Document:

Exhibit 10.2

 

EXECUTION COPY

 

 

INDENTURE

 

BETWEEN

 

VERTEX PHARMACEUTICALS INCORPORATED,

 

AS ISSUER

 

AND

 

US BANK NATIONAL ASSOCIATION,

 

AS TRUSTEE

 

53⁄4% CONVERTIBLE SENIOR SUBORDINATED
NOTES DUE 2011

 

DATED AS OF SEPTEMBER 17, 2004

 

 

CROSS-REFERENCE
TABLE*

 

	
  Trust Indenture

  Act Section

  	
   

  	
  Indenture

  Section

  
	
   

  	
   

  	
   

  
	
  310(a)(1)

  	
   

  	
  5.11

  
	
  (a)(2)

  	
   

  	
  5.11

  
	
  (a)(3)

  	
   

  	
  n/a

  
	
  (a)(4)

  	
   

  	
  n/a

  
	
  (a)(5)

  	
   

  	
  5.11

  
	
  (b)

  	
   

  	
  5.3; 5.11

  
	
  (c)

  	
   

  	
  n/a

  
	
  311(a)

  	
   

  	
  5.12

  
	
  (b)

  	
   

  	
  5.12

  
	
  (c)

  	
   

  	
  n/a

  
	
  312(a)

  	
   

  	
  2.10

  
	
  (b)

  	
   

  	
  14.3

  
	
  (c)

  	
   

  	
  14.3

  
	
  313(a)

  	
   

  	
  5.7

  
	
  (b)(1)

  	
   

  	
  n/a

  
	
  (b)(2)

  	
   

  	
  5.7

  
	
  (c)

  	
   

  	
  5.7; 14.2

  
	
  (d)

  	
   

  	
  5.7

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

  	
   

  	
  9.6; 14.6

  
	
  (a)(4)

  	
   

  	
  9.6; 9.7; 14.6

  
	
  (b)

  	
   

  	
  n/a

  
	
  (c)(1)

  	
   

  	
  14.5

  
	
  (c)(2)

  	
   

  	
  14.5

  
	
  (c)(3)

  	
   

  	
  n/a

  
	
  (d)

  	
   

  	
  n/a

  
	
  (e)

  	
   

  	
  14.6

  
	
  (f)

  	
   

  	
  n/a

  
	
  315(a)

  	
   

  	
  5.1(a)

  

 

i

 

	
  Trust Indenture

  Act Section

  	
   

  	
  Indenture

  Section

  
	
   

  	
   

  	
   

  
	
  (b)

  	
   

  	
  5.6; 14.2

  
	
  (c)

  	
   

  	
  5.1(b)

  
	
  (d)

  	
   

  	
  5.1(c)

  
	
  (e)

  	
   

  	
  4.14

  
	
  316(a)(last sentence)

  	
   

  	
  2.13

  
	
  (a)(1)(A)

  	
   

  	
  4.5

  
	
  (a)(1)(B)

  	
   

  	
  4.4

  
	
  (a)(2)

  	
   

  	
  n/a

  
	
  (b)

  	
   

  	
  4.7

  
	
  (c)

  	
   

  	
  7.4

  
	
  317(a)(1).

  	
   

  	
  4.8

  
	
  (a)(2)

  	
   

  	
  4.9

  
	
  (b)

  	
   

  	
  2.5

  
	
  318(a)

  	
   

  	
  14.1

  
	
  (b)

  	
   

  	
  n/a

  
	
  (c)

  	
   

  	
  14.1

  

 

“n/a” means not
applicable.

 

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

 

ii

 

TABLE
OF CONTENTS

 

	
  ARTICLE 1

  	
  DEFINITIONS
  AND INCORPORATION BY REFERENCE

  	
   

  
	
   

  	
  Section 1.1

  	
   

  	
  Definitions

  	
   

  
	
   

  	
  Section 1.2

  	
   

  	
  Incorporation
  by Reference of Trust Indenture Act

  	
   

  
	
   

  	
  Section 1.3

  	
   

  	
  Rules of Construction

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 2

  	
  THE SECURITIES

  	
   

  
	
   

  	
  Section 2.1

  	
   

  	
  Title and Terms

  	
   

  
	
   

  	
  Section 2.2

  	
   

  	
  Form of Securities

  	
   

  
	
   

  	
  Section 2.3

  	
   

  	
  Legends

  	
   

  
	
   

  	
  Section 2.4

  	
   

  	
  Execution,
  Authentication, Delivery and Dating

  	
   

  
	
   

  	
  Section 2.5

  	
   

  	
  Registrar and Paying Agent

  	
   

  
	
   

  	
  Section 2.6

  	
   

  	
  Paying Agent To
  Hold Assets in Trust

  	
   

  
	
   

  	
  Section 2.7

  	
   

  	
  General
  Provisions Relating To Transfer and Exchange

  	
   

  
	
   

  	
  Section 2.8

  	
   

  	
  Book-Entry
  Provisions for the Global Securities

  	
   

  
	
   

  	
  Section 2.9

  	
   

  	
  Special Transfer Provisions

  	
   

  
	
   

  	
  Section 2.10

  	
  Holder Lists

  	
   

  
	
   

  	
  Section 2.11

  	
  Persons Deemed Owners

  	
   

  
	
   

  	
  Section 2.12

  	
  Mutilated,
  Destroyed, Lost or Stolen Securities

  	
   

  
	
   

  	
  Section 2.13

  	
  Treasury Securities

  	
   

  
	
   

  	
  Section 2.14

  	
  Temporary Securities

  	
   

  
	
   

  	
  Section 2.15

  	
  Cancellation

  	
   

  
	
   

  	
  Section 2.16

  	
  CUSIP Numbers

  	
   

  
	
   

  	
  Section 2.17

  	
  Defaulted Interest

  	
   

  
	
   

  	
  Section 2.18

  	
  Additional Notes

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 3

  	
  SATISFACTION AND DISCHARGE

  	
   

  
	
   

  	
  Section 3.1

  	
   

  	
  Satisfaction
  and Discharge of Indenture

  	
   

  
	
   

  	
  Section 3.2

  	
   

  	
  Deposited Monies
  To Be Held in Trust

  	
   

  
	
   

  	
  Section 3.3

  	
   

  	
  Return of Unclaimed Monies

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 4

  	
  DEFAULTS AND REMEDIES

  	
   

  
	
   

  	
  Section 4.1

  	
   

  	
  Events of Default

  	
   

  

 

iii

 

	
   

  	
  Section 4.2

  	
   

  	
  Acceleration
  of Maturity; Rescission and Annulment

  	
   

  
	
   

  	
  Section 4.3

  	
   

  	
  Other Remedies

  	
   

  
	
   

  	
  Section 4.4

  	
   

  	
  Waiver of Past Defaults

  	
   

  
	
   

  	
  Section 4.5

  	
   

  	
  Control by Majority

  	
   

  
	
   

  	
  Section 4.6

  	
   

  	
  Limitation on Suit

  	
   

  
	
   

  	
  Section 4.7

  	
   

  	
  Unconditional
  Rights of Holders To Receive Payment and To Convert

  	
   

  
	
   

  	
  Section 4.8

  	
   

  	
  Collection
  of Indebtedness and Suits for Enforcement by the Trustee

  	
   

  
	
   

  	
  Section 4.9

  	
   

  	
  Trustee May File
  Proofs of Claim

  	
   

  
	
   

  	
  Section 4.10

  	
  Restoration of
  Rights and Remedies

  	
   

  
	
   

  	
  Section 4.11

  	
  Rights and Remedies
  Cumulative

  	
   

  
	
   

  	
  Section 4.12

  	
  Delay or Omission Not
  Waiver

  	
   

  
	
   

  	
  Section 4.13

  	
  Application of Money
  Collected

  	
   

  
	
   

  	
  Section 4.14

  	
  Undertaking for Costs

  	
   

  
	
   

  	
  Section 4.15

  	
  Waiver of Stay or
  Extension Laws

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 5

  	
  THE TRUSTEE

  	
   

  
	
   

  	
  Section 5.1

  	
   

  	
  Certain Duties and
  Responsibilities

  	
   

  
	
   

  	
  Section 5.2

  	
   

  	
  Certain Rights of Trustee

  	
   

  
	
   

  	
  Section 5.3

  	
   

  	
  Individual Rights of
  Trustee

  	
   

  
	
   

  	
  Section 5.4

  	
   

  	
  Money Held in Trust

  	
   

  
	
   

  	
  Section 5.5

  	
   

  	
  Trustee’s Disclaimer

  	
   

  
	
   

  	
  Section 5.6

  	
   

  	
  Notice of Defaults

  	
   

  
	
   

  	
  Section 5.7

  	
   

  	
  Reports by Trustee to
  Holders

  	
   

  
	
   

  	
  Section 5.8

  	
   

  	
  Compensation and
  Indemnification

  	
   

  
	
   

  	
  Section 5.9

  	
   

  	
  Replacement of Trustee

  	
   

  
	
   

  	
  Section 5.10

  	
  Successor Trustee by
  Merger, Etc

  	
   

  
	
   

  	
  Section 5.11

  	
  Corporate
  Trustee Required; Eligibility

  	
   

  
	
   

  	
  Section 5.12

  	
  Collection of
  Claims Against the Company

  	
   

  

 

iv

 

	
  ARTICLE 6

  	
  CONSOLIDATION,
  MERGER, CONVEYANCE, TRANSFER OR LEASE

  	
   

  
	
   

  	
  Section 6.1

  	
   

  	
  Company
  May Consolidate, Etc., Only on Certain Terms

  	
   

  
	
   

  	
  Section 6.2

  	
   

  	
  Successor Substituted

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 7

  	
  AMENDMENTS,
  SUPPLEMENTS AND WAIVERS

  	
   

  
	
   

  	
  Section 7.1

  	
   

  	
  Without
  Consent of Holders of Securities

  	
   

  
	
   

  	
  Section 7.2

  	
   

  	
  With Consent of
  Holders of Securities

  	
   

  
	
   

  	
  Section 7.3

  	
   

  	
  Compliance With
  Trust Indenture Act

  	
   

  
	
   

  	
  Section 7.4

  	
   

  	
  Revocation
  of Consents and Effect of Consents or Votes

  	
   

  
	
   

  	
  Section 7.5

  	
   

  	
  Notation on or
  Exchange of Securities

  	
   

  
	
   

  	
  Section 7.6

  	
   

  	
  Trustee To Sign
  Amendment, Etc

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 8

  	
  MEETING OF HOLDERS OF
  SECURITIES

  	
   

  
	
   

  	
  Section 8.1

  	
   

  	
  Purposes for
  Which Meetings May Be Called

  	
   

  
	
   

  	
  Section 8.2

  	
   

  	
  Call Notice and Place
  of Meetings

  	
   

  
	
   

  	
  Section 8.3

  	
   

  	
  Persons Entitled
  To Vote at Meetings

  	
   

  
	
   

  	
  Section 8.4

  	
   

  	
  Quorum; Action

  	
   

  
	
   

  	
  Section 8.5

  	
   

  	
  Determination
  of Voting Rights; Conduct and Adjournment of Meetings

  	
   

  
	
   

  	
  Section 8.6

  	
   

  	
  Counting
  Votes and Recording Action of Meetings

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 9

  	
  COVENANTS

  	
   

  
	
   

  	
  Section 9.1

  	
   

  	
  Payment of
  Principal, Premium and Interest

  	
   

  
	
   

  	
  Section 9.2

  	
   

  	
  Maintenance of
  Offices or Agencies

  	
   

  
	
   

  	
  Section 9.3

  	
   

  	
  Corporate Existence

  	
   

  
	
   

  	
  Section 9.4

  	
   

  	
  Maintenance of Properties

  	
   

  
	
   

  	
  Section 9.5

  	
   

  	
  Payment of Taxes and
  Other Claims

  	
   

  
	
   

  	
  Section 9.6

  	
   

  	
  Reports

  	
   

  
	
   

  	
  Section 9.7

  	
   

  	
  Compliance Certificate

  	
   

  
	
   

  	
  Section 9.8

  	
   

  	
  Resale of Certain
  Securities

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 10

  	
  REDEMPTION OF SECURITIES

  	
   

  
	
   

  	
  Section 10.1

  	
  Optional Redemption

  	
   

  
	
   

  	
  Section 10.2

  	
  [Reserved]

  	
   

  
	
   

  	
  Section 10.3

  	
  Notice to Trustee

  	
   

  

 

v

 

	
   

  	
  Section 10.4

  	
  Selection of
  Securities To Be Redeemed

  	
   

  
	
   

  	
  Section 10.5

  	
  Notice of Redemption

  	
   

  
	
   

  	
  Section 10.6

  	
  Effect of Notice of
  Redemption

  	
   

  
	
   

  	
  Section 10.7

  	
  Deposit of Redemption Price

  	
   

  
	
   

  	
  Section 10.8

  	
  Securities Redeemed in Part

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 11

  	
  REPURCHASE
  AT THE OPTION OF A HOLDER UPON A CHANGE OF CONTROL

  	
   

  
	
   

  	
  Section 11.1

  	
  Repurchase Right

  	
   

  
	
   

  	
  Section 11.2

  	
  Conditions
  to the Company’s Election To Pay the Repurchase Price in Common Stock

  	
   

  
	
   

  	
  Section 11.3

  	
  Notices;
  Method of Exercising Repurchase Right, Etc

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 12

  	
  CONVERSION OF SECURITIES

  	
   

  
	
   

  	
  Section 12.1

  	
  Conversion Right
  and Conversion Price

  	
   

  
	
   

  	
  Section 12.2

  	
  Exercise of Conversion
  Right

  	
   

  
	
   

  	
  Section 12.3

  	
  Fractions of Shares

  	
   

  
	
   

  	
  Section 12.4

  	
  Adjustment of Conversion
  Price

  	
   

  
	
   

  	
  Section 12.5

  	
  Notice of
  Adjustments of Conversion Price

  	
   

  
	
   

  	
  Section 12.6

  	
  Notice Prior to Certain
  Actions

  	
   

  
	
   

  	
  Section 12.7

  	
  Company To Reserve Common
  Stock

  	
   

  
	
   

  	
  Section 12.8

  	
  Taxes on Conversions

  	
   

  
	
   

  	
  Section 12.9

  	
  Covenant as to Common Stock

  	
   

  
	
   

  	
  Section 12.10

  	
  Cancellation of
  Converted Securities

  	
   

  
	
   

  	
  Section 12.11

  	
  Effect
  of Recapitalization, Reclassification, Consolidation, Merger or Sale

  	
   

  
	
   

  	
  Section 12.12

  	
  Responsibility
  of Trustee for Conversion Provisions

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 13

  	
  SUBORDINATION

  	
   

  
	
   

  	
  Section 13.1

  	
  Securities
  Subordinated to Senior Debt

  	
   

  
	
   

  	
  Section 13.2

  	
  Subrogation

  	
   

  
	
   

  	
  Section 13.3

  	
  Obligation
  of the Company Is Absolute and Unconditional

  	
   

  
	
   

  	
  Section 13.4

  	
  Maturity of or
  Default on Senior Debt

  	
   

  
	
   

  	
  Section 13.5

  	
  Payments on Securities
  Permitted

  	
   

  
					

 

vi

 

	
   

  	
  Section 13.6

  	
  Effectuation
  of Subordination by Trustee

  	
   

  
	
   

  	
  Section 13.7

  	
  Knowledge of Trustee

  	
   

  
	
   

  	
  Section 13.8

  	
  Trustee’s Relation to
  Senior Debt

  	
   

  
	
   

  	
  Section 13.9

  	
  Rights of
  Holders of Senior Debt Not Impaired

  	
   

  
	
   

  	
  Section 13.10

  	
  Modification of
  Terms of Senior Debt

  	
   

  
	
   

  	
  Section 13.11

  	
  Certain
  Conversions Not Deemed Payment

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 14

  	
  OTHER
  PROVISIONS OF GENERAL APPLICATION

  	
   

  
	
   

  	
  Section 14.1

  	
  Trust Indenture Act
  Controls

  	
   

  
	
   

  	
  Section 14.2

  	
  Notices

  	
   

  
	
   

  	
  Section 14.3

  	
  Communication
  by Holders With Other Holders

  	
   

  
	
   

  	
  Section 14.4

  	
  Acts of Holders of
  Securities

  	
   

  
	
   

  	
  Section 14.5

  	
  Certificate
  and Opinion as to Conditions Precedent

  	
   

  
	
   

  	
  Section 14.6

  	
  Statements
  Required in Certificate or Opinion

  	
   

  
	
   

  	
  Section 14.7

  	
  Effect of
  Headings and Table of Contents

  	
   

  
	
   

  	
  Section 14.8

  	
  Successors and Assigns

  	
   

  
	
   

  	
  Section 14.9

  	
  Separability Clause

  	
   

  
	
   

  	
  Section 14.10

  	
  Benefits
  of Indenture

  	
   

  
	
   

  	
  Section 14.11

  	
  Governing Law

  	
   

  
	
   

  	
  Section 14.12

  	
  Counterparts

  	
   

  
	
   

  	
  Section 14.13

  	
  Legal Holidays

  	
   

  
	
   

  	
  Section 14.14

  	
  Recourse
  Against Others

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  EXHIBITS

  	
   

  	
   

  	
   

  
	
  EXHIBIT A: 
  Form of Security

  	
   

  
					

 

vii

 

INDENTURE, dated as of
September 17, 2004, between VERTEX PHARMACEUTICALS INCORPORATED, a
corporation duly organized and existing under the laws of the Commonwealth of
Massachusetts, having its principal office at 130 Waverly Street, Cambridge,
Massachusetts 02139 (the “Company”), and US BANK NATIONAL ASSOCIATION, as
trustee (the “Trustee”), having its principal corporate trust office at One
Federal Street, Boston, Massachusetts 02110.

 

RECITALS OF THE COMPANY

 

The Company has duly
authorized the creation of an issue of its 53⁄4% Convertible Senior Subordinated
Notes due February 15, 2011 (herein called the “Securities”) of
substantially the tenor and amount hereinafter set forth, and to provide
therefor the Company has duly authorized the execution and delivery of this
Indenture.

 

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

 

NOW, THEREFORE, THIS INDENTURE
WITNESSETH:

 

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

 

ARTICLE 1

 

DEFINITIONS AND
INCORPORATION BY REFERENCE

 

SECTION 1.1                                                  Definitions.

 

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

 

“Act,” when used with
respect to any Holder of a Security, has the meaning specified in
Section 14.4(a) hereof.

 

“Additional Note Board
Resolution” means resolutions duly adopted by the Board of Directors of the
Company and delivered to the Trustee in an Officers’ Certificate providing for
issuance of Additional Notes.

 

“Additional Note
Supplemental Indenture” means a supplement to this Indenture providing for the
issuance and terms of Additional Notes duly executed and delivered by the
Company and the Trustee pursuant to Article 7 and in accordance with
Section 2.18.

 

“Additional Notes” means
the Company’s Securities originally issued after the Issue Date pursuant to
Section 2.18, except for Securities authenticated and delivered upon
registration of, transfer of, or in exchange for, or in lieu of other
Securities pursuant to Section 2.7, 2.8, 2.9,

 

1

 

2.12, 7.5, 10.8, 11.1 or
12.2 hereof, as specified in the relevant Additional Note Board Resolutions or
Additional Note Supplemental Indenture issued therefor in accordance with this
Indenture.

 

 “Adjusted Interest Rate” means, with respect
to any Reset Transaction, the rate per annum that is the arithmetic average of
the rates quoted by two Reference Dealers selected by the Company or its
successor as the rate at which interest on the Securities should accrue so that
the fair market value, expressed in dollars, of a Security immediately after
the later of:

 

(1)                                  the
public announcement of such Reset Transaction; or

 

(2)                                  the
public announcement of a change in dividend policy in connection with such
Reset Transaction,

 

will equal the average
Trading Price of a Security for the 20 Trading Days preceding the date of
public announcement of such Reset Transaction; provided, that, the Adjusted
Interest Rate shall not be less than 5% per annum.

 

“Affiliate” of any
specified Person means any other Person directly or indirectly controlling or
controlled by or under direct or indirect common control with such specified
Person.  For the purposes of this
definition, “control”, when used with respect to any specified 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.

 

“Bankruptcy Law” means
Title 11 of the U.S. Code or any similar federal or state law for the relief of
debtors.

 

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

 

“Board Resolution” means
a resolution duly adopted by the Board of Directors, a copy of which, certified
by the Secretary or an Assistant Secretary of the Company to be in full force
and effect on the date of such certification, shall have been delivered to the
Trustee.

 

“Business Day,” when used
with respect to any Place of Payment or Place of Conversion, means each Monday,
Tuesday, Wednesday, Thursday and Friday which is not a day on which banking
institutions in that Place of Payment or Place of Conversion, as the case may
be, are authorized or obligated by law to close.

 

“Change of Control” means
the occurrence of any of the following after the original issuance of the
Securities:

 

(1)                                  the
acquisition by any person, including any syndicate or group deemed to be a
“person” under Section 13(d)(3) of the Exchange Act, of beneficial
ownership, directly or indirectly, through a purchase, merger or other
acquisition transaction or series of transactions, of shares of capital stock
of the Company entitling such person to exercise 50% or more of the total
voting power of all shares of capital stock of the

 

2

 

Company entitled to vote
generally in elections of directors, other than any such acquisition by the
Company, any subsidiary of the Company or any employee benefit plan of the
Company;

 

(2)                                  any
consolidation or merger of the Company with or into any other person, any
merger of another person into the Company, or any conveyance, transfer, sale,
lease or other disposition of all or substantially all of the properties and
assets of the Company to another person, other than (a) any such transaction
(x) that does not result in any reclassification, conversion, exchange or
cancellation of outstanding shares of capital stock of the Company and (y)
pursuant to which holders of capital stock of the Company immediately prior to
such transaction have the entitlement to exercise, directly or indirectly, 50%
or more of the total voting power of all shares of capital stock of the Company
entitled to vote generally in the election of directors of the continuing or
surviving person immediately after such transaction or (b) any merger which is
effected solely to change the jurisdiction of incorporation of the Company and
results in a reclassification, conversion or exchange of outstanding shares of
Common Stock solely into shares of common stock of the surviving entity;

 

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

 

(4)                                  the
Company is liquidated or dissolved or a resolution is passed by the Company’s
stockholders approving a plan of liquidation or dissolution of the Company
other than in a transaction which complies with the provisions described in
Article 6 of the Indenture.

 

Beneficial ownership
shall be determined in accordance with Rule 13d-3 promulgated by the SEC under
the Exchange Act.  The term “person”
shall include any syndicate or group which would be deemed to be a “person”
under Section 13(d)(3) of the Exchange Act.

 

“Chief Executive Officer”
means any chief executive officer of the Company.

 

“Closing Date” means
September 17, 2004 or such later date on which the Securities may be
delivered pursuant to the Dealer Manager Agreement.

 

“Closing Price” of any
security on any date of determination means:

 

(1)                                  the
closing sale price (or, if no closing sale price is reported, the last reported
sale price) of such security (regular way) on the New York Stock Exchange on
such date;

 

3

 

(2)                                  if
such security is not listed for trading on the New York Stock Exchange on any
such date, the closing sale price as reported in the composite transactions for
the principal U.S. exchange on which such security is so listed;

 

(3)                                  if
such security is not so listed on a U.S. national or regional securities
exchange, the closing sale price as reported by the Nasdaq National Market;

 

(4)                                  if
such security is not so reported, the last quoted bid price for such security
in the over-the-counter market as reported by the National Quotation Bureau or
similar organization; or

 

(5)                                  if
such bid price is not available, the average of the mid-point of the last bid
and ask prices of such security on such date from at least three nationally
recognized independent investment banking firms retained for this purpose by
the Company.

 

“Common Stock” means any
stock of any class of the Company which has no preference in respect of
dividends or of amounts payable in the event of any voluntary or involuntary
liquidation, dissolution or winding up of the Company and which is not subject
to redemption by the Company.  However,
subject to the provisions of Section 12.11 hereof, shares issuable on
conversion of Securities shall include only shares of the class designated as
Common Stock, par value $0.01 per share, of the Company at the date of this
Indenture or shares of any class or classes resulting from any reclassification
or reclassifications thereof and which have no preference in respect of
dividends or of amounts payable in the event of any voluntary or involuntary
liquidation, dissolution or winding up of the Company and which are not subject
to redemption by the Company, provided that if at any time there shall be more
than one such resulting class, the shares of each such class then so issuable
shall be substantially in the proportion which the total number of shares of such
class resulting from all such reclassifications bears to the total number of
shares of all such classes resulting from all such reclassifications.

 

“Company” means the
corporation named as the “Company” in the first paragraph of this instrument
until a successor corporation shall have become such pursuant to the applicable
provisions of this Indenture, and thereafter “Company” shall mean such
successor corporation.

 

“Company Notice” has the
meaning specified in Section 11.3 hereof.

 

“Company Order” means a
written order signed in the name of the Company by both (1) the Chief Executive
Officer, the President or a Vice President and (2) so long as not the same as
the officer signing pursuant to clause (1), the Chief Financial Officer, the
Treasurer or the Secretary of the Company, and delivered to the Trustee.

 

“Conversion Agent” means
any Person authorized by the Company to convert Securities in accordance with
Article 12 hereof.

 

“Conversion Price” has
the meaning specified in Section 12.1 hereof.

 

“Corporate Trust Office”
means for purposes of presentation or surrender of Securities for payment,
registration, transfer, exchange or conversion or for service of notices or
demands upon the Company, the office of the Trustee located in the City of New
York (which at the date

 

4

 

of this Indenture is
located at 100 Wall Street, New York, NY 10005), and for all other purposes,
the office of the Trustee located in Boston, Massachusetts (which at the date
of this Indenture is located at One Federal Street, Boston, Massachusetts
02110).

 

“Corporation” means
corporations, associations, limited liability companies, companies and business
trusts.

 

“Current Market Price”
has the meaning set forth in Section 12.4(g).

 

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

 

“Dealer Manager” means
UBS Securities LLC.

 

“Dealer Manager
Agreement” means the Dealer Manager Agreement, dated September 13, 2004,
between the Company and the Dealer Manager.

 

“Default” means an event
which is, or after notice or lapse of time or both would be, an Event of
Default.

 

“Defaulted Interest” has
the meaning specified in Section 2.17 hereof.

 

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

 

“Designated Senior Debt”
means Senior Debt of the Company which, at the date of determination, has an
aggregate amount outstanding of, or under which, at the date of determination,
the holders thereof are committed to lend up to, at least $20 million and is
specifically designated in the instrument evidencing or governing that Senior
Debt as “Designated Senior Debt” for purposes of this Indenture, provided,
that, such instrument may place limitations and conditions on the right of such
Senior Debt to exercise the rights of Designated Senior Debt.

 

“Dividend Yield” on any
security for any period means the dividends paid or proposed to be paid
pursuant to an announced dividend policy on such security for such period
divided by, if with respect to dividends paid on such security, the average
Closing Price of such security during such period and, if with respect to
dividends proposed to be paid on such security, the Closing Price of such
security on the effective date of the related Reset Transaction.

 

“Dollar,” “U.S. Dollar”
or “U.S. $” means a dollar or other equivalent unit in such coin or currency of
the United States as at the time shall be legal tender for the payment of
public and private debts.

 

“DTC Participants” has
the meaning specified in Section 2.8 hereof.

 

“Event of Default” has
the meaning specified in Section 4.1 hereof.

 

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

 

5

 

“Expiration Time” has the
meaning specified in Section 12.4(f) hereof.

 

“Fair market value” has
the meaning set forth in Section 12.4(g) hereof.

 

“February Notes”
means the Company’s 53⁄4% Convertible Senior Subordinated Notes due
February 15, 2011 issued on February 13, 2004.

 

“Global Security” has the
meaning specified in Section 2.2 hereof.

 

“Guarantee” means any
obligation, contingent or otherwise, of any Person, directly or indirectly
guaranteeing any Indebtedness of any other Person and any obligation, direct or
indirect, contingent or otherwise, of such Person:

 

(1)                                  to
purchase or pay (or advance or supply funds for the purchase or payment of)
such Indebtedness of such other Person (whether arising by virtue of
partnership arrangements, or by agreement to keep-well, to purchase assets,
goods, securities or services, to take-or-pay, or maintain financial statement
conditions or otherwise); or

 

(2)                                  entered
into for purposes of assuring in any other manner the obligee of such
Indebtedness of the payment thereof or to protect such obligee against loss in
respect thereof (in whole or in part);

 

provided, however, that
the term “guarantee” will not include endorsements for collection or deposit in
the ordinary course of business.  The
term “guarantee” used as a verb has a corresponding meaning.

 

“Holder,” when used with
respect to any Security, means the Person in whose name the Security is
registered in the Register.

 

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

 

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

 

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

 

6

 

(3)                                  all
obligations and liabilities (contingent or otherwise) in respect of (a) 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 and (b) any lease or related documents (including a
purchase agreement) in connection with the lease of real property which
provides that such Person is contractually obligated to purchase or cause a
third party to purchase the leased property and thereby guarantee a minimum
residual value of the leased property to the landlord and the obligations of
such Person under such lease or related document to purchase or to cause a
third party to purchase the leased property;

 

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

 

(5)                                  all
direct or indirect guaranties or similar agreements by such Person in respect
of, and obligations or liabilities (contingent or otherwise) of such Person to
purchase or otherwise acquire or otherwise assure a creditor against loss in
respect of, indebtedness, obligations or liabilities of another Person of the
kind described in clauses (1) through (4);

 

(6)                                  any
indebtedness or other obligations described in clauses (1) through (4) 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

 

(7)                                  any
and all deferrals, renewals, extensions, refinancings, replacements,
restatements and refundings of, or amendments, modifications or supplements to,
any indebtedness, obligation or liability of the kind described in clauses (1)
through (6).

 

“Indenture” means this
instrument as originally executed or as it may from time to time be
supplemented or amended by one or more indentures supplemental hereto entered
into pursuant to the applicable provisions hereof.

 

“Interest Payment Date”
means each February 15 and August 15.

 

“Interest Rate” means,
(a) if a Reset Transaction has not occurred, 53⁄4% per annum, or (b) following
the occurrence of a Reset Transaction, the Adjusted Interest Rate related to
such Reset Transaction to, but not including the effective date of any
succeeding Reset Transaction.

 

“Interest Rate Protection
Agreement” means, with respect to any Person, any interest rate swap agreement,
interest rate cap or collar agreement or other financial agreement or
arrangement designed to protect such person against fluctuations in interest
rates, as in effect from time to time.

 

“Internal Revenue Code”
means the Internal Revenue Code of 1986, as amended.

 

7

 

“Liquidated Damages” means
all liquidated damages, if any, payable pursuant to Section 3 of the
Registration Rights Agreement.

 

“Maturity” means the date
on which the principal of such Security becomes due and payable as therein or
herein provided, whether at the Stated Maturity or by acceleration, conversion,
call for redemption, exercise of a Repurchase Right or otherwise.

 

“Nasdaq National Market”
means the National Association of Securities Dealers Automated Quotation
National Market or any successor national securities exchange or automated
over-the-counter trading market in the United States.

 

“Non-Electing Share” has
the meaning specified in Section 12.11 hereof.

 

“Notice Date” has the
meaning specified in Section 10.1 hereof.

 

“Officer” of the Company
means the Chief Executive Officer, the President, the Chief Financial Officer,
the Treasurer, any Vice President or the Secretary of the Company.

 

“Officers’ Certificate”
means a certificate signed by both (1) the Chief Executive Officer, the
President or a Vice President and (2) so long as not the same as the officer
signing pursuant to clause (1), the Chief Financial Officer, the Treasurer or
the Secretary of the Company, and delivered to the Trustee.

 

“Old Securities” means
the Company’s 5% Convertible Subordinated Notes due 2007 issued on
September 19, 2000.

 

“Opinion of Counsel”
means a written opinion of counsel, who may be counsel to the Company (and may
include directors or employees of the Company) and which opinion is acceptable
to the Trustee which acceptance shall not be unreasonably withheld.

 

“Outstanding,” when used
with respect to Securities, means, as of the date of determination, all
Securities theretofore authenticated and delivered under this Indenture, except
Securities:

 

(1)                                  previously
canceled by the Trustee or delivered to the Trustee for cancellation;

 

(2)                                  for
the payment or redemption of which money in the necessary amount has been
previously deposited with the Trustee or any Paying Agent (other than the
Company) in trust or set aside and segregated in trust by the Company (if the
Company shall act as its own Paying Agent) for the Holders of such Securities,
provided that if such Securities are to be redeemed, notice of such redemption
has been duly given pursuant to this Indenture; and

 

(3)                                  which
have been paid, in exchange for or in lieu of which other Securities have been
authenticated and delivered pursuant to this Indenture, other than any such
Securities in respect of which there shall have been presented to the Trustee
proof

 

8

 

satisfactory to it that
such Securities are held by a protected purchaser in whose hands such
Securities are valid obligations of the Company.

 

“Paying Agent” has the
meaning specified in Section 2.5 hereof.

 

“Payment Blockage Notice”
has the meaning specified in Section 13.1(d) hereof.

 

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

 

“Physical Securities” has
the meaning specified in Section 2.2 hereof.

 

“Place of Conversion”
means any city in which any Conversion Agent is located.

 

“Place of Payment” means
any city in which any Paying Agent is located.

