Document:

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                                  EXHIBIT 10.29

                                 SYNOPSYS, INC.

                             1992 STOCK OPTION PLAN

 (AMENDED JULY 29, 1992, OCTOBER 28, 1992, OCTOBER 27, 1993, OCTOBER 27, 1994,
         NOVEMBER 1, 1995, MAY 1, 1996, MAY 3, 1996, OCTOBER 30, 1996,
              JANUARY 11, 2000, MAY 25, 2001 AND AUGUST 29, 2001)

                                   ARTICLE ONE
                                     GENERAL

I.             PURPOSE OF THE PLAN

               A. This 1992 Stock Option Plan ("Plan") is intended to promote
the interests of Synopsys, Inc., a Delaware corporation (the "Corporation"), by
providing (i) key employees (including officers and directors) of the
Corporation (or its parent or subsidiary corporations) who are responsible for
the management, growth and financial success of the Corporation (or its parent
or subsidiary corporations) and (ii) consultants and other independent advisors
who provide valuable services to the Corporation (or its parent or subsidiary
corporations) with the opportunity to acquire a proprietary interest, or
otherwise increase their proprietary interest, in the Corporation as an
incentive for them to remain in the service of the Corporation (or its parent or
subsidiary corporations).

               B. The Plan shall become effective on the first date on which the
shares of the Corporation's common stock are registered under Section 12(g) of
the Securities Exchange Act of 1934, as amended (the "1934 Act"). Such date is
hereby designated as the Effective Date of the Plan.

               C. This Plan shall serve as the successor to the Corporation's
1988 Restricted Stock Plan (the "1988 Plan"), and no further option grants shall
be made under the 1988 Plan from and after the Effective Date of this Plan. All
options outstanding under the 1988 Plan on such Effective Date are hereby
incorporated into this Plan and shall accordingly be treated as outstanding
options under this Plan. However, each outstanding option so incorporated shall
continue to be governed solely by the express terms and conditions of the
instrument evidencing such grant, and no provision of this Plan shall be deemed
to affect or otherwise modify the rights or obligations of the holders of such
incorporated options with respect to their acquisition of shares of the
Corporation's common stock thereunder. All outstanding unvested share issuances
under the 1988 Plan shall continue to be governed solely by the express terms
and conditions of the instruments evidencing such issuances, and no provision of
this Plan shall be deemed to affect or otherwise modify the rights or
obligations of the holders of such unvested shares.

               D. For purposes of the Plan, the following provisions shall be
applicable in determining the parent and subsidiary corporations of the
Corporation:

               Any corporation (other than the Corporation) in an unbroken chain
of corporations ending with the Corporation shall be considered to be a parent
of the Corporation, provided each such corporation in the unbroken chain (other
than the Corporation) owns, at the time of the determination, stock possessing
fifty percent (50%) or more of the total combined voting power of all classes of
stock in one of the other corporations in such chain.

               Each corporation (other than the Corporation) in an unbroken
chain of corporations beginning with the Corporation shall be considered to be a
subsidiary of the Corporation, provided each such corporation (other than the
last corporation) in the unbroken chain owns, at the time of the determination,
stock possessing fifty percent (50%) or more of the total combined voting power
of all classes of stock in one of the other corporations in such chain.

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II.            ADMINISTRATION OF THE PLAN

               A. Administrator. The Plan shall be administered by the Board of
Directors or a committee that will satisfy Rule 16b-3 of the Securities and
Exchange Commission and Section 162(m) of the Internal Revenue Code, as in
effect with respect to the Company from time to time (in either case, the
"Administrator"). In connection with the administration of the Plan, the
Administrator shall have the powers possessed by the Board. The Administrator
may act only by a majority of its members, except that the Administrator may
authorize any one or more of its members or any officer of the Company to
execute and deliver documents on behalf of the Administrator. For so long as not
otherwise required for the Plan to comply with Rule 16b-3, the Administrator or
the Board may delegate to one or more directors of the Company authority to
grant stock options to persons who are not subject to Section 16 of the Exchange
Act, and may delegate administrative duties to such director(s) and such
employees of the Company as it deems proper. The Board at any time may terminate
the authority delegated to any committee of the Board pursuant to this Section
III(a) and revest in the Board the administration of the Plan.

               B. Authority. The Administrator shall grant options and authorize
stock issuances (in either case an "Award") to selected eligible employees and
consultants. In particular and without limitation, the Administrator, subject to
the terms of the Plan, shall:

                      (i) select the officers, other employees, and consultants
        to whom Awards may be granted;

                      (ii) determine whether and to what extent Awards are to be
        granted under the Plan;

                      (iii) determine the number of shares to be covered by each
        Award granted under the Plan; and

                      (iv) determine the terms and conditions of any Award
        granted under the Plan and any related loans to be made by the Company,
        based upon factors determined by the Administrator;

                      provided, however, that the Administrator shall not have
        the power to approve a program whereby outstanding Awards are
        surrendered in exchange for Awards with a lower exercise price, without
        first obtaining stockholder approval of such program.

III.           ELIGIBILITY

               A. The persons eligible to receive option grants ("Optionee") are
as follows:

                      (i) officers and other key employees of the Corporation
        (or its parent or subsidiary corporations) who render services which
        contribute to the management, growth and financial success of the
        Corporation (or its parent or subsidiary corporations);

                      (ii) those consultants or other independent advisors who
        provide valuable services to the Corporation (or its parent or
        subsidiary corporations).

               B. Non-employee members of the Board shall not be eligible to
participate in the Plan or in any other stock option, stock purchase, stock
bonus or other stock plan of the Corporation (or its parent or subsidiary
corporations), other than the 1994 Non-Employee Directors Stock Option Plan.

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IV.            STOCK SUBJECT TO THE PLAN

               A. Shares of the Corporation's common stock (the "Common Stock")
shall be available for issuance under the Plan and shall be drawn from either
the Corporation's authorized but unissued shares of Common Stock or from
reacquired shares of Common Stock, including shares repurchased by the
Corporation on the open market. The maximum number of shares of Common Stock
which may be issued over the term of the Plan shall not exceed the sum of (i)
17,767,142 shares plus (ii) an additional number of shares equal to 5% of the
number of shares of Common Stock and Common Stock equivalents outstanding on the
first day of each of the 1997, 1998 and 1999 fiscal years. Such authorized share
reserve includes the number of shares which remained available for issuance, as
of the Effective Date, under the 1988 Plan as last approved by the Corporation's
stockholders prior to such Effective Date, including the shares subject to the
outstanding options incorporated into this Plan and any other shares available
for future option grant under the 1988 Plan as last approved by the
stockholders, and such reserve shall be adjusted from time to time in accordance
with the provisions of this Section IV. To the extent one or more outstanding
options under the 1988 Plan which have been incorporated into this Plan are
subsequently exercised, the number of shares issued with respect to each such
option shall reduce, on a share- for-share basis, the number of shares available
for issuance under this Plan.

               B. In no event may the maximum number of shares which may be
issued pursuant to Incentive Options granted under the Plan on or after the
first day of the 1995 fiscal year (October 2, 1994) exceed 16,000,000 shares,
subject to adjustment from time to time in accordance with the provisions of
this Section IV. The maximum number of shares which may be issued pursuant to
Incentive Options granted under the Plan prior to the first day of the 1995
fiscal year (October 2, 1994) shall not exceed 11,400,000 shares, subject to
adjustment from time to time in accordance with the provisions of this Section
IV.

               C. In no event may the aggregate number of shares of Common Stock
for which any one individual participating in the Plan may be granted stock
options and/or separately-exercisable stock appreciation rights during any
fiscal year exceed 750,000 shares, except in the case of an individual's initial
employment with the Company, in which case such individual may be granted stock
options and/or stock appreciation rights for an additional 250,000 shares,
subject to adjustment from time to time in accordance with the provisions of
this Section IV. For purposes of such limitation, no stock options or stock
appreciation rights granted prior to January 1, 1994 shall be taken into
account.

               D. Should one or more outstanding options under this Plan
(including outstanding options under the 1988 Plan incorporated into this Plan)
expire or terminate for any reason prior to exercise in full (including any
option cancelled in accordance with the cancellation-regrant provisions of
Section IV of Article Two of the Plan), then the shares subject to the portion
of each option not so exercised shall be available for subsequent option grant
under the Plan. Shares subject to any option or portion thereof surrendered or
cancelled in accordance with Section V of Article Two and all shares issuances
under the Plan, whether or not the shares are subsequently repurchased by the
Corporation pursuant to its repurchase rights under the Plan, shall not be
available for subsequent option grant under the Plan. In addition, should the
exercise price of an outstanding option under the Plan be paid with shares of
Common Stock, then the number of shares of Common Stock available for issuance
under the Plan shall be reduced by the gross number of shares for which the
option is exercised, and not by the net number of shares of Common Stock
actually issued to the holder of such option.

               E. In the event any change is made to the Common Stock issuable
under the Plan by reason of any stock split, stock dividend, recapitalization,
combination of shares, exchange of shares or other change affecting the
outstanding Common Stock as a class without the Corporation's receipt of
consideration, appropriate adjustments shall be made to (i) the maximum number
and/or class of securities issuable under the Plan, (ii) the maximum number
and/or class of securities which may be issued pursuant to Incentive Options
granted under the Plan, whether before or after the first day of the 1995 fiscal
year, (iii) the total number and/or class of securities for which stock options
and separately-exercisable stock appreciation rights may be granted to any one
participant in the Plan after December 31, 1993, (iv) the number and/or class of
securities and price per share in effect under each outstanding option under the
Plan and (v) the number and/or class of securities and price per share in effect
under each outstanding option

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incorporated into this Plan from the 1988 Plan. Such adjustments to the
outstanding options are to be effected in a manner which shall preclude the
enlargement or dilution of rights and benefits under such options.

               The adjustments determined by the Plan Administrator shall be
final, binding and conclusive.

               F. Common Stock issuable under the Plan may be subject to such
restrictions on transfer, repurchase rights or other restrictions determined by
the Plan Administrator.

                                   ARTICLE TWO
                                  OPTION GRANTS

I.             TERMS AND CONDITIONS OF OPTIONS

               Options granted pursuant to the Plan shall be authorized by
action of the Plan Administrator and may, at the Plan Administrator's
discretion, be either Incentive Options or non-statutory options. Individuals
who are not Employees of the Corporation or its parent or subsidiary
corporations may only be granted non-statutory options. Each granted option
shall be evidenced by one or more instruments in the form approved by the Plan
Administrator; provided, however, that each such instrument shall comply with
the terms and conditions specified below. Each instrument evidencing an
Incentive Option shall, in addition, be subject to the applicable provisions of
Section II of this Article Two.

               A.  Option Price.

               (1) The option price per share shall be fixed by the Plan
Administrator. In no event, however, shall it be less than one hundred percent
(100%) of the fair market value per share of Common Stock on the date of the
option grant.

               (2) The option price shall become immediately due upon exercise
of the option and, subject to the provisions of Article Three, Section I and the
instrument evidencing the grant, shall be payable in one of the following
alternative forms specified below:

                   - full payment in cash or check drawn to the Corporation's
        order;

                   - full payment in shares of Common Stock held for at least
        six (6) months and valued at fair market value on the Exercise Date (as
        such term is defined below);

                   - full payment in a combination of shares of Common Stock
        held for at least six (6) months and valued at fair market value on the
        Exercise Date and cash or check; or

                   - full payment through a broker-dealer sale and remittance
        procedure pursuant to which the Optionee (I) shall provide irrevocable
        written instructions to a Corporation-designated brokerage firm to
        effect the immediate sale of the purchased shares and remit to the
        Corporation, out of the sale proceeds available on the settlement date,
        sufficient funds to cover the aggregate option price payable for the
        purchased shares plus all applicable Federal and State income and
        employment taxes required to be withheld by the Corporation in
        connection with such purchase and (II) shall provide written directives
        to the Corporation to deliver the certificates for the purchased shares
        directly to such brokerage firm in order to complete the sale
        transaction.

               For purposes of this subparagraph (2), the Exercise Date shall be
the date on which written notice of the option exercise is delivered to the
Corporation. Except to the extent the sale and remittance procedure is utilized
in connection with the exercise of the option, payment of the option price for
the purchased shares must accompany such notice.

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               (3) The fair market value per share of Common Stock on any
relevant date under the Plan shall be determined in accordance with the
following provisions:

                   - If the Common Stock is not at the time listed or admitted
        to trading on any national stock exchange but is traded on the Nasdaq
        National Market, the fair market value shall be the closing selling
        price per share of Common Stock on the date in question, as such price
        is reported by the National Association of Securities Dealers on the
        Nasdaq National Market System or any successor system. If there is no
        reported closing selling price for the Common Stock on the date in
        question, then the closing selling price on the last preceding date for
        which such quotation exists shall be determinative of fair market value.

                   - If the Common Stock is at the time listed or admitted to
        trading on any national stock exchange, then the fair market value shall
        be the closing selling price per share of Common Stock on the date in
        question on the stock exchange determined by the Plan Administrator to
        be the primary market for the Common Stock, as such price is officially
        quoted in the composite tape of transactions on such exchange. If there
        is no reported sale of Common Stock on such exchange on the date in
        question, then the fair market value shall be the closing selling price
        on the exchange on the last preceding date for which such quotation
        exists.

               B. Term and Exercise of Options. Each option shall be exercisable
at such time or times and during such period as is determined by the Plan
Administrator and set forth in the stock option agreement evidencing the grant;
provided that at least 75% of the options granted hereunder shall become
exercisable ratably over a four year period from the date of grant, with the
vesting interval (i.e., monthly, quarterly, etc.) and any period prior to the
commencement of vesting determined in each case by the Plan Administrator. No
such option, however, shall have a maximum term in excess of ten (10) years from
the grant date. During the lifetime of the Optionee, the option shall be
exercisable only by the Optionee and shall not be assignable or transferable by
the Optionee otherwise than by will or by the laws of descent and distribution
following the Optionee's death.

               C.  Termination of Service.

               (1) Except to the extent otherwise provided pursuant to Section
VI of this Article Two, the following provisions shall govern the exercise
period applicable to any outstanding options under the Plan which are held by
the Optionee at the time of his or her cessation of Service or death.

                   - Should the Optionee cease Service for any reason (including
        death or permanent disability as defined in Section 22(e)(3) of the
        Internal Revenue Code) while holding one or more outstanding options
        under the Plan, then none of those options shall (except to the extent
        otherwise provided pursuant to Section VI of this Article Two) remain
        exercisable beyond the limited post-Service period designated by the
        Plan Administrator at the time of the option grant and set forth in the
        option agreement.

                   - Any option granted to an Optionee under the Plan and
        exercisable in whole or in part on the date of the Optionee's death may
        be subsequently exercised, by the personal representative of the
        Optionee's estate or by the person or persons to whom the option is
        transferred pursuant to the Optionee's will or in accordance with the
        laws of descent and distribution, provided and only if such exercise
        occurs prior to the earlier of (i) the expiration of the period
        designated by the Plan Administrator at the time of the option grant and
        set forth in the option agreement, which may be any period from one
        month to three years measured from the date of the Optionee's death, or
        (ii) the specified expiration date of the option term. Upon the
        occurrence of the earlier event, the option shall terminate and cease to
        be exercisable.

                   - Under no circumstances, however, shall any such option be
        exercisable after the specified expiration date of the option term.

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                   - During the limited post-Service exercise period, the option
        may not be exercised for more than the number of shares for which the
        option is exercisable on the date of the Optionee's cessation of
        Service. Upon the expiration of such limited exercise period or (if
        earlier) upon the expiration of the option term, the option shall
        terminate and cease to be exercisable. However, upon the Optionee's
        cessation of Service, each outstanding option at the time held by the
        Optionee shall immediately terminate and cease to be outstanding with
        respect to any shares for which the option is not otherwise at that time
        exercisable or in which the Optionee is not otherwise vested.

                   - Should (i) the Optionee's Service be terminated for
        misconduct (including, but not limited to, any act of dishonesty,
        willful misconduct, fraud or embezzlement) or (ii) the Optionee make any
        unauthorized use or disclosure of confidential information or trade
        secrets of the Corporation or its parent or subsidiary corporations,
        then in any such event all outstanding options held by the Optionee
        under this Article Two shall terminate immediately and cease to be
        exercisable.

               (2) The Plan Administrator shall have complete discretion,
exercisable either at the time the option is granted or at any time while the
option remains outstanding, to permit one or more options held by the Optionee
under this Article Two to be exercised, during the limited period of
exercisability provided under subparagraph (1) above, not only with respect to
the number of shares for which each such option is exercisable at the time of
the Optionee's cessation of Service but also with respect to one or more
subsequent installments for which the option would otherwise have become
exercisable had such cessation of Service not occurred.

               (3) For purposes of the foregoing provisions of this Section I.C
(and for all other purposes under the Plan):

                   - The Optionee shall (except to the extent otherwise
        specifically provided in the applicable option agreement) be deemed to
        remain in the Service of the Corporation for so long as such individual
        renders services on a periodic basis to the Corporation (or any parent
        or subsidiary corporation) in the capacity of an Employee, a
        non-employee member of the Board or an independent consultant or
        advisor.

                   - The Optionee shall be considered to be an Employee for so
        long as he or she remains in the employ of the Corporation or one or
        more parent or subsidiary corporations, subject to the control and
        direction of the employer entity not only as to the work to be performed
        but also as to the manner and method of performance.

               D.  Stockholder Rights.

               An Optionee shall have no stockholder rights with respect to any
shares covered by the option until such individual shall have exercised the
option, paid the option price for the purchased shares and been issued a stock
certificate for such shares.

               E.  Repurchase Rights.

               The shares of Common Stock acquired upon the exercise of options
granted under this Article Two may be subject to repurchase by the Corporation
in accordance with the following provisions:

               (a) The Plan Administrator shall have the discretion to authorize
the issuance of unvested shares of Common Stock under this Article Two. Should
the Optionee cease Service while holding such unvested shares, the Corporation
shall have the right to repurchase any or all of those unvested shares at the
option price paid per share. The terms and conditions upon which such repurchase
right shall be exercisable (including the period and procedure for exercise and
the appropriate vesting schedule for the purchased shares) shall be established
by the Plan Administrator and set forth in the instrument evidencing such
repurchase right.

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               (b) All of the Corporation's outstanding repurchase rights shall
automatically terminate, and all shares subject to such terminated rights shall
immediately vest in full, upon the occurrence of any Corporate Transaction under
Section III of this Article Two, except to the extent:

                   (i) any such repurchase right is to be assigned to the
        successor corporation (or parent thereof) in connection with the
        Corporate Transaction or (ii) such termination is precluded by other
        limitations imposed by the Plan Administrator at the time the repurchase
        right is issued.

               (c) The Plan Administrator shall have the discretionary
authority, exercisable either before or after the Optionee's cessation of
Service, to cancel the Corporation's outstanding repurchase rights with respect
to one or more shares purchased or purchasable by the Optionee under this
Article Two and thereby accelerate the vesting of such shares in whole or in
part at any time.

II.            INCENTIVE OPTIONS

               The terms and conditions specified below shall be applicable to
all Incentive Options granted under the Plan. Incentive Options may only be
granted to individuals who are Employees of the Corporation. Options which are
specifically designated as "non- statutory" options when issued under the Plan
shall not be subject to such terms and conditions.

               A. Dollar Limitation. The aggregate fair market value (determined
as of the respective date or dates of grant) of the Common Stock for which one
or more options granted to any Employee after December 31, 1986 under this Plan
(or any other option plan of the Corporation or its parent or subsidiary
corporations) may for the first time become exercisable as incentive stock
options under the Federal tax laws during any one calendar year shall not exceed
the sum of One Hundred Thousand Dollars ($100,000). To the extent the Employee
holds two or more such options which become exercisable for the first time in
the same calendar year, the foregoing limitation on the exercisability of such
options as incentive stock options under the Federal tax laws shall be applied
on the basis of the order in which such options are granted.

               B. 10% Stockholder. If any individual to whom an Incentive Option
is granted is the owner of stock (as determined under Section 424(d) of the
Internal Revenue Code) possessing 10% or more of the total combined voting power
of all classes of stock of the Corporation or any one of its parent or
subsidiary corporations, then the option price per share shall not be less than
one hundred and ten percent (110%) of the fair market value per share of Common
Stock on the grant date, and the option term shall not exceed five (5) years,
measured from the grant date.

