenture
dated as of February [  ], 2008 (the “Indenture”), between the Company and
the Trustee. The terms of this Security include those stated in the Indenture
and those required by or made part of the Indenture by reference to the TIA, as
in effect on the date of the Indenture. This Security is subject to all such
terms, and the Holder of this Security is referred to the Indenture and TIA for
a statement of them.

 

2

 

The Securities are senior
subordinated unsecured obligations of the Company up to $[282,500,000] in
aggregate principal amount at maturity. The Indenture does not limit the
incurrence of other debt of the Company or its existing or future Subsidiaries,
secured or unsecured.

 

5.             OPTIONAL REDEMPTION.

 

Prior to [  ],
2010, the Company cannot redeem the Securities. 
The Company may, on or after [  ], 2010, at its option, redeem
the Securities in whole or in part on any date from time to time, upon notice
to the Holders as provided in the Indenture, at a redemption prices set forth below, plus
accrued and unpaid interest, if any, to but excluding the Redemption Date.

 

	
  Year

  	
   

  	
  Redemption

  Price

  	
   

  
	
  2010

  	
   

  	
  [·]

  	
  %

  
	
  2011

  	
   

  	
  [·]

  	
  %

  
	
  2012

  	
   

  	
  [·]

  	
  %

  

 

If fewer than all the
Securities are to be redeemed, the Trustee shall select the particular
Securities to be redeemed from the outstanding Securities by the methods as
provided in the Indenture.  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 (provided, however, that the Holder of such
Security so converted and deemed redeemed shall not be entitled to any
additional interest payment as a result of such deemed redemption than such
Holder would have otherwise been entitled to receive upon conversion of such
Security).  Securities which have been
converted during a selection of Securities to be redeemed may be treated by the
Trustee as Outstanding for the purpose of such selection.

 

On and after the Redemption
Date, interest ceases to accrue on Securities or portions of Securities called
for redemption, unless the Company defaults in the payment of the redemption
price and accrued and unpaid interest.

 

6.                                      PURCHASE OF
SECURITIES AT OPTION OF HOLDER UPON A FUNDAMENTAL CHANGE

 

If a Fundamental Change
occurs, at the option of the Holder and subject to the terms and conditions of
the Indenture, the Company shall become obligated to purchase for cash, subject
to certain exceptions described in the Indenture all or any part specified by the
Holder (so long as the principal amount of such part is $1,000 or an integral
multiple of $1,000) of the Securities held by such Holder on a date specified
by the Company that is no later than 30 days after the date of the Fundamental
Change Company Notice, at a purchase price equal to 100% of the principal
amount thereof together with unpaid interest, including Special Interest, if
any, accrued to, but excluding, the Fundamental Change Repurchase Date. A
Fundamental Change Company Notice shall be given by the Company to the Holders
as provided in the Indenture. To exercise

 

3

 

such repurchase right, a
Holder must deliver to the Trustee a Fundamental Change Repurchase Notice as
provided in the Indenture.

 

7.             CONVERSION

 

Subject to and upon
compliance with the provisions of the Indenture, a Holder may surrender for
conversion any Security that is $1,000 principal amount or integral multiples
thereof.

 

Subject to certain
conditions provided for in the Indenture, in certain circumstances, a Holder
may receive an amount in Common Stock equal to the Make-Whole Premium, in
addition to the shares of Common Stock issuable upon conversion of such
Security.

 

The Conversion Rate shall be
initially equal to [  ] shares of Common Stock per $1,000 principal
amount of Securities. The Conversion Rate shall be adjusted under certain
circumstances as provided in the Indenture.

 

No fractional share of
Common Stock shall be issued upon conversion of a Security. Instead, the
Company shall pay a cash adjustment as provided in the Indenture.

 

8.             SUBORDINATION

 

The Indebtedness evidenced
by this Security is, to the extent and in the manner provided in the Indenture,
subordinated and subject in right of payment to the prior payment in full of
all amounts then due on all Senior Debt of the Company; provided, however,
that the Securities, the Indebtedness represented thereby and the payment of
the principal of and premium, if any, and interest on the Securities in all
respects shall rank equally with, or prior to, all existing and future
Indebtedness of the Company that is expressly subordinated to any Senior Debt,
and this Security is issued subject to such provisions of the Indenture with
respect thereto. Each Holder of this Security, by accepting the same, (a) agrees
to and shall be bound by such provisions, (b) authorizes and directs the
Trustee on such Holder’s behalf to take such action as may be necessary or
appropriate to effectuate the subordination so provided, and (c) appoints
the Trustee such Holder’s attorney-in-fact for any and all such purposes.

