Document:

Exhibit
4.6

 

EXECUTION COPY

 

 

FEI
COMPANY

 

ZERO
COUPON CONVERTIBLE SUBORDINATED NOTES DUE JUNE 15, 2023

FIRST PUTABLE JUNE 15, 2008

 

 

INDENTURE

DATED AS OF JUNE 13, 2003

 

 

BNY
WESTERN TRUST COMPANY

AS TRUSTEE

 

 

 

TABLE OF
CONTENTS

 

	
  ARTICLE
  1

  
	
  DEFINITIONS
  AND INCORPORATION BY REFERENCE

  
	
   

  
	
  SECTION 1.1.

  	
  DEFINITIONS

  
	
  SECTION 1.2.

  	
  OTHER DEFINITIONS

  
	
  SECTION 1.3.

  	
  TRUST INDENTURE ACT PROVISIONS

  
	
  SECTION 1.4.

  	
  RULES OF CONSTRUCTION

  
	
   

  	
   

  
	
  ARTICLE
  2

  
	
  THE SECURITIES

  
	
   

  	
   

  
	
  SECTION 2.1.

  	
  FORM AND DATING

  
	
  SECTION 2.2.

  	
  EXECUTION AND AUTHENTICATION

  
	
  SECTION 2.3.

  	
  REGISTRAR, PAYING AGENT AND CONVERSION
  AGENT

  
	
  SECTION 2.4.

  	
  PAYING AGENT TO HOLD MONEY IN TRUST

  
	
  SECTION 2.5.

  	
  SECURITYHOLDER LISTS

  
	
  SECTION 2.6.

  	
  TRANSFER AND EXCHANGE

  
	
  SECTION 2.7.

  	
  REPLACEMENT SECURITIES

  
	
  SECTION 2.8.

  	
  OUTSTANDING SECURITIES

  
	
  SECTION 2.9.

  	
  TREASURY SECURITIES

  
	
  SECTION 2.10.

  	
  TEMPORARY SECURITIES

  
	
  SECTION 2.11.

  	
  CANCELLATION

  
	
  SECTION 2.12.

  	
  LEGEND; ADDITIONAL TRANSFER AND EXCHANGE
  REQUIREMENTS

  
	
  SECTION 2.13.

  	
  CUSIP NUMBERS

  
	
   

  	
   

  
	
  ARTICLE
  3

  
	
  REDEMPTION AND PURCHASES

  
	
   

  	
   

  
	
  SECTION 3.1.

  	
  RIGHT TO REDEEM; NOTICE TO TRUSTEE

  
	
  SECTION 3.2.

  	
  SELECTION OF SECURITIES TO BE REDEEMED

  
	
  SECTION 3.3.

  	
  NOTICE OF REDEMPTION

  
	
  SECTION 3.4.

  	
  EFFECT OF NOTICE OF REDEMPTION

  
	
  SECTION 3.5.

  	
  DEPOSIT OF REDEMPTION PRICE

  
	
  SECTION 3.6.

  	
  SECURITIES REDEEMED IN PART

  
	
  SECTION 3.7.

  	
  CONVERSION ARRANGEMENT ON CALL FOR
  REDEMPTION

  
	
  SECTION 3.8.

  	
  PURCHASE OF SECURITIES AT OPTION OF THE
  HOLDER UPON CHANGE IN CONTROL

  
	
  SECTION 3.9.

  	
  EFFECT OF CHANGE IN CONTROL PURCHASE NOTICE

  
	
  SECTION 3.10.

  	
  DEPOSIT OF CHANGE IN CONTROL PURCHASE
  PRICE

  
	
  SECTION 3.11.

  	
  PURCHASE OF SECURITIES AT OPTION OF THE
  HOLDER ON SPECIFIED DATES

  
	
  SECTION 3.12.

  	
  SECURITIES PURCHASED IN PART

  
	
  SECTION 3.13.

  	
  COMPLIANCE WITH SECURITIES LAWS UPON
  PURCHASE OF SECURITIES

  

 

i

 

	
  ARTICLE 4

  
	
  CONVERSION

  
	
   

  	
   

  
	
  SECTION 4.1.

  	
  CONVERSION PRIVILEGE

  
	
  SECTION 4.2.

  	
  CONVERSION PROCEDURE

  
	
  SECTION 4.3.

  	
  FRACTIONAL SHARES

  
	
  SECTION 4.4.

  	
  TAXES ON CONVERSION

  
	
  SECTION 4.5.

  	
  COMPANY TO PROVIDE STOCK

  
	
  SECTION 4.6.

  	
  ADJUSTMENT OF CONVERSION PRICE

  
	
  SECTION 4.7.

  	
  NO ADJUSTMENT

  
	
  SECTION 4.8.

  	
  NOTICE OF ADJUSTMENT

  
	
  SECTION 4.9.

  	
  ADJUSTMENT FOR TAX PURPOSES

  
	
  SECTION 4.10.

  	
  NOTICE OF CERTAIN TRANSACTIONS

  
	
  SECTION 4.11.

  	
  EFFECT OF
  RECLASSIFICATION, CONSOLIDATION, MERGER OR SALE ON CONVERSION PRIVILEGE

  
	
  SECTION 4.12.

  	
  TRUSTEE’S DISCLAIMER

  
	
  SECTION 4.13.

  	
  VOLUNTARY REDUCTION

  
	
   

  	
   

  
	
  ARTICLE
  5

  
	
  SUBORDINATION

  
	
   

  	
   

  
	
  SECTION 5.1.

  	
  AGREEMENT OF SUBORDINATION

  
	
  SECTION 5.2.

  	
  PAYMENTS TO HOLDERS

  
	
  SECTION 5.3.

  	
  SUBROGATION OF SECURITIES

  
	
  SECTION 5.4.

  	
  AUTHORIZATION TO EFFECT SUBORDINATION

  
	
  SECTION 5.5.

  	
  NOTICE TO TRUSTEE

  
	
  SECTION 5.6.

  	
  TRUSTEE’S RELATION TO SENIOR INDEBTEDNESS

  
	
  SECTION 5.7.

  	
  NO IMPAIRMENT OF SUBORDINATION

  
	
  SECTION 5.8.

  	
  CERTAIN CONVERSIONS DEEMED PAYMENT

  
	
  SECTION 5.9.

  	
  ARTICLE APPLICABLE TO PAYING AGENTS

  
	
  SECTION 5.10.

  	
  SENIOR INDEBTEDNESS ENTITLED TO RELY

  
	
   

  	
   

  
	
  ARTICLE 6

  
	
  COVENANTS

  
	
   

  	
   

  
	
  SECTION 6.1.

  	
  PAYMENT OF SECURITIES

  
	
  SECTION 6.2.

  	
  SEC REPORTS

  
	
  SECTION 6.3.

  	
  COMPLIANCE CERTIFICATES

  
	
  SECTION 6.4.

  	
  FURTHER INSTRUMENTS AND ACTS

  
	
  SECTION 6.5.

  	
  MAINTENANCE OF CORPORATE EXISTENCE

  
	
  SECTION 6.6.

  	
  RULE 144A INFORMATION REQUIREMENT

  
	
  SECTION 6.7.

  	
  STAY, EXTENSION AND USURY LAWS

  
	
  SECTION 6.8.

  	
  PAYMENT OF INTEREST AMOUNTS

  
	
   

  	
   

  
	
  ARTICLE
  7

  
	
  CONSOLIDATION, MERGER, CONVEYANCE,
  TRANSFER OR LEASE

  
	
   

  	
   

  
	
  SECTION 7.1.

  	
  COMPANY MAY CONSOLIDATE, ETC, ONLY ON
  CERTAIN TERMS

  
	
  SECTION 7.2.

  	
  SUCCESSOR SUBSTITUTED

  

 

ii

 

	
  ARTICLE
  8

  
	
  DEFAULT AND REMEDIES

  
	
   

  	
   

  
	
  SECTION 8.1.

  	
  EVENTS OF DEFAULT

  
	
  SECTION 8.2.

  	
  ACCELERATION

  
	
  SECTION 8.3.

  	
  OTHER REMEDIES

  
	
  SECTION 8.4.

  	
  WAIVER OF DEFAULTS AND EVENTS OF DEFAULT

  
	
  SECTION 8.5.

  	
  CONTROL BY MAJORITY

  
	
  SECTION 8.6.

  	
  LIMITATIONS ON SUITS

  
	
  SECTION 8.7.

  	
  RIGHTS OF HOLDERS TO RECEIVE PAYMENT AND
  TO CONVERT

  
	
  SECTION 8.8.

  	
  COLLECTION SUIT BY TRUSTEE

  
	
  SECTION 8.9.

  	
  TRUSTEE MAY FILE PROOFS OF CLAIM

  
	
  SECTION 8.10.

  	
  PRIORITIES

  
	
  SECTION 8.11.

  	
  UNDERTAKING FOR COSTS

  
	
   

  	
   

  
	
  ARTICLE
  9

  
	
  TRUSTEE

  
	
   

  	
   

  
	
  SECTION 9.1.

  	
  DUTIES OF TRUSTEE

  
	
  SECTION 9.2.

  	
  RIGHTS OF TRUSTEE

  
	
  SECTION 9.3.

  	
  INDIVIDUAL RIGHTS OF TRUSTEE

  
	
  SECTION 9.4.

  	
  TRUSTEE’S DISCLAIMER

  
	
  SECTION 9.5.

  	
  NOTICE OF DEFAULT OR EVENTS OF DEFAULT

  
	
  SECTION 9.6.

  	
  REPORTS BY TRUSTEE TO HOLDERS

  
	
  SECTION 9.7.

  	
  COMPENSATION AND INDEMNITY

  
	
  SECTION 9.8.

  	
  REPLACEMENT OF TRUSTEE

  
	
  SECTION 9.9.

  	
  SUCCESSOR TRUSTEE BY MERGER, ETC

  
	
  SECTION 9.10.

  	
  ELIGIBILITY; DISQUALIFICATION

  
	
  SECTION 9.11.

  	
  PREFERENTIAL COLLECTION OF CLAIMS AGAINST
  COMPANY

  
	
   

  	
   

  
	
  ARTICLE 10

  
	
  SATISFACTION
  AND DISCHARGE OF INDENTURE

  
	
   

  	
   

  
	
  SECTION 10.1.

  	
  SATISFACTION AND DISCHARGE OF INDENTURE

  
	
  SECTION 10.2.

  	
  APPLICATION OF TRUST MONEY

  
	
  SECTION 10.3.

  	
  REPAYMENT TO COMPANY

  
	
  SECTION 10.4.

  	
  REINSTATEMENT

  
	
   

  	
   

  
	
  ARTICLE 11

  
	
  AMENDMENTS, SUPPLEMENTS AND WAIVERS

  
	
   

  	
   

  
	
  SECTION 11.1.

  	
  WITHOUT CONSENT OF HOLDERS

  
	
  SECTION 11.2.

  	
  WITH CONSENT OF HOLDERS

  
	
  SECTION 11.3.

  	
  COMPLIANCE WITH TRUST INDENTURE ACT

  
	
  SECTION 11.4.

  	
  REVOCATION AND EFFECT OF CONSENTS

  
	
  SECTION 11.5.

  	
  NOTATION ON OR EXCHANGE OF SECURITIES

  
	
  SECTION 11.6.

  	
  TRUSTEE TO SIGN AMENDMENTS, ETC

  
	
  SECTION 11.7.

  	
  EFFECT OF SUPPLEMENTAL INDENTURES

  

 

iii

 

	
  ARTICLE 12

  
	
  MISCELLANEOUS

  
	
   

  	
   

  
	
  SECTION 12.1.

  	
  TRUST INDENTURE ACT CONTROLS

  
	
  SECTION 12.2.

  	
  NOTICES

  
	
  SECTION 12.3.

  	
  COMMUNICATIONS BY HOLDERS WITH OTHER
  HOLDERS

  
	
  SECTION 12.4.

  	
  CERTIFICATE AND OPINION AS TO CONDITIONS
  PRECEDENT

  
	
  SECTION 12.5.

  	
  RECORD DATE FOR VOTE, WAIVER OR CONSENT
  OF SECURITYHOLDERS

  
	
  SECTION 12.6.

  	
  RULES BY TRUSTEE, PAYING AGENT, REGISTRAR
  AND CONVERSION AGENT

  
	
  SECTION 12.7.

  	
  LEGAL HOLIDAYS

  
	
  SECTION 12.8.

  	
  GOVERNING LAW

  
	
  SECTION 12.9.

  	
  NO ADVERSE INTERPRETATION OF OTHER
  AGREEMENTS

  
	
  SECTION 12.10.

  	
  NO RECOURSE AGAINST OTHERS

  
	
  SECTION 12.11.

  	
  SUCCESSORS

  
	
  SECTION 12.12.

  	
  MULTIPLE
  COUNTERPARTS

  
	
  SECTION 12.13.

  	
  SEPARABILITY

  
	
  SECTION 12.14.

  	
  TABLE OF CONTENTS, HEADINGS, ETC

  

 

iv

 

CROSS-REFERENCE TABLE*

 

	
  TIA

  SECTION

  	
   

  	
   

  	
   

  	
  INDENTURE

  SECTION

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section

  	
   

  	
  310(a)(1)

  	
   

  	
  9.10

  
	
   

  	
   

  	
  (a)(2)

  	
   

  	
  9.10

  
	
   

  	
   

  	
  (a)(3)

  	
   

  	
  N.A.**

  
	
   

  	
   

  	
  (a)(4)

  	
   

  	
  N.A.

  
	
   

  	
   

  	
  (a)(5)

  	
   

  	
  9.10

  
	
   

  	
   

  	
  (b)

  	
   

  	
  9.8; 9.10

  
	
   

  	
   

  	
  (c)

  	
   

  	
  N.A.

  
	
  Section

  	
   

  	
  311(a)

  	
   

  	
  9.11

  
	
   

  	
   

  	
  (b)

  	
   

  	
  9.11

  
	
   

  	
   

  	
  (c)

  	
   

  	
  N.A.

  
	
  Section

  	
   

  	
  312(a)

  	
   

  	
  2.5

  
	
   

  	
   

  	
  (b)

  	
   

  	
  12.3

  
	
   

  	
   

  	
  (c)

  	
   

  	
  12.3

  
	
  Section

  	
   

  	
  313(a)

  	
   

  	
  9.6

  
	
   

  	
   

  	
  (b)(1)

  	
   

  	
  N.A.

  
	
   

  	
   

  	
  (b)(2)

  	
   

  	
  9.6

  
	
   

  	
   

  	
  (c)

  	
   

  	
  9.6; 12.2

  
	
   

  	
   

  	
  (d)

  	
   

  	
  9.6

  
	
  Section

  	
   

  	
  314(a)

  	
   

  	
  6.2; 6.4

  
	
   

  	
   

  	
  (b)

  	
   

  	
  N.A.

  
	
   

  	
   

  	
  (c)(1)

  	
   

  	
  12.4(a)

  
	
   

  	
   

  	
  (c)(2)

  	
   

  	
  12.4(a)

  
	
   

  	
   

  	
  (c)(3)

  	
   

  	
  N.A.

  
	
   

  	
   

  	
  (d)

  	
   

  	
  N.A.

  
	
   

  	
   

  	
  (e)

  	
   

  	
  12.4(b)

  
	
   

  	
   

  	
  (f)

  	
   

  	
  N.A.

  
	
  Section

  	
   

  	
  315(a)

  	
   

  	
  9.1(b)

  
	
   

  	
   

  	
  (b)

  	
   

  	
  9.5; 12.2

  
	
   

  	
   

  	
  (c)

  	
   

  	
  9.1(a)

  
	
   

  	
   

  	
  (d)

  	
   

  	
  9.1(c)

  
	
   

  	
   

  	
  (e)

  	
   

  	
  8.11

  
	
  Section

  	
   

  	
  316(a)(last sentence)

  	
   

  	
  2.9

  
	
   

  	
   

  	
  (a)(1)(A)

  	
   

  	
  8.5

  
	
   

  	
   

  	
  (a)(1)(B)

  	
   

  	
  8.4

  
	
   

  	
   

  	
  (a)(2)

  	
   

  	
  N.A.

  
	
   

  	
   

  	
  (b)

  	
   

  	
  8.7

  
	
   

  	
   

  	
  (c)

  	
   

  	
  12.5

  
	
  Section

  	
   

  	
  317(a)(1)

  	
   

  	
  8.8

  
	
   

  	
   

  	
  (a)(2)

  	
   

  	
  8.9

  
	
   

  	
   

  	
  (b)

  	
   

  	
  2.4

  

 

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

 

**          N.A. means Not
Applicable.

 

v

 

THIS INDENTURE dated as of June 13, 2003 is between
FEI Company, a corporation duly organized under the laws of the State of Oregon
(the “Company”), and BNY Western Trust Company, a California State Banking
Corporation, as Trustee (the “Trustee”).

 

In consideration of the premises and the purchase of
the Securities by the Holders thereof, both parties agree as follows for the
benefit of the other and for the equal and ratable benefit of the registered
Holders of the Securities.

 

ARTICLE 1

DEFINITIONS AND INCORPORATION BY
REFERENCE

 

SECTION 1.1.                  DEFINITIONS.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Common Stock” means the common stock of the Company,
no par value 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 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.

 

1

 

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

 

“Conversion Rate” means, as of any date of
determination with respect to the Securities, the number of shares of Common
Stock into which a Security may be converted in accordance with Article 4
hereof, and shall equal the quotient obtained by dividing $1,000 by the then
current Conversion Price.

 

“Conversion Value” of a Security means, as of any date
of determination, the product of the last reported bid price of the Common
Stock on that date of determination multiplied by the Conversion Rate of that
Security on that date.

 

“Corporate Trust Office” means the office of the
Trustee at which at any time the trust created by this Indenture shall be
administered, which office at the date of the execution of this Indenture is
located at 550 Kearny Street, Suite 600, San Francisco, CA 94108, Attn:
Corporate Trust Department or at any other time at such other address as the
Trustee may designate from time to time by notice to the Company.

 

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

 

“Designated Senior Indebtedness” means the Company’s
obligations under any particular Senior Indebtedness in which the instrument
creating or evidencing the same or the assumption or guarantee thereof (or any
related agreements or documents to which the Company is a party) expressly
provides that such Indebtedness shall be “Designated Senior Indebtedness” for
purposes of this Indenture (provided that
such instrument, agreement or other document may place limitations and
conditions on the right of such Senior Indebtedness to exercise the rights of Designated
Senior Indebtedness).  If any payment
made to any holder of any Designated Senior Indebtedness or its Representative
with respect to such Designated Senior Indebtedness is rescinded or must
otherwise be returned by such holder or Representative upon the insolvency,
bankruptcy or reorganization of the Company or otherwise, the reinstated
Indebtedness of the Company arising as a result of such rescission or return
shall constitute Designated Senior Indebtedness effective as of the date of
such rescission or return.

 

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

 

“Final Maturity Date” means June 15, 2023.

 

“GAAP” means generally accepted accounting principles
in the United States of America as in effect as of the date of this Indenture,
including those set forth in (1) the opinions and pronouncements of the
Accounting Principles Board of the American Institute of Certified Public
Accountants, (2) the statements and pronouncements of the Financial
Accounting Standards Board, (3) such other statements by such other entity
as approved by a significant segment of the accounting profession and
(4) the rules and regulations of the SEC governing the inclusion of
financial statements (including pro forma financial statements) in registration
statements filed under the Securities Act and periodic reports required to be
filed pursuant to Section 13 of the Exchange Act, including opinions and
pronouncements in staff accounting bulletins and similar written statements
from the accounting staff of the SEC.

 

“Global Security” means a permanent Global Security
that is in substantially the form attached hereto as Exhibit A and
that includes the information and schedule called for by footnotes 1, 3
and 4

 

2

 

thereof and which is deposited with the Depositary or its custodian and
registered in the name of the Depositary or its nominee.

 

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

 

“Indebtedness” means, with respect to any Person,
without duplication, (a) all indebtedness, obligations and other liabilities
(contingent or otherwise) of such Person for borrowed money (including
obligations of such Person in respect of overdrafts, foreign exchange
contracts, currency exchange agreements, interest rate protection agreements,
and any loans or advances from banks, whether or not evidenced by notes or similar
instruments) or evidenced by credit or loan agreements, bonds, debentures,
notes or similar instruments (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 trade accounts payable or other accrued current expense incurred in
the ordinary course of business in connection with the obtaining of materials
or services), (b) all reimbursement obligations and other liabilities
(contingent or otherwise) of such Person with respect to letters of credit,
bank guarantees or bankers’ acceptances, (c) all obligations and liabilities
(contingent or otherwise) of such Person (i) in respect of leases of such
Person required, in conformity with generally accepted accounting principles, to
be accounted for as capitalized lease obligations on the balance sheet of such
Person, (ii) as lessee under other leases for facilities equipment (and related
assets leased together therewith), whether or not capitalized, entered into or
leased for financing purposes (as determined by the Company) or (iii) under any
lease or related document (including a purchase agreement) in connection with
the lease of real property or improvements (or any personal property included
as part of any such lease) which provides that such Person is contractually
obligated to purchase or cause a third party to purchase the leased property
and thereby guarantee a minimum residual value of the leased property to the
lessor and the obligations of such Person under such lease or related document
to purchase or cause to a third party to purchase such leased property (whether
or not such lease transaction is characterized as an operating lease or a
capitalized lease in accordance with generally accepted accounting principles),
(d) all obligations (contingent or otherwise) of such Person with respect to
any interest rate, currency or other swap, cap, floor or collar agreement,
hedge agreement, forward contract, or other similar instrument or foreign
currency hedge, exchange, purchase or similar instrument or agreement, (e) all
direct or indirect guarantees, agreements to be jointly liable 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
(a) through (d), (f) any indebtedness or other obligations described in clauses
(a) through (e) 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 (g) any and all deferrals, renewals, extensions and
refundings of, or amendments, modifications or supplements to, any
indebtedness, obligation or liability of the kind described in clauses (a)
through (f).

 

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

 

“Initial Purchasers” means Credit Suisse First Boston
LLC and Goldman, Sachs & Co.

 

“Interest Amounts” has the meaning given to “Interest”
in Section 6 of the Registration Rights Agreement and also means the
interest payable pursuant to Section 4.5 hereof and for the purposes of this
Indenture, default interest (to the extent the payment thereof is lawful) on
overdue installments of Interest Amounts, if any, and overdue principal.

 

“Interest Amounts Payment Date”, if applicable, means
June 15 and December 15 of each year.

 

3

 

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

 

“Officers’ Certificate” means a certificate signed by
two Officers; provided, however, that for purposes of
Sections 4.11 and 6.3, “Officers’ Certificate” means a certificate signed
by the principal executive officer, principal financial officer or principal
accounting officer of the Company and by one other Officer.

 

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

 

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

 

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

 

“Put Right Purchase Date” means either the 2008
Purchase Date or the applicable 2013-2018 Purchase Date, as the case may be.

 

“Put Right Purchase Price” means the 2008 Purchase
Price or the 2013-2018 Purchase Price, as the case may be.

 

“Record Date” for Interest Amounts, if any, payable on
any Interest Amounts Payment Date, means June 1 or December 1 (whether or not a
Business Day) next preceding such Interest Amounts Payment Date.

 

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

 

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

 

“Registration Rights Agreement” means the Registration
Rights Agreement, dated as of June 13, 2003, between the Company and the
Initial Purchasers.

 

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

 

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

 

4

 

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

 

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

 

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

 

“Sale Price” of the Common Stock means, as of any date
of determination, the closing per share sale price (or if no closing sale price
is reported, the average of the bid and ask prices or, if more than one in
either case, the average of the average bid and the average ask prices) on such
date as reported in composite transactions for the principal United States securities
exchange on which the Common Stock is traded or, if the Common Stock is not
listed on a United States national or regional securities exchange, as reported
on the Nasdaq System or by the National Quotation Bureau Incorporated.

 

“Series A Preferred Stock” means the Series A
preferred stock of the Company in existence on the date hereof with such rights
as described in the Certificate of Designation to the Second Amended and
Restated Certificate of Incorporation of the Company filed with the Secretary of
State of Oregon on June 10, 2003, and any shares of any class or classes of
capital stock of the Company resulting from any reclassification thereof.

 

“SEC” means the Securities and Exchange Commission.

 

“Securities” means the Zero Coupon Convertible Subordinated
Notes due June 15, 2023, First Putable June 15, 2008, 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 Indebtedness” means the principal of, premium,
if any, interest (including all interest accruing subsequent to the
commencement of any bankruptcy or similar proceeding, whether or not a claim
for post-petition interest is allowable as a claim in any such proceeding) and
rent payable on 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 secured or unsecured, absolute or contingent, due or to become due,
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, unless in the case of any particular Indebtedness
the instrument creating or evidencing the same or the assumption or guarantee
thereof expressly provides that such Indebtedness shall not be senior in right
of payment to the Securities or expressly provides that such Indebtedness is
“pari passu” or “junior” to the Securities. 
If any payment made to any holder of any Senior Indebtedness or its
Representative with respect to such Senior Indebtedness is rescinded or must
otherwise be returned by such holder or Representative upon the insolvency,
bankruptcy or reorganization of the Company or otherwise, the reinstated
Indebtedness of the Company arising as a result of such rescission or return
shall constitute Senior Indebtedness effective as of the date of such
rescission or return.  Notwithstanding the
foregoing, Senior Indebtedness shall not include (a) Indebtedness that
expressly provides that such Indebtedness shall not be senior in right of
payment to the Securities or expressly provides that such Indebtedness is on
the same basis or junior to the Securities, (b) Indebtedness under the
Company’s 5.5% Convertible Subordinated Notes due August 2008,

 

5

 

(c) any Indebtedness of the Company to any subsidiary of the Company
and (d) any obligations for federal, state, local or other taxes.

 

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

 

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

 

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

 

“Trading Day” means a day during which trading in
securities generally occurs on the NNM (or, if the Common Stock is not quoted
on the NNM, on the principal other market on which the Common Stock is then
traded), other than a day on which a material suspension of or limitation on
trading is imposed that affects either the NNM (or, if applicable, such other
market) in its entirety or only the shares of Common Stock (by reason of
movements in price exceeding limits permitted by the relevant market on which
the Common Stock is traded or otherwise) or on which the NNM (or, if
applicable, such other market) cannot clear the transfer of Common Stock due to
an event beyond the Company’s control.

 

“Trading Price” means, on any date of determination,
the average of the secondary bid quotations per Security obtained by the
Conversion Agent for $5,000,000 principal amount of the Securities at
approximately 3:30 p.m., New York City time, on such determination date from
three independent nationally recognized securities dealers selected by the
Company; provided, that if at least three such bids cannot reasonably
be obtained, but two such bids can reasonably be obtained, then the average of
these two bids shall be used; provided,
further, that if at least two such bids cannot
reasonably be obtained, but one such bid can reasonably be obtained, this one
bid shall be used.  If the Conversion
Agent cannot reasonably obtain at least one bid for $5,000,000 principal amount
of the Securities from an independent nationally recognized securities dealer
or, in the reasonable judgment of the Company, the bid quotations are not
indicative of the secondary market value of the Securities, then the Trading
Price of such Securities will equal (a) the applicable Conversion Rate of such
Securities multiplied by (b) the Sale Price of the Common Stock.

 

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

 

“Trust Officer” or “Authorized 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.