               Except as modified by the preceding provisions of this Section
II, the provisions of Articles One, Two and Three of the Plan shall apply to all
Incentive Options granted hereunder.

III.           CORPORATE TRANSACTIONS/CHANGES IN CONTROL

               A. In the event of any of the following stockholder-approved
transactions to which the Corporation is a party (a "Corporate Transaction"):

               (i) a merger or consolidation in which the Corporation is not the
surviving entity, except for a transaction the principal purpose of which is to
change the State of the Corporation's incorporation,

               (ii) the sale, transfer or other disposition of all or
substantially all of the assets of the Corporation in liquidation or dissolution
of the Corporation, or

               (iii) any reverse merger in which the Corporation is the
surviving entity but in which securities possessing more than fifty percent
(50%) of the total combined voting power of the Corporation's

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outstanding securities are transferred to holders different from those who held
such securities immediately prior to such merger, then the exercisability of
each option outstanding under the Plan shall automatically accelerate so that
each such option shall, immediately prior to the specified effective date for
the Corporate Transaction, become fully exercisable with respect to the total
number of shares of Common Stock at the time subject to such option and may be
exercised for all or any portion of such shares. However, an outstanding option
under this Article Two shall not so accelerate if and to the extent: (i) such
option is, in connection with the Corporate Transaction, to be assumed by the
successor corporation or parent thereof or replaced with a comparable option to
purchase shares of the capital stock of the successor corporation or parent
thereof, (ii) such option is to be replaced by a comparable cash incentive
program of the successor corporation based on the option spread at the time of
the Corporate Transaction, or (iii) the acceleration of such option is subject
to other limitations imposed by the Plan Administrator at the time of the option
grant. The determination of comparability under clause (i) or (ii) above shall
be made by the Plan Administrator, and its determination shall be final, binding
and conclusive.

               B. Immediately after the consummation of the Corporate
Transaction, all outstanding options under the Plan shall terminate and cease to
be outstanding, except to the extent assumed by the successor corporation or its
parent company.

               C. Each outstanding option under the Plan which is assumed in
connection with the Corporate Transaction or is otherwise to continue in effect
shall be appropriately adjusted, immediately after such Corporate Transaction,
to apply and pertain to the number and class of securities which would have been
issued to the option holder, in consummation of such Corporate Transaction, had
such person exercised the option immediately prior to such Corporate
Transaction. Appropriate adjustments shall also be made to the option price
payable per share, provided the aggregate option price payable for such
securities shall remain the same. In addition, the maximum number and/or class
of securities available for issuance under the Plan, the maximum number and/or
class of securities which may be issued pursuant to Incentive Options granted
under the Plan, whether before or after the first day of the 1995 fiscal year,
and the total number and/or class of securities for which stock options and
separately-exercisable stock appreciation rights may be granted to any one
participant in the Plan after December 31, 1993 shall be appropriately adjusted
following the consummation of the Corporate Transaction to reflect the effect of
such transaction upon the Corporation's capital structure.

               D. The grant of options under the Plan shall in no way affect the
right of the Corporation to adjust, reclassify, reorganize or otherwise change
its capital or business structure or to merge, consolidate, dissolve, liquidate
or sell or transfer all or any part of its business or assets.

               E. The Plan Administrator shall have the discretionary authority,
exercisable at the time the option is granted or at any time while the option
remains outstanding, to provide for the automatic acceleration of one or more
outstanding options under this Article Two (and the termination of one or more
of the Corporation's outstanding repurchase rights under this Article Two) upon
the occurrence of a Change in Control. Alternatively, the Plan Administrator
shall have full power and authority to condition any such option acceleration
(and the termination of any outstanding repurchase rights) upon the subsequent
termination of the Optionee's Service within a specified period following the
Change in Control.

               F. For purposes of this Section III, a Change in Control shall be
deemed to occur in the event:

               (i) any person or related group of persons (other than the
Corporation or a person that directly or indirectly controls, is controlled by,
or is under common control with, the Corporation) directly or indirectly
acquires beneficial ownership (within the meaning of Rule 13d-3 of the 1934 Act)
of securities possessing more than fifty percent (50%) of the total combined
voting power of the Corporation's outstanding securities pursuant to a tender or
exchange offer made directly to the Corporation's stockholders which the Board
does not recommend such stockholders to accept; or

               (ii) there is a change in the composition of the Board over a
period of twenty-four (24) consecutive months or less such that a majority of
the Board members ceases, by reason of one or more

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proxy contests for the election of Board members, to be comprised of individuals
who either (A) have been Board members continuously since the beginning of such
period or (B) have been elected or nominated for election as Board members
during such period by at least a majority of the Board members described in
clause (A) who were still in office at the time such election or nomination was
approved by the Board.

               G. Any options accelerated in connection with the Change in
Control shall remain fully exercisable until the expiration or sooner
termination of the option term.

               H. The exercisability as incentive stock options under the
Federal tax laws of any options accelerated under this Section III in connection
with a Corporate Transaction or Change in Control shall remain subject to the
dollar limitation of Section II of this Article Two.

IV.            [INTENTIONALLY OMITTED.]

V.             STOCK APPRECIATION RIGHTS

               A. Provided and only if the Plan Administrator determines in its
discretion to implement the stock appreciation right provisions of this Section
V, one or more Optionees may be granted the right, exercisable upon such terms
and conditions as the Plan Administrator may establish, to surrender all or part
of an unexercised option under this Article Two in exchange for a distribution
from the Corporation in an amount equal to the excess of (i) the fair market
value (on the option surrender date) of the number of shares in which the
Optionee is at the time vested under the surrendered option (or surrendered
portion thereof) over (ii) the aggregate option price payable for such vested
shares.

               B. No surrender of an option shall be effective hereunder unless
it is approved by the Plan Administrator. If the surrender is so approved, then
the distribution to which the Optionee shall accordingly become entitled under
this Section V may be made in shares of Common Stock valued at fair market value
on the option surrender date, in cash, or partly in shares and partly in cash,
as the Plan Administrator shall in its sole discretion deem appropriate.

               C. If the surrender of an option is rejected by the Plan
Administrator, then the Optionee shall retain whatever rights the Optionee had
under the surrendered option (or surrendered portion thereof) on the option
surrender date and may exercise such rights at any time prior to the later of
(i) five (5) business days after the receipt of the rejection notice or (ii) the
last day on which the option is otherwise exercisable in accordance with the
terms of the instrument evidencing such option, but in no event may such rights
be exercised more than ten (10) years after the date of the option grant.

               D. One or more officers of the Corporation subject to the
short-swing profit restrictions of the Federal securities laws may, in the Plan
Administrator's sole discretion, be granted limited stock appreciation rights in
tandem with their outstanding options under the Plan. Upon the occurrence of a
Hostile Take-Over effected at any time when the Corporation's outstanding Common
Stock is registered under Section 12(g) of the 1934 Act, each outstanding option
with such a limited stock appreciation right in effect for at least six (6)
months shall automatically be cancelled, to the extent such option is at the
time exercisable for fully-vested shares of Common Stock. The Optionee shall in
return be entitled to a cash distribution from the Corporation in an amount
equal to the excess of (i) the Take-Over Price of the vested shares of Common
Stock at the time subject to the cancelled option (or cancelled portion of such
option) over (ii) the aggregate exercise price payable for such shares. The cash
distribution payable upon such cancellation shall be made within five (5) days
following the consummation of the Hostile Take-Over. Neither the approval of the
Plan Administrator nor the consent of the Board shall be required in connection
with such option cancellation and cash distribution. The uncancelled portion of
the option (if any) shall continue to remain outstanding and become exercisable
in accordance with the terms of the agreement evidencing that grant.

               E. For purposes of Section V.D, the following definitions shall
be in effect:

                                       9
<PAGE>

               A Hostile Take-Over shall be deemed to occur in the event (i) any
person or related group of persons (other than the Corporation or a person that
directly or indirectly controls, is controlled by, or is under common control
with, the Corporation) directly or indirectly acquires beneficial ownership
(within the meaning of Rule 13d-3 of the 1934 Act) of securities possessing more
than fifty percent (50%) of the total combined voting power of the Corporation's
outstanding securities pursuant to a tender or exchange offer made directly to
the Corporation's stockholders which the Board does not recommend such
stockholders to accept and (ii) more than fifty percent (50%) of the securities
so acquired in such tender or exchange offer are accepted from holders other
than Corporation officers and directors participating in the Plan.

               The Take-Over Price per share shall be deemed to be equal to the
greater of (a) the fair market value per share on the date of cancellation, as
determined pursuant to the valuation provisions of Section I.A. (3) of this
Article Two, or (b) the highest reported price per share of Common Stock paid in
effecting such Hostile Take-Over. However, if the cancelled option is an
Incentive Option, the Take-Over Price shall not exceed the clause (a) price per
share.

               F. The shares of Common Stock subject to any option surrendered
or cancelled for an appreciation distribution pursuant to this Section V shall
not be available for subsequent option grant under the Plan.

VI.            EXTENSION OF EXERCISE PERIOD

               The Plan Administrator shall have full power and authority to
extend the period of time for which any option granted under this Article Two is
to remain exercisable following the Optionee's cessation of Service or death
from the limited period in effect under Section I.C.(1) of this Article Two to
such greater period of time as the Plan Administrator shall deem appropriate;
provided, however, that in no event shall such option be exercisable after the
specified expiration date of the option term.

                                  ARTICLE THREE
                                  MISCELLANEOUS

I.             [INTENTIONALLY OMITTED.]

II.            AMENDMENT OF THE PLAN AND AWARDS

               A. The Board has complete and exclusive power and authority to
amend or modify the Plan in any or all respects whatsoever. However, no such
amendment or modification may adversely affect the rights and obligations of an
Optionee with respect to options at the time outstanding under the Plan, unless
the Optionee consents to such amendment. In addition, the Board may not, without
the approval of the Corporation's stockholders, amend the Plan to (i) materially
increase the maximum number of shares issuable under the Plan, the maximum
number of shares issuable pursuant to Incentive Options granted under the Plan
on or after the first day of the 1995 fiscal year or the number of shares for
which any one individual participating in the Plan may be granted stock options
and separately-exercisable stock appreciation rights in the aggregate after
December 31, 1993 (except for permissible adjustments under Article One, Section
IV) or (ii) materially modify the eligibility requirements for participation in
the Plan or the benefits accruing to Optionees under the Plan.

               B. Options to purchase shares of Common Stock may be granted in
excess of the number of shares then available for issuance under the Plan,
provided any excess shares actually issued are held in escrow until stockholder
approval is obtained for a sufficient increase in the number of shares available
for issuance under the Plan. If such stockholder approval is not obtained within
twelve (12) months after the date the first such excess option grants are made,
then (I) any unexercised excess options shall terminate

                                       10
<PAGE>

and cease to be exercisable and (II) the Corporation shall promptly refund the
purchase price paid for any excess shares actually issued under the Plan and
held in escrow, together with interest (at the applicable Short Term Federal
Rate) for the period the shares were held in escrow.

III.           EFFECTIVE DATE AND TERM OF PLAN

               A. The Plan was initially adopted by the Board effective February
24, 1992. The Plan was amended by the Board on July 29, 1992, October 28, 1992,
October 27, 1993, October 27, 1994, November 1, 1995, May 1, 1996, May 3, 1996,
October 30, 1996, January 11, 2000, May 25, 2001 and August 29, 2001.

               B. Each option issued and outstanding under the 1988 Plan
immediately prior to the Effective Date of this Plan shall be incorporated into
this Plan and treated as an outstanding option under this Plan, but each such
option shall continue to be governed solely by the terms and conditions of the
instrument evidencing such grant, and nothing in this Plan shall be deemed to
affect or otherwise modify the rights or obligations of the holders of such
options with respect to their acquisition of shares of Common Stock thereunder.
Each unvested share of Common Stock outstanding under the 1988 Plan on the
Effective Date of this Plan shall continue to be governed solely by the terms
and conditions of the instrument evidencing such share issuance, and nothing in
this Plan shall be deemed to affect or otherwise modify the rights or
obligations of the holder of such unvested shares.

               C. The sale and remittance procedure authorized for the exercise
of outstanding options under this Plan shall be available for all options
granted under this Plan on or after the Effective Date and for all non-statutory
options outstanding under the 1988 Plan and incorporated into this Plan. The
Plan Administrator may also allow such procedure to be utilized in connection
with one or more disqualifying dispositions of Incentive Option shares effected
after the Effective Date, whether such Incentive Options were granted under this
Plan or the 1988 Plan.

               D. The option/vesting acceleration provisions of Section III of
Article Two relating to Corporate Transactions and Changes in Control may, in
the Plan Administrator's discretion, be extended to one or more stock options
which are outstanding under the 1988 Plan on the Effective Date of this Plan but
which do not otherwise provide for such acceleration.

               E. The Plan shall terminate upon the earlier of (i) January 13,
2007 or (ii) the date on which all shares available for issuance under the Plan
shall have been issued or cancelled pursuant to the exercise, surrender or
cash-out of the outstanding options under the Plan. If the date of termination
is determined under clause (i) above, then all option grants outstanding on such
date shall thereafter continue to have force and effect in accordance with the
provisions of the instruments evidencing such grants.

IV.            USE OF PROCEEDS

               Any cash proceeds received by the Company from the sale of shares
under the Plan shall be used for general corporate purposes.

V.             REGULATORY APPROVALS

               A. The implementation of the Plan, the granting of any option
under the Plan and the issuance of Common Stock upon the exercise or surrender
of the option grants made hereunder shall be subject to the Corporation's
procurement of all approvals and permits required by regulatory authorities
having jurisdiction over the Plan, the options granted under it, and the Common
Stock issued pursuant to it.

               B. No shares of Common Stock or other assets shall be issued or
delivered under this Plan unless and until there shall have been compliance with
all applicable requirements of Federal and

                                       11
<PAGE>

State securities laws, including the filing and effectiveness of the Form S-8
registration statement for the shares of Common Stock issuable under the Plan,
and all applicable listing requirements of any securities exchange on which
stock of the same class is then listed.

VI.            NO EMPLOYMENT/SERVICE RIGHTS

               Neither the action of the Company in establishing the Plan, nor
any action taken by the Plan Administrator hereunder, nor any provision of the
Plan shall be construed so as to grant any individual the right to remain in the
employ or service of the Corporation (or any parent or subsidiary corporation)
for any period of specific duration, and the Corporation (or any parent or
subsidiary corporation retaining the services of such individual) may terminate
such individual's employment or service at any time and for any reason, with or
without cause.

VII.           MISCELLANEOUS PROVISIONS

               A. The right to acquire Common Stock or other assets under the
Plan may not be assigned, encumbered or otherwise transferred by any Optionee.

               B. The provisions of the Plan shall be governed by the laws of
the State of California, as such laws are applied to contracts entered into and
performed in such State.

               C. The provisions of the Plan shall inure to the benefit of, and
be binding upon, the Corporation and its successors or assigns, whether by
Corporate Transaction or otherwise, and the Optionees, the legal representatives
of their respective estates, their respective heirs or legatees and their
permitted assignees.

                                       12<PAGE>
                                                                     Exhibit 4.1

                              LSI LOGIC CORPORATION

                                       TO

                       STATE STREET BANK AND TRUST COMPANY

                              OF CALIFORNIA, N.A.,
                                   AS TRUSTEE

                                    INDENTURE

                          DATED AS OF OCTOBER 30, 2001
                  4.00% CONVERTIBLE SUBORDINATED NOTES DUE 2006

<PAGE>

                                        TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                               PAGE
                                                                                               ----
<S>                                                                                             <C>
ARTICLE I........................................................................................1

        Section 1.1.  Definitions................................................................1
        Section 1.2.  Incorporation by Reference of Trust Indenture Act..........................8
        Section 1.3.  Rules of Construction......................................................8

ARTICLE II.......................................................................................9

        Section 2.1.  Designation Amount and Issue of Notes......................................9
        Section 2.2.  Form of Notes..............................................................9
        Section 2.3.  Date and Denomination of Notes; Payments of Interest......................10
        Section 2.4.  Execution of Notes........................................................11
        Section 2.5.  Exchange and Registration of Transfer of Notes: Restrictions
                      on Transfer; Depositary...................................................12
        Section 2.6.  Mutilated, Destroyed, Lost or Stolen Notes................................18
        Section 2.7.  Temporary Notes...........................................................19
        Section 2.8.  Cancellation of Notes Paid, Etc. .........................................19
        Section 2.9.  CUSIP Numbers.............................................................20

ARTICLE III.....................................................................................20

        Section 3.1.  Redemption Prices.........................................................20
        Section 3.2.  Notice of Redemption; Selection of Notes..................................20
        Section 3.3.  Payment of Notes Called for Redemption....................................21
        Section 3.4.  Conversion Arrangement on Call for Redemption.............................22
        Section 3.5.  Repurchase at Option of Holders...........................................23

ARTICLE IV......................................................................................25

        Section 4.1.  Notes Subordinated to Senior Debt.........................................25
        Section 4.2.  Subrogation...............................................................27
        Section 4.3.  Obligation of Company Unconditional.......................................27
        Section 4.4.  Modification of Terms of Senior Debt......................................28
        Section 4.5.  Payments on Notes Permitted...............................................28
        Section 4.6.  Effectuation of Subordination by Trustee..................................28
        Section 4.7.  Knowledge of Trustee......................................................28
        Section 4.8.  Trustee's Relation to Senior Debt.........................................29
        Section 4.9.  Rights of Holders of Senior Debt Not Impaired.............................29
        Section 4.10. Certain Conversions Not Deemed Payment....................................29

ARTICLE V.......................................................................................30

        Section 5.1.  Payment of Principal, Premium and Interest................................30
        Section 5.2.  Maintenance of Office or Agency...........................................30
        Section 5.3.  Appointments to Fill Vacancies in Trustee's Office........................31
</TABLE>

                                      -i-

<PAGE>

                               TABLE OF CONTENTS
                                  (continued)

<TABLE>
<CAPTION>
                                                                                                PAGE
                                                                                                ----
<S>                                                                                              <C>
        Section 5.4.  Provisions as to Paying Agent..............................................31
        Section 5.5.  Existence..................................................................32
        Section 5.6.  Maintenance of Properties..................................................32
        Section 5.7.  Payment of Taxes and Other Claims..........................................32
        Section 5.8.  Rule 144A Information Requirement..........................................33
        Section 5.9.  Stay, Extension and Usury Laws.............................................33
        Section 5.10. Compliance Certificate.....................................................33
        Section 5.11. Additional Interest........................................................34

ARTICLE VI.......................................................................................34

        Section 6.1.  Noteholders' Lists.........................................................34
        Section 6.2.  Preservation and Disclosure of Lists.......................................34
        Section 6.3.  Reports by Trustee.........................................................35
        Section 6.4.  Reports by Company.........................................................35

ARTICLE VII......................................................................................35

        Section 7.1.  Events of Default..........................................................35
        Section 7.2.  Payments of Notes on Default; Suit Therefor................................37
        Section 7.3.  Application of Monies Collected by Trustee.................................39
        Section 7.4.  Proceedings by Noteholder..................................................39
        Section 7.5.  Proceedings by Trustee.....................................................40
        Section 7.6.  Remedies Cumulative and Continuing.........................................40
        Section 7.7.  Direction of Proceedings and Waiver of Defaults by Majority
                      of Noteholders.............................................................41
        Section 7.8.  Notice of Defaults.........................................................41
        Section 7.9.  Undertaking to Pay Costs...................................................41

ARTICLE VIII.....................................................................................42

        Section 8.1.  Duties and Responsibilities of Trustee.....................................42
        Section 8.2.  Reliance on Documents, Opinions, Etc. .....................................43
        Section 8.3.  No Responsibility for Recitals, Etc. ......................................44
        Section 8.4.  Trustee, Paying Agents, Conversion Agents or Registrar May
                      Own Notes..................................................................44
        Section 8.5.  Monies to Be Held in Trust.................................................44
        Section 8.6.  Compensation and Expenses of Trustee.......................................44
        Section 8.7.  Officers' Certificate as Evidence..........................................45
        Section 8.8.  Conflicting Interests of Trustee...........................................45
        Section 8.9.  Eligibility of Trustee.....................................................45
        Section 8.10. Resignation or Removal of Trustee..........................................46
</TABLE>

                                      -ii-

<PAGE>

                                TABLE OF CONTENTS
                                   (continued)
<TABLE>
<CAPTION>
                                                                                                PAGE
                                                                                                ----
<S>                                                                                              <C>
        Section 8.11. Acceptance by Successor Trustee............................................47
        Section 8.12. Succession by Merger, Etc. ................................................47
        Section 8.13. Preferential Collection of Claims..........................................48
        Section 8.14. Trustee's Application for Instructions from the Company....................48