 

“Predecessor Security” of
any particular Security means every previous Security evidencing all or a
portion of the same debt as that evidenced by such particular Security; and,
for the purposes of this definition, any Security authenticated and delivered
under Section 2.12 hereof in exchange for or in lieu of a mutilated,
destroyed, lost or stolen Security shall be deemed to evidence the same debt as
the mutilated, destroyed, lost or stolen Security.

 

“QIB” means a “qualified
institutional buyer” as defined in Rule 144A.

 

“Record Date” means
either a Regular Record Date or a Special Record Date, as the case may be,
provided that, for purposes of Section 12.4 hereof, Record Date has the
meaning specified in Section 12.4(g) hereof.

 

“Reference Dealer” means
a dealer engaged in the trading of convertible securities.

 

“Reference Period” has
the meaning set forth in Section 12.4(d) hereof.

 

“Register” has the
meaning specified in Section 2.5 hereof.

 

“Registrar” has the
meaning specified in Section 2.5 hereof.

 

“Registration Rights
Agreement” means the Resale Registration Rights Agreement dated
September 17, 2004, between the Company and the Dealer Manager.

 

“Regular Record Date” for
the interest on the Securities (including Liquidated Damages, if any) payable
means the February 1 (whether or not a Business Day) next preceding a
February 15 Interest Payment Date and the August 1 (whether or not a
Business Day) next preceding a August 15 Interest Payment Date.

 

“Repurchase Date” has the
meaning specified in Section 11.1 hereof.

 

“Repurchase Price” has
the meaning specified in Section 11.1 hereof.

 

9

 

“Repurchase Right” has
the meaning specified in Section 11.1 hereof.

 

“Reset Transaction” means
(A) a merger, consolidation or statutory share exchange to which the entity
that is the issuer of the shares of common stock into which the Securities are
then convertible into is a party; (B) a sale of all or substantially all the
assets of that entity; (C) a recapitalization of those shares of common stock;
or (D) a distribution described in Section 12.4(d) hereof; after the
effective date of which transaction or distribution the Securities would be
convertible into:

 

(1)                                  shares
of an entity the common stock of which had a Dividend Yield for the four fiscal
quarters of such entity immediately preceding the public announcement of such
transaction or distribution that was more than 2.5% higher than the Dividend
Yield on the Common Stock (or other common stock then issuable upon conversion
of the Securities) for the four fiscal quarters preceding the public
announcement of such transaction or distribution; or

 

(2)                                  shares
of an entity that announces a dividend policy prior to the effective date of
such transaction or distribution which policy, if implemented, would result in
a Dividend Yield on such entity’s common stock for the next four fiscal
quarters that would result in such a 2.5% increase.

 

“Responsible Officer,”
when used with respect to the Trustee, means any officer of the Trustee,
including any vice president, assistant vice president, secretary, assistant
secretary, the treasurer, any assistant treasurer, the managing director or any
other officer of the Trustee customarily performing functions similar to those
performed by any of the above designated officers and also means, with respect
to a particular corporate trust matter, any other officer to whom such matter
is referred because of such officer’s knowledge of and familiarity with the
particular subject.

 

“Restricted Securities”
means the Securities defined as such in Section 2.3(a) hereof.

 

“Restricted Securities
Legend” has the meaning set forth in Section 2.3(a) hereof.

 

“Rule 144” means Rule 144
as promulgated under the Securities Act (including any successor rule thereof),
as the same may be amended from time to time.

 

“Rule 144A” means Rule
144A as promulgated under the Securities Act (including any successor rule
thereof), as the same may be amended from time to time.

 

“SEC” means the
Securities and Exchange Commission.

 

“Securities” has the
meaning ascribed to it in the first paragraph under the caption “Recitals of
the Company” and, as used herein, shall apply equally to Additional Notes,
subject in each case to such adjustments as permitted by Section 2.18 and
set forth in the applicable Additional Notes Supplemental Indenture.

 

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

 

10

 

“Senior Debt” 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 termination payment with respect to or in
connection with, and all fees, costs, expenses and other amounts accrued or due
on or in connection with, Indebtedness of the Company, whether outstanding on
the date of this Indenture or subsequently created, incurred, assumed,
guaranteed or in effect guaranteed by the Company (including all deferrals,
renewals, extensions or refundings of, or amendments, modifications or
supplements to, the foregoing), except for (a) any Indebtedness that by its
terms expressly provides that such Indebtedness shall not be senior in right of
payment to the Securities or expressly provides that such Indebtedness is equal
with or junior to the Securities and (b) any Indebtedness between or among the
Company and/or any of its Subsidiaries or Affiliates and (c) any Indebtedness
represented by the Company’s 5% Convertible Subordinated Notes due 2007 issued
on September 19, 2000.  The term
“Senior Debt” shall include, without limitation, all Designated Senior Debt.

 

“Significant Subsidiary”
means any Subsidiary which is a “significant subsidiary” within the meaning of
Rule 405 under the Securities Act.

 

“Special Record Date” for
the payment of any Defaulted Interest means a date fixed by the Trustee
pursuant to Section 2.17 hereof.

 

“Stated Maturity” means
the date specified in any Security as the fixed date for the payment of
principal on such Security or on which an installment of interest (including
Liquidated Damages, if any) on such Security is due and payable.

 

“Subsidiary” means a
corporation more than 50% of the outstanding voting stock of which is owned,
directly or indirectly, by the Company or by one or more other Subsidiaries, or
by the Company and one or more other Subsidiaries.  For the purposes of this definition only, “voting stock” means
stock which ordinarily has voting power for the election of directors, whether
at all times or only so long as no senior class of stock has such voting power
by reason of any contingency.

 

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

 

“Trading Day” means:

 

(1)                                  if
the applicable security is listed or admitted for trading on the New York Stock
Exchange or another national security exchange, a day on which the New York
Stock Exchange or such other national security exchange is open for business;

 

(2)                                  if
the applicable security is quoted on the Nasdaq National Market, a day on which
trades may be made thereon; or

 

11

 

(3)                                  if
the applicable security is not so listed, admitted for trading or quoted, any day
other than a Saturday or Sunday or a day on which banking institutions in the
State of New York are authorized or obligated by law or executive order to
close.

 

“Trading Price” of a
security on any date of determination means:

 

(1)                                  the
closing sale price (or, if no closing sale price is reported, the last reported
sale price) of such security (regular way) on the New York Stock Exchange on
such date;

 

(2)                                  if
such security is not listed for trading on the New York Stock Exchange on any
such date, the closing sale price as reported in the composite transactions for
the principal U.S. securities exchange on which such security is so listed;

 

(3)                                  if
such security is not so listed on a U.S. national or regional securities
exchange, the closing sale price as reported by the Nasdaq National Market;

 

(4)                                  if
such security is not so reported, the last price quoted by Interactive Data
Corporation for such security or, if Interactive Data Corporation is not
quoting such price, a similar quotation service selected by the Company;

 

(5)                                  if
such security is not so quoted, the average of the mid-point of the last bid
and ask prices for such security from at least two dealers recognized as
market-makers for such security; or

 

(6)                                  if
such security is not so quoted, the average of the last bid and ask prices for
such security from a Reference Dealer.

 

“Transfer Agent” means
any Person, which may be the Company, authorized by the Company to exchange or
register the transfer of Securities.

 

“Trigger Event” has the
meaning specified in Section 12.4(d) hereof.

 

“Trustee” means the
Person named as the “Trustee” in the first paragraph of this instrument until a
successor Trustee shall have become such pursuant to the applicable provisions
of this Indenture, and thereafter “Trustee” shall mean such successor Trustee.

 

“U.S. Government
Obligations” means:  (1) direct
obligations of the United States of America for the payment of which the full
faith and credit of the United States of America is pledged or (2) obligations
of a person controlled or supervised by and acting as an agency or
instrumentality of the United States of America, the payment of which is
unconditionally guaranteed as a full faith and credit obligation by the United
States of America and which in either case, are non-callable at the option of
the issuer thereof.

 

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

 

12

 

SECTION 1.2                                                  Incorporation
by Reference of Trust Indenture Act.

 

Whenever this Indenture
refers to a provision of the TIA, the provision is incorporated by reference in
and made a part of this Indenture.

 

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

 

“indenture securities”
means the Securities;

 

“indenture security
holder” means a Holder;

 

“indenture to be
qualified” means this Indenture;

 

“indenture trustee” or
“institutional trustee” means the Trustee; and

 

“obligor” on the
Securities means the Company and any other obligor on the indenture securities.

 

All other TIA terms used
in this Indenture that are defined by the TIA, defined by TIA reference to
another statute or defined by SEC rule have the meanings assigned to them by
such definitions.

 

SECTION 1.3                                                  Rules
of Construction.

 

For all purposes of this
Indenture, except as otherwise expressly provided or unless the context
otherwise requires:

 

(1)                                  the
terms defined in this Article have the meanings assigned to them in this
Article and include the plural as well as the singular;

 

(2)                                  all
accounting terms not otherwise defined herein have the meanings assigned to
them in accordance with accounting principles generally accepted in the United
States prevailing at the time of any relevant computation hereunder; and

 

(3)                                  the
words “herein,” “hereof” and “hereunder” 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                                                  Title
and Terms.

 

The Securities shall be
known and designated as the “53⁄4% Convertible Senior Subordinated Notes due
2011” of the Company.  The Securities
shall be issuable in denominations of $1,000 or integral multiples thereof.

 

The Securities shall
mature on February 15, 2011.

 

13

 

Interest shall accrue
from September 17, 2004 at the Interest Rate until the principal thereof
is paid or made available for payment. 
Interest shall be payable semiannually in arrears on February 15
and August 15 in each year, commencing February 15, 2005.

 

Interest on the
Securities shall be computed (i) for any full semiannual period for which a
particular Interest Rate is applicable on the basis of a 360-day year of twelve
30-day months and (ii) for any period for which a particular Interest Rate is
applicable shorter than a full semiannual period for which interest is
calculated, on the basis of a 30-day month and, for such periods of less than a
month, the actual number of days elapsed over a 30-day month.  For purposes of determining the Interest
Rate, the Trustee may assume that a Reset Transaction has not occurred unless
the Trustee has received an Officers’ Certificate stating that a Reset
Transaction has occurred and specifying the Adjusted Interest Rate then in
effect.

 

A Holder of any Security
at the close of business on a Regular Record Date shall be entitled to receive
interest (including Liquidated Damages, if any) on such Security on the
corresponding Interest Payment Date.

 

A Holder of any Security
which is converted after the close of business on a Regular Record Date and
prior to the corresponding Interest Payment Date shall be entitled to receive
interest (including Liquidated Damages, if any) on the principal amount of such
Security on such Interest Payment Date, notwithstanding the conversion of such
Security prior to such Interest Payment Date. 
However, any such Holder which surrenders any such Security for
conversion during such period shall be required to pay the Company an amount
equal to the interest (including Liquidated Damages, if any) on the principal
amount of such Security so converted, which is payable by the Company to such
Holder on such Interest Payment Date, at the time such Holder surrenders such
Security for conversion. 
Notwithstanding the foregoing, any such Holder which surrenders for
conversion during such period any Security which has been called for redemption
by the Company in a notice of redemption given by the Company pursuant to
Section 10.5 hereof (whether the redemption date for such Security is on
such Interest Payment Date or otherwise) shall be entitled to receive (and
retain) such interest (including Liquidated Damages, if any) and need not pay
the Company an amount equal to the interest (including Liquidated Damages, if
any) on the principal amount of such Security so converted at the time such
Holder surrenders such Security for conversion.

 

Principal of, and
premium, if any, and interest on, Global Securities shall be payable to the
Depositary in immediately available funds.

 

Principal and premium, if
any, on Physical Securities, if any, shall be payable at the office or agency
of the Company maintained for such purpose, initially the Corporate Trust
Office of the Trustee.  Interest on
Physical Securities will be payable by (i) U.S. Dollar check drawn on a bank
located in the city where the Corporate Trust Office of the Trustee is located
mailed to the address of the Person entitled thereto as such address shall
appear in the Register, or (ii) upon application to the Registrar not later
than the relevant Record Date by a Holder of an aggregate principal amount in
excess of $5,000,000, wire transfer in immediately available funds.

 

14

 

The Securities shall be
redeemable at the option of the Company as provided in Article 10 hereof.

 

The Securities shall have
a Repurchase Right exercisable at the option of Holders as provided in
Article 11 hereof.

 

The Securities shall be
convertible as provided in Article 12 hereof.

 

The Securities shall be
unsecured obligations of the Company and will be (i) senior in right of payment
to Old Securities and any future obligations that are designated by the Company
as subordinate to the Securities; (ii) equal in right of payment with any
existing or future obligations that are designated by the Company as, or
otherwise are determined to be, on a parity with the Securities and (iii)
subordinated in right of payment to the prior payment in full of all of the
existing and future Senior Debt of the Company, each as provided in
Article 13 hereof.  The Securities
will constitute “Designated Senior Debt” for purposes of the indenture for the
Old Securities.

 

SECTION 2.2                                                  Form
of Securities.

 

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

 

Any of the Securities may
have such letters, numbers or other marks of identification and such notations,
legends and endorsements as the officers executing the same may approve
(execution thereof to be conclusive evidence of such approval) and as are not
inconsistent with the provisions of this Indenture, or as may be required to
comply with any law or with any rule or regulation made pursuant thereto or
with any rule or regulation of any securities exchange or automated quotation
system on which the Securities may be listed or designated for issuance, or to
conform to usage.

 

The Securities will be
offered and sold only to QIBs and shall be issued initially only in the form of
one or more permanent Global Securities (each, a “Global Security”) in fully
registered form without interest coupons. 
The Global Securities shall be:

 

(1)                                  duly
executed by the Company and authenticated by the Trustee as hereinafter
provided;

 

(2)                                  registered
in the name of the Depositary (or its nominee) for credit to the respective
accounts of the Holders at the Depositary; and

 

(3)                                  deposited
with the Trustee, as custodian for the Depositary.

 

The Global Securities
shall be substantially in the form of Security set forth in Exhibit A annexed
hereto (including the text and schedule called for by footnotes 1 and 2
thereto).  The

 

15

 

aggregate principal
amount of the Global Securities may from time to time be increased or decreased
by adjustments made on the records of the Trustee, as custodian for the
Depositary (or its nominee), in accordance with the instructions given by the
Holder thereof, as hereinafter provided.

 

Securities issued in
exchange for interests in the Global Securities pursuant to Section 2.8(d)
hereof shall be issued in the form of permanent definitive Securities (the
“Physical Securities”) in registered form without interest coupons.  The Physical Securities shall be
substantially in the form set forth in Exhibit A annexed hereto.

 

The Securities shall be
typed, printed, lithographed or engraved or produced by any combination of
these methods or may be produced in any other manner permitted by the rules of
any securities exchange on which the Securities may be listed, all as determined
by the Officers executing such Securities, as evidenced by their execution of
such Securities.

 

SECTION 2.3                                                  Legends.

 

(a)                                  Restricted
Securities Legends.

 

Each Security issued
hereunder shall, upon issuance, bear the legend set forth in
Section 2.3(a)(i) or Section 2.3(a)(ii) (each, a “Restricted
Securities Legend”), as the case may be, and such legend shall not be removed
except as provided in Section 2.3(a)(iii).  Each Security that bears or is required to bear the Restricted
Securities Legend set forth in Section 2.3(a)(i) (together with any Common
Stock issued upon conversion of the Securities and required to bear the
Restricted Securities Legend set forth in Section 2.3(a)(ii),
collectively, the “Restricted Securities”) shall be subject to the restrictions
on transfer set forth in this Section 2.3(a) (including the Restricted
Securities Legend set forth below), and the Holder of each such Restricted
Security, by such Holder’s acceptance thereof, shall be deemed to have agreed
to be bound by all such restrictions on transfer.

 

As used in
Section 2.3(a), the term “transfer” encompasses any sale, pledge, transfer
or other disposition whatsoever of any Restricted Security.

 

(i)                                     Restricted
Securities Legend for Securities.

 

Except as provided in
Section 2.3(a)(iii), until two years after the original issuance date of
any Security, any certificate evidencing such Security (and all securities
issued in exchange therefor or substitution thereof, other than Common Stock,
if any, issued upon conversion thereof which shall bear the legend set forth in
Section 2.3(a)(ii), if applicable) shall bear a Restricted Securities
Legend in substantially the following form:

 

THE NOTES EVIDENCED HEREBY HAVE NOT
BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), OR ANY STATE SECURITIES LAWS, AND MAY NOT BE OFFERED OR SOLD
EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. 
BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT IT IS A
“QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT); (2) AGREES THAT IT WILL NOT WITHIN

 

16

 

TWO YEARS AFTER THE ORIGINAL ISSUANCE
OF THE NOTE EVIDENCED HEREBY RESELL OR OTHERWISE TRANSFER THE NOTE EVIDENCED
HEREBY OR THE COMMON STOCK ISSUABLE UPON CONVERSION OF SUCH NOTE EXCEPT (A) TO
THE COMPANY OR ANY SUBSIDIARY THEREOF, (B) TO A QUALIFIED INSTITUTIONAL BUYER
IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C) PURSUANT TO THE
EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF
AVAILABLE) OR (D) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED
EFFECTIVE UNDER THE SECURITIES ACT (AND WHICH CONTINUES TO BE EFFECTIVE AT THE
TIME OF SUCH TRANSFER); AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO
WHOM THE NOTE EVIDENCED HEREBY IS TRANSFERRED (OTHER THAN A TRANSFER PURSUANT
TO CLAUSE 2(D) ABOVE) A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.  IN CONNECTION WITH ANY TRANSFER OF THE NOTE
EVIDENCED HEREBY WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF SUCH NOTE
(OTHER THAN A TRANSFER PURSUANT TO CLAUSE 2(D) ABOVE), THE HOLDER MUST CHECK
THE APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER OF
SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO STATE STREET BANK AND TRUST COMPANY,
AS TRUSTEE (OR ANY SUCCESSOR TRUSTEE, AS APPLICABLE).  IF THE PROPOSED TRANSFER IS PURSUANT TO CLAUSE 2(C) ABOVE, THE
HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO US BANK NATIONAL ASSOCIATION,
AS TRUSTEE (OR ANY SUCCESSOR TRUSTEE, AS APPLICABLE), SUCH CERTIFICATIONS,
LEGAL OPINIONS AND OTHER INFORMATION AS THE COMPANY MAY REASONABLY REQUIRE TO
CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT,
THIS LEGEND WILL BE REMOVED UPON THE EARLIER OF THE TRANSFER OF THIS NOTE
EVIDENCED HEREBY PURSUANT TO CLAUSE 2(C) OR 2(D) ABOVE OR THE EXPIRATION OF TWO
YEARS FROM THE ORIGINAL ISSUANCE OF THE NOTE EVIDENCED HEREBY.

 

(ii)                                  Restricted
Securities Legend for Common Stock Issued Upon Conversion of the Securities.

 

Until two years after the
original issuance date of any Security, any stock certificate representing
Common Stock issued upon conversion of such Security shall bear a Restricted
Securities Legend in substantially the following form:

 

THE COMMON STOCK EVIDENCED HEREBY HAS
NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), OR ANY STATE SECURITIES LAWS, AND MAY NOT BE OFFERED OR SOLD
EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. 
THE HOLDER HEREOF AGREES THAT UNTIL THE

 

17

 

EXPIRATION OF TWO YEARS AFTER THE
ORIGINAL ISSUANCE OF THE NOTE UPON THE CONVERSION OF WHICH THE COMMON STOCK
EVIDENCED HEREBY WAS ISSUED, (1) IT WILL NOT RESELL OR OTHERWISE TRANSFER THE
COMMON STOCK EVIDENCED HEREBY EXCEPT (A) TO THE COMPANY OR ANY SUBSIDIARY
THEREOF, (B) TO A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT) IN COMPLIANCE WITH RULE 144A, (C) IN ACCORDANCE WITH
THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT
OR (D) IN ACCORDANCE WITH A REGISTRATION STATEMENT THAT HAS BEEN DECLARED
EFFECTIVE UNDER THE SECURITIES ACT AND THAT CONTINUES TO BE EFFECTIVE AT THE
TIME OF SUCH TRANSFER; (2) PRIOR TO ANY SUCH TRANSFER (OTHER THAN A TRANSFER
PURSUANT TO CLAUSE 1(D) ABOVE), IT WILL FURNISH TO EQUISERVE LIMITED
PARTNERSHIP, AS TRANSFER AGENT (OR ANY SUCCESSOR, AS APPLICABLE), SUCH
CERTIFICATIONS, LEGAL OPINIONS AND OTHER INFORMATION AS THE COMPANY MAY
REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT; AND (3) IT WILL DELIVER TO EACH PERSON TO
WHOM THE COMMON STOCK EVIDENCED HEREBY IS TRANSFERRED (OTHER THAN A TRANSFER
PURSUANT TO CLAUSE l(D) ABOVE) A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS
LEGEND.  THIS LEGEND WILL BE REMOVED
UPON THE EARLIER OF THE TRANSFER OF THE COMMON STOCK EVIDENCED HEREBY PURSUANT
TO CLAUSE l(C) OR l(D) ABOVE OR THE EXPIRATION OF TWO YEARS FROM THE ORIGINAL
ISSUANCE OF THE NOTE UPON THE CONVERSION OF WHICH THE COMMON STOCK EVIDENCED
HEREBY WAS ISSUED.

 

(iii)                               Removal
of the Restricted Securities Legends.

 

Each Security or share of
Common Stock issued upon conversion of such Security shall bear the Restricted
Securities Legend set forth in Section 2.3(a)(i) or 2.3(a)(ii), as the
case may be, until the earlier of:

 

(A)                              two
years after the original issuance date of such Security;

 

(B)                                such
Security or Common Stock has been sold (x) pursuant to a registration statement
that has been declared effective under the Securities Act (and which continues
to be effective at the time of such sale) or (y) pursuant to the exemption from
registration provided by Rule 144 under the Securities Act (subject to the
satisfaction of any requirement to furnish any certification, legal opinion or
other information in accordance with the Restricted Securities Legend and this
Indenture); or

 

(C)                                such
Common Stock has been issued upon conversion of Securities that have been sold
(x) pursuant to a registration statement that has been declared effective

 

18

 

under the Securities Act
(and which continues to be effective at the time of such sale) or (y) pursuant
to the exemption from registration provided by Rule 144 under the Securities
Act (subject to the satisfaction of any requirement to furnish any
certification, legal opinion or other information in accordance with the
Restricted Securities Legend and this Indenture).

 

The Holder must give
notice thereof to the Trustee and any transfer agent for the Common Stock, as
applicable.

 

Notwithstanding the
foregoing, the Restricted Securities Legend may be removed if there is
delivered to the Company such satisfactory evidence, which may include an
opinion of independent counsel, as may be reasonably required by the Company
that neither such legend nor the restrictions on transfer set forth therein are
required to ensure that transfers of such Security will not violate the
registration requirements of the Securities Act.  Upon provision of such satisfactory evidence, the Trustee, at the
written direction of the Company, shall authenticate and deliver in exchange
for such Securities another Security or Securities having an equal aggregate
principal amount that does not bear such legend.  If the Restricted Securities Legend has been removed from a
Security as provided above, no other Security issued in exchange for all or any
part of such Security shall bear such legend, unless the Company has reasonable
cause to believe that such other Security is a “restricted security” within the
meaning of Rule 144 and instructs the Trustee in writing to cause a Restricted
Securities Legend to appear thereon.

 

Any Security (or security
issued in exchange or substitution thereof) as to which such restrictions on
transfer shall have expired in accordance with their terms or as to which the
conditions for removal of the Restricted Securities Legend set forth in
Section 2.3(a)(i) as set forth therein have been satisfied may, upon
surrender of such Security for exchange to the Registrar in accordance with the
provisions of Section 2.7 hereof, be exchanged for a new Security or Securities,
of like tenor and aggregate principal amount, which shall not bear the
Restricted Securities Legend required by Section 2.3(a)(i).

 

Any such Common Stock as
to which such restrictions on transfer shall have expired in accordance with
their terms or as to which the conditions for removal of the Restricted
Securities Legend set forth in Section 2.3(a)(ii) as set forth therein
have been satisfied may, upon surrender of the certificates representing such
shares of Common Stock for exchange in accordance with the procedures of the
transfer agent for the Common Stock, be exchanged for a new certificate or
certificates for a like aggregate number of shares of Common Stock, which shall
not bear the Restricted Securities Legend required by Section 2.3(a)(ii).

 

(b)                                 Global
Security Legend.

 

Each Global Security
shall also bear the following legend on the face thereof:

 

UNLESS THIS CERTIFICATE IS PRESENTED
BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (“DTC”) TO
VERTEX PHARMACEUTICALS INCORPORATED (OR ITS SUCCESSOR) OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE,

 

19

 

CONVERSION OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT
HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

 

(c)                                  Securities
Legend

 

Each Security issued
hereunder shall, upon issuance, bear the following legend:

 

THIS NOTE HAS BEEN ISSUED WITH
ORIGINAL ISSUE DISCOUNT FOR U.S. FEDERAL INCOME TAX PURPOSES.  FOR INFORMATION ABOUT THE ISSUE PRICE, THE
AMOUNT OF ORIGINAL ISSUE DISCOUNT, THE ISSUE DATE AND THE YIELD TO MATURITY,
PLEASE CONTACT VERTEX PHARMACEUTICALS INCORPORATED, 130 WAVERLY STREET,
CAMBRIDGE, MASSACHUSETTS 02139, (617) 444-6100, ATTENTION: INVESTOR RELATIONS.

 

SECTION 2.4                                                  Execution,
Authentication, Delivery and Dating.

 

Two Officers shall
execute the Securities on behalf of the Company by manual or facsimile
signature.  If an Officer whose
signature is on a Security no longer holds that office at the time the Security
is authenticated, the Security shall be valid nevertheless.

 

At any time and from time
to time after the execution and delivery of this Indenture, the Company may
deliver Securities executed by the Company to the Trustee for authentication,
together with a Company Order for the authentication and delivery of such
Securities, and the Trustee in accordance with such Company Order shall
authenticate and deliver such Securities as in this Indenture provided and not
otherwise.

 

Each Security shall be
dated the date of its authentication.

 

No Security shall be
entitled to any benefit under this Indenture, or be valid or obligatory for any
purpose, unless there appears on such Security a certificate of authentication
substantially in the form provided for herein executed by or on behalf of the
Trustee by manual signature, and such certificate upon any Security shall be
conclusive evidence, and the only evidence, that such Security has been duly
authenticated and delivered hereunder.

 

The Trustee may appoint
an authenticating agent or agents reasonably acceptable to the Company with
respect to the Securities.  Unless
limited by the terms of such appointment, 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.

 

20

 

SECTION 2.5                                                  Registrar
and Paying Agent.

 

The Company shall
maintain an office or agency where Securities may be presented for registration
of transfer or for exchange (the “Registrar”) and an office or agency where
Securities may be presented for payment (the “Paying Agent”).  The Registrar shall keep a register of the
Securities (the “Register”) and of their transfer and exchange.  The Company may appoint one or more
co-Registrars and one or more additional Paying Agents for the Securities.  The term “Paying Agent” includes any
additional paying agent and the term “Registrar” includes any additional
registrar.  The Company may change any
Paying Agent or Registrar without prior notice to any Holder.

 

The Company will cause
each Paying Agent (other than the Trustee) to execute and deliver to the
Trustee an instrument in which such Paying Agent shall agree with the Trustee,
subject to the provisions of this Section, that such Paying Agent will:

 

(1)                                  hold
all sums held by it for the payment of the principal of and premium, if any, or
interest (including Liquidated Damages, if any) on Securities in trust for the
benefit of the Persons entitled thereto until such sums shall be paid to such
Persons or otherwise disposed of as provided in this Indenture;

 

(2)                                  give
the Trustee notice of any Default by the Company in the making of any payment
of principal and premium, if any, or interest (including Liquidated Damages, if
any); and

 

(3)                                  at
any time during the continuance of any such Default, upon the written request
of the Trustee, forthwith pay to the Trustee all sums so held in trust by such
Paying Agent.

 

The Company shall give
prompt written notice to the Trustee of the name and address of any Agent who
is not a party to this Indenture.  If
the Company fails to appoint or maintain another entity as Registrar or Paying
Agent, the Trustee shall act as such. 
The Company or any Affiliate of the Company may act as Paying Agent or
Registrar; provided, however, that none of the Company, its subsidiaries or the
Affiliates of the foregoing shall act:

 

(i)                                     as
Paying Agent in connection with redemptions, offers to purchase and discharges,
as otherwise specified in this Indenture, and

 

(ii)                                  as
Paying Agent or Registrar if a Default or Event of Default has occurred and is
continuing.

 

The Company hereby
initially appoints the Trustee as Registrar and Paying Agent for the
Securities.

 

SECTION 2.6                                                  Paying
Agent To Hold Assets in Trust.

 

Not later than 11:00 a.m.
(New York City time) on each due date of the principal, premium, if any, and
interest (including Liquidated Damages, if any) on any Securities, the Company
shall deposit with one or more Paying Agents money in immediately available
funds

 

21

 

sufficient to pay such
principal, premium, if any, and interest (including Liquidated Damages, if any)
so becoming due.  The Company at any
time may require a Paying Agent to pay all money held by it to the Trustee.  Upon payment over to the Trustee, the Paying
Agent (if other than the Company) shall have no further liability for the money
so paid over to the Trustee.

 

If the Company shall act
as a Paying Agent, it shall, prior to or on each due date of the principal of
and premium, if any, or interest (including Liquidated Damages, if any) on any
of the Securities, segregate and hold in trust for the benefit of the Holders a
sum sufficient with monies held by all other Paying Agents, to pay the
principal and premium, if any, or interest (including Liquidated Damages, if
any) so becoming due until such sums shall be paid to such Persons or otherwise
disposed of as provided in this Indenture, and shall promptly notify the
Trustee of its action or failure to act.

 

SECTION 2.7                                                  General
Provisions Relating To Transfer and Exchange.

 

The Securities are
issuable only in registered form.  A
Holder may transfer a Security only by written application to the Registrar
stating the name of the proposed transferee and otherwise complying with the
terms of this Indenture.  No such
transfer shall be effected until, and such transferee shall succeed to the
rights of a Holder only upon, final acceptance and registration of the transfer
by the Registrar in the Register. 
Furthermore, any Holder of a Global Security shall, by acceptance of
such Global Security, agree that transfers of beneficial interests in such
Global Security may be effected only through a book-entry system maintained by
the Holder of such Global Security (or its agent) and that ownership of a
beneficial interest in the Security shall be required to be reflected in a
book-entry.  Notwithstanding the
foregoing, in the case of a Restricted Security, a beneficial interest in a
Global Security being transferred in reliance on an exemption from the
registration requirements of the Securities Act other than in accordance with
Rule 144 and Rule 144A may only be transferred for a Physical Security.

 

When Securities are
presented to the Registrar with a request to register the transfer or to
exchange them for an equal aggregate principal amount of Securities of other
authorized denominations, the Registrar shall register the transfer or make the
exchange as requested if its requirements for such transactions are met
(including that such Securities are duly endorsed or accompanied by a written
instrument of transfer duly executed by the Holder thereof or by an attorney
who is authorized in writing to act on behalf of the Holder).  Subject to Section 2.4 hereof, to
permit registrations of transfers and exchanges, the Company shall execute and
the Trustee shall authenticate Securities at the Registrar’s request.  No service charge shall be made for any
registration of transfer or exchange or redemption of the Securities, but the
Company may require payment of a sum sufficient to cover any transfer tax or
similar governmental charge payable in connection therewith (other than any
such transfer taxes or other similar governmental charge payable upon exchanges
pursuant to Section 2.14, 7.5 or 10.8 hereof).

 

Neither the Company nor the
Registrar shall be required to exchange or register a transfer of any
Securities:

 

(1)                                  for
a period of 15 Business Days prior to the day of any selection of Securities
for redemption under Article 10 hereof;

 

22

 

(2)                                  so
selected for redemption or, if a portion of any Security is selected for
redemption, such portion thereof selected for redemption; or

 

(3)                                  surrendered
for conversion or, if a portion of any Security is surrendered for conversion,
such portion thereof surrendered for conversion.

 

SECTION 2.8                                                  Book-Entry
Provisions for the Global Securities.

 

(a)                                  The
Global Securities initially shall:

 

(i)                                     be
registered in the name of the Depositary (or a nominee thereof);

 

(ii)                                  be
delivered to the Trustee as custodian for such Depositary; and

 

(iii)                               bear
the Restricted Securities Legend as set forth in Section 2.3(a)(i) hereof.

 

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

 

(b)                                 The
registered Holder of a Global Security may grant proxies and otherwise
authorize any Person, including DTC Participants and Persons that may hold
interests through DTC Participants, to take any action which a Holder is
entitled to take under this Indenture or the Securities.

 

(c)                                  A
Global Security may not be transferred, in whole or in part, to any Person
other than the Depositary (or a successor or nominee thereof), and no such
transfer to any such other Person may be registered.  Beneficial interests in a Global Security may be transferred in
accordance with the rules and procedures of the Depositary and the provisions
of Section 2.9 hereof.