 

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

 

6

 

“Volume Weighted Average Price” means, with respect to
one share of Common Stock on any Trading Day, the volume weighted average
prices as displayed under the heading “Bloomberg VWAP” on Bloomberg Page FEIC
<equity> AQR in respect of the period from 9:30 a.m. to 4:00 p.m. (New York
City time) on that Trading Day (or if such volume weighted average price is not
available, the market value of one share of Common Stock on such Trading Day as
the Company determines in good faith using a volume weighted method).

 

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

 

SECTION 1.2.                  OTHER DEFINITIONS.

 

	
  Term

  	
   

  	
  Defined in
  Section

  
	
   

  	
   

  	
   

  
	
  “Agent Members”

  	
   

  	
  2.1(b)

  
	
  “Bankruptcy Law”

  	
   

  	
  8.1

  
	
  “Cash Settlement”

  	
   

  	
  4.2(b)

  
	
  “Cash Settlement Averaging Period”

  	
   

  	
  4.2(b)

  
	
  “Change in Control”

  	
   

  	
  3.8(a)

  
	
  “Change in Control Purchase Date”

  	
   

  	
  3.8(a)

  
	
  “Change in Control Purchase Notice”

  	
   

  	
  3.8(c)

  
	
  “Change in Control Purchase Price”

  	
   

  	
  3.8(a)

  
	
  “Closing Price”

  	
   

  	
  4.6(e)

  
	
  “Combined Settlement”

  	
   

  	
  4.2(b)(3)

  
	
  “Company Order”

  	
   

  	
  2.2

  
	
  “Company Put Right Notice”

  	
   

  	
  3.11(b)

  
	
  “Conversion Agent”

  	
   

  	
  2.3

  
	
  “Conversion Date”

  	
   

  	
  4.2(a)

  
	
  “Conversion Obligations”

  	
   

  	
  4.2(b)

  
	
  “Conversion Price”

  	
   

  	
  4.6

  
	
  “Conversion Retraction Period”

  	
   

  	
  4.2(d)

  
	
  “Conversion Settlement Election
  Notice”

  	
   

  	
  4.2(e)

  
	
  “Current Market Price”

  	
   

  	
  4.6(e)

  
	
  “Custodian”

  	
   

  	
  8.1

  
	
  “DTC”

  	
   

  	
  2.1(a)

  
	
  “Depositary”

  	
   

  	
  2.1(a)

  
	
  “Determination Date”

  	
   

  	
  4.6(d)(1)

  
	
  “Event of Default”

  	
   

  	
  8.1

  
	
  “Exchange Agent”

  	
   

  	
  4.5(b)

  
	
  “Expiration Date”

  	
   

  	
  4.6(d)(2)

  
	
  “Expiration Time”

  	
   

  	
  4.6(d)(2)

  
	
  “Legal Holiday”

  	
   

  	
  12.7

  
	
  “Legend”

  	
   

  	
  2.12(a)

  
	
  “NNM”

  	
   

  	
  4.6(e)

  
	
  “Partial Cash Amount”

  	
   

  	
  4.2(b)

  
	
  “Paying Agent”

  	
   

  	
  2.3

  
	
  “Payment Blockage Notice”

  	
   

  	
  5.2

  
	
  “Primary Registrar”

  	
   

  	
  2.3

  

 

7

 

	
  Term

  	
   

  	
  Defined in
  Section

  
	
  “Purchase Agreement”

  	
   

  	
  2.1

  
	
  “Purchased Shares”

  	
   

  	
  4.6(d)(2)

  
	
  “Put Right Purchase Notice”

  	
   

  	
  3.11(c)

  
	
  “QIB”

  	
   

  	
  2.1(a)

  
	
  “Registrar”

  	
   

  	
  2.3

  
	
  “Reserve Sufficient Date”

  	
   

  	
  4.5(a)

  
	
  “Rights Plan”

  	
   

  	
  4.6(c)

  
	
  “Settlement Notice Period”

  	
   

  	
  4.2(d)(2)

  
	
  “Share Settlement”

  	
   

  	
  4.2(b)(1)

  
	
  “Triggering Distribution”

  	
   

  	
  4.6(d)(1)

  
	
  “Trigger Event”

  	
   

  	
  4.6(c)

  
	
  “Unissued Shares”

  	
   

  	
  3.8(a)

  
	
  “2008 Purchase Date”

  	
   

  	
  3.11(a)

  
	
  “2008 Purchase Price”

  	
   

  	
  3.11(a)

  
	
  “2013-2018 Purchase Dates”

  	
   

  	
  3.11(a)

  
	
  “2013-2018 Purchase Price”

  	
   

  	
  3.11(a)

  

 

SECTION 1.3.                  TRUST INDENTURE ACT PROVISIONS.

 

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

 

“indenture securities” means the Securities;

 

“indenture security holder” means a Securityholder;

 

“indenture to be qualified” means this Indenture;

 

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

 

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

 

SECTION 1.4.                  RULES OF CONSTRUCTION.

 

Unless the context otherwise requires:

 

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

 

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

 

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

 

8

 

(D)                               provisions
apply to successive events and transactions;

 

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

 

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

 

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

 

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

 

ARTICLE 2

THE SECURITIES

 

SECTION 2.1.                  FORM AND DATING.

 

The Securities and the corresponding Trustee’s
certificate of authentication shall be substantially in the respective forms
set forth in Exhibit A, which Exhibit is incorporated in and
made part of this Indenture.  The
Securities may have notations, legends or endorsements required by law, stock
exchange rule or usage.  The Company
shall provide any such notations, legends or endorsements to the Trustee in
writing.  Each Security shall be dated
the date of its authentication.  The
Securities are being offered and sold by the Company pursuant to a Purchase
Agreement, dated June 10, 2003 (the “Purchase Agreement”),
between the Company and the Initial Purchasers, in transactions exempt from, or
not subject to, the registration requirements of the Securities Act.

 

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

 

(b)                                 Global
Securities In General.  Each Global
Security shall represent such of the outstanding Securities as shall be
specified therein and each shall provide that it shall represent the aggregate
amount of outstanding Securities from time to time endorsed thereon and that
the aggregate amount of outstanding Securities represented thereby may from
time to time be reduced or increased, as appropriate, to reflect replacements,
exchanges, redemptions, purchases or conversions of such Securities.  Any adjustment of the aggregate principal
amount of a Global Security to reflect the amount of any increase or decrease
in the amount of outstanding Securities represented thereby shall be made by
the Trustee in accordance with instructions given by the Holder thereof as
required by Section 2.12 hereof and shall be made on the records of the Trustee
and the Depositary.  The Trustee may
rely on such instructions without independent verification.

 

9

 

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

 

(c)                                  Book
Entry Provisions.  The Company shall
execute and the Trustee shall, in accordance with this Section 2.1(c),
authenticate and deliver initially one or more Global Securities that
(i) shall be registered in the name of the Depositary or its nominee,
(ii) shall be delivered by the Trustee to the Depositary or pursuant to
the Depositary’s instructions and (iii) shall bear legends substantially
to the following effect:

 

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

 

SECTION 2.2.                  EXECUTION AND AUTHENTICATION.

 

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

 

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

 

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

 

10

 

The Trustee shall authenticate and make available for
delivery Securities for original issue in the aggregate principal amount of up
to $200,000,000 upon receipt of a written order or orders of the Company signed
by two Officers of the Company (a “Company Order”).  Each Company Order shall specify the amount of Securities to be
authenticated, shall provide that all such Securities will be represented by a
Restricted Global Security and the date on which each original issue of
Securities is to be authenticated.  The
aggregate principal amount of Securities outstanding at any time may not exceed
$200,000,000, except as provided in Section 2.7.

 

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

 

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

 

SECTION 2.3.                  REGISTRAR, PAYING AGENT AND
CONVERSION AGENT.

 

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

 

The Company shall enter into an appropriate agency
agreement with any Agent not a party to this Indenture.  The agreement shall implement the provisions
of this Indenture that relate to such Agent. 
The Company shall notify the Trustee of the name and address of any
Agent not a party to this Indenture.  If
the Company fails to maintain a Registrar, Paying Agent, Conversion Agent or
agent for service of notices and demands in any place required by this
Indenture, or fails to give the foregoing notice, the Trustee shall act as
such.  The Company or any Affiliate of
the Company may act as Paying Agent (except for the purposes of
Section 6.1 and Article 10).

 

The Company hereby initially designates the Trustee as
Paying Agent, Registrar, Primary Registrar, Custodian and Conversion Agent, and
each of the Corporate Trust Office of the Trustee and the office or agency of
the Trustee or any affiliate of the Trustee in the Borough of Manhattan, The
City of New York (which shall initially be The Bank of New York, 101 Barclay
Street – Lobby Level, Debt Processing Window, New York, New York 10286), one
such office or agency of the Company for each of the aforesaid purposes.

 

SECTION 2.4.                  PAYING AGENT TO HOLD MONEY IN TRUST.

 

Prior to 12:00 noon, New York City time, on each due
date of the principal of or Interest Amounts, if any, on any Securities, the
Company shall deposit with a Paying Agent a sum sufficient to pay such
principal or Interest Amounts, if any, so becoming due.  Subject to Section 5.2, a Paying Agent
shall hold in trust for the benefit of Securityholders or the Trustee all money
held by the Paying Agent for

 

11

 

the payment of principal of or Interest Amounts, if any, on the
Securities, and shall notify the Trustee of any default by the Company (or any
other obligor on the Securities) in making any such payment.  If the Company or an Affiliate of the
Company acts as Paying Agent, it shall, before 12:00 noon, New York City time,
on each due date of the principal of or Interest Amounts, if any, on any
Securities, segregate the money and hold it as a separate trust fund.  The Company at any time may require a Paying
Agent to pay all money held by it to the Trustee, and the Trustee may at any
time during the continuance of any default, upon written request to a Paying
Agent, require such Paying Agent to pay forthwith to the Trustee all sums so
held in trust by such Paying Agent. 
Upon doing so, the Paying Agent (other than the Company) shall have no
further liability for the money.

 

SECTION 2.5.                  SECURITYHOLDER LISTS.

 

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

 

SECTION 2.6.                  TRANSFER AND EXCHANGE.

 

(a)                                  Subject
to compliance with any applicable additional requirements contained in
Section 2.12, when a Security is presented to a Registrar with a request
to register a transfer thereof or to exchange such Security for an equal
principal amount of Securities of other authorized denominations, the Registrar
shall register the transfer or make the exchange as requested; provided, however,
that every Security presented or surrendered for registration of transfer or
exchange shall be duly endorsed or accompanied by an assignment form and, if
applicable, a transfer certificate each in the form included in Exhibit A,
and in form satisfactory to the Registrar duly executed by the Holder thereof
or its attorney duly authorized in writing. 
To permit registration of transfers and exchanges, upon surrender of any
Security for registration of transfer or exchange at an office or agency
maintained pursuant to Section 2.3, the Company shall execute and the
Trustee shall authenticate Securities of a like aggregate principal amount at
the Registrar’s request.  Any exchange
or transfer shall be without charge, except that the Company or the Registrar
may require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto; and provided, that this
sentence shall not apply to any exchange pursuant to Section 2.10,
2.12(a), 3.6, 3.12, 4.2 (last paragraph) or 11.5.

 

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

 

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

 

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

 

12

 

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

 

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

 

SECTION 2.7.                  REPLACEMENT SECURITIES.

 

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

 

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

 

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

 

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

 

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

 

SECTION 2.8.                  OUTSTANDING SECURITIES.

 

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

 

13

 

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

 

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

 

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

 

SECTION 2.9.                  TREASURY SECURITIES.

 

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

 

SECTION 2.10.           TEMPORARY SECURITIES.

 

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

 

SECTION 2.11.           CANCELLATION.

 

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

 

14

 

by any investment bankers or other purchasers pursuant to
Section 3.7, but not pursuant to Section 4.5, shall be surrendered
for conversion and thereafter cancelled, and may not be reoffered, sold or
otherwise transferred.

 

SECTION 2.12.           LEGEND; ADDITIONAL TRANSFER AND EXCHANGE
REQUIREMENTS.

 

(a)                                  If
Securities are issued upon the transfer, exchange or replacement of Securities
subject to restrictions on transfer and bearing the legends set forth on the
forms of Securities attached hereto as Exhibit A (collectively, the
“Legend”), or if a request is made to remove the Legend on a Security, the
Securities so issued shall bear the Legend, or the Legend shall not be removed,
as the case may be, unless there is delivered to the Company and the Registrar
such satisfactory evidence, which shall include an opinion of counsel if
requested by the Company or such Registrar, as may be reasonably required by
the Company and the Registrar, that neither the Legend nor the restrictions on
transfer set forth therein are required to ensure that transfers thereof comply
with the provisions of Rule 144A, Rule 144 or Regulation S under the Securities
Act or that such Securities are not “restricted” within the meaning of Rule 144
under the Securities Act; provided that no
such evidence need be supplied in connection with the sale of such Security
pursuant to a registration statement that is effective at the time of such
sale.  Upon (i) provision of such
satisfactory evidence if requested, or (ii) notification by the Company to
the Trustee and Registrar of the sale of such Security pursuant to a
registration statement that is effective at the time of such sale, the Trustee,
at the written direction of the Company, shall authenticate and deliver a
Security that does not bear the Legend. 
If the Legend is removed from the face of a Security and the Security is
subsequently held by an Affiliate of the Company, the Legend shall be
reinstated.

 

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

 

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

 

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

 

15

 

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

 

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

 

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

 

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

 

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

 

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

 

16

 

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

 

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

 

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

 

SECTION 2.13.           CUSIP NUMBERS.

 

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

 

ARTICLE 3

REDEMPTION AND PURCHASES

 

SECTION
3.1.                  RIGHT TO REDEEM;
NOTICE TO TRUSTEE.

 

The Securities may be redeemed at the election of the
Company, as a whole or from time to time in part, at the times and at the
Redemption Prices specified in paragraph 5 of the form of Security
attached hereto as Exhibit A, together with any accrued Interest
Amounts, if any, up to, but not including, the Redemption Date; provided that if the Redemption Date falls
after an Interest Amounts Record Date, if any, and on or before an Interest
Amounts Payment Date, then the Interest Amounts, if any, on the Securities will
be payable to the Holders in whose name the Securities are registered at the
close of business on such Interest Amounts Record Date, if any.

 

If the Company elects to redeem Securities pursuant to
this Section 3.1 and paragraph 5 of the Securities, it shall notify the
Trustee at least 25 days prior to the Redemption Date as fixed by the Company
(unless a shorter notice shall be satisfactory to the Trustee) of the
Redemption Date and the principal amount of Securities to be redeemed.  If fewer than all of the Securities are to be
redeemed, the record date relating to such redemption shall be selected by the
Company and given to the Trustee, which record date shall not be less than ten
days after the date of notice to the Trustee.

 

17

 

SECTION 3.2.                  SELECTION OF SECURITIES TO BE
REDEEMED.

 

If less than all of the Securities are to be redeemed,
unless the procedures of the Depositary provide otherwise, the Trustee shall,
at least 15 days but not more than 60 days prior to the Redemption Date,
select the Securities to be redeemed. 
The Trustee shall make the selection from the Securities outstanding and
not previously called for redemption, by lot, or in its discretion, on a pro
rata basis.  Securities in denominations
of $1,000 may only be redeemed in whole. 
The Trustee may select for redemption portions (equal to $1,000 or any
integral multiple thereof) of the principal of Securities that have
denominations larger than $1,000. 
Provisions of this Indenture that apply to Securities called for
redemption also apply to portions of Securities called for redemption.

 

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

 

SECTION 3.3.                  NOTICE OF REDEMPTION.

 

At least 15 days but not more than 60 days before a
Redemption Date, the Company shall mail or cause to be mailed a notice of
redemption to each Holder of Securities to be redeemed at such Holder’s address
as it appears on the Primary Registrar’s books.

 

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

 

(1)                                  the
Redemption Date;

 

(2)                                  the
Redemption Price;

 

(3)                                  the
then current Conversion Price;

 

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

 

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

 

(6)                                  that
Holders who wish to convert Securities must surrender such Securities for
conversion no later than the close of business on the Business Day immediately
preceding the Redemption Date and must satisfy the other requirements set forth
in paragraph 9 of the Securities and Article 4 hereof;

 

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

 

(8)                                  if
any Security is being redeemed in part, the portion of the principal amount of
such Security to be redeemed and that, after the Redemption Date, upon
presentation and surrender of

 

18

 

such Security, a new Security or Securities in aggregate principal
amount equal to the unredeemed portion thereof will be issued.

 

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

 

At the Company’s request, the Trustee shall give such
notice of redemption on behalf of the Company and at the Company’s expense; provided, however,
that, in all cases, the text of such notice of redemption shall be prepared by
the Company.

 

SECTION 3.4.                  EFFECT OF NOTICE OF REDEMPTION.

 

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

 

SECTION 3.5.                  DEPOSIT OF REDEMPTION PRICE.

 

Prior to 12:00 noon, New York City time, on the Redemption
Date, the Company shall deposit with a Paying Agent (or, if the Company acts as
Paying Agent, shall segregate and hold in trust) an amount of money (in
immediately available funds if deposited on such Redemption Date) sufficient to
pay the Redemption Price of and any accrued Interest Amounts, on all Securities
to be redeemed on that date, other than Securities or portions thereof called
for redemption on that date which have been delivered by the Company to the
Trustee for cancellation or have been converted.  The Paying Agent shall as promptly as practicable return to the
Company any money not required for that purpose because of the conversion of
Securities pursuant to Article 4 or, if such money is then held by the
Company in trust and is not required for such purpose, it shall be discharged
from the trust.

 

SECTION 3.6.                  SECURITIES REDEEMED IN PART.

 

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

 

SECTION 3.7.                  CONVERSION ARRANGEMENT ON CALL FOR
REDEMPTION.

 

In connection with any redemption of Securities, the
Company may arrange for the purchase and conversion of any Securities called
for redemption by an agreement with one or more investment banks or other
purchasers to purchase such Securities by paying to a Paying Agent (other than
the Company or any of its Affiliates) in trust for the Holders, on or before
12:00 noon New York City time on the Redemption Date, an amount that, together
with any amounts deposited with such Paying Agent by the Company for

 

19

 

the redemption of such Securities, is not less than the Redemption
Price, together with any Interest Amounts, if any, accrued to, but not
including, the Redemption Date of such Securities.  Notwithstanding anything to the contrary contained in this Article 3,
the obligation of the Company to pay the Redemption Price of such Securities,
including all accrued Interest Amounts, if any, shall be deemed to be satisfied
and discharged to the extent such amount is so paid by such purchasers; provided, however, that nothing in this
Section 3.7 shall relieve the Company of its obligation to pay the
Redemption Price, plus any accrued Interest Amounts, to but excluding the
relevant Redemption Date, on Securities called for redemption.  If such an agreement with one or more
investment banks or other purchasers is entered into, any Securities called for
redemption and not surrendered for conversion by the Holders thereof prior to
the relevant Redemption Date may, at the option of the Company upon written
notice to the Trustee, be deemed, to the fullest extent permitted by law,
acquired by such purchasers from such Holders and (notwithstanding anything to
the contrary contained in Article 4) surrendered by such purchasers for
conversion, all as of 12:00 noon New York City time on the Redemption Date, subject
to payment of the above amount as aforesaid. 
The Paying Agent shall hold and pay to the Holders whose Securities are
selected for redemption any such amount paid to it for purchase in the same
manner as it would money deposited with it by the Company for the redemption of
Securities.  Without the Paying Agent’s
prior written consent, no arrangement between the Company and such purchasers
for the purchase and conversion of any Securities shall increase or otherwise affect
any of the powers, duties, responsibilities or obligations of the Paying Agent
as set forth in this Indenture, and the Company agrees to indemnify the Paying
Agent from, and hold it harmless against, any loss, liability or expense
arising out of or in connection with any such arrangement for the purchase and
conversion of any Securities between the Company and such purchasers, including
the costs and expenses incurred by the Paying Agent in the defense of any claim
or liability arising out of or in connection with the exercise or performance
of any of its powers, duties, responsibilities or obligations under this
Indenture.

 

SECTION 3.8.                  PURCHASE OF SECURITIES AT OPTION OF
THE HOLDER UPON CHANGE IN CONTROL.

 

(a)                                  If
at any time that Securities remain outstanding there shall occur a Change in Control,
Securities shall be purchased by the Company at the option of the Holders, as
of the date that is 30 Business Days after the occurrence of the Change in
Control (the “Change in Control Purchase Date”) at a purchase price equal to
100% of the principal amount of the Securities, together with any accrued and
unpaid Interest Amounts, if any, to, but excluding, the Change in Control
Purchase Date (the “Change in Control Purchase Price”), subject to satisfaction
by or on behalf of any Holder of the requirements set forth in
subsection (c) of this Section 3.8.

 

A “Change in Control” shall be deemed to have occurred
if any of the following occurs after the date hereof:

 

(1)                                  any
“person” or “group” (as such terms are defined below) is or becomes the
“beneficial owner” (as defined below), directly or indirectly, of shares of
Voting Stock of the Company representing 50% or more of the total voting power
of all outstanding classes of Voting Stock of the Company or has the power,
directly or indirectly, to elect a majority of the members of the Board of
Directors of the Company; or

 

(2)                                  the
Company consolidates with, or merges with or into, another Person or the
Company sells, assigns, conveys, transfers, leases or otherwise disposes of all
or substantially all of the assets of the Company, or any Person consolidates
with, or merges with or into, the Company, in any such event other than
pursuant to a transaction in which the Persons that “beneficially owned” (as
defined below), directly or indirectly, shares of Voting Stock of the Company
immediately prior to such transaction “beneficially own” (as defined below),
directly or indirectly, shares of Voting Stock of the

 

20

 

Company representing at least a majority of the total voting power of
all outstanding classes of Voting Stock of the surviving or transferee Person;
or

 

(3)                                  the
holders of capital stock of the Company approve any plan or proposal for the
liquidation or dissolution of the Company (whether or not otherwise in
compliance with the terms hereof).

 

For the purpose of the definition of “Change in Control”,
(i) ”person” and “group” have the meanings given to them for purposes of
Section 13(d) and 14(d) of the Exchange Act or any successor provisions,
and the term “group” includes 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 (or any successor provision thereto), (ii) a
“beneficial owner” shall be determined in accordance with Rule 13d-3 under
the Exchange Act, as in effect on the date of this Indenture, except that the
number of shares of Voting Stock of the Company shall be deemed to include, in
addition to all outstanding shares of Voting Stock of the Company and Unissued
Shares (as defined below) deemed to be held by the “person” or “group” (as such
terms are defined above) or other Person with respect to which the Change in
Control determination is being made, all Unissued Shares deemed to be held by
all other Persons, and (iii) the terms “beneficially owned” and
“beneficially own” shall have meanings correlative to that of “beneficial
owner”.  The term “Unissued Shares”
means shares of Voting Stock of the Company not outstanding that are subject to
options, warrants, rights to purchase or conversion privileges exercisable
within 60 days of the date of determination of a Change in Control.

 

Notwithstanding anything to the contrary set forth in
this Section 3.8, a Change in Control will not be deemed to have occurred if
either:

 

(1)                                  the
Closing Price (determined in accordance with Section 4.6(e) of this Indenture)
of the Common Stock for any five (5) Trading Days during the ten Trading Days
immediately preceding the Change in Control is at least equal to 105% of the
Conversion Price in effect on such Trading Day; or

 

(2)                                  in
the case of a merger or consolidation, all of the consideration (excluding cash
payments for fractional shares and cash payments made pursuant to dissenters’
appraisal rights) in the merger or consolidation otherwise constituting a
Change in Control consists of shares of common stock, depositary receipts or
other certificates representing common equity interests traded on a United
States national securities exchange or quoted on the Nasdaq National Market (or
which will be so traded or quoted immediately following such merger or
consolidation) and as a result of such merger or consolidation the Securities
become convertible solely into such common stock, depositary receipts or other
certificates representing common equity interests.

 

(b)                                 Within
10 Business Days after the occurrence of a Change in Control, the Company shall
mail a written notice of the Change in Control to the Trustee and to each
Holder (and to beneficial owners as required by applicable law).  The notice shall include the form of a
Change in Control Purchase Notice to be completed by the Holder and shall
state:

 

(1)                                  the
date of such Change in Control and, briefly, the events causing such Change in
Control;

 

(2)                                  the
terms and conditions of the transaction leading to the Change in Control;

 

(3)                                  the
date by which the Change in Control Purchase Notice pursuant to this Section
3.8 must be given;

 

21

 

(4)                                  the
Change in Control Purchase Date;

 

(5)                                  the
Change in Control Purchase Price;

 

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

 

(7)                                  briefly,
the conversion rights of the Securities;

 

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

 

(9)                                  the
Conversion Price and any adjustments thereto;

 

(10)                            that
Securities as to which a Change in Control Purchase Notice has been given may
be converted if they are otherwise convertible only in accordance with
Article 4 of this Indenture and paragraph 9 of the Securities only to the
extent that the Change in Control Purchase Notice has been withdrawn in
accordance with the terms of this Indenture;

 

(11)                            the
procedures that the Holder must follow to exercise rights under this Section
3.8;

 

(12)                            the
procedures for withdrawing a Change in Control Purchase Notice, including a
form of notice of withdrawal; and

 

(13)                            that
the Holder must satisfy the requirements set forth in the Securities in order
to convert the Securities.

 

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 procedures of the Depositary applicable to the repurchase of
Global Securities.

 

At the Company’s request, the Trustee shall give
notice of such Change in Control on behalf of the Company and at the Company’s
expense; provided, however, that, in all cases, the text of
such notice shall be prepared by the Company.

 

(c)                                  A
Holder may exercise its rights specified in subsection (a) of this
Section 3.8 upon delivery of a written notice (which shall be in
substantially the form included in Exhibit A hereto, 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
customary procedures) of the exercise of such rights (a “Change in Control
Purchase Notice”) to any Paying Agent at any time prior to the close of
business on the Business Day immediately preceding the Change in Control
Purchase Date.  The notice most specify
the Securities, or the portion thereof, for which the purchase right is being
exercised.

 

The delivery of such Security to any Paying Agent
(together with all necessary endorsements) at the office of such Paying Agent
shall be a condition to the receipt by the Holder of the Change in Control
Purchase Price therefor.

 

The Company shall purchase from the Holder thereof,
pursuant to this Section 3.8, a portion of a Security if the principal amount
of such portion is $1,000 or an integral multiple of $1,000.  Provisions of the Indenture that apply to
the purchase of all of a Security pursuant to Sections 3.8 through 3.13 also
apply to the purchase of such portion of such Security.

 

22

 

Notwithstanding anything herein to the contrary, any
Holder delivering to a Paying Agent the Change in Control Purchase Notice
contemplated by this subsection (c) shall have the right to withdraw such
Change in Control Purchase Notice in whole or in a portion thereof that is a
principal amount of $1,000 or in an integral multiple thereof at any time prior
to the close of business on the Business Day immediately preceding the Change
in Control Purchase Date by delivery of a written notice of withdrawal to the
Paying Agent in accordance with Section 3.9.

 

A Paying Agent shall promptly notify the Company of
the receipt by it of any Change in Control Purchase Notice or written
withdrawal thereof.

 

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

 

SECTION 3.9.                  EFFECT OF CHANGE IN CONTROL PURCHASE
NOTICE.