ARTICLE IX.......................................................................................48

        Section 9.1.  Action by Noteholders......................................................48
        Section 9.2.  Proof of Execution by Noteholders..........................................49
        Section 9.3.  Who Are Deemed Absolute Owners.............................................49
        Section 9.4.  Company-Owned Notes Disregarded............................................49
        Section 9.5.  Revocation of Consents; Future Holders Bound...............................50

ARTICLE X........................................................................................50

        Section 10.1. Purpose of Meetings........................................................50
        Section 10.2. Call of Meetings by Trustee................................................50
        Section 10.3. Call of Meetings by Company or Noteholders.................................51
        Section 10.4. Qualifications for Voting..................................................51
        Section 10.5. Regulations................................................................51
        Section 10.6. Voting.....................................................................52
        Section 10.7. No Delay of Rights by Meeting..............................................52

ARTICLE XI.......................................................................................52

        Section 11.1. Supplemental Indentures Without Consent of Noteholders.....................52
        Section 11.2. Supplemental Indenture with Consent of Noteholders.........................54
        Section 11.3. Effect of Supplemental Indenture...........................................55
        Section 11.4. Notation on Notes..........................................................55
        Section 11.5. Evidence of Compliance of Supplemental Indenture to Be Furnished
                      Trustee....................................................................55

ARTICLE XII......................................................................................55

        Section 12.1. Company May Consolidate Etc. ..............................................55
        Section 12.2. Successor Corporation to Be Substituted....................................56
        Section 12.3. Opinion of Counsel to Be Given Trustee.....................................56

ARTICLE XIII.....................................................................................56

        Section 13.1. Discharge of Indenture.....................................................57
        Section 13.2. Deposited Monies to Be Held in Trust by Trustee............................57
        Section 13.3. Paying Agent to Repay Monies Held..........................................57
        Section 13.4. Return of Unclaimed Monies.................................................58
        Section 13.5. Reinstatement..............................................................58
</TABLE>

                                     -iii-

<PAGE>

                               TABLE OF CONTENTS
                                  (continued)

<TABLE>
<CAPTION>
                                                                                                 PAGE
                                                                                                 ----
<S>                                                                                               <C>
ARTICLE XIV.......................................................................................58

        Section 14.1. Indenture and Notes Solely Corporate Obligations............................58

ARTICLE XV........................................................................................58

        Section 15.1.  Right to Convert...........................................................58
        Section 15.2.  Exercise of Conversion Privilege; Issuance of Common Stock
                       on Conversion; No Adjustment for Interest or Dividends.....................59
        Section 15.3.  Cash Payments in Lieu of Fractional Shares.................................60
        Section 15.4.  Conversion Price...........................................................61
        Section 15.5.  Adjustment of Conversion Price.............................................61
        Section 15.6.  Effect of Reclassification, Consolidation, Merger or Sale..................69
        Section 15.7.  Taxes on Shares Issued.....................................................70
        Section 15.8.  Reservation of Shares; Shares to Be Fully Paid; Compliance
                       with Governmental Requirements; Listing of Common Stock....................70
        Section 15.9.  Responsibility of Trustee..................................................71
        Section 15.10. Notice to Holders Prior to Certain Actions.................................72

ARTICLE XVI.......................................................................................73

        Section 16.1.  Provisions Binding on Company's Successors.................................73
        Section 16.2.  Official Acts by Successor Corporation.....................................73
        Section 16.3.  Addresses for Notices, Etc. ...............................................73
        Section 16.4.  Governing Law..............................................................73
        Section 16.5.  Evidence of Compliance with Conditions Precedent;
                       Certificates to Trustee....................................................73
        Section 16.6.  Legal Holidays.............................................................74
        Section 16.7.  Trust Indenture Act........................................................74
        Section 16.8.  No Security Interest Created...............................................74
        Section 16.9.  Benefits of Indenture......................................................74
        Section 16.10. Table of Contents, Headings, Etc. .........................................75
        Section 16.11. Authenticating Agent.......................................................75
        Section 16.12. Execution in Counterparts..................................................76

EXHIBIT A.   Form of Note........................................................................A-1
EXHIBIT B.   Institutional Accredit Investor Letter..............................................B-1
</TABLE>

                                      -iv-

<PAGE>

                                      LSI LOGIC CORPORATION

        Reconciliation and Tie Between the Trust Indenture Act of 1939 and
Indenture, dated as of October 30, 2001, between LSI Logic Corporation and State
Street Bank and Trust Company of California, N.A., as Trustee.

<TABLE>
<CAPTION>
TRUST INDENTURE ACT SECTION                                                     INDENTURE SECTION
---------------------------                                                     -----------------
<S>                                                                         <C>
Section 310(a)(1).............................................................................8.9
(a)(2)........................................................................................8.9
(a)(3).............................................................................Not Applicable
(a)(4).............................................................................Not Applicable
(a)(5)........................................................................................8.9
(b)..........................................................................8.8; 8.9; 8.10; 8.11
Section 311(a)...............................................................................8.13
(b)..........................................................................................8.13
(b)(2).....................................................................................6.3(a)
Section 312(a)........................................................................6.1; 6.2(a)
(b)........................................................................................6.2(b)
(c)........................................................................................6.2(c)
Section 313(a).............................................................................6.3(a)
(b)........................................................................................6.3(a)
(c)........................................................................................6.3(a)
(d)........................................................................................6.3(b)
Section 314(a)...............................................................................6.14
(b)................................................................................Not Applicable
(c)(1).......................................................................................16.5
(c)(2).......................................................................................16.5
(c)(3).............................................................................Not Applicable
(d)................................................................................Not Applicable
(e)..........................................................................................16.5
Section 315(a)................................................................................8.1
(b)...........................................................................................7.8
(c)...........................................................................................8.1
(d)...........................................................................................8.1
(d)(1).....................................................................................8.1(a)
(d)(2).....................................................................................8.1(b)
(d)(3).....................................................................................8.1(c)
(e)...........................................................................................7.9
Section 316(a)................................................................................7.7
(a)(1)(A).....................................................................................7.7
(a)(1)(B).....................................................................................7.7
(a)(2).............................................................................Not Applicable
(b)...........................................................................................7.4
Section 317(a)(1).............................................................................7.5
(a)(2)........................................................................................7.5
(b)...........................................................................................5.4
Section 318(a)...............................................................................16.7
</TABLE>

---------------
Note: This reconciliation and tie shall not, for any purpose, be deemed to be a
      part of the Indenture.

<PAGE>

                                    INDENTURE

        INDENTURE, dated as of October 30, 2001, between LSI Logic Corporation,
a Delaware corporation (hereinafter sometimes called the "Company", as more
fully set forth in Section 1.1), and State Street Bank and Trust Company of
California, N.A., a national banking association organized under the laws of the
United States of America, as trustee hereunder (hereinafter sometimes called the
"Trustee", as more fully set forth in Section 1.1).

                                   WITNESSETH:

        WHEREAS, for its lawful corporate purposes, the Company has duly
authorized the issuance of its 4.00% Convertible Subordinated Notes due 2006
(hereinafter sometimes called the "Notes"), in an aggregate principal amount not
to exceed $450,000,000 (or $517,500,000 if the over-allotment option set forth
in Section 2 of the Purchase Agreement dated October 24, 2001 between the
Company and the Purchaser is exercised in full) and, to provide the terms and
conditions upon which the Notes are to be authenticated, issued and delivered,
the Company has duly authorized the execution and delivery of this Indenture;
and

        WHEREAS, the Notes, the certificate of authentication to be borne by the
Notes, a form of assignment, a form of option to elect repayment upon a
Fundamental Change, and a form of conversion notice to be borne by the Notes are
to be substantially in the forms hereinafter provided for; and

        WHEREAS, all acts and things necessary to make the Notes, when executed
by the Company and authenticated and delivered by the Trustee or a duly
authorized authenticating agent, as in this Indenture provided, the valid,
binding and legal obligations of the Company, and to constitute these presents a
valid agreement according to its terms, have been done and performed, and the
execution of this Indenture and the issue hereunder of the Notes have in all
respects been duly authorized.

        NOW, THEREFORE, THIS INDENTURE WITNESSETH:

        That in order to declare the terms and conditions upon which the Notes
are, and are to be, authenticated, issued and delivered, and in consideration of
the premises and of the purchase and acceptance of the Notes by the holders
thereof, the Company covenants and agrees with the Trustee for the equal and
proportionate benefit of the respective holders from time to time of the Notes
(except as otherwise provided below), as follows:

                                    ARTICLE I

                                   DEFINITIONS

SECTION 1.1. DEFINITIONS. The terms defined in this Section 1.1 (except as
herein otherwise expressly provided or unless the context otherwise requires)
for all purposes of this Indenture and of

<PAGE>

any indenture supplemental hereto shall have the respective meanings specified
in this Section 1.1. All other terms used in this Indenture that are defined in
the Trust Indenture Act or which are by reference therein defined in the
Securities Act (except as herein otherwise expressly provided or unless the
context otherwise requires) shall have the meanings assigned to such terms in
said Trust Indenture Act and in said Securities Act as in force at the date of
the execution of this Indenture. The words "herein," "hereof," "hereunder," and
words of similar import refer to this Indenture as a whole and not to any
particular Article, Section or other Subdivision. The terms defined in this
Article include the plural as well as the singular.

        ADDITIONAL INTEREST: The term "Additional Interest" shall have the
meaning specified in Section 3(a) of the Registration Rights Agreement.

        AFFILIATE: The term "Affiliate" of any specified person shall mean 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 or cause the direction of 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.

        BOARD OF DIRECTORS: The term "Board of Directors" shall mean the Board
of Directors of the Company or a committee of such Board duly authorized to act
for it hereunder.

        BUSINESS DAY: The term "Business Day" shall mean each Monday, Tuesday,
Wednesday, Thursday and Friday which is not a day on which the banking
institutions in The City of New York or the city in which the Corporate Trust
Office is located are authorized or obligated by law or executive order to close
or be closed.

        CLOSING PRICE: The term "Closing Price" shall have the meaning specified
in Section 15.5(h)(1).

        COMMISSION: The term "Commission" shall mean the Securities and Exchange
Commission.

        COMMON STOCK: The term "Common Stock" shall mean 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.
Subject to the provisions of Section 15.6, however, shares issuable on
conversion of Notes shall include only shares of the class designated as common
stock 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

                                      -2-
<PAGE>

all such reclassifications bears to the total number of shares of all such
classes resulting from all such reclassifications.

        COMPANY: The term "Company" shall mean LSI Logic Corporation, a Delaware
corporation, having its principal office at 1551 McCarthy Boulevard, Milpitas,
California 95035 and subject to the provisions of Article XII, shall include its
successors and assigns.

        COMPANY NOTE: The term "Company Note" shall have the meaning specified
in Section 3.5(b).

        CONVERSION PRICE: The term "Conversion Price" shall have the meaning
specified in Section 15.4.

        CORPORATE TRUST OFFICE: The term "Corporate Trust Office" or other
similar term, shall mean the office of the Trustee at which at any particular
time the trust created by this Indenture shall be administered, which office is,
at the date as of which this Indenture is dated, located at 633 West 5th Street,
12th Floor, Los Angeles, CA 90071, Attention: Corporate Trust Department (LSI
Logic Corporation -- 4.00% Convertible Subordinated Notes due 2006).

        CUSTODIAN: The term "Custodian" shall mean State Street Bank and Trust
Company of California, N.A., as custodian with respect to the Notes in global
form, or any successor entity thereto.

        DEFAULT: The term "default" shall mean any event that is, or after
notice or passage of time, or both, would be, an Event of Default.

        DEFAULTED INTEREST: The term "Defaulted Interest" shall have the meaning
specified in Section 2.3.

        DEPOSITARY: The term "Depositary" shall mean, with respect to the Notes
issuable or issued in whole or in part in global form, the person specified in
Section 2.5(d) as the Depositary with respect to such Notes, until a successor
shall have been appointed and become such pursuant to the applicable provisions
of this Indenture, and thereafter, "Depositary" shall mean or include such
successor.

        DESIGNATED SENIOR DEBT: The term "Designated Senior Debt" shall mean any
Senior Debt in which the instrument creating or evidencing the same or the
assumption or guarantee thereof (or related agreements or documents to which the
Company is a party) expressly provides that such Senior Debt shall be
"Designated Senior Debt" for purposes of this Indenture (provided that such
instrument, agreement or other document may place limitations and conditions on
the right of such Senior Debt to exercise the rights of Designated Senior Debt).

        EVENT OF DEFAULT: The term "Event of Default" shall mean any event
specified in Section 7.1(a), (b), (c), (d) or (e).

                                      -3-
<PAGE>

        EXCHANGE ACT: The term "Exchange Act" shall mean the Securities Exchange
Act of 1934, as amended, and the rules and regulations promulgated thereunder,
as in effect from time to time.

        FUNDAMENTAL CHANGE: The term "Fundamental Change" shall mean the
occurrence of any transaction or event in connection with which all or
substantially all of the Common Stock shall be exchanged for, be converted into,
acquired for, or constitute solely the right to receive, consideration (whether
by means of an exchange offer, liquidation, tender offer, consolidation, merger,
combination, reclassification, recapitalization or otherwise) which is not all
or substantially all common stock listed (or, upon consummation of or
immediately following such transaction or event, which will be listed) on a
United States national securities exchange or approved for quotation on the
Nasdaq National Market or any similar United States system of automated
dissemination of quotations of securities prices.

        GLOBAL NOTE: The term "Global Note" shall have the meaning set forth in
Section 2.5(b).

        INDEBTEDNESS: The term "Indebtedness" shall mean, with respect to any
person, (i) all obligations, contingent or otherwise, of such person (a) for
borrowed money (whether or not the recourse of the lender is to the whole of the
assets of such person or only to a portion thereof), (b) evidenced by a note,
debenture, bond or written instrument (including a purchase money obligation),
(c) in respect of leases of such person required, in conformity with generally
accepted accounting principles, to be accounted for as capitalized lease
obligations on the balance sheet of such person and all obligations and other
liabilities (contingent or otherwise) under any lease or related document
(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 lessor and the obligations of such
person under such lease or related document to purchase or to cause a third
party to purchase such leased property; or (d) in respect of letters of credit
(including reimbursement obligations with respect thereto), local guarantees or
bankers' acceptances; (ii) all obligations of others of the type described in
clause (i) above or clause (iii), (iv) or (v) below assumed by or guaranteed in
any manner by such person or in effect guaranteed by such person through an
agreement to purchase, contingent or otherwise (and the obligations of such
person under any such assumptions, guarantees or other such arrangements); (iii)
all obligations secured by a mortgage, pledge, lien, encumbrance, charge or
adverse claim affecting title or resulting in an encumbrance to which the
property or assets of such person are subject, whether or not the obligations
secured thereby shall have been assumed by or shall otherwise be such person's
legal liability; (iv) to the extent not otherwise included, all obligations of
such person under interest rate and currency swap agreements, cap, floor and
collar agreements, spot and forward contracts and similar agreements and
arrangements; and (v) all obligations, contingent or otherwise, of such person
under or in respect of any and all deferrals, renewals, extensions and
refundings of, or amendments, modifications or supplements to, any liability of
the kind described in any of the preceding clauses (i), (ii), (iii) or (iv).

        INDENTURE: The term "Indenture" shall mean this instrument as originally
executed or, if amended or supplemented as herein provided, as so amended or
supplemented.

                                      -4-
<PAGE>

        INSTITUTIONAL ACCREDITED INVESTOR: The term "Institutional Accredited
Investor" shall mean an institutional "accredited investor" within the meaning
of Rule 501(a)(1), (2), (3) or (7) under the Securities Act.

        NOTE OR NOTES: The terms "Note" or "Notes" shall mean any Note or Notes,
as the case may be, authenticated and delivered under this Indenture, including
the Global Note.

        NOTEHOLDER OR HOLDER: The terms "Noteholder" or "holder" as applied to
any Note, or other similar terms (but excluding the term "beneficial holder"),
shall mean any person in whose name at the time a particular Note is registered
on the Note registrar's books.

        NOTE REGISTER: The term "Note register" shall have the meaning specified
in Section 2.5.

        OFFICERS' CERTIFICATE: The term "Officers' Certificate," when used with
respect to the Company, shall mean a certificate signed by both (a) the
President, the Chief Executive Officer, Executive or Senior Vice President or
any Vice President (whether or not designated by a number or numbers or word or
words added before or after the title "Vice President") and (b) by the Treasurer
or any Assistant Treasurer or Secretary or any Assistant Secretary of the
Company.

        OPINION OF COUNSEL: The term "Opinion of Counsel" shall mean an opinion
in writing signed by legal counsel, who may be an employee of or counsel to the
Company, or other counsel acceptable to the Trustee.

        OUTSTANDING: The term "outstanding," when used with reference to Notes,
shall, subject to the provisions of Section 9.4, mean, as of any particular
time, all Notes authenticated and delivered by the Trustee under this Indenture,
except

        (a) Notes theretofore canceled by the Trustee or delivered to the
Trustee for cancellation;

        (b) Notes, or portions thereof, (i) for the redemption of which monies
in the necessary amount shall have been deposited in trust with the Trustee or
with any paying agent (other than the Company) or (ii) which shall have been
otherwise defeased in accordance with Article XIII;

        (c) Notes in lieu of which, or in substitution for which, other Notes
shall have been authenticated and delivered pursuant to the terms of Section
2.6; and

        (d) Notes converted into Common Stock pursuant to Article XV and Notes
deemed not outstanding pursuant to Article III.

        PAYMENT BLOCKAGE NOTICE: The term "Payment Blockage Notice" shall have
the meaning specified in Section 4.2.

                                      -5-
<PAGE>

        PERSON: The term "person" shall mean a corporation, an association, a
partnership, a limited liability corporation, an individual, a joint venture, a
joint stock company, a trust, an unincorporated organization or a government or
an agency or a political subdivision thereof.

        PORTAL MARKET: The term "The Portal Market" shall mean The Portal Market
operated by the National Association of Securities Dealers, Inc. or any
successor thereto.

        PREDECESSOR NOTE: The term "Predecessor Note" of any particular Note
shall mean every previous Note evidencing all or a portion of the same debt as
that evidenced by such particular Note; and, for the purposes of this
definition, any Note authenticated and delivered under Section 2.6 in lieu of a
lost, destroyed or stolen Note shall be deemed to evidence the same debt as the
lost, destroyed or stolen Note that it replaces.

        PRINCIPAL AMOUNT: The term "Principal Amount" shall have the meaning
specified in Section 2.5(b).

        PURCHASER: The term "Purchaser" shall mean Lehman Brothers Inc.

        QIB: The term "QIB" shall mean a "qualified institutional buyer" as
defined in Rule 144A.

        RECORD DATE: The term "Record Date" shall have the meaning specified in
Section 15.5(h)(iv).

        REGISTRATION RIGHTS AGREEMENT: The term "Registration Rights Agreement"
shall mean that certain Registration Rights Agreement, dated as of October 30,
2001, between the Company and the Purchaser, as amended from time to time in
accordance with its terms.

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

        REPURCHASE DATE: The term "Repurchase Date" shall have the meaning
specified in Section 3.5.

        RESPONSIBLE OFFICER: The term "Responsible Officer," when used with
respect to the Trustee, shall mean an officer of the Trustee in the Corporate
Trust Office assigned and duly authorized by the Trustee to administer its
corporate trust matters.

        RESTRICTED SECURITIES: The term "Restricted Securities" shall have the
meaning specified in Section 2.5.

                                      -6-
<PAGE>

        RULE 144A: The term "Rule 144A" shall mean Rule 144A as promulgated
under the Securities Act.

        SECURITIES ACT: The term "Securities Act" shall mean the Securities Act
of 1933, as amended, and the rules and regulations promulgated thereunder.