 

(d)                                 If
at any time:

 

(i)                                     the
Depositary notifies the Company in writing that it is no longer willing or able
to continue to act as Depositary for the Global Securities or the Depositary
ceases to be a “clearing agency” registered under the Exchange Act when the
Depositary is required to be so registered in order to act as Depositary and in
each case a successor depositary for the Global Securities is not appointed by
the Company within 90 days of such notice or cessation; or

 

23

 

(ii)                                  the
Company, at its option, notifies the Trustee in writing that it elects to cause
the issuance of the Securities in definitive form under this Indenture in
exchange for all or any part of the Securities represented by a Global Security
or Global Securities; or

 

 [Test hidden to force numbering]

 

(iii)                               an
Event of Default has occurred and is continuing and  the Registrar has received a request from the Depositary or the
Holder of a Global Security or Global Securities for the issuance of Physical
Securities in exchange for such Global Security or Global Securities,

 

 the Depositary shall surrender such Global
Security or Global Securities to the Trustee for cancellation and the Company
shall execute, and the Trustee, upon receipt of an Officers’ Certificate and
Company Order for the authentication and delivery of Securities, shall
authenticate and deliver in exchange for such Global Security or Global
Securities, Physical Securities of like tenor as that of the Global Securities
in an aggregate principal amount equal to the aggregate principal amount of
such Global Security or Global Securities. 
Such Physical Securities shall be registered in such names as the
Depositary shall identify in writing as the beneficial owners of the Securities
represented by such Global Security or Global Securities (or any nominees
thereof).

 

In the event that
Physical Securities are not issued to each such beneficial owner promptly after
the Registrar has received a request from the Depositary or the Holder of a
Global Security to issue such Physical Securities pursuant to the immediately
preceding paragraph, the Company expressly acknowledges, with respect to the
right of any Holder to pursue a remedy pursuant to Section 4.6 or 4.7
hereof, the right of any beneficial holder of Securities to pursue such remedy
with respect to the portion of the Global Securities that represents such beneficial
holders’ Securities as if such Physical Securities had been issued.

 

Notwithstanding the
foregoing, in connection with any transfer of beneficial interests in a Global
Security to beneficial owners pursuant to Section 2.8(d) hereof, the
Registrar shall reflect on its books and records the date and a decrease in the
principal amount of such Global Security in an amount equal to the principal
amount of the beneficial interest in such Global Security to be transferred.

 

SECTION 2.9                                                  Special
Transfer Provisions.

 

Unless a Security is
transferred after the time period referred to in Rule 144(k) under the
Securities Act or otherwise sold pursuant to a registration statement that has
been declared effective under the Securities Act (and which continues to be effective
at the time of such sale), the following provisions shall apply.

 

With respect to the
registration of any proposed transfer of Securities to a QIB:

 

(i)                                     If
the Securities to be transferred consist of an interest in the Global
Securities, the transfer of such interest may be effected only through the
book-entry system maintained by the Depositary.

 

(ii)                                  If
the Securities to be transferred consist of Physical Securities, the Registrar
shall register the transfer if such transfer is being made by a proposed
transferor who has checked the box provided for on the form of Security
stating, or has otherwise advised the Company and the

 

24

 

Registrar in writing,
that the sale has been made in compliance with the provisions of Rule 144A to a
transferee who has signed the certification provided for on the form of
Security stating or has otherwise advised the Company and the Registrar in
writing that:

 

(A)                              it
is purchasing the Securities for its own account or an account with respect to
which it exercises sole investment discretion, in each case for investment and
not with a view to distribution;

 

(B)                                it
and any such account is a QIB within the meaning of Rule 144A; and

 

(C)                                it
is aware that the sale to it is being made in reliance on Rule 144A.

 

In addition, the
Registrar shall reflect on its books and records the date and an increase in
the principal amount of the Global Securities in an amount equal to the
principal amount of the Physical Securities to be transferred, and the Trustee
shall cancel the Physical Securities so transferred.

 

By its acceptance of any
Security bearing the Restricted Securities Legend, each Holder of such a
Security acknowledges the restrictions on transfer of such Security set forth
in this Indenture and agrees that it will transfer such Security only as
provided in this Indenture.  The
Registrar shall not register a transfer of any Security unless such transfer
complies with the restrictions on transfer of such Security set forth in this
Indenture.  The Registrar shall be
entitled to receive and rely on written instructions from the Company verifying
that such transfer complies with such restrictions on transfer.  In connection with any transfer of
Securities, each Holder agrees by its acceptance of the Securities to furnish
the Registrar or the Company such certifications, legal opinions or other
information as either of them may reasonably require to confirm that such
transfer is being made pursuant to an exemption from, or a transaction not
subject to, the registration requirements of the Securities Act; provided that
the Registrar shall not be required to determine (but may rely on a
determination made by the Company with respect to) the sufficiency of any such
certifications, legal opinions or other information.

 

The Registrar shall
retain copies of all letters, notices and other written communications received
pursuant to Section 2.8 hereof or this Section 2.9.  The Company shall have the right to inspect
and make copies of all such letters, notices or other written communications at
any reasonable time upon the giving of reasonable written notice to the
Registrar.

 

SECTION 2.10                                            Holder
Lists.

 

The Trustee shall
preserve in as current a form as is reasonably practicable the most recent list
available to it of the names and addresses of Holders and shall otherwise
comply with Section 312(a) of the TIA. 
If the Trustee is not the Registrar, the Company shall furnish to the
Trustee prior to or on each Interest Payment Date and at such other times as
the Trustee may request in writing a list in such form and as of such date as
the Trustee may reasonably require of the names and addresses of Holders
relating to such Interest Payment Date or request, as the case may be.

 

25

 

SECTION 2.11                                            Persons
Deemed Owners.

 

Except as provided in
Section 2.8, the Company, the Trustee and any agent of the Company or the
Trustee may treat the Person in whose name any Security is registered as the
owner of such Security for the purpose of receiving payment of principal of and
premium, if any, and interest (including Liquidated Damages, if any) on such
Security and for all other purposes whatsoever, whether or not such Security be
overdue, and notwithstanding any notice of ownership or writing thereon, or any
notice of previous loss or theft or other interest therein.

 

SECTION 2.12                                            Mutilated,
Destroyed, Lost or Stolen Securities.

 

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

 

If there is delivered to
the Company and the Trustee

 

(1)                                  evidence
to their satisfaction of the destruction, loss or theft of any Security, and

 

(2)                                  such
security or indemnity as may be required by them to save each of them and any
agent of either of them harmless, then, in the absence of notice to the Company
or the Trustee that such Security has been acquired by a protected purchaser,
the Company shall execute and, upon request, the Trustee shall authenticate and
deliver, in lieu of any such destroyed, lost or stolen Security, a new Security
of like tenor and principal amount and bearing a number not contemporaneously
outstanding.

 

In case any such
mutilated, destroyed, lost or stolen Security has become or is about to become
due and payable, the Company in its discretion, but subject to any conversion
rights, may, instead of issuing a new Security, pay such Security, upon
satisfaction of the condition set forth in the preceding paragraph.

 

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

 

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

 

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

 

26

 

SECTION 2.13                                            Treasury
Securities.

 

In determining whether
the Holders of the requisite principal amount of Outstanding Securities are
present at a meeting of Holders for quorum purposes or have given any request,
demand, authorization, direction, notice, consent or waiver hereunder,
Securities owned by the Company or any Affiliate of the Company shall be
disregarded and deemed not to be Outstanding, except that, in determining
whether the Trustee shall be protected in relying upon any such determination
as to the presence of a quorum or upon any such request, demand, authorization,
direction, notice, consent or waiver, only such Securities of which the Trustee
has received written notice and are so owned shall be so disregarded.

 

SECTION 2.14                                            Temporary
Securities.

 

Pending the preparation
of Securities in definitive form, the Company may execute and the Trustee
shall, upon written request of the Company, authenticate and deliver temporary
Securities (printed or lithographed). 
Temporary Securities shall be issuable in any authorized denomination,
and substantially in the form of the Securities in definitive form but with
such omissions, insertions and variations as may be appropriate for temporary
Securities, all as may be determined by the Company.  Every such temporary Security shall be executed by the Company
and authenticated by the Trustee upon the same conditions and in substantially the
same manner, and with the same effect, as the Securities in definitive
form.  Without unreasonable delay, the
Company will execute and deliver to the Trustee Securities in definitive form
(other than in the case of Securities in global form) and thereupon any or all
temporary Securities (other than any such Securities in global form) may be
surrendered in exchange therefor, at each office or agency maintained by the
Company pursuant to Section 9.2 and the Trustee shall authenticate and
deliver in exchange for such temporary Securities an equal aggregate principal
amount of Securities in definitive form. 
Such exchange shall be made by the Company at its own expense and
without any charge therefor.  Until so
exchanged, the temporary Securities shall in all respects be entitled to the
same benefits and subject to the same limitations under this Indenture as
Securities in definitive form authenticated and delivered hereunder.

 

SECTION 2.15                                            Cancellation.

 

All securities
surrendered for payment, redemption, repurchase, conversion, registration of
transfer or exchange shall, if surrendered to any Person other than the
Trustee, be delivered to the Trustee. 
All Securities so delivered shall be canceled promptly by the Trustee,
and no Securities shall be issued in lieu thereof except as expressly permitted
by any of the provisions of this Indenture. 
Upon written instructions of the Company, the Trustee shall destroy
canceled Securities and, after such destruction, shall deliver a certificate of
such destruction to the Company.  If the
Company shall acquire any of the Securities, such acquisition shall not operate
as a redemption or satisfaction of the indebtedness represented by such
Securities unless the same are delivered to the Trustee for cancellation.

 

27

 

SECTION 2.16                                            CUSIP
Numbers.

 

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

 

SECTION 2.17                                            Defaulted
Interest.

 

If the Company fails to
make a payment of interest (including Liquidated Damages, if any) on any
Security when due and payable (“Defaulted Interest”), it shall pay such
Defaulted Interest plus (to the extent lawful) any interest payable on the
Defaulted Interest, in any lawful manner. 
It may elect to pay such Defaulted Interest, plus any such interest
payable on it, to the Persons who are Holders of such Securities on which the
interest is due on a subsequent Special Record Date.  The Company shall notify the Trustee in writing of the amount of
Defaulted Interest proposed to be paid on each such Security.  The Company shall fix any such Special
Record Date and payment date for such payment. 
At least 15 days before any such Special Record Date, the Company shall
mail to Holders affected thereby a notice that states the Special Record Date,
the Interest Payment Date, and amount of such interest (and such Liquidated
Damages, if any) to be paid.

 

SECTION 2.18                                            Additional
Notes.

 

The Company may, from
time to time, subject to compliance with any other applicable provisions of
this Indenture, without the consent of the Holders, create and issue pursuant
to this Indenture additional notes (“Additional Notes”) having terms and
conditions identical to those of the Outstanding Securities, except that
Additional Notes:

 

(i) may have a different
issue date from the Outstanding Securities;

 

(ii) may have a different
amount of interest payable on the first Interest Payment Date after issuance
than is payable on other Outstanding Securities; and

 

(iii) may have terms specified
in the Additional Note Board Resolution or Additional Note Supplemental
Indenture for such Additional Notes making appropriate adjustments to this Article II
and Exhibit A (and related definitions) applicable to such Additional
Notes in order to conform to and ensure compliance with the Securities Act (or
other applicable securities laws) and any registration rights or similar
agreement applicable to such Additional Notes, which are not adverse in any
material respect to the Holder of any Outstanding Securities (other than such
Additional Notes);

 

 provided,
that no adjustment pursuant to this Section 2.18 shall cause such
Additional Notes to constitute, as determined pursuant to an Opinion of
Counsel, a different class of securities than the Securities for U.S. federal
income tax purposes except for Additional Notes that have a

 

28

 

separate CUSIP number
from the Outstanding Securities pending performance by the Company of its
obligations under the Registration Rights Agreement.

 

ARTICLE 3

 

SATISFACTION AND
DISCHARGE

 

SECTION 3.1                                                  Satisfaction
and Discharge of Indenture.

 

When:

 

(1)                                  The
Company shall deliver to the Trustee for cancellation all securities previously
authenticated (other than any securities which have been destroyed, lost or
stolen and in lieu of, or in substitution for which, other securities shall
have been authenticated and delivered) and not previously canceled, or

 

(2)                                  (A)
all the securities not previously canceled or delivered to the Trustee for
cancellation shall have become due and payable, or are by their terms to become
due and payable at their scheduled maturity within one year or are to be called
for redemption within one year under arrangements satisfactory to the Trustee
for the giving of notice of redemption,

 

(B)                                the
Company shall deposit with the Trustee, in trust, cash in U.S. dollars and/or
U.S. Government Obligations which through the payment of interest and principal
in respect thereof, in accordance with their terms, will provide (and without
reinvestment and assuming no tax liability will be imposed on such Trustee),
not later than one day before the due date of any payment of money, an amount
in cash, sufficient, in the opinion of a nationally recognized firm of independent
public accountants expressed in a written certification thereof delivered to
the Trustee, to pay principal of, premium, if any, or interest (including
Liquidated Damages, if any) on all of the Securities (other than any Securities
which shall have been mutilated, destroyed, lost or stolen and in lieu of or in
substitution for which other Securities shall have been authenticated and
delivered) not previously canceled or delivered to the Trustee for
cancellation, on the dates such payments of principal, premium, if any, or
interest (including Liquidated Damages, if any) are due to such date of
maturity or redemption, as the case may be, and

 

(C)                                the
Company shall have delivered to the Trustee an Officers’ Certificate and an
Opinion of Counsel to the effect that (x) the Company has received from, or
there has been published by, the Internal Revenue Service a ruling or (y) since
the date of execution of this Indenture, there has been a change in the
applicable federal income tax law, in the case of either clause (x) or (y) to
the effect that, and based thereon such Opinion of Counsel shall confirm that,
the Holders will not recognize income, gain or loss for federal income tax
purposes as a result of such deposit and discharge and will be subject to
federal income tax on the same amount and in the same manner and at the same
times as would have been the case if such deposit and discharge had not
occurred, and

 

29

 

if, in the case of either
clause (1) or (2), the Company shall also pay or cause to be paid all other
sums payable hereunder by the Company, then this Indenture shall cease to be of
further effect (except as to:

 

(i)                                     remaining
rights of registration of transfer, substitution and exchange and conversion of
Securities,

 

(ii)                                  rights
hereunder of Holders to receive payments of principal of and premium, if any,
and interest (including Liquidated Damages, if any) on, the Securities and the
other rights, duties and obligations of Holders, as beneficiaries hereof with
respect to the amounts, if any, so deposited with the Trustee, and

 

(iii)                               the
rights, obligations and immunities of the Trustee hereunder),

 

and the Trustee, on
demand of the Company accompanied by an Officers’ Certificate and an Opinion of
Counsel and at the cost and expense of the Company, shall execute proper
instruments acknowledging satisfaction of and discharging this Indenture;
provided, however, the Company shall reimburse the Trustee for all amounts due
the Trustee under Section 5.8 hereof and for any costs or expenses
thereafter reasonably and properly incurred by the Trustee and to compensate
the Trustee for any services thereafter reasonably and properly rendered by the
Trustee in connection with this Indenture or the Securities.

 

SECTION 3.2                                                  Deposited
Monies To Be Held in Trust.

 

Subject to
Section 3.3 hereof, all monies deposited with the Trustee pursuant to
Section 3.1 hereof shall be held in trust and applied by it to the
payment, notwithstanding the provisions of Article 13 hereof, either
directly or through any Paying Agent (including the Company if acting as its
own Paying Agent), to the Holders of the particular Securities for the payment
or redemption of which such monies have been deposited with the Trustee, of all
sums due and to become due thereon for principal, premium, if any, and interest
(including Liquidated Damages, if any). 
All monies deposited with the Trustee pursuant to Section 3.1
hereof (and held by it or any Paying Agent) for the payment of Securities
subsequently converted shall be returned to the Company upon request of the
Company.

 

SECTION 3.3                                                  Return
of Unclaimed Monies.

 

The Trustee and the
Paying Agent shall pay to the Company any money held by them for the payment of
principal or premium, if any, or interest (including Liquidated Damages, if
any) that remains unclaimed for two years after the date upon which such
payment shall have become due.  After
payment to the Company, Holders entitled to the money must look to the Company
for payment as general creditors unless an applicable abandoned property law
designates another Person, and all liability of the Trustee and such Paying
Agent with respect to such money shall cease.

 

30

 

ARTICLE 4

 

DEFAULTS AND
REMEDIES

 

SECTION 4.1                                                  Events
of Default.

 

An “Event of Default”
with respect to the Securities occurs when any of the following occurs
(whatever the reason for such Event of Default and whether it shall be
occasioned by the provisions of Article 13 hereof or be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):

 

(a)                                  the
Company defaults in the payment of the principal of or premium, if any, on any
of the Securities when it becomes due and payable at Maturity, upon redemption
or exercise of a Repurchase Right or otherwise, whether or not such payment is
prohibited by Article 13 hereof; or

 

(b)                                 the
Company defaults in the payment of an installment of interest (including
Liquidated Damages, if any) on any of the Securities when it becomes due and
payable and such default continues for a period of 30 days, whether or not such
payment is prohibited by Article 13 hereof; or

 

(c)                                  the
Company fails to deliver shares of Common Stock, together with cash instead of
fractional shares, when those shares of Common Stock or cash instead of
fractional shares are required to be delivered following conversion of a
Security in accordance with Article 12, and that failure continues for 10
days; or

 

(d)                                 the
Company fails to perform or observe any other term, covenant or agreement
contained in the Securities or this Indenture and the failure continues for a
period of 60 days after written notice of such failure, requiring the Company
to remedy the same, shall have been given to the Company by the Trustee or to
the Company and the Trustee by the Holders of at least 25% in aggregate
principal amount of the Outstanding Securities; or

 

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

 

(f)                                    the
entry by a court having jurisdiction in the premises of (i) a decree or order
for relief in respect of the Company in an involuntary case or proceeding under
any applicable U.S. federal or state bankruptcy, insolvency, reorganization or
other similar law or (ii) a decree or order adjudging the Company a bankrupt or
insolvent, or approving as properly filed a petition seeking reorganization,
arrangement, adjustment or composition of or in respect of the Company under
any applicable U.S. federal or state law, or appointing a custodian, receiver,
liquidator,

 

31

 

assignee, trustee,
sequestrator or other similar official of the Company or of any substantial
part of its property, or ordering the winding up or liquidation of its affairs,
and the continuance of any such decree or order for relief or any such other
decree or order unstayed and in effect for a period of 60 consecutive days; or

 

(g)                                 the
commencement by the Company of a voluntary case or proceeding under any
applicable U.S. federal or state bankruptcy, insolvency, reorganization or
other similar law or of any other case or proceeding to be adjudicated a
bankrupt or insolvent, or the consent by the Company to the entry of a decree
or order for relief in respect of the Company in an involuntary case or
proceeding under any applicable U.S. federal or state bankruptcy, insolvency,
reorganization or other similar law or to the commencement of any bankruptcy or
insolvency case or proceeding against the Company, or the filing by the Company
of a petition or answer or consent seeking reorganization or relief under any
applicable U.S. federal or state law, or the consent by the Company to the
filing of such petition or to the appointment of or the taking possession by a
custodian, receiver, liquidator, assignee, trustee, sequestrator or other
similar official of the Company or of any substantial part of its property, or
the making by the Company of an assignment for the benefit of creditors, or the
admission by the Company in writing of its inability to pay its debts generally
as they become due, or the taking of corporate action by the Company expressly
in furtherance of any such action.

 

SECTION 4.2                                                  Acceleration
of Maturity; Rescission and Annulment.

 

If an Event of Default
with respect to Outstanding Securities (other than an Event of Default
specified in Section 4.1(f) or 4.1(g) hereof) occurs and is continuing,
the Trustee or the Holders of at least 25% in aggregate principal amount of the
Outstanding Securities, by written notice to the Company, may declare due and
payable 100% of the principal amount of all Outstanding Securities plus any
accrued and unpaid interest (including Liquidated Damages, if any) to the date
of payment.  Upon a declaration of
acceleration, such principal and accrued and unpaid interest to the date of payment
shall be immediately due and payable.

 

If an Event of Default
specified in Section 4.1(f) or 4.1(g) hereof occurs and is continuing, all
unpaid principal and accrued and unpaid interest (including Liquidated Damages,
if any) on the Outstanding Securities shall automatically become and be
immediately due and payable, without any declaration or other act on the part
of the Trustee or any Holder.

 

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

 

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

 

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

 

provided, however, that
in the event such declaration of acceleration has been made based on the
existence of an Event of Default under Section 4.1(e) hereof and such
Event of Default has been remedied, cured or waived in accordance with
Section 4.1(e) hereof, then, without any further

 

32

 

action by the Holders,
such declaration of acceleration shall be rescinded automatically and the
consequences of such declaration shall be annulled.  No such rescission or annulment shall affect any subsequent Default
or impair any right consequent thereon.

 

SECTION 4.3                                                  Other
Remedies.

 

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

 

The Trustee may maintain
a proceeding in which it may prosecute and enforce all rights of action and
claims under this Indenture or the Securities, even if it does not possess any
of the Securities or does not produce any of them in the proceeding.

 

SECTION 4.4                                                  Waiver
of Past Defaults.

 

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

 

(1)                                  in
the payment of the principal of or premium, if any, or interest (including
Liquidated Damages, if any) on any Security (provided, however, that subject to
Section 4.7 hereof, the Holders of a majority in aggregate principal
amount of the Outstanding Securities may rescind an acceleration and its
consequences, including any related payment default that resulted from such
acceleration);

 

(2)                                  in
respect of the right to convert any Security in accordance with
Article 12; or

 

(3)                                  in
respect of a covenant or provision hereof which, under Section 7.2 hereof,
cannot be modified or amended without the consent of the Holders of each
Outstanding Security affected.

 

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

 

SECTION 4.5                                                  Control
by Majority.

 

The Holders, either (a)
through the written consent of not less than a majority in aggregate principal
amount of the Outstanding Securities, or (b) by the adoption of a resolution,
at a meeting of Holders of the Outstanding Securities at which a quorum is
present, by the Holders of at least a majority in aggregate principal amount of
the Outstanding Securities

 

33

 

represented at such
meeting, shall have the right to 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 the Trustee. 
However, the Trustee may refuse to follow any direction that:

 

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

 

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

 

(3)                                  may
expose the Trustee to personal liability.

 

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

 

SECTION 4.6                                                  Limitation
on Suit.

 

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

 

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

 

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

 

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

 

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

 

provided, however, that
no one or more of such Holders may use this Indenture to prejudice the rights
of another Holder or to obtain preference or priority over another Holder.

 

SECTION 4.7                                                  Unconditional
Rights of Holders To Receive Payment and To Convert.

 

Notwithstanding any other
provision in this Indenture, the Holder of any Security shall have the right,
which is absolute and unconditional, to receive payment of the principal of and
premium, if any, and interest (including Liquidated Damages, if any) on such
Security on the Stated Maturity expressed in such Security (or, in the case of
redemption, on the redemption date, or in the case of the exercise of a
Repurchase Right, on the Repurchase Date) and to convert such Security in
accordance with Article 12, and to bring suit for the enforcement of any
such payment on or after such respective dates and right to convert, and such
rights shall not be impaired or affected without the consent of such Holder.

 

34

 

SECTION 4.8                                                  Collection
of Indebtedness and Suits for Enforcement by the Trustee.

 

The Company covenants
that if:

 

(1)                                  a
Default or Event of Default is made in the payment of any interest (including
Liquidated Damages, if any) on any Security when such interest (including
Liquidated Damages, if any) becomes due and payable and such Default or Event
of Default continues for a period of 30 days, or

 

(2)                                  a
Default or Event of Default is made in the payment of the principal of or
premium, if any, on any Security at the Maturity thereof,

 

the Company shall, upon
demand of the Trustee, pay to it, for the benefit of the Holders of such Securities,
the whole amount then due and payable (as expressed therein or as a result of
any acceleration effected pursuant to Section 4.2 hereof) on such
Securities for principal and premium, if any, and interest (including
Liquidated Damages, if any) and, to the extent that payment of such interest
shall be legally enforceable, interest on any overdue principal and premium, if
any, and on any overdue interest (including Liquidated Damages, if any),
calculated using the Interest Rate, and, in addition thereto, such further
amount as shall be sufficient to cover the costs and expenses of collection,
including the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel.

 

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

 

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

 

SECTION 4.9                                                  Trustee
May File Proofs of Claim.

 

In case of the pendency
of any receivership, insolvency, liquidation, bankruptcy, reorganization,
arrangement, adjustment, composition or other judicial proceeding relative to
the Company or the property of the Company or its creditors, the Trustee
(irrespective of whether the principal of the Securities shall then be due and
payable as therein expressed or by declaration or otherwise and irrespective of
whether the Trustee shall have made any demand on the Company for the payment
of overdue principal or interest (including Liquidated Damages, if any)) shall
be entitled and empowered, by intervention in such proceeding or otherwise,

 

(1)                                  to
file and prove a claim for the whole amount of principal and premium, if any,
and interest (including Liquidated Damages, if any) owing and unpaid in respect
of the Securities and to file such other papers or documents as may be
necessary or advisable in order to have the claims of the Trustee (including
any claim for the

 

35

 

reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel)
and of the Holders of Securities allowed in such judicial proceeding, and

 

(2)                                  to
collect and receive any moneys or other property payable or deliverable on any
such claim and to distribute the same;

 

and any custodian,
receiver, assignee, trustee, liquidator, sequestrator or other similar official
in any such judicial proceedings is hereby authorized by each Holder of
Securities to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the Holders of
Securities, to pay to the Trustee any amount due to it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel and any other amounts due the Trustee under Section 5.8.

 

Nothing contained herein
shall be deemed to authorize the Trustee to authorize or consent to or accept,
or adopt on behalf of any Holder of a Security, any plan of reorganization,
arrangement, adjustment or composition affecting the Securities or the rights of
any Holder thereof or to authorize the Trustee to vote in respect of the claim
of any Holder of a Security in any such proceeding.

 

SECTION 4.10                                            Restoration
of Rights and Remedies.

 

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

 

SECTION 4.11                                            Rights
and Remedies Cumulative.

 

Except as otherwise
provided with respect to the replacement or payment of mutilated, destroyed,
lost or stolen Securities in the last paragraph of Section 2.12, no right
or remedy conferred in this Indenture upon or reserved to the Trustee or to the
Holders of Securities is intended to be exclusive of any other right or remedy,
and every right and remedy shall, to the extent permitted by law, be cumulative
and in addition to every other right and remedy given hereunder or hereafter
existing at law or in equity or otherwise. 
The assertion or employment of any right or remedy hereunder, or
otherwise, shall not prevent the concurrent assertion or employment of any
other appropriate right or remedy.

 

SECTION 4.12                                            Delay
or Omission Not Waiver.

 

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

 

36

 

exercised from time to
time, and as often as may be deemed expedient, by the Trustee or by the Holders
of Securities, as the case may be.

 

SECTION 4.13                                            Application
of Money Collected.

 

Subject to
Article 13, any money and property collected by the Trustee pursuant to
this Article shall be applied in the following order, at the date or dates
fixed by the Trustee and, in case of the distribution of such money and
property on account of principal or premium, if any, or interest (including
Liquidated Damages, if any), upon presentation of the Securities and the
notation thereon of the payment if only partially paid and upon surrender
thereof if fully paid:

 

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

 

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

 

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

 

SECTION 4.14                                            Undertaking
for Costs.

 

All parties to this
Indenture agree, and each Holder of any Security by such Holder’s acceptance
thereof shall be deemed to have agreed, that any court may in its discretion
require, in any suit for the enforcement of any right or remedy under this
Indenture, or in any suit against the Trustee for any action taken, suffered or
omitted by it as Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys’ fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to any suit instituted by the
Company, to any suit instituted by the Trustee, to any suit instituted by any
Holder, or group of Holders, holding in the aggregate more than 10% in
aggregate principal amount of the Outstanding Securities, or to any suit
instituted by any Holder of any Security for the enforcement of the payment of
the principal of or premium, if any, or interest (including Liquidated Damages,
if any) on any Security on or after the Stated Maturity expressed in such
Security (or, in the case of redemption or exercise of a Repurchase Right, on
or after the redemption date) or for the enforcement of the right to convert
any Security in accordance with Article 12.

 

SECTION 4.15                                            Waiver
of Stay or Extension Laws.

 

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

 

37

 

covenants that it will
not hinder, delay or impede the execution of any power herein granted to the
Trustee, but will suffer and permit the execution of every such power as though
no such law had been enacted.

 

ARTICLE 5

 

THE TRUSTEE

 

SECTION 5.1                                                  Certain
Duties and Responsibilities.

 

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

 

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

 

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

 

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

 

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

 

(1)                                  This
paragraph (c) shall not be construed to limit the effect of paragraph (a) of
this Section 5.1;

 

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

 

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

 

38

 

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

 

(d)                                 Whether
or not herein expressly so provided, every provision of this Indenture relating
to the conduct or affecting the liability of or affording protection to the
Trustee shall be subject to the provisions of this Section 5.1.

 

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

 

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

 

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

 

(h)                                 The
Trustee shall not be deemed to have notice or actual knowledge of any Event of
Default or a Registration Default (as such term is defined in the Registration
Rights Agreement) or the obligation of the Company to pay Liquidated Damages
unless a Responsible Officer of the Trustee has actual knowledge thereof or
unless written notice of any event which is in fact a Default is received by
the Trustee pursuant to Section 14.2 hereof, and such notice references
the Securities and this Indenture.

 

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

 

SECTION 5.2                                                  Certain
Rights of Trustee.

 

Subject to the provisions
of Section 5.1 hereof and subject to Sections 315(a) through (d) of the
TIA:

 

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

 

39

 

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

 

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

 

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

 

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

 

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

 

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

 

SECTION 5.3                                                  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 any Affiliate of the Company with
the same rights it would have if it were not Trustee.  However, in the event that the Trustee acquires any conflicting
interest (as such term is defined in Section 310(b) of the TIA), it must
eliminate such conflict within 90 days, apply to the SEC for permission to
continue as trustee (to the extent permitted under Section 310(b) of the
TIA) or resign.  Any agent may do the
same with like rights and duties.  The
Trustee is also subject to Sections 5.11 and 5.12 hereof.

 

SECTION 5.4                                                  Money
Held in Trust.

 

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

 

SECTION 5.5                                                  Trustee’s
Disclaimer.

 

The recitals contained
herein and in the Securities (except for those in the certificate of
authentication) shall be taken as the statements of the Company, and the
Trustee assumes no responsibility for their correctness.  The Trustee makes no representations as to
the validity,

 

40

 

sufficiency or priority
of this Indenture or of the Securities. 
The Trustee shall not be accountable for the use or application by the
Company of Securities or the proceeds thereof.

 

SECTION 5.6                                                  Notice
of Defaults.

 

Within 90 days after the
occurrence of any Default or Event of Default hereunder of which the Trustee
has received written notice, the Trustee shall give notice to Holders pursuant
to Section 14.2 hereof, unless such Default or Event of Default shall have
been cured or waived; provided, however, that, except in the case of a Default
or Event of Default in the payment of the principal of or premium, if any, or
interest (including Liquidated Damages, if any), or in the payment of any
redemption or repurchase obligation on any Security, the Trustee shall be
protected in withholding such notice if and so long as Responsible Officers of
the Trustee in good faith determine that the withholding of such notice is in
the interest of the Holders.

 

SECTION 5.7                                                  Reports
by Trustee to Holders.

 

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

 

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

 

SECTION 5.8                                                  Compensation
and Indemnification.

 

The Company covenants and
agrees to pay to the Trustee from time to time, and the Trustee shall be
entitled to, reasonable compensation (which shall not be limited by any
provision of law in regard to the compensation of a trustee of an express
trust) and the Company covenants and agrees to pay or reimburse the Trustee
upon its request for all reasonable expenses, disbursements and advances
incurred or made by or on behalf of it in accordance with any of the provisions
of this Indenture (including the reasonable compensation and the expenses and
disbursements of its counsel and of all agents and other persons not regularly
in its employ), except to the extent that any such expense, disbursement or
advance is due to its negligence or bad faith. 
When the Trustee incurs expenses or renders services in connection with
an Event of Default specified in Section 4.1 hereof, the expenses
(including the reasonable charges and expenses of its counsel) and the
compensation for the services are intended to constitute expenses of administration
under any Bankruptcy Law.  The Company
also covenants to indemnify the Trustee and its officers, directors, employees
and agents for, and to hold such Persons harmless against, any loss, liability
or expense incurred by them, arising out of or in connection with the
acceptance or administration of this Indenture or the trusts hereunder or the
performance of their duties hereunder, including the costs and expenses of
defending themselves against or investigating any claim of liability in the premises,
except to the extent that any such loss, liability or expense was due to the
negligence or willful misconduct of such Persons.  The obligations of the Company under this Section 5.8 to
compensate and indemnify the Trustee and its officers, directors, employees and
agents and to pay or reimburse such Persons for expenses,

 

41

 

disbursements and
advances shall constitute additional indebtedness hereunder and shall survive
the satisfaction and discharge of this Indenture or the earlier resignation or
removal of the Trustee.  Such additional
indebtedness shall be a senior claim to that of the Securities upon all
property and funds held or collected by the Trustee as such, except funds held
in trust for the benefit of the Holders of particular Securities, and the
Securities are hereby subordinated to such senior claim.  “Trustee” for purposes of this
Section 5.8 shall include any predecessor Trustee, but the negligence or
willful misconduct of any Trustee shall not affect the indemnification of any
other Trustee.