 

Upon receipt by any Paying Agent of the Change in
Control Purchase Notice specified in Section 3.8(c), the Holder of the Security
in respect of which such Change in Control Purchase Notice was given shall
(unless such Change in Control Purchase Notice is withdrawn as specified below)
thereafter be entitled to receive the Change in Control Purchase Price with
respect to such Security.  Such Change
in Control Purchase Price shall be paid to such Holder promptly following the
later of (a) the Change in Control Purchase Date with respect to such
Security (provided the conditions
in Section 3.8(c) have been satisfied) and (b) the time of delivery
of such Security to a Paying Agent by the Holder thereof in the manner required
by Section 3.8(c).  Securities in
respect of which a Change in Control Purchase Notice has been given by the
Holder thereof may not be converted into shares of Common Stock pursuant to
Article 4 on or after the date of the delivery of such Change in Control
Purchase Notice unless such Change in Control Purchase Notice has first been
validly withdrawn.

 

A Change in Control Purchase Notice may be withdrawn
by means of a written notice (which may be delivered by mail, 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 customary procedures) of withdrawal
delivered by the Holder to a Paying Agent at any time prior to the close of
business on the Business Day immediately preceding the Change in Control
Purchase Date, specifying the principal amount of the Security or portion
thereof (which must be a principal amount of $1,000 or an integral multiple of
$1,000 in excess thereof) with respect to which such notice of withdrawal is
being submitted.

 

SECTION 3.10.           DEPOSIT OF CHANGE IN CONTROL PURCHASE PRICE.

 

On or before 12:00 noon, New York City time on the
Change in Control Purchase Date, the Company shall deposit with the Trustee or
with a Paying Agent (other than the Company or an Affiliate of the Company) an
amount of money (in immediately available funds if deposited on such Change in
Control Purchase Date) sufficient to pay the aggregate Change in Control
Purchase Price of all the Securities or portions thereof that are to be
purchased as of such Change in Control Purchase Date.  The manner in which the deposit required by this Section 3.10 is
made by the Company shall be at the option of the Company; provided  that
such deposit shall be made in a manner such that the Trustee or a
Paying Agent shall have immediately available funds on the Change in Control
Purchase Date.

 

If a Paying Agent holds, in accordance with the terms
hereof, money sufficient to pay the Change in Control Purchase Price of any
Security for which a Change in Control Purchase Notice has been tendered and
not withdrawn in accordance with this Indenture then, on the Change in Control Purchase

 

23

 

Date, such Security will cease to be outstanding and the rights of the
Holder in respect thereof shall terminate (other than the right to receive the
Change in Control Purchase Price as aforesaid).  The Company shall publicly announce the principal amount of
Securities purchased as a result of such Change in Control on or as soon as
practicable after the Change in Control Purchase Date.

 

To the extent that the aggregate amount of cash
deposited by the Company pursuant to this Section 3.10 exceeds the aggregate
Change in Control Purchase Price together with Interest Amounts, if any,
thereon of the Securities or portions thereof that the Company is obligated to
purchase, then promptly after the Change in Control Purchase Date the Trustee
or a Paying Agent, as the case may be, shall return any such excess cash to the
Company.

 

SECTION 3.11.           PURCHASE OF SECURITIES AT OPTION OF THE
HOLDER ON SPECIFIED DATES.

 

(a)                                  Securities
shall be purchased in cash by the Company in accordance with the provisions of
paragraph 8 of the Securities as of June 15, 2008 (the “2008 Purchase
Date”) at a purchase price per Security equal to 100.25% of the aggregate
principal amount of the Security, together with any accrued Interest Amounts,
if any, up to but not including the 2008 Purchase Date (the “2008 Purchase
Price”), and as of June 15, 2013 and June 15, 2018 (collectively, the
“2013-2018 Purchase Dates”), at a purchase price per Security equal to 100% of
the aggregate principal amount of the Security, together with any accrued
Interest Amounts up to but not including the applicable 2013-2018 Purchase Date
(the “2013-2018 Purchase Price”); provided
that if the Put Right Purchase Date falls after an Interest Amounts
Record Date, if any, and on or before the related Interest Amounts Payment
Date, any Interest Amounts on the Securities will be payable to the Holders in
whose names the Securities are registered at the close of business on such
Interest Amounts Record Date, if any.

 

(b)                                 The
Company shall give written notice of the applicable Put Right Purchase Date by
notice sent by first-class mail to the Trustee and to each Holder (at its
address shown in the register of the Registrar) not less than 20 Business Days
prior to each Put Right Purchase Date (the “Company Put Right Notice”).  Each Company Put Right Notice shall include
a form of Put Right Purchase Notice to be completed by a Securityholder and
shall state:

 

(i)                                     the
Put Right Purchase Price, the Put Right Purchase Date and the Conversion Price
in effect;

 

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

 

(iii)                               that Securities as to
which a Put Right Purchase Notice has been given may be converted if they are
otherwise convertible only in accordance with Article 4 hereof and paragraph 9
of the Securities only to the extent that the Put Right Purchase Notice has
been withdrawn in accordance with the terms of this Indenture;

 

(iv)                              that
Securities must be surrendered to the Paying Agent to collect payment;

 

(v)                                 that
the Put Right Purchase Price for any Security as to which a Put Right Purchase
Notice has been given and not withdrawn will be paid promptly following the
later of the Put Right Purchase Date and the time of surrender of such Security
as described in subclause (iv) above;

 

24

 

(vi)                              the
procedures the Holder must follow to exercise rights under this Section and a
brief description of those rights;

 

(vii)                           briefly, the conversion
rights of the Securities;

 

(viii)                        the procedures for withdrawing
a Put Right Purchase Notice (including pursuant to the terms of Section
3.11(d));

 

(ix)                                that,
unless the Company defaults in making payment on Securities for which a Put
Right Purchase Notice has been submitted, Interest Amounts, if any, on such
Securities will cease to accrue on and after the Put Right Purchase Date; and

 

(x)                                   the
CUSIP number of the Securities.

 

If any of the Securities are to be redeemed in the
form of a Global Security, the Company shall modify such notice to the extent
necessary to accord with the procedures of the Depositary applicable to
redemptions.

 

At the Company’s request, the Trustee shall give such
Company Put Right Notice on behalf of the Company and at the Company’s expense;
provided, however, that, in all cases, the text of
such Company Put Right Notice shall be prepared by the Company.

 

(c)                                  Purchases
of Securities by the Company pursuant to this Section 3.11 shall be made, at
the option of the Holder thereof, upon:

 

(1)                                  delivery
to the Paying Agent by the Holder of a written notice of purchase in the form
set forth in Exhibit A attached hereto (a “Put Right Purchase Notice”)
at any time from the opening of business on the date that is 20 Business Days
prior to the applicable Put Right Purchase Date until the close of business on
the fifth (5th) Business Day prior to such Put Right Purchase Date
stating:

 

(A)                              the
certificate number of the Security which the Holder will deliver to be
purchased,

 

(B)                                the
portion (which may be 100%) of the principal amount of the Security which the
Holder will deliver to be purchased, which portion must be in a principal
amount of $1,000 or an integral multiple thereof, and

 

(C)                                that
such Security shall be purchased as of the applicable Put Right Purchase Date
pursuant to the terms and conditions specified in paragraph 8 of the Securities
and in this Section 3.11 of this Indenture.

 

(2)                                  delivery
of such Security to the Paying Agent at any time after delivery of the Put
Right Purchase Notice (together with all necessary endorsements) at the offices
of the Paying Agent.  Delivery of such
Security shall be a condition to receipt by the Holder of the Put Right
Purchase Price therefor.  The Put Right
Purchase Price shall be paid pursuant to this Section 3.11 only if the Security
delivered to the Paying Agent shall conform in all respects to the description
thereof in the related Put Right Purchase Notice, as determined by the Company.

 

(d)                                 Notwithstanding
anything herein to the contrary, any Holder delivering to the Paying Agent the
Put Right Purchase Notice contemplated by this Section 3.11 shall have the
right to withdraw such Put Right Purchase Notice at any time prior to the close
of business on the second Business Day

 

25

 

immediately preceding the Put Right Purchase Date by delivery of a
written notice of withdrawal to the Paying Agent specifying:

 

(1)                                  the
certificate number, if any, of the Security in respect of which such notice of
withdrawal is being submitted,

 

(2)                                  the
aggregate principal amount of the Security with respect to which such notice of
withdrawal is being submitted, and

 

(3)                                  the
aggregate principal amount, if any, of such Security which remains subject to
the original Put Right Purchase Notice and which has been or will be delivered
for purchase by the Company.

 

The Paying Agent shall promptly notify the Company of
the receipt by it of any Put Right Purchase Notice or written notice of
withdrawal thereof.

 

(e)                                  On
or before 12:00 noon (local time in the City of New York) on the Put Right
Purchase Date, the Company shall deposit with the Trustee or 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 2.4) an amount
of money (in immediately available funds if deposited on such Put Right
Purchase Date) sufficient to pay the aggregate Put Right Purchase Price of all
the Securities or portions thereof which are to be purchased as of the Put
Right Purchase Date.  The manner in
which the deposit required by this Section 3.11(e) is made by the Company shall
be at the option of the Company; provided
that such deposit shall be made in a manner such that the Trustee or
a Paying Agent shall have immediately available funds on the Put Right Purchase
Date.

 

If a Paying Agent holds, in accordance with the terms
hereof, money sufficient to pay the Put Right Purchase Price of any Security
for which a Put Right Notice has been tendered and not withdrawn on the Put
Right Purchase Date, then, on the Put Right Purchase Date, such Security will
cease to be outstanding, whether or not the Security is delivered to the Paying
Agent, and the rights of the Holder in respect thereof shall terminate (other
than the right to receive the Put Right Purchase Price as aforesaid) and
Interest Amounts, if any, will cease to accrue on such Security.

 

The Put Right Purchase Price shall be paid to such
Holder with respect to Securities for which a Put Right Purchase Notice has
been tendered and not withdrawn, subject to receipt of funds by the Paying
Agent, promptly following the later of (x) the Put Right Purchase Date with
respect to such Security (provided the conditions in Section 3.11(c) have been
satisfied) and (y) the time of delivery of such Security to the Paying Agent by
the Holder thereof in the manner required by Section 3.11(c).  Securities in respect of which a Put Right
Purchase Notice has been given by the Holder thereof may not be converted
pursuant to Article 4 hereof on or after the date of the delivery of such Put
Right Purchase Notice, unless such Put Right Purchase Notice has first been
validly withdrawn as specified in Section 3.11(d).

 

To the extent that the aggregate amount of cash
deposited by the Company pursuant to this Section 3.11(e) exceeds the aggregate
Put Right Purchase Price of the Securities or portions thereof that the Company
is obligated to purchase, then promptly after the Put Right Purchase Date the
Trustee or a Paying Agent, as the case may be, shall return any such excess
cash to the Company.

 

(f)                                    There
shall be no purchase of any Securities pursuant to this Section 3.11 if
there has occurred (prior to, on or after as the case may be, the giving, by
the Holders of such Securities, of the required Put Right Purchase Notice) and
is continuing an Event of Default (other than a default in the

 

26

 

payment of the Put Right Purchase Price).  The Paying Agent will promptly return to the respective Holders
thereof any Securities (x) with respect to which a Put Right Purchase Notice
has been withdrawn in compliance with this Indenture, or (y) held by it during
the continuance of an Event of Default (other than a default in the payment of
the Put Right Purchase Price) in which case, upon such return, the Put Right
Purchase Notice with respect thereto shall be deemed to have been withdrawn.

 

Upon receipt by the Paying Agent of the Put Right
Purchase Notice specified in Section 3.11(c), the Holder of the Security in
respect of which such Put Right Purchase Notice was given shall (unless such
Put Right Purchase Notice is withdrawn as specified herein) thereafter be
entitled to receive solely the Put Right Purchase Price with respect to such
Security.

 

(g)                                 The
Company shall purchase from the Holder thereof, pursuant to this Section 3.11,
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.

 

SECTION 3.12.           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
Change in Control Purchase Date or the Put Right Purchase Date, as the case may
be, 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, 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 3.13.           COMPLIANCE WITH SECURITIES LAWS UPON PURCHASE
OF SECURITIES.

 

In connection with any offer to purchase or purchase
of Securities under Section 3.8 or 3.11, the Company shall (a) comply with
Rule 13e-4 and Rule 14e-1 (or any successor to either such Rule), if applicable
and any other tender offer rules, 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, with a copy to the Trustee, 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
3.8 through 3.12 to be exercised in the time and in the manner specified
therein.

 

ARTICLE 4

CONVERSION

 

SECTION 4.1.                  CONVERSION PRIVILEGE.

 

(a)                                  Subject
to the further provisions of this Article 4 and paragraph 9 of the Securities,
a Holder of a Security may convert the principal amount of such Security (or
any portion thereof equal to $1,000 or any integral multiple of $1,000 in
excess thereof) into Common Stock at any time prior to the close of business on
the Final Maturity Date, at the Conversion Price then in effect, if, as of such
Conversion Date, the Sale Price of the Common Stock on the last Trading Day of
the immediately preceding fiscal quarter is more than 120% of the Conversion
Price per share of Common Stock on such Trading Day (the “Sale Price
Condition”), subject to the exceptions provided in Section 4.1(b).  The Conversion Agent shall, on each
applicable Trading Day set forth above, determine whether the Securities

 

27

 

are convertible pursuant to this Section 4.1(a) and will notify the
Company and, if the Conversion Agent is not the Trustee, the Trustee of its
determination.

 

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

 

A Security in respect of which a Holder has delivered
a Change in Control Purchase Notice pursuant to Section 3.8(c) exercising
the option of such Holder to require the Company to purchase such Security may
be converted only if such Change in Control Purchase Notice is withdrawn by a
written notice of withdrawal delivered to a Paying Agent prior to the close of
business on the Business Day immediately preceding the Change in Control
Purchase Date in accordance with Section 3.9.  A Security in respect of which a Holder has delivered a Put Right
Purchase Notice pursuant to Section 3.11(c) exercising the option of such
Holder to require the Company to purchase such Security may be converted only
if such Put Right Purchase Notice is withdrawn by a written notice of
withdrawal delivered to a Paying Agent prior to the close of business on the
second Business Day immediately preceding the Put Right Purchase Date in
accordance with Section 3.11(d).

 

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

 

(b)                                 Even
if the Sale Price Condition is not satisfied,

 

(1)                                  a
Holder may surrender for conversion a Security which has been called for
redemption pursuant to Section 3.1 at any time prior to the close of business
on the day that is two Business Days prior to the redemption date;

 

(2)                                  if
after any five consecutive Trading Day period in which the average of the
Trading Prices for the Securities for that five Trading Day period was less
than 100% of the average of the Conversion Values for the Securities during
that period, a holder may surrender Securities for conversion at any time
during the following 10 Trading Days; provided,
however, that no Securities may
be converted based on the satisfaction of this condition during the six-month
period immediately preceding each specified date on which the Holders may
require the Company to repurchase Securities pursuant to Section 3.11, if on
any day during such five consecutive Trading Day period, the Sale Price of
Common Stock is between the Conversion Price and 120% of the Conversion Price;

 

(3)                                  in
the event that the Company declares

 

(A)                              a
dividend or distribution of any rights or warrants to all holders of Common
Stock entitling them to subscribe for or purchase shares of Common Stock at a
price per share less than the Current Market Price per share (as defined in
Section 4.6(e)) on the record date for such issuance (other than a distribution
of rights by the Company to its stockholders pursuant to a Rights Plan), or

 

(B)                                a
dividend or distribution to all holders of Common Stock of cash, debt
securities (or other evidences of indebtedness), or other assets (excluding
dividends or distributions for which Conversion Price adjustment is required to
be made under Section 4.6(a) or 4.6(b) of the Indenture), which distribution,
together with all other such distributions within the preceding twelve months,
has a per share value exceeding 10% of the Current Market Price of the Common
Stock as of the

 

28

 

Trading Day immediately prior to the date of declaration for such
distribution,

 

then the Company must notify the Holders at least 20 days prior to the
ex-dividend date for such distribution. 
Once the Company has given such notice, Holders may surrender their
Securities for conversion at any time thereafter until the earlier of (i) the
close of business on the Business Day prior to the ex-dividend date or (ii) the
announcement by the Company that such distribution will not take place; and

 

(4)                                  If
the Company is party to a consolidation, merger or transfer, lease or other
disposition of all or substantially all of its assets pursuant to which its
Common Stock would be converted into, or into the right to receive, cash,
securities or other assets, a Holder may surrender Securities for conversion at
any time beginning 20 days before the anticipated effective date of the
transaction until 20 days after the actual effective date of the
transaction.  If the Company is party to
a consolidation, merger or transfer, lease or other disposition of all or
substantially all of its assets pursuant to which its Common Stock is converted
into, or into the right to receive, cash, securities or other assets, then at
the effective time of the transaction, the right to convert a Security into
Common Stock will be changed into a right to convert it into, or into the right
to receive, as applicable, the kind and amount of cash, securities or other
property which the Holder would have received if the Holder had converted that
Holder’s Securities immediately before the transaction (assuming, in a case in
which the Company’s shareholders may exercise rights of election, that a Holder
of Securities would not have exercised any rights of election as to the stock,
other securities or other property or assets receivable in connection therewith
and received per share the kind and amount of cash, securities or other
property received per share by a plurality of nonelecting shares).

 

The Company will provide written notice to the
Conversion Agent upon the occurrence of any of the conversion events specified
in paragraph (b) of this Section 4.1 (other than Section 4.1(b)(1)).

 

(c)                                  If
a Security is called for redemption or submitted or presented for purchase
pursuant to Article 3, such conversion right shall terminate at the close
of business on the Business Day immediately preceding the Redemption Date,
Change in Control Purchase Date or Put Right Purchase Date, as the case may be,
for such Security or such earlier date as the Holder presents such Security for
redemption or for purchase (unless the Company shall default in making the
redemption payment, Change in Control Purchase Price payment or Put Right
Purchase Price payment when due, in which case the conversion right shall
terminate at the close of business on the date such default is cured and such
Security is redeemed or purchased, as the case may be).  The number of shares of Common Stock
issuable upon conversion of a Security shall be determined by dividing the
principal amount of the Security or portion thereof surrendered for conversion
by the Conversion Price in effect on the Conversion Date.  The initial Conversion Price is set forth in
paragraph 9 of the Securities and is subject to adjustment as provided in
this Article 4.  The number of
shares of Series A Preferred Stock, if any, issuable upon conversion of a
Security shall be determined in accordance with Section 4.5.

 

SECTION 4.2.                  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 a
Conversion Agent, (2) surrender the Security to a Conversion Agent,
(3) furnish appropriate endorsements and transfer documents if required by
a Registrar or a Conversion Agent, and (4) pay any transfer or similar
tax, if required.  The date on which the
Holder satisfies all of those requirements is the “Conversion Date.”

 

(b)                                 As
soon as practicable after the Conversion Date, the Company shall satisfy all of
its obligations (“Conversion Obligations”) upon conversion of the Securities by
delivering to the Holder, at

 

29

 

the Company’s option, either shares of Common Stock, cash or a
combination of cash and shares of Common Stock, in the following manner:

 

(1)                                  If
the Company elects to satisfy the entire Conversion Obligation in shares of
Common Stock (“Share Settlement”), then the Company will deliver to the Holder
shares of Common Stock equal to the quotient of (A) the aggregate
principal amount of Securities to be converted by the Holder divided by
(B) the then applicable Conversion Price;

 

(2)                                  If
the Company elects to satisfy the entire Conversion Obligation in cash (“Cash
Settlement”), then the Company will deliver to the Holder cash in an amount
equal to the product of (A) a number equal to the aggregate principal
amount of Securities to be converted by such Holder divided by the then
applicable Conversion Price, and (B) the arithmetic mean of the Volume
Weighted Average Prices of the Common Stock on each Trading Day during the
applicable cash settlement averaging period as provided below (the “Cash
Settlement Averaging Period”); or

 

(3)                                  If
the Company elects to satisfy a portion of the Conversion Obligation in cash
(the “Partial Cash Amount”) and a portion in shares of Common Stock (together
with the Partial Cash Amount, a “Combined Settlement”), then the Company will
deliver to the Holder such Partial Cash Amount plus a number of shares equal to
(A) the cash settlement amount as set forth in clause (2) above minus
such Partial Cash Amount divided by (B) the arithmetic mean of the Volume
Weighted Average Prices of the Common Stock on each Trading Day during the
applicable Cash Settlement Averaging Period as provided below.

 

(c)                                  If
the Company elects Share Settlement or Combined Settlement but is unable to
issue Common Stock to discharge its Conversion Obligations pursuant to this
Section 4.2, the provisions of Section 4.5 will apply.

 

(d)                                 If
the Company receives the conversion notice from a Holder on or prior to the day
that is thirty (30) days prior to June 15, 2008 or after June 15,
2008, then the following procedures shall apply:

 

(1)                                  If
the Company elects to satisfy the Conversion Obligation by Share Settlement,
then settlement in shares will be made on or prior to the tenth (10th)
Trading Day following receipt of such conversion notice.

 

(2)                                  If
the Company elects to satisfy the Conversion Obligation by Cash Settlement or
Combined Settlement, then the Company will notify the Holder, through the
Trustee, of the dollar amount to be satisfied in cash at any time on or before
the date that is two Business Days following receipt of the notice of
conversion (the “Settlement Notice Period”). 
Share Settlement will apply automatically if the Company does not notify
the Holder that the Company has chosen another settlement method.

 

(3)                                  If
the Company timely elects Cash Settlement or Combined Settlement, then the
Holder may retract the conversion notice at any time during the two (2)
Business Day period beginning on the day after the Settlement Notice Period
(the “Conversion Retraction Period”). 
The Holder cannot retract the conversion notice (and the conversion
notice therefore will be irrevocable) if the Company elects Share Settlement.  If the Holder has not retracted the
conversion notice during the Conversion Retraction Period, then Cash Settlement
or Combined Settlement will occur on the first Trading Day following the Cash
Settlement Averaging Period.  For
purposes of this Section 4.2(d)(3), the Cash Settlement Averaging Period will
be the five (5) Trading Day period beginning on the first Trading Day after the
Conversion Retraction Period.

 

30

 

(e)                                  If
the Company receives the conversion notice from the first day after the day
that is thirty (30) days prior to June 15, 2008 to, and including,
June 15, 2008, then the following procedures will apply:

 

(1)                                  On
or prior to the day that is thirty (30) days prior to June 15, 2008, the
Company may notify (the “Conversion Settlement Election Notice”) the Holder,
through the Trustee, that the Company intends to satisfy all Conversion
Obligations arising during such thirty (30) day period by either Cash
Settlement or Combined Settlement, and the Company will state in the Conversion
Settlement Election Notice the fixed dollar amount of cash that will be
delivered to the Holder.  Share
Settlement will apply automatically if the Company does not deliver to the
Holder the Conversion Settlement Election Notice on or prior to the day that is
thirty (30) days prior to June 15, 2008. 
The Company will settle all conversions of Securities in the same
manner.  The Holder cannot retract the
conversion notice if the Holder delivers such notice from the first day after
the day that is thirty (30) days prior to June 15, 2008 to, and including,
June 15, 2008 (and the conversion notice therefore will be irrevocable).

 

(2)                                  If
the Company has timely elected Cash Settlement or Combined Settlement, then
with respect to all subsequent conversions, settlement amounts will be computed
as set forth above, except that the Cash Settlement Averaging Period will be
the twenty (20) Trading Day period that begins on the date that is the
twenty-second (22nd) Trading Day expected to occur prior to
June 15, 2008 and that ends no later than the Trading Day immediately
preceding June 15, 2008.  However,
if twenty (20) Trading Days do not occur after such date and prior to
June 15, 2008, then the Cash Settlement Averaging Period will be the
number of Trading Days that do occur prior to June 15, 2008.

 

(3)                                  Settlement
(in shares and/or cash) will occur on or prior to the fifth (5th)
Trading Day following June 15, 2008 (or, if June 15, 2008 is not a
Trading Day, on the first Trading Day after such five (5) Trading Day period).

 

(f)                                    If
an Event of Default (other than an Event of Default in a cash payment upon
conversion of the Securities), has occurred and is continuing, the Company may
not pay cash upon conversion of any Security or portion of a Security (other
than cash for fractional shares).

 

(g)                                 Anything
herein to the contrary notwithstanding, in the case of Global Securities,
conversion notices may be delivered and such Global Securities may be
surrendered for conversion in accordance with the Applicable Procedures as in
effect from time to time.

 

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

 

To the extent that any Securities are surrendered for
conversion (in whole or in part) during the period from the close of business
on any Interest Amounts Record Date to the opening of business on the next
succeeding Interest Amounts Payment Date, if any, the Company shall be entitled
to direct the

 

31

 

Paying Agent to take any and all actions consistent with custom and
practice in order to prevent the payment of Interest Amounts, if any, in excess
of the amounts provided in the Registration Rights Agreement and Section 4.5.

 

Nothing in this Section 4.2 shall affect the right
of a Holder in whose name any Security is registered at the close of business
on a Interest Amounts Record Date to receive the Interest Amounts, if any,
payable on such Security on the related Interest Amounts Payment Date in
accordance with the terms of this Indenture, the Securities and the
Registration Rights Agreement. If a Holder converts more than one Security at
the same time, the number of shares of Common Stock issuable upon the
conversion shall be based on the aggregate principal amount of Securities
converted.

 

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

 

SECTION 4.3.                  FRACTIONAL SHARES.

 

The Company will not issue fractional shares of Common
Stock upon conversion of Securities.  In
lieu thereof, the Company will pay an amount in cash for the fractional shares
equal to the arithmetic mean of the Volume Weighted Average Price of the Common
Stock determined during the applicable Cash Settlement Averaging Period
relating to the conversion multiplied by the fractional share (calculated to
the nearest 1/1,000th of a share of Common Stock) and rounding the product
to the nearest whole cent.

 

The Company will issue fractional shares of
Series A Preferred Stock up to 1/1000th of a share of Series A
Preferred Stock.  Any fraction of a
share of Series A Preferred Stock that is less than 1/1000th of a
share shall be paid in cash.  The cash
paid for such excess fractional share of Series A Preferred Stock shall equal
the product of (i) such excess fractional share of Series A Preferred Stock
multiplied by 1000 and (ii) the arithmetic mean of the Volume Weighted Average
Price of the Common Stock determined during the applicable Cash Settlement
Averaging Period relating to the conversion, and rounding the product to the
nearest whole cent.

 

SECTION 4.4.                  TAXES ON CONVERSION.

 

If a Holder converts a Security, the Company shall pay
any documentary, stamp or similar issue or transfer tax due on the issue of
shares of Common Stock or Series A Preferred Stock upon such conversion or due
upon the delivery upon exchange of Common Stock by an Exchange Agent pursuant
to Section 4.5.  However, the Holder
shall pay any such tax which is due because the Holder requests the shares to
be issued in a name other than the Holder’s name.  The Conversion Agent may refuse to deliver the certificate
representing the Common Stock or Series A Preferred Stock being issued in a
name other than the Holder’s name until the Conversion Agent receives a sum
sufficient to pay any tax which will be due because the shares are to be issued
in a name other than the Holder’s name. 
Nothing herein shall preclude any tax withholding required by law or
regulation.

 

SECTION 4.5.                  COMPANY TO PROVIDE STOCK.