        SENIOR DEBT: The term "Senior Debt" means the principal of, premium, if
any, and interest on, rent payable under, and any other amounts due on or in
connection with any and all Indebtedness of the Company (including, without
limitation, fees, costs, expenses and any interest accruing after the filing of
a petition initiating any proceeding pursuant to any bankruptcy law, but only to
the extent allowed or permitted to the holder of such Indebtedness against the
bankruptcy or other insolvency estate of the Company in such proceeding),
whether outstanding on the date of the Indenture or thereafter created,
incurred, assumed, guaranteed or in effect guaranteed by the Company (including
all deferrals, renewals, extensions or refundings of, or amendments,
modifications or supplements to the foregoing); provided, however, that Senior
Debt does not include (1) Indebtedness evidenced by the Notes, (2) Indebtedness
of the Company to any subsidiary of the Company, a majority of the voting stock
of which is owned by the Company, except to the extent such Indebtedness is
pledged by such subsidiary as security for any Senior Debt, (3) accounts payable
of the Company to trade creditors arising in the ordinary course of business,
and (4) any particular Indebtedness in which the instrument creating or
evidencing the same or the assumption or guarantee thereof expressly provides
that such Indebtedness shall not be senior in right of payment to, or is pari
passu with, or is subordinated or junior to, the Notes, (5) the Company's 4%
Convertible Subordinated Notes due February 15, 2005 and (6) the Company's 4
1/4% Convertible Subordinated Notes due 2004.

        SIGNIFICANT SUBSIDIARY: The term "Significant Subsidiary" shall mean, as
of any date of determination, a Subsidiary of the Company, if as of such date of
determination either (a) the assets of such subsidiary equal 10% or more of the
Company's total consolidated assets or (b) the total revenue of which
represented 10% or more of the Company's consolidated total revenue for the most
recently completed fiscal year.

        SUBSIDIARY: The term "Subsidiary" shall mean, with respect to any
person, (i) any corporation, association or other business entity of which more
than 50% of the total voting power of shares of capital stock entitled (without
regard to the occurrence of any contingency) to vote in the election of
directors, managers or trustees thereof is at the time owned or controlled,
directly or indirectly, by such person or one or more of the other subsidiaries
of that person (or a combination thereof) and (ii) any partnership (a) the sole
general partner or managing general partner of which is such person or a
subsidiary of such person or (b) the only general partners of which are such
person or of one or more subsidiaries of such person (or any combination
thereof).

        TRADING DAY: The term "Trading Day" shall have the meaning specified in
Section 15.5(h)(5).

                                      -7-
<PAGE>

        TRIGGER EVENT: The term "Trigger Event" shall have the meaning specified
in Section 15.5(d).

        TRUST INDENTURE ACT: The term "Trust Indenture Act" shall mean the Trust
Indenture Act of 1939, as amended, as it was in force at the date of execution
of this Indenture, except as provided in Sections 11.3 and 15.6; provided,
however, that in the event the Trust Indenture Act of 1939 is amended after the
date hereof, the term "Trust Indenture Act" shall mean, to the extent required
by such amendment, the Trust Indenture Act of 1939 as so amended.

        TRUSTEE: The term "Trustee" shall mean State Street Bank and Trust
Company of California, N.A. and its successors and any corporation resulting
from or surviving any consolidation or merger to which it or its successors may
be a party and any successor trustee at the time serving as successor trustee
hereunder.

        The definitions of certain other terms are as specified in Sections 2.5
and 3.5 and Article XV.

SECTION 1.2. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT. Whenever this
Indenture refers to a provision of the Trust Indenture Act, the provision is
incorporated by reference in and made a part of this Indenture.

        The following Trust Indenture Act 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 Trust Indenture Act terms used in this Indenture that are
defined by the Trust Indenture Act, defined by Trust Indenture Act reference to
another statute or defined by Commission 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;

                                      -8-
<PAGE>

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

        (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; and

        (4) all references to section and article numbers in this Indenture
shall refer to sections and articles hereof, unless otherwise specified.

                                   ARTICLE II

        ISSUE, DESCRIPTION, EXECUTION, REGISTRATION AND EXCHANGE OF NOTES

SECTION 2.1. DESIGNATION AMOUNT AND ISSUE OF NOTES. The Notes shall be
designated as "4.00% Convertible Subordinated Notes due 2006." Notes not to
exceed the aggregate principal amount of $450,000,000 (or $517,500,000 if the
over-allotment option set forth in Section 2 of the Purchase Agreement dated
October 24, 2001 (as amended from time to time by the parties thereto) by and
between the Company and the Purchaser is exercised in full) (except pursuant to
Sections 2.5, 2.6, 3.3, 3.5 and 15.2 hereof) upon the execution of this
Indenture, or from time to time thereafter, may be executed by the Company and
delivered to the Trustee for authentication, and the Trustee shall thereupon
authenticate and deliver said Notes to or upon the written order of the Company,
signed by its (a) Chief Executive Officer, President, Executive or Senior Vice
President or any Vice President (whether or not designated by a number or
numbers or word or words added before or after the title "Vice President") and
(b) Treasurer or Assistant Treasurer or its Secretary or any Assistant
Secretary, without any further action by the Company hereunder.

SECTION 2.2. FORM OF NOTES. The Notes and the Trustee's certificate of
authentication to be borne by such Notes shall be substantially in the form set
forth in Exhibit A, which is incorporated in and made a part of this Indenture.

        Any of the Notes 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 Notes may be
listed, or to conform to usage.

        Any Note in global form shall represent such of the outstanding Notes as
shall be specified therein and shall provide that it shall represent the
aggregate amount of outstanding Notes from time to time endorsed thereon and
that the aggregate amount of outstanding Notes represented thereby may from time
to time be increased or reduced to reflect transfers or exchanges permitted
hereby. Any endorsement of a Note in global form to reflect the amount of any
increase or decrease in the amount of outstanding Notes represented thereby
shall be made by the Trustee or the Custodian, at

                                      -9-
<PAGE>

the direction of the Trustee, in such manner and upon instructions given by the
holder of such Notes in accordance with this Indenture. Payment of principal of
and interest and premium, if any, on any Note in global form shall be made to
the holder of such Note.

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

SECTION 2.3. DATE AND DENOMINATION OF NOTES; PAYMENTS OF INTEREST. The Notes
shall be issuable in registered form without coupons in denominations of $1,000
principal amount and integral multiples thereof. Every Note shall be dated the
date of its authentication and shall bear interest from the applicable date in
each case as specified on the face of the form of Note attached as Exhibit A
hereto. Interest on the Notes shall be computed on the basis of a 360-day year
comprised of twelve (12) 30-day months.

        The person in whose name any Note (or its Predecessor Note) is
registered on the Note register at the close of business on any record date with
respect to any interest payment date shall be entitled to receive the interest
payable on such interest payment date, except (i) that the interest payable upon
redemption (unless the date of redemption is an interest payment date) will be
payable only to the person to whom principal is payable pursuant to such
redemption and (ii) as set forth in the next succeeding sentence. In the case of
any Note (or portion thereof) which is converted into Common Stock of the
Company during the period from (but excluding) a record date to (but excluding)
the next succeeding interest payment date either (i) if such Note (or portion
thereof) has been called for redemption on a redemption date which occurs during
such period, or is to be repurchased in connection with a Fundamental Change on
a Repurchase Date (as defined in Section 3.5) which occurs during such period,
the Company shall not be required to pay interest on such interest payment date
in respect of any such Note (or portion thereof) except to the extent required
to be paid upon redemption or repurchase of such Note or portion thereof
pursuant to Section 3.3 or 3.5 hereof or (ii) if otherwise, any Note (or portion
thereof) submitted for conversion during such period shall be accompanied by
funds equal to the interest payable on such succeeding interest payment date on
the principal amount so converted. Interest shall be payable at the office of
the Company maintained by the Company for such purposes in the Borough of
Manhattan, The City of New York, which shall initially be an office or agency of
the Trustee and may, as the Company shall specify to the paying agent in writing
by each record date, be paid either (i) by check mailed to the address of the
person entitled thereto as it appears in the Note register (provided that the
holder of Notes with an aggregate principal amount in excess of $10,000,000
shall, at the written election of such holder, be paid by wire transfer in
immediately available funds) or (ii) by transfer to an account maintained by
such person located in the United States; provided, however, that payments to
the Depositary will be made by wire transfer of immediately available funds to
the account of the Depositary or its nominee. The term "record date" with
respect to any interest payment date shall mean the April 15 or October 15
immediately preceding said May 1 or November 1, respectively.

                                      -10-
<PAGE>

        Any interest on any Note which is payable, but is not punctually paid or
duly provided for, on any said May 1 or November 1 (herein called "Defaulted
Interest") shall forthwith cease to be payable to the Noteholder on the relevant
record date by virtue of his having been such Noteholder; and such Defaulted
Interest shall be paid by the Company, at its election in each case, as provided
in clause (1) or (2) below;

            (i) The Company may elect to make payment of any Defaulted Interest
to the persons in whose names the Notes (or their respective Predecessor Notes)
are registered at the close of business on a special record date for the payment
of such Defaulted Interest, which shall be fixed in the following manner. The
Company shall notify the Trustee in writing of the amount of Defaulted Interest
to be paid on each Note and the date of the payment (which shall be not less
than twenty-five (25) days after the receipt by the Trustee of such notice,
unless the Trustee shall consent to an earlier date), and at the same time the
Company shall deposit with the Trustee an amount of money equal to the aggregate
amount to be paid in respect of such Defaulted Interest or shall make
arrangements satisfactory to the Trustee for such deposit prior to the date of
the proposed payment, such money when deposited to be held in trust for the
benefit of the persons entitled to such Defaulted Interest as in this clause
provided. Thereupon the Trustee shall fix a special record date for the payment
of such Defaulted Interest which shall be not more than fifteen (15) days and
not less than ten (10) days prior to the date of the proposed payment, and not
less than ten (10) days after the receipt by the Trustee of the notice of the
proposed payment, the Trustee shall promptly notify the Company of such special
record date and, in the name and at the expense of the Company, shall cause
notice of the proposed payment of such Defaulted Interest and the special record
date therefor to be mailed, first-class postage prepaid, to each Noteholder at
his address as it appears in the Note register, not less than ten (10) days
prior to such special record date. Notice of the proposed payment of such
Defaulted Interest and the special record date therefor having been so mailed,
such Defaulted Interest shall be paid to the persons in whose names the Notes
(or their respective Predecessor Notes) were registered at the close of business
on such special record date and shall no longer be payable pursuant to the
following clause (2) of this Section 2.3.

            (ii) The Company may make payment of any Defaulted Interest in any
other lawful manner not inconsistent with the requirements of any securities
exchange or automated quotation system on which the Notes may be listed or
designated for issuance, and upon such notice as may be required by such
exchange or automated quotation system, if, after notice given by the Company to
the Trustee of the proposed payment pursuant to this clause, such manner of
payment shall be deemed practicable by the Trustee.

SECTION 2.4. EXECUTION OF NOTES. The Notes shall be signed in the name and on
behalf of the Company by the manual or facsimile signature of its Chief
Executive Officer, President, any Executive or Senior Vice President or any Vice
President (whether or not designated by a number or numbers or word or words
added before or after the title "Vice President") or Treasurer and attested by
the manual or facsimile signature of its Secretary or any of its Assistant
Secretaries or Treasurer or any of its Assistant Treasurers (which may be
printed, engraved or otherwise reproduced thereon, by facsimile or otherwise).
Only such Notes as shall bear thereon a certificate of authentication

                                      -11-
<PAGE>

substantially in the form set forth on the form of Note attached as Exhibit A
hereto, manually executed by the Trustee (or an authenticating agent appointed
by the Trustee as provided by Section 16.11), shall be entitled to the benefits
of this Indenture or be valid or obligatory for any purpose. Such certificate by
the Trustee (or such an authenticating agent) upon any Note executed by the
Company shall be conclusive evidence that the Note so authenticated has been
duly authenticated and delivered hereunder and that the holder is entitled to
the benefits of this Indenture.

        In case any officer of the Company who shall have signed any of the
Notes shall cease to be such officer before the Notes so signed shall have been
authenticated and delivered by the Trustee, or disposed of by the Company, such
Notes nevertheless may be authenticated and delivered or disposed of as though
the person who signed such Notes had not ceased to be such officer of the
Company; and any Note may be signed on behalf of the Company by such persons as,
at the actual date of the execution of such Note, shall be the proper officers
of the Company, although at the date of the execution of this Indenture any such
person was not such an officer.

SECTION 2.5. EXCHANGE AND REGISTRATION OF TRANSFER OF NOTES: RESTRICTIONS ON
TRANSFER; DEPOSITARY.

        (a) The Company shall cause to be kept at the Corporate Trust Office a
register (the register maintained in such office and in any other office or
agency of the Company designated pursuant to Section 5.2 being herein sometimes
collectively referred to as the "Note register") in which, subject to such
reasonable regulations as it may prescribe, the Company shall provide for the
registration of Notes and of transfers of Notes. The Note register shall be in
written form or in any form capable of being converted into written form within
a reasonably prompt period of time. The Trustee is hereby appointed "Note
registrar" for the purpose of registering Notes and transfers of Notes as herein
provided. The Company may appoint one or more co-registrars in accordance with
Section 5.2.

        Upon surrender for registration of transfer of any Note to the Note
registrar or any co-registrar, and satisfaction of the requirements for such
transfer set forth in this Section 2.5, the Company shall execute, and the
Trustee shall authenticate and deliver, in the name of the designated transferee
or transferees, one or more new Notes of any authorized denominations and of a
like aggregate principal amount and bearing such restrictive legends as may be
required by this Indenture.

        Notes may be exchanged for other Notes of any authorized denominations
and of a like aggregate principal amount, upon surrender of the Notes to be
exchanged at any such office or agency maintained by the Company pursuant to
Section 5.2. Whenever any Notes are so surrendered for exchange, the Company
shall execute, and the Trustee shall authenticate and deliver, the Notes which
the Noteholder making the exchange is entitled to receive bearing registration
numbers not contemporaneously outstanding.

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

                                      -12-
<PAGE>

        All Notes presented or surrendered for registration of transfer or for
exchange, redemption or conversion shall (if so required by the Company or the
Note registrar) be duly endorsed, or be accompanied by a written instrument or
instruments of transfer in form satisfactory to the Company, and the Notes shall
be duly executed by the Noteholder thereof or his attorney duly authorized in
writing.

        No service charge shall be made to the Noteholders for any registration
of transfer or exchange of Notes, but the Company may require payment of a sum
sufficient to cover any tax, assessment or other governmental charge that may be
imposed in connection with any registration of transfer or exchange of Notes.

        Neither the Company nor the Trustee nor any Note registrar shall be
required to exchange or register a transfer of (a) any Notes for a period of
fifteen (15) days next preceding any selection of Notes to be redeemed or (b)
any Notes or portions thereof called for redemption pursuant to Section 3.2 or
(c) any Notes or portion thereof surrendered for conversion pursuant to Article
XV or (d) any Notes or portions thereof tendered for redemption (and not
withdrawn) pursuant to Section 3.5.

        (b) So long as the Notes are eligible for book-entry settlement with the
Depositary, or unless otherwise required by law, all Notes that upon initial
issuance are beneficially owned by QIBs or as a result of a sale or transfer
after initial issuance are beneficially owned by QIBs will be represented by one
or more Notes in global form registered in the name of the Depositary or the
nominee of the Depositary (each, a "Global Note"), except as otherwise specified
below. The transfer and exchange of beneficial interests in any Global Note
shall be effected through the Depositary in accordance with this Indenture and
the procedures of the Depositary therefor. The Trustee shall make appropriate
endorsements to reflect increases or decreases in the principal amounts of any
such Global Note as set forth on the face of the Note ("Principal Amount") to
reflect any such transfers. Except as provided below, beneficial owners of a
Global Note shall not be entitled to have certificates registered in their
names, will not receive or be entitled to receive physical delivery of
certificates in definitive form and will not be considered holders of such
Global Note.

        (c) So long as the Notes are eligible for book-entry settlement, or
unless otherwise required by law, upon any transfer of a definitive Note to a
QIB in accordance with Rule 144A, and upon receipt of the definitive Note or
Notes being so transferred, together with a certification, substantially in the
form on the reverse of the Note, from the transferor that the transfer is being
made in compliance with Rule 144A (or other evidence satisfactory to the
Trustee), the Trustee shall make an endorsement on the Global Note to reflect an
increase in the aggregate Principal Amount of the Notes represented by such
Global Note, the Trustee shall cancel such definitive Note or Notes in
accordance with the standing instructions and procedures of the Depositary, the
aggregate Principal Amount of Notes represented by such Global Note to be
increased accordingly; provided that no definitive Note, or portion thereof, in
respect of which the Company or an Affiliate of the Company held any beneficial
interest shall be included in such Global Note until such definitive Note is
freely

                                      -13-
<PAGE>

tradable in accordance with Rule 144(k) under the Securities Act; provided
further that the Trustee shall issue Notes in definitive form upon any transfer
of a beneficial interest in the Global Note to the Company or any Affiliate of
the Company.

        Upon any sale or transfer of a Note to an Institutional Accredited
Investor (other than pursuant to a registration statement that has been declared
effective under the Securities Act), such Institutional Accredited Investor
shall, prior to such sale or transfer, furnish to the Company and/or the Trustee
a signed letter containing representations and agreements relating to
restrictions on transfer substantially in the form set forth in Exhibit B to
this Indenture. Upon any transfer of a beneficial interest in the Global Note to
an Institutional Accredited Investor, the Trustee shall make an endorsement on
the Global Note to reflect a decrease in the aggregate Principal Amount of the
Notes represented by such Note in global form, and the Company shall execute a
definitive Note or Notes in exchange therefore, and the Trustee, upon receipt of
such definitive Note or Notes and the written order of the Company, shall
authenticate and deliver such, definitive Note or Notes.

        Any Global Note may be endorsed with or have incorporated in the text
thereof such legends or recitals or changes not inconsistent with the provisions
of this Indenture as may be required by the Custodian, the Depositary or by the
National Association of Securities Dealers, Inc. in order for the Notes to be
tradeable on The Portal Market or as may be required for the Notes to be
tradeable on any other market developed for trading of securities pursuant to
Rule 144A or required to comply with any applicable law or any regulation
thereunder or with the rules and regulations of any securities exchange or
automated quotation system upon which the Notes may be listed or traded or to
conform with any usage with respect thereto, or to indicate any special
limitations or restrictions to which any particular Notes are subject.

        (d) Every Note that bears or is required under this Section 2.5(d) to
bear the legend set forth in this Section 2.5(d) (together with any Common Stock
issued upon conversion of the Notes and required to bear the legend set forth in
Section 2.5(e), collectively, the "Restricted Securities") shall be subject to
the restrictions on transfer set forth in this Section 2.5(d) (including those
set forth in the legend set forth below) unless such restrictions on transfer
shall be waived by written consent of the Company, and the holder of each such
Restricted Security, by such holder's acceptance thereof, agrees to be bound by
all such restrictions on transfer. As used in Sections 2.5(d) and 2.5(e), the
term "transfer" encompasses any sale, pledge, transfer or other disposition
whatsoever of any Restricted Security.

        Until the expiration of the holding period applicable to sales thereof
under Rule 144(k) under the Securities Act (or any successor provision), any
certificate evidencing such Note (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 2.5(e), if applicable)
shall bear a legend in substantially the following form, unless such Note has
been 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 transfer), or unless otherwise agreed by the Company in writing, with
written notice thereof to the Trustee:

                                      -14-
<PAGE>

        THE NOTE EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE 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
ACQUISITION HEREOF, THE HOLDER: (1) REPRESENTS THAT IT IS A "QUALIFIED
INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT OF 1933 OR
AN INSTITUTIONAL ACCREDITED INVESTOR WITHIN THE MEANING OF RULE 501(A)(1), (2),
(3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT; (2) AGREES THAT IT WILL NOT
WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THIS NOTE RESELL OR OTHERWISE
TRANSFER THE NOTE EVIDENCED HEREBY OR THE COMMON STOCK ISSUABLE UPON CONVERSION
OF SUCH SECURITY EXCEPT (A) TO LSI LOGIC CORPORATION OR ANY SUBSIDIARY THEREOF,
(B) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE
SECURITIES ACT OF 1933, (C) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED
BY RULE 144 UNDER THE SECURITIES ACT OF 1933 (IF AVAILABLE), (D) TO AN
INSTITUTIONAL INVESTOR THAT IS AN ACCREDITED INVESTOR WITHIN THE MEANING OF RULE
501(A)(1) , (2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT PURSUANT TO
AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT (IF AVAILABLE), (E)
PURSUANT TO AND IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT, OR (F)
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(C) OR 2(F)
ABOVE) A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.