 

SECTION 5.9                                                  Replacement
of Trustee.

 

A resignation or removal
of the Trustee and appointment of a successor Trustee shall become effective
only upon the successor Trustee’s acceptance of appointment as provided in this
Section 5.9.

 

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

 

(i)                                     the
Trustee fails to comply with Section 5.11 hereof or Section 310 of
the TIA;

 

(ii)                                  the
Trustee becomes incapable of acting.

 

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

 

(iv)                              a
Custodian or public officer takes charge of the Trustee or its property.

 

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

 

Any Holder may petition
any court of competent jurisdiction for the removal of the Trustee and the
appointment of a successor Trustee if the Trustee fails to comply with
Section 5.11 hereof.

 

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

 

A successor Trustee shall
deliver a written acceptance of its appointment to the retiring Trustee and to
the Company.  Thereupon the resignation
or removal of the retiring Trustee shall become effective, and the successor
Trustee shall have all the rights, powers and duties of the

 

42

 

Trustee under this
Indenture.  The Company shall mail a
notice of the successor Trustee’s succession to the Holders.  The retiring Trustee shall promptly transfer
all property held by it as Trustee to the successor Trustee.  Notwithstanding replacement of the Trustee
pursuant to this Section 5.9, the Company’s obligations under
Section 5.8 hereof shall continue for the benefit of the retiring Trustee
with respect to expenses, losses and liabilities incurred by it prior to such
replacement.

 

SECTION 5.10                                            Successor
Trustee by Merger, Etc.

 

Subject to
Section 5.11 hereof, if the Trustee consolidates with, merges or converts
into, or transfers or sells all or substantially all of its corporate trust
business to, another corporation or national banking association, the successor
entity without any further act shall be the successor Trustee as to the
Securities.

 

SECTION 5.11                                            Corporate
Trustee Required; Eligibility.

 

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

 

SECTION 5.12                                            Collection
of Claims Against the Company.

 

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

 

ARTICLE 6

 

CONSOLIDATION, MERGER, CONVEYANCE,
TRANSFER OR LEASE

 

SECTION 6.1                                                  Company
May Consolidate, Etc., Only on Certain Terms.

 

The Company shall not
consolidate with or merge into any other Person or convey, transfer or lease
its properties and assets substantially as an entirety to any Person, and the
Company shall not permit any Person to consolidate with or merge into the
Company or convey, transfer or lease its properties and assets substantially as
an entirety to the Company, unless:

 

(1)                                  in
the event that the Company shall consolidate with or merge into another Person
or convey, transfer or lease its properties and assets substantially as an
entirety to any Person, the Person formed by such consolidation or into which
the Company is merged or the Person which acquires by conveyance or transfer,
or which leases, the properties and assets of the Company substantially as an
entirety shall be a corporation, limited liability company, partnership or
trust organized and validly existing under the laws of the United States of
America, any State thereof or the District of Columbia and, if the entity
surviving such transaction or transferee entity is not the Company, then such

 

43

 

surviving or transferee
entity 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 premium, if any and interest
(including Liquidated Damages, if any), on all the Securities and the
performance of every covenant and obligation of this Indenture on the part of
the Company to be performed or observed and shall have provided for conversion
rights in accordance with Section 12.11 hereof;

 

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

 

(3)                                  the
Company shall have 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 6.2                                                  Successor
Substituted.

 

Upon any consolidation or
merger by the Company with or into any other Person or any conveyance, transfer
or lease of the properties and assets of the Company substantially as an
entirety to any Person, in accordance with Section 6.1 hereof, 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 to
another Person, the predecessor Person shall be relieved of all obligations and
covenants under this Indenture and the Securities.

 

ARTICLE 7

 

AMENDMENTS,
SUPPLEMENTS AND WAIVERS

 

SECTION 7.1                                                  Without
Consent of Holders of Securities.

 

Without the consent of
any Holders of Securities, the Company, when authorized by a Board Resolution,
and the Trustee, at any time and from time to time, may amend this Indenture
and the Securities to:

 

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

 

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

 

(c)                                  make
provision with respect to the conversion rights of Holders of Securities
pursuant to Section 12.11 hereof;

 

44

 

(d)                                 provide
for the assumption of the Company’s obligations to the Holders of Securities in
the case of a merger, consolidation, conveyance, transfer or lease pursuant to
Article 6 hereof;

 

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

 

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

 

(g)                                 make
any changes or modifications to this Indenture necessary in connection with the
registration of any Securities under the Securities Act as contemplated in the
Registration Rights Agreement, provided that such action pursuant to this
clause (g) does not adversely affect the interests of the Holders of Securities
in any material respect;

 

(h)                                 cure
any ambiguity, correct or supplement any provision herein which may be
inconsistent with any other provision herein or which is otherwise defective,
or make any other provisions with respect to matters or questions arising under
this Indenture which the Company and the Trustee may deem necessary or
desirable and which shall not be inconsistent with the provisions of this
Indenture, provided that such action pursuant to this clause (h) does not, in
the good faith opinion of the Board of Directors and the Trustee, adversely
affect the interests of the Holders of Securities in any material respect;

 

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

 

(j)                                     make
provision for the establishment of a book-entry system, in which Holders would
have the option to participate, for the clearance and settlement of
transactions in Securities originally issued in definitive form.

 

SECTION 7.2                                                  With
Consent of Holders of Securities.

 

Except as provided below
in this Section 7.2, this Indenture or the Securities may be amended or
supplemented, and noncompliance by the Company in any particular instance with
any provision of this Indenture or the Securities may be waived, in each case
(i) with the written consent of the Holders of at least a majority in aggregate
principal amount of the Outstanding Securities or (ii) by the adoption of a
resolution, at a meeting of Holders of the Outstanding Securities at which a
quorum is present, by the Holders of a majority in aggregate principal amount
of the Outstanding Securities represented at such meeting.

 

Without the written
consent or the affirmative vote of each Holder of Securities affected, an
amendment or waiver under this Section 7.2 may not:

 

45

 

(a)                                  change
the Stated Maturity of the principal of, or any installment of interest
(including Liquidated Damages, if any) on, any Security;

 

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

 

(c)                                  reduce
the Interest Rate or interest (including Liquidated Damages, if any) on any
Security;

 

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

 

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

 

(f)                                    modify
the obligation of the Company to maintain an office or agency in The City of
New York pursuant to Section 9.2 hereof;

 

(g)                                 except
as permitted by Section 12.11 hereof, adversely affect the right to
convert any Security as provided in Article 12 hereof;

 

(h)                                 adversely
affect the Repurchase Right;

 

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

 

(j)                                     modify
any of the provisions of this Section, Section 4.4 or Section 14.11,
except to increase any percentage contained herein or therein or to provide
that certain other provisions of this Indenture cannot be modified or waived
without the consent of the Holder of each Outstanding Security affected
thereby;

 

(k)                                  reduce
the requirements of Section 8.4 hereof for quorum or voting, or reduce the
percentage in aggregate principal amount of the Outstanding Securities the
consent of whose Holders is required for any supplemental indenture or the
consent of whose Holders is required for any waiver provided for in this
Indenture; or

 

(l)                                     provide
for the issuance and terms of Additional Notes in accordance with
Section 2.18.

 

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

 

SECTION 7.3                                                  Compliance
With Trust Indenture Act.

 

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

 

46

 

SECTION 7.4                                                  Revocation
of Consents and Effect of Consents or Votes.

 

Until an amendment,
supplement or waiver becomes effective, a written 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;
provided, however, that unless a record date shall have been established, any
such Holder or subsequent Holder may revoke the consent as to its Security or
portion of a Security if the Trustee receives written notice of revocation
before the date the amendment, supplement or waiver becomes effective.

 

An amendment, supplement
or waiver becomes effective on receipt by the Trustee of written consents from
or affirmative votes by, as the case may be, the Holders of the requisite
percentage of aggregate principal amount of the Outstanding Securities, and
thereafter shall bind every Holder of Securities; provided, however, if the
amendment, supplement or waiver makes a change described in any of the clauses
(a) through (k) of Section 7.2 hereof, the amendment, supplement or waiver
shall bind only each Holder of a Security which has consented to it or voted
for it, as the case may be, and every subsequent Holder of a Security or
portion of a Security that evidences the same indebtedness as the Security of
the consenting or affirmatively voting, as the case may be, Holder.

 

SECTION 7.5                                                  Notation
on or Exchange of Securities.

 

If an amendment,
supplement or waiver changes the terms of a Security:

 

(a)                                  the
Trustee may require the Holder of a Security to deliver such Securities to the
Trustee, the Trustee may place an appropriate notation on the Security about
the changed terms and return it to the Holder and the Trustee may place an
appropriate notation on any Security thereafter authenticated; or

 

(b)                                 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.

 

Failure to make the
appropriate notation or issue a new Security shall not affect the validity and
effect of such amendment, supplement or waiver.

 

SECTION 7.6                                                  Trustee
To Sign Amendment, Etc.

 

The Trustee shall sign
any amendment authorized pursuant to this Article 7 if the amendment does
not adversely affect the rights, duties, liabilities or immunities of the
Trustee.  If the amendment does
adversely affect the rights, duties, liabilities or immunities of the Trustee,
the Trustee may but need not sign it. 
In signing or refusing to sign such amendment, the Trustee shall be
entitled to receive and shall be fully protected in relying upon an Officers’
Certificate and an Opinion of Counsel as conclusive evidence that such
amendment is authorized or permitted by this Indenture.

 

47

 

ARTICLE 8

 

MEETING OF HOLDERS
OF SECURITIES

 

SECTION 8.1                                                  Purposes
for Which Meetings May Be Called.

 

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

 

Notwithstanding anything
contained in this Article 8, the Trustee may, during the pendency of a
Default or an Event of Default, call a meeting of Holders of Securities in
accordance with its standard practices.

 

SECTION 8.2                                                  Call
Notice and Place of Meetings.

 

(a)                                  The
Trustee may at any time call a meeting of Holders of Securities for any purpose
specified in Section 8.1 hereof, to be held at such time and at such place
in The City of New York or Boston, Massachusetts.  Notice of every meeting of Holders of Securities, setting forth
the time and the place of such meeting, in general terms the action proposed to
be taken at such meeting and the percentage of the principal amount of the
Outstanding Securities which shall constitute a quorum at such meeting, shall
be given, in the manner provided in Section 14.2 hereof, not less than 21
nor more than 180 days prior to the date fixed for the meeting.

 

(b)                                 In
case at any time the Company, pursuant to a Board Resolution, or the Holders of
at least 10% in principal amount of the Outstanding Securities shall have
requested the Trustee to call a meeting of the Holders of Securities for any
purpose specified in Section 8.1 hereof, by written request setting forth
in reasonable detail the action proposed to be taken at the meeting, and the
Trustee shall not have made the first publication of the notice of such meeting
within 21 days after receipt of such request or shall not thereafter proceed to
cause the meeting to be held as provided herein, then the Company or the
Holders of Securities in the amount specified, as the case may be, may
determine the time and the place in The City of New York or Boston,
Massachusetts for such meeting and may call such meeting for such purposes by
giving notice thereof as provided in paragraph (a) of this Section.

 

SECTION 8.3                                                  Persons
Entitled To Vote at Meetings.

 

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

 

48

 

SECTION 8.4                                                  Quorum;
Action.

 

The Persons entitled to
vote a majority in aggregate principal amount of the Outstanding Securities
shall constitute a quorum.  In the
absence of a quorum within 30 minutes of the time appointed for any such
meeting, the meeting shall, if convened at the request of Holders of
Securities, be dissolved.  In any other
case, the meeting may be adjourned for a period of not less than 10 days as
determined by the chairman of the meeting prior to the adjournment of such
meeting.  In the absence of a quorum at
any such adjourned meeting, such adjourned meeting may be further adjourned for
a period of not less than 10 days as determined by the chairman of the meeting
prior to the adjournment of such adjourned meeting.  Notice of the reconvening of any adjourned meeting shall be given
as provided in Section 8.2(a) hereof, except that such notice need be
given only once and not less than five days prior to the date on which the
meeting is scheduled to be reconvened.

 

At a meeting or an
adjourned meeting duly reconvened and at which a quorum is present as
aforesaid, any resolution and all matters (except as limited by the second
paragraph of Section 7.2 hereof) shall be effectively passed and decided
if passed or decided by the Persons entitled to vote not less than a majority
in aggregate principal amount of Outstanding Securities represented and voting
at such meeting.

 

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

 

SECTION 8.5                                                  Determination
of Voting Rights; Conduct and Adjournment of Meetings.

 

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

 

(b)                                 The
Trustee shall, by an instrument in writing, appoint a temporary chairman (which
may be the Trustee) of the meeting, unless the meeting shall have been called
by the Company or by Holders of Securities as provided in Section 8.2(b)
hereof, in which case the Company or the Holders of Securities calling the
meeting, as the case may be, shall in like manner appoint a temporary
chairman.  A permanent chairman and a
permanent secretary of the meeting shall be elected by vote of the Persons entitled
to vote a majority in principal amount of the Outstanding Securities
represented at the meeting.

 

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

 

49

 

(d)                                 Any
meeting of Holders of Securities duly called pursuant to Section 8.2
hereof at which a quorum is present may be adjourned from time to time by
Persons entitled to vote a majority in principal amount of the Outstanding
Securities represented at the meeting, and the meeting may be held as so
adjourned without further notice.

 

SECTION 8.6                                                  Counting
Votes and Recording Action of Meetings.

 

The vote upon any
resolution submitted to any meeting of Holders of Securities shall be by
written ballots on which shall be subscribed the signatures of the Holders of
Securities or of their representatives by proxy and the principal amounts and
serial numbers of the Outstanding Securities held or represented by them.  The permanent chairman of the meeting shall
appoint two inspectors of votes who shall count all votes cast at the meeting
for or against any resolution and who shall make and file with the secretary of
the meeting their verified written reports in duplicate of all votes cast at
the meeting.  A record, at least in
duplicate, of the proceedings of each meeting of Holders of Securities shall be
prepared by the secretary of the meeting and there shall be attached to said
record the original reports of the inspectors of votes on any vote by ballot
taken thereat and affidavits by one or more Persons having knowledge of the
facts setting forth a copy of the notice of the meeting and showing that said
notice was given as provided in Section 8.2 hereof and, if applicable,
Section 8.4 hereof.  Each copy
shall be signed and verified by the affidavits of the permanent chairman and
secretary of the meeting and one such copy shall be delivered to the Company
and another to the Trustee to be preserved by the Trustee, the latter to have
attached thereto the ballots voted at the meeting.  Any record so signed and verified shall be conclusive evidence of
the matters therein stated.

 

ARTICLE 9

 

COVENANTS

 

SECTION 9.1                                                  Payment
of Principal, Premium and Interest.

 

The Company will duly and
punctually pay the principal of and premium, if any, and interest (including
Liquidated Damages, if any) in respect of the Securities in accordance with the
terms of the Securities and this Indenture. 
The Company will deposit or cause to be deposited with the Trustee as
directed by the Trustee, no later than 11:00 a.m. on the day of the Stated
Maturity of any Security or installment of interest (including Liquidated
Damages, if any), all payments so due.

 

SECTION 9.2                                                  Maintenance
of Offices or Agencies.

 

The Company hereby
appoints the Trustee’s Corporate Trust Office as its office in The City of New
York, where Securities may be:

 

(i)                                     presented
or surrendered for payment;

 

(ii)                                  surrendered
for registration of transfer or exchange;

 

(iii)                               surrendered
for conversion;

 

50

 

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

 

The Company may at any
time and from time to time vary or terminate the appointment of any such office
or appoint any additional offices for any or all of such purposes; provided,
however, that until all of the Securities have been delivered to the Trustee
for cancellation, or moneys sufficient to pay the principal of and premium, if
any, and interest (including Liquidated Damages, if any) on the Securities have
been made available for payment and either paid or returned to the Company
pursuant to the provisions of Section 9.3 hereof, the Company will
maintain in The City of New York, an office or agency where Securities may be
presented or surrendered for payment, where Securities may be surrendered for
registration of transfer or exchange, where Securities may be surrendered for
conversion and where notices and demands to or upon the Company in respect of
the Securities and this Indenture may be served.  The Company will give prompt written notice to the Trustee, and
notice to the Holders in accordance with Section 14.2 hereof, of the
appointment or termination of any such agents and of the location and any
change in the location of any such office or agency.

 

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

 

SECTION 9.3                                                  Corporate
Existence.

 

Subject to Article 6
hereof, the Company will do or cause to be done all things necessary to
preserve and keep in full force and effect its corporate existence, rights
(charter and statutory) and franchises; provided, however, that the Company
shall not be required to preserve any such right or franchise if the Company
determines that the preservation thereof is no longer desirable in the conduct
of the business of the Company and that the loss thereof is not disadvantageous
in any material respect to the Holders.

 

SECTION 9.4                                                  Maintenance
of Properties.

 

The Company will maintain
and keep its properties and every part thereof in such repair, working order
and condition, and make or cause to be made all such needful and proper
repairs, renewals and replacements thereto, as in the judgment of the Company
are necessary in the interests of the Company; provided, however, that nothing
contained in this Section shall prevent the Company from selling,
abandoning or otherwise disposing of any of its properties or discontinuing a
part of its business from time to time if, in the judgment of the Company, such
sale, abandonment, disposition or discontinuance is advisable and does not
materially adversely affect the interests or business of the Company.

 

SECTION 9.5                                                  Payment
of Taxes and Other Claims.

 

The Company will, and
will cause any Significant Subsidiary to, promptly pay and discharge or cause
to be paid and discharged all material taxes, assessments and governmental
charges or levies lawfully imposed upon it or upon its income or profits or
upon any of its property, real or personal, or upon any part thereof, as well
as all material claims for labor,

 

51

 

materials and supplies
which, if unpaid, might by law become a lien or charge upon its property;
provided, however, that neither the Company nor any Significant Subsidiary
shall be required to pay or discharge or cause to be paid or discharged any
such tax, assessment, charge, levy, or claim if the amount, applicability or
validity thereof shall currently be contested in good faith by appropriate
proceedings and if the Company or such Significant Subsidiary, as the case may
be, shall have set aside on its books reserves deemed by it adequate with
respect thereto.

 

SECTION 9.6                                                  Reports.

 

(a)                                  The
Company shall deliver to the Trustee within 15 days after it files them with
the SEC copies of the annual reports and of the information, documents, and
other reports (or copies of such portions of any of the foregoing as the SEC
may by rules and regulations prescribe) which the Company is required to file
with the SEC pursuant to Section 13 or 15(d) of the Exchange Act;
provided, however, the Company shall not be required to deliver to the Trustee
any materials for which the Company has sought and received confidential
treatment by the SEC.  The Company also
shall comply with the other provisions of Section 314(a) of the TIA.

 

(b)                                 If
at any time the Company is not subject to Section 13 or 15(d) of the
Exchange Act, upon the request of a Holder of a Security, the Company will
promptly furnish or cause to be furnished to such Holder or to a prospective
purchaser of such Security designated by such Holder, as the case may be, the
information, if any, required to be delivered by it pursuant to Rule 144A(d)(4)
under the Securities Act to permit compliance with Rule 144A in connection with
the resale of such Security; provided, however, that the Company shall not be
required to furnish such information in connection with any request made on or
after the date which is two years from the later of the date such security was
last acquired from the Company or an Affiliate of the Company.

 

SECTION 9.7                                                  Compliance
Certificate.

 

The Company shall deliver
to the Trustee, within 90 days after the end of each fiscal year of the
Company, an Officers’ Certificate stating that in the course of the performance
by the signers of their duties as Officers of the Company, they would normally
have knowledge of any failure by the Company to comply with all conditions, or
Default by the Company with respect to any covenants, under this Indenture, and
further stating whether or not they have knowledge of any such failure or
Default and, if so, specifying each such failure or Default and the nature
thereof.  Within five Business Days of
an Officer of the Company coming to have actual knowledge of a Default,
regardless of the date, the Company shall deliver an Officers’ Certificate to
the Trustee specifying such Default and the nature and status thereof.

 

SECTION 9.8                                                  Resale
of Certain Securities.

 

During the period of two
years after the last date of original issuance of any Securities, the Company
shall not, and shall not permit any of its Affiliates to, resell any
Securities, or shares of Common Stock issuable upon conversion of the
Securities, which constitute “restricted securities” under Rule 144, that are
acquired by any of them within the United States or to “U.S. persons” (as
defined in Regulation S) except pursuant to an effective registration statement
under

 

52

 

the Securities Act or an
applicable exemption therefrom.  The
Trustee shall have no responsibility or liability in respect of the Company’s
performance of its agreement in the preceding sentence.

 

ARTICLE 10

 

REDEMPTION OF
SECURITIES

 

SECTION 10.1                                            Optional
Redemption.

 

Prior to
February 15, 2007, the Company cannot redeem the Securities.  The Company may, on or after
February 15, 2007, at its option, redeem the Securities in whole or in
part on any date from time to time, upon notice as set forth in
Section 10.5, at a redemption price, payable in cash, equal to 100% of the
principal amount of the Securities redeemed plus accrued and unpaid interest
(including any Liquidated Damages), if any, to but excluding the date of
redemption.

 

If the Paying Agent hold
money sufficient to pay the redemption price due on a Security on the date of redemption
in accordance with the terms hereof, then, on and after such date of
redemption, the Security will cease to be outstanding, and interest on such
Security will cease to accrue, whether or not the Security is delivered to the
Paying Agent.  Thereafter, all other
rights of the Holder terminate, other than the right to receive the redemption
price upon delivery of the Security.

 

SECTION 10.2                                            [Reserved].

 

SECTION 10.3                                            Notice
to Trustee.

 

If the Company elects to
redeem Securities pursuant to the redemption provisions of Section 10.1
hereof, it shall notify the Trustee at least 20 days prior to the redemption
date of such intended redemption date, the principal amount of Securities to be
redeemed and the CUSIP numbers of the Securities to be redeemed.

 

SECTION 10.4                                            Selection
of Securities To Be Redeemed.

 

If fewer than all the
Securities are to be redeemed, the Trustee shall select the particular
Securities to be redeemed from the Outstanding Securities on a pro rata basis
or by lot or in accordance with any other method the Trustee considers fair and
appropriate.  Securities and portions
thereof that the Trustee selects shall be in amounts equal to the minimum
authorized denominations for Securities to be redeemed or any integral multiple
thereof.

 

If any Securities are to
be redeemed in part only, a new Security or Securities in principal amount
equal to the unredeemed principal portion thereof will be issued.

 

If any Security selected
for partial redemption is converted in part before termination of the conversion
right with respect to the portion of the Security so selected, the converted
portion of such Security shall be deemed to be the portion selected for
redemption (provided, however, that the Holder of such Security so converted
and deemed redeemed shall not be entitled to any additional interest payment as
a result of such deemed redemption than such Holder would have

 

53

 

otherwise been entitled
to receive upon conversion of such Security). 
Securities which have been converted during a selection of Securities to
be redeemed may be treated by the Trustee as Outstanding for the purpose of
such selection.

 

The Trustee shall
promptly notify the Company and the Registrar in writing of the Securities selected
for redemption and, in the case of any Securities selected for partial
redemption, the principal amount thereof to be redeemed.

 

For all purposes of this
Indenture, unless the context otherwise requires, all provisions relating to
the redemption of Securities shall relate, in the case of any Securities
redeemed or to be redeemed only in part, to the portion of the principal amount
of such Securities which has been or is to be redeemed.

 

SECTION 10.5                                            Notice
of Redemption.

 

Notice of redemption
shall be given in the manner provided in Section 14.2 hereof to the
Holders of Securities to be redeemed. 
Such notice shall be given not less than 30 nor more than 60 days prior
to the redemption date.

 

All notices of redemption
shall state:

 

(1)                                  the
redemption date;

 

(2)                                  the
redemption price and interest (including Liquidated Damages, if any) and
accrued and unpaid to the redemption date, if any;

 

(3)                                  if
fewer than all the Outstanding Securities are to be redeemed, the aggregate
principal amount of Securities to be redeemed and the aggregate principal
amount of Securities which will be outstanding after such partial redemption;

 

(4)                                  that
on the redemption date the redemption price and interest (including Liquidated
Damages, if any) accrued and unpaid to the redemption date, if any, will become
due and payable upon each such Security to be redeemed, and that interest
thereon shall cease to accrue on and after such date;

 

(5)                                  the
Conversion Price, the date on which the right to convert the principal of the
Securities to be redeemed will terminate and the places where such Securities
may be surrendered for conversion;

 

(6)                                  the
place or places where such Securities are to be surrendered for payment of the
redemption price and accrued and unpaid interest, if any; and

 

(7)                                  the
CUSIP number of the Securities.

 

The notice given shall
specify the last date on which exchanges or transfers of Securities may be made
pursuant to Section 2.7 hereof, and shall specify the serial numbers of
Securities and the portions thereof called for redemption.

 

54

 

Notice of redemption of
Securities to be redeemed at the election of the Company shall be given by the
Company.

 

SECTION 10.6                                            Effect
of Notice of Redemption.

 

Notice of redemption
having been given as provided in Section 10.5 hereof, the Securities so to
be redeemed shall, on the redemption date, become due and payable at the
redemption price therein specified and from and after such date (unless the
Company shall default in the payment of the redemption price and accrued and
unpaid interest (including Liquidated Damages, if any)) such Securities shall
cease to bear interest.  Upon surrender
of any such Security for redemption in accordance with such notice, such
Security shall be paid by the Company at the redemption price plus accrued and
unpaid interest (including any Liquidated Damages), if any; provided, however,
that the installments of interest on Securities whose Stated Maturity is prior
to or on the redemption date shall be payable to the Holders of such
Securities, or one or more Predecessor Securities, registered as such on the
relevant Record Date according to their terms and the provisions of
Section 2.1 hereof.

 

If any Security called
for redemption shall not be so paid upon surrender thereof for redemption, the
principal and premium, if any, shall, until paid, bear interest from the
redemption date at the Interest Rate.

 

SECTION 10.7                                            Deposit
of Redemption Price.

 

Prior to or on any
redemption date, the Company shall deposit with the Trustee or with a Paying
Agent an amount of money sufficient to pay the redemption price of all the
Securities to be redeemed on that redemption date, other than any Securities
called for redemption on that date which have been converted prior to the date
of such deposit, and accrued and unpaid interest (including any Liquidated
Damages), if any, on such Securities.

 

If any Security called
for redemption is converted, any money deposited with the Trustee or with a
Paying Agent or so segregated and held in trust for the redemption of such
Security shall (subject to any right of the Holder of such Security or any
Predecessor Security to receive interest as provided in Section 2.1
hereof) be paid to the Company on Company Request or, if then held by the Company,
shall be discharged from such trust.

 

SECTION 10.8                                            Securities
Redeemed in Part.

 

Any Security which is to
be redeemed only in part shall be surrendered at an office or agency of the
Company designated for that purpose pursuant to Section 9.2 hereof (with,
if the Company or the Trustee so requires, due endorsement by, or a written
instrument of transfer in form satisfactory to the Company and the Trustee duly
executed by, the Holder thereof or the Holder’s attorney duly authorized in
writing), and 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 any authorized denomination as requested by such Holder in
aggregate principal amount equal to and in exchange for the unredeemed portion
of the principal of the Security so surrendered.

 

55

 

ARTICLE 11

 

REPURCHASE AT THE
OPTION OF A HOLDER UPON A CHANGE OF CONTROL

 

SECTION 11.1                                            Repurchase
Right.

 

In the event that a
Change of Control shall occur, each Holder shall have the right (the
“Repurchase Right”), at the Holder’s option, but subject to the provisions of
Section 11.2 hereof, to require the Company to repurchase, and upon the
exercise of such right the Company shall repurchase, all of such Holder’s
Securities not theretofore called for redemption, or any portion of the
principal amount thereof that is equal to $1,000 or any integral multiple
thereof (provided that no single Security may be repurchased in part unless the
portion of the principal amount of such Security to be Outstanding after such
repurchase is equal to $1,000 or integral multiples thereof), on the date (the
“Repurchase Date”) that is 45 days after the date of the Company Notice at a purchase
price equal to 100% of the principal amount of the Securities to be repurchased
(the “Repurchase Price”), plus interest (including Liquidated Damages, if any)
accrued and unpaid to, but excluding, the Repurchase Date; provided, however,
that installments of interest on Securities whose Stated Maturity is prior to
or on the Repurchase Date shall be payable to the Holders of such Securities,
or one or more Predecessor Securities, registered as such on the relevant
Record Date according to their terms and the provisions of Section 2.1
hereof.

 

Subject to the
fulfillment by the Company of the conditions set forth in Section 11.2
hereof, the Company may elect to pay the Repurchase Price by delivering the
number of shares of Common Stock equal to (i) the Repurchase Price divided by
(ii) 95% of the average of the Closing Prices per share of Common Stock for the
five consecutive Trading Days immediately preceding and including the third
Trading Day prior to the Repurchase Date.

 

Whenever in this
Indenture (including Sections 2.2, 4.1(a) and 4.7 hereof) or Exhibit A annexed
hereto there is a reference, in any context, to the principal of any Security
as of any time, such reference shall be deemed to include reference to the
Repurchase Price payable in respect to such Security to the extent that such
Repurchase Price is, was or would be so payable at such time, and express
mention of the Repurchase Price in any provision of this Indenture shall not be
construed as excluding the Repurchase Price in those provisions of this
Indenture when such express mention is not made; provided, however, that, for
the purposes of Article 13 hereof, such reference shall be deemed to
include reference to the Repurchase Price only to the extent the Repurchase
Price is payable in cash.

 

SECTION 11.2                                            Conditions
to the Company’s Election To Pay the Repurchase Price in Common Stock.

 

(a)                                  The
shares of Common Stock to be issued upon repurchase of Securities hereunder:

 

(i)                                     shall
not require registration under any federal securities law before such shares
may be freely transferable without being subject to any transfer restrictions
under the Securities

 

56

 

Act upon repurchase or,
if such registration is required, such registration shall be completed and
shall become effective prior to the Repurchase Date; and

 

(ii)                                  shall
not require registration with, or approval of, any governmental authority under
any state law or any other federal law before shares may be validly issued or
delivered upon repurchase or if such registration is required or such approval
must be obtained, such registration shall be completed or such approval shall
be obtained prior to the Repurchase Date.

 

(b)                                 The
shares of Common Stock to be issued upon repurchase of Securities hereunder
are, or shall have been, approved for listing on the Nasdaq National Market or
the New York Stock Exchange or listed on another national securities exchange,
in any case, prior to the Repurchase Date.

 

(c)                                  All
shares of Common Stock which may be issued upon repurchase of Securities will
be issued out of the Company’s authorized but unissued Common Stock and will,
upon issue, be duly and validly issued and fully paid and nonassessable and
free of any preemptive or similar rights.

 

(d)                                 If
any of the conditions set forth in clauses (a) through (c) of this
Section 11.2 are not satisfied in accordance with the terms thereof, the
Repurchase Price shall be paid by the Company only in cash.

 

SECTION 11.3                                            Notices;
Method of Exercising Repurchase Right, Etc.

 

(a)                                  Unless
the Company shall have theretofore called for redemption all of the Outstanding
Securities, prior to or on the 30th day after the occurrence of a Change of
Control, the Company, or, at the written request and expense of the Company
prior to or on the 30th day after such occurrence, the Trustee, shall give to
all Holders of Securities notice, in the manner provided in Section 14.2
hereof, of the occurrence of the Change of Control and of the Repurchase Right
set forth herein arising as a result thereof (the “Company Notice”).  The Company shall also deliver a copy of
such notice of a Repurchase Right to the Trustee.  Each notice of a Repurchase Right shall state:

 

(1)                                  the
Repurchase Date;

 

(2)                                  the
date by which the Repurchase Right must exercised;

 

(3)                                  the
Repurchase Price and accrued and unpaid interest (including any Liquidated
Damages), if any, and whether the Repurchase Price shall be paid by the Company
in cash or by delivery of shares of Common Stock;

 

(4)                                  a
description of the procedure which a Holder must follow to exercise a
Repurchase Right, and the place or places where such Securities, are to be
surrendered for payment of the Repurchase Price and accrued and unpaid interest
(including any Liquidated Damages), if any;

 

(5)                                  that
on the Repurchase Date the Repurchase Price and accrued and unpaid interest
(including any Liquidated Damages), if any, will become due and payable upon

 

57

 

each such Security
designated by the Holder to be repurchased, and that interest thereon shall
cease to accrue on and after said date;

 

(6)                                  the
Conversion Rate then in effect, the date on which the right to convert the
principal amount of the Securities to be repurchased will terminate and the
place where such Securities may be surrendered for conversion, and

 

(7)                                  the
place or places where such Securities, together with the Option to Elect
Repayment Upon a Change of Control certificate included in Exhibit A annexed
hereto are to be delivered for payment of the Repurchase Price and accrued and
unpaid interest (including any Liquidated Damages), if any.

 

No failure of the Company
to give the foregoing notices or defect therein shall limit any Holder’s right
to exercise a Repurchase Right or affect the validity of the proceedings for
the repurchase of Securities.