 

(a)                                  Prior
to the Reserve Sufficient Date (as defined below), 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 and Series A Preferred
Stock, a sufficient number of shares of Common Stock and Series A Preferred
Stock to permit the conversion of all outstanding Securities into shares of
Common Stock and Series A Preferred Stock.

 

32

 

In the event the Company has not established a reserve
of Common Stock sufficient for conversion into Common Stock of all outstanding
Securities by the date 120 days after the latest date of issuance of the
Securities, the Securities then outstanding will bear interest at the rate
0.75% per annum from and after such date to, but excluding, the date on which a
reserve sufficient for conversion of all Securities then outstanding has been
established (the “Reserve Sufficient Date”). 
Such Interest Amounts shall be paid on the relevant Interest Amounts
Payment Dates to Holders on the applicable Interest Amounts Record Date.

 

On and after the Reserve Sufficient Date, subsections
(b) and (c) of this Section 4.5 and the preceding two paragraphs of this
Section 4.5(a) shall no longer be in effect.  On and after the Reserve Sufficient Date the Company shall from
time to time, as may be necessary, reserve a sufficient number of shares of
Common Stock to permit the conversion of all outstanding Securities into shares
of Common Stock.

 

(b)                                 The
Company may, in its discretion, designate a financial institution (the
“Exchange Agent”) to which Securities surrendered for conversion by a Holder of
Securities shall be initially offered by the Conversion Agent for exchange in
lieu of the Company converting the Securities. 
In such circumstances, when a Holder surrenders Securities for
conversion, the Conversion Agent shall cause the Securities first to be offered
to the Exchange Agent for exchange in lieu of conversion.  If the Exchange Agent accepts any such
Security, it shall deliver the appropriate number of shares of Common Stock
that the Holder of such Securities would receive upon conversion, plus cash for
any fractional shares and shall deliver, or shall cause to be delivered on its
behalf, the appropriate number of shares of Common Stock and cash to the Holder
who surrendered the Securities or to the Conversion Agent and the Conversion
Agent shall deliver those shares and cash to the Holder who surrendered the
Securities.  The designation of an
institution as an Exchange Agent does not require the institution to accept any
Securities from the Conversion Agent. 
If the Exchange Agent declines to accept any Securities in whole or in
part or agrees to accept Securities for exchange but does not timely deliver
the related shares of Common Stock and cash, such Securities or portion of
Securities not exchanged shall be converted pursuant to this Article 4.  Any Securities accepted for exchange by the
Exchange Agent shall remain outstanding until maturity or until redeemed,
converted or purchased in accordance with the Indenture.

 

The Company has designated Credit Suisse First Boston
LLC as Exchange Agent but only with respect to Securities surrendered for
conversion for which the shares of Common Stock reserved for issuance upon
conversion of outstanding Securities are insufficient for such conversion.  The Company may revoke, amend or supplement
its designation by Company Order to the Conversion Agent.  The term Exchange Agent includes any
additional exchange agent.  Upon the
Company establishing a reserve of Common Stock sufficient for conversion into
Common Stock of all Securities remaining outstanding, the Company shall deliver
to the Conversion Agent and the Trustee a Company Order advising of that fact
and that subsections (b) and (c) of this Section 4.5 and the first two
paragraphs of Section 4.5(a) shall no longer be in effect.

 

(c)                                  In
the event that the Company in unable to satisfy its Conversion Obligations in
shares of Common Stock and the Exchange Agent designated to exchange Securities
surrendered for conversion declines to exchange such Securities or does not
timely deliver such shares of Common Stock, the Company may issue Series A
Preferred Stock in lieu of shares of Common Stock based on a ratio of 1.1
shares of Series A Preferred Stock for each 1,000 shares of Common Stock.  The Company may issue fractions of Series A
Preferred Stock up to 1/1000th of a share of Series A Preferred
Stock, with any smaller fraction being paid in cash in accordance with Section
4.3.

 

33

 

(d)                                 Any
and all shares of Common Stock and Series A Preferred Stock delivered upon
conversion of the Securities shall be duly authorized, validly issued, fully
paid and nonassessable and shall be free from preemptive rights and free of any
lien or adverse claim.

 

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

 

SECTION 4.6.                  ADJUSTMENT OF CONVERSION PRICE.

 

The conversion price as stated in paragraph 9 of the
Securities (the “Conversion Price”) shall be adjusted from time to time by the
Company as follows:

 

(a)                                  In
case the Company shall (i) pay a dividend on its Common Stock in shares of
Common Stock, (ii) make a distribution on its Common Stock in shares of
Common Stock, (iii) subdivide its outstanding Common Stock into a greater
number of shares, or (iv) combine its outstanding Common Stock into a
smaller number of shares, the Conversion Price in effect immediately prior thereto
shall be adjusted so that the Holder of any Security thereafter surrendered for
conversion shall be entitled to receive that number of shares of Common Stock
which it would have owned had such Security been converted immediately prior to
the happening of such event.  An
adjustment made pursuant to this subsection (a) shall become effective
immediately after the record date in the case of a dividend or distribution and
shall become effective immediately after the effective date in the case of
subdivision or combination.

 

(b)                                 In
case the Company shall issue rights or warrants to all or substantially all
holders of its Common Stock entitling them (for a period of not more than 60
days after such issuance) to subscribe for or purchase shares of Common Stock
(or securities convertible into 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 subsection (e) of this
Section 4.6) on the record date for the determination of stockholders
entitled to receive such rights or warrants, the Conversion Price in effect
immediately prior thereto shall be adjusted so that the same shall equal the
price determined by multiplying the Conversion Price in effect immediately
prior to such record date by a fraction of which the numerator shall be the
number of shares of Common Stock outstanding 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 (or the aggregate conversion price of the
convertible securities so offered, which shall be determined by multiplying the
number of shares of Common Stock issuable upon conversion of such convertible
securities by the conversion price per share of Common Stock pursuant to the
terms of such convertible securities) would purchase at the Current Market
Price per share (as defined in subsection (e) of this Section 4.6) of
Common Stock on such record date, and of which the denominator shall be the
number of shares of Common Stock outstanding on such record date plus the
number of additional shares of Common Stock offered (or into which the
convertible securities so offered are convertible).  Such adjustment shall be made successively whenever any such
rights or warrants are issued, and shall become effective immediately after
such record date.  If at the end of the
period during which such rights or 

 

34

 

warrants are exercisable not all rights or warrants shall have been
exercised, the adjusted Conversion Price shall be immediately readjusted to
what it would have been based upon the number of additional shares of Common
Stock actually issued (or the number of shares of Common Stock issuable upon conversion
of convertible securities actually issued).

 

(c)                                  In
case the Company shall distribute to all or substantially all holders of its
Common Stock any shares of capital stock of the Company (other than Common
Stock), evidences of indebtedness or other non-cash assets (including
securities of any person other than the Company but excluding
(1) dividends or distributions paid exclusively in cash or
(2) dividends or distributions referred to in subsection (a) of this
Section 4.6), or shall distribute to all or substantially all holders of
its Common Stock rights or warrants to subscribe for or purchase any of its
securities (excluding those rights and warrants referred to in
subsection (b) of this Section 4.6 and also excluding the
distribution of rights to all holders of Common Stock pursuant to a Rights Plan
or the detachment of such rights under the terms of such Rights Plan), then in
each such case the Conversion Price shall be adjusted so that the same shall
equal the price determined by multiplying the current Conversion Price by a
fraction of which the numerator shall be the Current Market Price per share (as
defined in subsection (e) of this Section 4.6) of the Common Stock on
the record date mentioned below less the fair market value on such record date
(as determined by the Board of Directors, whose determination shall be
conclusive evidence of such fair market value and which shall be evidenced by
an Officers’ Certificate delivered to the Trustee) of the portion of the
capital stock, evidences of indebtedness or other non-cash assets so
distributed or of such rights or warrants applicable to one share of Common
Stock (determined on the basis of the number of shares of Common Stock
outstanding on the record date), and of which the denominator shall be the
Current Market Price per share (as defined in subsection (d) of this
Section 4.6) of the Common Stock on such record date.  Such adjustment shall be made successively
whenever any such distribution is made and shall become effective immediately
after the record date for the determination of shareholders entitled to receive
such distribution.

 

In the event the then fair market value (as so
determined) of the portion of the capital stock, evidences of indebtedness or
other non-cash assets so distributed or of such rights or warrants applicable
to one share of Common Stock is equal to or greater than the Current Market
Price per share of the Common Stock on such record date, in lieu of the
foregoing adjustment, adequate provision shall be made so that each holder of a
Security shall have the right to receive upon conversion the amount of capital
stock, evidences of indebtedness or other non-cash assets so distributed or of
such rights or warrants such holder would have received had such holder
converted each Security on such record date. 
In the event that such dividend or distribution is not so paid or made,
the Conversion Price shall again be adjusted to be the Conversion Price which
would then be in effect if such dividend or distribution had not been declared.  If the Board of Directors determines the
fair market value of any distribution for purposes of this Section 4.6(c)
by reference to the actual or when issued trading market for any securities, it
must in doing so consider the prices in such market over the same period used
in computing the Current Market Price of the Common Stock.

 

In the event that the Company implements a preferred
shares rights plan (“Rights Plan”), upon conversion of the Securities into
Common Stock, to the extent that the Rights Plan has been implemented and is
still in effect upon such conversion, the holders of Securities will receive,
in addition to the Common Stock, the rights described therein (whether or not
the rights have separated from the Common Stock at the time of conversion),
subject to the limitations set forth in the Rights Plan.  Any distribution of rights or warrants
pursuant to a Rights Plan complying with the requirements set forth in the
immediately preceding sentence of this paragraph shall not constitute a distribution
of rights or warrants pursuant to this Section 4.6(c).

 

35

 

Rights or warrants (or other rights issued pursuant to
a Rights Plan) 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 4.6 (and no adjustment to the Conversion Price under this
Section 4.6 will be required) until the occurrence of the earliest Trigger
Event, whereupon such rights and warrants shall be deemed to have been
distributed and an appropriate adjustment (if any is required) to the Conversion
Price shall be made under this Section 4.6(c).  If any such right or warrant, including any such existing rights
or warrants distributed prior to the date of this Indenture, are subject to
events, upon the occurrence of which such rights or warrants become exercisable
to purchase different securities, evidences of indebtedness or other assets,
then the date of the occurrence of any and each such event shall be deemed to
be the date of distribution and record date with respect to new rights or
warrants with such rights (and a termination or expiration of the existing
rights or warrants without exercise by any of the holders thereof).  In addition, in the event of any
distribution (or deemed distribution) of rights or warrants, or any Trigger
Event or other event (of the type described in the preceding sentence) with
respect thereto that was counted for purposes of calculating a distribution
amount for which an adjustment to the Conversion Price under this
Section 4.6 was made, (1) in the case of any such rights or warrants
which shall all have been redeemed or repurchased without exercise by any
holders thereof, the Conversion Price shall be readjusted upon such final
redemption or repurchase to give effect to such distribution or Trigger Event,
as the case may be, as though it were a cash distribution, equal to the per
share redemption or repurchase price received by a holder or holders of Common
Stock with respect to such rights or warrants (assuming such holder had
retained such rights or warrants), made to all holders of Common Stock as of
the date of such redemption or repurchase, and (2) in the case of such
rights or warrants which shall have expired or been terminated without exercise
by any holders thereof, the Conversion Price shall be readjusted as if such rights
and warrants had not been issued.

 

(d)                                 (1)                                  In
case the Company shall, by dividend or otherwise, at any time distribute (a
“Triggering Distribution”) to all or substantially all holders of its Common
Stock cash in an aggregate amount that, together with the aggregate amount of
(A) any cash and the fair market value (as determined by the Board of
Directors, whose determination shall be conclusive evidence thereof and which
shall be evidenced by an Officers’ Certificate delivered to the Trustee) of any
other consideration payable in respect of any tender offer by the Company or a
Subsidiary of the Company for Common Stock consummated within the
12 months preceding the date of payment of the Triggering Distribution and
in respect of which no Conversion Price adjustment pursuant to this
Section 4.6 has been made and (B) all other cash distributions to all
or substantially all holders of its Common Stock made within the 12 months
preceding the date of payment of the Triggering Distribution and in respect of
which no Conversion Price adjustment pursuant to this Section 4.6 has been
made, exceeds an amount equal to 5.0% of the product of the Current Market
Price per share of Common Stock (as determined in accordance with
subsection (e) of this Section 4.6) on the Business Day (the
“Determination Date”) immediately preceding the day on which such Triggering
Distribution is declared by the Company multiplied by the number of shares of
Common Stock outstanding on the Determination Date (excluding shares held in the
treasury of the Company), the Conversion Price shall be reduced so that the
same shall equal the price determined by multiplying such Conversion Price in
effect immediately prior to the Determination Date by a fraction of which the
numerator shall be the Current Market Price per share of the Common Stock (as
determined in accordance with subsection (e) of this Section 4.6) on
the Determination Date less the sum of the aggregate amount of cash and the
aggregate fair market value (determined as aforesaid in this Section 4.6(d)(1))
of any such other consideration so distributed, paid or payable within such 12
months (including, without limitation, the Triggering Distribution) applicable
to one share of Common Stock (determined on the basis of the number of shares
of Common Stock outstanding on the Determination

 

36

 

Date) and the denominator shall be such Current Market Price per share
of the Common Stock (as determined in accordance with subsection (e) of
this Section 4.6) on the Determination Date, such reduction to become
effective immediately prior to the opening of business on the day following the
date on which the Triggering Distribution is paid.

 

(2)                                  In
case any tender offer made by the Company or any of its Subsidiaries for Common
Stock shall expire and such tender offer (as amended upon the expiration
thereof) shall involve the payment of aggregate consideration in an amount
(determined as the sum of the aggregate amount of cash consideration and the
aggregate fair market value (as determined by the Board of Directors, whose
determination shall be conclusive evidence thereof and which shall be evidenced
by an Officers’ Certificate delivered to the Trustee thereof) of any other
consideration) that, together with the aggregate amount of (A) any cash
and the fair market value (as determined by the Board of Directors, whose
determination shall be conclusive evidence thereof and which shall be evidenced
by an Officers’ Certificate delivered to the Trustee) of any other
consideration payable in respect of any other tender offers by the Company or
any Subsidiary of the Company for Common Stock consummated within the 12 months
preceding the date of the Expiration Date (as defined below) and in respect of
which no Conversion Price adjustment pursuant to this Section 4.6 has been
made and (B) all cash distributions to all or substantially all holders of
its Common Stock made within the 12 months preceding the Expiration Date and in
respect of which no Conversion Price adjustment pursuant to this
Section 4.6 has been made, exceeds an amount equal to 5.0% of the product
of the Current Market Price per share of Common Stock (as determined in
accordance with subsection (e) of this Section 4.6) as of the last
date (the “Expiration Date”) tenders could have been made pursuant to such
tender offer (as it may be amended) (the last time at which such tenders could
have been made on the Expiration Date is hereinafter sometimes called the
“Expiration Time”) multiplied by the number of shares of Common Stock
outstanding (including tendered shares but excluding any shares held in the
treasury of the Company) at the Expiration Time, then, immediately prior to the
opening of business on the day after the Expiration Date, the Conversion Price
shall be reduced so that the same shall equal the price determined by
multiplying the Conversion Price in effect immediately prior to the close of
business on the Expiration Date by a fraction of which the numerator shall be
the product of the number of shares of Common Stock outstanding (including
tendered shares but excluding any shares held in the treasury of the Company)
at the Expiration Time multiplied by the Current Market Price per share of the
Common Stock (as determined in accordance with subsection (e) of this
Section 4.6) on the Trading Day next succeeding the Expiration Date and
the denominator shall be the sum of (x) the aggregate consideration
(determined as aforesaid) payable to stockholders based on the acceptance (up to
any maximum specified in the terms of the tender offer) of all shares validly
tendered and not withdrawn as of the Expiration Time (the shares deemed so
accepted, up to any such maximum, being referred to as the “Purchased Shares”)
and (y) the product of the number of shares of Common Stock outstanding
(less any Purchased Shares and excluding any shares held in the treasury of the
Company) at the Expiration Time and the Current Market Price per share of
Common Stock (as determined in accordance with subsection (e) of this
Section 4.6) on the Trading Day next succeeding the Expiration Date, such
reduction to become effective immediately prior to the opening of business on
the day following the Expiration Date. 
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 or all such purchases or any or all such
purchases are rescinded, the Conversion Price shall again be adjusted to be the
Conversion Price which would have been in effect based upon the number of
shares actually purchased.  If the
application of this Section 4.6(d)(2) to any tender offer would result in
an increase in the Conversion Price, no adjustment shall be made for such
tender offer under this Section 4.6(d)(2).

 

(3)                                  For
purposes of this Section 4.6(d), the term “tender offer” shall mean and
include both tender offers and exchange offers, all references to “purchases”
of shares in tender offers (and all similar references) shall mean and include
both the purchase of shares in tender offers and the

 

37

 

acquisition of shares pursuant to exchange offers, and all references
to “tendered shares” (and all similar references) shall mean and include shares
tendered in both tender offers and exchange offers.

 

(e)                                  For
the purpose of any computation under subsections (b), (c) and (d) of this
Section 4.6, the current market price (the “Current Market Price”) per
share of Common Stock on any date shall be deemed to be the average of the
daily closing prices for the 30 consecutive Trading Days commencing 45 Trading
Days before (i) the Determination Date or the Expiration Date, as the case
may be, with respect to distributions or tender offers under subsection (c)
or (d) of this Section 4.6 or (ii) the record date with respect to
distributions, issuances or other events requiring such computation under
subsection (b), (c) or (d) of this Section 4.6.  The closing price (the “Closing Price”) for
each day shall be the last reported sales price or, in case no such reported
sale takes place on such date, the average of the reported closing bid and
asked prices in either case on the Nasdaq National Market (the “NNM”) or, if
the Common Stock is not quoted on the NNM, on the principal national securities
exchange on which the Common Stock is listed or admitted to trading or, if not
quoted on the NNM or listed or admitted for trading on any national securities
exchange, the last reported sales price of the Common Stock as quoted on NASDAQ
or, in case no reported sales takes place, the average of the closing bid and
asked prices as quoted on NASDAQ or any comparable system or, if the Common
Stock is not quoted on NASDAQ or any comparable system, the closing sales price
or, in case no reported sale takes place, the average of the closing bid and
asked prices, as furnished by any two members of the National Association of
Securities Dealers, Inc. selected from time to time by the Company for that
purpose.  If no such prices are available,
the Current Market Price per share shall be the fair value of a share of Common
Stock as determined by the Board of Directors (which shall be evidenced by an
Officers’ Certificate delivered to the Trustee).

 

(f)                                    In
any case in which this Section 4.6 shall require that an adjustment be
made following a record date or a Determination Date or Expiration Date, as the
case may be, established for purposes of this Section 4.6, 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 4.9)
issuing to the Holder of any Security converted after such record date or
Determination Date or Expiration Date 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 issuable upon
such conversion only on the basis of the Conversion Price prior to adjustment;
and, in lieu of the shares 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
shares.  If any distribution in respect
of which an adjustment to the Conversion Price is required to be made as of the
record date or Determination Date or Expiration Date therefor is not thereafter
made or paid by the Company for any reason, the Conversion Price shall be
readjusted to the Conversion Price which would then be in effect if such record
date had not been fixed or such effective date or Determination Date or
Expiration Date had not occurred.

 

SECTION 4.7.                  NO ADJUSTMENT.

 

No adjustment in the Conversion Price shall be
required unless the adjustment would require an increase or decrease of at
least 1% in the Conversion Price as last adjusted; provided, however, that any adjustments which by
reason of this Section 4.7 are not required to be made shall be carried
forward and taken into account in any subsequent adjustment.  All calculations under this Article 4
shall be made to the nearest cent or to the nearest one-hundredth of a share,
as the case may be.

 

Except pursuant to Section 4.6 and this Section 4.7,
no adjustment need be made for issuances of Common Stock or any securities
convertible or exchangeable for Common Stock or the right to purchase Common
Stock or such convertible or exchangeable securities.

 

38

 

To the extent that the Securities become convertible
into the right to receive cash, no adjustment need be made thereafter as to the
cash.  Interest will not accrue on the
cash.

 

SECTION 4.8.                             NOTICE OF ADJUSTMENT.

 

Whenever the Conversion Price or conversion privilege
is adjusted, the Company shall promptly mail to Securityholders a notice of the
adjustment and file with the Trustee an Officers’ Certificate briefly stating
the facts requiring the adjustment and the manner of computing it.  Unless and until the Trustee shall receive
an Officers’ Certificate setting forth an adjustment of the Conversion Price,
the Trustee may assume without inquiry that the Conversion Price has not been
adjusted and that the last Conversion Price of which it has knowledge remains
in effect.

 

SECTION 4.9.                             ADJUSTMENT FOR TAX
PURPOSES.

 

The Company shall be entitled to make such reductions
in the Conversion Price, in addition to those required by Section 4.6, as it in
its discretion shall determine to be advisable in order that any stock
dividends, subdivision of shares, distributions of rights to purchase stock or
securities or distributions of securities convertible into or exchangeable for
stock hereafter made by the Company to its stockholders shall not be taxable.

 

SECTION 4.10.                      NOTICE OF CERTAIN TRANSACTIONS.

 

In the event that:

 

(1)                                  the
Company takes any action which would require an adjustment in the Conversion
Price;

 

(2)                                  the
Company consolidates or merges with, or transfers all or substantially all of
its property and assets to, another corporation and shareholders of the Company
must approve the transaction; or

 

(3)                                  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 record or effective date, as the case may be.  The Company shall mail the notice at least
ten days before such date.  Failure to
mail such notice or any defect therein shall not affect the validity of any
transaction referred to in clause (1), (2) or (3) of this
Section 4.10.

 

SECTION 4.11.           EFFECT OF RECLASSIFICATION, CONSOLIDATION,
MERGER OR SALE ON CONVERSION PRIVILEGE.

 

If any of the following shall occur, namely:  (a) any reclassification or change of
shares of Common Stock issuable upon conversion of the Securities (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, or any other change
for which an adjustment is provided in Section 4.6); (b) any
consolidation or merger or combination to which the Company is a party other
than a merger in which the Company is the continuing corporation and which does
not result in any reclassification of, or change (other than 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) in, outstanding shares of Common Stock;
or (c) any sale or conveyance as an entirety or substantially as an
entirety of the property and assets of the Company, directly or indirectly, to
any Person, then the Company, or such successor, purchasing or transferee
Person, as the case may be, shall,

 

39

 

as a condition precedent to such reclassification, change, combination,
consolidation, merger, sale or conveyance, execute and deliver to the Trustee a
supplemental indenture providing that the Holder of each Security then
outstanding shall have the right to convert such Security into the kind and
amount of shares of stock and other securities and property (including cash)
receivable upon such reclassification, change, combination, consolidation,
merger, sale or conveyance by a holder of the number of shares of Common Stock
deliverable upon conversion of such Security immediately prior to such
reclassification, change, combination, consolidation, merger, sale or
conveyance.  Such supplemental indenture
shall provide for adjustments of the Conversion Price which shall be as nearly
equivalent as may be practicable to the adjustments of the Conversion Price
provided for in this Article 4. 
If, in the case of any such consolidation, merger, combination, sale or
conveyance, the stock or other securities and property (including cash)
receivable thereupon by a holder of Common Stock include shares of stock or
other securities and property of a Person other than the successor, purchasing
or transferee Person, as the case may be, in such consolidation, merger,
combination, sale or conveyance, then such supplemental indenture shall also be
executed by such other Person and shall contain such additional provisions to
protect the interests of the Holders of the Securities as the Board of
Directors shall reasonably consider necessary by reason of the foregoing.  The provisions of this Section 4.11
shall similarly apply to successive reclassifications, changes, combinations,
consolidations, mergers, sales or conveyances.

 

In the event the Company
shall execute a supplemental indenture pursuant to this Section 4.11, the
Company shall promptly file with the Trustee (x) an Officers’ Certificate
briefly stating the reasons therefor, the kind or amount of shares of stock or
other securities or property (including cash) receivable by Holders of the
Securities upon the conversion of their Securities after any such
reclassification, change, combination, consolidation, merger, sale or
conveyance, any adjustment to be made with respect thereto and that all
conditions precedent have been complied with and (y) an Opinion of Counsel
that all conditions precedent have been complied with, and the Company or the
Trustee on behalf of the Company shall promptly mail notice thereof to all
Holders.

 

SECTION 4.12.                      TRUSTEE’S
DISCLAIMER.

 

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

 

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

 

SECTION 4.13.                      VOLUNTARY
REDUCTION.

 

The Company from time to time may reduce the
Conversion Price by any amount for any period of time if the period is at least
20 days if the Company’s Board of Directors determines that such reduction
would be in the best interest 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 similar event, and the Company provides 15 days prior
notice of any reduction in the Conversion Price; provided, however,
that in no event may the Company reduce the Conversion Price to be less than
the par value of a share of Common Stock.

 

40

 

ARTICLE 5

SUBORDINATION

 

SECTION 5.1.                             AGREEMENT OF
SUBORDINATION.

 

The Company covenants and agrees, and each Holder of
Securities issued hereunder by its acceptance thereof likewise covenants and
agrees, that all Securities shall be issued subject to the provisions of this
Article 5; and each Person holding any Security, whether upon original issue or
upon transfer, assignment or exchange thereof, accepts and agrees to be bound
by such provisions.

 

The payment of the principal of, premium, if any, and
Interest Amounts, if any, on all Securities (including, but not limited to, the
Redemption Price with respect to the Securities called for redemption or the
Change in Control Purchase Price or Put Right Purchase Price with respect to
the Securities subject to purchase in accordance with Article 3 as
provided in this Indenture) issued hereunder shall, to the extent and in the
manner hereinafter set forth, be subordinated and subject in right of payment
to the prior payment in full in cash or payment satisfactory to the holders of
Senior Indebtedness of all Senior Indebtedness, whether outstanding at the date
of this Indenture or thereafter incurred.

 

No provision of this Article 5 shall prevent the
occurrence of any default or Event of Default hereunder.

 

SECTION 5.2.                             PAYMENTS TO HOLDERS.

 

No payment shall be made with respect to the principal
of, or premium, if any, or Interest Amounts, if any, on the Securities
(including, but not limited to, the Redemption Price with respect to the
Securities to be called for redemption or the Change in Control Purchase Price
or Put Right Purchase Price with respect to the Securities subject to purchase
in accordance with Article 3 as provided in this Indenture), except payments
and distributions made by the Trustee as permitted by the first or second
paragraph of Section 5.5, if:

 

(i)                                     a
default in the payment of principal, premium, interest, rent or other
obligations due on any Senior Indebtedness occurs and is continuing (or, in the
case of Senior Indebtedness for which there is a period of grace, in the event
of such a default that continues beyond the period of grace, if any, specified
in the instrument or lease evidencing such Senior Indebtedness), unless and
until such default shall have been cured or waived or shall have ceased to
exist; or

 

(ii)                                  a
default, other than a payment default, on any Designated Senior Indebtedness
occurs and is continuing that then permits holders of such Designated Senior
Indebtedness to accelerate its maturity and the Trustee receives a notice of
the default (a “Payment Blockage Notice”) from a Representative or holder of
such Designated Senior Indebtedness or the Company.