        Any Note (or security issued in exchange or substitution therefor) as to
which such restrictions on transfer shall have expired in accordance with their
terms or as to the conditions for removal of the foregoing legend set forth
therein have been satisfied may, upon surrender of such Note for exchange to the
Note registrar in accordance with the provisions of this Section 2.5, be
exchanged for a new Note or Notes, of like tenor and aggregate principal amount,
which shall not bear the restrictive legend required by this Section 2.5(d).

        Notwithstanding any other provisions of this Indenture (other than the
provisions set forth in the second paragraph of Section 2.5(c) and in this
Section 2.5(d)), a Global Note may not be transferred as a whole or in part
except by the Depositary to a nominee of the Depositary or by a nominee of the
Depositary to the Depositary or another nominee of the Depositary or by the
Depositary or any such nominee to a successor Depositary or a nominee of such
successor Depositary.

        The Depositary shall be a clearing agency registered under the Exchange
Act. The Company initially appoints The Depository Trust Company to act as
Depositary with respect to the Global

                                      -15-
<PAGE>

Notes. Initially, the Global Note shall be issued to the Depositary, registered
in the name of Cede & Co., as the nominee of the Depositary, and deposited with
the Custodian for Cede & Co.

        If at any time the Depositary for a Global Note notifies the Company
that it is unwilling or unable to continue as Depositary for such Note, the
Company may appoint a successor Depositary with respect to such Note. If a
successor Depositary is not appointed by the Company within ninety (90) days
after the Company receives such notice, the Company will execute, and the
Trustee, upon receipt of an Officers' Certificate for the authentication and
delivery of Notes, will authenticate and deliver, Notes in certificated form, in
aggregate principal amount equal to the principal amount of such Global Note, in
exchange for such Global Note.

        If a Note in certificated form is issued in exchange for any portion of
a Global Note after the close of business at the office or agency where such
exchange occurs on any record date and before the opening of business at such
office or agency on the next succeeding interest payment date, interest will not
be payable on such interest payment date in respect of such Note, but will be
payable on such interest payment date, subject to the provisions of Section 2.3,
only to the person to whom interest in respect of such portion of such Global
Note is payable in accordance with the provisions of this Indenture.

        Notes in certificated form issued in exchange for all or a part of a
Global Note pursuant to this Section 2.5 shall be registered in such names and
in such authorized denominations as the Depositary, pursuant to instructions
from its direct or indirect participants or otherwise, shall instruct the
Trustee. Upon execution and authentication, the Trustee shall deliver such Notes
in certificated form to the persons in whose names such Notes in certificated
form are so registered.

        At such time as all interests in a Global Note have been redeemed,
converted, canceled, exchanged for Notes in certificated form, or transferred to
a transferee who receives Notes in certificated form thereof, such Global Note
shall, upon receipt thereof, be canceled by the Trustee in accordance with
standing procedures and instructions existing between the Depositary and the
Custodian. At any time prior to such cancellation, if any interest in a Global
Note is exchanged for Notes in certificated form, redeemed, converted,
repurchased or canceled, exchanged for Notes in certificated form or transferred
to a transferee who receives Notes in certificated form therefor or any Note in
certificated form is exchanged or transferred for part of a Global Note, the
principal amount of such Global Note shall, in accordance with the standing
procedures and instructions existing between the Depositary and the Custodian,
be appropriately reduced or increased, as the case may be, and an endorsement
shall be made on such Global Note, by the Trustee or the Custodian, at the
direction of the Trustee, to reflect such reduction or increase.

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

        UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) (THE
"DEPOSITORY," WHICH TERM INCLUDES ANY SUCCESSOR DEPOSITARY FOR THE CERTIFICATES)
TO THE COMPANY OR ITS AGENT FOR

                                      -16-
<PAGE>

REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY AND ANY PAYMENT HEREON IS MADE TO
CEDE & CO. (OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY), 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.

        (e) Until the expiration of the holding period applicable to sales
thereof under Rule 144(k) under the Securities Act (or any successor provision),
any stock certificate representing Common Stock issued upon conversion of any
Note shall bear a legend in substantially the following form, unless such Common
Stock has been 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 transfer) or such Common Stock has been issued upon conversion of
Notes that have been transferred pursuant to a registration statement that has
been declared effective under the Securities Act, or unless otherwise agreed by
the Company in writing with written notice thereof to the transfer agent:

        THE COMMON STOCK EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE
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 ACQUISITION HEREOF, THE HOLDER: (1) REPRESENTS THAT IT IS
A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT OF 1933 OR AN INSTITUTIONAL ACCREDITED INVESTOR WITHIN THE MEANING OF RULE
501(A)(1), (2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT; (2) AGREES
THAT, UNTIL THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THE
SECURITY EVIDENCED HEREBY UNDER RULE 144(K) UNDER THE SECURITIES ACT (OR ANY
SUCCESSOR PROVISION), IT WILL NOT RESELL OR OTHERWISE TRANSFER THE COMMON STOCK
EVIDENCED HEREBY EXCEPT (A) TO LSI LOGIC CORPORATION OR ANY SUBSIDIARY THEREOF,
(B) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE
SECURITIES ACT OF 1933, (C) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED
BY RULE 144 UNDER THE SECURITIES ACT OF 1933 (IF AVAILABLE), (D) TO AN
INSTITUTIONAL INVESTOR THAT IS AN ACCREDITED INVESTOR WITHIN THE MEANING OF RULE
501(A)(1) , (2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT PURSUANT TO
AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT (IF AVAILABLE), (E)
PURSUANT TO AND IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT, OR (F)
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 COMMON STOCK
EVIDENCED HEREBY IS TRANSFERRED (OTHER THAN A

                                      -17-
<PAGE>

TRANSFER PURSUANT TO CLAUSE 2(C) OR 2(F) ABOVE) A NOTICE SUBSTANTIALLY TO THE
EFFECT OF THIS LEGEND.

        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 foregoing legend 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 number of
shares of Common Stock, which shall not bear the restrictive legend required by
this Section 2.5(e).

        (f) Any Note or Common Stock issued upon the conversion or exchange of a
Note that, prior to the expiration of the holding period applicable to sales
thereof under Rule 144(k) under the Securities Act (or any successor provision),
is purchased or owned by the Company or any Affiliate thereof may not be resold
by the Company or such Affiliate unless registered under the Securities Act or
resold pursuant to an exemption from the registration requirements of the
Securities Act in a transaction which results in such Notes or Common Stock, as
the case may be, no longer being "restricted securities" (as defined under Rule
144).

SECTION 2.6. MUTILATED, DESTROYED, LOST OR STOLEN NOTES. In case any Note shall
become mutilated or be destroyed, lost or stolen, the Company in its discretion
may execute, and upon its written request the Trustee or an authenticating agent
appointed by the Trustee shall authenticate and make available for delivery, a
new Note, bearing a number not contemporaneously outstanding, in exchange and
substitution for the mutilated Note, or in lieu of and in substitution for the
Note so destroyed, lost or stolen. In every case the applicant for a substituted
Note shall furnish to the Company, to the Trustee and, if applicable, to such
authenticating agent such security or indemnity as may be required by them to
save each of them harmless for any loss, liability, cost or expense caused by or
connected with such substitution, and, in every case of destruction, loss or
theft, the applicant shall also furnish to the Company, to the Trustee and, if
applicable, to such authenticating agent evidence to their satisfaction of the
destruction, loss or theft of such Note and of the ownership thereof.

        Following receipt by the Trustee or such authenticating agent, as the
case may be, of satisfactory security or indemnity and evidence, as described in
the preceding paragraph, the Trustee or such authenticating agent may
authenticate any such substituted Note and make available for delivery such
Note. Upon the issuance of any substituted Note, 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 connected therewith.
In case any Note which has matured or is about to mature or has been called for
redemption or has been tendered for redemption (and not withdrawn) or is about
to be converted into Common Stock shall become mutilated or be destroyed, lost
or stolen, the Company may, instead of issuing a substitute Note, pay or
authorize the payment of or convert or authorize the conversion of the same
(without surrender thereof except in the case of a mutilated Note), as the case
may be, if the applicant for such payment or conversion shall furnish to the
Company, to the Trustee and, if applicable, to such authenticating agent such
security or

                                      -18-
<PAGE>

indemnity as may be required by them to save each of them harmless for any loss,
liability, cost or expense caused by or connected with such substitution, and,
in case of destruction, loss or theft, evidence satisfactory to the Company, the
Trustee and, if applicable, any paying agent or conversion agent of the
destruction, loss or theft of such Note and of the ownership thereof.

        Every substitute Note issued pursuant to the provisions of this Section
2.6 by virtue of the fact that any Note is destroyed, lost or stolen shall
constitute an additional contractual obligation of the Company, whether or not
the destroyed, lost or stolen Note shall be found at any time, and shall be
entitled to all the benefits of (but shall be subject to all the limitations set
forth in) this Indenture equally and proportionately with any and all other
Notes duly issued hereunder. To the extent permitted by law, all Notes shall be
held and owned upon the express condition that the foregoing provisions are
exclusive with respect to the replacement or payment or conversion of mutilated,
destroyed, lost or stolen Notes and shall preclude any and all other rights or
remedies notwithstanding any law or statute existing or hereafter enacted to the
contrary with respect to the replacement or payment or conversion of negotiable
instruments or other securities without their surrender.

SECTION 2.7. TEMPORARY NOTES. Pending the preparation of Notes in certificated
form, the Company may execute and the Trustee or an authenticating agent
appointed by the Trustee shall, upon the written request of the Company,
authenticate and deliver temporary Notes (printed or lithographed). Temporary
Notes shall be issuable in any authorized denomination, and substantially in the
form of the Notes in certificated form, but with such omissions, insertions and
variations as may be appropriate for temporary Notes, all as may be determined
by the Company. Every such temporary Note shall be executed by the Company and
authenticated by the Trustee or such authenticating agent upon the same
conditions and in substantially the same manner, and with the same effect, as
the Notes in certificated form. Without unreasonable delay the Company will
execute and deliver to the Trustee or such authenticating agent Notes in
certificated form (other than in the case of Notes in global form) and thereupon
any or all temporary Notes (other than any such Note in global form) may be
surrendered in exchange therefor, at each office or agency maintained by the
Company pursuant to Section 5.2 and the Trustee or such authenticating agent
shall authenticate and make available for delivery in exchange for such
temporary Notes an equal aggregate principal amount of Notes in certificated
form. Such exchange shall be made by the Company at its own expense and without
any charge therefor. Until so exchanged, the temporary Notes shall in all
respects be entitled to the same benefits and subject to the same limitations
under this Indenture as Notes in certificated form authenticated and delivered
hereunder.

SECTION 2.8. CANCELLATION OF NOTES PAID, ETC. All Notes surrendered for the
purpose of payment, redemption, conversion, exchange or registration of
transfer, shall, if surrendered to the Company or any paying agent or any Note
registrar or any conversion agent, be surrendered to the Trustee and promptly
canceled by it, or, if surrendered to the Trustee, shall be promptly canceled by
it, and no Notes shall be issued in lieu thereof except as expressly permitted
by any of the provisions of this Indenture. The Trustee shall return such
canceled Notes to the Company. If the Company shall acquire any of the Notes,
such acquisition shall not operate as a redemption or satisfaction of the

                                      -19-
<PAGE>

indebtedness represented by such Notes unless and until the same are delivered
to the Trustee for cancellation.

SECTION 2.9. CUSIP NUMBERS. The Company in issuing the Notes may use "CUSIP"
numbers (if then generally in use), and, if so, the Trustee shall use "CUSIP"
numbers in notices of redemption as a convenience to Noteholders; provided that
any such notice may state that no representation is made as to the correctness
of such numbers either as printed on the Notes or as contained in any notice of
a redemption and that reliance may be placed only on the other identification
numbers printed on the Notes, and any such redemption shall not be affected by
any defect in or omission of such numbers. The Company will promptly notify the
Trustee of any change in the CUSIP numbers.

                                   ARTICLE III

                       REDEMPTION AND REPURCHASE OF NOTES

SECTION 3.1. REDEMPTION PRICES. The Company may not redeem the Notes prior to
November 6, 2004. At any time on or after November 6, 2004, the Company may, at
its option, redeem all or from time to time any part of the Notes on any date
prior to maturity, upon notice as set forth in Section 3.2, and at the optional
redemption prices set forth in the form of Note attached as Exhibit A hereto,
together with accrued but unpaid interest to, but excluding, the date fixed for
redemption.

SECTION 3.2. NOTICE OF REDEMPTION; SELECTION OF NOTES. In case the Company shall
desire to exercise the right to redeem all or, as the case may be, any part of
the Notes pursuant to Section 3.1, it shall fix a date for redemption and it or,
at its written request received by the Trustee not fewer than forty-five (45)
days prior (or such shorter period of time as may be acceptable to the Trustee)
to the date fixed for redemption, the Trustee in the name of and at the expense
of the Company, shall mail or cause to be mailed a notice of such redemption at
least thirty (30) days prior to (but not more than sixty (60) days prior to) the
date fixed for redemption to the holders of Notes so to be redeemed as a whole
or in part at their last addresses as the same appear on the Note register;
provided that if the Company shall give such notice, it shall also give written
notice, and written notice of the Notes to be redeemed, to the Trustee. Such
mailing shall be by first class mail. The notice if mailed in the manner herein
provided shall be conclusively presumed to have been duly given, whether or not
the holder receives such notice. In any case, failure to give such notice by
mail or any defect in the notice to the holder of any Note designated for
redemption as a whole or in part shall not affect the validity of the
proceedings for the redemption of any other Note.

        Each such notice of redemption shall specify the aggregate principal
amount of Notes to be redeemed, the CUSIP numbers, the date fixed for redemption
(which shall be a Business Day), the redemption price at which Notes are to be
redeemed, the place or places of payment, that payment will be made upon
presentation and surrender of such Notes, that unpaid interest accrued to the
date fixed for redemption will be paid as specified in said notice, and that on
and after said date interest thereon or on the portion thereof to be redeemed
will cease to accrue. Such notice shall also state the current Conversion Price
and the date on which the right to convert such Notes or portions thereof into
Common Stock will expire. If fewer than all the Notes are to be redeemed, the
notice of

                                      -20-
<PAGE>

redemption shall identify the Notes to be redeemed (including CUSIP numbers, if
any). In case any Note is to be redeemed in part only, the notice of redemption
shall state the portion of the principal amount thereof to be redeemed and shall
state that on and after the date fixed for redemption, upon surrender of such
Note, a new Note or Notes in principal amount equal to the unredeemed portion
thereof will be issued.

        On or prior to the redemption date specified in the notice of redemption
given as provided in this Section 3.2, the Company will deposit with the Trustee
or with one or more paying agents (or, if the Company is acting as its own
paying agent, set aside, segregate and hold in trust as provided in Section 5.4)
an amount of money sufficient to redeem on the redemption date all the Notes (or
portions thereof) so called for redemption (other than those theretofore
surrendered for conversion into Common Stock) at the appropriate redemption
price, together with accrued but unpaid interest to, but excluding, the date
fixed for redemption; provided that if such payment is made on the redemption
date it must be received by the Trustee or paying agent, as the case may be, by
10:00 a.m. New York City time, on such date. If any Note called for redemption
is converted pursuant hereto, any money deposited with the Trustee or any paying
agent or so segregated and held in trust for the redemption of such Note shall
be paid to the Company upon its written request, or, if then held by the Company
shall be discharged from such trust. Whenever any Notes are to be redeemed, the
Company will give the Trustee written notice in the form of an Officers'
Certificate not fewer than forty-five (45) days (or such shorter period of time
as may be acceptable to the Trustee) prior to the redemption date as to the
aggregate principal amount of Notes to be redeemed.

        If fewer than all the Notes are to be redeemed, the Trustee shall select
the Notes or portions thereof of the Global Note or the Notes in certificated
form to be redeemed (in principal amounts of $1,000 or integral multiples
thereof), by lot or by another method the Trustee deems fair and appropriate. If
any Note selected for partial redemption is converted in part after such
selection, the converted portion of such Note shall be deemed (so far as may be)
to be the portion to be selected for redemption. The Notes (or portions thereof)
so selected shall be deemed duly selected for redemption for all purposes
hereof, notwithstanding that any such Note is converted as a whole or in part
before the mailing of the notice of redemption.

        Upon any redemption of less than all Notes, the Company and the Trustee
may (but need not) treat as outstanding any Notes surrendered for conversion
during the period of fifteen (15) days next preceding the mailing of a notice of
redemption and may (but need not) treat as outstanding any Note authenticated
and delivered during such period in exchange for the unconverted portion of any
Note converted in part during such period.

SECTION 3.3. PAYMENT OF NOTES CALLED FOR REDEMPTION. If notice of redemption has
been given as above provided, the Notes or portion of Notes with respect to
which such notice has been given shall, unless converted into Common Stock
pursuant to the terms hereof, become due and payable on the date fixed for
redemption and at the place or places stated in such notice at the applicable
redemption price, together with unpaid interest accrued to (but excluding) the
date fixed for redemption, and on and after said date (unless the Company shall
default in the payment of such

                                      -21-
<PAGE>

Notes at the redemption price, together with unpaid interest accrued to said
date), interest on the Notes or portion of Notes so called for redemption shall
cease to accrue and such Notes shall cease after the close of business on the
Business Day next preceding the date fixed for redemption to be convertible into
Common Stock and, except as provided in Sections 8.5 and 13.4, to be entitled to
any benefit or security under this Indenture, and the holders thereof shall have
no right in respect of such Notes except the right to receive the redemption
price thereof and unpaid interest accrued to (but excluding) the date fixed for
redemption. On presentation and surrender of such Notes at a place of payment in
said notice specified, the said Notes or the specified portions thereof shall be
paid and redeemed by the Company at the applicable redemption price, together
with unpaid interest accrued thereon to (but excluding) the date fixed for
redemption; provided that, if the applicable redemption date is an interest
payment date, the semi-annual payment of interest becoming due on such date
shall be payable to the holders of such Notes registered as such on the relevant
record date instead of the holders surrendering such Notes for redemption on
such date.

        Upon presentation of any Note redeemed in part only, the Company shall
execute and the Trustee shall authenticate and make available for delivery to
the holder thereof, at the expense of the Company, a new Note or Notes, of
authorized denominations, in principal amount equal to the unredeemed portion of
the Notes so presented.

        Notwithstanding the foregoing, the Trustee shall not redeem any Notes or
mail any notice of optional redemption during the continuance of a default in
payment of interest on the Notes. If any Note called for redemption shall not be
so paid upon surrender thereof for redemption, the principal and premium, if
any, shall, until paid or duly provided for, bear interest from the date fixed
for redemption at the rate borne by the Note and such Note shall remain
convertible into Common Stock until the principal and premium, if any, and
interest shall have been paid or duly provided for.

SECTION 3.4. CONVERSION ARRANGEMENT ON CALL FOR REDEMPTION. In connection with
any redemption of Notes, the Company may arrange for the purchase and conversion
of any Notes by an agreement with one or more investment bankers or other
purchasers to purchase such Notes by paying to the Trustee in trust for the
Noteholders, on or before the date fixed for redemption, an amount not less than
the applicable redemption price, together with unpaid interest accrued to (but
excluding) the date fixed for redemption, of such Notes. Notwithstanding
anything to the contrary contained in this Article III, the obligation of the
Company to pay the redemption price of such Notes, together with unpaid interest
accrued to (but excluding) the date fixed for redemption, shall be deemed to be
satisfied and discharged to the extent such amount is so paid by such
purchasers. If such an agreement is entered into, a copy of which will be filed
with the Trustee prior to the date fixed for redemption, any Notes not duly
surrendered for conversion by the holders thereof may, at the option of the
Company, be deemed, to the fullest extent permitted by law, acquired by such
purchasers from such holders and (notwithstanding anything to the contrary
contained in Article XV) surrendered by such purchasers for conversion, all as
of immediately prior to the close of business on the business day immediately
preceding the date fixed for redemption (and the right to convert any such Notes
shall be extended through such time), subject to payment of the above amount as
aforesaid. At the direction of the Company, the Trustee shall hold and dispose
of any such amount

                                      -22-
<PAGE>

paid to it in the same manner as it would monies deposited with it by the
Company for the redemption of Notes. Without the Trustee's prior written
consent, no arrangement between the Company and such purchasers for the purchase
and conversion of any Notes shall increase or otherwise affect any of the
powers, duties, responsibilities or obligations of the Trustee as set forth in
this Indenture.

SECTION 3.5. REPURCHASE AT OPTION OF HOLDERS.