 

9.             DENOMINATIONS, TRANSFER, EXCHANGE

 

The Securities are in
registered form, without coupons, in denominations of $1,000 principal amount
and integral multiples of $1,000 principal amount. A Holder may register the
transfer of or exchange Securities 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.

 

10.           PERSONS DEEMED OWNERS

 

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

 

4

 

11.           UNCLAIMED MONEY

 

If money for the payment of
principal or interest, including Special Interest, if any, remains unclaimed
for two years, the Trustee and any Paying Agent will pay the money back to the
Company at its written request, subject to applicable unclaimed property law
and the provisions of the Indenture. 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.

 

12.           DISCHARGE PRIOR TO MATURITY.

 

Subject to certain
conditions contained in the Indenture, the Company may discharge its
obligations under the Securities and the Indenture if (1) all of the
Securities then outstanding shall become due and payable at their scheduled
Maturity within one year, and (2) the Company shall have deposited with
the Trustee money and/or U.S. Government Obligations sufficient to pay the
principal of, and premium, if any, and interest, including Special Interest, if
any, on all of the outstanding Securities on the date of Maturity.

 

13.           AMENDMENT, SUPPLEMENT AND WAIVER

 

The Indenture permits, with
certain exceptions as therein provided, the amendment thereof and the
modification of the rights and obligations of the Company and the rights of the
Holders of the Securities under the Indenture at any time by the Company and
the Trustee with the consent of the Holders of a majority in aggregate
principal amount of the Securities then outstanding (or such lesser amount as
shall have acted at a meeting pursuant to the provisions of the Indenture). The
Indenture also contains provisions permitting the Holders of specified
percentages in principal amount of the Securities at the time outstanding, on
behalf of the Holders of all the Securities, to waive compliance by the Company
with certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Security shall be conclusive and binding upon such Holder and upon all
future Holders of this Security and of any Security issued upon registration of
transfer hereof or in exchange herefor or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Security or such other
Security.

 

No reference herein to the
Indenture and no provision of this Security or of the Indenture shall alter or
impair the obligation of the Company, which is absolute and unconditional, to
pay the principal of and premium, if any, and interest, including Special
Interest, if any, on this Security at the times, places and rate, and in the
coin or currency, herein prescribed or to convert this Security as provided in
the Indenture.

 

14.           SUCCESSOR ENTITY

 

When a successor corporation
assumes all the obligations of its predecessor under the Securities 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.

 

15.           DEFAULTS AND REMEDIES

 

Under the Indenture, an Event
of Default shall occur if:

 

5

 

(a)  the Company shall
fail to pay when due the principal, Redemption Price or any Fundamental Change
Repurchase Price of any Security, including any Make-Whole Premium, when the
same becomes due and payable whether at the Final Maturity Date, upon
repurchase, redemption, acceleration or otherwise whether or not such payment
is prohibited by Article 5 of the Indenture; or

 

(b)  the Company shall
fail to pay an installment of interest, including Special Interest, if any, on
any of the Securities, which failure continues for 30 days after the date when
due whether or not such payment is prohibited by Article 5 hereof; or

 

(c)  the Company shall
fail to deliver when due all shares of Common Stock, together with cash instead
of fractional shares deliverable upon conversion of the Securities, which
failure continues for 10 days; or

 

(d)  the Company fails
to perform or observe any other term, covenant or agreement contained in the Securities
or the Indenture and the failure continues for a period of 60 days after
written notice of such failure, requiring the Company to remedy the same, shall
have been given 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
then-outstanding Securities; or

 

(e)  (i) the
Company fails to make any payment by the end of the applicable grace period, if
any, after the maturity of any Indebtedness for borrowed money in an amount in
excess of $5,000,000, or (ii) there is an acceleration of any Indebtedness
for borrowed money in an amount in excess of $5,000,000 because of a default
with respect to such Indebtedness without such Indebtedness having been
discharged or such acceleration having been cured, waived, rescinded or
annulled, in the case of either (i) or (ii) above, for a period of 30
days after written notice to the Company by the Trustee or to the Company and
the Trustee by Holders of at least 25% in aggregate principal amount of the
then-outstanding Securities; or

 

(f)  the Company fails
to provide a Fundamental Change Company Notice in accordance with Section 3.08
of the Indenture; or

 

(g)  certain events of
bankruptcy, insolvency or reorganization as specified in the Indenture.

 

If an Event of Default shall
occur and be continuing, the principal of all the Securities may be declared
due and payable in the manner and with the effect provided in the Indenture.