 

Subject to the provisions of Section 5.5, if the
Trustee receives any Payment Blockage Notice pursuant to clause (ii)
above, no subsequent Payment Blockage Notice shall be effective for purposes of
this Section unless and until at least 365 days shall have elapsed since the
date the Trustee received the immediately prior Payment Blockage Notice and all
scheduled payments on the Securities that have come due have been paid in full
in cash.  No nonpayment default that
existed or was continuing on the date of delivery of any Payment Blockage
Notice to the Trustee (unless such default was waived, cured or otherwise
ceased to exist and thereafter subsequently reoccurred) shall be the basis for
a subsequent Payment Blockage Notice.

 

The Company shall resume payments on and distributions
in respect of the Securities:

 

41

 

(a)                                  in
the case of a default referred to in clause (i) above, the date upon which
the default is cured or waived or ceases to exist, or

 

(b)                                 in
the case of a default referred to in clause (ii) above,  the earlier of the date on which such
default is cured or waived or ceases to exist or 179 days after the date on
which the applicable Payment Blockage Notice is received, if the maturity of
such Designated Senior Indebtedness has not been accelerated, unless this
Article 5 otherwise prohibits the payment or distribution at the time of such
payment or distribution.

 

Upon any payment by the Company, or distribution of
assets of the Company of any kind or character, whether in cash, property or
securities, to creditors upon any dissolution or winding-up or liquidation or
reorganization of the Company (whether voluntary or involuntary) or in
bankruptcy, insolvency, receivership or similar proceedings, all amounts due or
to become due upon all Senior Indebtedness shall first be paid in full in cash,
or other payments satisfactory to the holders of Senior Indebtedness before any
payment is made on account of the principal of, premium, if any, or Interest
Amounts, if any, on the Securities (except payments made pursuant to Article 10
from monies deposited with the Trustee pursuant thereto prior to commencement
of proceedings for such dissolution, winding-up, liquidation or
reorganization); and upon any such dissolution or winding-up or liquidation or
reorganization of the Company or bankruptcy, insolvency, receivership or other
proceeding, any payment by the Company, or distribution of assets of the
Company of any kind or character, whether in cash, property or securities, to
which the Holders of the Securities or the Trustee would be entitled, except
for the provision of this Article 5, shall (except as aforesaid) be paid by the
Company or by any receiver, trustee in bankruptcy, liquidating trustee, agent
or other Person making such payment or distribution, or by the Holders of the
Securities or by the Trustee under this Indenture if received by them or it,
directly to the holders of Senior Indebtedness (pro rata to such holders on the
basis of the respective amounts of Senior Indebtedness held by such holders, or
as otherwise required by law or a court order) or their Representative or
Representatives, or to the trustee or trustees under any indenture pursuant to
which any instruments evidencing any Senior Indebtedness may have been issued,
as their respective interests may appear, to the extent necessary to pay all
Senior Indebtedness in full in cash, or other payment satisfactory to the
holders of Senior Indebtedness, after giving effect to any concurrent payment or
distribution to or for the holders of Senior Indebtedness, before any payment
or distribution is made to the Holders of the Securities or to the Trustee.

 

For purposes of this Article 5, the words, “cash,
property or securities” shall not be deemed to include shares of stock of the
Company as reorganized or readjusted, or securities of the Company or any other
corporation provided for by a plan of reorganization or readjustment, the
payment of which is subordinated at least to the extent provided in this
Article 5 with respect to the Securities to the payment of all Senior
Indebtedness which may at the time be outstanding; provided  that (i) the
Senior Indebtedness is assumed by the new corporation, if any, resulting from
any reorganization or readjustment, and (ii) the rights of the holders of
Senior Indebtedness (other than leases which are not assumed by the Company or
the new corporation, as the case may be) are not, without the consent of such
holders, altered by such reorganization or readjustment.  The consolidation of the Company with, or
the merger of the Company into, another corporation or the liquidation or
dissolution of the Company following the conveyance, transfer or lease of its
property as an entirety, or substantially as an entirety, to another
corporation upon the terms and conditions provided for in Article 7 shall not
be deemed a dissolution, winding-up, liquidation or reorganization for the
purposes of this Section 5.2 if such other corporation shall, as a part of
such consolidation, merger, conveyance, transfer or lease, comply with the
conditions stated in Article 7.

 

In the event of the acceleration of the Securities
because of an Event of Default, no payment or distribution shall be made to the
Trustee or any Holder of Securities in respect of the principal of,

 

42

 

premium, if any, or Interest Amounts, if any, on the Securities by the
Company (including, but not limited to, the Redemption Price with respect to
the Securities called for redemption or the Change in Control Purchase Price or
Put Right Purchase Price with respect to the Securities subject to purchase in
accordance with Article 3 as provided in this Indenture), except payments and
distributions made by the Trustee as permitted by Section 5.5, until all Senior
Indebtedness has been paid in full in cash or other payment satisfactory to the
holders of Senior Indebtedness or such acceleration is rescinded in accordance
with the terms of this Indenture.  If
payment of the Securities is accelerated because of an Event of Default, the
Company shall promptly notify holders of Senior Indebtedness of such
acceleration.

 

In the event that, notwithstanding the foregoing
provisions, any payment or distribution of assets of the Company of any kind or
character, whether in cash, property or securities (including, without
limitation, by way of setoff or otherwise), prohibited by the foregoing, shall
be received by the Trustee or the Holders of the Securities before all Senior
Indebtedness is paid in full, in cash or other payment satisfactory to the
holders of Senior Indebtedness, or provision is made for such payment thereof
in accordance with its terms in cash or other payment satisfactory to the
holders of Senior Indebtedness, such payment or distribution shall be held in
trust for the benefit of and shall be paid over or delivered to the holders of
Senior Indebtedness or their Representative or Representatives, or to the
trustee or trustees under any indenture pursuant to which any instruments
evidencing any Senior Indebtedness may have been issued, as their respective
interests may appear, as calculated by the Company, for application to the
payment of all Senior Indebtedness remaining unpaid to the extent necessary to
pay all Senior Indebtedness in full, in cash or other payment satisfactory to
the holders of Senior Indebtedness, after giving effect to any concurrent
payment or distribution to or for the holders of such Senior Indebtedness.

 

Nothing in this Section 5.2 shall apply to claims of,
or payments to, the Trustee under or pursuant to Section 9.7.  This Section 5.2 shall be subject to the
further provisions of Section 5.5.

 

SECTION 5.3.                             SUBROGATION OF SECURITIES.

 

Subject to the payment in full, in cash or other
payment satisfactory to the holders of Senior Indebtedness, of all Senior
Indebtedness, the rights of the Holders of the Securities shall be subrogated
to the extent of the payments or distributions made to the holders of such
Senior Indebtedness pursuant to the provisions of this Article 5 (equally and
ratably with the holders of all indebtedness of the Company which by its
express terms is subordinated to other indebtedness of the Company to
substantially the same extent as the Securities are subordinated and is
entitled to like rights of subrogation) to the rights of the holders of Senior
Indebtedness to receive payments or distributions of cash, property or
securities of the Company applicable to the Senior Indebtedness until the
principal, premium, if any, and Interest Amounts, if any, on the Securities
shall be paid in full in cash or other payment satisfactory to the holders of
Senior Indebtedness; and, for the purposes of such subrogation, no payments or
distributions to the holders of the Senior Indebtedness of any cash, property
or securities to which the Holders of the Securities or the Trustee would be
entitled except for the provisions of this Article 5, and no payment over
pursuant to the provisions of this Article 5, to or for the benefit of the
holders of Senior Indebtedness by Holders of the Securities or the Trustee,
shall, as between the Company, its creditors other than holders of Senior
Indebtedness, and the Holders of the Securities, be deemed to be a payment by
the Company to or on account of the Senior Indebtedness; and no payments or
distributions of cash, property or securities to or for the benefit of the
Holders of the Securities pursuant to the subrogation provisions of this
Article 5, which would otherwise have been paid to the holders of Senior Indebtedness
shall be deemed to be a payment by the Company to or for the account of the
Securities.  It is understood that the
provisions of this Article 5 are and are intended solely for the purposes of
defining the relative rights of the Holders of the Securities, on the one hand,
and the holders of the Senior Indebtedness, on the other hand.

 

43

 

Nothing contained in this Article 5 or elsewhere in
this Indenture or in the Securities is intended to or shall impair, as among
the Company, its creditors other than the holders of Senior Indebtedness, 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 Amounts, 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 the Senior
Indebtedness, nor shall anything herein or therein prevent the Trustee or the
Holder of any Security from exercising all remedies otherwise permitted by
applicable law upon default under this Indenture, subject to the rights, if
any, under this Article 5 of the holders of Senior Indebtedness in respect of
cash, property or securities of the Company received upon the exercise of any
such remedy.

 

Upon any payment or distribution of assets of the
Company referred to in this Article 5, the Trustee, subject to the provisions
of Section 9.1, 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
such bankruptcy, dissolution, winding-up, liquidation or reorganization
proceedings are pending, or a certificate of the receiver, trustee in
bankruptcy, liquidating trustee, agent or other person making such 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
distribution, the holders of the Senior Indebtedness and other indebtedness of
the Company, the amount thereof or payable thereon and all other facts
pertinent thereto or to this Article 5.

 

SECTION
5.4.                             AUTHORIZATION
TO EFFECT SUBORDINATION.

 

Each Holder of a Security by the Holder’s acceptance
thereof authorizes and directs the Trustee on the Holder’s behalf to take such
action as may be necessary or appropriate to effectuate the subordination as
provided in this Article 5 and appoints the Trustee to act as the Holder’s
attorney-in-fact for any and all such purposes.  If the Trustee does not file a proper proof of claim or proof of
debt in the form required in any proceeding referred to in Section 5.3 hereof
at least 30 days before the expiration of the time to file such claim, the
holders of any Senior Indebtedness or their Representatives are hereby
authorized to file an appropriate claim for and on behalf of the Holders of the
Securities.

 

SECTION 5.5.                             NOTICE TO TRUSTEE.

 

The Company shall give prompt written notice in the
form of an Officers’ Certificate to a Trust Officer of the Trustee and to any
Paying Agent of any fact known to the Company which would prohibit the making
of any payment of monies to or by the Trustee or any Paying Agent in respect of
the Securities pursuant to the provisions of this Article 5.  Notwithstanding the provisions of this
Article 5 or any other provision of this Indenture, the Trustee shall not be
charged with knowledge of the existence of any facts which would prohibit the
making of any payment of monies to or by the Trustee in respect of the
Securities pursuant to the provisions of this Article 5, unless and until a
Trust Officer of the Trustee shall have received written notice thereof at the
Corporate Trust Office from the Company (in the form of an Officers’
Certificate) or a Representative or a holder or holders of Senior Indebtedness
or from any trustee thereof; and before the receipt of any such written notice,
the Trustee, subject to the provisions of Section 9.1, shall be entitled in all
respects to assume that no such facts exist; provided
that if on a date not less than one Business Day prior to the date
upon which by the terms hereof any such monies may become payable for any
purpose (including, without limitation, the payment of the principal of, or
premium, if any, or Interest Amounts, if any, on any Security) the Trustee
shall not have received, with respect to such monies, the notice provided for
in this Section 5.5, then, anything herein contained to the contrary
notwithstanding, the Trustee shall have full power and authority to receive
such monies and to apply the same to the purpose for which they were received,
and shall not be affected by any notice to the

 

44

 

contrary which may be received by it on or after such prior date.  Notwithstanding anything in this Article 5
to the contrary, nothing shall prevent any payment by the Trustee to the Holders
of monies deposited with it pursuant to Article 10, and any such payment shall
not be subject to the provisions of Article 5.

 

The Trustee, subject to the provisions of Section 9.1,
shall be entitled to rely on the delivery to it of a written notice by a
Representative or a person representing himself to be a holder of Senior
Indebtedness (or a trustee on behalf of such holder) to establish that such
notice has been given by a Representative or a holder of Senior Indebtedness or
a trustee on behalf of any such holder or holders.  In the event that the Trustee determines in good faith that
further evidence is required with respect to the right of any person as a
holder of Senior Indebtedness to participate in any payment or distribution
pursuant to this Article 5, the Trustee may request such Person to furnish
evidence to the reasonable satisfaction of the Trustee as to the amount of
Senior Indebtedness held by such Person, the extent to which such Person is
entitled to participate in such payment or distribution and any other facts
pertinent to the rights of such Person under this Article 5, and if such
evidence is not furnished the Trustee may defer any payment to such Person
pending judicial determination as to the right of such Person to receive such payment.

 

SECTION 5.6.                             TRUSTEE’S RELATION TO
SENIOR INDEBTEDNESS.

 

The Trustee in its individual capacity shall be
entitled to all the rights set forth in this Article 5 in respect of any Senior
Indebtedness at any time held by it, to the same extent as any other holder of
Senior Indebtedness, and nothing in Section 9.11 or elsewhere in this Indenture
shall deprive the Trustee of any of its rights as such holder.

 

With respect to the holders of Senior Indebtedness,
the Trustee undertakes to perform or to observe only such of its covenants and
obligations as are specifically set forth in this Article 5, and no implied
covenants or obligations with respect to the holders of Senior Indebtedness
shall be read into this Indenture against the Trustee.  The Trustee shall not be deemed to owe any
fiduciary duty to the holders of Senior Indebtedness and, subject to the
provisions of Section 9.1, the Trustee shall not be liable to any holder of
Senior Indebtedness if it shall pay over or deliver to Holders of Securities,
the Company or any other person money or assets to which any holder of Senior
Indebtedness shall be entitled by virtue of this Article 5 or otherwise.

 

SECTION 5.7.                             NO IMPAIRMENT OF
SUBORDINATION.

 

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

 

SECTION 5.8.                             CERTAIN CONVERSIONS DEEMED
PAYMENT.

 

For the purposes of this Article 5 only,
(1) the issuance and delivery of junior securities upon conversion of
Securities in accordance with Article 4 shall not be deemed to constitute a
payment or distribution on account of the principal of (or premium, if any) or
Interest Amounts, if any, on Securities or on account of the purchase or other
acquisition of Securities, and (2) the payment, issuance or delivery of
cash (except in satisfaction of fractional shares pursuant to Section 4.3),
property or securities (other than junior securities) upon conversion of a
Security shall be deemed to constitute payment on account of the principal of
such Security.  For the purposes of this
Section 5.8, the term “junior securities” means (a) shares of any stock of
any class of the Company, or (b) securities of the Company which are

 

45

 

subordinated in right of payment to all Senior Indebtedness which 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 this
Indenture or in the Securities is intended to or shall impair, as among the
Company, its creditors other than holders of Senior Indebtedness and the
Holders, the right, which is absolute and unconditional, of the Holder of any
Security to convert such Security in accordance with Article 4.

 

SECTION 5.9.                             ARTICLE APPLICABLE TO
PAYING AGENTS.

 

If at any time any Paying Agent other than the Trustee
shall have been appointed by the Company and be then acting hereunder, the term
“Trustee” as used in this Article shall (unless the context otherwise requires)
be construed as extending to and including such Paying Agent within its meaning
as fully for all intents and purposes as if such Paying Agent were named in
this Article in addition to or in place of the Trustee; provided, however,
that the first paragraph of Section 5.5 shall not apply to the Company or any
Affiliate of the Company if it or such Affiliate acts as Paying Agent.

 

SECTION 5.10.                      SENIOR
INDEBTEDNESS ENTITLED TO RELY.

 

The holders of Senior Indebtedness (including, without
limitation, Designated Senior Indebtedness) shall have the right to rely upon
this Article 5, and no amendment or modification of the provisions contained
herein shall diminish the rights of such holders unless such holders shall have
agreed in writing thereto.

 

ARTICLE 6

COVENANTS

 

SECTION 6.1.                             PAYMENT OF SECURITIES.

 

The Company shall promptly make all payments in
respect of the Securities on the dates and in the manner provided in the
Securities and this Indenture.  An
installment of principal or Interest Amounts, if any, shall be considered paid
on the date it is due if the Paying Agent (other than the Company) holds by
12:00 noon, New York City time, on that date money, deposited by the Company or
an Affiliate thereof, sufficient to pay the installment.  Subject to Section 4.2 hereof, accrued and
unpaid Interest Amounts, if any, on any Security that is payable, and is
punctually paid or duly provided for, on any Interest Amounts Payment Date
shall be paid to the person in whose name that Security is registered at the
close of business on the Interest Amounts Record Date for such Interest
Amounts, if any, at the office or agency of the Company maintained for such
purpose.  The Company shall, (in
immediately available funds) to the fullest extent permitted by law, pay
interest on overdue principal (including premium, if any) and overdue
installments of any Interest Amounts, if any, arising pursuant to the
Registration Rights Agreement and Section 4.5 at the rate of 4% per annum.

 

Payment of the principal of (and premium, if any) and
any Interest Amounts, if any, on the Securities shall be made at the office or
agency of the Company maintained for that purpose in the Borough of Manhattan,
The City of New York (which shall initially be The Bank of New York, 101
Barclay Street – Lobby Level, Debt Processing Window, New York, New York 10286)
or at the Corporate Trust Office of the Trustee in such coin or currency of the
United States of America as at the time of payment is legal tender for payment
of public and private debts; provided, however, that at the option of the
Company payment of Interest Amounts may be made by check mailed to the address
of the Person entitled thereto as such address appears in the Register; provided further that a Holder with an
aggregate principal amount in excess of $2,000,000 will be paid by wire
transfer in immediately available

 

46

 

funds at the election of such Holder if such Holder has provided wire
transfer instructions to the Company and to the Paying Agent at least 10
Business Days prior to the payment date.

 

SECTION 6.2.                             SEC REPORTS.

 

The Company shall file all reports and other
information and documents which it is required to file with the SEC pursuant to
Section 13 or 15(d) of the Exchange Act, and within 30 days after it files
them with the SEC, the Company shall file copies of all such reports,
information and other documents with the Trustee.

 

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 6.3.                             COMPLIANCE CERTIFICATES.

 

The Company shall deliver to the Trustee, within 90
days after the end of each fiscal year of the Company (beginning with the
fiscal year ending December 31, 2003), an Officers’ Certificate as to the
signer’s knowledge of the Company’s compliance with all conditions and
covenants on its part contained in this Indenture and stating whether or not
the signer knows of any default or Event of Default.  If such signer knows of such a default or Event of Default, the
Officers’ Certificate shall describe the default or Event of Default and the
efforts to remedy the same.  For the
purposes of this Section 6.3, compliance shall be determined without
regard to any grace period or requirement of notice provided pursuant to the
terms of this Indenture.  The Company
will notify the Trustee of any change to its fiscal year.

 

SECTION 6.4.                             FURTHER INSTRUMENTS AND
ACTS.

 

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

 

SECTION 6.5.                             MAINTENANCE OF CORPORATE
EXISTENCE.

 

Subject to Article 7, the Company will do or
cause to be done all things necessary to preserve and keep in full force and
effect its corporate existence.

 

SECTION 6.6.                             RULE 144A INFORMATION
REQUIREMENT.

 

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

 

47

 

such Rule may be amended from time to time.  Upon the request of any Holder or any beneficial holder of the
Securities or such Common Stock, the Company will deliver to such Holder a
written statement as to whether it has complied with such requirements.

 

SECTION 6.7.                             STAY, EXTENSION AND USURY
LAWS.

 

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

 

SECTION 6.8.                             PAYMENT OF INTEREST
AMOUNTS.

 

If Interest Amounts are payable by the Company
pursuant to the Registration Rights Agreement or Section 4.5, the Company
shall deliver to the Trustee a certificate to that effect stating (i) the
amount of such Interest Amounts, if any, that are payable and (ii) the
date on which such Interest Amounts, if any, are payable.  Unless and until a Trust Officer of the
Trustee receives such a certificate, the Trustee may assume without inquiry
that no such Interest Amounts, if any, are payable.  If the Company has paid Interest Amounts directly to the Persons
entitled to it, the Company shall deliver to the Trustee a certificate setting
forth the particulars of such payment.

 

ARTICLE 7

CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

 

SECTION 7.1.                             COMPANY MAY CONSOLIDATE,
ETC, ONLY ON CERTAIN TERMS.

 

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

 

(1)                                  in
case the Company shall consolidate with or merge into another Person (in a
transaction in which the Company is not the surviving Person) or convey,
transfer or lease all or substantially all of its properties and assets as an
entirety to any Person, the Person formed by such consolidation or into which
the Company is merged or the Person who acquires by conveyance or transfer, or
who leases all or substantially all of the properties and assets of the Company
as an entirety shall be organized and validly existing under the laws of the
United States of America, any State thereof or the District of Columbia;

 

(2)                                  the
successor Person formed by such consolidation or into which the Company is
merged or to whom such conveyance, transfer or lease is made shall expressly
assume, by an indenture supplemental hereto, executed and delivered to the
Trustee, in form satisfactory to the Trustee, the due and punctual payment of
the principal of and any premium and Interest Amounts, if any, on all the
Securities and the performance or observance of every covenant of this
Indenture on the part of the Company to be performed or observed and the
conversion rights shall be provided for in accordance with Article 4, by
supplemental indenture satisfactory in form to the Trustee, executed and
delivered to the

 

48

 

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
who shall have acquired the Company’s assets;

 

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

 

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

 

SECTION 7.2.                             SUCCESSOR SUBSTITUTED.

 

Upon any consolidation of the Company with, or merger
of the Company into, any other Person or any conveyance, transfer or lease of
all or substantially all of the properties and assets of the Company as an
entirety in accordance with Section 7.1, the successor Person formed by such
consolidation or into which the Company is merged or to which such conveyance,
transfer or lease is made shall succeed to, and be substituted for, and may
exercise every right and power of, the Company under this Indenture with the
same effect as if such successor Person had been named as the Company herein,
and thereafter, except in the case of a lease, the predecessor Person shall be
relieved of all obligations and covenants under this Indenture and the
Securities.

 

ARTICLE 8

DEFAULT AND REMEDIES

 

SECTION 8.1.                             EVENTS OF DEFAULT.

 

An “Event of Default” shall occur if:

 

(1)                                  the
Company defaults in the payment of any interest (including Interest Amounts, if
any,) on any Security when the same becomes due and payable and the default
continues for a period of 30 days, whether or not such payment shall be
prohibited by the provisions of Article 5 hereof;

 

(2)                                  the
Company defaults in the payment of any principal of (including, without
limitation, any premium, if any, on) any Security when the same becomes due and
payable (whether at maturity, upon redemption, on a Change of Control Purchase
Date or Put Right Purchase Date or otherwise), whether or not such payment
shall be prohibited by the provisions of Article 5 hereof;

 

(3)                                  the
Company fails to perform any other covenants required of it in the Indenture
and the default continues for the period and after the notice specified below;

 

(4)                                  the
Company defaults in the payment of the purchase price of any Security when the
same becomes due and payable, whether or not such payment shall be prohibited
by the provisions of Article 5 hereof; or

 

(5)                                  the
Company fails to provide notice of a Change in Control when required by Section
3.8(b); or

 

(6)                                  any
Indebtedness for money borrowed by the Company or any Significant Subsidiary in
an outstanding principal amount in excess of U.S. $25,000,000, whether such
Indebtedness

 

49

 

now exists or shall hereafter be created, is not paid at final maturity
(either at its stated maturity or upon acceleration thereof), and such
Indebtedness is not discharged, or such acceleration is not cured, waived,
rescinded or annulled, within a period of 30 days after there shall have been
given, by registered or certified mail, to the Company by the Trustee or to the
Company and the Trustee by the Holders of at least 25% in aggregate principal amount
of the outstanding Securities a written notice specifying such default and
requiring the Company to cause such Indebtedness to be discharged or cause such
default to be cured or waived or such acceleration to be rescinded or annulled
and stating that such notice is a “Notice of Default” hereunder; or

 

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

 

(A)                              commences
a voluntary case or proceeding;

 

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

 

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

 

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

 

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

 

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

 

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

 

(C)                                orders
the liquidation of the Company;

 

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

 

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

 

A default under clause (3) above is not an Event
of Default until the Trustee notifies the Company, or the Holders of at least
25% in aggregate principal amount of the Securities then outstanding notify the
Company and the Trustee in writing of the default, and the Company does not
cure the default within 60 days after receipt of such notice.  The notice given pursuant to this Section 8.1
must specify the default, demand that it be remedied and state that the notice
is a “Notice of Default.”  When any
default under this Section 8.1 is cured, it ceases.

 

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

 

50

 

SECTION 8.2.                             ACCELERATION.

 

If an Event of Default (other than an Event of Default
specified in clause (7) or (8) of Section 8.1) with respect to the
Company occurs and is continuing, the Trustee may, by notice to the Company, or
the Holders of at least 25% in aggregate principal amount of the Securities
then outstanding may, by notice to the Company and the Trustee, declare all
unpaid principal to the date of acceleration on the Securities then outstanding
(if not then due and payable) to be due and payable upon any such declaration,
and the same shall become and be immediately due and payable.  If an Event of Default specified in
clause (7) or (8) of Section 8.1 with respect to the Company occurs,
all unpaid principal of the Securities then outstanding shall ipso facto become
and be immediately due and payable without any declaration or other act on the
part of the Trustee or any Holder.  Any
payments by the Company on the Securities following such acceleration will be
subject to the subordination provisions of Article 5 to the extent provided
herein.  After an acceleration, the
Holders of a majority in aggregate principal amount of the Securities then
outstanding by notice to the Trustee may rescind an acceleration and its
consequences if (a) all existing Events of Default, other than the
nonpayment of the principal of the Securities which has become due solely by
such declaration of acceleration, have been cured or waived; (b) to the
extent the payment of such interest is lawful, interest (at the rate of 4% per
annum) on overdue installments of Interest Amounts, if any, which has become
due otherwise than by such declaration of acceleration, has been paid;
(c) the rescission would not conflict with any judgment or decree of a
court of competent jurisdiction; and (d) all payments due to the Trustee
and any predecessor Trustee under Section 9.7 have been made.  No such rescission shall affect any
subsequent default or impair any right consequent thereto.

 

SECTION 8.3.                             OTHER REMEDIES.

 

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

 

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

 

SECTION 8.4.                             WAIVER OF DEFAULTS AND
EVENTS OF DEFAULT.

 

Subject to Sections 8.7 and 11.2, the Holders of
a majority in aggregate principal amount of the Securities then outstanding by
notice to the Trustee may waive an existing default or Event of Default and its
consequence, except a default or Event of Default in the payment of the
principal of, premium, if any, or any interest (including any Interest Amounts)
on any Security when due, a failure by the Company to convert any Securities
into Common Stock or Series A Preferred Stock pursuant to this Indenture or any
default or Event of Default in respect of any provision of this Indenture or
the Securities which, under Section 11.2, cannot be modified or amended
without the consent of the Holder of each Security affected.  When a default or Event of Default is
waived, it is cured and ceases.

 

SECTION 8.5.                             CONTROL BY MAJORITY.

 

The Holders of a majority in aggregate principal
amount of the Securities then outstanding may direct the time, method and place
of conducting any proceeding for any remedy available to the Trustee or
exercising any trust or power conferred on it. 
However, the Trustee may refuse to follow any direction that conflicts
with law or this Indenture, that the Trustee determines may be unduly
prejudicial to the rights of another Holder or the Trustee, or that may involve
the Trustee in personal liability unless the

 

51

 

Trustee is offered indemnity satisfactory to it; provided, however,
that the Trustee may take any other action deemed proper by the Trustee which
is not inconsistent with such direction.

 

SECTION 8.6.                             LIMITATIONS ON SUITS.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

SECTION 8.7.                             RIGHTS OF HOLDERS TO
RECEIVE PAYMENT AND TO CONVERT.