 

If any of the foregoing
provisions or other provisions of this Article 11 are inconsistent with
applicable law, such law shall govern.

 

(b)                                 To
exercise a Repurchase Right, a Holder shall deliver to the Trustee prior to or
on the 30th day after the date of the Company Notice:

 

(1)                                  written
notice of the Holder’s exercise of such right, which notice shall set forth the
name of the Holder, the principal amount of the Securities to be repurchased
(and, if any Security is to be repurchased in part, the serial number thereof,
the portion of the principal amount thereof to be repurchased) and a statement
that an election to exercise the Repurchase Right is being made thereby, and,
in the event that the Repurchase Price shall be paid in shares of Common Stock,
the name or names (with addresses) in which the certificate or certificates for
shares of Common Stock shall be issued, and

 

(2)                                  the
Securities with respect to which the Repurchase Right is being exercised.

 

Such written notice shall
be irrevocable, except that the right of the Holder to convert the Securities
with respect to which the Repurchase Right is being exercised shall continue
until the close of business on the Business Day immediately preceding the Repurchase
Date.

 

(c)                                  In
the event a Repurchase Right shall be exercised in accordance with the terms
hereof, the Company shall pay or cause to be paid to the Trustee the Repurchase
Price in cash for payment to the Holder on the Repurchase Date or, if shares of
Common Stock are to be paid, shares of Common Stock, as provided above, as
promptly after the Repurchase Date as practicable, together with accrued and
unpaid interest (including any Liquidated Damages, if any) to the Repurchase
Date payable in cash with respect to the Securities as to which the Repurchase
Right has been exercised; provided, however, that installments of interest that
mature prior to or on the Repurchase Date shall be payable in cash to the
Holders of such Securities, or one or more Predecessor Securities, registered
as such at the close of business on the relevant Regular Record Date.

 

58

 

(d)                                 If
any Security (or portion thereof) surrendered for repurchase shall not be so
paid on the Repurchase Date, the principal amount of such Security (or portion
thereof, as the case may be) shall, until paid, bear interest to the extent
permitted by applicable law from the Repurchase Date at the Interest Rate, and
each Security shall remain convertible into Common Stock until the principal of
such Security (or portion thereof, as the case may be) shall have been paid or
duly provided for.

 

(e)                                  Any
Security which is to be repurchased only in part shall be surrendered to the
Trustee (with, if the Company or the Trustee so requires, due endorsement by,
or a written instrument of transfer in form satisfactory to the Company and the
Trustee duly executed by the Holder thereof or his attorney duly authorized in
writing), and the Company shall execute, and the Trustee shall authenticate and
make available for delivery to the Holder of such Security without service
charge, a new Security or Securities, containing identical terms and
conditions, each in an authorized denomination in aggregate principal amount
equal to and in exchange for the unrepurchased portion of the principal of the
Security so surrendered.

 

(f)                                    Any
issuance of shares of Common Stock in respect of the Repurchase Price shall be
deemed to have been effected immediately prior to the close of business on the
Repurchase Date and the Person or Persons in whose name or names any
certificate or certificates for shares of Common Stock shall be issuable upon
such repurchase shall be deemed to have become on the Repurchase Date the
holder or holders of record of the shares represented thereby; provided,
however, that any surrender for repurchase on a date when the stock transfer
books of the Company shall be closed shall constitute the Person or Persons in
whose name or names the certificate or certificates for such shares are to be
issued as the record holder or holders thereof for all purposes at the opening
of business on the next succeeding day on which such stock transfer books are
open.  No payment or adjustment shall be
made for dividends or distributions on any Common Stock issued upon repurchase
of any Security declared prior to the Repurchase Date.

 

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

 

(h)                                 Any
issuance and delivery of certificates for shares of Common Stock on repurchase
of Securities shall be made without charge to the Holder of Securities being
repurchased for such certificates or for any tax or duty in respect of the
issuance or delivery of such certificates or the Securities represented thereby;
provided, however, that the Company shall not be required to pay any tax or
duty which may be payable in respect of (i) income of the Holder or (ii) any
transfer involved in the issuance or delivery of certificates for shares of
Common Stock in a name other than that of the Holder of the Securities being
repurchased, and

 

59

 

no such issuance or
delivery shall be made unless the Persons requesting such issuance or delivery
has paid to the Company the amount of any such tax or duty or has established,
to the satisfaction of the Company, that such tax or duty has been paid.

 

(i)                                     All
Securities delivered for repurchase shall be delivered to the Trustee to be
canceled at the direction of the Trustee, which shall dispose of the same as
provided in Section 2.15 hereof.

 

ARTICLE 12

 

CONVERSION OF
SECURITIES

 

SECTION 12.1                                            Conversion
Right and Conversion Price.

 

Subject to and upon
compliance with the provisions of this Article, at the option of the Holder
thereof, any Security or any portion of the principal amount thereof which is
$1,000 or an integral multiple of $1,000 may be converted at the principal
amount thereof, or of such portion thereof, into the number of duly authorized,
fully paid and nonassessable shares of Common Stock obtained by dividing the
aggregate principal amount of such Security (or portion thereof) surrendered
for conversion by the Conversion Price, determined as hereinafter provided, in
effect at the time of conversion.  Such
conversion right shall expire at the close of business on February 14,
2011.

 

In case a Security or
portion thereof is called for redemption, such conversion right in respect of
the Security or the portion so called, shall expire at the close of business on
the Business Day immediately preceding the redemption date, unless the Company
defaults in making the payment due upon redemption.  In the case of a Change of Control for which the Holder exercises
its Repurchase Right in respect of a Security or portion thereof, such
conversion right in respect of the Security or portion thereof shall expire at
the close of business on the Business Day immediately preceding the Repurchase
Date.

 

The price at which shares
of Common Stock shall be delivered upon conversion (the “Conversion Price”)
shall be initially equal to $14.94 per share of Common Stock.  The Conversion Price shall be adjusted in
certain instances as provided in paragraphs (a), (b), (c), (d), (e), (f), (h)
and (l) of Section 12.4 hereof.

 

SECTION 12.2                                            Exercise
of Conversion Right.

 

To exercise the
conversion right, the Holder of any Security to be converted shall surrender
such Security duly endorsed or assigned to the Company or in blank, at the
office of any Conversion Agent, accompanied by a duly signed conversion notice
substantially in the form attached to the Security to the Company stating that
the Holder elects to convert such Security or, if less than the entire
principal amount thereof is to be converted, the portion thereof to be
converted.

 

Any Security surrendered
for conversion during the period between the close of business on any Regular
Record Date and prior to the corresponding Interest Payment Date shall be
accompanied by payment in New York Clearing House funds or other funds
acceptable to the

 

60

 

Company of an amount
equal to the interest (including Liquidated Damages, if any) to be received by
the Holder on such Interest Payment Date on the principal amount of the
Security being surrendered for conversion. 
Notwithstanding the foregoing, any Holder which during such period
surrenders for conversion any Security which has been called for redemption by
the Company in a notice of redemption given by the Company pursuant to
Section 10.5 hereof (whether the redemption date for such Security is on
such Interest Payment Date or otherwise) need not pay the Company an amount
equal to the interest (including Liquidated Damages, if any) on the principal
amount of such Security so converted at the time such Holder surrenders such
Security for conversion.

 

Securities shall be
deemed to have been converted immediately prior to the close of business on the
day of surrender of such Securities for conversion in accordance with the
foregoing provisions, and at such time the rights of the Holders of such
Securities as Holders shall cease, and the Person or Persons entitled to
receive the Common Stock issuable upon conversion shall be treated for all
purposes as the record holder or holders of such Common Stock at such time.  As promptly as practicable on or after the
conversion date, the Company shall cause to be issued and delivered to such
Conversion Agent a certificate or certificates for the number of full shares of
Common Stock issuable upon conversion, together with payment in lieu of any
fraction of a share as provided in Section 12.3 hereof.

 

In the case of any
Security which is converted in part only, upon such conversion the Company
shall execute and the Trustee shall authenticate and deliver to the Holder
thereof, at the expense of the Company, a new Security or Securities of
authorized denominations in aggregate principal amount equal to the unconverted
portion of the principal amount of such Securities.

 

If shares of Common Stock
to be issued upon conversion of a Restricted Security, or Securities to be
issued upon conversion of a Restricted Security in part only, are to be
registered in a name other than that of the Holder of such Restricted Security,
such Holder must deliver to the Conversion Agent a certificate in substantially
the form set forth in the form of Security set forth in Exhibit A annexed
hereto, dated the date of surrender of such Restricted Security and signed by
such Holder, as to compliance with the restrictions on transfer applicable to
such Restricted Security.  Neither the
Trustee nor any Conversion Agent, Registrar or Transfer Agent shall be required
to register in a name other than that of the Holder shares of Common Stock or
Securities issued upon conversion of any such Restricted Security (i) not so
accompanied by a properly completed certificate or (ii) the Holder does not
comply with the applicable restrictions on transfer set forth in Sections 2.7,
2.8 and 2.9 of this Indenture.

 

The Company hereby
initially appoints the Trustee as the Conversion Agent.

 

Except as provided in
Section 2.1 and this Article 12, no payment or other adjustment shall
be made for interest accrued on any Security converted or for dividends on any
shares of Common Stock issued upon conversion of such Security.  Accrued and unpaid interest on any Security
at the time of conversion will be treated as paid in stock.

 

61

 

SECTION 12.3                                            Fractions
of Shares.

 

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

 

SECTION 12.4                                            Adjustment
of Conversion Price.

 

The Conversion Price
shall be subject to adjustments, calculated by the Company, from time to time
as follows:

 

(a)                                  In
case the Company shall hereafter pay a dividend or make a distribution to all
holders of the outstanding Common Stock in shares of Common Stock, the
Conversion Price in effect at the opening of business on the date following the
date fixed for the determination of stockholders entitled to receive such
dividend or other distribution shall be reduced by multiplying such Conversion
Price by a fraction:

 

(i)                                     the
numerator of which shall be the number of shares of Common Stock outstanding at
the close of business on the Record Date (as defined in Section 12.4(g))
fixed for such determination, and

 

(ii)                                  the
denominator of which shall be the sum of such number of shares and the total
number of shares constituting such dividend or other distribution.

 

Such reduction shall
become effective immediately after the opening of business on the day following
the Record Date.  If any dividend or
distribution of the type described in this Section 12.4(a) is declared but
not so paid or made, the Conversion Price shall again be adjusted to the
Conversion Price which would then be in effect if such dividend or distribution
had not been declared.

 

(b)                                 In
case the outstanding shares of Common Stock shall be subdivided into a greater
number of shares of Common Stock, the Conversion Price in effect at the opening
of business on the day following the day upon which such subdivision becomes
effective shall be proportionately reduced, and conversely, in case outstanding
shares of Common Stock shall be combined into a smaller number of shares of
Common Stock, the Conversion Price in effect at the opening of business on the
day following the day upon which such combination becomes effective shall be
proportionately increased, such reduction or increase, as the case may be, to
become effective immediately after the opening of business on the day following
the day upon which such subdivision or combination becomes effective.

 

(c)                                  In
case the Company shall issue rights or warrants (other than any rights or
warrants referred to in Section 12.4(d)) to all holders of its outstanding
shares of Common Stock

 

62

 

entitling them 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 (as defined in Section 12.4(g))
on the Record Date fixed for the determination of stockholders entitled to
receive such rights or warrants, the Conversion Price shall be reduced so that
the same shall equal the price determined by multiplying the Conversion Price
in effect at the opening of business on the date after such Record Date by a
fraction:

 

(i)                                     the
numerator of which shall be the number of shares of Common Stock outstanding at
the close of business on the Record Date plus the number of shares which the
aggregate offering price of the total number of shares so offered for
subscription or purchase (or the aggregate conversion price of the convertible
securities so offered) would purchase at such Current Market Price, and

 

(ii)                                  the
denominator of which shall be the number of shares of Common Stock outstanding
on the close of business on the Record Date plus the total number of additional
shares of Common Stock so offered for subscription or purchase (or into which
the convertible securities so offered are convertible).

 

Such adjustment shall
become effective immediately after the opening of business on the day following
the Record Date fixed for determination of stockholders entitled to receive
such rights or warrants.  To the extent
that shares of Common Stock (or securities convertible into Common Stock) are
not delivered pursuant to such rights or warrants, upon the expiration or
termination of such rights or warrants the Conversion Price shall be readjusted
to the Conversion Price which would then be in effect had the adjustments made
upon the issuance of such rights or warrants been made on the basis of the
delivery of only the number of shares of Common Stock (or securities
convertible into Common Stock) actually delivered.  In the event that such rights or warrants are not so issued, the
Conversion Price shall again be adjusted to be the Conversion Price which would
then be in effect if such date fixed for the determination of stockholders
entitled to receive such rights or warrants had not been fixed.  In determining whether any rights or warrants
entitle the holders to subscribe for or purchase shares of Common Stock at less
than such Current Market Price, and in determining the aggregate offering price
of such shares of Common Stock, there shall be taken into account any
consideration received for such rights or warrants, the value of such
consideration if other than cash, to be determined by the Board of Directors.

 

(d)                                 In
case the Company shall, by dividend or otherwise, distribute to all holders of
its Common Stock shares of any class of capital stock of the Company (other
than any dividends or distributions to which Section 12.4(a) applies) or
evidences of its indebtedness, cash or other assets, including securities, but
excluding (1) any rights or warrants referred to in Section 12.4(c), (2)
any stock, securities, dividends or other property or assets or distributions
(including cash) distributed in connection with a reclassification, change,
merger, consolidation, statutory share exchange, combination, sale or
conveyance to which Section 12.11 hereof applies and (3) dividends and
distributions paid exclusively in cash (the securities described in foregoing
clauses (1), (2) and (3) hereinafter in this Section 12.4(d) called the
“securities”), then, in each such case, subject to the second succeeding
paragraph of this Section 12.4(d), the Conversion Price shall be reduced
so that the same shall be equal to the price determined by multiplying the
Conversion

 

63

 

Price in effect
immediately prior to the close of business on the Record Date (as defined in
Section 12.4(g)) with respect to such distribution by a fraction:

 

(i)                                     the
numerator of which shall be the Current Market Price (determined as provided in
Section 12.4(g)) on such date less the fair market value (as determined by
the Board of Directors, whose determination shall be conclusive and set forth
in a Board Resolution) on such date of the portion of the shares of capital
stock, evidences of indebtedness, cash or other assets, including securities,
so distributed applicable to one share of Common Stock (determined on the basis
of the number of shares of the Common Stock outstanding on the Record Date),
and

 

(ii)                                  the
denominator of which shall be such Current Market Price on such date.

 

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

 

If the Board of Directors
determines the fair market value of any distribution for purposes of this
Section 12.4(d) by reference to the actual or when issued trading market
for any securities comprising all or part of such distribution, it must in
doing so consider the prices in such market over the same period (the
“Reference Period”) used in computing the Current Market Price pursuant to
Section 12.4(g) to the extent possible, unless the Board of Directors in a
Board Resolution determines in good faith that determining the fair market
value during the Reference Period would not be in the best interest of the
Holder.

 

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

 

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

 

(ii)                                  are
not exercisable; and

 

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

 

shall be deemed not to
have been distributed for purposes of this Section 12.4(d) (and no
adjustment to the Conversion Price under this Section 12.4(d) will be
required) until the occurrence of the earliest Trigger Event.  If such right or warrant is subject to
subsequent events, upon the occurrence of which such right or warrant shall
become exercisable to purchase different securities, evidences of indebtedness
or other assets or entitle the holder to purchase a

 

64

 

different number or
amount of the foregoing or to purchase any of the foregoing at a different
purchase price, then the occurrence of each such event shall be deemed to be
the date of issuance and record date with respect to a new right or warrant
(and a termination or expiration of the existing right or warrant without
exercise by the holder thereof).  In
addition, in the event of any distribution (or deemed distribution) of rights
or warrants, or any Trigger Event or other event (of the type described in the
preceding sentence) with respect thereto, that resulted in an adjustment to the
Conversion Price under this Section 12.4(d):

 

(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 of Common Stock with respect to such rights or warrant (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 all of which shall have expired or been
terminated without exercise, the Conversion Price shall be readjusted as if
such rights and warrants had never been issued.

 

For purposes of
this Section 12.4(d) and Sections 12.4(a), 12.4(b) and 12.4(c), any
dividend or distribution to which this Section 12.4(d) is applicable that
also includes shares of Common Stock, a subdivision or combination of Common
Stock to which Section 12.4(b) applies, or rights or warrants to subscribe
for or purchase shares of Common Stock to which Section 12.4(c) applies
(or any combination thereof), shall be deemed instead to be:

 

(1)                                  a
dividend or distribution of the evidences of indebtedness, assets, shares of
capital stock, rights or warrants other than such shares of Common Stock, such
subdivision or combination or such rights or warrants to which Sections
12.4(a), 12.4(b) and 12.4(c) apply, respectively (and any Conversion Price reduction
required by this Section 12.4(d) with respect to such dividend or
distribution shall then be made), immediately followed by

 

(2)                                  a
dividend or distribution of such shares of Common Stock, such subdivision or
combination or such rights or warrants (and any further Conversion Price
reduction required by Sections 12.4(a), 12.4(b) and 12.4(c) with respect to
such dividend or distribution shall then be made), except:

 

(A)                              the
Record Date of such dividend or distribution shall be substituted as (x) “the date
fixed for the determination of stockholders entitled to receive such dividend
or other distribution,” “Record Date fixed for such determination” and “Record
Date” within the meaning of Section 12.4(a), (y) “the day upon which such
subdivision becomes effective” and “the day upon which such combination becomes
effective” within the meaning of Section 12.4(b), and (z) as “the Record
Date fixed for the determination of stockholders entitled to receive such
rights or warrants,” such “Record

 

65

 

Date,” “the Record Date
fixed for the determination of stockholders entitled to receive such rights or
warrants” and “such dated fixed for the determination of stockholders entitled
to receive such rights or warrants” within the meaning of Section 12.4(c),
and

 

(B)                                any
shares of Common Stock included in such dividend or distribution shall not be
deemed “outstanding at the close of business on the Record Date fixed for such
determination” within the meaning of Section 12.4(a) and any reduction or
increase in the number of shares of Common Stock resulting from such
subdivision or combination shall be disregarded in connection with such
dividend or distribution.

 

(e)                                  In
case the Company shall, by dividend or otherwise, distribute to all holders of
its Common Stock cash (excluding any cash that is distributed upon a
reclassification, change, merger, consolidation, statutory share exchange,
combination, sale or conveyance to which Section 12.11 hereof applies or
as part of a distribution referred to in Section 12.4(d) hereof), in an
aggregate amount that, combined together with:

 

(1)                                  the
aggregate amount of any other such distributions to all holders of Common Stock
made exclusively in cash within the 12 months preceding the date of payment of
such distribution, and in respect of which no adjustment pursuant to this
Section 12.4(e) has been made, and

 

(2)                                  the
aggregate of any cash plus the fair market value (as determined by the Board of
Directors, whose determination shall be conclusive and set forth in a Board
Resolution), as of the expiration of the tender or exchange offer referred to
below, of consideration payable in respect of any tender or exchange offer by
the Company or any of its subsidiaries for all or any portion of the Common
Stock concluded within the 12 months preceding the date of such distribution,
and in respect of which no adjustment pursuant to Section 12.4(f) hereof
has been made,

 

exceeds 10% of the
product of the Current Market Price (determined as provided in
Section 12.4(g)) on the Record Date with respect to such distribution
times the number of shares of Common Stock outstanding on such date, then and
in each such case, immediately after the close of business on such date, the
Conversion Price shall be reduced so that the same shall equal the price
determined by multiplying the Conversion Price in effect immediately prior to
the close of business on such Record Date by a fraction:

 

(i)                                     the
numerator of which shall be equal to the Current Market Price on the Record
Date less an amount equal to the quotient of (x) the excess of such combined
amount over such 10% and (y) the number of shares of Common Stock outstanding
on the Record Date, and

 

(ii)                                  the
denominator of which shall be equal to the Current Market Price on such 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.

 

(f)                                    In
case a tender or exchange offer made by the Company or any of its subsidiaries
for all or any portion of the Common Stock shall expire and such tender or
exchange offer (as

 

66

 

amended upon the expiration
thereof) shall require the payment to stockholders (based on the acceptance (up
to any maximum specified in the terms of the tender or exchange offer) of
Purchased Shares (as defined below)) of an aggregate consideration having a
fair market value (as determined by the Board of Directors, whose determination
shall be conclusive and set forth in a Board Resolution) that combined together
with:

 

(1)                                  the
aggregate of the cash plus the fair market value (as determined by the Board of
Directors, whose determination shall be conclusive and set forth in a Board
Resolution), as of the expiration of the other tender or exchange offer
referred to below, of consideration payable in respect of any other tender or
exchange offers by the Company or any of its subsidiaries for all or any
portion of the Common Stock expiring within the preceding 12 months and in
respect of which no adjustment pursuant to this Section 12.4(f) has been
made, and

 

(2)                                  the
aggregate amount of any distributions to all holders of the Company’s Common
Stock made exclusively in cash within the preceding 12 months and in respect of
which no adjustment pursuant to Section 12.4(e) has been made, exceeds 10%
of the product of the Current Market Price (determined as provided in
Section 12.4(g)) as of the last time (the “Expiration Time”) tenders could
have been made pursuant to such tender or exchange offer (as it may be amended)
times the number of shares of Common Stock outstanding (including any tendered
or exchanged shares) on the Expiration Time, then, and in each such case,
immediately prior to the opening of business on the day after the date of the
Expiration Time, the Conversion Price shall be adjusted so that the same shall
equal the price determined by multiplying the Conversion Price in effect
immediately prior to close of business on the date of the Expiration Time by a
fraction:

 

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

 

(ii)                                  the
denominator shall be the product of the number of shares of Common Stock
outstanding (including any Purchased Shares) on the Expiration Time and the
Current Market Price of the Common Stock on the Trading Day next succeeding the
Expiration Time.

 

Such reduction (if any)
shall become effective immediately prior to the opening of business on the day
following the Expiration Time.  In the
event that the Company is obligated to purchase shares pursuant to any such
tender offer, but the Company is permanently prevented by applicable law from
effecting any such purchases or all such purchases are rescinded, the
Conversion Price shall again be adjusted to be the Conversion Price which would
then be in effect if such tender or exchange offer had not been made.  If the application of this
Section 12.4(f)

 

67

 

to any tender or exchange
offer would result in an increase in the Conversion Price, no adjustment shall
be made for such tender or exchange offer under this Section 12.4(f).

 

(g)                                 For
purposes of this Section 12.4, the following terms shall have the meanings
indicated:

 

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

 

(i)                                     the
“ex” date (as hereinafter defined) for any event (other than the issuance or
distribution requiring such computation) that requires an adjustment to the
Conversion Price pursuant to Section 12.4(a), (b), (c), (d), (e) or (f)
occurs during such ten consecutive Trading Days, the Closing Price for each
Trading Day prior to the “ex” date for such other event shall be adjusted by
multiplying such Closing Price by the same fraction by which the Conversion
Price is so required to be adjusted as a result of such other event;

 

(ii)                                  the
“ex” date for any event (other than the issuance or distribution requiring such
computation) that requires an adjustment to the Conversion Price pursuant to
Section 12.4(a), (b), (c), (d), (e) or (f) occurs on or after the “ex”
date for the issuance or distribution requiring such computation and prior to
the day in question, the Closing Price for each Trading Day on and after the
“ex” date for such other event shall be adjusted by multiplying such Closing
Price by the reciprocal of the fraction by which the Conversion Price is so
required to be adjusted as a result of such other event; and

 

(iii)                               the
“ex” date for the issuance or distribution requiring such computation is prior
to the day in question, after taking into account any adjustment required
pursuant to clause (i) or (ii) of this proviso, the Closing Price for each
Trading Day on or after such “ex” date shall be adjusted by adding thereto the
amount of any cash and the fair market value (as determined by the Board of
Directors in a manner consistent with any determination of such value for
purposes of Section 12.4(d) or (f), whose determination shall be
conclusive and set forth in a Board Resolution) of the evidences of
indebtedness, shares of capital stock or assets being distributed applicable to
one share of Common Stock as of the close of business on the day before such
“ex” date.

 

For purposes of any
computation under Section 12.4(f), the Current Market Price of the Common
Stock on any date shall be deemed to be the average of the daily Closing Prices
per share of Common Stock for such day and the next two succeeding Trading
Days; provided, however, that if the “ex” date for any event (other than the
tender offer requiring such computation) that requires an adjustment to the
Conversion Price pursuant to Section 12.4(a), (b), (c), (d), (e) or (f)
occurs on or after the Expiration Time for the tender or exchange offer
requiring such computation and prior to the day in question, the Closing Price
for each Trading Day on and after the “ex” date for such other event shall be
adjusted by multiplying such Closing Price by the reciprocal of the fraction by
which the Conversion Price is so required to be adjusted as a result of such
other event.  For purposes of this
paragraph, the term “ex” date, when used:

 

68

 

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

 

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

 

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

 

Notwithstanding the
foregoing, whenever successive adjustments to the Conversion Price are called
for pursuant to this Section 12.4, such adjustments shall be made to the
Current Market Price as may be necessary or appropriate to effectuate the
intent of this Section 12.4 and to avoid unjust or inequitable results as
determined in good faith by the Board of Directors.

 

(1)                                  HIDDEN
FOR NUMBERING

 

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

 

(3)                                  “Record
Date” shall mean, with respect to any dividend, distribution or other
transaction or event in which the holders of Common Stock have the right to
receive any cash, securities or other property or in which the Common Stock (or
other applicable security) is exchanged for or converted into any combination
of cash, securities or other property, the date fixed for determination of
stockholders entitled to receive such cash, securities or other property
(whether such date is fixed by the Board of Directors or by statute, contract
or otherwise).

 

(h)                                 The
Company may make such reductions in the Conversion Price, in addition to those
required by Section 12.4(a), (b), (c), (d), (e) or (f), as the Board of
Directors considers to be advisable to avoid or diminish any income tax to
holders of Common Stock or rights to purchase Common Stock resulting from any
dividend or distribution of stock (or rights to acquire stock) or from any
event treated as such for income tax purposes.

 

To the extent permitted
by applicable law, 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
and the reduction is irrevocable during the period and the Board of Directors
determines in good faith that such reduction would be in the best interests of
the Company, which determination shall be conclusive and set forth in a Board
Resolution.  Whenever the Conversion
Price is reduced pursuant to the preceding sentence, the Company shall mail to
the Trustee and each Holder at the address of such Holder as it appears in the
Register a notice of the reduction at least 15 days prior to the date the
reduced Conversion Price takes effect, and such notice shall state the reduced
Conversion Price and the period during which it will be in effect.

 

(i)                                     No
adjustment in the Conversion Price shall be required unless such adjustment
would require an increase or decrease of at least 1% in such price; provided,
however, that any

 

69

 

adjustments which by
reason of this Section 12.4(i) are not required to be made shall be
carried forward and taken into account in any subsequent adjustment.  All calculations under this Article 12
shall be made by the Company and shall be made to the nearest cent or to the
nearest one hundredth of a share, as the case may be.  No adjustment need be made for a change in the par value or no
par value of the Common Stock.

 

(j)                                     In
any case in which this Section 12.4 provides that an adjustment shall
become effective immediately after a Record Date for an event, the Company may
defer until the occurrence of such event (i) issuing to the Holder of any
Security converted after such Record Date and before the occurrence of such
event the additional shares of Common Stock issuable upon such conversion by
reason of the adjustment required by such event over and above the Common Stock
issuable upon such conversion before giving effect to such adjustment and (ii)
paying to such holder any amount in cash in lieu of any fraction pursuant to
Section 12.3 hereof.

 

(k)                                  For
purposes of this Section 12.4, the number of shares of Common Stock at any
time outstanding shall not include shares held in the treasury of the Company
but shall include shares issuable in respect of scrip certificates issued in
lieu of fractions of shares of Common Stock. 
The Company will not pay any dividend or make any distribution on shares
of Common Stock held in the treasury of the Company.

 

(l)                                     If
the distribution date for the rights provided in the Company’s rights
agreement, if any, occurs prior to the date a Security is converted, the Holder
of the Security who converts such Security after the distribution date is not
entitled to receive the rights that would otherwise be attached (but for the
date of conversion) to the shares of Common Stock received upon such
conversion; provided, however, that an adjustment shall be made to the
Conversion Price pursuant to clause 12.4(b) as if the rights were being
distributed to the common stockholders of the Company immediately prior to such
conversion.  If such an adjustment is
made and the rights are later redeemed, invalidated or terminated, then a
corresponding reversing adjustment shall be made to the Conversion Price, on an
equitable basis, to take account of such event.

 

SECTION 12.5                                            Notice
of Adjustments of Conversion Price.

 

Whenever the Conversion
Price is adjusted as herein provided (other than in the case of an adjustment
pursuant to the second paragraph of Section 12.4(h) for which the notice
required by such paragraph has been provided), the Company shall promptly file
with the Trustee and any Conversion Agent other than the Trustee an Officers’
Certificate setting forth the adjusted Conversion Price and showing in
reasonable detail the facts upon which such adjustment is based.  Promptly after delivery of such Officers’
Certificate, the Company shall prepare a notice stating that the Conversion
Price has been adjusted and setting forth the adjusted Conversion Price and the
date on which each adjustment becomes effective, and shall mail such notice to
each Holder at the address of such Holder as it appears in the Register within
20 days of the effective date of such adjustment.  Failure to deliver such notice shall not effect the legality or
validity of any such adjustment.

 

70

 

SECTION 12.6                                            Notice
Prior to Certain Actions.

 

In case at any time after
the date hereof:

 

(1)                                  the
Company shall declare a dividend (or any other distribution) on its Common
Stock payable otherwise than in cash out of its capital surplus or its
consolidated retained earnings;

 

(2)                                  the
Company shall authorize the granting to the holders of its Common Stock of
rights or warrants to subscribe for or purchase any shares of capital stock of
any class (or of securities convertible into shares of capital stock of any
class) or of any other rights;

 

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

 

(4)                                  there
shall occur the voluntary or involuntary dissolution, liquidation or winding up
of the Company;

 

the Company shall cause
to be filed at each office or agency maintained for the purpose of conversion
of securities pursuant to Section 9.2 hereof, and shall cause to be
provided to the Trustee and all Holders in accordance with Section 14.2
hereof, at least 20 days (or 10 days in any case specified in clause (1) or (2)
above) prior to the applicable record or effective date hereinafter specified,
a notice stating:

 

(A)                              the
date on which a record is to be taken for the purpose of such dividend,
distribution, rights or warrants, or, if a record is not to be taken, the date
as of which the holders of Common Stock of record to be entitled to such dividend,
distribution, rights or warrants are to be determined, or

 

(B)                                the
date on which such reclassification, merger, consolidation, statutory share
exchange, combination, sale, transfer, conveyance, dissolution, liquidation or
winding up is expected to become effective, and the date as of which it is
expected that holders of Common Stock of record shall be entitled to exchange
their shares of Common Stock for securities, cash or other property deliverable
upon such reclassification, merger, consolidation, statutory share exchange,
sale, transfer, dissolution, liquidation or winding up.

 

Neither the failure to
give such notice nor any defect therein shall affect the legality or validity
of the proceedings or actions described in clauses (1) through (4) of this
Section 12.6.

 

71

 

SECTION 12.7                                            Company
To Reserve Common Stock.

 

The Company shall at all
times use its best efforts to reserve and keep available, free from preemptive
rights, out of its authorized but unissued Common Stock, for the purpose of
effecting the conversion of Securities, the full number of shares of fully paid
and nonassessable Common Stock then issuable upon the conversion of all
Outstanding Securities.

 

SECTION 12.8                                            Taxes
on Conversions.

 

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

 

SECTION 12.9                                            Covenant
as to Common Stock.

 

The Company covenants
that all shares of Common Stock which may be issued upon conversion of
Securities will upon issue be fully paid and nonassessable and, except as
provided in Section 12.8, the Company will pay all taxes, liens and
charges with respect to the issue thereof.

 

SECTION 12.10                                      Cancellation
of Converted Securities.

 

All Securities delivered
for conversion shall be delivered to the Trustee to be canceled by or at the
direction of the Trustee, which shall dispose of the same as provided in
Section 2.9.

 

SECTION 12.11                                      Effect
of Recapitalization, Reclassification, Consolidation, Merger or Sale.