        (a) If there shall occur a Fundamental Change, then each Noteholder
shall have the right, at such holder's option, to require the Company to
repurchase all of such holder's Notes, or any portion thereof that is an
integral multiple of $1,000 principal amount, on the date (the "Repurchase
Date") that is thirty (30) days after the date of the Company Notice (as defined
in Section 3.5(b) below) of such Fundamental Change (or, if such 30th day is not
a Business Day, the next succeeding Business Day). Such repayment shall be made
at a price equal to 100% of the principal amount to be redeemed. The Company
shall also pay to such holders accrued but unpaid interest on the redeemed Notes
to, but excluding, the Repurchase Date; provided that, if such Repurchase Date
is May 1 or November 1, then the interest payable on such date shall be paid to
the holders of record of the Notes on the next preceding April 15 or October 15,
respectively.

        Upon presentation of any Note redeemed in part only, the Company shall
execute and, upon the Company's written direction to the Trustee, the Trustee
shall authenticate and deliver to the holder thereof, at the expense of the
Company, a new Note or Notes, of authorized denominations, in principal amount
equal to the unredeemed portion of the Notes so presented.

        (b) On or before the tenth day after the occurrence of a Fundamental
Change, the Company, or, at its written request (which must be received by the
Trustee at least five (5) Business Days prior to the date the Trustee is
requested to give notice as described below), the Trustee in the name of and at
the expense of the Company, shall mail or cause to be mailed to all holders of
record on the date of the Fundamental Change a notice (the "Company Notice") of
the occurrence of such Fundamental Change and of the redemption right at the
option of the holders arising as a result thereof. Such notice shall be mailed
in the manner and with the effect set forth in the first paragraph of Section
3.2. The Company shall also deliver a copy of the Company Notice to the Trustee
at such time as it is mailed to Noteholders.

        Each Company Notice shall specify the circumstances constituting the
Fundamental Change, the Repurchase Date, the latest time (not less than thirty
(30) days after the date of the Company's notice of a Fundamental Change) on the
Repurchase Date by which the holder must exercise the redemption right (the
"Fundamental Change Expiration Time"), that the holder shall have the right to
withdraw any Notes surrendered prior to the Fundamental Change Expiration Time,
a description of the procedure which a Noteholder must follow to exercise such
redemption right and to withdraw any surrendered Notes, the place or places
where the holder is to surrender such holder's Notes, and the amount of unpaid
interest accrued on each Note to the Repurchase Date.

                                      -23-
<PAGE>

        No failure of the Company to give the foregoing notices and no defect
therein shall limit the Noteholders' redemption rights or affect the validity of
the proceedings for the repurchase of the Notes pursuant to this Section 3.5.

        (c) For a Note to be so repaid at the option of the holder, the Company
must receive at the office or agency of the Company maintained for that purpose
or, at the option of such holder, the Corporate Trust Office, such Note with the
form entitled "Option to Elect Repayment Upon A Fundamental Change" on the
reverse thereof duly completed, together with such Notes duly endorsed for
transfer, on or before the Fundamental Change Expiration Time. All questions as
to the validity, eligibility (including time of receipt) and acceptance of any
Note for repayment shall be determined by the Company, whose determination shall
be final and binding absent manifest error.

        (d) On or prior to the Repurchase Date, the Company will deposit with
the Trustee or with one or more paying agents (or, if the Company is acting as
its own paying agent, set aside, segregate and hold in trust as provided in
Section 5.4) an amount of money sufficient to repay on the Repurchase Date all
the Notes to be repaid on such date at the appropriate repurchase price,
together with accrued but unpaid interest to (but excluding) the Repurchase
Date; provided that if such payment is made on the Repurchase Date it must be
received by the Trustee or paying agent, as the case may be, by 10:00 a.m. New
York City time, on such date. Payment for Notes surrendered for redemption (and
not withdrawn) prior to the Fundamental Change Expiration Time will be made
promptly (but in no event more than five (5) Business Days) following the
Repurchase Date by mailing checks for the amount payable to the holders of such
Notes entitled thereto as they shall appear on the registry books of the
Company.

        (e) In the case of a reclassification, change, consolidation, merger,
combination, sale or conveyance to which Section 15.6 applies, in which the
Common Stock of the Company is changed or exchanged as a result into the right
to receive stock, securities or other property or assets (including cash), which
includes shares of Common Stock of the Company or another person that are, or
upon issuance will be, traded on a United States national securities exchange or
approved for trading on an established automated over-the-counter trading market
in the United States and such shares constitute at the time such change or
exchange becomes effective in excess of 50% of the aggregate fair market value
of such stock, securities or other property or assets (including cash) into
which the Common Stock of the Company is or is to be changed or exchanged or (as
determined by the Company, which determination shall be conclusive and binding),
then the person formed by such consolidation or resulting from such merger or
which acquires such assets, as the case may be, shall execute and deliver to the
Trustee a supplemental indenture (accompanied by an Opinion of Counsel that such
supplemental indenture complies with the Trust Indenture Act as in force at the
date of execution of such supplemental indenture) modifying the provisions of
this Indenture relating to the right of holders of the Notes to cause the
Company to repurchase the Notes following a Fundamental Change, including
without limitation the applicable provisions of this Section 3.5 and the
definitions of Common Stock and Fundamental Change, as appropriate, as
determined in good faith by the Company (which determination shall be conclusive
and binding), to make such provisions apply to

                                      -24-
<PAGE>

such other person if different from the Company and the common stock issued
thereby (in lieu of the Company and the Common Stock of the Company).

        (f) The Company will comply with the provisions of Rule 13e-4 and any
other tender offer rules under the Exchange Act to the extent then applicable in
connection with the redemption rights of the holders of Notes in the event of a
Fundamental Change.

                                   ARTICLE IV

                             SUBORDINATION OF NOTES

SECTION 4.1. NOTES SUBORDINATED TO SENIOR DEBT. The Company covenants and
agrees, and each Holder of Notes, by his acceptance thereof, likewise covenants
and agrees, that the indebtedness represented by the Notes and the payment of
the principal of (and premium, if any) and interest on each and all of the Notes
is hereby expressly subordinate and junior, to the extent and in the manner
hereinafter set forth, in right of payment to the prior payment in full of all
Senior Debt.

        (a) In the event of any 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 marshaling of the assets
and liabilities of the Company or otherwise, then the holders of all Senior Debt
shall first be entitled to receive payment of the full amount due thereon in
cash or other consideration satisfactory to the holders of Senior Debt in
respect of principal (and premium, if any) and interest, or provision shall be
made for such amount in money or money's worth, before the Holders of any of the
Notes 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 on the indebtedness evidenced by the Notes.

        For purposes of this Article IV, the words, "cash, securities or other
property" shall not be deemed to include shares of stock of the Company as
reorganized or readjusted, or securities of the Company or any other corporation
provided for by a plan of reorganization or readjustment, the payment of which
is subordinated at least to the extent provided in this Article IV with respect
to the Notes to the payment of all Senior Debt which may at the time be
outstanding; provided that (i) the Senior Debt is assumed by the new
corporation, if any, resulting from any reorganization or readjustment, and (ii)
the rights of the holders of Senior Debt (other than leases which are not
assumed by the Company or the new corporation, as the case may be) are not,
without the consent of such holders, altered by such reorganization or
readjustment. The consolidation of the Company with, or the merger of the
Company into, another person or the liquidation or dissolution of the Company
following the conveyance or transfer of its property as an entirety, or
substantially as an entirety, to another person upon the terms and conditions
provided for in Article XII shall not be deemed a dissolution, winding-up,
liquidation or reorganization for the purposes of this Section 4.1(a) if such
other person shall, as a part of such consolidation, merger, conveyance or
transfer, comply with the conditions stated in Article XII.

                                      -25-
<PAGE>

        (b) In the event of any default in payment of the principal of or
premium, if any, or interest on, rent under, or any other payment obligation
under any Senior Debt (a "Payment Default") beyond any applicable grace period
with respect thereto, then, unless and until all such payments due in respect of
such Senior Debt have been paid in full in cash or other consideration
satisfactory to holders of Senior Debt or such default shall have been cured or
waived or shall have ceased to exist, no payment shall be made by the Company
with respect to the principal of, premium, if any, or interest on the Notes or
to acquire any of the Notes (including any repurchase pursuant to the repurchase
right of a Holder upon a Fundamental Change).

        (c) In the event (i) any event of default, other than a payment default,
with respect to any Designated Senior Debt shall have occurred and be continuing
permitting the holders of such Designated Senior Debt (or a trustee or other
representative on behalf of the holders thereof) to declare such Designated
Senior Debt due and payable prior to the date on which it would otherwise have
become due and payable, upon written notice thereof to the Company and the
Trustee by any holders of such Designated Senior Debt (or a trustee or other
representative on behalf of the holders thereof) (the "Default Notice"), unless
and until such event of default shall have been cured or waived or shall have
ceased to exist and such acceleration shall have been rescinded or annulled, or
(ii) any judicial proceeding shall be pending with respect to any such default
in payment or event of default, then no payment shall be made by the Company,
directly or indirectly, with respect to principal of, premium, if any, or
interest on the Notes (including any repurchase pursuant to the exercise of the
repurchase right of a Holder upon a Fundamental Change) provided, however, that
clause (i) of this paragraph shall not prevent the making of any such payment by
the Company with respect to the Notes for more than 179 days after a Default
Notice shall have been received by the Trustee unless the Designated Senior Debt
in respect of which such event of default exists has been declared due and
payable in its entirety in which case no such payment may be made until such
acceleration has been rescinded or annulled or such Designated Senior Debt has
been paid in full. Notwithstanding the foregoing, no event of default which
existed or was continuing on the date of any Default Notice shall be made the
basis for the giving of a second Default Notice; provided, further, however,
that no subsequent Default Notice shall be effective for purposes of this
Section 4.1(c) unless and until at least 365 days shall have elapsed since the
initial effectiveness of the immediately prior Default Notice.

        (d) If the maturity of the Notes is accelerated, no payment may be made
on the Notes until all amounts due or to become due on Senior Debt has been paid
in full in cash or other consideration satisfactory to holders of Senior Debt or
until such acceleration has been cured or waived.

        (e) In the event that, notwithstanding the foregoing provisions of
Sections 4.1(a), (b), (c) and (d), any payment on account of principal of or
interest on the Notes shall be made by or on behalf of the Company and received
by the Trustee, by any Holder or by any Paying Agent (or, if the Company is
acting as its own Paying Agent, money for any such payment shall be segregated
and held in trust), at a time when such payment is not permitted by any of such
provisions, then, unless and until all Senior Debt (or Designated Senior Debt,
in the case of Section 4.1(c)) is paid in full in

                                      -26-
<PAGE>

cash or other consideration satisfactory to the holders thereof, or such payment
is otherwise permitted to be made by the provisions of each of Sections 4.1(a),
4.1(b), 4.1(c) and 4.1(d) (subject, in each case, to the provisions of Section
4.7), such payment on account of principal of or interest on the Notes shall be
held in trust for the benefit of, and shall be immediately paid over to, the
holders of Senior Debt (or Designated Senior Debt, in the case of Section
4.1(c)) or their representative or representatives or the trustee or trustees
under any indenture under which any instruments evidencing any of the Senior
Debt (or Designated Senior Debt, in the case of Section 4.1(c)) may have been
issued, as their interests may appear.

        Regardless of anything to the contrary herein, nothing shall prevent (a)
any payment by the Company or the Trustee to Holders of amounts in connection
with a redemption of Notes if (i) notice of such redemption has been given
pursuant to Section 3.2 prior to the receipt by the Trustee of written notice as
aforesaid, and (ii) such notice of redemption is given not earlier than 75 days
before the Redemption Date, or (b) any payment by the Trustee to the Holders of
amounts deposited with it pursuant to Sections 4.1 and 4.2.

SECTION 4.2. SUBROGATION. Subject to the payment in full of all Senior Debt to
which the indebtedness evidenced by the Notes is in the circumstances
subordinated as provided in Section 4.1, the Holders of the Notes (together with
the holders of any other indebtedness of the Company which is subordinate in
right of payment to the payment in full of all Senior Debt, which is not
subordinate in right of payment to the Notes and which by its terms grants such
right of subrogation to the holders thereof) 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 Notes shall be paid in full, and, as between the Company,
its creditors other than holders of such Senior Debt, and the Holders of the
Notes, 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 Notes shall be deemed to be a payment by the Company on account of such
Senior Debt, it being understood that the provisions of this Article are and are
intended solely for the purpose of defining the relative rights of the Holders
of the Notes, on the one hand, and the holders of Senior Debt, on the other
hand.

SECTION 4.3. OBLIGATION OF COMPANY UNCONDITIONAL. Nothing contained in this
Article or elsewhere in this Indenture or in the Notes is intended to or shall
impair, as between the Company, its creditors other than the holders of Senior
Debt, and the Holders of the Notes, the obligation of the Company, which is
absolute and unconditional, to pay to the Holders of the Notes the principal of
(and premium, if any) and interest on the Notes 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 Notes and creditors of
the Company other than the holders of Senior Debt, nor shall anything herein or
therein prevent the Trustee or the Holder of any Note 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.

                                      -27-
<PAGE>

SECTION 4.4. MODIFICATION OF TERMS OF SENIOR DEBT. Any renewal or extension of
the time of payment of any Senior Debt or the exercise by the holders of Senior
Debt of any of their rights under any instrument creating or evidencing Senior
Debt, including without limitation the waiver of default thereunder, may be made
or done all without notice to or assent from the Holders of the Notes 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 of any applicable document, shall in any
way alter or affect any of the provisions of this Article or of the Notes
relating to the subordination thereof

SECTION 4.5. PAYMENTS ON NOTES PERMITTED. Nothing contained in this Article or
elsewhere in this Indenture, or in any of the Notes, 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 on the Notes 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 on the Notes, in each case except
as otherwise provided in this Article.

SECTION 4.6. EFFECTUATION OF SUBORDINATION BY TRUSTEE. Each Holder of Notes, by
his acceptance thereof, authorizes and directs the Trustee in his behalf to take
such action as may be necessary or appropriate to effectuate the subordination
provided in this Article and appoints the Trustee his 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 Notes 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 Notes, for the purpose of
ascertaining the Persons entitled to participate in such payment or
distribution, and as to other facts pertinent to the right of such Persons under
this Article, and if such evidence is not furnished, the Trustee may defer any
payment to such Persons pending judicial determination as to the right of such
Persons to receive such payment.

SECTION 4.7. KNOWLEDGE OF TRUSTEE. Notwithstanding the provisions of this
Article or any other provisions of this Indenture, the Trustee shall not be
charged with knowledge of the existence of any Senior Debt, of any default in
payment of principal, premium (if any) or interest on 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 and until 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 Notes, any Paying or Conversion

                                      -28-
<PAGE>

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
(other than a payment under Article III) the Trustee shall have received the
notice provided for in this Section 4.7, 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 4.8. 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 in this Article shall apply to claims of or payments to the
Trustee under or pursuant to Section 8.6.

        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 4.9. 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 4.10. CERTAIN CONVERSIONS NOT DEEMED PAYMENT. For the purposes of this
Article IV only, (1) the issuance and delivery of junior securities upon
conversion of Notes in accordance with Article XV shall not be deemed to
constitute a payment or distribution on account of the principal of, premium, if
any, or interest (including Additional Interest, if any) on Notes or on account
of the purchase or other acquisition of Notes, and (2) the payment, issuance or
delivery of cash (except in satisfaction of fractional shares pursuant to
Section 15.2), property or securities (other than junior securities) upon
conversion of a Note shall be deemed to constitute payment on account of the
principal of, premium, if any, or interest (including Additional Interest, if
any) on such Note. For the purposes of this Section 4.10, the term "junior
securities" means (a) shares of any stock of any class of the Company or (b)
securities of the Company that are subordinated in right of payment to all
Senior Debt to substantially the same extent as, or to a greater extent than,
the Notes are so

                                      -29-
<PAGE>

subordinated as provided in this Article. Nothing contained in this Article IV
or elsewhere in this Indenture or in the Notes is intended to or shall impair,
as among the Company, its creditors (other than holders of Senior Debt) and the
Holders, the right, which is absolute and unconditional, of the holder of any
Note to convert such note in accordance with Article XV.

                                    ARTICLE V

                       PARTICULAR COVENANTS OF THE COMPANY

SECTION 5.1. PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST. The Company covenants
and agrees that it will duly and punctually pay or cause to be paid the
principal of and premium, if any (including upon redemption or repurchase
pursuant to Article III), and interest (including Additional Interest, if any)
on each of the Notes at the places, at the respective times and in the manner
provided herein and in the Notes. Each installment of interest on the Notes due
on any semi-annual interest payment date may be paid either (i) by check mailed
to the address of the person entitled thereto as it appears in the Note
register; provided that the holder of Notes with an aggregate principal amount
in excess of $10,000,000 shall, at the written election of such holder, be paid
by wire transfer in immediately available funds; or (ii) by transfer to an
account maintained by such person located in the United States; provided,
however, that payments to the Depositary will be made by wire transfer of
immediately available funds to the account of the Depositary or its nominee.

SECTION 5.2. MAINTENANCE OF OFFICE OR AGENCY. The Company will maintain an
office or agency in The Borough of Manhattan, The City of New York, where the
Notes may be surrendered for registration of transfer or exchange or for
presentation for payment or for conversion or redemption and where notices and
demands to or upon the Company in respect of the Notes and this Indenture may be
served. The Company will give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency not
designated or appointed by the Trustee. If at any time the Company shall fail to
maintain any such required office or agency or shall fail to furnish the Trustee
with the address thereof, such presentations, surrenders, notices and demands
may be made or served at the Corporate Trust Office or the office or agency of
the Trustee in The Borough of Manhattan, The City of New York (which shall
initially be located at State Street Bank and Trust Company, N.A., 61 Broadway,
New York, NY 10006, Attention: Corporate Trust (LSI Logic Corporation 4.00%
Convertible Subordinated Notes due 2006)).

        The Company may also from time to time designate co-registrars and one
or more other offices or agencies where the Notes may be presented or
surrendered for any or all such purposes and may from time to time rescind such
designations. The Company will give prompt written notice to any such
designation or rescission and of any change in the location of any such other
office or agency.

        The Company hereby initially designates the Trustee as paying agent,
Note registrar, Custodian and conversion agent and each of the Corporate Trust
Office of the Trustee and the office or agency of the Trustee in The Borough of
Manhattan, The City of New York (which shall initially be located at State
Street Bank and Trust Company, N.A., 61 Broadway, New York, NY 10006,

                                      -30-
<PAGE>

Attention: Corporate Trust (LSI Logic Corporation 4.00% Convertible Subordinated
Notes due 2006)), shall be considered as one such office or agency of the
Company for each of the aforesaid purposes.

        So long as the Trustee is the Note registrar, the Trustee agrees to
mail, or cause to be mailed, the notices set forth in Section 8.10(a) and the
third paragraph of Section 8.11. If co-registrars have been appointed in
accordance with this Section, the Trustee shall mail such notices only to the
Company and the holders of Notes it can identify from its records.

SECTION 5.3. APPOINTMENTS TO FILL VACANCIES IN TRUSTEE'S OFFICE. The Company,
whenever necessary to avoid or fill a vacancy in the office of Trustee, will
appoint, in the manner provided in Section 8.10, a Trustee, so that there shall
at all times be a Trustee hereunder.

SECTION 5.4. PROVISIONS AS TO PAYING AGENT.

        (a) If the Company shall appoint a paying agent other than the Trustee,
or if the Trustee shall appoint such a paying agent, it will cause such paying
agent to execute and deliver to the Trustee an instrument in which such agent
shall agree with the Trustee, subject to the provisions of this Section 5.4:

            (i) that it will hold all sums held by it as such agent for the
payment of the principal of and premium, if any, or interest on the Notes
(whether such sums have been paid to it by the Company or by any other obligor
on the Notes) in trust for the benefit of the holders of the Notes;

            (ii) that it will give the Trustee notice of any failure by the
Company (or by any other obligor on the Notes) to make any payment of the
principal of and premium, if any, or interest on the Notes when the same shall
be due and payable; and

            (iii) that at any time during the continuance of an Event of
Default, upon request of the Trustee, it will forthwith pay to the Trustee all
sums so held in trust.