 

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

 

SECTION 8.8.                             COLLECTION SUIT BY
TRUSTEE.

 

If an Event of Default in the payment of principal or
Interest Amounts, if any, specified in clause (1) or (2) of
Section 8.1 occurs and is continuing, the Trustee may recover judgment in
its own name and as trustee of an express trust against the Company or another
obligor on the Securities for the whole amount of principal and accrued
Interest Amounts, if any, remaining unpaid, together with, to the extent that
payment of such interest is lawful, interest on overdue principal and on
overdue installments of Interest Amounts, if any, in each case at the rate of
4% per annum and such further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.

 

SECTION 8.9.                             TRUSTEE MAY FILE PROOFS OF
CLAIM.

 

The Trustee may file such proofs of claim and other
papers or documents as may be necessary or advisable in order to have the
claims of the Trustee (including any claim for the reasonable compensation,

 

52

 

expenses, disbursements and advances of the Trustee, its agents and
counsel) and the Holders allowed in any judicial proceedings relative to the
Company (or any other obligor on the Securities), its creditors or its property
and shall be entitled and empowered to collect and receive any money or other
property payable or deliverable on any such claims and to distribute the same,
and any Custodian in any such judicial proceeding is hereby authorized by each
Holder to make such payments to the Trustee and, in the event that the Trustee
shall consent to the making of such payments directly to the Holders, to pay to
the Trustee any amount due to it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any
other amounts due the Trustee under Section 9.7, and to the extent that
such payment of the reasonable compensation, expenses, disbursements and
advances in any such proceedings shall be denied for any reason, payment of the
same shall be secured by a lien on, and shall be paid out of, any and all
distributions, dividends, money, securities and other property which the
Holders may be entitled to receive in such proceedings, whether in liquidation
or under any plan of reorganization or arrangement or otherwise.  Nothing herein contained shall be deemed to
authorize the Trustee to authorize or consent to, or, on behalf of any Holder,
to authorize, accept or adopt any plan of reorganization, arrangement,
adjustment or composition affecting the Securities or the rights of any Holder
thereof, or to authorize the Trustee to vote in respect of the claim of any
Holder in any such proceeding.

 

SECTION
8.10.                      PRIORITIES.

 

If the Trustee collects any money pursuant to this
Article 8, it shall pay out the money in the following order:

 

First, to the Trustee for amounts due under Section 9.7;

 

Second, to the holders of Senior Indebtedness to the
extent required by Article 5;

 

Third, to Holders for amounts due and unpaid on the
Securities for principal and Interest Amounts, if any, ratably, without
preference or priority of any kind, according to the amounts due and payable on
the Securities for principal and Interest Amounts, if any, respectively; and

 

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

 

The Trustee may fix a record date and payment date for
any payment to Holders pursuant to this Section 8.10.

 

SECTION 8.11.                      UNDERTAKING
FOR COSTS.

 

In any suit for the enforcement of any right or remedy
under this Indenture or in any suit against the Trustee for any action taken or
omitted by it as Trustee, a court in its discretion may require the filing by
any party litigant in the suit of an undertaking to pay the costs of the suit,
and the court in its discretion may assess reasonable costs, including
reasonable attorneys’ fees and expenses, against any party litigant in the
suit, having due regard to the merits and good faith of the claims or defenses
made by the party litigant.  This
Section 8.11 does not apply to a suit made by the Trustee, a suit by a
Holder pursuant to Section 8.7, or a suit by Holders of more than 10% in
aggregate principal amount of the Securities then outstanding.

 

53

 

ARTICLE 9

TRUSTEE

 

SECTION 9.1.                             DUTIES OF TRUSTEE.

 

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

 

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

 

(1)                                  the
Trustee need perform only those duties as are specifically set forth in this
Indenture and no others; and

 

(2)                                  in
the absence of bad faith on its part, the Trustee may conclusively rely, as to
the truth of the statements and the correctness of the opinions expressed
therein, upon certificates or opinions furnished to the Trustee and conforming
to the requirements of this Indenture. 
The Trustee, however, shall examine any certificates and opinions which
by any provision hereof are specifically required to be delivered to the
Trustee to determine whether or not on their face they conform to the
requirements of this Indenture.

 

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

 

(1)                                  this
paragraph does not limit the effect of subsection (b) of this
Section 9.1;

 

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

 

(3)                                  the
Trustee shall not be liable with respect to any action it takes or omits to
take in good faith in accordance with a direction received by it pursuant to
Section 8.5.

 

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

 

(e)                                  Every
provision of this Indenture that in any way relates to the Trustee is subject
to subsections (a), (b), (c) and (d) of this Section 9.1.

 

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

 

SECTION 9.2.                             RIGHTS OF TRUSTEE.

 

Subject to Section 9.1:

 

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

 

(b)                                 Before
the Trustee acts or refrains from acting, it may require an Officers’
Certificate or an Opinion of Counsel, which shall conform to
Section 12.4(b).  The Trustee shall
not be liable for any action it takes or omits to take in good faith in
reliance on such Officers’ Certificate or Opinion.

 

54

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

SECTION 9.3.                             INDIVIDUAL RIGHTS OF
TRUSTEE.

 

The Trustee in its individual or any other capacity
may become the owner or pledgee of Securities and may otherwise deal with the
Company or an Affiliate of the Company with the same rights it would have if it
were not Trustee.  Any Agent may do the
same with like rights.  However, the
Trustee is subject to Sections 9.10 and 9.11.

 

SECTION 9.4.                             TRUSTEE’S DISCLAIMER.

 

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

 

55

 

SECTION 9.5.                             NOTICE OF DEFAULT OR
EVENTS OF DEFAULT.

 

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

 

SECTION 9.6.                             REPORTS BY TRUSTEE TO
HOLDERS.

 

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

 

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

 

SECTION 9.7.                             COMPENSATION AND
INDEMNITY.

 

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

 

The Company shall indemnify the Trustee or any
predecessor Trustee (which for purposes of this Section 9.7 shall include
its officers, directors, employees and agents) for, and hold it harmless
against, any and all loss, liability or expense including taxes (other than
taxes based upon, measured by or determined by the income of the Trustee),
(including reasonable legal fees and expenses whether incurred before trial, on
trial, on appeal, or in any bankruptcy or arbitration proceeding) incurred by
it in connection with the acceptance or administration of its duties under this
Indenture or any action or failure to act as authorized or within the
discretion or rights or powers conferred upon the Trustee hereunder including
the reasonable costs and expenses of the Trustee and its counsel in defending
itself against any claim or liability in connection with the exercise or performance
of any of its powers or duties hereunder. 
The Trustee shall notify the Company promptly of any claim asserted
against the Trustee for which it may seek indemnity.  The Company need not pay for any settlement without its written
consent, which shall not be unreasonably withheld.

 

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

 

To secure the Company’s payment obligations in this
Section 9.7, the Trustee shall have a senior claim to which the Securities
are hereby made subordinate on all money or property held or collected by the
Trustee, except such money or property held in trust to pay the principal of
and Interest Amounts, if any, on the Securities.  The obligations of the Company under this Section 9.7 shall
survive the satisfaction and discharge of this Indenture or the resignation or
removal of the Trustee.

 

56

 

When the Trustee incurs expenses or renders services
after an Event of Default specified in clause (7) or (8) of
Section 8.1 occurs, the expenses and the compensation for the services are
intended to constitute expenses of administration under any Bankruptcy
Law.  The provisions of this
Section shall survive the termination of this Indenture.

 

SECTION 9.8.                             REPLACEMENT OF TRUSTEE.

 

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

 

(1)                                  the
Trustee fails to comply with Section 9.10;

 

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

 

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

 

(4)                                  the
Trustee becomes incapable of acting.

 

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

 

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

 

If the Trustee fails to comply with Section 9.10,
any Holder may petition any court of competent jurisdiction for the removal of
the Trustee and the appointment of a successor Trustee.

 

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

 

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

 

Notwithstanding replacement of the Trustee pursuant to
this Section 9.8, the Company’s obligations under Section 9.7 shall
continue for the benefit of the retiring Trustee.

 

SECTION 9.9.                             SUCCESSOR TRUSTEE BY
MERGER, ETC.

 

If the Trustee consolidates with, merges or converts
into, or transfers all or substantially all of its corporate trust assets
(including the administration of this Indenture) to, another corporation, the
resulting,

 

57

 

surviving or transferee corporation, without any further act, shall be
the successor Trustee, provided
such transferee corporation shall qualify and be eligible under
Section 9.10.  Such successor
Trustee shall promptly mail notice of its succession to the Company and each Holder.

 

SECTION 9.10.                      ELIGIBILITY;
DISQUALIFICATION.

 

The Trustee shall always satisfy the requirements of
paragraphs (1), (2) and (5) of TIA Section 310(a).  The Trustee (or its parent holding company)
shall have a combined capital and surplus of at least $50,000,000.  If at any time the Trustee shall cease to
satisfy any such requirements, it shall resign immediately in the manner and
with the effect specified in this Article 9.  The Trustee shall be subject to the provisions of TIA
Section 310(b).  Nothing herein
shall prevent the Trustee from filing with the SEC the application referred to
in the penultimate paragraph of TIA Section 310(b).

 

SECTION
9.11.                      PREFERENTIAL
COLLECTION OF CLAIMS AGAINST COMPANY.

 

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

 

ARTICLE 10

SATISFACTION AND DISCHARGE OF
INDENTURE

 

SECTION 10.1.                      SATISFACTION
AND DISCHARGE OF INDENTURE.

 

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

 

(a)                                  either

 

(A)                              all
Securities theretofore authenticated and delivered (other than (i) Securities
which have been destroyed, lost or stolen and which have been replaced or paid
as provided in Section 2.7 and (ii) Securities for whose payment money has
theretofore been deposited in trust and thereafter repaid to the Company as
provided in Section 10.3) have been delivered to the Trustee for cancellation;
or

 

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

 

(i)                                     have
become due and payable, or

 

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

 

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

 

58

 

and the Company, in the
case of clause (i), (ii) or (iii) above, has irrevocably
deposited or caused to be irrevocably deposited with the Trustee or a Paying
Agent (other than the Company or any of its Affiliates) as trust funds in trust
for such purpose cash in an amount sufficient to pay and discharge the entire
indebtedness on such Securities not theretofore delivered to the Trustee for
cancellation, for principal and interest to the date of such deposit (in the
case of Securities which have become due and payable) or to the Final Maturity
Date or Redemption Date, as the case may be. 
In the event that the Company exercises its right to redeem the
Securities as provided in Article 3, the Company shall have the right to
withdraw its funds previously deposited with the Trustee or Paying Agent
pursuant to the immediately preceding sections;

 

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

 

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

 

Notwithstanding the satisfaction and discharge of this
Indenture, the obligations of the Company to the Trustee under Section 9.7
shall survive and the provisions of Section 2.3, Section 2.4, Section 2.5,
Section 2.6, Section 2.7, Section 2.12, Section 3.8, Section 3.9, Section 3.10,
Section 3.11, Section 3.12, Section 3.13, Section 12.5, Article 4, the last
paragraph of Section 6.1 and this Article 10 shall survive until the Securities
have been paid in full.

 

SECTION 10.2.                      APPLICATION
OF TRUST MONEY.

 

Subject to the provisions of Section 10.3, the Trustee
or a Paying Agent shall hold in trust, for the benefit of the Holders, all
money deposited with it pursuant to Section 10.1 and shall apply the deposited
money in accordance with this Indenture and the Securities to the payment of
the principal of and interest on the Securities.  Money so held in trust shall not be subject to the subordination
provisions of Article 5.

 

SECTION 10.3.                      REPAYMENT TO
COMPANY.

 

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

 

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

 

59

 

SECTION 10.4.                      REINSTATEMENT.

 

(a)                                  If
the Trustee or any Paying Agent is unable to apply any money in accordance with
Section 10.2 by reason of any legal proceeding or by reason of any order or
judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, then the Company’s obligations under
this Indenture and the Securities shall be revived and reinstated as though no
deposit had occurred pursuant to Section 10.1 until such time as the Trustee or
such Paying Agent is permitted to apply all such money in accordance with
Section 10.2; provided, however, that if the Company has made any
payment of the principal of or interest on any Securities because of the
reinstatement of its obligations, the Company shall be subrogated to the rights
of the Holders of such Securities to receive any such payment from the money
held by the Trustee or such Paying Agent.

 

(b)                                 If,
pursuant to the last sentence of Section 10.1(a), the Company withdraws its
previously deposited funds as a result of its exercise of its redemption right,
the Company’s obligations under this Indenture and the Securities shall be
revived and reinstated as though no deposit has occurred pursuant to Section
10.1.

 

ARTICLE 11

AMENDMENTS, SUPPLEMENTS AND WAIVERS

 

SECTION 11.1.                      WITHOUT
CONSENT OF HOLDERS.

 

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

 

(a)                                  to
comply with Sections 4.11 and 7.1;

 

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

 

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

 

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

 

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

 

(f)                                    to
appoint a successor Trustee; or

 

(g)                                 to
provide for uncertificated Securities in addition to or in place of
certificated Securities.

 

SECTION 11.2.                      WITH CONSENT
OF HOLDERS.

 

The Company and the Trustee may amend or supplement
the Securities or this Indenture with the written consent of the Holders of at
least a majority in aggregate principal amount of the Securities then
outstanding.  The Holders of at least a
majority in aggregate principal amount of the Securities then outstanding may
waive compliance in a particular instance by the Company with any provision of
the Securities or this Indenture without notice to any Securityholder.  However, notwithstanding the foregoing but
subject to Section 11.4, without the written consent of each
Securityholder affected, an amendment, supplement or waiver, including a waiver
pursuant to Section 8.4, may not:

 

(a)                                  change
the stated maturity of the principal of, or Interest Amounts, if any, on, any
Security;

 

60

 

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

 

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

 

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

 

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

 

(f)                                    modify
the provisions with respect to the purchase right of Holders pursuant to 

Section 3.8 upon a Change in Control or as described in Section 3.11 in a
manner adverse to Holders;

 

(g)                                 modify
the subordination provisions of Article 5 in a manner materially adverse to the
Holders of Securities;

 

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

 

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

 

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

 

(k)                                  modify
any of the provisions of this Section 11.2 or Section 8.4, except to
increase the percentage required for modification or waiver or to provide that
certain provisions of this Indenture cannot be modified or waived without the
consent of the Holder of each outstanding Security affected thereby.

 

It shall not be necessary for the consent of the
Holders under this Section 11.2 to approve the particular form of any
proposed amendment, supplement or waiver, but it shall be sufficient if such
consent approves the substance thereof.

 

After an amendment, supplement or waiver under this
Section 11.2 becomes effective, the Company shall mail to the Holders
affected thereby a notice briefly describing the amendment, supplement or
waiver.  Any failure of the Company to
mail such notice, or any defect therein, shall not, however, in any way impair
or affect the validity of any such amendment, supplement or waiver.  An amendment or supplement under this
Section 11.2 or under Section 11.1 may not make any change that
adversely affects the rights under Article 5 of any holder of an issue of
Senior Indebtedness unless the holders of that issue, pursuant to its terms,
consent to the change.

 

SECTION 11.3.                      COMPLIANCE
WITH TRUST INDENTURE ACT.

 

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

 

61

 

SECTION 11.4.                      REVOCATION
AND EFFECT OF CONSENTS.

 

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

 

After an amendment, supplement or waiver becomes
effective, it shall bind every applicable Securityholder, unless it makes a
change described in any of clauses (a) through (k) of Section 11.2.  In that case the amendment, supplement or
waiver shall bind each Holder of a Security who has consented to it and every
subsequent Holder of a Security or portion of a Security that evidences the
same debt as the consenting Holder’s Security.

 

SECTION 11.5.                      NOTATION ON
OR EXCHANGE OF SECURITIES.

 

If an amendment, supplement or waiver changes the
terms of a Security, the Trustee may require the Holder of the Security to
deliver it to the Trustee.  The Trustee
may place an appropriate notation on the Security about the changed terms and
return it to the Holder.  Alternatively,
if the Company or the Trustee so determines, the Company in exchange for the
Security shall issue and the Trustee shall authenticate a new Security that
reflects the changed terms.

 

SECTION 11.6.                      TRUSTEE TO
SIGN AMENDMENTS, ETC.

 

The Trustee shall sign any amendment or supplemental
indenture authorized pursuant to this Article 11 if the amendment or
supplemental indenture does not adversely affect the rights, duties,
liabilities or immunities of the Trustee. 
If it does, the Trustee may, in its sole discretion, but need not sign
it.  In signing or refusing to sign such
amendment or supplemental indenture, the Trustee shall be entitled to receive
and, subject to Section 9.1, shall be fully protected in relying upon, an
Opinion of Counsel stating that such amendment or supplemental indenture is
authorized or permitted by this Indenture. 
The Company may not sign an amendment or supplement indenture until the
Board of Directors approves it.

 

SECTION 11.7.                      EFFECT OF
SUPPLEMENTAL INDENTURES.

 

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

 

ARTICLE 12

MISCELLANEOUS

 

SECTION 12.1.                      TRUST
INDENTURE ACT CONTROLS.

 

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

 

SECTION 12.2.                      NOTICES.

 

Any demand, authorization notice, request, consent or
communication shall be given in writing and delivered in person or mailed by
first-class mail, postage prepaid, addressed as follows or transmitted

 

62

 

by facsimile transmission (confirmed by delivery in person or mail by
first-class mail, postage prepaid, or by guaranteed overnight courier) to the
following facsimile numbers:

 

If to the Company, to:

 

FEI Company

7451 NW Evergreen Parkway

Hillsboro, OR 97124-5830

Attention: General Counsel

Facsimile No.: (503) 640-7509

 

if to the Trustee, to:

 

BNY Western Trust Company

550 Kearny Street, Suite 600

San Francisco, CA 94108

Attention: Corporate Trust Department

Facsimile No.: (415) 399-1647

 

Such notices or communications shall be effective when
received.

 

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

 

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

 

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

 

SECTION 12.3.                      COMMUNICATIONS
BY HOLDERS WITH OTHER HOLDERS.

 

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

 

SECTION 12.4.                      CERTIFICATE
AND OPINION AS TO CONDITIONS PRECEDENT.

 

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

 

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

 

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

 

63

 

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

 

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

 

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

 

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

 

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

 

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

 

SECTION 12.5.                      RECORD DATE
FOR VOTE, WAIVER OR CONSENT OF SECURITYHOLDERS.

 

The Company (or, in the event deposits have been made
pursuant to Section 10.1, the Trustee) may set a record date for purposes
of determining the identity of Holders entitled to vote, waive or consent to
any action by vote, waiver or consent authorized or permitted under this
Indenture, which record date shall not be more than thirty (30) days prior to
the date of the commencement of solicitation of such action.  Notwithstanding the provisions of
Section 11.4, if a record date is fixed, those persons who were Holders of
Securities at the close of business on such record date (or their duly
designated proxies), and only those persons, shall be entitled to take such
action by vote or consent or to revoke any vote or consent previously given,
whether or not such persons continue to be Holders after such record date.

 

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

 

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

 

SECTION 12.7.                      LEGAL
HOLIDAYS.

 

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

 

SECTION 12.8.                      GOVERNING
LAW.

 

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

 

64

 

SECTION 12.9.                      NO ADVERSE
INTERPRETATION OF OTHER AGREEMENTS.

 

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

 

SECTION 12.10.               NO RECOURSE AGAINST
OTHERS.

 

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

 

SECTION 12.11.               SUCCESSORS.

 

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

 

SECTION
12.12.               MULTIPLE COUNTERPARTS.

 

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

 

SECTION 12.13.               SEPARABILITY.

 

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

 

SECTION 12.14.               TABLE OF CONTENTS,
HEADINGS, ETC.

 

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

 

 

[SIGNATURE PAGE FOLLOWS]

 

65

 

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

 

 

	
   

  	
  FEI
  Company

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Vahé A. Sarkissian

  	
   

  
	
   

  	
  Name:

  	
  Vahé A. Sarkissian

  
	
   

  	
  Title:

  	
  Chairman, Chief Executive Officer and

  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BNY Western Trust Company

  as Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Priscilla R. Dedoro

  	
   

  
	
   

  	
  Authorized Officer

  
					

 

 

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)

 

[THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY
ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES
SECURITIES ACT OF 1933 (THE “SECURITIES ACT”), AND THIS SECURITY AND THE SHARES
ISSUABLE UPON CONVERSION THEREOF MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION
THEREFROM.  EACH PURCHASER OF THIS
SECURITY IS HEREBY NOTIFIED THAT THE SELLER OF THIS SECURITY MAY BE RELYING ON
THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED
BY RULE 144A THEREUNDER.](2)

 

[THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF
THE COMPANY THAT (A) THIS SECURITY AND THE SHARES ISSUABLE UPON CONVERSION
THEREOF MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY
(I) IN THE UNITED STATES TO A PERSON WHOM THE SELLER REASONABLY BELIEVES
IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A,
(II) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN ACCORDANCE
WITH RULE 904 UNDER THE SECURITIES ACT, (III) PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144
THEREUNDER (IF AVAILABLE) OR 

 

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

 

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

 

A-1

 

(IV) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT, IN EACH OF CASES (I) THROUGH (IV) IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES, AND (B) THE
HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF
THIS SECURITY FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.  IN ANY CASE, THE HOLDER HEREOF WILL NOT,
DIRECTLY OR INDIRECTLY, ENGAGE IN ANY HEDGING TRANSACTIONS WITH REGARD TO THIS
SECURITY EXCEPT AS PERMITTED UNDER THE SECURITIES ACT.](2)

 

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

 

 

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

 

A-2

 

FEI
COMPANY

 

	
  CUSIP:                   

  	
   

  	
  A-        

  

 

ZERO COUPON CONVERTIBLE
SUBORDINATED NOTES DUE JUNE 15, 2023,

FIRST PUTABLE JUNE 15, 2008

 

FEI Company, an Oregon corporation (the “Company”,
which term shall include any successor corporation under the Indenture referred
to on the reverse hereof), promises to pay to Cede & Co., or its registered
assigns, the principal sum of                                                         
Dollars ($                 )
on June 15, 2023 [or such greater or lesser amount as is indicated on the
Schedule of Exchanges of Notes on the other side of this Note].(3)

 

Interest Amounts Payment Dates:  June 15 and December 15

 

Interest Amounts Record Dates:  June 1 and December 1

 

This Note shall not bear interest, other than Interest
Amounts payable in certain circumstances, if any.  This Note is convertible as specified on the other side of this
Note.  Additional provisions of this
Note are set forth on the other side of this Note.

 

SIGNATURE PAGE FOLLOWS

 

 

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

 

A-3

 

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

 

 

	
   

  	
  FEI
  COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
  Dated: June 13, 2003

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Vahé A. Sarkissian

  
	
   

  	
  Title:

  	
  Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ATTEST

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Bradley J. Thies

  
	
   

  	
  Title:

  	
  Secretary

  
					

 

 

TRUSTEE’S CERTIFICATE OF
AUTHENTICATION:

BNY WESTERN TRUST COMPANY, as Trustee,
certifies

that this is one of the Securities referred to in the within-mentioned
Indenture.

 

	
  By:

  	
   

  	
   

  
	
   

  	
  Authorized Signatory

  	
   

  

 

A-4

 

[FORM OF
REVERSE SIDE OF SECURITY]

 

FEI
COMPANY

 

ZERO
COUPON CONVERTIBLE SUBORDINATED NOTES DUE JUNE 15, 2023,

FIRST PUTABLE JUNE 15, 2008

 

1.                                                           INTEREST
AMOUNTS

 

FEI Company, an Oregon corporation (the “Company”,
which term shall include any successor corporation under the Indenture
hereinafter referred to), will not pay interest on the principal amount of this
Note other than any Interest Amounts, if any, accrued and payable as provided
in the Registration Rights Agreement or in the Indenture.

 

2.                                                           METHOD
OF PAYMENT

 

The Company shall pay Interest Amounts, if any, on
this Note to the person who is the Holder of this Note at the close of business
on June 1 or December 1, as the case may be, next preceding the related
Interest Amount payment date.  The
Holder must surrender this Note to a Paying Agent to collect payment of
principal.  The Company will pay
principal and Interest Amounts, 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, however, pay
principal and Interest Amounts, if any, in respect of any Certificated Security
by check or wire payable in such money; provided,
however, that a Holder with an
aggregate principal amount in excess of $2,000,000 will be paid by wire
transfer in immediately available funds at the election of such Holder if such
Holder has provided wire transfer instructions to the Company and to the Paying
Agent at least 5 Business Days prior to the payment date.  The Company may mail a check for Interest
Amounts, if any, to the Holder’s registered address.  Notwithstanding the foregoing, so long as this Note 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.

 

3.                                                           PAYING
AGENT, REGISTRAR AND CONVERSION AGENT

 

Initially, BNY Western Trust Company (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 Note is one of a duly authorized issue of
Securities of the Company designated as its Zero Coupon Convertible
Subordinated Notes due June 15, 2023, First Putable June 15, 2008 (the
“Notes”), issued under an Indenture dated as of June 13, 2003 (together with
any supplemental indentures thereto, the “Indenture”), between the Company and
the Trustee.  The terms of this Note
include those stated in the Indenture and those required by or made part of the
Indenture by reference to the Trust Indenture Act of 1939, as amended, as in
effect on the date of the Indenture. 
This Note is subject to all such terms, and the Holder of this Note is
referred to the Indenture and said Act for a statement of them.

 

A-1

 

The Notes are subordinated unsecured obligations of
the Company limited to $200,000,000 aggregate principal amount.  The Indenture does not limit other debt of
the Company, secured or unsecured, including Senior Indebtedness.

 

5.                                                           OPTIONAL
REDEMPTION

 

The Notes are subject to redemption, at any time, or
from time to time, on or after June 15, 2008, as a whole or in part, at the
election of the Company.  The Redemption
Price is 100% (or 100.25% if the Redemption Date is June 15, 2008) of the
principal amount of the Notes to be redeemed, together with accrued and unpaid
Interest Amounts, if any, up to but not including the Redemption Date; provided that if the Redemption Date falls
after an Interest Amounts Record Date, if any, and on or before an Interest
Amount Payment Date, then the Interest Amounts, if any, will be payable to the
Holders in whose names the Notes are registered at the close of business on
such Interest Amounts Record Date, if any.

 

No sinking fund is provided for the Notes.

 

6.                                                           NOTICE
OF REDEMPTION

 

Notice of redemption will be mailed by first-class
mail at least 15 days but not more than 60 days before the Redemption Date to
each Holder of Notes to be redeemed at its registered address.  Notes in denominations larger than $1,000
may be redeemed in part, but only in whole multiples of $1,000.  On and after the Redemption Date, subject to
the deposit with the Paying Agent of funds sufficient to pay the Redemption
Price plus accrued Interest Amounts, if any, accrued to, but excluding, the
Redemption Date, Interest Amounts, if any, shall cease to accrue on Notes or
portions of them called for redemption.