 

If any of following
events occur, namely:

 

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

 

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

 

(iii)                               any
sale, conveyance or lease of the properties and assets of the Company as, or
substantially as, an entirety to any other corporation as a result of which
holders of Common Stock shall be entitled to receive stock, securities or other
property or assets (including cash or any combination thereof) with respect to
or in exchange for such Common Stock,

 

72

 

the Company or the
successor or purchasing corporation, as the case may be, shall execute with the
Trustee a supplemental indenture (which shall comply with the TIA as in force
at the date of execution of such supplemental indenture if such supplemental
indenture is then required to so comply) providing that each Security shall be
convertible into the kind and amount of shares of stock and other securities or
property or assets (including cash or any combination thereof) which such
Holder would have been entitled to receive upon such recapitalization,
reclassification, change, merger, consolidation, statutory share exchange,
combination, sale or conveyance had such Securities been converted into Common
Stock immediately prior to such recapitalization, reclassification, change,
merger, consolidation, statutory share exchange, combination, sale or
conveyance assuming such holder of Common Stock did not exercise its rights of
election, if any, as to the kind or amount of securities, cash or other
property receivable upon such recapitalization, reclassification, change,
merger, consolidation, statutory share exchange, combination, sale or
conveyance (provided that, if the kind or amount of securities, cash or other
property receivable upon such recapitalization, reclassification, change,
merger, consolidation, statutory share exchange, combination, sale or
conveyance is not the same for each share of Common Stock in respect of which
such rights of election shall not have been exercised (“Non-Electing Share”),
then for the purposes of this Section 12.11 the kind and amount of securities,
cash or other property receivable upon such recapitalization, reclassification,
change, merger, consolidation, statutory share exchange, combination, sale or
conveyance for each Non-Electing Share shall be deemed to be the kind and
amount so receivable per share by a plurality of the Non-Electing Shares).  Such supplemental indenture shall provide
for adjustments which shall be as nearly equivalent as may be practicable to
the adjustments provided for in this Article 12.  If, in the case of any such recapitalization, reclassification,
change, merger, consolidation, statutory share exchange, combination, sale or
conveyance, the stock or other securities and assets receivable thereupon by a
holder of shares of Common Stock includes shares of stock or other securities
and assets of a corporation other than the successor or purchasing corporation,
as the case may be, in such recapitalization, reclassification, change, merger,
consolidation, statutory share exchange, combination, sale or conveyance, then
such supplemental indenture shall also be executed by such other corporation
and shall contain such additional provisions to protect the interests of the
Holders of the Securities as the Board of Directors shall reasonably consider
necessary by reason of the foregoing, including to the extent practicable the
provisions providing for the Repurchase Rights set forth in Article 11
hereof.

 

The Company shall cause
notice of the execution of such supplemental indenture to be mailed to each
Holder, at the address of such Holder as it appears on the Register, within 20
days after execution thereof.  Failure
to deliver such notice shall not affect the legality or validity of such
supplemental indenture.

 

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

 

If this
Section 12.11 applies to any event or occurrence, Section 12.4 hereof
shall not apply.

 

73

 

SECTION 12.12                                      Responsibility
of Trustee for Conversion Provisions.

 

The Trustee, subject to
the provisions of Section 5.1 hereof, and any Conversion Agent shall not
at any time be under any duty or responsibility to any Holder of Securities to
determine whether any facts exist which may require any adjustment of the
Conversion Price, or with respect to the nature or intent of any such
adjustments when made, or with respect to the method employed, or herein or in
any supplemental indenture provided to be employed, in making the same.  Neither the Trustee, subject to the
provisions of Section 5.1 hereof, nor any Conversion Agent shall be
accountable with respect to the validity or value (of the kind or amount) of
any Common Stock, or of any other securities or property, which may at any time
be issued or delivered upon the conversion of any Security; and it or they do
not make any representation with respect thereto.  Neither the Trustee, subject to the provisions of
Section 5.1 hereof, nor any Conversion Agent shall be responsible for any
failure of the Company to make any cash payment or to issue, transfer or
deliver any shares of stock or share certificates or other securities or
property upon the surrender of any Security for the purpose of conversion; and
the Trustee, subject to the provisions of Section 5.1 hereof, and any
Conversion Agent shall not be responsible or liable for any failure of the
Company to comply with any of the covenants of the Company contained in this Article.

 

ARTICLE 13

 

SUBORDINATION

 

SECTION 13.1                                            Securities
Subordinated to Senior Debt.

 

The Company covenants and
agrees, and each Holder of Securities, by such Holder’s acceptance thereof,
likewise covenants and agrees, that the Indebtedness represented by the
Securities and the payment of the principal of and premium, if any, and
interest (including Liquidated Damages, if any) on each and all of the
Securities is hereby expressly (i) senior in right of payment to the Old
Securities and any future obligations that are designated by the Company as
subordinate to the Securities; (ii) equal in right of payment with the
February Notes and any other existing or future obligations that are
designated by the Company as, or are otherwise determined to be, on a parity with
the Securities and (iii) subordinated and junior, to the extent and in the
manner set forth and as set forth in this Section 13.1, in right of
payment to the prior payment in full of all Senior Debt.  The Securities will constitute “Designated
Senior Debt” for purposes of the indenture for the Old Securities.

 

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

 

74

 

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

 

(c)                                  In
the event of and during the continuance of any default in payment of the
principal of or premium, if any, or interest on, rent or other payment
obligation in respect of, any Senior Debt, unless all such payments due in
respect of such Senior Debt have been paid in full in cash or other payments
satisfactory to the holders of Senior Debt, no payment shall be made by the
Company with respect to the principal of, premium, if any, or interest
(including Liquidated Damages, if any) on the Securities or to acquire any of
the Securities (including any redemption, conversion or cash repurchase
pursuant to the exercise of the Repurchase Right).  The Company shall give prompt written notice to the Trustee of
any default under any Senior Debt or under any agreement pursuant to which
Senior Debt may have been issued.

 

(d)                                 During
the continuance of any event of default with respect to any Designated Senior
Debt, as such event of default is defined under any such Designated Senior Debt
or in any agreement pursuant to which any Designated Senior Debt has been
issued (other than a default in payment of the principal of or premium, if any,
or interest on, rent or other payment obligation in respect of any Designated
Senior Debt), permitting the holder or holders of such Designated Senior Debt
to accelerate the maturity thereof (or in the case of any lease, permitting the
landlord either to terminate the lease or to require the Company to make an
irrevocable offer to terminate the lease following an event of default
thereunder), no payment shall be made by the Company, directly or indirectly,
with respect to principal of, premium, if any, or interest (including
Liquidated Damages, if any) on the Securities for 179 days following notice in
writing (a “Payment Blockage Notice”) to the Company, from any holder or
holders of such Designated Senior Debt or their representative or
representatives or the trustee or trustees under any indenture or under which
any instrument evidencing any such Designated Senior Debt may have been issued,
that such an event of default has occurred and is continuing, unless such event
of default has been cured or waived or such Designated Senior Debt has been
paid in full in cash or other payment satisfactory to the holders of such
Designated Senior Debt; provided, however, if the maturity of such Designated
Senior Debt is accelerated (or in the case of any lease, as a result of such
event of default, the landlord under the lease has given the Company notice of
its intention to terminate the lease or to require the Company to make an
irrevocable offer to terminate the lease following an event of default
thereunder), no payment may be made on the Securities until such Designated
Senior Debt has been paid in full in cash or other payment satisfactory to the
holders of such Designated Senior Debt or such acceleration (or termination, in
the case of a lease) has been cured or waived.

 

For purposes of this
Section 13.1(d), such Payment Blockage Notice shall be deemed to include
notice of all other events of default under such indenture or instrument which
are continuing at the time of the event of default specified in such Payment
Blockage Notice.  The provisions of this
Section 13.1(d) shall apply only to one such Payment Blockage Notice given
in any period of 365 days with respect to any issue of Designated Senior Debt,
and no such

 

75

 

continuing event of
default that existed or was continuing on the date of delivery of any Payment
Blockage Notice shall be, or shall be made, the basis for a subsequent Payment
Blockage Notice.

 

(e)                                  In
the event that, notwithstanding the foregoing provisions of Sections 13.1(a),
13.1(b), 13.1(c) and 13.1(d), any payment on account of principal, premium, if
any, or interest (including Liquidated Damages, if any) on the Securities shall
have been made by or on behalf of the Company and received by the Trustee, by
any Holder or by any Paying Agent (or, if the Company is acting as its own
Paying Agent, money for any such payment shall be segregated and held in
trust):

 

(i)                                     after
the occurrence of an event specified in Section 13.1(a) or 13.1(b), then,
unless all Senior Debt is paid in full in cash, or provision shall be made
therefor,

 

(ii)                                  after
the happening of an event of default of the type specified in
Section 13.1(c) above, then, unless the amount of such Senior Debt then
due shall have been paid in full, or provision made therefor or such event of
default shall have been cured or waived, or

 

(iii)                               after
the happening of an event of default of the type specified in
Section 13.1(d) above and delivery of a Payment Blockage Notice, then,
unless such event of default shall have been cured or waived or the 179-day
period specified in Section 13.1(d) shall have expired,

 

such payment (subject, in
each case, to the provisions of Section 13.7 hereof) shall be held in
trust for the benefit of, and shall be immediately paid over to, the holders of
Designated Senior Debt (unless an event described in Section 13.1(a), (b)
or (c) has occurred, in which case the payment shall be held in trust for the
benefit of, and shall be immediately paid over to all holders of Senior Debt)
or their representative or representatives or the trustee or trustees under any
indenture under which any instruments evidencing any of the Designated Senior
Debt or Senior Debt, as the case may be, may have been issued, as their
interests may appear.

 

SECTION 13.2                                            Subrogation.

 

Subject to the payment in
full of all Senior Debt to which the Indebtedness evidenced by the Securities
is in the circumstances subordinated as provided in Section 13.1 hereof,
the Holders of the Securities shall be subrogated to the rights of the holders
of such Senior Debt to receive payments or distributions of cash, property or
securities of the Company applicable to such Senior Debt until all amounts
owing on the Securities shall be paid in full, and, as between the Company, its
creditors other than holders of such Senior Debt, and the Holders of the
Securities, no such payment or distribution made to the holders of Senior Debt
by virtue of this Article which otherwise would have been made to the holders
of the Securities shall be deemed to be a payment by the Company on account of
such Senior Debt, provided that the provisions of this Article are and are
intended solely for the purpose of defining the relative rights of the Holders
of the Securities, on the one hand, and the holders of Senior Debt, on the
other hand.

 

SECTION 13.3                                            Obligation
of the Company Is Absolute and Unconditional.

 

Nothing contained in this
Article or elsewhere in this Indenture or in the Securities is intended to
or shall impair, as between the Company, its creditors other than the holders
of Senior Debt, and the Holders of the Securities, the obligation of the
Company, which is absolute

 

76

 

and unconditional, to pay
to the Holders of the Securities the principal of and premium, if any, and
interest (including Liquidated Damages, if any) on the Securities as and when
the same shall become due and payable in accordance with their terms, or is
intended to or shall affect the relative rights of the Holders of the
Securities and creditors of the Company other than the holders of Senior Debt,
nor shall anything contained herein or therein prevent the Trustee or the
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 of the holders of Senior Debt in respect of cash,
property or securities of the Company received upon the exercise of any such
remedy.

 

SECTION 13.4                                            Maturity
of or Default on Senior Debt.

 

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

 

SECTION 13.5                                            Payments
on Securities Permitted.

 

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

 

SECTION 13.6                                            Effectuation
of Subordination by Trustee.

 

Each Holder of
Securities, by such Holder’s acceptance thereof, authorizes and directs the
Trustee on such Holder’s behalf to take such action as may be necessary or
appropriate to effectuate the subordination provided in this Article and
appoints the Trustee such Holder’s attorney-in-fact for any and all such
purposes.

 

Upon any payment or
distribution of assets of the Company referred to in this Article, the Trustee
and the Holders of the Securities shall be entitled to rely upon any order or
decree made by any court of competent jurisdiction in which any such
dissolution, winding up, liquidation or reorganization proceeding affecting the
affairs of the Company is pending or upon a certificate of the trustee in
bankruptcy, receiver, assignee for the benefit of creditors, liquidating
trustee or agent or other Person making any payment or distribution, delivered
to the Trustee or to the Holders of the Securities, for the purpose of
ascertaining the Persons entitled to participate in such payment or
distribution, and as to other facts pertinent to the right of such Persons
under this Article, and if such evidence is not furnished, the Trustee may
defer any payment to such Persons pending judicial determination as to the
right of such Persons to receive such payment.

 

77

 

SECTION 13.7                                            Knowledge
of Trustee.

 

Notwithstanding the
provision of this Article or any other provisions of this Indenture, the
Trustee shall not be charged with knowledge of the existence of any Senior
Debt, of any default in payment of principal of, premium, if any, or interest
on, rent or other payment obligation in respect of any Senior Debt, or of any
facts which would prohibit the making of any payment of moneys to or by the
Trustee, or the taking of any other action by the Trustee, unless a Responsible
Officer of the Trustee having responsibility for the administration of the
trust established by this Indenture shall have received written notice thereof
from the Company, any Holder of Securities, any Paying or Conversion Agent of
the Company or the holder or representative of any class of Senior Debt, and,
prior to the receipt of any such written notice, the Trustee shall be entitled
in all respects to assume that no such default or facts exist; provided,
however, that unless on the third Business Day prior to the date upon which by
the terms hereof any such moneys may become payable for any purpose the Trustee
shall have received the notice provided for in this Section 13.7, then,
anything herein contained to the contrary notwithstanding, the Trustee shall
have full power and authority to receive such moneys and apply the same to the
purpose for which they were received, and shall not be affected by any notice
to the contrary which may be received by it on or after such date.

 

SECTION 13.8                                            Trustee’s
Relation to Senior Debt.

 

The Trustee shall be
entitled to all the rights set forth in this Article with respect to any
Senior Debt at the time held by it, to the same extent as any other holder of
Senior Debt and nothing in this Indenture shall deprive the Trustee of any of
its rights as such holder.

 

Nothing contained in this
Article shall apply to claims of or payments to the Trustee under or
pursuant to Section 5.8 hereof.

 

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

 

SECTION 13.9                                            Rights
of Holders of Senior Debt Not Impaired.

 

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

 

SECTION 13.10                                      Modification
of Terms of Senior Debt.

 

Any renewal or extension
of the time of payment of any Senior Debt or the exercise by the holders of
Senior Debt of any of their rights under any instrument creating or evidencing

 

78

 

Senior Debt, including
without limitation the waiver of default thereunder, may be made or done all
without notice to or assent from the Holders of the Securities or the Trustee.

 

No compromise, alteration,
amendment, modification, extension, renewal or other change of, or waiver,
consent or other action in respect of, any liability or obligation under or in
respect of, or of any of the terms, covenants or conditions of any indenture or
other instrument under which any Senior Debt is outstanding or of such Senior
Debt, whether or not such release is in accordance with the provisions or any
applicable document, shall in any way alter or affect any of the provisions of
this Article or of the Securities relating to the subordination thereof.

 

SECTION 13.11                                      Certain
Conversions Not Deemed Payment.

 

For the purposes of this
Article 13 only:

 

(1)                                  the
issuance and delivery of junior securities upon conversion of Securities in
accordance with Article 12 hereof shall not be deemed to constitute a
payment or distribution on account of the principal of, premium, if any, or
interest (including Liquidated Damages, 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 12.3 hereof), property or securities (other
than junior securities) upon conversion of a Security shall be deemed to
constitute payment on account of the principal of, premium, if any, or interest
(including Liquidated Damages, if any) on such Security.

 

For the purposes of this
Section 13.11, the term “junior securities” means:

 

(a)                                  shares
of any common stock of the Company or

 

(b)                                 other
securities of the Company that are subordinated in right of payment to all
Senior Debt that may be outstanding at the time of issuance or delivery of such
securities to substantially the same extent as, or to a greater extent than,
the Securities are so subordinated as provided in this Article.

 

Nothing contained in this
Article 13 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 Debt) and the Holders of Securities, the right, which is absolute and
unconditional, of the Holder of any Security to convert such Security in
accordance with Article 12 hereof.

 

ARTICLE 14

 

OTHER PROVISIONS
OF GENERAL APPLICATION

 

SECTION 14.1                                            Trust
Indenture Act Controls.

 

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

 

SECTION 14.2                                            Notices.

 

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

 

79

 

(a)                                  if
to the Company:

 

Vertex Pharmaceuticals
Incorporated

130 Waverly Street

Cambridge, MA  02139

Attention:  Investor Relations

 

with a copy to:

 

Mintz, Levin, Cohn,
Ferris, Glovsky 
  and Popeo, P.C.

One Financial Center

Boston, MA  02111

Attention:  Michael L. Fantozzi, Esq.

 

(b)                                 if
to the Trustee:

 

US Bank National
Association

Corporate Trust Department

One Federal Street, Boston, MA 02110

Attention: John Brennan

 

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

 

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

 

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

 

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

 

SECTION 14.3                                            Communication
by Holders With Other Holders.

 

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

 

80

 

SECTION 14.4                                            Acts
of Holders of Securities.

 

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

 

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

 

(2)                                  the
record of Holders of Securities voting in favor thereof, either in person or by
proxies duly appointed in writing, at any meeting of Holders of Securities duly
called and held in accordance with the provisions of Article 8; or

 

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

 

Except as herein
otherwise expressly provided, such action shall become effective when such
instrument or instruments or record or both are delivered to the Trustee and,
where it is hereby expressly required, to the Company.  Such instrument or instruments and record
(and the action embodied therein and evidenced thereby) are herein sometimes
referred to as the “Act” of the Holders of Securities signing such instrument
or instruments and so voting at such meeting. 
Proof of execution of any such instrument or of a writing appointing any
such agent or proxy, or of the holding by any Person of a Security, shall be
sufficient for any purpose of this Indenture and (subject to Section 5.1
hereof) conclusive in favor of the Trustee and the Company if made in the
manner provided in this Section.  The
record of any meeting of Holders of Securities shall be proved in the manner
provided in Section 8.6 hereof.

 

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

 

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

 

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

 

SECTION 14.5                                            Certificate
and Opinion as to Conditions Precedent.

 

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

 

81

 

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

 

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

 

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

 

SECTION 14.6                                            Statements
Required in Certificate or Opinion.

 

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

 

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

 

(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 each such individual, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and

 

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

 

SECTION 14.7                                            Effect
of Headings and Table of Contents.

 

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

 

82

 

SECTION 14.8                                            Successors
and Assigns.

 

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

 

SECTION 14.9                                            Separability
Clause.

 

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

 

SECTION 14.10                                      Benefits
of Indenture.

 

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

 

SECTION 14.11                                      Governing
Law.

 

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

 

SECTION 14.12                                      Counterparts.

 

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

 

SECTION 14.13                                      Legal
Holidays.

 

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

 

83

 

SECTION 14.14                                      Recourse
Against Others.

 

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

 

84

 

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

 

	
   

  	
  VERTEX
  PHARMACEUTICALS INCORPORATED

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Joshua S. Boger

  	
   

  
	
   

  	
   

  	
  Name: Joshua S. Boger

  	
   

  
	
   

  	
   

  	
  Title: Chairman and Chief

  Executive Officer

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  US
  BANK NATIONAL ASSOCIATION,

  AS TRUSTEE

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John A. Brennan

  	
   

  
	
   

  	
   

  	
  Name: John A. Brennan

  	
   

  
	
   

  	
   

  	
  Title: Trust Officer

  	
   

  

 

 

EXHIBIT
A

 

FORM OF SECURITY

 

[FACE OF SECURITY]

 

UNLESS THIS CERTIFICATE IS PRESENTED
BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (“DTC”) TO
VERTEX PHARMACEUTICALS INCORPORATED (OR ITS SUCCESSOR) OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE, CONVERSION OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER ENTITY AS
IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS
MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF,
CEDE & CO., HAS AN INTEREST HEREIN.(1)

 

 

THE NOTES EVIDENCED HEREBY HAVE NOT
BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), OR ANY STATE SECURITIES LAWS, AND MAY NOT BE OFFERED OR SOLD
EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. 
BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT IT IS A
“QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT); (2) AGREES THAT IT WILL NOT WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE
OF THE NOTE EVIDENCED HEREBY RESELL OR OTHERWISE TRANSFER THE NOTE EVIDENCED
HEREBY OR THE COMMON STOCK ISSUABLE UPON CONVERSION OF SUCH NOTE EXCEPT (A) TO
THE COMPANY OR ANY SUBSIDIARY THEREOF, (B) TO A QUALIFIED INSTITUTIONAL BUYER
IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C) PURSUANT TO THE
EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF
AVAILABLE) OR (D) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED
EFFECTIVE UNDER THE SECURITIES ACT (AND WHICH CONTINUES TO BE EFFECTIVE AT THE
TIME OF SUCH TRANSFER); AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO
WHOM THE NOTE EVIDENCED HEREBY IS TRANSFERRED (OTHER THAN A TRANSFER PURSUANT
TO CLAUSE 2(D) ABOVE) A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.  IN CONNECTION WITH ANY TRANSFER OF THE NOTE
EVIDENCED HEREBY WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF SUCH NOTE
(OTHER THAN A TRANSFER PURSUANT TO CLAUSE 2(D) ABOVE), THE HOLDER MUST CHECK
THE APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER OF
SUCH TRANSFER AND SUBMIT THIS

 

(1)   This legend should be included only if the
Security is issued in global form.

 

A-1

 

CERTIFICATE TO STATE STREET BANK AND TRUST COMPANY, AS
TRUSTEE (OR ANY SUCCESSOR TRUSTEE, AS APPLICABLE).  IF THE PROPOSED TRANSFER IS PURSUANT TO CLAUSE 2(C) ABOVE, THE
HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO STATE STREET BANK AND TRUST
COMPANY, AS TRUSTEE (OR ANY SUCCESSOR TRUSTEE, AS APPLICABLE), SUCH
CERTIFICATIONS, LEGAL OPINIONS AND OTHER INFORMATION AS THE COMPANY MAY
REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. 
THIS LEGEND WILL BE REMOVED UPON THE EARLIER OF THE TRANSFER OF THE NOTE
EVIDENCED HEREBY PURSUANT TO CLAUSE 2(C) OR 2(D) ABOVE OR THE EXPIRATION OF TWO
YEARS FROM THE ORIGINAL ISSUANCE OF THE NOTE EVIDENCED HEREBY.

 

A-2

 

VERTEX PHARMACEUTICALS INCORPORATED

 

53⁄4 % Convertible
Subordinated Note due 2011

 

CUSIP NO.
[              ]

 

	
  No.

  	
   

  	
  $

  	
   

  

 

VERTEX PHARMACEUTICALS
INCORPORATED, a Massachusetts corporation (the “Company”, which term includes
any successor corporation under the Indenture hereinafter referred to), for
value received, hereby promises to pay to Cede & Co., or its registered
assigns, the principal sum of                                                 
U.S. Dollars ($                     )
on February 15, 2011.

 

Interest Payment
Dates:  February 15 and
August 15, commencing February 15, 2005.

 

Regular Record
Dates:  February 1 and
August 1.

 

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

 

A-3

 

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

 

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  VERTEX PHARMACEUTICALS INCORPORATED

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

Trustee’s Certificate of
Authentication

 

This is one of the 53⁄4%
Convertible Subordinated Notes due 2011 described in the within-named
Indenture.

 

	
  US BANK NATIONAL ASSOCIATION,

  
	
   

  	
  as Trustee

  	
   

  
	
   

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Authorized Signatory

  	
   

  
	
   

  
	
   

  
	
  Dated:

  

 

A-4

 

[REVERSE OF SECURITY]

 

VERTEX PHARMACEUTICALS INCORPORATED

 

53⁄4% Convertible
Subordinated Note due 2011

 

Capitalized terms used
herein but not defined shall have the meanings assigned to them in the
Indenture referred to below unless otherwise indicated.

 

1.                                       Principal
and Interest.

 

Vertex Pharmaceuticals
Incorporated, a Massachusetts corporation, promises to pay interest on the
principal amount of this Security at the Interest Rate from the date of
issuance until repayment at Maturity, redemption or repurchase.  The Company will pay interest on this
Security semiannually in arrears on February 15 and August 15 of each
year (each an “Interest Payment Date”), commencing February 15, 2005.

 

Interest on the
Securities shall be computed (i) for any full semiannual period for which a
particular Interest Rate is applicable on the basis of a 360-day year of twelve
30-day months and (ii) for any period for which a particular Interest Rate is
applicable shorter than a full semiannual period for which interest is calculated,
on the basis of a 30-day month and, for such periods of less than a month, the
actual number of days elapsed over a 30-day month.

 

A Holder of any Security
at the close of business on a Regular Record Date shall be entitled to receive
interest on such Security on the corresponding Interest Payment Date.  A Holder of any Security which is converted
after the close of business on a Regular Record Date and prior to the
corresponding Interest Payment Date (other than any Security whose Maturity is
prior to such Interest Payment Date) shall be entitled to receive interest on
the principal amount of such Security, notwithstanding the conversion of such
Security prior to such Interest Payment Date. 
However, any such Holder which surrenders any such Security for
conversion during such period shall be required to pay the Company an amount
equal to the interest on the principal amount of such Security so converted,
which is payable by the Company to such Holder on such Interest Payment Date,
at the time such Holder surrenders such Security for conversion.  Notwithstanding the foregoing, any such
Holder which surrenders for conversion during such period any Security which
has been called for redemption by the Company in a notice of redemption given
by the Company pursuant to Section 10.5 of the Indenture (whether the
redemption date for such Security is on such Interest Payment Date or
otherwise) shall be entitled to receive (and retain) such interest and need not
pay the Company an amount equal to the interest on the principal amount of such
Security so converted at the time such Holder surrenders such Security for
conversion.  Except as provided in
Section 2.1 and Article 12 of the Indenture, no payment or other
adjustment shall be made for interest accrued on any Security converted or for
dividends on any shares of Common Stock issued upon conversion of such
Security.

 

In accordance with the
terms of the Registration Rights Agreement, during the first 90 days following
a Registration Default (as defined in the Registration Rights Agreement), the
Interest Rate borne by the Securities shall be increased by 0.25% on:

 

A-5

 

(A)                              January 16,
2005, if the shelf registration statement (the “Shelf Registration Statement”)
is not filed with the SEC prior to or on January 15, 2005;

 

(B)                                May
16, 2005, if the Shelf Registration Statement is not declared effective by the
SEC prior to or on May 15, 2005;

 

(C)                                the
day after the fifth Business Day after the Shelf Registration Statement,
previously declared effective, ceases to be effective or fails to be usable, if
a post-effective amendment (or report filed pursuant to the Exchange Act) that
cures the Shelf Registration Statement is not filed with the SEC during such
five Business Day period; or

 

(D)                               the
day after the 45th or 60th day, as specified in the Registration Rights
Agreement, of any period that the prospectus contained in the Shelf
Registration Statement has been suspended, if such suspension has not been
terminated.

 

From and after the 91st
day following such Registration Default, the Interest Rate borne by the
Securities shall be increased by 0.50%. 
In no event shall the Interest Rate borne by the Securities be increased
by more than 0.50%.

 

Any amount of additional
interest will be payable in cash semiannually, in arrears, on each Interest
Payment Date and will cease to accrue on the date the Registration Default is
cured.  The Holder of this Security is
entitled to the benefits of the Registration Rights Agreement.

 

2.                                       Method
of Payment.

 

Interest (including
Liquidated Damages, if any) on any Security which is payable, and is punctually
paid or duly provided for, on any Interest Payment Date shall be paid to the
person in whose name that Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such
interest.

 

Principal of, and
premium, if any, and interest (including Liquidated Damages, if any) on, Global
Securities will be payable to the Depositary in immediately available funds.

 

Principal and premium, if
any, on Physical Securities, if any, will be payable at the office or agency of
the Company maintained for such purpose, initially the Corporate Trust Office
of the Trustee.  Interest on Physical
Securities will be payable by (i) U.S. Dollar check drawn on a bank located in
the city where the Corporate Trust Office of the Trustee is located, mailed to
the address of the Person entitled thereto as such address shall appear in the
Register, or (ii) upon application to the Registrar not later than the relevant
Record Date by a Holder of an aggregate principal amount in excess of
$5,000,000, wire transfer in immediately available funds.

 

3.                                       Paying
Agent and Registrar.

 

Initially, US Bank
National Association, the Trustee under the Indenture, will act as Paying Agent
and Registrar.  The Company may change
the Paying Agent or Registrar without notice to any Holder.

 

A-6

 

4.                                       Indenture.

 

The Company issued this
Security under an Indenture, dated as of September 17, 2004, as it may
from time to time be supplemented or amended by one or more indentures
supplemental thereto entered into pursuant to the applicable provisions thereof
(the “Indenture”), between the Company and US Bank National Association, as
Trustee.  The terms of the Security
include those stated in the Indenture and those made part of the Indenture by
reference to the TIA.  This Security is
subject to all such terms, and Holders are referred to the Indenture and the
TIA for a statement of all such terms. 
To the extent permitted by applicable law, in the event of any
inconsistency between the terms of this Security and the terms of the
Indenture, the terms of the Indenture shall control.

 

5.                                       [Reserved]

 

6.                                       Optional
Redemption.

 

Prior to
February 15, 2007, the Company cannot redeem the Securities.  The Company may, on or after
February 15, 2007, at its option, redeem the Securities in whole or in
part on any date from time to time, upon notice to the Holders as provided in
the Indenture, at a redemption price, payable in cash, equal to 100% of the
principal amount of the Securities redeemed plus accrued and unpaid interest
(including any Liquidated Damages), if any, to but excluding the date of
redemption.

 

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

 

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

 

7.                                       Repurchase
Right Upon a Change of Control.

 

If a Change of Control
occurs, the Holder of Securities, at the Holder’s option, shall have the right,
in accordance with the provisions of the Indenture, to require the Company to
repurchase the Securities (or any portion of the principal amount hereof that
is at least $1,000 or an integral multiple thereof, provided that the portion
of the principal amount of this Security to be Outstanding after such
repurchase is at least equal to $1,000) at the Repurchase Price, plus any
interest accrued and unpaid to the Repurchase Date.

 

A-7

 

Subject to the conditions
provided in Section 11.2 of the Indenture, the Company may elect to pay
the Repurchase Price by delivering a number of shares of Common Stock equal to
(i) the Repurchase Price divided by (ii) 95% of the average of the Closing
Prices per share for the five consecutive Trading Days immediately preceding
and including the third Trading Day prior to the Repurchase Date.

 

No fractional shares of
Common Stock will be issued upon repurchase of any Securities.  Instead of any fractional share of Common
Stock which would otherwise be issued upon conversion of such Securities, the
Company shall pay a cash adjustment as provided in the Indenture.

 

A Company Notice will be
given by the Company to the Holders as provided in the Indenture.  To exercise a Repurchase Right, a Holder
must deliver to the Trustee a written notice as provided in the Indenture.

 

8.                                       Conversion
Rights.

 

Subject to and upon
compliance with the provisions of the Indenture, the Holder of Securities is
entitled, at such Holder’s option, at any time before the close of business on
February 14, 2011 to convert the Holder’s Securities (or any portion of
the principal amount hereof which is $1,000 or an integral multiple thereof),
at the principal amount thereof or of such portion, into duly authorized, fully
paid and nonassessable shares of Common Stock of the Company at the Conversion
Price in effect at the time of conversion.

 

In the case of a Security
(or a portion thereof) called for redemption, such conversion right in respect
of the Security (or such portion thereof) so called shall expire at the close
of business on the Business Day immediately preceding the redemption date,
unless the Company defaults in making the payment due upon redemption.  In the case of a Change of Control for which
the Holder exercises its Repurchase Right in respect of a Security (or a
portion thereof), such conversion right in respect of the Security (or portion
thereof) shall expire at the close of business on the Business Day immediately
preceding the Repurchase Date.

 

The Conversion Price
shall be initially equal to $14.94 per share of Common Stock.  The Conversion Price shall be adjusted under
certain circumstances as provided in the Indenture.

 

To exercise the
conversion right, the Holder must surrender the Security (or portion thereof)
duly endorsed or assigned to the Company or in blank, at the office of the
Conversion Agent, accompanied by a duly signed conversion notice to the
Company.  Any Security surrendered for
conversion during the period between the close of business on any Regular
Record Date and prior to the corresponding Interest Payment Date (other than
any Security whose Maturity is prior to such Interest Payment Date) shall be
accompanied by payment in New York Clearing House funds or other funds
acceptable to the Company of an amount equal to the interest payable on such
Interest Payment Date by the Company on the principal amount of the Security
being surrendered for conversion. 
Notwithstanding the foregoing, any Holder which during such period
surrenders for conversion any Security which has been called for redemption by
the Company in a notice of redemption given by the Company pursuant to
Section 10.5 of the Indenture (whether the redemption date for such
Security is on such Interest Payment Date or

 

A-8

 

otherwise) need not pay
the Company an amount equal to the interest on the principal amount of such
Security so converted at the time such Holder surrenders such Security for
conversion.

 

No fractional shares of
Common Stock will be issued upon conversion of any Securities.  Instead of any fractional share of Common
Stock which would otherwise be issued upon conversion of such Securities, the
Company shall pay a cash adjustment as provided in the Indenture.

 

9.                                       Subordination.

 

The Indebtedness
evidenced by this Security is, to the extent and in the manner provided in the
Indenture, (i) senior in right of payment to the Old Securities and any future
obligations that are designated by the Company as subordinate to the
Securities; (ii) equal in right of payment with the February Notes and any
other existing or future obligations that are designated by the Company as, or
are otherwise determined to be, on a parity with the Securities and (iii)
subordinated and subject in right of payment to the prior payment in full of
all amounts then due on all Senior Debt of the Company, and this Security is
issued subject to such provisions of the Indenture with respect thereto.  Each Holder of this Security, by accepting
the same, (a) agrees to and shall be bound by such provisions, (b) authorizes
and directs the Trustee on such Holder’s behalf to take such action as may be
necessary or appropriate to effectuate the subordination so provided and (c)
appoints the Trustee such Holder’s attorney-in-fact for any and all such
purposes. The Securities will constitute “Designated Senior Debt” for purposes
of the indenture for the Old Securities.