        The Company shall, on or before each due date of the principal of,
premium, if any, or interest on the Notes, deposit with the paying agent a sum
in good funds sufficient to pay such principal, premium, if any, or interest,
and (unless such paying agent is the Trustee) the Company will promptly notify
the Trustee of any failure to take such action; provided that if such deposit is
made on the due date, such deposit shall be received by the paying agent by
10:00 a.m. New York City time, on such date.

        (b) If the Company shall act as its own paying agent, it will, on or
before each due date of the principal of, premium, if any, or interest
(including Additional Interest, if any) on the Notes, set aside, segregate and
hold in trust for the benefit of the holders of the Notes a sum sufficient to
pay such principal, premium, if any, or interest (including Additional Interest,
if any) so becoming due and promptly will notify the Trustee of any failure to
take such action and of any failure by the Company (or any other obligor under
the Notes) to make any payment of the principal of, premium,

                                      -31-
<PAGE>

if any, or interest (including Additional Interest, if any) on the Notes when
the same shall become due and payable.

        (c) Anything in this Section 5.4 to the contrary notwithstanding, the
Company may, at any time, for the purpose of obtaining a satisfaction and
discharge of this Indenture, or for any other reason, pay or cause to be paid to
the Trustee all sums held in trust by the Company or any paying agent hereunder
as required by this Section 5.4, such sums to be held by the Trustee upon the
trusts herein contained and upon such payment by the Company or any paying agent
to the Trustee, the Company or such paying agent shall be released from all
further liability with respect to such sums.

        (d) Anything in this Section 5.4 to the contrary notwithstanding, the
agreement to hold sums in trust as provided in this Section 5.4 is subject to
Sections 13.3 and 13.4.

        The Trustee shall not be responsible for the actions of any other paying
agents (including the Company if acting as its own paying agent) and shall have
no control of any funds held by such other paying agents.

SECTION 5.5. EXISTENCE. Subject to Article XII, the Company will do or cause to
be done all things necessary to preserve and keep in full force and effect its
existence and rights (charter and statutory); provided, however, that the
Company shall not be required to preserve any such right if the Company shall
determine 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 5.6. MAINTENANCE OF PROPERTIES. The Company will cause all properties
used or useful in the conduct of its business or the business of any Significant
Subsidiary to be maintained and kept in good condition, repair and working order
and supplied with all necessary equipment and will cause to be made all
necessary repairs, renewals, replacements, betterments and improvements thereof,
all as in the judgment of the Company may be necessary so that the business
carried on in connection therewith may be properly and advantageously conducted
at all times; provided, however, that nothing in this Section shall prevent the
Company from discontinuing the operation or maintenance of any of such
properties if such discontinuance is, in the judgment of the Company, desirable
in the conduct of its business or the business of any subsidiary and not
disadvantageous in any material respect to the holders.

SECTION 5.7. PAYMENT OF TAXES AND OTHER CLAIMS. The Company will pay or
discharge, or cause to be paid or discharged, before the same may become
delinquent, (i) all taxes, assessments and governmental charges levied or
imposed upon the Company or any Significant Subsidiary or upon the income,
profits or property of the Company or any Significant Subsidiary, (ii) all
claims for labor, materials and supplies which, if unpaid, might by law become a
lien or charge upon the property of the Company or any Significant Subsidiary
and (iii) all stamps and other duties, if any, which may be imposed by the
United States or any political subdivision thereof or therein in connection with
the issuance, transfer, exchange or conversion of any Notes or with respect to
this Indenture; provided, however, that, in the case of clauses (i) and (ii),
the Company shall not be required to pay or discharge or cause to be paid or
discharged any such tax, assessment, charge or

                                      -32-
<PAGE>

claim (A) if the failure to do so will not, in the aggregate, have a material
adverse impact on the Company, or (B) if the amount, applicability or validity
is being contested in good faith by appropriate proceedings.

SECTION 5.8. RULE 144A INFORMATION REQUIREMENT. Within the period prior to the
expiration of the holding period applicable to sales thereof under Rule 144(k)
under the Securities Act (or any successor provision), the Company covenants and
agrees that it shall, during any period in which it is not subject to Section 13
or 15(d) under the Exchange Act, make available to any holder or beneficial
holder of Notes or any Common Stock issued upon conversion thereof which
continue to be Restricted Securities in connection with any sale thereof and any
prospective purchaser of Notes or such Common Stock from such holder or
beneficial holder, the information required pursuant to Rule 144A(d)(4) under
the Securities Act upon the request of any holder or beneficial holder of the
Notes or such Common Stock and it will take such further action as any holder or
beneficial holder of such Notes or such Common Stock may reasonably request, all
to the extent required from time to time to enable such holder or beneficial
holder to sell its Notes or Common Stock without registration under the
Securities Act within the limitation of the exemption provided by Rule 144A, as
such Rule may be amended from time to time. Upon the request of any holder or
any beneficial holder of the Notes or such Common Stock, the Company will
deliver to such holder a written statement as to whether it has complied with
such requirements.

SECTION 5.9. STAY, EXTENSION AND USURY LAWS. The Company covenants (to the
extent that it may lawfully do so) that it shall not at any time insist upon,
plead, or in any manner whatsoever claim or take the benefit or advantage of,
any stay, extension or usury law or other law which would prohibit or forgive
the Company from paying all or any portion of the principal of, premium, if any,
or interest (including Additional Interest, if any) on the Notes as contemplated
herein, wherever enacted, now or at any time hereafter in force, or which may
affect the covenants or the performance of this Indenture, and the Company (to
the extent it may lawfully do so) hereby expressly waives all benefit or
advantage of any such law, and covenants that it will not, by resort to any such
law, hinder, delay or impede the execution of any power herein granted to the
Trustee, but will suffer and permit the execution of every such power as though
no such law had been enacted.

SECTION 5.10. COMPLIANCE CERTIFICATE. The Company shall deliver to the Trustee,
within one hundred twenty (120) days after the end of each fiscal year of the
Company, a certificate signed by either the principal executive officer,
principal financial officer or principal accounting officer of the Company,
stating whether or not to the best knowledge of the signer thereof the Company
is in default in the performance and observance of any of the terms, provisions
and conditions of this Indenture (without regard to any period of grace or
requirement of notice provided hereunder) and, if the Company shall be in
default, specifying all such defaults and the nature and status thereof of which
the signer may have knowledge.

        The Company will deliver to the Trustee, forthwith upon becoming aware
of any default in the performance or observance of any covenant, agreement or
condition contained in this Indenture, or any Event of Default, an Officers'
Certificate specifying with particularity such default or Event of

                                      -33-
<PAGE>

Default and further stating what action the Company has taken, is taking or
proposes to take with respect thereto.

        Any notice required to be given under this Section 5.10 shall be
delivered to the Trustee at its Corporate Trust Office.

SECTION 5.11. ADDITIONAL INTEREST. If additional Interest is payable by the
Company pursuant to the Registration Rights Agreement, the Company shall deliver
to the Trustee a certificate to the effect stating (i) the amount of such
Additional Interest that is payable and (ii) the date on which such interest is
payable. Unless and until a Responsible Officer of the Trustee receives such
certificate, the Trustee may assume without inquiry that no Additional Interest
is payable. If the Company has paid Additional Interest directly to the persons
entitled to such interest, the Company shall deliver to the Trustee a
certificate setting forth the particulars of such payment.

                                   ARTICLE VI

          NOTEHOLDERS' LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE

SECTION 6.1. NOTEHOLDERS' LISTS. The Company covenants and agrees that it will
furnish or cause to be furnished to the Trustee, semiannually, not more than
fifteen (15) days after each April 15 and October 15 in each year beginning with
April 15, 2002, and at such other times as the Trustee may request in writing,
within thirty (30) days after receipt by the Company of any such request (or
such lesser time as the Trustee may reasonably request in order to enable it to
timely provide any notice to be provided by it hereunder), a list in such form
as the Trustee may reasonably require of the names and addresses of the holders
of Notes as of a date not more than fifteen (15) days (or such other date as the
Trustee may reasonably request in order to so provide any such notices) prior to
the time such information is furnished, except that no such list need be
furnished by the Company to the Trustee so long as the Trustee is acting as the
sole Note registrar.

SECTION 6.2. PRESERVATION AND DISCLOSURE OF LISTS.

        (a) The Trustee shall preserve, in as current a form as is reasonably
practicable, all information as to the names and addresses of the holders of
Notes contained in the most recent list furnished to it as provided in Section
6.1 or maintained by the Trustee in its capacity as Note registrar or
co-registrar in respect of the Notes, if so acting. The Trustee may destroy any
list furnished to it as provided in Section 6.1 upon receipt of a new list so
furnished.

        (b) The rights of Noteholders to communicate with other holders of Notes
with respect to their rights under this Indenture or under the Notes, and the
corresponding rights and duties of the Trustee, shall be as provided by the
Trust Indenture Act.

                                      -34-
<PAGE>

        (c) Every Noteholder, by receiving and holding the same, agrees with the
Company and the Trustee that neither the Company nor the Trustee nor any agent
of either of them shall be held accountable by reason of any disclosure of
information as to names and addresses of holders of Notes made pursuant to the
Trust Indenture Act.

SECTION 6.3. REPORTS BY TRUSTEE.

        (a) Within sixty (60) days after May 15 of each year commencing with the
year 2002, the Trustee shall transmit to holders of Notes such reports dated as
of May 15 of the year in which such reports are made concerning the Trustee and
its actions under this Indenture as may be required pursuant to the Trust
Indenture Act at the times and in the manner provided pursuant thereto.

        (b) A copy of such report shall, at the time of such transmission to
holders of Notes, be filed by the Trustee with each stock exchange and automated
quotation system upon which the Notes are listed and with the Company. The
Company will notify the Trustee in writing within a reasonable time when the
Notes are listed on any stock exchange or automated quotation system or delisted
therefrom.

SECTION 6.4. REPORTS BY COMPANY. The Company shall file with the Trustee (and
the Commission if at any time after the Indenture becomes qualified under the
Trust Indenture Act), and transmit to holders of Notes, such information,
documents and other reports and such summaries thereof, as may be required
pursuant to the Trust Indenture Act at the times and in the manner provided
pursuant to such Act, whether or not the Notes are governed by such Act;
provided that any such information, documents or reports required to be filed
with the Commission pursuant to Section 13 or 15(d) of the Exchange Act shall be
filed with the Trustee within fifteen (15) days after the same is so required to
be filed with the Commission. Delivery of such reports, information and
documents to the Trustee is for informational purposes only and the Trustee's
receipt of such shall not constitute constructive notice of any information
contained therein or determinable from information contained therein, including
the Company's compliance with any of its covenants hereunder (as to which the
Trustee is entitled to rely exclusively on Officers' Certificates).

                                   ARTICLE VII

        REMEDIES OF THE TRUSTEE AND NOTEHOLDERS UPON AN EVENT OF DEFAULT

SECTION 7.1. EVENTS OF DEFAULT. In case one or more of the following Events of
Default (whatever the reason for such Event of Default and whether it shall 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) shall have occurred and be continuing:

        (a) default in the payment of any installment of interest (including
Additional Interest, if any) upon any of the Notes as and when the same shall
become due and payable, and continuance of such default for a period of thirty
(30) days, whether or not such payment is permitted under Article IV hereof; or

                                      -35-
<PAGE>

        (b) default in the payment of the principal of or premium, if any, on
any of the Notes as and when the same shall become due and payable either at
maturity or in connection with any redemption or repurchase pursuant to Article
III, by acceleration or otherwise, whether or not such payment is permitted
under Article IV hereof; or

        (c) failure on the part of the Company duly to observe or perform any
other of the covenants or agreements on the part of the Company in the Notes or
in this Indenture (other than a covenant or agreement a default in whose
performance or whose breach is elsewhere in this Section 7.1 specifically dealt
with) continued for a period of sixty (60) days after the date on which 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 a Responsible
Officer of the Trustee by the holders of at least twenty-five percent (25%) in
aggregate principal amount of the Notes at the time outstanding determined in
accordance with Section 9.4; or

        (d) the Company shall commence a voluntary case or other proceeding
seeking liquidation, reorganization or other relief with respect to the Company
or its debts under any bankruptcy, insolvency or other similar law now or
hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any substantial part of
the property of the Company, or shall consent to any such relief or to the
appointment of or taking possession by any such official in an involuntary case
or other proceeding commenced against it, or shall make a general assignment for
the benefit of creditors, or shall fail generally to pay its debts as they
become due; or

        (e) an involuntary case or other proceeding shall be commenced against
the Company seeking liquidation, reorganization or other relief with respect to
it or its debts under any bankruptcy, insolvency or other similar law now or
hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any substantial part of
the property of the Company, and such involuntary case or other proceeding shall
remain undismissed and unstayed for a period of ninety (90) consecutive days;

        then, and in each and every such case (other than an Event of Default
specified in Section 7.1 (d) or (e)), unless the principal of all of the Notes
shall have already become due and payable, either the Trustee or the holders of
not less than twenty-five percent (25%) in aggregate principal amount of the
Notes then outstanding hereunder determined in accordance with Section 9.4, by
notice in writing to the Company (and to the Trustee if given by Noteholders),
may declare the principal of and premium, if any, on all the Notes and the
unpaid interest accrued thereon (including Additional Interest, if any) to be
due and payable immediately, and upon any such declaration the same shall become
and shall be immediately due and payable, anything in this Indenture or in the
Notes contained to the contrary notwithstanding. If an Event of Default
specified in Section 7.1(d) or (e) occurs, the principal of all the Notes and
the unpaid interest accrued thereon shall (including Additional Interest, if
any) be immediately and automatically due and payable without necessity of
further action. This provision, however, is subject to the conditions that if,
at any time after the principal of the Notes shall have been so declared due and
payable, and before any judgment or

                                      -36-
<PAGE>

decree for the payment of the monies due shall have been obtained or entered as
hereinafter provided, the Company shall pay or shall deposit with the Trustee a
sum sufficient to pay all matured installments of interest upon (including
Additional Interest, if any) all Notes and the principal of and premium, if any,
on any and all Notes which shall have become due otherwise than by acceleration
(with interest on overdue installments of interest (including Additional
Interest, if any) (to the extent that payment of such interest is enforceable
under applicable law) and on such principal and premium, if any, at the rate
borne by the Notes, to the date of such payment or deposit) and amounts due to
the Trustee pursuant to Section 8.6, and if any and all defaults under this
Indenture, other than the nonpayment of principal of and premium, if any, and
accrued but unpaid interest on (including Additional Interest, if any) Notes
which shall have become due by acceleration, shall have been cured or waived
pursuant to Section 7.7 -- then and in every such case the holders of a majority
in aggregate principal amount of the Notes then outstanding, by written notice
to the Company and to the Trustee, may waive all defaults or Events of Default
and rescind and annul such declaration and its consequences; but no such waiver
or rescission and annulment shall extend to or shall affect any subsequent
default or Event of Default, or shall impair any right consequent thereon. The
Company shall notify a Responsible Officer of the Trustee in writing, promptly
upon becoming aware thereof, of any Event of Default.

        In case the Trustee shall have proceeded to enforce any right under this
Indenture and such proceedings shall have been discontinued or abandoned because
of such waiver or rescission and annulment or for any other reason or shall have
been determined adversely to the Trustee, then and in every such case the
Company, the holders of Notes, and the Trustee shall be restored respectively to
their several positions and rights hereunder, and all rights, remedies and
powers of the Company, the holders of Notes, and the Trustee shall continue as
though no such proceeding had been taken.

SECTION 7.2. PAYMENTS OF NOTES ON DEFAULT; SUIT THEREFOR. The Company covenants
that (a) in case default shall be made in the payment of any installment of
interest upon (including Additional Interest, if any) any of the Notes as and
when the same shall become due and payable, and such default shall have
continued for a period of thirty (30) days, or (b) in case default shall be made
in the payment of the principal of or premium, if any, on any of the Notes as
and when the same shall have become due and payable, whether at maturity of the
Notes or in connection with any redemption, by or under this Indenture
declaration or otherwise -- then, upon demand of the Trustee, the Company will
pay to the Trustee, for the benefit of the holders of the Notes, the whole
amount that then shall have become due and payable on all such Notes for
principal and premium, if any, or interest (including Additional Interest, if
any), as the case may be, with interest upon the overdue principal and premium,
if any, and (to the extent that payment of such interest is enforceable under
applicable law) upon the overdue installments of interest (including Additional
Interest, if any) at the rate borne by the Notes; and, in addition thereto, such
further amount as shall be sufficient to cover the costs and expenses of
collection, including reasonable compensation to the Trustee, its agents,
attorneys and counsel, and other amounts due the Trustee under Section 8.6.
Until such demand by the Trustee, the Company may pay the principal of and
premium, if any, and interest on (including Additional Interest, if any) the
Notes to the registered holders, whether or not the Notes are overdue.

                                      -37-
<PAGE>

        In case the Company shall fail forthwith to pay such amounts upon such
demand, the Trustee, in its own name and as trustee of an express trust, shall
be entitled and empowered to institute any actions or proceedings at law or in
equity for the collection of the sums so due and unpaid, and may prosecute any
such action or proceeding to judgment or final decree, and may enforce any such
judgment or final decree against the Company or any other obligor on the Notes
and collect in the manner provided by law out of the property of the Company or
any other obligor on the Notes wherever situated the monies adjudged or decreed
to be payable.

        In the case there shall be pending proceedings for the bankruptcy or for
the reorganization of the Company or any other obligor on the Notes under Title
11 of the United States Code, or any other applicable law, or in case a
receiver, assignee or trustee in bankruptcy or reorganization, liquidator,
sequestrator or similar official shall have been appointed for or taken
possession of the Company or such other obligor, the property of the Company or
such other obligor, or in the case of any other judicial proceedings relative to
the Company or such other obligor upon the Notes, or to the creditors or
property of the Company or such other obligor, the Trustee, irrespective of
whether the principal of the Notes 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 pursuant to the provisions of this Section 7.2, shall
be entitled and empowered, by intervention in such proceedings or otherwise, to
file and prove a claim or claims for the whole amount of principal, premium, if
any, and interest (including Additional Interest, if any) owing and unpaid in
respect of the Notes, and, in case of any judicial proceedings, to file such
proofs of claim and other papers or documents as may be necessary or advisable
in order to have the claims of the Trustee and of the Noteholders allowed in
such judicial proceedings relative to the Company or any other obligor on the
Notes, its or their creditors, or its or their property, and to collect and
receive any monies or other property payable or deliverable on any such claims,
and to distribute the same after the deduction of any amounts due the Trustee
under Section 8.6; and any receiver, assignee or trustee in bankruptcy or
reorganization, liquidator, custodian or similar official is hereby authorized
by each of the Noteholders 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 Noteholders, to pay to the Trustee any amount due it for reasonable
compensation, expenses, advances and disbursements, including counsel fees
incurred by it up to the date of such distribution. To the extent that such
payment of reasonable compensation, expenses, advances and disbursements out of
the estate in any such proceedings shall be denied for any reason, payment of
the same shall be secured by a lien on, and shall be paid out of, any and all
distributions, dividends, monies, securities and other property which the
holders of the Notes may be entitled to receive in such proceedings, whether in
liquidation or under any plan of reorganization or arrangement or otherwise.

        All rights of action and of asserting claims under this Indenture, or
under any of the Notes, may be enforced by the Trustee without the possession of
any of the Notes, or the production thereof at any trial or other proceeding
relative thereto, and any such suit or proceeding instituted by the Trustee
shall be brought in its own name as trustee of an express trust, and any
recovery of judgment shall, after provision for the payment of the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, be for the ratable benefit of the holders of the Notes.

                                      -38-
<PAGE>

        In any proceedings brought by the Trustee (and in any proceedings
involving the interpretation of any provision of this Indenture to which the
Trustee shall be a party) the Trustee shall be held to represent all the holders
of the Notes, and it shall not be necessary to make any holders of the Notes
parties to any such proceedings.