 

7.                                                           PURCHASE
OF NOTES AT OPTION OF HOLDER UPON A CHANGE IN CONTROL

 

At the option of the Holder and subject to the terms
and conditions of the Indenture, the Company shall become obligated to purchase
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 in excess thereof) of the
Notes held by such Holder on the date that is 30 Business Days after the
occurrence of a Change in Control, at a purchase price equal to 100% of the
principal amount thereof together with any accrued Interest Amounts up to, but
excluding, the Change in Control Purchase Date.  The Holder shall have the right to withdraw any Change in Control
Purchase Notice (in whole or in a portion thereof that is $1,000 or an integral
multiple of $1,000 in excess thereof) at any time prior to the close of
business on the Business Day immediately preceding the Change in Control
Purchase Date by delivering a written notice of withdrawal to the Paying Agent
in accordance with the terms of the Indenture.

 

8.                                                           PURCHASE
OF NOTES AT OPTION OF HOLDER ON SPECIFIED DATES

 

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 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 in excess
thereof) of the Notes held by such Holder on the applicable Put Right Purchase
Date at the applicable Put Right Purchase Price.  The Holder shall have the right to withdraw any Put Right
Purchase Notice (in whole or in a portion thereof that is $1,000 or an integral
multiple of $1,000 in excess thereof) at any time prior to the close of
business on the second Business Day immediately preceding the Put Right
Purchase Date by delivering a written notice of withdrawal to the Paying Agent
in accordance with the terms of the Indenture.

 

A-2

 

9.                                                           CONVERSION

 

(a)                                  To
convert a Note, a Holder must (1) complete and manually sign the
conversion notice on the back of the Note and deliver such notice to a
Conversion Agent, (2) surrender the Note to a Conversion Agent,
(3) furnish appropriate endorsements and transfer documents if required by
a Registrar or a Conversion Agent, and (4) pay any transfer or similar
tax, if required.

 

(b)                                 A
Holder may convert a Note in accordance with the Indenture and the provisions
hereof.

 

(c)                                  The
initial Conversion Price is $27.132 per share, subject to adjustment under
certain circumstances as provided in the Indenture.  The number of shares of Common Stock issuable upon conversion of
a Note is determined by dividing the principal amount of the Note or portion
thereof converted by the Conversion Price in effect on the Conversion
Date.  No fractional shares will be
issued upon conversion; in lieu thereof, an amount will be paid in accordance
with the Indenture.

 

(d)                                 As
soon as practicable after the Conversion Date, the Company shall satisfy all of
its obligations (“Conversion Obligations”) upon conversion of the Notes by
delivering to the Holder, at the Company’s option, either shares of Common
Stock, cash or a combination of cash and shares of Common Stock, in the manner
provided in the Indenture.

 

(e)                                  In
the event that the Company in unable to satisfy its Conversion Obligations in
shares of Common Stock and the Exchange Agent designated to exchange Notes
surrendered for conversion of shares of Common Stock as set forth in the
Indenture declines to exchange such Notes or does not timely deliver such
shares of Common Stock, the Company may issue Series A Preferred Stock in lieu
of shares of Common Stock based on a ratio of 1.1 shares of Series A Preferred
Stock for each 1,000 shares of Common Stock. 
One share of Series A Preferred Stock is equivalent to 1000 shares of
Common Stock.  The Company may issue
fractions of Series A Preferred Stock up to 1/1,000th of a share of
Series A Preferred Stock, with any smaller fraction being paid in cash in
accordance with the Indenture.  The
designation by the Company, and the rights, of the Exchange Agent are set forth
in the Indenture.

 

(f)                                    Prior
to the Reserve Sufficient Date (as defined below), 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 and Series
A Preferred Stock, a sufficient number of shares of Common Stock and Series A
Preferred Stock to permit the conversion of all outstanding Securities into shares
of Common Stock and Series A Preferred Stock. 
In the event the Company has not established a reserve of Common Stock
sufficient for conversion into Common Stock of all outstanding Securities by
the date 120 days after the latest date of issuance of the Securities, the
Securities then outstanding will bear interest at the rate 0.75% per annum from
and after such date to, but excluding, the date on which a reserve sufficient
for conversion of all Securities then outstanding has been established (the “Reserve
Sufficient Date”).  Such Interest
Amounts shall be paid on the relevant Interest Amounts Payment Dates to Holders
on the applicable Interest Amounts Record Date.  On and after the Reserve Sufficient Date, the provisions of this
paragraph and paragraph 9(e) of this Note above, and the related
provisions of the Indenture, shall no longer be in effect.

 

(g)                                 On
and after the Reserve Sufficient Date the Company shall from time to time, as
may be necessary, reserve a sufficient number of shares of Common Stock to
permit the conversion of all outstanding Securities into shares of Common
Stock.

 

(h)                                 Anything
herein to the contrary notwithstanding, in the case of Global Notes, conversion
notices may be delivered and such Global Notes may be surrendered for conversion
in accordance with the Applicable Procedures as in effect from time to time.

 

A-3

 

(i)                                     If
an Event of Default (other than an Event of Default in a cash payment upon
conversion of the Notes), has occurred an is continuing, the Company may not
pay cash upon conversion of any Note or portion of a Note (other than cash for
fractional shares).

 

To the extent that any Notes are surrendered for
conversion (in whole or in part) during the period from the close of business
on any Interest Amounts Record Date to the opening of business on the next
succeeding Interest Amounts Payment Date, if any, the Company shall be entitled
to direct the Paying Agent to take any and all actions consistent with custom
and practice in order to prevent the payment of Interest Amounts in excess of
the amounts provided in the Registration Rights Agreement and Section 4.5 of
the Indenture.

 

A Note in respect of which a Holder had delivered a
Change in Control Purchase Notice or Put Right Purchase Notice exercising the
option of such Holder to require the Company to purchase such Note may be
converted only if the Change in Control Purchase Notice or Put Right Purchase
Notice, as the case may be, is withdrawn in accordance with the terms of the
Indenture.

 

10.                                                     CONVERSION
ARRANGEMENT ON CALL FOR REDEMPTION

 

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

 

11.                                                     SUBORDINATION

 

The indebtedness evidenced by the Notes is, to the
extent and in the manner provided in the Indenture, subordinate and junior in
right of payment to the prior payment in full of all Senior Indebtedness of the
Company.  Any Holder by accepting this
Note agrees to and shall be bound by such subordination provisions and
authorizes the Trustee to give them effect. 
In addition to all other rights of Senior Indebtedness described in the
Indenture, the Senior Indebtedness shall continue to be Senior Indebtedness and
entitled to the benefits of the subordination provisions irrespective of any
amendment, modification or waiver of any terms of any instrument relating to
the Senior Indebtedness or any extension or renewal of the Senior Indebtedness.

 

12.                                                     DENOMINATIONS,
TRANSFER, EXCHANGE

 

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

 

13.                                                     PERSONS
DEEMED OWNERS

 

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

 

A-4

 

14.                                                     UNCLAIMED
MONEY

 

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

 

15.                                                     AMENDMENT,
SUPPLEMENT AND WAIVER

 

Subject to certain exceptions, the Notes or the
Indenture may be amended or supplemented with the consent of the Holders of at
least a majority in aggregate principal amount of the Notes then outstanding,
and an existing default or Event of Default with respect to the Notes and its
consequence or compliance with any provision of the Notes or the Indenture with
respect to the Notes may be waived in a particular instance with the consent of
the Holders of a majority in aggregate principal amount of the Notes then
outstanding.  Without the consent of or
notice to any Holder, the Company and the Trustee may amend or supplement the
Indenture or the Notes to, among other things, cure any ambiguity, defect or
inconsistency or make any other change that does not adversely affect the
rights of any Holder.

 

16.                                                     SUCCESSOR
ENTITY

 

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

 

17.                                                     DEFAULTS
AND REMEDIES

 

The Indenture sets forth events that constitute an
Event of Default under the Indenture. 
If an Event of Default with respect to the Notes (other than as a result
of certain events of bankruptcy, insolvency or reorganization of the Company)
occurs and is continuing, the Trustee or the Holders of at least 25% in
aggregate principal amount of the Notes then outstanding may declare all unpaid
principal to the date of acceleration on the Notes then outstanding to be due
and payable immediately, all as and to the extent provided in the
Indenture.  If an Event of Default
occurs as a result of certain events of bankruptcy, insolvency or
reorganization of the Company, unpaid principal of the Notes then outstanding
shall become due and payable immediately without any declaration or other act
on the part of the Trustee or any Holder, all as and to the extent provided in
the Indenture.  Holders may not enforce
the Indenture or the Notes except as provided in the Indenture.  The Trustee may require indemnity
satisfactory to it before it enforces the Indenture or the Notes.  Subject to certain limitations, Holders of a
majority in aggregate principal amount of the Notes then outstanding may direct
the Trustee in its exercise of any trust or power.  The Trustee may withhold from Holders notice of any continuing
default (except a default in payment of principal or Interest Amounts) if it
determines that withholding notice is in their interests.  The Company is required to file periodic
reports with the Trustee as to the absence of default.

 

18.                                                     TRUSTEE
DEALINGS WITH THE COMPANY

 

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

 

A-5

 

19.                                                     NO
RECOURSE AGAINST OTHERS

 

A director, officer, employee or shareholder, as such,
of the Company shall not have any liability for any obligations of the Company
under the Notes or the Indenture nor for any claim based on, in respect of or
by reason of such obligations or their creation.  The Holder of this Note by accepting this Note waives and
releases all such liability.  The waiver
and release are part of the consideration for the issuance of this Note.

 

20.                                                     AUTHENTICATION

 

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

 

21.                                                     ABBREVIATIONS
AND DEFINITIONS

 

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

 

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

 

22.                                                     INDENTURE
TO CONTROL; GOVERNING LAW

 

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

 

The Company will furnish to any Holder, upon written
request and without charge, a copy of the Indenture.  Requests may be made to: 
FEI Company, 7451 NW Evergreen Parkway, Hillsboro, OR 97124-5830
Attention: General Counsel.

 

A-6

 

ASSIGNMENT
FORM

 

To assign this Note, fill in the form below:

 

I or we assign and transfer this Note to

 

	
   

  

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

 

	
   

  
	
   

  
	
   

  
	
   

  

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

 

	
  and irrevocably appoint

  
	
   

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

  

 

 

 

	
   

  	
  Your Signature:

  
	
   

  	
   

  
	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
   

  
	
   

  	
  (Sign exactly as your name appears on the

  other side of this Note)

  
	
   

  	
   

  
	
  *Signature guaranteed by:

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
					

 

 

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

 

A-7

 

CONVERSION
NOTICE

 

To convert this Note, check the box:  o

 

The Company may elect to satisfy its Conversion
Obligations by Share Settlement, Cash Settlement or Combined Settlement.

 

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

 

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

 

	
   

  

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

 

	
   

  
	
   

  
	
   

  
	
   

  

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

	
   

  	
   

  	
   

  

 

 

	
   

  	
  Your Signature:

  
	
   

  	
   

  
	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
   

  
	
   

  	
  (Sign exactly as your name appears on the

  other side of this Note)

  
	
   

  	
   

  
	
  *Signature guaranteed by:

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
					

 

 

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

 

A-8

 

OPTION
TO ELECT REPURCHASE

UPON A CHANGE OF CONTROL

 

To:                              FEI
Company

 

The undersigned registered owner of this Security
hereby irrevocably acknowledges receipt of a notice from FEI Company (the
“Company”) as to the occurrence of a Change in Control with respect to the
Company and requests and instructs the Company to redeem 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 Change in Control Purchase Price,
together with accrued Interest Amounts, if any, to, but excluding, such date,
to the registered Holder hereof.

 

	
  Dated:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Signature(s)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Signature(s) must be guaranteed by a

  qualified guarantor institution with

  membership in an approved signature

  guarantee program pursuant to

  Rule 17Ad-15 under the Securities

  Exchange Act of 1934.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Signature Guaranty

  
	
   

  	
   

  	
   

  
	
  Principal amount to be redeemed

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

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
						

 

 

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

 

A-9

 

OPTION
TO ELECT REPURCHASE

ON SPECIFIED DATES

 

To:                              FEI
Company

 

The undersigned hereby requests and instructs FEI
Company to redeem the entire principal amount of this Security, or the portion
thereof (which is $1,000 or an integral multiple thereof) below designated, on
June 15,           in
accordance with the terms of the Indenture referred to in this Security at the
Put Right Purchase Price to the registered Holder hereof.

 

	
  Dated:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Signature(s) must be guaranteed by a

  qualified guarantor institution with

  membership in an approved signature

  guarantee program pursuant to

  Rule 17Ad-15 under the Securities

  Exchange Act of 1934.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Signature Guaranty

  
	
   

  	
   

  	
   

  
	
  Principal amount to be redeemed

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

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
						

 

 

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

 

A-10

 

SCHEDULE
OF EXCHANGES OF NOTES(4)

 

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

 

	
  Principal Amount

  of this Global Note

  Following Such

  Decrease Date of Exchange

  (or Increase)

  	
   

  	
  Authorized

  Signatory of

  Securities

  Custodian

  	
   

  	
  Amount of
  Decrease in

  Principal Amount

  of this Global Note

  	
   

  	
  Amount of

  Increase in

  Principal Amount

  of this Global Note

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

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

 

A-11

 

CERTIFICATE
TO BE DELIVERED UPON EXCHANGE OR

REGISTRATION OF TRANSFER RESTRICTED SECURITIES(5)

 

Re:                               Zero
Coupon Convertible Subordinated Notes due June 15, 2023, First Putable June 15,
2008 (the “Notes”) of FEI Company.

 

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

 

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

 

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

 

In connection with such request and in respect of each
such Note, the Transferor does hereby certify that the Transferor is familiar
with transfer restrictions relating to the Notes as provided in Section 2.12
of the Indenture dated as of June 13, 2003 between FEI Company and BNY Western
Trust Company, as trustee (the “Indenture”), and the transfer of such Note is
being made pursuant to an effective registration statement under the Securities
Act of 1933, as amended (the “Securities Act”) (check applicable box) or the
transfer or exchange, as the case may be, of such Note does not require
registration under the Securities Act because (check applicable box):

 

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

 

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

 

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

 

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

 

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

 

o                                    Such
Note is being transferred to a Non-U.S. Person in an offshore transaction in
compliance with Rule 904 of Regulation S under the Securities Act or
any successor thereto.

 

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

 

A-12

 

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

 

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

 

	
  Date:

  	
   

  	
   

  	
   

  
	
   

  	
  (Insert Name of Transferor)

  

 

A-13Exhibit
4.8

 

$150,000,000

 

FEI COMPANY

 

Zero Coupon Convertible Subordinated Notes Due June 15, 2023

 

REGISTRATION RIGHTS AGREEMENT

 

June 13, 2003

 

Credit Suisse First Boston LLC

Goldman, Sachs & Co.

c/o Credit Suisse First Boston LLC

Eleven Madison Avenue

New York, New York 10010-3629

 

Ladies and Gentlemen:

 

FEI Company, an Oregon corporation (the “Company”),
proposes to issue and sell to the several initial purchasers named in Schedule
A of the Purchase Agreement (as defined below) (the “Initial Purchasers”), upon
the terms set forth in a purchase agreement dated June 10, 2003 (the “Purchase
Agreement”), up to $150,000,000 aggregate principal amount of its
Zero Coupon Convertible Subordinated Notes due June 15, 2023 (the “Firm Securities”) and also proposes to
grant to the Initial Purchasers an option, exercisable from time to time by the
Initial Purchasers to purchase up to an additional $50,000,000 aggregate
principal amount (“Optional Securities”)
of its Zero Coupon Convertible Subordinated Notes due June 15, 2023.  The Firm Securities and the Optional
Securities which the Initial Purchasers may elect to purchase pursuant to
Section 3 of the Purchase Agreement are herein collectively called the “Notes”. 
The Notes will be convertible into shares of common stock, no par value,
of the Company or, in the event we have insufficient shares of common stock,
shares of series A preferred stock, no par value, of the Company (the “Preferred Shares”), which Preferred Shares
shall have the same rights, preferences and privileges of the common stock
(either such shares, the “Shares”)
at the conversion price set forth in the Offering Circular dated June 10,
2003.  The Notes will be issued pursuant
to an Indenture, dated as of June 13, 2003 (the “Indenture”), by and between
the Company and BNY Western Trust Company, as trustee  (the “Trustee”). 
As an inducement to the Initial Purchasers to enter into the Purchase
Agreement, the Company agrees with the Initial Purchasers, for the benefit of
(i) the Initial Purchasers and (ii) the holders of the Notes and the Shares
issuable upon conversion of the Notes (collectively, the “Securities”) from time to time until such
time as such Securities have been sold pursuant to a Shelf Registration
Statement (as defined below) (each of the foregoing a “Holder” and collectively the “Holders”),
as follows:

 

1.                Shelf Registration.  The Company shall take the following
actions:

 

(a)           The Company shall, at its cost, promptly (but in no event more than 90
days after the latest date of original issuance of the Notes (such 90th
day being a “Filing Deadline”) file with the Securities and Exchange Commission (the “Commission”) and thereafter use its
commercially reasonable efforts to cause to be declared effective no later than
180 days after the latest date of original issuance of the Notes (such 180th
day being an “Effectiveness Date”) a registration statement (the “Shelf
Registration Statement”) on an
appropriate form under the Securities Act of 1933, as amended, (the “Securities Act”) relating to the offer and sale of the Registrable Securities (as
defined below) by the Holders thereof from time to time in accordance with the
methods of distribution set forth in the Shelf Registration Statement and
Rule 415 under the Securities Act (hereinafter, the “Shelf Registration”); provided,
however,
that no Holder (other than an Initial Purchaser) shall be entitled to have the
Securities held by it covered by such Shelf Registration Statement unless such
Holder agrees in writing to be bound by all the provisions of this Agreement
applicable to such Holder.

 

(b)          The Company shall use its commercially reasonable efforts to keep the
Shelf Registration Statement continuously effective in order to permit the
prospectus included therein (the “Prospectus”) to be lawfully delivered by the Holders of the relevant Securities,
for a period of two years (or for such longer period if extended pursuant to

 

1

 

Section 2(i)
below) from the date of its effectiveness or such shorter period that will
terminate when all the Securities covered by the Shelf Registration Statement
(i) have been sold pursuant thereto or (ii) may be sold pursuant
to Rule 144(k) under the Securities Act (or any successor
rule thereof), assuming for this purpose that the Holders thereof are not
affiliates of the Company (in any case, such period being called the “Shelf Registration Period”).  The Company shall be deemed
not to have used its commercially reasonable efforts to keep the Shelf
Registration Statement effective during the requisite period if it voluntarily
takes any action that would result in Holders of Securities covered thereby not
being able to offer and sell such Securities during that period, unless such
action is required by applicable law.

 

(c)           Notwithstanding any other provisions of this Agreement to the contrary,
the Company shall cause the Shelf Registration Statement and the Prospectus and
any amendment or supplement thereto, as of the effective date of the Shelf
Registration Statement, amendment or supplement, (i) to comply in all material
respects with the applicable requirements of the Securities Act and the rules
and regulations of the Commission and (ii) not to contain any untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.

 

(d)          Each Holder of Registrable Securities (as defined below) agrees that if
such Holder wishes to sell Registrable Securities pursuant to a Shelf
Registration Statement and related Prospectus, it will do so only in accordance
with this Section 1(d) and Section 2(b). 
Each Holder of Registrable Securities wishing to sell Registrable
Securities pursuant to a Shelf Registration Statement and related Prospectus
agrees to deliver a written notice, substantially in the form of Annex A to the
Offering Circular (a “Notice and Questionnaire”) to the Company at least five (5) Business Days (a “Business Day” meaning each day that is not a Saturday, Sunday or legal holiday)
prior to any intended distribution of Registrable Securities under the Shelf
Registration Statement (each such Holder delivering the Notice and
Questionnaire, a “Notice Holder”). From and after the date the Shelf Registration Statement is declared
effective, the Company shall, as promptly as practicable after the date of
receipt of a Notice and Questionnaire (i) if required by applicable law, file
with the SEC a post-effective amendment to the Shelf Registration Statement or
prepare and, if required by applicable law, file a supplement to the related
Prospectus or a supplement or amendment to any document incorporated therein by
reference or file any other document required under the Securities Act so that
the Holder delivering such Notice and Questionnaire is named as a selling
securityholder in the Shelf Registration Statement and the related Prospectus
in such a manner as to permit such Holder to deliver such Prospectus to
purchasers of the Registrable Securities in accordance with applicable law and,
if the Company shall file a post-effective amendment to the Shelf Registration
Statement, use reasonable efforts to cause such post-effective amendment to be
declared effective under the Securities Act as promptly as is practicable, but
in any event by the date (the “Amendment
Effectiveness Deadline Date”) that is
thirty (30) Business Days after the date such post-effective amendment is
required by this clause to be filed; (ii) provide such Holder copies of any
documents filed pursuant to Section 1(d)(i); and (iii) notify such Holder as
promptly as practicable after the effectiveness under the Securities Act of any
post-effective amendment filed pursuant to Section 1(d)(i); provided that if such
Notice and Questionnaire is delivered during a Suspension Period (as defined
below), the Company shall so inform the Holder delivering such Notice and
Questionnaire and shall take the actions set forth in clauses (i), (ii) and
(iii) above upon expiration of the Suspension Period in accordance with Section
2(b). Notwithstanding anything contained herein to the contrary, (i) the
Company shall be under no obligation to name any Holder that is not a Notice
Holder as a selling securityholder in any Registration Statement or related
Prospectus and (ii) the Amendment Effectiveness Deadline Date shall be extended
by up to ten (10) days from the expiration of a Suspension Period (and the
Company shall incur no obligation to pay Interest during such extension) if such
Suspension Period is in effect on the Amendment Effectiveness Deadline Date;
and provided further, that the Company shall not be obligated to file more than
one (1) post-effective amendment or supplement in any twenty (20) day period
following the date the Shelf Registration Statement is declared effective for
the purpose of naming Holders as selling securityholders who were not named in
the Shelf Registration Statement at the time of effectiveness. Any Holder who,
subsequent to the date the Registration Statement is declared effective,
provides a Notice and Questionnaire required by this Section 1(d) pursuant to
the provisions of this Section (whether or not such Holder has supplied the
Notice and Questionnaire at the time the Shelf Registration Statement was
declared effective) shall be named as a selling securityholder in the Shelf
Registration Statement and related Prospectus in accordance with the
requirements of this Section 1(d).  Such
Holder shall also be subject to relevant civil liability provisions under the
Securities Act in connection with such sales.

 

2

 

2.                Registration Procedures.  In connection with the Shelf Registration
contemplated by  Section 1 hereof,
the following provisions shall apply:

 

(a)           The Company shall (i) furnish to the Initial Purchasers, prior to
the filing thereof with the Commission, a copy of the Shelf Registration
Statement and each amendment thereof and each supplement, if any, to the
Prospectus included therein and, in the event that the Initial Purchasers (with
respect to any portion of an unsold allotment from the original offering) is
participating in the Shelf Registration Statement, the Company shall use its
commercially reasonable efforts to reflect in each such document, when so filed
with the Commission, such comments as the Initial Purchasers reasonably may
propose within a reasonable period of time; and (ii) include the names of
the Holders who propose to sell Securities pursuant to the Shelf Registration Statement
as selling securityholders.

 

(b)          Upon (A) the issuance by the SEC of a stop order suspending the
effectiveness of a Shelf Registration Statement or the initiation of
proceedings with respect to a Shelf Registration Statement under Section 8(d)
or 8(e) of the Securities Act, (B) the occurrence of any event or the existence
of any fact (a “Material Event”) as a result of which any Registration Statement shall contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein not
misleading, or any Prospectus shall contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, or (C) the occurrence or existence
of any pending corporate development, public filing with the SEC or other
similar event with respect to the Company that, in the reasonable discretion of
the Company, makes it appropriate to suspend the availability of a Shelf
Registration Statement and the related Prospectus, (i) in the case of clause
(B) above, subject to the next sentence, as promptly as practicable prepare and
file, if necessary pursuant to applicable law, a post-effective amendment to
such Registration Statement or a supplement to the related Prospectus or any
document incorporated therein by reference or file any other required document
that would be incorporated by reference into such Registration Statement and
Prospectus so that such Registration Statement does not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading, and
such Prospectus does not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading, and, in the case of a post-effective amendment to a
Registration Statement, subject to the next sentence, use reasonable efforts to
cause it to be declared effective as promptly as practicable, and (ii) give
notice to the Notice Holders that the availability of the Shelf Registration
Statement is suspended (a “Deferral Notice”) and, upon receipt of any Deferral Notice, each Notice Holder agrees
not to sell any Registrable Securities (as defined below) pursuant to the
Registration Statement until such Notice Holder’s receipt of copies of the
supplemented or amended Prospectus provided for in clause (i) above, or until
it is advised in writing by the Company that the Prospectus may be used, and
has received copies of any additional or supplemental filings that are
incorporated or deemed incorporated by reference in such Prospectus. The
Company will use commercially reasonable efforts to ensure that the use of the
Prospectus may be resumed (x) in the case of clause (A) above, as promptly as
practicable, (y) in the case of clause (B) above, as soon as, in the sole
judgment of the Company, public disclosure of such Material Event would not be
prejudicial to or contrary to the interests of the Company or, if necessary to
avoid unreasonable burden or expense, as soon as practicable thereafter and (z)
in the case of clause (C) above, as soon as, in the discretion of the Company,
such suspension is no longer appropriate. The Company shall be entitled to
exercise its right under this Section 2(b) to suspend the availability of the
Shelf Registration Statement or any Prospectus, without incurring or accruing
any obligation to pay Interest pursuant to Section 6, for one or more periods
not to exceed an aggregate of 45 days in any 90-day period or an aggregate of
90 days in any 12-month period (such period, during which the availability of
the Registration Statement and any Prospectus is suspended being a “Suspension Period”).

 

(c)           The Company shall make every reasonable effort to obtain the withdrawal
at the earliest possible time, of any order suspending the effectiveness of the
Shelf Registration Statement.

 

(d)          The Company shall give written notice to each holder in the same manner
as the Company would provide notice to holders of the Notes under the Indenture
of (i) its intention to file the Shelf Registration Statement (the “Filing Notice”) or (ii) when the Shelf Registration Statement or any amendment
thereto has been filed with the Commission and when the Shelf Registration
Statement or any post-effective amendment thereto has become effective.  The Filing Notice will seek, among other
things, a determination from each such Holder as to whether

 

3

 

such Holder
elects to have its Securities registered for sale pursuant to the Shelf
Registration Statement.  For purposes of
this section 2(d), notice to The Depository Trust Company shall be sufficient
to satisfy the Company’s obligation to provide notice to the holders.

 

(e)           The Company shall furnish to each Notice Holder included within the
coverage of the Shelf Registration, without charge, at least one copy of the
Shelf Registration Statement and any post-effective amendment thereto (other
than an amendment or supplement solely with respect to including the name of a
Notice Holder in the Shelf Registration Statement, in which case, the Company
shall furnish such amendment solely to such Notice Holder), including financial
statements and schedules.

 

(f)             The Company shall, during the Shelf Registration Period, deliver to each
Notice Holder included within the coverage of the Shelf Registration, without
charge, as many copies of the Prospectus (including each preliminary
prospectus) included in the Shelf Registration Statement and any amendment or
supplement thereto as such person may reasonably request.  The Company consents, subject to the
provisions of this Agreement, to the use of the Prospectus or any amendment or
supplement thereto by each Notice Holder of the Securities in connection with
the offering and sale of the Securities covered by the Prospectus, or any
amendment or supplement thereto, included in the Shelf Registration Statement.