 

10.                                 Denominations;
Transfer; Exchange.

 

The Securities are
issuable in registered form, without coupons, in denominations of $1,000 and
integral multiples of $1,000 in excess thereof.  A Holder may register the transfer or exchange of Securities in
accordance with the Indenture.  The
Registrar may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents and the Company may require a Holder to pay
any taxes and fees required by law or permitted by the Indenture.

 

In the event of a
redemption in part, the Company will not be required (a) to register the transfer
of, or exchange, Securities for a period of 15 days immediately preceding the
date notice is given identifying the serial numbers of the Securities called
for such redemption, or (b) to register the transfer of, or exchange, any such
Securities, or portion thereof, called for redemption.

 

In the event of
redemption, conversion or repurchase of the Securities in part only, a new
Security or Securities for the unredeemed, unconverted or unrepurchased portion
thereof will be issued in the name of the Holder hereof.

 

11.                                 Persons
Deemed Owners.

 

Except as provided in the
Indenture, the registered Holder of this Security shall be treated as its owner
for all purposes.

 

A-9

 

12.                                 Unclaimed
Money.

 

The Trustee and the
Paying Agent shall pay to the Company any money held by them for the payment of
principal, premium, if any, or interest that remains unclaimed for two years
after the date upon which such payment shall have become due.  After payment to the Company, Holders
entitled to the money must look to the Company for payment as general creditors
unless an applicable abandoned property law designates another Person, and all
liability of the Trustee and such Paying Agent with respect to such money shall
cease.

 

13.                                 Discharge
Prior to Redemption or Maturity.

 

Subject to certain
conditions contained in the Indenture, the Company may discharge its
obligations under the Securities and the Indenture if (1) (a) all of the
Outstanding Securities shall become due and payable at their scheduled Maturity
within one year or (b) all of the Outstanding Securities are scheduled for
redemption within one year, and (2) the Company shall have deposited with the
Trustee money and/or U.S. Government Obligations sufficient to pay the principal
of, and premium, if any, and interest on, all of the Outstanding Securities on
the date of Maturity or redemption, as the case may be.

 

14.                                 Amendment;
Supplement; Waiver.

 

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

 

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

 

15.                                 Defaults
and Remedies.

 

The Indenture provides
that an Event of Default with respect to the Securities occurs when any of the
following occurs:

 

(a)                                  the
Company defaults in the payment of the principal of or premium, if any, on any
of the Securities when it becomes due and payable at

 

A-10

 

Maturity, upon redemption
or exercise of a Repurchase Right or otherwise, whether or not such payment is
prohibited by the subordination provisions of Article 13 of the Indenture;

 

(b)                                 the
Company defaults in the payment of an installment of interest (including
Liquidated Damages, if any) on any of the Securities when it becomes due and
payable and such default continues for a period of 30 days, whether or not such
payment is prohibited by the subordination provisions of Article 13 of the
Indenture;

 

(c)                                  the
Company fails to deliver shares of Common Stock, together with cash instead of
fractional shares, when those shares of Common Stock or cash instead of
fractional shares are required to be delivered following conversion of a
Security in accordance with the provisions of Article 12 of the Indenture,
and that failure continues for 10 days;

 

(d)                                 the
Company fails to perform or observe any other term, covenant or agreement
contained in the Securities or the Indenture and such default continues for a
period of 60 days after written notice of such failure is given as specified in
the Indenture;

 

(e)                                  (i)
the Company fails to make any payment by the end of the applicable grace
period, if any, after the maturity of any Indebtedness for borrowed money in an
amount in excess of $5,000,000, or (ii) there is an acceleration of any
Indebtedness for borrowed money in an amount in excess of $5,000,000 because of
a default with respect to such Indebtedness without such Indebtedness having
been discharged or such acceleration having been cured, waived, rescinded or
annulled, in the case of either clause (i) or (ii) above, for a period of 30
days after written notice is given to the Company as specified in the
Indenture; and

 

(f)                                    there
are certain events of bankruptcy, insolvency or reorganization of the Company.

 

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

 

16.                                 Authentication.

 

This Security shall not
be valid until the Trustee (or authenticating agent) executes the certificate
of authentication on the other side of this Security.

 

17.                                 Abbreviations.

 

Customary abbreviations
may be used in the name of a 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 U/G/M/A (= Uniform Gifts
to Minors Act).

 

A-11

 

18.                                 Additional
Rights of Holders of Transfer Restricted Securities.

 

In addition to the rights
provided to Holders under the Indenture, Holders of Transfer Restricted
Securities shall have all the rights set forth in the Registration Rights
Agreement.

 

19.                                 CUSIP
Numbers.

 

Pursuant to a
recommendation promulgated by the Committee on Uniform Security Identification
Procedures, the Company has caused CUSIP numbers to be printed on this Security
and the Trustee may use CUSIP numbers in notices of redemption as a convenience
to Holders.  No representation is made
as to the accuracy of such numbers either as printed on this Security or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.

 

20.                                 Governing
Law.

 

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

 

21.                                 Successor
Corporation.

 

In the event a successor
corporation assumes all the obligations of the Company under this Security,
pursuant to the terms hereof and of the Indenture, the Company will be released
from all such obligations.

 

A-12

 

ASSIGNMENT FORM

 

To assign this Security,
fill in the form below and have your signature guaranteed:  (I) or (we) assign and transfer this
Security to:

 

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

 

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

 

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

 

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Your Name:

  	
   

  
	
   

  	
  (Print your name
  exactly as it appears on the face of this Security)

  
	
   

  	
   

  
	
   

  	
  Your Signature:

  	
   

  
	
   

  	
  (Sign exactly as your
  name appears on the face of this Security)

  
	
   

  	
   

  
	
   

  	
  Signature Guarantee*:

  	
   

  
							

 

 

* PARTICIPANT IN A RECOGNIZED
SIGNATURE GUARANTEE MEDALLION PROGRAM (OR OTHER SIGNATURE GUARANTOR ACCEPTABLE
TO THE TRUSTEE).

 

In connection with any
transfer of this Security occurring prior to the end of the period referred to
in Rule 144(k) under the Securities Act, the undersigned confirms that without
utilizing any general solicitation or general advertising that:

 

[Check One]

 

o (a) this Security is being transferred in
compliance with the exemption from registration under the Securities Act of
1933, as amended, provided by Rule 144A thereunder.

 

or

 

o (b) this Security is being transferred other
than in accordance with (a) above and documents are being furnished which
comply with the conditions of transfer set forth in this Security and the
Indenture.

 

A-13

 

If none of the foregoing
boxes is checked, the Trustee or other Registrar shall not be obligated to
register this Security in the name of any Person other than the Holder hereof
unless the conditions to any such transfer of registration set forth herein and
in Sections 2.7, 2.8 and 2.9 of the Indenture shall have been satisfied.

 

	
  Dated:

  	
   

  	
   

  	
   

  

 

 

NOTICE:  The signature to this assignment must
correspond with the name as written upon the face of the within-mentioned
instrument in every particular, without alteration or any change whatsoever.

 

 

Signature Guarantee:

 

 

Signature must be
guaranteed by a participant in a recognized signature guaranty medallion program
or other signature guarantor acceptable to the Trustee.

 

A-14

 

TO BE COMPLETED BY
PURCHASER IF (a) ABOVE IS CHECKED.

 

The undersigned
represents and warrants that it is purchasing this Security for its own account
or an account with respect to which it exercises sole investment discretion, in
each case for investment and not with a view to distribution, and that it and
any such account is a “Qualified Institutional Buyer” within the meaning of
Rule 144A under the Securities Act of 1933 and is aware that the sale to it is
being made in reliance on Rule 144A and acknowledges that it has received such
information regarding the Company as the undersigned has requested pursuant to
Rule 144A or has determined not to request such information and that it is
aware that the transferor is relying upon the undersigned’s foregoing
representations in order to claim the exemption from registration provided by
Rule 144A.

 

	
  Dated:

  	
   

  	
   

  	
   

  

 

 

NOTICE:  To be executed by an executive officer

 

A-15

 

CONVERSION NOTICE

 

TO:  VERTEX PHARMACEUTICALS INCORPORATED

130 Waverly Street

Cambridge, Massachusetts  02139

 

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

 

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Your Name:

  	
   

  
	
   

  	
  (Print your name
  exactly as it appears on the face of this Security)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Your Signature:

  	
   

  
	
   

  	
  (Sign exactly as your
  name appears on the face of this Security)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Signature Guarantee*:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Social Security or
  other Taxpayer

  
	
   

  	
  Identification Number:

  	
   

  
								

 

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

 

* PARTICIPANT IN A RECOGNIZED SIGNATURE GUARANTEE MEDALLION
PROGRAM (OR OTHER SIGNATURE GUARANTOR ACCEPTABLE TO THE TRUSTEE).

 

A-16

 

Fill in for registration
of shares (if to be issued) and Securities (if to be delivered) other than to
and in the name of the registered holder:

 

(Name)

 

(Street Address)

 

(City, State and
Zip Code)

 

A-17

 

NOTICE OF EXERCISE OF REPURCHASE
RIGHT

 

TO:  VERTEX PHARMACEUTICALS INCORPORATED

130 Waverly Street

Cambridge, Massachusetts  02139

 

The undersigned
registered owner of this Security hereby irrevocably acknowledges receipt of a
notice from Vertex Pharmaceuticals Incorporated (the “Company”) as to the
occurrence of a Change of Control with respect to the Company and requests and
instructs the Company to repay the entire principal amount of this Security, or
the portion thereof (which is $1,000 principal amount or an integral multiple
thereof) below designated, in accordance with the terms of the Indenture referred
to in this Security, together with interest (including Liquidated Damages, if
any) accrued and unpaid to, but excluding, such date, to the registered holder
hereof, in cash.

 

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Your Name:

  	
   

  
	
   

  	
  (Print your name
  exactly as it appears on the face of this Security)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Your Signature:

  	
   

  
	
   

  	
  (Sign exactly as your
  name appears on the face of this Security)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Signature Guarantee*:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Social Security or
  other Taxpayer

  
	
   

  	
  Identification Number:

  	
   

  
								

 

 

Principal amount to be
repaid (if less than all):  $

 

* PARTICIPANT IN A RECOGNIZED SIGNATURE GUARANTEE MEDALLION
PROGRAM (OR OTHER SIGNATURE GUARANTOR ACCEPTABLE TO THE TRUSTEE).

 

A-18

 

SCHEDULE OF EXCHANGES FOR
PHYSICAL SECURITIES(2)

 

The following exchanges
of a part of this Global Security for Physical Securities have been made:

 

	
  Date of Exchange

  	
   

  	
  Amount of
  decrease

  in Principal Amount

  of this Global

  Security

  	
   

  	
  Amount of
  increase

  in Principal Amount

  of this Global

  Security

  	
   

  	
  Principal
  Amount

  of this Global

  Security following

  such decrease

  (or increase)

  	
   

  	
  Signature
  of

  authorized officer of

  Trustee

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

(2)  This schedule should be included only
if the Security is issued in global form.

 

A-19Exhibit 10.3

 

EXECUTION COPY

 

 

RESALE REGISTRATRION RIGHTS AGREEMENT

 

among

 

VERTEX PHARMACEUTICALS INCORPORATED,

 

and

 

UBS Securities LLC

 

as Dealer Manager

 

Dated
September 17, 2004

 

 

Resale Registration
Rights Agreement (this “Agreement”), dated September 17, 2004, between
Vertex Pharmaceuticals Incorporated, a Massachusetts corporation (together with
any successor entity, the “Issuer”), and UBS Securities LLC, as Dealer Manager
(the “Dealer Manager”).

 

Pursuant to the Dealer
Manager Agreement, dated September 13, 2004, between the Issuer and the
Dealer Manager (the “Dealer Manager Agreement”), the Dealer Manager has agreed
to facilitate the placement of $79,313,000 in aggregate principal amount of 53⁄4%
Convertible Senior Subordinated Notes due 2011 (the “Notes”) on behalf of the
Holders. The Notes will be convertible into fully paid, nonassessable common
stock, par value $.01 per share, of the Issuer (the “Common Stock”) on the
terms, and subject to the conditions, set forth in the Indenture (as defined
herein). In connection with the placement of the Notes, the Issuer has agreed
to provide the registration rights set forth in this Agreement pursuant to the
Dealer Manager Agreement.

 

The parties hereby agree
as follows:

 

1.                                      DEFINITIONS.
As used in this Agreement, the following capitalized terms shall have the
following meanings:

 

AGREEMENT:  As defined in the preamble hereto.

 

ADVICE:  As defined in Section 4(c)(ii) hereof.

 

BUSINESS DAY:  A day other than a Saturday or Sunday or any
federal holiday in the United States.

 

COMMISSION:  Securities and Exchange Commission.

 

COMMON STOCK:  As defined in the preamble hereto.

 

DAMAGES PAYMENT
DATE:  Each Interest Payment Date. For
purposes of this Agreement, if no Notes are outstanding, “DAMAGES PAYMENT DATE”
shall mean each February 15 and August 15.

 

DEALER MANAGER:  As defined in the preamble hereto.

 

DEALER MANAGER
AGREEMENT:  As defined in the preamble
hereto.

 

EFFECTIVENESS
PERIOD:  As defined in
Section 2(a)(iii) hereof.

 

EFFECTIVENESS TARGET
DATE:  As defined in
Section 2(a)(ii) hereof.

 

EXCHANGE ACT:  Securities Exchange Act of 1934, as amended.

 

HOLDER:  A Person who owns, beneficially or
otherwise, Transfer Restricted Securities.

 

INDENTURE:  The Indenture, dated as of
September 17, 2004, between the Issuer and U.S. Bank National Association,
as trustee, pursuant to which the Notes are to be issued, as such

 

1

 

Indenture may be amended,
modified or supplemented from time to time in accordance with the terms
thereof.

 

INTEREST PAYMENT
DATE:  As defined in the Indenture.

 

ISSUER:  As defined in the preamble hereto.

 

LIQUIDATED DAMAGES:  As defined in Section 3(a) hereof.

 

MAJORITY OF HOLDERS:
Holders holding over 50% of the aggregate principal amount of Notes
outstanding; PROVIDED that, for purpose of this definition, a holder of shares
of Common Stock which constitute Transfer Restricted Securities and were issued
upon conversion of the Notes shall be deemed to hold an aggregate principal
amount of Notes (in addition to the aggregate principal amount of Notes held by
such Holder) equal to the aggregate principal amount of Notes converted by such
Holder into such shares of Common Stock.

 

NASD:  NASD, Inc.

 

NOTES:  As defined in the preamble hereto.

 

PERSON:  An individual, partnership, corporation,
unincorporated organization, trust, joint venture or a government or agency or
political subdivision thereof.

 

PROSPECTUS:  The prospectus included in a Shelf
Registration Statement, as amended or supplemented by any prospectus supplement
and by all other amendments thereto, including post-effective amendments, and
all material incorporated by reference into such Prospectus.

 

QUESTIONNAIRE
DEADLINE:  As defined in
Section 2(b) hereof.

 

RECORD HOLDER:  With respect to any Damages Payment Date,
each Person who is a Holder on the record date with respect to the Interest
Payment Date on which such Damages Payment Date shall occur. In the case of a
Holder of shares of Common Stock issued upon conversion of the Notes, “RECORD
HOLDER” shall mean each Person who is a Holder of shares of Common Stock which
constitute Transfer Restricted Securities on the February 1 or
August 1 immediately preceding the Damages Payment Date.

 

REGISTRATION
DEFAULT:  As defined in
Section 3(a) hereof.

 

SECURITIES ACT:  Securities Act of 1933, as amended.

 

SHELF FILING
DEADLINE:  As defined in
Section 2(a)(i) hereof.

 

SHELF REGISTRATION
STATEMENT:  As defined in
Section 2(a)(i) hereof.

 

SUSPENSION PERIOD:  As defined in Section 4(b)(i) hereof.

 

TIA: Trust Indenture Act
of 1939, as in effect on the date the Indenture is qualified under the TIA.

 

2

 

TRANSFER RESTRICTED
SECURITIES: Each Note and each share of Common Stock issued upon conversion of
Notes until the earlier of:

 

(i)                                     the
date on which such Note or such share of Common Stock issued upon conversion
has been effectively registered under the Securities Act and disposed of in
accordance with the Shelf Registration Statement;

 

(ii)                                  the
date on which such Note or such share of Common Stock issued upon conversion is
transferred in compliance with Rule 144 under the Securities Act or may be sold
or transferred pursuant to Rule 144(k) under the Securities Act (or any other
similar provision then in force); or

 

(iii)                               the
date on which such Note or such share of Common Stock issued upon conversion
ceases to be outstanding (whether as a result of redemption, repurchase and
cancellation, conversion or otherwise).

 

UNDERWRITER:  As defined in Section 6(a) hereof.

 

UNDERWRITTEN REGISTRATION
OR UNDERWRITTEN OFFERING: A registration in which securities of the Issuer are
sold to an underwriter for reoffering to the public.

 

2.                                      SHELF
REGISTRATION.

 

(a)                                  The
Issuer shall:

 

(i)                                     not
later than 120 days after the date hereof (the “Shelf Filing Deadline”), cause
to be filed a registration statement pursuant to Rule 415 under the Securities
Act (the “Shelf Registration Statement”), which Shelf Registration Statement
shall provide for resales of all Transfer Restricted Securities held by Holders
that have provided the information required pursuant to the terms of
Section 2(b) hereof;

 

(ii)                                  use
its best efforts to cause the Shelf Registration Statement to be declared
effective by the Commission as promptly as practicable, but in no event later
than 210 days after the date hereof (the “Effectiveness Target Date”); and

 

(iii)                               use
its best efforts to keep the Shelf Registration Statement continuously
effective, supplemented and amended as required by the provisions of
Section 4(b) hereof to the extent necessary to ensure that (A) it is
available for resales by the Holders of Transfer Restricted Securities entitled
to the benefit of this Agreement and (B) conforms with the requirements of this
Agreement and the Securities Act and the rules and regulations of the
Commission promulgated thereunder as announced from time to time for a period
(the “Effectiveness Period”) of:

 

(1)                                  two
years following the last date of original issuance of Notes; or

 

3

 

(2)                                  such
shorter period that will terminate when (X) all of the Holders of Transfer
Restricted Securities are able to sell all Transfer Restricted Securities
immediately without restriction pursuant to Rule 144(k) under the Securities
Act or any successor rule thereto, (Y) when all Transfer Restricted Securities
have ceased to be outstanding (whether as a result of redemption, repurchase
and cancellation, conversion or otherwise) or (Z) all Transfer Restricted
Securities registered under the Shelf Registration Statement have been sold.

 

(b)                                 No
Holder may include any of its Transfer Restricted Securities in the Shelf
Registration Statement pursuant to this Agreement unless such Holder furnishes
to the Issuer in writing, at least ten Business Days prior to the effectiveness
of the Shelf Registration Statement (the “Questionnaire Deadline”), such
information as the Issuer may reasonably request for use in connection with the
Shelf Registration Statement or the Prospectus or preliminary Prospectus included
therein and in any application to be filed with or under state securities
laws.  In connection with all such
requests for information from Holders, the Issuer shall notify such Holders of
the requirements set forth in the preceding sentence.

 

3.                                      LIQUIDATED
DAMAGES.

 

(a)                                  If:

 

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

 

(ii)                                  the
Shelf Registration Statement has not been declared effective by the Commission
prior to or on the Effectiveness Target Date;

 

(iii)                               subject
to the provisions of Section 4(b)(i) hereof, the Shelf Registration
Statement is filed and declared effective but, during the Effectiveness Period,
shall thereafter cease to be effective or fail to be usable for its intended
purpose without being succeeded within five Business Days by a post-effective
amendment to the Shelf Registration Statement or a report filed with the
Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange
Act that cures such failure and, in the case of a post-effective amendment, is
itself immediately declared effective; or

 

(iv)                              prior
to or on the 45th or 60th day, as the case may be, of any Suspension Period,
such suspension has not been terminated,

 

(each such event referred
to in foregoing clauses (i) through (iv), a “Registration Default”), the Issuer
hereby agrees to pay liquidated damages (“Liquidated Damages”) with respect to
the Transfer Restricted Securities from and including the day following the
Registration Default to but excluding the day on which the Registration Default
has been cured:

 

(A)                              in
respect of the Notes, to each Holder of Notes, (x) with respect to the first
90-day period during which a Registration Default shall have occurred and be
continuing, in an amount per year equal to an additional 0.25% of the principal
amount of the Notes and (y) with respect to

 

4

 

the period commencing on
the 91st day following the day the Registration Default shall have occurred and
be continuing, in an amount per year equal to an additional 0.50% of the
principal amount of the Notes; PROVIDED that in no event shall Liquidated
Damages accrue at a rate per year exceeding 0.50% of the principal amount of
the Notes; and

 

(B)                                in
respect of any shares of Common Stock, to each Holder of shares of Common Stock
issued upon conversion of Notes, (x) with respect to the first 90-day period in
which a Registration Default shall have occurred and be continuing, in an
amount per year equal to 0.25% of the principal amount of the converted Notes
and (y) with respect to the period commencing the 91st day following the day
the Registration Default shall have occurred and be continuing, in an amount
per year equal to 0.50% of the principal amount of the converted Notes;
PROVIDED

 

that in no event shall
Liquidated Damages accrue at a rate per year exceeding 0.50% of the principal
amount of the converted Notes.

 

(b)                                 All
accrued Liquidated Damages shall be paid in arrears to Record Holders by the
Issuer on each Damages Payment Date by wire transfer of immediately available
funds or by federal funds check. Following the cure of all Registration
Defaults relating to any particular Note or share of Common Stock, the accrual
of Liquidated Damages with respect to such Note or share of Common Stock will
cease.

 

All obligations of the
Issuer set forth in this Section 3 that are outstanding with respect to
any Transfer Restricted Security at the time such security ceases to be a
Transfer Restricted Security shall survive until such time as all such
obligations with respect to such Transfer Restricted Security shall have been
satisfied in full.

 

The Liquidated Damages
set forth above shall be the exclusive monetary remedy available to the Holders
for such Registration Default.

 

4.                                      REGISTRATION
PROCEDURES.

 

(a)                                  In
connection with the Shelf Registration Statement, the Issuer shall comply with
all the provisions of Section 4(b) hereof and shall use its best efforts
to effect such registration to permit the sale of the Transfer Restricted
Securities being sold in accordance with the intended method or methods of
distribution thereof, and pursuant thereto, shall as expeditiously as possible
prepare and file with the Commission a Shelf Registration Statement relating to
the registration on any appropriate form under the Securities Act.

 

(b)                                 In
connection with the Shelf Registration Statement and any Prospectus required by
this Agreement to permit the sale or resale of Transfer Restricted Securities,
the Issuer shall:

 

(i)                                     Subject
to any notice by the Issuer in accordance with this Section 4(b) of the
existence of any fact or event of the kind described in
Section 4(b)(iii)(D), use its best efforts to keep the Shelf Registration
Statement continuously effective during the Effectiveness Period. Upon the
occurrence of any event that would cause the Shelf Registration Statement or
the Prospectus

 

5

 

contained therein (A) to
contain a material misstatement or omission or (B) not be effective and usable
for resale of Transfer Restricted Securities during the Effectiveness Period,
the Issuer shall file promptly an appropriate amendment to the Shelf
Registration Statement or a report filed with the Commission pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act, in the case of
clause (A), correcting any such misstatement or omission, and, in the case of
either clause (A) or (B), use its best efforts to cause any such amendment to
be declared effective and the Shelf Registration Statement and the related
Prospectus to become usable for their intended purposes as soon as practicable
thereafter. Notwithstanding the foregoing, the Issuer may suspend the
effectiveness of the Shelf Registration Statement by written notice to the
Holders for a period not to exceed an aggregate of 45 days in any 90-day period
(each such period, a “Suspension Period”) if:

 

(x)                                   an
event occurs and is continuing as a result of which the Shelf Registration
Statement would, in the Issuer’s reasonable judgment, contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading; and

 

(y)                                 the
Issuer reasonably determines that the disclosure of such event at such time
would have a material adverse effect on the business of the Issuer (and its
subsidiaries, if any, taken as a whole);

 

PROVIDED that in the
event the disclosure relates to a previously undisclosed proposed or pending
material business transaction, the disclosure of which would impede the
Issuer’s ability to consummate such transaction, the Issuer may extend a
Suspension Period from 45 days to 60 days; PROVIDED, HOWEVER, that Suspension
Periods shall not exceed an aggregate of 90 days in any 360-day period.

 

(ii)                                  Prepare
and file with the Commission such amendments and post-effective amendments to
the Shelf Registration Statement as may be necessary to keep the Shelf
Registration Statement effective during the Effectiveness Period; cause the
Prospectus to be supplemented by any required Prospectus supplement, and as so
supplemented to be filed pursuant to Rule 424 under the Securities Act, and to
comply fully with the applicable provisions of Rules 424 and 430A under the
Securities Act in a timely manner; and comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by the
Shelf Registration Statement during the applicable period in accordance with
the intended method or methods of distribution by the sellers thereof set forth
in the Shelf Registration Statement or Prospectus supplement.

 

(iii)                               Advise
the selling Holders that have furnished information pursuant to
Section 4(d) hereof, the Dealer Manager, and the underwriter(s), if any,
promptly (but in any event within five Business Days) and, if requested by such
Persons, confirm such advice in writing:

 

(A)                              with
respect to the Shelf Registration Statement or any post-effective amendment
thereto, when the same has become

 

6

 

effective, and when the
Prospectus or any Prospectus supplement or post-effective amendment has been
filed,

 

(B) of any request by the
Commission for amendments to the Shelf Registration Statement or amendments or
supplements to the Prospectus or for additional information relating thereto,

 

(C) of the issuance by
the Commission of any stop order suspending the effectiveness of the Shelf
Registration Statement under the Securities Act or of the suspension by any
state securities commission of the qualification of the Transfer Restricted
Securities for offering or sale in any jurisdiction, or the initiation of any
proceeding for any of the preceding purposes, or

 

(D) of the existence of
any fact or the happening of any event, during the Effectiveness Period, that
makes any statement of a material fact made in the Shelf Registration Statement
or the Prospectus, any amendment or supplement thereto, or any document
incorporated by reference therein untrue, or that requires the making of any
additions to or changes in the Shelf Registration Statement or the Prospectus
in order to make the statements therein not misleading.

 

If at any time the
Commission shall issue any stop order suspending the effectiveness of the Shelf
Registration Statement, or any state securities commission or other regulatory
authority shall issue an order suspending the qualification or exemption from
qualification of the Transfer Restricted Securities under state securities or
Blue Sky laws, the Issuer shall use its reasonable best efforts to obtain the
withdrawal or lifting of such order at the earliest possible time.

 

(iv)                              Furnish
to each of the selling Holders that has furnished information pursuant to
Section 4(d) hereof, the Dealer Manager and each of the underwriter(s), if
any, at least five Business Days before filing with the Commission, a copy of
the Shelf Registration Statement and copies of any Prospectus included therein
or any amendments or supplements to the Shelf Registration Statement or
Prospectus (other than documents incorporated by reference after the initial
filing of the Shelf Registration Statement), which documents will be subject to
the review of such Holders, Dealer Manager and underwriter(s), if any, for a
period of five Business Days, and the Issuer will not file any Shelf
Registration Statement or Prospectus or any amendment or supplement to the
Shelf Registration Statement or Prospectus (other than documents incorporated
by reference) to which a selling Holder of Transfer Restricted Securities
covered by the Shelf Registration Statement, Dealer Manager, or the
underwriter(s), if any, shall reasonably object. A selling Holder, Dealer
Manager, or an underwriter, if any, shall be deemed to have reasonably objected
to such filing if the Shelf Registration Statement, amendment, Prospectus or
supplement, as applicable, as proposed to be filed, contains a material
misstatement or omission. Notwithstanding the foregoing, the Issuer shall not
be

 

7

 

required to furnish the
selling Holders with any amendment or supplement to the Shelf Registration
Statement or Prospectus filed solely to reflect changes to the amount of Notes
held by any particular Holder at the request of such Holder or immaterial
revisions to the information contained therein.

 

(v)                                 Make
available at reasonable times for inspection by one or more representatives of
the selling Holders, designated in writing by a Majority of Holders whose
Transfer Restricted Securities are included in the Shelf Registration
Statement, any underwriter participating in any distribution pursuant to the
Shelf Registration Statement and any attorney or accountant retained by such
selling Holders or any of the underwriter(s), all financial and other records,
pertinent corporate documents and properties of the Issuer as shall be
reasonably necessary to enable them to exercise any applicable due diligence
responsibilities, and cause the Issuer’s officers, directors, managers and
employees to supply all information reasonably requested by any such
representative or representatives of the selling Holders, underwriter, attorney
or accountant in connection with the Shelf Registration Statement after the
filing thereof and before its effectiveness; PROVIDED, HOWEVER, that any
information designated by the Issuer as confidential at the time of delivery of
such information shall be kept confidential by the recipient thereof.

 

(vi)                              If
requested by any selling Holders, the Dealer Manager, or the underwriter(s), if
any, promptly incorporate in the Shelf Registration Statement or Prospectus,
pursuant to a supplement or post-effective amendment if necessary, such
information as such selling Holders, the Dealer Manager, and such
underwriter(s), if any, may reasonably request to have included therein,
including, without limitation: (1) information relating to the “Plan of
Distribution” of the Transfer Restricted Securities, (2) information with
respect to the principal amount of Notes or number of shares of Common Stock
being sold to such underwriter(s), (3) the purchase price being paid therefor
and (4) any other terms of the offering of the Transfer Restricted Securities
to be sold in such offering; and make all required filings of such Prospectus
supplement or post-effective amendment as soon as reasonably practicable after
the Issuer is notified of the matters to be incorporated in such Prospectus
supplement or post-effective amendment. Notwithstanding the foregoing,
following the effective date of the Shelf Registration Statement, the Issuer shall
not be required to file more than one such supplement or post-effective
amendment to reflect changes in the amount of Transfer Restricted Securities
held by any Holders at the request of such Holders in any 30-day period.

 

(vii)                           Furnish
to each selling Holder, the Dealer Manager and each of the underwriter(s), if
any, without charge, at least one copy of the Shelf Registration Statement, as
first filed with the Commission, and of each amendment thereto (and any
documents incorporated by reference therein or exhibits thereto (or exhibits
incorporated in such exhibits by reference) as such Person may request).

 

8

 

(viii)                        Deliver to
each selling Holder, the Dealer Manager and each of the underwriter(s), if any,
without charge, as many copies of the Prospectus (including each preliminary
prospectus) and any amendment or supplement thereto as such Persons reasonably
may request; subject to any notice by the Issuer in accordance with this
Section 4(b) of the existence of any fact or event of the kind described
in Section 4(b)(iii)(D), the Issuer hereby consents to the use of the
Prospectus and any amendment or supplement thereto by each of the selling
Holders and each of the underwriter(s), if any, in connection with the offering
and the sale of the Transfer Restricted Securities covered by the Prospectus or
any amendment or supplement thereto.

 

(ix)                                If
an underwriting agreement is entered into and the registration is an
Underwritten Registration, the Issuer shall:

 

(A)                              upon
request, furnish to each selling Holder and each underwriter, if any, in such
substance and scope as they may reasonably request and as are customarily made
by issuers to underwriters in primary underwritten offerings, upon the date of
closing of any sale of Transfer Restricted Securities in an Underwritten
Registration:

 

(1)                                  a
certificate, dated the date of such closing, signed by either the Chief
Financial Officer or the Chief Executive Officer of the Issuer and confirming,
as of the date thereof, the matters set forth in Section 12.5 of the
Dealer Manager Agreement and such other matters as such parties may reasonably
request;

 

(2)                                  opinions,
each dated the date of such closing, of counsel to the Issuer covering such of
the matters set forth in the exhibits to the Dealer Manager Agreement referred
to in Section 12.4(A) thereof as are customarily covered in legal opinions
to underwriters in connection with primary underwritten offerings of
securities; and

 

(3)                                  customary
comfort letters, dated the date of such closing, from the Issuer’s independent
certified public accountants (and from any other accountants whose report is
contained or incorporated by reference in the Shelf Registration Statement), in
the customary form and covering matters of the type customarily covered in
comfort letters to underwriters in connection with primary underwritten
offerings of securities;

 

(B) set forth in full in
the underwriting agreement, if any, indemnification provisions and procedures
which provide rights no less protective than those set forth in Section 6
hereof with respect to all parties to be indemnified; and

 

(C) deliver such other
documents and certificates as may be reasonably requested by such parties to
evidence compliance with

 

9

 

clause (A) above and with
any customary conditions contained in the underwriting agreement or other
agreement entered into by the selling Holders pursuant to this clause (ix).

 

(x)                                   Before
any public offering of Transfer Restricted Securities, cooperate with the
selling Holders, the underwriter(s), if any, and their respective counsel in
connection with the registration and qualification of the Transfer Restricted
Securities under the securities or Blue Sky laws of such jurisdictions as the
selling Holders or underwriter(s), if any, may reasonably request and do any
and all other acts or things necessary or advisable to enable the disposition
in such jurisdictions of the Transfer Restricted Securities covered by the
Shelf Registration Statement; PROVIDED, HOWEVER, that the Issuer shall not be
required (A) to register or qualify as a foreign corporation or a dealer of
securities where it is not now so qualified or to take any action that would
subject it to the service of process in any jurisdiction where it is not now so
subject or (B) to subject itself to taxation in any such jurisdiction if it is
not now so subject.