 

Notwithstanding the
foregoing or anything to the contrary set forth in the Indenture, to the extent
elected by the Company, the sole remedy for an Event of Default relating to the
failure to comply with the reporting obligations set forth in Section 6.05
of the Indenture and for any failure to comply with the requirements of Section 314(a)(1) of
the Trust Indenture Act will for the first 180 days after the occurrence of
such an Event of Default consist exclusively of the right to receive special
interest on the Securities at an annual rate equal to 1.0% of the principal
amount of the Securities (“Special
Interest”). The Special Interest will accrue on all outstanding
Securities from and including the date on which an Event of Default relating to
a failure to comply with the reporting obligations set forth in Section 6.05
of the Indenture first occurs to but not including the 180th day thereafter (or
such earlier date on which the Event of Default shall

 

6

 

have been cured or waived).
On such 180th day (or earlier, if the Event of Default relating to the
reporting obligations is cured or waived prior to such 180th day), such Special
Interest will cease to accrue and, if the Event of Default relating to
reporting obligations has not been cured or waived prior to such 180th day, the
Securities will be subject to acceleration as provided for in Section 8.02
of the Indenture. In the event the Company does not elect to pay Special
Interest upon an Event of Default in accordance with this paragraph, the
Securities will be subject to acceleration as provided for above. If the
Company elects to pay Special Interest as the sole remedy for an Event of
Default relating to the failure to comply with reporting obligations in Section 6.05
of the Indenture or for any failure to comply with the requirements of Section 314(a)(1) of
the TIA in, the Company will notify all Holders, the Trustee and Paying Agent
of such election on or before the close of business on the date on which such
Event of Default first occurs.

 

16.           NO RECOURSE AGAINST OTHERS

 

A director, officer,
employee or shareholder, as such, of the Company shall not have any liability
for any obligations of the Company under the Securities 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 Security by accepting this Security waives and
releases all such liability. The waiver and release are part of the
consideration for the issuance of this Security.

 

17.           AUTHENTICATION

 

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

 

18.           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 Security but not specifically defined herein are
defined in the Indenture and are used herein as so defined.

 

19.           CUSIP NUMBERS.

 

Pursuant to a recommendation
promulgated by the Committee on Uniform Security Identification Procedures, the
Company has caused CUSIP numbers to be printed on this Security. No
representation is made as to the accuracy of such numbers either as printed on
this Security and reliance may be placed only on the other identification
numbers placed thereon.

 

20.           INDENTURE TO CONTROL; GOVERNING LAW

 

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

 

7

 

The Company will furnish to
any Holder, upon written request and without charge, a copy of the Indenture.
Requests may be made to: Vertex Pharmaceuticals Incorporated, 130 Waverly
Street, Cambridge, MA  02139
Attention:  Investor Relations.

 

8

 

ASSIGNMENT FORM

 

To assign this Security,
fill in the form below:

 

I or we assign and transfer
this Security 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 Security on the books of the
  Company. The Agent may substitute another to act for him or her.

  

 

 

	
  Date:

  	
   

  	
   

  	
  Your Signature:

  	
   

  
	
   

  	
   

  	
  (Sign exactly as your name appears on the

  other side of this Security)

  

 

 

*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.

 

1

 

CONVERSION NOTICE

 

To convert this Security,
check the box:

	
   

  	
  o

  

 

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

 

If you want the cash paid to
another person or 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) and irrevocably appoint

  
	
   

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

  
	
   

  

 

 

	
  Date:

  	
   

  	
   

  	
  Your Signature:

  	
   

  
	
   

  	
   

  	
  (Sign exactly as your name appears on the

  other side of this Security)

  

 

 

*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.

 

1

 

FUNDAMENTAL CHANGE REPURCHASE NOTICE

 

TO:  VERTEX
PHARMACEUTICALS INCORPORATED

130 Waverly Street

Cambridge,
Massachusetts  02139

 

The undersigned registered
owner of this Security hereby irrevocably acknowledges receipt of a notice from
VERTEX PHARMACEUTICALS INCORPORATED
(the “Company”) as to the
occurrence of a Fundamental Change with respect to the Company and requests and
instructs the Company to purchase the entire principal amount of this Security,
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
Security at the Fundamental Change Repurchase Price to the registered Holder
hereof.

 

 

	
  Date:

  	
   

  	
   

  	
  Your Signature:

  	
   

  

 

 

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
repurchased (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
Security in every particular, without any alteration or change whatsoever.

 

1

 

SCHEDULE OF EXCHANGES OF SECURITIES

 

The following exchanges,
purchase, repurchases, redemption or conversions of a part of this Global
Security have been made:

 

	
  Date of Exchange

  	
   

  	
  Amount of

  Decrease in

  Principal

  Amount of this

  Security

  	
   

  	
  Amount of

  Increase in

  Principal

  Amount of this

  Security

  	
   

  	
  Principal

  Amount of this

  Global Security

  following Each

  Increase of

  Decrease

  	
   

  	
  Signature of

  Authorized

  Officer of

  Trustee

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

1

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