 

(g)          Prior to any public offering of the Securities pursuant to the Shelf
Registration Statement, the Company shall register or qualify or cooperate with
the Notice Holders and their respective counsel in connection with the
registration or qualification of the Securities for offer and sale under the
securities or “blue sky” laws of such states of the United States as any Notice
Holder reasonably requests in writing and do any and all other acts or things
necessary or advisable to enable the offer and sale in such jurisdictions of
the Securities covered by the Shelf Registration Statement; provided, however,
that the Company shall not be required to (i) qualify generally to do
business in any jurisdiction where it is not then so qualified or
(ii) take any action which would subject it to general service of process
or to taxation in any jurisdiction where it is not then so subject.

 

(h)          The Company shall cooperate with the Notice Holders to facilitate the
timely preparation and delivery of certificates representing the Securities to
be sold pursuant to the Shelf Registration Statement free of any restrictive
legends and in such denominations and registered in such names as the Notice
Holders may request in writing a reasonable period of time prior to sales of
the Securities pursuant to the Shelf Registration Statement.

 

(i)              If the Company notifies the Initial Purchasers and the Holders in
accordance with Section 2(b) above to suspend the use of the Prospectus
until the requisite changes to the Prospectus have been made, then the Initial
Purchasers and the Holders shall suspend use of such Prospectus, and the period
of effectiveness of the Shelf Registration Statement provided for in
Section 1(b) above shall be extended by the number of days from and
including the date of the giving of such notice to and including the date when
the Initial Purchasers and the Holders shall have received such amended or
supplemented Prospectus pursuant to this Section 2(i).

 

(j)              Not later than the effective date of the Shelf Registration Statement,
the Company will provide CUSIP numbers for the Notes and the Shares registered
under the Shelf Registration Statement, and provide the Trustee with printed
certificates for such Notes, in a form eligible for deposit with The Depository
Trust Company.

 

(k)           The Company will comply with all rules and regulations of the Commission
to the extent and so long as they are applicable to the Shelf Registration and
will make generally available to its security holders (or otherwise provide in
accordance with Section 11(a) of the Securities Act) an earnings statement
satisfying the provisions of Section 11(a) of the Securities Act, no later
than 45 days after the end of a 12-month period (or 90 days, if such
period is a fiscal year) beginning with the first month of the Company’s first
fiscal quarter commencing after the effective date of the Shelf Registration
Statement, which statement shall cover such 12-month period; provided, that if
the Company files the reports required by this Section 2(k) with the
Commission and such reports are publicly available, it shall be deemed to have
satisfied its obligation to furnish such reports to its securityholders
pursuant to this Section 2(k).

 

(l)              The Company shall cause the Indenture to be qualified under the Trust
Indenture Act of 1939, as amended, in a timely manner and containing such
changes, if any, as shall be necessary for such qualification.  In

 

4

 

the event
that such qualification would require the appointment of a new trustee under
the Indenture, the Company shall appoint a new trustee thereunder pursuant to
the applicable provisions of the Indenture.

 

(m)        The Company may require each Holder that proposes to sell Securities
pursuant to the Shelf Registration Statement to furnish to the Company a Notice
and Questionnaire containing such information regarding the Holder and the
distribution of the Securities as the Company may from time to time reasonably
require for inclusion in the Shelf Registration Statement, and the Company may
exclude from such registration the Securities of any Holder that unreasonably
fails to furnish such information within a reasonable time after receiving such
request.

 

(n)          The Company shall enter into such customary agreements (including, if
requested, an underwriting agreement in customary form) and take all such other
actions, if any, as any Holder shall reasonably request in order to facilitate
the disposition of the Securities pursuant to the Shelf Registration.

 

(o)          Subject to the execution of a confidentiality agreement reasonably
acceptable to the Company, the Company shall (i) make reasonably available
for inspection by the Holders, any underwriter participating in any disposition
pursuant to the Shelf Registration Statement and any attorney, accountant or
other agent retained by the Holders or any such underwriter, all relevant
financial and other records, pertinent corporate documents and properties of
the Company and (ii) cause the Company’s officers, directors, employees,
accountants and auditors to supply all relevant information reasonably
requested by the Holders or any such underwriter, attorney, accountant or agent
in connection with the Shelf Registration Statement, in each case, as shall be
reasonably necessary to enable such persons, to conduct a reasonable
investigation within the meaning of Section 11 of the Securities Act; provided, however,
that the foregoing inspection and information gathering shall be coordinated by
one counsel designated by and on behalf of the Initial Purchasers and the
Holders as described in Section 3 hereof.

 

(p)          The Company, if requested by any Notice Holder covered by the Shelf
Registration Statement, shall cause (i) its counsel to deliver an opinion
and updates thereof relating to the Securities in customary form addressed to
such Notice Holders and the managing underwriters, if any, thereof and dated,
in the case of the initial opinion, the effective date of the Shelf
Registration Statement (it being agreed that the matters to be covered by such
opinion shall include, without limitation, the due incorporation and good
standing of the Company and its subsidiaries; the qualification of the Company
and its subsidiaries to transact business as foreign corporations; the due
authorization, execution and delivery of the relevant agreement of the type
referred to in Section 2(n) hereof; the due authorization, execution,
authentication and issuance, and the validity and enforceability, of the
Securities; the absence to such counsel’s knowledge of material legal or
governmental proceedings involving the Company and its subsidiaries; the
absence of governmental approvals required to be obtained in connection with
the Shelf Registration Statement, the offering and sale of the Securities, or
any agreement of the type referred to in Section 2(n) hereof; the
compliance as to form of the Shelf Registration Statement and any documents
incorporated by reference therein and of the Indenture with the requirements of
the Securities Act and the Trust Indenture Act, respectively; and, as of the
date of the opinion and as of the effective date of the Shelf Registration
Statement or most recent post-effective amendment thereto, as the case may be,
the absence from the Shelf Registration Statement and the Prospectus included
therein, as then amended or supplemented, and from any documents incorporated
by reference therein of an untrue statement of a material fact or the omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading (in the case of any such documents,
in the light of the circumstances existing at the time that such documents were
filed with the Commission under the Exchange Act of 1934, as amended (the “Exchange Act”)); (ii) its officers to execute and deliver all customary
documents and certificates and updates thereof reasonably requested by any underwriters
of the Securities; and (iii) its independent public accountants and the
independent public accountants with respect to any other entity for which
financial information is provided in the Shelf Registration Statement to
provide to the Notice Holders and any underwriter therefor a comfort letter in
customary form and covering matters of the type customarily covered in comfort
letters in connection with primary underwritten offerings, subject to receipt
of appropriate documentation as contemplated, and only if permitted, by
Statement of Auditing Standards No. 72.

 

(q)          The Company shall use commercially reasonable efforts to take all other
steps necessary to effect the registration of the Securities covered by the
Shelf Registration Statement contemplated hereby.

 

5

 

3.                Registration Expenses.  (a) Subject to Section 8 hereof, all
expenses incident to the Company’s performance of and compliance with this
Agreement will be borne by the Company, regardless of whether the Shelf
Registration Statement is ever filed or becomes effective, including without
limitation:

 

(i)                    all registration and filing fees and expenses;

 

(ii)                 all fees and expenses of compliance with federal securities and state
“blue sky” or securities laws;

 

(iii)              all expenses of printing (including printing of prospectuses), messenger
and delivery services and telephone;

 

(iv)             all fees and disbursements of counsel for the Company;

 

(v)                all application and filing fees in connection with listing the
Securities on a national securities exchange or automated quotation system
pursuant to the requirements hereof; and

 

(vi)             all fees and disbursements of independent certified public accountants
of the Company (including the expenses of any special audit and comfort letters
required by or incident to such performance).

 

The Company will bear its internal expenses (including, without
limitation, all salaries and expenses of its officers and employees performing
legal or accounting duties), the expenses of any annual audit and the fees and
expenses of any person, including special experts, retained by the Company.

 

(b)          In connection with the Shelf Registration Statement required by this
Agreement, the Company will reimburse the Initial Purchasers and the Notice
Holders of Registrable Securities who are selling or reselling Securities
pursuant to the “Plan of Distribution” contained in the Shelf Registration
Statement for the reasonable fees and disbursements of not more than one
counsel.

 

4.                Indemnification.  (a) 
The Company agrees to indemnify and hold harmless each Notice Holder and
each person, if any, who controls such Notice Holder within the meaning of the
Securities Act or the Exchange Act (each Notice Holder, and such controlling
persons are referred to collectively as the “Indemnified
Parties”) from and against any
losses, claims, damages or liabilities, joint or several, or any actions in
respect thereof (including, but not limited to, any losses, claims, damages,
liabilities or actions relating to purchases and sales of the Securities) to
which each Indemnified Party may become subject under the Securities Act, the
Exchange Act or otherwise, insofar as such losses, claims, damages, liabilities
or actions arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact contained in the Shelf Registration
Statement or Prospectus or in any amendment or supplement thereto or in any
preliminary prospectus relating to the Shelf Registration, or arise out of, or
are based upon, the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, and shall reimburse, as incurred, the Indemnified Parties for
any legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action in
respect thereof; provided, however, that (i) the Company shall
not be liable in any such case to the extent that such loss, claim, damage or
liability arises out of or is based upon any untrue statement or alleged untrue
statement or omission or alleged omission made in the Shelf Registration
Statement or Prospectus or in any amendment or supplement thereto or in any
preliminary prospectus relating to the Shelf Registration in reliance upon and
in conformity with written information pertaining to such Notice Holder and
furnished to the Company by or on behalf of such Notice Holder specifically for
inclusion therein and (ii) with respect to any untrue statement or
omission or alleged untrue statement or omission made in any preliminary
prospectus relating to the Shelf Registration Statement, the indemnity
agreement contained in this subsection (a) shall not inure to the benefit
of any Notice Holder from whom the person asserting any such losses, claims,
damages or liabilities purchased the Securities concerned, to the extent that a
prospectus relating to such Securities was required to be delivered by such
Notice Holder under the Securities Act in connection with such purchase and any
such loss, claim, damage or liability of such Notice Holder results from the
fact that there was not sent or given to such person, at or prior to the
written confirmation of the sale of such Securities to such person, a copy of
the final

 

6

 

Prospectus
if the Company had previously furnished copies thereof to such Notice Holder; provided further, however, that this indemnity agreement
will be in addition to any liability which the Company may otherwise have to
such Indemnified Party.  The Company
shall also indemnify underwriters, their officers and directors and each person
who controls such underwriters within the meaning of the Securities Act or the
Exchange Act to the same extent as provided above with respect to the
indemnification of the Notice Holders of the Securities if requested by such
Notice Holders.

 

(b)          Each Notice Holder, severally and not jointly, will indemnify and hold
harmless the Company and each person, if any, who controls the Company within
the meaning of the Securities Act or the Exchange Act from and against any
losses, claims, damages or liabilities or any actions in respect thereof, to
which the Company or any such controlling person may become subject under the
Securities Act, the Exchange Act or otherwise, insofar as such losses, claims,
damages, liabilities or actions arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in the Shelf
Registration Statement or Prospectus or in any amendment or supplement thereto
or in any preliminary prospectus relating to the Shelf Registration, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact necessary to make the statements therein not misleading, but in
each case only to the extent that the untrue statement or omission or alleged
untrue statement or omission was made in reliance upon and in conformity with
written information pertaining to such Notice Holder and furnished to the
Company by or on behalf of such Notice Holder specifically for inclusion
therein; and, subject to the limitation set forth immediately preceding this
clause, shall reimburse, as incurred, the Company for any legal or other expenses
reasonably incurred by the Company or any such controlling person in connection
with investigating or defending any loss, claim, damage, liability or action in
respect thereof.  This indemnity
agreement will be in addition to any liability which such Notice Holder may
otherwise have to the Company or any of its controlling persons.

 

(c)           Promptly after receipt by an indemnified party under this Section 4
of notice of the commencement of any action or proceeding (including a
governmental investigation), such indemnified party will, if a claim in respect
thereof is to be made against the indemnifying party under this Section 4,
notify the indemnifying party of the commencement thereof; but the omission so
to notify the indemnifying party will not, in any event, relieve the
indemnifying party from any obligations to any indemnified party other than the
indemnification obligations provided in paragraph (a) or (b) above.  In case any such action is brought against
any indemnified party, and it notifies the indemnifying party of the
commencement thereof, the indemnifying party will be entitled to participate
therein and, to the extent that it may wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel reasonably satisfactory to such indemnified party (who shall not,
except with the consent of the indemnified party, be counsel to the
indemnifying party), and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof the
indemnifying party will not be liable to such indemnified party under this
Section 4 for any legal or other expenses, other than reasonable costs of
investigation, subsequently incurred by such indemnified party in connection
with the defense thereof.  No
indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement of any pending or threatened action in respect of
which any indemnified party is or could have been a party and indemnity could
have been sought hereunder by such indemnified party unless such settlement
includes an unconditional release of such indemnified party from all liability
on any claims that are the subject matter of such action, and does not include
a statement as to or an admission of fault, culpability or a failure to act by
or on behalf of any indemnified party.

 

(d)          If the indemnification provided for in this Section 4 is
unavailable or insufficient to hold harmless an indemnified party under
subsections (a) or (b) above, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred to in
subsection (a) or (b) above (i) in such proportion as is appropriate to
reflect the relative benefits received by the indemnifying party or parties on
the one hand and the indemnified party on the other from the exchange of the
Securities, pursuant to the Shelf Registration, or (ii) if the allocation provided
by the foregoing clause (i) is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the indemnifying party or
parties on the one hand and the indemnified party on the other in connection
with the statements or omissions that resulted in such losses, claims, damages
or liabilities (or actions in respect thereof) as well as any other relevant
equitable considerations.  The relative
fault of the parties shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact

 

7

 

relates to
information supplied by the Company on the one hand or such Notice Holder or
such other indemnified party, as the case may be, on the other, and the
parties’ relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. 
The amount paid by an indemnified party as a result of the losses,
claims, damages or liabilities referred to in the first sentence of this
subsection (d) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any action or claim which is the subject of this
subsection (d).  Notwithstanding
any other provision of this Section 4(d), the Notice Holders shall not be
required to contribute any amount in excess of the amount by which the net
proceeds received by such Notice Holders from the sale of the Securities
pursuant to the Shelf Registration Statement exceeds the amount of damages
which such Notice Holders have otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission.  No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities
Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation.  For
purposes of this paragraph (d), each person, if any, who controls such
indemnified party within the meaning of the Securities Act or the Exchange Act
shall have the same rights to contribution as such indemnified party and each
person, if any, who controls the Company within the meaning of the Securities
Act or the Exchange Act shall have the same rights to contribution as the
Company.

 

(e)           The agreements contained in this Section 4 shall survive the sale
of the Securities pursuant to the Shelf Registration Statement and shall remain
in full force and effect, regardless of any termination or cancellation of this
Agreement or any investigation made by or on behalf of any indemnified party.

 

5.                Holders’ Obligations.  Each Holder agrees, by
acquisition of the Registrable Securities, that no Holder of Registrable
Securities shall be entitled to sell any of such Registrable Securities
pursuant to a Registration Statement or to receive a prospectus relating thereto,
unless such Holder has furnished the Company with a Notice and Questionnaire as
required pursuant to Section 1(d) hereof and the information set forth in
the next sentence. Each Notice Holder agrees promptly to furnish to the Company
all information required to be disclosed in order to make the information
previously furnished to the Company by such Notice Holder not misleading and
any other information regarding such Notice Holder and the distribution of such
Registrable Securities as the Company may from time to time reasonably
request.  Any sale of any Registrable
Securities by any Holder shall constitute a representation and warranty by such
Holder that the information relating to such Holder and its plan of
distribution is as set forth in the Prospectus delivered by such Holder in
connection with such disposition, that such Prospectus does not as of the time
of such sale contain any untrue statement of a material fact relating to or
provided by such Holder or its plan of distribution and that such Prospectus
does not as of the time of such sale omit to state any material fact relating
to or provided by such Holder or its plan of distribution necessary to make the
statements in such Prospectus, in the light of the circumstances under which
they were made, not misleading.  Each
Holder agrees that within ten (10) Business Days of any sale, disposition or
other transfer of Securities, whether pursuant to a Registration Statement or
exemption from registration under the Securities Act, such Holder shall provide
written notice to the Company specifying the amount of Securities sold,
disposed of or transferred and the name and address of the transferee of such
Securities.

 

6.                Interest on the Notes Under Certain Circumstances.  (a)  Interest (the “Interest”) with respect to the Notes shall
be assessed as follows if any of the following events occur (each such event in
clauses (i) through (iii) below being herein called a “Registration Default”):

 

(i)             the Shelf Registration Statement required by this Agreement is not filed
with the Commission on or prior to the Filing Deadline;

 

(ii)          the Shelf Registration Statement required by this Agreement is not
declared effective by the Commission on or prior to the applicable
Effectiveness Deadline; or

 

(iii)       the Shelf Registration
Statement required by this Agreement has been declared effective by the
Commission but (A) the Shelf Registration Statement thereafter ceases to
be effective or (B) the Prospectus contained therein ceases to be usable
in connection with resales of Registrable Securities during the periods
specified herein (other than pursuant to Section 1(c) hereof) and (1)
unless the Company declares a Suspension Period is in effect, the Company fails
to cure the Shelf Registration Statement within five (5) Business Days by a
post-effective amendment or a report filed pursuant to the Exchange Act or (2)

 

8

 

if applicable, the Company does
not terminate the Suspension Period by the 45th or 90th day, as the case may
be.

 

Each of the foregoing will constitute a Registration Default whatever
the reason for any such event and whether it is voluntary or involuntary or is
beyond the control of the Company or pursuant to operation of law or as a
result of any action or inaction by the Commission.

 

Interest shall accrue on the Notes from and including
the date on which any such Registration Default shall occur to, but excluding,
the date on which all such Registration Defaults have been cured, at a rate of
0.50% per annum for the Notes (the “Interest Rate”) and, if applicable, on an
equivalent basis per share (subject to adjustment in the case of stock splits,
stock recombinations, stock dividends and the like) of Shares issuable upon
conversion of the Notes.

 

(b)          A Registration Default referred to in Section 6(a)(iii) hereof
shall be deemed not to have occurred and be continuing in relation to the Shelf
Registration Statement or the related Prospectus if (i) such Registration
Default has occurred solely as a result of (x) the filing of a post-effective
amendment to the Shelf Registration Statement to incorporate annual audited
financial information with respect to the Company where such post-effective
amendment is not yet effective and needs to be declared effective to permit Notice
Holders to use the related Prospectus or (y) other material events, with
respect to the Company that would need to be described in such Shelf
Registration Statement or the related Prospectus and (ii) in the case of clause
(y), the Company is proceeding promptly and in good faith to amend or
supplement the Shelf Registration Statement and related Prospectus to describe
such events; provided, however, that in any case if such
Registration Default occurs for a continuous period in excess of 30 days,
Interest shall be payable in accordance with the above paragraph from
the day such Registration Default occurs until such Registration Default
is cured.

 

(c)           Any amounts of Interest due pursuant to Section 6(a) will be
payable in cash to Holders on June 15 and December 15 to record holders on June
1 and December 1.

 

(d)           “Registrable Securities”
means each Security until (i) the date on which such Security has been
effectively registered under the Securities Act and disposed of in accordance
with the Shelf Registration Statement or (ii) the date on which such
Security is distributed to the public pursuant to Rule 144 under the
Securities Act or is saleable pursuant to Rule 144(k) under the Securities
Act.

 

7.                Rules 144 and 144A.  The Company shall use its best efforts to
file the reports required to be filed by it under the Securities Act and the
Exchange Act in a timely manner and, if at any time the Company is not required
to file such reports, it will, upon the request of any Holder, make publicly
available other information so long as necessary to permit sales of their
securities pursuant to Rules 144 and 144A.  The Company covenants that it will take such further action as
any Holder may reasonably request, all to the extent required from time to time
to enable such Holder to sell Securities without registration under the
Securities Act within the limitation of the exemptions provided by
Rules 144 and 144A (including the requirements of
Rule 144A(d)(4)).  The Company will
provide a copy of this Agreement to prospective purchasers of Securities
identified to the Company by the Initial Purchasers upon request.  Upon the request of any Holder, the Company
shall deliver to such Holder a written statement as to whether it has complied
with such requirements.  Notwithstanding
the foregoing, nothing in this Section 7 shall be deemed to require the
Company to register any of its securities pursuant to the Exchange Act.

 

8.                Underwritten Registrations.  If any of the Registrable Securities covered
by the Shelf Registration are to be sold in an underwritten offering, the
investment banker or investment bankers and manager or managers that will
administer the offering (“Managing
Underwriters”) will be selected by the Notice Holders of a majority
in aggregate principal amount of such Registrable Securities to be included in
such offering (provided that Holders of Shares issued upon conversion of the
Notes shall not be deemed Holders of Shares, but shall be deemed to be Holders
of the aggregate principal amount of the Notes from which such Shares were
converted).

 

No person may participate in any underwritten
registration hereunder unless such person (i) agrees to sell such person’s
Registrable Securities on the basis reasonably provided in any underwriting
arrangements approved by the persons entitled hereunder to approve such
arrangements and (ii) completes and executes all questionnaires,

 

9

 

powers of attorney, indemnities, underwriting agreements and other
documents reasonably required under the terms of such underwriting
arrangements.

 

Notwithstanding any other provisions of this Agreement
to the contrary, the Company shall not be required to pay the expenses of an
underwritten offering of Registrable Securities pursuant to this Section 8
unless such underwritten offering is for Registrable Securities in the
aggregate principal amount of at least $50,000,000 and shall not be required to
pay any underwriter discount, commission or similar fees related to the sale of
the Registrable Securities.

 

9.                Miscellaneous.

 

(a)           Remedies.  The Company acknowledges and
agrees that any failure by the Company to comply with its obligations under
Section 1 hereof may result in material irreparable injury to the Initial
Purchasers or the Holders for which there is no adequate remedy at law, that it
will not be possible to measure damages for such injuries precisely and that,
in the event of any such failure, the Initial Purchasers or any Holder may
obtain such relief as may be required to specifically enforce the Company’s
obligations under Section 1 hereof. 
The Company further agrees to waive the defense in any action for
specific performance that a remedy at law would be adequate.

 

(b)          No Inconsistent Agreements.  The Company will not on or after
the date of this Agreement enter into any agreement with respect to its
securities that is inconsistent with the rights granted to the Holders in this
Agreement or otherwise conflicts with the provisions hereof.  The rights granted to the Holders hereunder
do not in any way conflict with and are not inconsistent with the rights
granted to the holders of the Company’s securities under any agreement in
effect on the date hereof.

 

(c)           Amendments and Waivers.  The provisions of this
Agreement may not be amended, modified or supplemented, and waivers or consents
to departures from the provisions hereof may not be given, except by the
Company and the written consent of the Holders of a majority in principal
amount of the Registrable Securities (provided that the Holders of Shares
issued upon conversion of the Notes shall not be deemed Holders of Shares, but
shall be deemed to be Holders of the aggregate principal amount of Notes from
which such Shares was converted) affected by such amendment, modification, supplement,
waiver or consents.

 

(d)          Notices.  All notices and other
communications provided for or permitted hereunder shall be made in writing by
hand delivery, first-class mail, facsimile transmission, or air courier which
guarantees overnight delivery:

 

(1)                 if to a
Holder, that is not a Notice Holder, at the most current address given by such
Holder to the Company.

 

(2)                 if to a
Notice Holder, at the most current address given by such Holder to the Company
in a Notice and Questionnaire or any amendment thereto.

 

(3)                 if to the
Initial Purchasers:

 

	
   

  	
  Credit Suisse First Boston LLC

  
	
   

  	
  Eleven Madison Avenue

  
	
   

  	
  New York, NY 10010-3629

  
	
   

  	
  Fax No.: 
  (212) 325-8278

  
	
   

  	
  Attention: 
  Transactions Advisory Group

  
	
   

  
	
   

  	
  with a copy to:

  	
   

  
	
   

  	
   

  
	
   

  	
  Shearman & Sterling

  
	
   

  	
  555 California Street

  
	
   

  	
  San Francisco, CA 
  94104-1522

  
	
   

  	
  Fax No.: (415) 616-1199

  
	
   

  	
  Attention: 
  John D. Wilson

  
			

 

10

 

(4)                 if to the
Company, at its address as follows:

 

	
   

  	
  FEI Company

  
	
   

  	
  7451 NW Evergreen Parkway

  
	
   

  	
  Hillsboro, OR 
  97124-5830

  
	
   

  	
  Fax No.: (503) 640-7570

  
	
   

  	
  Attention: 
  General Counsel

  
	
   

  	
   

  
	
   

  	
  with a copy to:

  	
   

  
	
   

  	
   

  
	
   

  	
  Wilson Sonsini Goodrich & Rosati

  
	
   

  	
  650 Page Mill Road

  
	
   

  	
  Palo Alto, CA 
  94304-1001

  
	
   

  	
  Fax No.: (650) 496-4367

  
	
   

  	
  Attention: 
  John A. Fore

  
			

 

All such notices and communications shall be deemed to
have been duly given:  at the time
delivered by hand, if personally delivered; three (3) Business Days after being
deposited in the mail, postage prepaid, if mailed; when receipt is acknowledged
by recipient’s facsimile machine operator, if sent by facsimile transmission;
and on the day delivered, if sent by overnight air courier guaranteeing
next day delivery.

 

(e)           Third Party Beneficiaries.  The Holders shall be third
party beneficiaries to the agreements made hereunder between the Company, on
the one hand, and the Initial Purchasers, on the other hand, and shall have the
right to enforce such agreements directly to the extent they may deem such
enforcement necessary or advisable to protect their rights or the rights of
Holders hereunder.

 

(f)             Successors and Assigns.  This Agreement shall be
binding upon the Company and its successors and assigns.

 

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

 

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

 

(i)              Governing Law.  THIS AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.

 

(j)              Severability.  If any one or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the
remaining provisions contained herein shall not be affected or impaired
thereby.

 

(k)           Securities Held by the Company.  Whenever the consent or
approval of Holders of a specified percentage of principal amount of Securities
is required hereunder, Securities held by the Company or its affiliates (other
than subsequent Holders of Securities if such subsequent Holders are deemed to
be affiliates solely by reason of their holdings of such Securities) shall not
be counted in determining whether such consent or approval was given by the
Holders of such required percentage.

 

11

 

If the foregoing is in accordance with your
understanding of our agreement, please sign and return to the Company a
counterpart hereof, whereupon this instrument, along with all counterparts,
will become a binding agreement between the Initial Purchasers and the Company
in accordance with its terms.

 

	
   

  	
   

  	
  Very truly yours,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  FEI COMPANY

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Vahé A. Sarkissian

  	
   

  
	
   

  	
   

  	
   

  	
  Name:  Vahé
  A. Sarkissian

  
	
   

  	
   

  	
   

  	
  Title: 
  Chairman, Chief Executive Officer and President

  
	
   

  	
   

  	
   

  	
   

  
	
  The foregoing
  Registration Rights Agreement

  is hereby confirmed and accepted as of the

  date first above written.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  CREDIT SUISSE FIRST BOSTON LLC

  	
   

  	
   

  	
   

  
	
  GOLDMAN, SACHS & CO.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:  CREDIT SUISSE FIRST BOSTON LLC

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John Hodge

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name:  John
  Hodge

  	
   

  	
   

  	
   

  
	
   

  	
  Title: 
  Managing Director

  	
   

  	
   

  	
   

  
									

 

12

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