 

(xi)                                Cooperate
with the selling Holders and the underwriter(s), if any, to facilitate the
timely preparation and delivery of certificates representing Transfer
Restricted Securities to be sold and not bearing any restrictive legends
(unless required by applicable securities laws); and enable such Transfer
Restricted Securities to be in such denominations and registered in such names
as the Holders or the underwriter(s), if any, may request at least two Business
Days before any sale of Transfer Restricted Securities made by such
underwriter(s).

 

(xii)                             Use
its best efforts to cause the Transfer Restricted Securities covered by the
Shelf Registration Statement to be registered with or approved by such other
U.S. governmental agencies or authorities as may be necessary to enable the
seller or sellers thereof or the underwriter(s), if any, to consummate the
disposition of such Transfer Restricted Securities.

 

(xiii)                          Subject
to Section 4(b)(i) hereof, if any fact or event contemplated by
Section 4(b)(iii)(D) hereof shall exist or have occurred, use its
reasonable best efforts to prepare a supplement or post-effective amendment to the
Shelf Registration Statement or related Prospectus or any document incorporated
therein by reference or file any other required document so that, as thereafter
delivered to the purchasers of Transfer Restricted Securities, the Prospectus
will not contain an 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.

 

(xiv)                         Provide
CUSIP numbers for all Transfer Restricted Securities not later than the effective
date of the Shelf Registration Statement and provide the Trustee under the
Indenture with certificates for the Notes that are in a form eligible for
deposit with The Depository Trust Company.

 

10

 

(xv)                            Cooperate
and assist in any filings required to be made with the NASD and in the
performance of any due diligence investigation by any underwriter that is
required to be retained in accordance with the rules and regulations of the
NASD.

 

(xvi)                         Otherwise
use its best efforts to comply with all applicable rules and regulations of the
Commission and all reporting requirements under the rules and regulations of
the Exchange Act.

 

(xvii)                      Cause the
Indenture to be qualified under the TIA not later than the effective date of
the Shelf Registration Statement required by this Agreement, and, in connection
therewith, cooperate with the trustee and the Holders of Notes to effect such
changes to the Indenture as may be required for such Indenture to be so
qualified in accordance with the terms of the TIA; and execute and use its best
efforts to cause the trustee thereunder to execute all documents that may be
required to effect such changes and all other forms and documents required to
be filed with the Commission to enable such Indenture to be so qualified in a
timely manner.

 

(xviii)                   Cause all
Transfer Restricted Securities covered by the Shelf Registration Statement to
be listed or quoted, as the case may be, on each securities exchange or
automated quotation system on which similar securities issued by the Issuer are
then listed or quoted.

 

(xix)                           Provide
promptly to each Holder upon written request each document filed with the
Commission pursuant to the requirements of Section 13 and Section 15
of the Exchange Act after the effective date of the Shelf Registration
Statement.

 

(xx)                              If
requested by the underwriters, make appropriate officers of the Issuer
available to the underwriters for meetings with prospective purchasers of the
Transfer Restricted Securities and prepare and present to potential investors
customary “road show” material in a manner consistent with new issuances of
other securities similar to the Transfer Restricted Securities.

 

(c)                                  Each
Holder agrees by acquisition of a Transfer Restricted Security that, upon
receipt of any notice from the Issuer of the existence of any fact of the kind
described in Section 4(b)(iii)(D) hereof, such Holder will, and will use
its reasonable best efforts to cause any underwriter(s) in an Underwritten
Offering to, forthwith discontinue disposition of Transfer Restricted
Securities pursuant to the Shelf Registration Statement, and hold the content
of such notice from the Company in confidence, until:

 

(i)                                     such
Holder has received copies of the supplemented or amended Prospectus
contemplated by Section 4(b)(xiii) hereof; or

 

(ii)                                  such
Holder is advised in writing by the Issuer that the use of the Prospectus may
be resumed, and has received copies of any additional or supplemental filings
that are incorporated by reference in the Prospectus.

 

11

 

If so directed by the
Issuer, each Holder will deliver to the Issuer (at the Issuer’s expense) all
copies, other than permanent file copies then in such Holder’s possession, of
the Prospectus covering such Transfer Restricted Securities that was current at
the time of receipt of such notice of suspension.

 

(d)                                 (1)                                  Not
less than 30 calendar days prior to the effectiveness of the Shelf Registration
Statement, the Company shall mail the a questionnaire to each Holder of
Transfer Restricted Securities.  Each
Holder who intends to be named as a selling Holder in the Shelf Registration
Statement shall furnish to the Issuer in writing by the Questionnaire Deadline,
as set forth in the questionnaire, such information regarding such Holder and
the proposed distribution by such Holder of its Transfer Restricted Securities
as the Issuer may reasonably request for use in connection with the Shelf
Registration Statement or Prospectus or preliminary Prospectus included
therein.  The form of the questionnaire
is attached hereto as Exhibit A.  Each
Holder who intends to be named as a selling Holder in the Shelf Registration
Statement shall promptly furnish to the Issuer in writing such other
information as the Issuer may from time to time reasonably request in writing.
Each Holder as to which the Shelf Registration Statement is being effected
agrees to furnish promptly to the Issuer all information required to be
disclosed in order to make information previously furnished to the Issuer by
such Holder not materially misleading. 
The Company shall take action to name each Holder that furnishes to the
Issuer the requested information by the Questionnaire Deadline so that such
Holder is named as a selling securityholder in the Shelf Registration Statement
at the time of its effectiveness and is permitted to deliver the Prospectus
forming a part thereof as of such time to purchasers of such Holder’s Transfer
Restricted Securities in accordance with applicable law.  Holders that do not complete the
questionnaire and deliver it to the Issuer shall not be named as selling
securityholders in the Prospectus or preliminary Prospectus included in the
Shelf Registration Statement and therefore shall not be permitted to sell any
Transfer Restricted Securities pursuant to the Shelf Registration Statement.

 

(2)                                  After
the Shelf Registration Statement has become effective, the Company shall, upon
the request of any Holder of Transfer Restricted Securities, promptly send a
questionnaire to such Holder.  From and
after the date on which the Shelf Registration Statement has become effective,
the Company shall (i) as promptly as is practicable after the date a completed
and signed questionnaire is delivered to the Company prepare and file with the
Securities Exchange Commission (x) a supplement to the Prospectus or, if
required by applicable law, a post-effective amendment to the Shelf
Registration Statement and (y) any other document required by applicable law,
so that the Holder delivering such questionnaire is named as a selling
securityholder in the Shelf Registration Statement and is permitted to deliver
the Prospectus to purchasers of such Holder’s Transfer Restricted Securities in
accordance with applicable law, and (ii) if the Company shall file a
post-effective amendment to the Shelf Registration Statement, use its
reasonable best efforts to cause such post-effective amendment to become
effective under the Act as promptly as is practicable;  provided, however, that if a
questionnaire is delivered to the Company during a Suspension Period, the
Company shall not be obligated to take the actions set forth in clauses (i) and
(ii) until the termination of such Suspension Period.

 

12

 

5.                                      REGISTRATION
EXPENSES.

 

(a)                                  All
expenses incident to the Issuer’s performance of or compliance with this
Agreement shall be borne by the Issuer regardless of whether a Shelf
Registration Statement becomes effective, including, without limitation:

 

(i)                                     all
registration and filing fees and expenses (including filings made by the Dealer
Manager, Holders or underwriters with the NASD);

 

(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 and certificates for
the Common Stock to be issued upon conversion of the Notes), messenger and
delivery services and telephone;

 

(iv)                              all
fees and disbursements of counsel to the Issuer and, subject to Section 5(b)
below, the Holders of Transfer Restricted Securities;

 

(v)                                 all
application and filing fees in connection with listing (or authorizing for
quotation) the Common Stock 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
Issuer (including the expenses of any special audit and comfort letters
required by or incident to such performance).

 

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

 

(b)                                 In
connection with the Shelf Registration Statement required by this Agreement,
the Issuer shall reimburse the Dealer Manager and the Holders of Transfer
Restricted Securities being registered pursuant to the Shelf Registration
Statement, as applicable, for the reasonable fees and disbursements of not more
than one counsel, which shall be Cleary, Gottlieb, Steen & Hamilton, or
such other counsel as may be chosen by a Majority of Holders for whose benefit
the Shelf Registration Statement is being prepared.

 

6.                                      INDEMNIFICATION
AND CONTRIBUTION.

 

(a)                                  The
Issuer agrees to indemnify and hold harmless the Dealer Manager, each Holder
and each Person who participates as an underwriter (any such Person being an
“Underwriter”) and each Person, if any, who controls the Dealer Manager, any
Holder or any Underwriter within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act as follows:

 

(i)                                     against
any and all loss, liability, claim, damage and expense whatsoever, as incurred,
arising out of any untrue statement or alleged untrue statement of a material
fact contained in any Shelf Registration Statement (or any

 

13

 

amendment or supplement
thereto), including all documents incorporated therein by reference, or the
omission or alleged omission therefrom of a material fact required to be stated
therein or necessary to make the statements therein not misleading, or arising
out of any untrue statement or alleged untrue statement of a material fact
contained in any Prospectus (or any amendment or supplement thereto) or the
omission or alleged omission therefrom of a material fact necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading;

 

(ii)                                  against
any and all loss, liability, claim, damage and expense whatsoever, as incurred,
to the extent of the aggregate amount paid in settlement of any litigation, or
any investigation or proceeding by any governmental agency or body, commenced
or threatened, or of any claim whatsoever based upon any such untrue statement
or omission, or any such alleged untrue statement or omission; PROVIDED that
(subject to Section 6(d) below) any such settlement is effected with the
written consent of the Issuer; and

 

(iii)                               against
any and all expense whatsoever, as incurred (including the fees and
disbursements of counsel chosen by any indemnified party), reasonably incurred
in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission, to the extent that
any such expense is not paid under subparagraph (i) or (ii) above;

 

PROVIDED, HOWEVER, that
this indemnity agreement shall not apply to any loss, liability, claim, damage
or expense to the extent arising out of any untrue statement or omission or
alleged untrue statement or omission made in reliance upon and in conformity
with written information furnished to the Issuer by the Dealer Manager, such
Holder or such Underwriter expressly for use in a Shelf Registration Statement
(or any amendment thereto) or any Prospectus (or any amendment or supplement
thereto).

 

(b)                                 Each
Holder, severally but not jointly, agrees to indemnify and hold harmless the
Issuer, the Dealer Manager, each Underwriter and the other selling Holders and
each Person, if any, who controls the Issuer, the Dealer Manager, any
Underwriter or any other selling Holder within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act, against any and
all loss, liability, claim, damage and expense described in the indemnity
contained in Section 6(a) hereof, as incurred, but only with respect to
untrue statements or omissions, or alleged untrue statements or omissions, made
in any Shelf Registration Statement (or any amendment or supplement thereto) or
any Prospectus (or any amendment or supplement thereto) in reliance upon and in
conformity with written information with respect to such Holder furnished to
the Issuer by such Holder expressly for use in the Shelf Registration Statement
(or any amendment thereto) or such Prospectus (or any amendment or supplement
thereto); PROVIDED, HOWEVER, that no such Holder shall be liable for any claims
hereunder in excess of the amount of net proceeds received by such Holder from
the sale of Transfer Restricted Securities pursuant to such Shelf Registration
Statement.

 

14

 

(c)                                  Each
indemnified party shall give notice as promptly as reasonably practicable to
each indemnifying party of any action or proceeding commenced against it in
respect of which indemnity may be sought hereunder, but failure so to notify an
indemnifying party shall not relieve such indemnifying party from any liability
hereunder to the extent it is not materially prejudiced as a result thereof and
in any event shall not relieve it from any liability which it may have
otherwise than on account of this indemnity agreement. An indemnifying party
may participate at its own expense in the defense of such action; PROVIDED,
HOWEVER, that counsel to the indemnifying party shall not (except with the
consent of the indemnified party) also be counsel to the indemnified party. In
no event shall the indemnifying party or parties be liable for the fees and
expenses of more than one counsel (in addition to any local counsel) separate
from their own counsel for all indemnified parties in connection with any one
action or separate but similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances. No indemnifying
party shall, without the prior written consent of the indemnified parties,
settle or compromise or consent to the entry of any judgment with respect to
any litigation, or any investigation or proceeding by any governmental agency
or body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 6
(whether or not the indemnified parties are actual or potential parties
thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising out
of such litigation, investigation, proceeding or claim and (ii) does not
include a statement as to or an admission of fault, culpability or a failure to
act by or on behalf of any indemnified party.

 

(d)                                 If
at any time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel, such
indemnifying party agrees that it shall be liable for any settlement of the
nature contemplated by Section 6(a)(ii) effected without its written
consent if (i) such settlement is entered into more than 45 days after receipt
by such indemnifying party of the aforesaid request, (ii) such indemnifying
party shall have received notice of the terms of such settlement at least 30
days prior to such settlement being entered into and (iii) such indemnifying
party shall not have reimbursed such indemnified party in accordance with such
request prior to the date of such settlement.

 

(e)                                  If
the indemnification provided for in this Section 6 is for any reason
unavailable to or insufficient to hold harmless an indemnified party in respect
of any losses, liabilities, claims, damages or expenses referred to therein,
then each indemnifying party shall contribute to the aggregate amount of such
losses, liabilities, claims, damages and expenses incurred by such indemnified
party, as incurred, in such proportion as is appropriate to reflect the
relative fault of the indemnifying party or parties on the one hand and the
indemnified party or parties on the other hand in connection with the
statements or omissions which resulted in such losses, liabilities, claims,
damages or expenses, as well as any other relevant equitable considerations.

 

The relative fault of the
indemnifying party or parties on the one hand and the indemnified party or
parties on the other hand shall be determined by reference to, among other
things, whether any such untrue or alleged untrue statement of a material fact
or omission or alleged omission to state a material fact relates to information
supplied by the indemnifying party or parties on the one hand or the
indemnified party or parties on the other hand and the parties’

 

15

 

relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.

 

The parties hereto agree
that it would not be just and equitable if contribution pursuant to this
Section 6 were determined by pro rata allocation or by any other method of
allocation which does not take account of the equitable considerations referred
to above in this Section 6. The aggregate amount of losses, liabilities,
claims, damages and expenses incurred by an indemnified party and referred to
above in this Section 6 shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in investigating,
preparing or defending against any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened, or any
claim whatsoever based upon any such untrue or alleged untrue statement or
omission or alleged omission.

 

Notwithstanding the
provisions of this Section 6, no Holder shall be required to contribute
any amount in excess of the amount by which the total price at which the
Transfer Restricted Securities purchased by it were resold exceeds the amount
of any damages which such Holder has otherwise been required to pay by reason
of any untrue or alleged untrue statement or omission or alleged omission. The
Holders’ obligations to contribute as provided in this Section 6(e) are
several and not joint.

 

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
Section 6, each Person, if any, who controls the Dealer Manager, a Holder
or an Underwriter within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act shall have the same rights to
contribution as such Initial Purchaser, such Holder or such Underwriter, and
each director of the Issuer, and each Person, if any, who controls the Issuer
within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act shall have the same rights to contribution as the Issuer.

 

7.                                      RULE
144A.  In the event the Issuer is
not subject to Section 13 or 15(d) of the Exchange Act, the Issuer hereby
agrees with each Holder, for so long as any Transfer Restricted Securities
remain outstanding, to make available to any Holder or beneficial owner of
Transfer Restricted Securities in connection with any sale thereof and any
prospective purchaser of such Transfer Restricted Securities from such Holder
or beneficial owner, the information required by Rule 144A(d)(4) under the
Securities Act in order to permit resales of such Transfer Restricted
Securities pursuant to Rule 144A.

 

8.                                      PARTICIPATION
IN UNDERWRITTEN REGISTRATIONS.  No
Holder may participate in any Underwritten Registration hereunder unless such
Holder:

 

(i)                                     agrees
to sell such Holder’s Transfer Restricted Securities on the basis provided in
any underwriting arrangements approved by the Persons entitled hereunder to
approve such arrangements and

 

16

 

(ii)                                  completes
and executes all reasonable questionnaires, powers of attorney, indemnities,
underwriting agreements, lock-up letters and other documents required under the
terms of such underwriting arrangements.

 

9.                                      SELECTION
OF UNDERWRITERS.  The Holders of
Transfer Restricted Securities covered by the Shelf Registration Statement who
desire to do so may sell such Transfer Restricted Securities in an Underwritten
Offering. In any such Underwritten Offering, the investment banker or
investment bankers and manager or managers that will administer the offering
will be selected by a Majority of Holders whose Transfer Restricted Securities
are included in such offering; PROVIDED, that such investment bankers and managers
must be reasonably satisfactory to the Issuer.

 

10.                               MISCELLANEOUS.

 

(a)                                  REMEDIES.
The Issuer acknowledges and agrees that any failure by the Issuer to comply
with its obligations under Section 2 hereof may result in material
irreparable injury to the Dealer Manager 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 Dealer
Manager or any Holder may obtain such relief as may be required to specifically
enforce the Issuer’s obligations under Section 2 hereof. The Issuer
further agrees to waive the defense in any action for specific performance that
a remedy at law would be adequate.

 

(b)                                 ADJUSTMENTS
AFFECTING TRANSFER RESTRICTED SECURITIES. The Issuer shall not, directly or
indirectly, take any action with respect to the Transfer Restricted Securities
as a class that would adversely affect the ability of the Holders to include
such Transfer Restricted Securities in a registration undertaken pursuant to
this Agreement.

 

(c)                                  NO
INCONSISTENT AGREEMENTS. The Issuer 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. In addition, the Issuer shall
not grant to any of its security holders (other than the Holders of Transfer
Restricted Securities in such capacity) the right to include any of its
securities in the Shelf Registration Statement provided for in this Agreement
other than the Transfer Restricted Securities. The Issuer has not previously
entered into any agreement (which has not expired or been terminated) granting
any registration rights with respect to its securities to any Person which
rights conflict with the provisions hereof.

 

(d)                                 AMENDMENTS
AND WAIVERS. This Agreement may not be amended, modified or supplemented, and
waivers or consents to or departures from the provisions hereof may not be given,
unless the Issuer has obtained the written consent of a Majority of Holders.

 

(e)                                  NOTICES.
All notices and other communications provided for or permitted hereunder shall
be made in writing by hand-delivery, first-class mail (registered or

 

17

 

certified, return receipt
requested), telex, telecopier, or air courier guaranteeing overnight delivery:

 

(i)                                     if
to a Holder, at the address set forth on the records of the registrar under the
Indenture or the transfer agent of the Common Stock, as the case may be; and

 

(ii)                                  if
to the Issuer:

 

Vertex Pharmaceuticals
Incorporated 130 Waverly Street

Cambridge, Massachusetts 02139

Attention: Investor Relations

 

With a copy to:

 

Mintz, Levin, Cohn,
Ferris, Glovsky and Popeo, P.C. One

Financial Center Boston, Massachusetts 02111

Attention: Michael Fantozzi, Esq.

 

All such notices and
communications shall be deemed to have been duly given: at the time delivered
by hand, if personally delivered; five Business Days after being deposited in
the mail, postage prepaid, if mailed; when answered back, if telexed; when
receipt acknowledged, if telecopied; and on the next Business Day, if timely
delivered to an air courier guaranteeing overnight delivery.

 

(f)                                    SUCCESSORS
AND ASSIGNS. This Agreement shall inure to the benefit of and be binding upon
the successors and assigns of each of the parties, including without limitation
and without the need for an express assignment, subsequent Holders of Transfer
Restricted Securities; PROVIDED, HOWEVER, that (i) this Agreement shall not
inure to the benefit of or be binding upon a successor or assign of a Holder
unless and to the extent such successor or assign acquired Transfer Restricted
Securities from such Holder and (ii) nothing contained herein shall be deemed
to permit any assignment, transfer or other disposition of Transfer Restricted
Securities in violation of the terms of the Indenture. If any transferee of any
Holder shall acquire Transfer Restricted Securities, in any manner, whether by
operation of law or otherwise, such Transfer Restricted Securities shall be
held subject to all of the terms of this Agreement, and by taking and holding
such Transfer Restricted Securities such person shall be conclusively deemed to
have agreed to be bound by and to perform all of the terms and provisions of
this Agreement.

 

(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)                                 SECURITIES
HELD BY THE ISSUER OR ITS AFFILIATES. Whenever the consent or approval of
Holders of a specified percentage of Transfer Restricted Securities is required
hereunder, Transfer Restricted Securities held by the Issuer or its
“affiliates” (as such

 

18

 

term is defined in Rule
405 under the Securities Act) shall not be counted in determining whether such
consent or approval was given by the Holders of such required percentage.

 

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

 

(j)                                     GOVERNING
LAW. This Agreement shall be governed by, and construed in accordance with, the
law of the State of New York, without regard to conflict of laws principles
thereof.

 

(k)                                  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.

 

(l)                                     ENTIRE
AGREEMENT. This Agreement is intended by the parties as a final expression of
their agreement and intended to be a complete and exclusive statement of the
agreement and understanding of the parties hereto in respect of the subject
matter contained herein. There are no restrictions, promises, warranties or
undertakings, other than those set forth or referred to herein with respect to
the registration rights granted by the Issuer with respect to the Transfer
Restricted Securities. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter.

 

19

 

IN WITNESS WHEREOF, the
parties have executed this Agreement as of the date first written above.

 

	
   

  	
   

  	
  VERTEX PHARMACEUTICALS

  INCORPORATED

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Joshua S. Boger

  	
   

  
	
   

  	
   

  	
  Name: Joshua S. Boger

  	
   

  
	
   

  	
   

  	
  Title: Chairman and
  Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  UBS Securities LLC

  as Dealer Manager

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Chris Hite

  	
   

  
	
   

  	
   

  	
  Name: Chris Hite

  	
   

  
	
   

  	
   

  	
  Title: Managing
  Director

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Aradhana Sarin

  	
   

  
	
   

  	
   

  	
  Name: Aradhan Sarin

  	
   

  
	
   

  	
   

  	
  Title: Director

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Authorized Signatory

  	
   

  

 

 

Exhibit A

 

VERTEX PHARMACEUTICALS INCORPORATED

 

FORM OF SELLING SECURITYHOLDER NOTICE
AND QUESTIONNAIRE

 

The undersigned
beneficial holder of 53⁄4% Convertible Subordinated Notes due February 15,
2011 (the “Notes”) of Vertex Pharmaceuticals Incorporated (the “Issuer”), or
common stock, par value $.01 per share issued upon conversion of the Notes (the
“Shares” and together with the Notes, the “Transfer Restricted Securities”), of
the Issuer understands that the Issuer has filed, or intends to file, with the
Securities and Exchange Commission (the “Commission”) a registration statement
(the “Shelf Registration Statement”), for the registration and resale under
Rule 415 of the Securities Act of 1933, as amended (the “Securities Act”), of
the Transfer Restricted Securities in accordance with the terms of the
Registration Rights Agreement, dated September 17, 2004 (the “Registration
Rights Agreement”), between the Issuer and UBS Securities LLC, as Dealer
Manager. A copy of the Registration Rights Agreement is available from the
Issuer upon request at the address set forth below. All capitalized terms not
otherwise defined herein have the meaning ascribed thereto in the Registration
Rights Agreement.

 

Each beneficial owner of
Transfer Restricted Securities is entitled to the benefits of the Registration
Rights Agreement. In order to sell or otherwise dispose of any Transfer
Restricted Securities pursuant to the Shelf Registration Statement, a
beneficial owner of Transfer Restricted Securities generally will be required
to be named as a selling securityholder in the related Prospectus, deliver a
Prospectus to purchasers of Transfer Restricted Securities and be bound by
those provisions of the Registration Rights Agreement applicable to such
beneficial owner (including certain indemnification provisions, as described
below).

 

Beneficial owners that do
not complete this Notice and Questionnaire and deliver it to the Issuer as
provided below will not be named as selling securityholders in the prospectus
and will not be permitted to sell any Transfer Restricted Securities pursuant
to the Shelf Registration Statement. 
Beneficial owners are encouraged to complete and deliver this Notice and
Questionnaire on or before the tenth business day prior to the effectiveness of
the Shelf Registration Statement so that such beneficial owners may be named as
selling securityholders in the related prospectus at the time the Shelf Registration
Statement becomes effective.  Upon
receipt of a completed Notice and Questionnaire from a beneficial owner
following the effectiveness of the Shelf Registration Statement, the Issuer
will, as promptly as practicable, make filings with the Commission as are
necessary to permit such beneficial owner to deliver such prospectus to
purchasers of Transfer Restricted Securities, subject to certain limitations
set forth in the Registration Rights Agreement.  The Issuer has agreed to pay liquidated damages pursuant to the
Registration Rights Agreement under certain circumstances as set forth therein.

 

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

 

A-1

 

NOTICE

 

The undersigned
beneficial owner (the “Selling Securityholder”) of Transfer Restricted
Securities hereby gives notice to the Issuer of its intention to sell or
otherwise dispose of Transfer Restricted Securities beneficially owned by it
and listed below in Item 3 (unless otherwise specified under Item 3) pursuant
to the Shelf Registration Statement. The undersigned, by signing and returning
this Notice and Questionnaire, understands that it will be bound by the terms
and conditions of this Notice and Questionnaire and the Registration Rights
Agreement.

 

Pursuant to the
Registration Rights Agreement, the undersigned has agreed to indemnify and hold
harmless the Issuer, the Dealer Manager, any Underwriter and the other selling
holders and each person, if any, who controls such persons within the meaning
of either Section 15 of the Securities Act or Section 20 of the
Exchange Act, from and against certain losses arising in connection with
statements concerning the undersigned made in the Shelf Registration Statement
or the related Prospectus in reliance upon the information provided in this
Notice and Questionnaire.

 

The undersigned hereby
provides the following information to the Issuer and represents and warrants
that such information is accurate and complete:

 

QUESTIONNAIRE

 

1.                                       (a)                                  Full
legal name of Selling Securityholder:

 

(b)                                 Full
legal name of registered holder (if not the same as (a) above) through which
Transfer Restricted Securities listed in (3) below are held:

 

(c)                                  Full
legal name of DTC participant (if applicable and if not the same as (b) above)
through which Transfer Restricted Securities listed in (3) are held:

 

(d)                                 Taxpayer
identification or social security number of Selling Securityholder:

 

2.  Address for notices to Selling
Securityholders:

 

Telephone:

 

Fax:

 

Email:

 

Contact Person:

 

3.                                       Beneficial
ownership of Transfer Restricted Securities:

 

(a)                                  Type
of Transfer Restricted Securities beneficially owned, and principal amount of
Notes or number of shares of Common Stock, as the case may be, beneficially
owned:

 

(b)                                 CUSIP
No(s). of such Transfer Restricted Securities beneficially owned:

 

A-2

 

4.                                       Beneficial
ownership of the Issuer’s securities owned by the Selling Securityholder:

 

EXCEPT AS SET FORTH BELOW IN THIS
ITEM (4), THE UNDERSIGNED IS NOT THE BENEFICIAL OR REGISTERED OWNER OF ANY
SECURITIES OF THE ISSUER OTHER THAN THE TRANSFER RESTRICTED SECURITIES LISTED
ABOVE IN ITEM (3) (“OTHER SECURITIES”).

 

(a)                                  Type
and amount of Other Securities beneficially owned by the Selling
Securityholder:

 

(b)                                 CUSIP
No(s). of such Other Securities beneficially owned:

 

5.                                       Relationship
with the Issuer

 

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

 

State any exceptions
here:

 

6.                                       Nature
of the Selling Securityholder:

 

(a)                                  Is
the Selling Securityholder a reporting company under the Securities Exchange
Act, a majority owned subsidiary of a reporting company under the Securities
Exchange Act, or a registered investment company under the Investment Company
Act?  If so, please state which one.

 

If the entity is a
majority owned subsidiary of a reporting company, identify the majority
stockholder that is a reporting company.

 

If the entity is not any
of the above, identify the natural person or persons having voting and
investment control over the Company’s securities that the entity owns.

 

 (b)                              Is
the Selling Securityholder is a registered broker-dealer?

 

Yes  o    No  o

 

If yes, state whether the
Selling Securityholder received the Transfer Restricted Securities as
compensation for underwriting activities and, if so, provide a brief
description of the transaction(s) involved.

 

State whether the Selling
Securityholder is an affiliate of a broker-dealer and if so, list the name(s)
of the broker-dealer affiliate(s).  For
purposes of this Item 6(b), an “affiliate” of a broker-dealer includes any
company that directly, or indirectly through one or more intermediaries,
controls, is controlled by, or is under common control with, such
broker-dealer, and does not include individuals employed by any such
broker-dealers or by any of their affiliates.

 

A-3

 

Yes  o    No  o

 

If the answer is “Yes,” you must
answer the following:

 

If the Selling
Securityholder is an affiliate of a registered broker-dealer, the Selling
Securityholder purchased the Transfer Restricted Securities (i) in the ordinary
course of business and (ii) at the time of the purchase of the Transfer
Restricted Securities, had no agreements or understandings, directly or
indirectly, with any person to distribute the Transfer Restricted Securities.

 

Yes  o    No  o

 

If the answer is “No”, state any
exceptions here:

 

If the answer is “No,” this may
affect your ability to be included in the Shelf Registration Statement.

 

7.                                       Plan
of Distribution

 

Except as set forth
below, the undersigned (including its donees, pledges, transferees and other
successors in interest) intends to distribute the Transfer Restricted Securities
listed above in Item (3) pursuant to the Shelf Registration Statement only as
follows (if at all). Such Transfer Restricted Securities may be sold from time
to time directly by the undersigned or, alternatively, through underwriters,
broker-dealers or agents. If the Transfer Restricted Securities are sold
through underwriters or broker-dealers, the Selling Securityholder will be
responsible for underwriting discounts or commissions or agent’s commissions.
Such Transfer Restricted Securities may be sold in one or more transactions at
fixed prices, at prevailing market prices at the time of sale, at varying
prices determined at the time of sale, or at negotiated prices. Such sales may
be effected in transactions (which may involve crosses or block transactions):

 

(i)                                     on
any national securities exchange or quotation service on which the Transfer
Restricted Securities may be listed or quoted at the time of sale;

 

(ii)                                  in
the over-the-counter market;

 

(iii)                               in
transactions otherwise than on such exchanges or services or in the
over-the-counter market; or

 

(iv)                              through
the writing of options.

 

In connection with sales
of the Transfer Restricted Securities or otherwise, the undersigned may enter
into hedging transactions with broker-dealers, which may in turn engage in
short sales of the Transfer Restricted Securities and deliver Transfer
Restricted Securities to close out such short positions, or loan or pledge
Transfer Restricted Securities to broker-dealers that in turn may sell such
securities.

 

A-4

 

State any exceptions
here:

 

Note: In no event will
such method(s) of distribution take the form of an underwritten offering of the
Transfer Restricted Securities without the prior agreement of the Issuer.

 

8.                                       (Optional)
Submissions After the Shelf Registration Statement Becomes Effective:

 

If you are unable to
trace your securities back to an individual or entity listed as a selling
securityholder in the Shelf Registration Statement, we may need to file a
post-effective amendment to the Shelf Registration Statement.  This could result in additional delay in
your ability to resell your securities pursuant to the Shelf Registration
Statement.  In order to allow us to
determine whether your securities can be traced back to an individual or entity
listed as a selling stockholder in the Shelf Registration Statement, please
indicate from whom the Transfer Restricted Securities were acquired:

 

 

 

 

 

 

The undersigned
acknowledges that it understands its obligation to comply with the provisions
of the Exchange Act and the rules and regulations promulgated thereunder
relating to stock manipulation, particularly Regulation M thereunder (or any
successor rules or regulations), in connection with any offering of Transfer
Restricted Securities pursuant to the Shelf Registration Statement. The
undersigned agrees that neither it nor any person acting on its behalf will
engage in any transaction in violation of such provisions.

 

The Selling
Securityholder hereby acknowledges its obligations under the Registration
Rights Agreement to indemnify and hold harmless certain persons as set forth
therein.

 

Pursuant to the
Registration Rights Agreement, the Issuer has agreed under certain
circumstances to indemnify the Selling Securityholders against certain
liabilities.

 

In accordance with the
undersigned’s obligation under the Registration Rights Agreement to provide
such information as may be required by law for inclusion in the Shelf
Registration Statement, the undersigned agrees to promptly notify the Issuer of
any inaccuracies or changes in the information provided herein that may occur
subsequent to the date hereof at any time while the Shelf Registration
Statement remains effective. All notices hereunder and pursuant to the
Registration Rights Agreement shall be made in writing at the address set forth
below.

 

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

 

A-5

 

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

 

	
  Dated:

  	
   

  
	
   

  	
   

  
	
  Beneficial Owner

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  

 

Please return the
completed and executed Notice and Questionnaire to Vertex Pharmaceuticals
Incorporated at:

 

Vertex Pharmaceuticals
Incorporated 

130 Waverly Street 

Cambridge, Massachusetts 02139

Attention:  Valerie Andrews, Associate
General Counsel – Corporate 

Facsimile:  (617) 444-7117

 

A-6

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