SECTION 7.3. APPLICATION OF MONIES COLLECTED BY TRUSTEE. Any monies collected by
the Trustee pursuant to this Article VII shall be applied in the order
following, at the date or dates fixed by the Trustee for the distribution of
such monies, upon presentation of the several Notes, and stamping thereon the
payment, if only partially paid, and upon surrender thereof, if fully paid:

        FIRST: To the payment of all amounts due the Trustee under Section 8.6;

        SECOND: Subject to the provisions of Article IV, in case the principal
of the outstanding Notes shall not have become due and be unpaid, to the payment
of accrued but unpaid interest on (including Additional Interest, if any) the
Notes in default in the order of the maturity of the installments of such
interest, with interest (to the extent that such interest has been collected by
the Trustee) upon the overdue installments of interest (including Additional
Interest, if any) at the rate borne by the Notes, such payments to be made
ratably to the persons entitled thereto;

        THIRD: Subject to the provisions of Article IV, in case the principal of
the outstanding Notes shall have become due, by declaration or otherwise, and be
unpaid to the payment of the whole amount then owing and unpaid upon the Notes
for principal and premium, if any, and accrued but unpaid interest (including
Additional Interest, if any), with interest on the overdue principal and
premium, if any, and (to the extent that such interest has been collected by the
Trustee) upon overdue installments of interest (including Additional Interest,
if any) at the rate borne by the Notes; and in case such monies shall be
insufficient to pay in full the whole amounts so due and unpaid upon the Notes,
then to the payment of such principal and premium, if any, and interest
(including Additional Interest, if any) without preference or priority of
principal and premium, if any, over interest (including Additional Interest, if
any), or of interest (including Additional Interest, if any) over principal and
premium, if any, or of any installment of interest over any other installment of
interest, or of any Note over any other Note, ratably to the aggregate of such
principal and premium, if any, and accrued and unpaid interest; and

        FOURTH: Subject to the provisions of Article IV, to the payment of the
remainder, if any, to the Company or any other person lawfully entitled thereto.

SECTION 7.4. PROCEEDINGS BY NOTEHOLDER. No holder of any Note shall have any
right by virtue of or by availing of any provision of this Indenture to
institute any suit, action or proceeding in equity or at law upon or under or
with respect to this Indenture, or for the appointment of a receiver, trustee,
liquidator, custodian or other similar official, or for any other remedy
hereunder, unless such holder previously shall have given to the Trustee written
notice of an Event of Default and of the continuance thereof, as hereinbefore
provided, and unless also the holders of not less than twenty-five percent (25%)
in aggregate principal amount of the Notes then outstanding shall have made
written request upon the Trustee to institute such action, suit or proceeding in
its own name as

                                      -39-
<PAGE>

Trustee hereunder and shall have offered to the Trustee such reasonable
indemnity as it may require against the costs, expenses and liabilities to be
incurred therein or thereby, and the Trustee for sixty (60) days after its
receipt of such notice, request and offer of indemnity, shall have neglected or
refused to institute any such action, suit or proceeding and no direction
inconsistent with such written request shall have been given to the Trustee
pursuant to Section 7.7; it being understood and intended, and being expressly
covenanted by the taker and holder of every Note with every other taker and
holder and the Trustee, that no one or more holders of Notes shall have any
right in any manner whatever by virtue of or by availing of any provision of
this Indenture to affect, disturb or prejudice the rights of any other holder of
Notes, or to obtain or seek to obtain priority over or preference to any other
such holder, or to enforce any right under this Indenture, except in the manner
herein provided and for the equal, ratable and common benefit of all holders of
Notes (except as otherwise provided herein). For the protection and enforcement
of this Section 7.4, each and every Noteholder and the Trustee shall be entitled
to such relief as can be given either at law or in equity.

        Notwithstanding any other provision of this Indenture and any provision
of any Note, the right of any holder of any Note to receive payment of the
principal of and premium, if any (including upon redemption pursuant to Article
III), and accrued interest on (including Additional Interest, if any) such Note,
on or after the respective due dates expressed in such Note or in the event of
redemption, or to institute suit for the enforcement of any such payment on or
after such respective dates against the Company shall not be impaired or
affected without the consent of such holder.

        Anything in this Indenture or the Notes to the contrary notwithstanding,
the holder of any Note, without the consent of either the Trustee or the holder
of any other Note, in its own behalf and for its own benefit, may enforce, and
may institute and maintain any proceeding suitable to enforce, its rights of
conversion as provided herein.

SECTION 7.5. PROCEEDINGS BY TRUSTEE. In case of an Event of Default the Trustee
may in its discretion proceed to protect and enforce the rights vested in it by
this Indenture by such appropriate judicial proceedings as are necessary to
protect and enforce any of such rights, either by suit in equity or by action at
law or by proceeding in bankruptcy or otherwise, whether for the specific
enforcement of any covenant or agreement contained in this Indenture or in aid
of the exercise of any power granted in this Indenture, or to enforce any other
legal or equitable right vested in the Trustee by this Indenture or by law.

SECTION 7.6. REMEDIES CUMULATIVE AND CONTINUING. Except as provided in Section
2.6, all powers and remedies given by this Article VII to the Trustee or to the
Noteholders shall, to the extent permitted by law, be deemed cumulative and not
exclusive of any thereof or of any other powers and remedies available to the
Trustee or the holders of the Notes, by judicial proceedings or otherwise, to
enforce the performance or observance of the covenants and agreements contained
in this Indenture, and no delay or omission of the Trustee or of any holder of
any of the Notes to exercise any right or power accruing upon any default or
Event of Default occurring and continuing as aforesaid shall impair any such
right or power, or shall be construed to be a waiver of any such default or any

                                      -40-
<PAGE>

acquiescence therein; and, subject to the provisions of Section 7.4, every power
and remedy given by this Article VII or by law to the Trustee or to the
Noteholders may be exercised from time to time, and as often as shall be deemed
expedient, by the Trustee or by the Noteholders.

SECTION 7.7. DIRECTION OF PROCEEDINGS AND WAIVER OF DEFAULTS BY MAJORITY OF
Noteholders. The holders of a majority in aggregate principal amount of the
Notes at the time outstanding determined in accordance with Section 9.4 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; provided, however, that (a) such direction shall
not be in conflict with any rule of law or with this Indenture, (b) the Trustee
may take any other action which is not inconsistent with such direction and (c)
the Trustee may decline to take any action that would benefit some Noteholder to
the detriment of other Noteholders. The holders of a majority in aggregate
principal amount of the Notes at the time outstanding determined in accordance
with Section 9.4 may on behalf of the holders of all of the Notes waive any past
default or Event of Default hereunder and its consequences except (i) a default
in the payment of interest or premium, if any, on, or the principal of, the
Notes, (ii) a failure by the Company on request to convert any Notes into Common
Stock, (iii) a default in the payment of redemption or repurchase price pursuant
to Article III or (iv) a default in respect of a covenant or provisions hereof
which under Article XI cannot be modified or amended without the consent of the
holders of all Notes then outstanding or affected thereby. Upon any such waiver,
the Company, the Trustee and the holders of the Notes shall be restored to their
former positions and rights hereunder; but no such waiver shall extend to any
subsequent or other default or Event of Default or impair any right consequent
thereon. Whenever any default or Event of Default hereunder shall have been
waived as permitted by this Section 7.7, said default or Event of Default shall
for all purposes of the Notes and this Indenture be deemed to have been cured
and to be not continuing; but no such waiver shall extend to any subsequent or
other default or Event of Default or impair any right consequent thereon.

SECTION 7.8. NOTICE OF DEFAULTS. The Trustee shall, within ninety (90) days
after a Responsible Officer of the Trustee has knowledge of the occurrence of a
default, mail to all Noteholders, as the names and addresses of such holders
appear upon the Note register, notice of all defaults known to a Responsible
Officer, unless such defaults shall have been cured or waived before the giving
of such notice; and provided that, except in the case of default in the payment
of the principal of, or premium, if any, or interest (including Additional
Interest, if any) on any of the Notes, the Trustee shall be protected in
withholding such notice if and so long as a trust committee of directors and/or
Responsible Officers of the Trustee in good faith determines that the
withholding of such notice is in the interests of the Noteholders.

SECTION 7.9. UNDERTAKING TO PAY COSTS. All parties to this Indenture agree, and
each holder of any Note by his 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 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

                                      -41-
<PAGE>

such suit, having due regard to the merits and good faith of the claims or
defenses made by such party litigant; provided that the provisions of this
Section 7.9 (to the extent permitted by law) shall not apply to any suit
instituted by the Trustee, to any suit instituted by any Noteholder, or group of
Noteholders, holding in the aggregate more than ten percent in principal amount
of the Notes at the time outstanding determined in accordance with Section 9.4,
or to any suit instituted by any Noteholder for the enforcement of the payment
of the principal of or premium, if any, or interest on any Note on or after the
due date expressed in such Note or to any suit for the enforcement of the right
to convert any Note in accordance with the provisions of Article XV.

                                  ARTICLE VIII

                             CONCERNING THE TRUSTEE

SECTION 8.1. DUTIES AND RESPONSIBILITIES OF TRUSTEE. The Trustee, prior to the
occurrence of an Event of Default and after the curing of all Events of Default
which may have occurred, undertakes to perform such duties and only such duties
as are specifically set forth in this Indenture. In case an Event of Default has
occurred (which has not been cured or waived) 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 man would exercise or use under
the circumstances in the conduct of his own affairs.

        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

        (a) prior to the occurrence of an Event of Default and after the curing
or waiving of all Events of Default which may have occurred:

            (i) the duties and obligations of the Trustee shall be determined
solely by the express provisions of this Indenture and the Trust Indenture Act,
and the Trustee shall not be liable except for the performance of such duties
and obligations as are specifically set forth in this Indenture and no implied
covenants or obligations shall be read into this Indenture and the Trust
Indenture Act against the Trustee; and

            (ii) in the absence of bad faith and willful misconduct on the part
of the Trustee, the Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein, upon any
certificates or opinions furnished to the Trustee and conforming to the
requirements of this Indenture; but, in the case of any such certificates or
opinions which by any provisions hereof are specifically required to be
furnished to the Trustee, the Trustee shall be under a duty to examine the same
to determine whether or not they conform to the requirements of this Indenture;

        (b) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer or Officers of the Trustee, unless the
Trustee was negligent in ascertaining the pertinent facts;

                                      -42-
<PAGE>

        (c) 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 the written direction
of the holders of not less than a majority in principal amount of the Notes at
the time outstanding determined as provided in Section 9.4 relating to the time,
method and place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred upon the Trustee, under this
Indenture;

        (d) whether or not therein 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;

        (e) the Trustee shall not be liable in respect of any payment (as to the
correctness of amount, entitlement to receive or any other matters relating to
payment) or notice effected by the Company or any paying agent or any records
maintained by any co-registrar with respect to the Notes; and

        (f) if any party fails to deliver a notice relating to an event the fact
of which, pursuant to this Indenture, requires notice to be sent to the Trustee,
the Trustee may conclusively rely on its failure to receive such notice as
reason to act as if no such event occurred.

        None of the provisions contained in this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties or in the exercise of any of
its rights or powers, if there is reasonable ground for believing that the
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.

SECTION 8.2. RELIANCE ON DOCUMENTS, OPINIONS, ETC. Except as otherwise provided
in Section 8.1:

        (a) the Trustee may rely and shall be protected in acting upon any
resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order, bond, debenture, note, coupon or other paper or
document believed by it in good faith to be genuine and to have been signed or
presented by the proper party or parties;

        (b) any request, direction, order or demand of the Company mentioned
herein shall be sufficiently evidenced by an Officers' Certificate (unless other
evidence in respect thereof be herein specifically prescribed); and any
resolution of the Board of Directors may be evidenced to the Trustee by a copy
thereof certified by the Secretary or an Assistant Secretary of the Company;

        (c) the Trustee may consult with counsel and any advice or Opinion of
Counsel shall be full and complete authorization and protection in respect of
any action taken or omitted by it hereunder in good faith and in accordance with
such advice or Opinion of Counsel;

        (d) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request, order or
direction of any of the Noteholders pursuant to the

                                      -43-
<PAGE>

provisions of this Indenture, unless such Noteholders shall have offered to the
Trustee reasonable security or indemnity against the costs, expenses and
liabilities which may be incurred therein or thereby;

        (e) 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 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; and

        (f) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed by it with due care
hereunder.

SECTION 8.3. NO RESPONSIBILITY FOR RECITALS, ETC. The recitals contained herein
and in the Notes (except in the Trustee's certificate of authentication) shall
be taken as the statements of the Company, and the Trustee assumes no
responsibility for the correctness of the same. The Trustee makes no
representations as to the validity or sufficiency of this Indenture or of the
Notes. The Trustee shall not be accountable for the use or application by the
Company of any Notes or the proceeds of any Notes authenticated and delivered by
the Trustee in conformity with the provisions of this Indenture.

SECTION 8.4. TRUSTEE, PAYING AGENTS, CONVERSION AGENTS OR REGISTRAR MAY OWN
NOTES. The Trustee, any paying agent, any conversion agent or Note registrar, in
its individual or any other capacity, may become the owner or pledgee of Notes
with the same rights it would have if it were not Trustee, paying agent,
conversion agent or Note registrar.

SECTION 8.5. MONIES TO BE HELD IN TRUST. Subject to the provisions of Section
13.4 and Section 4.2, all monies received by the Trustee shall, until used or
applied as herein provided, be held in trust for the purposes for which they
were received. 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 may be agreed from time to time in writing by the Company and the
Trustee.

SECTION 8.6. COMPENSATION AND EXPENSES OF TRUSTEE. The Company covenants and
agrees to pay to the Trustee from time to time, and the Trustee shall be
entitled to, reasonable compensation for all services rendered by it hereunder
in any capacity (which shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust) as mutually agreed to in
writing between the Company and the Trustee, and the Company will pay or
reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances reasonably incurred or made by the Trustee 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 persons not regularly in

                                      -44-
<PAGE>

its employ) except any such expense, disbursement or advance as may arise from
its negligence, willful misconduct, recklessness or bad faith. The Company also
covenants to indemnify the Trustee (or any officer, director or employee of the
Trustee) in any capacity under this Indenture and its agents and any
authenticating agent for, and to hold them harmless against, any loss, liability
or expense incurred without negligence, willful misconduct, recklessness, or bad
faith on the part of the Trustee or such officers, directors, employees and
agent or authenticating agent, as the case may be, and arising out of or in
connection with the acceptance or administration of this trust or in any other
capacity hereunder, including the costs and expenses of defending themselves
against any claim of liability in the premises. The obligations of the Company
under this Section 8.6 to compensate or indemnify the Trustee and to pay or
reimburse the Trustee for expenses, disbursements and advances shall be secured
by a lien prior to that of the Notes 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 Notes. The obligation of the Company under this
Section shall survive the satisfaction and discharge of this Indenture.

        When the Trustee and its agents and any authenticating agent incur
expenses or render services after an Event of Default specified in Section
7.1(d) or (e) occurs, the expenses and the compensation for the services are
intended to constitute expenses of administration under any bankruptcy,
insolvency or similar laws.

SECTION 8.7. OFFICERS' CERTIFICATE AS EVIDENCE. Except as otherwise provided in
Section 8.1, whenever in the administration of the provisions of this Indenture
the Trustee shall deem it necessary or desirable that a matter be proved or
established prior to taking or omitting any action hereunder, such matter
(unless other evidence in respect thereof be herein specifically prescribed)
may, in the absence of negligence, willful misconduct, recklessness, or bad
faith on the part of the Trustee, be deemed to be conclusively proved and
established by an Officers' Certificate delivered to the Trustee.

SECTION 8.8. CONFLICTING INTERESTS OF TRUSTEE. If the Trustee has or shall
acquire a conflicting interest within the meaning of the Trust Indenture Act,
the Trustee shall either eliminate such interest or resign, to the extent and in
the manner provided by, and subject to the provisions of, the Trust Indenture
Act and this Indenture.

SECTION 8.9. ELIGIBILITY OF TRUSTEE. There shall at all times be a Trustee
hereunder which shall be a person that is eligible pursuant to the Trust
Indenture Act to act as such and has a combined capital and surplus of at least
$50,000,000 (or if such person is a member of a bank holding company system, its
bank holding company shall have a combined capital and surplus of at least
$50,000,000). If such person publishes reports of condition at least annually,
pursuant to law or to the requirements of any supervising or examining
authority, then for the purposes of this Section, the combined capital and
surplus of such person shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time
the Trustee shall cease to be eligible in accordance with the provisions of this
Section, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article.

                                      -45-
<PAGE>

SECTION 8.10. RESIGNATION OR REMOVAL OF TRUSTEE.

        (a) The Trustee may at any time resign by giving written notice of such
resignation to the Company and to the holders of Notes. Upon receiving such
notice of resignation, the Company shall promptly appoint a successor trustee by
written instrument, in duplicate, executed by order of the Board of Directors,
one copy of which instrument shall be delivered to the resigning Trustee and one
copy to the successor trustee. If no successor trustee shall have been so
appointed and have accepted appointment sixty (60) days after the mailing of
such notice of resignation to the Noteholders, the resigning Trustee may
petition any court of competent jurisdiction for the appointment of a successor
trustee, or any Noteholder who has been a bona fide holder of a Note or Notes
for at least six (6) months may, subject to the provisions of Section 7.9, on
behalf of himself and all others similarly situated, petition any such court for
the appointment of a successor trustee. Such court may thereupon, after such
notice, if any, as it may deem proper and prescribe, appoint a successor
trustee.

        (b) In case at any time any of the following shall occur:

            (i) the Trustee shall fail to comply with Section 8.8 after written
request therefor by the Company or by any Noteholder who has been a bona fide
holder of a Note or Notes for at least six (6) months; or

            (ii) the Trustee shall cease to be eligible in accordance with the
provisions of Section 8.9 and shall fail to resign after written request
therefor by the Company or by any such Noteholder; or

            (iii) the Trustee shall become incapable of acting, or shall be
adjudged a bankrupt or insolvent, or a receiver of the Trustee or of its
property shall be appointed, or any public officer shall take charge or control
of the Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation;

        then, in any such case, the Company may remove the Trustee and appoint a
successor trustee by written instrument, in duplicate, executed by order of the
Board of Directors, one copy of which instrument shall be delivered to the
Trustee so removed and one copy to the successor trustee, or, subject to the
provisions of Section 7.9, any Noteholder who has been a bona fide holder of a
Note or Notes for at least six (6) months may, on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor trustee; provided that
if no successor trustee shall have been appointed and have accepted appointment
sixty (60) days after either the Company or the Noteholders has removed the
Trustee, the Trustee so removed may petition any court of competent jurisdiction
for an appointment of a successor trustee. Such court may thereupon, after such
notice, if any, as it may deem proper and prescribe, remove the Trustee and
appoint a successor trustee.

        (c) The holders of a majority in aggregate principal amount of the Notes
at the time outstanding may at any time remove the Trustee and nominate a
successor trustee which shall be deemed appointed as successor trustee unless
within ten (10) days after notice to the Company of

                                      -46-
<PAGE>

such nomination the Company objects thereto, in which case the Trustee so
removed or any Noteholder, or if such Trustee so removed or any Noteholder fails
to act, the Company, upon the terms and conditions and otherwise as in Section
8.10(a) provided, may petition any court of competent jurisdiction for an
appointment of a successor trustee.

        (d) Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section 8.10 shall
become effective upon acceptance of appointment by the successor trustee as
provided in Section 8.11.

SECTION 8.11. ACCEPTANCE BY SUCCESSOR TRUSTEE. Any successor trustee appointed
as provided in Section 8.10 shall execute, acknowledge and deliver to the
Company and to its predecessor trustee an instrument accepting such appointment
hereunder, and thereupon the resignation or removal of the predecessor trustee
shall become effective and such successor trustee, without any further act, deed
or conveyance, shall become vested with all the rights, powers, duties and
obligations of its predecessor hereunder, with like effect as if originally
named as trustee herein; but, nevertheless, on the written request of the
Company or of the successor trustee, the trustee ceasing to act shall, upon
payment of any amounts then due it pursuant to the provisions of Section 8.6,
execute and deliver an instrument transferring to such successor trustee all the
rights and powers of the trustee so ceasing to act. Upon request of any such
successor trustee, the Company shall execute any and all instruments in writing
for more fully and certainly vesting in and confirming to such successor trustee
all such rights and powers. Any trustee ceasing to act shall, nevertheless,
retain a lien upon all property and funds held or collected by such trustee as
such, except for funds held in trust for the benefit of holders of particular
Notes, to secure any amounts then due it pursuant to the provisions of Section
8.6.

        No successor trustee shall accept appointment as provided in this
Section 8.11 unless at the time of such acceptance such successor trustee shall
be qualified under the provisions of Section 8.8 and be eligible under the
provisions of Section 8.9.

        Upon acceptance of appointment by a successor trustee as provided in
this Section 8.11, the Company (or the former trustee, at the written direction
of the Company) shall mail or cause to be mailed notice of the succession of
such trustee hereunder to the holders of Notes at their addresses as they shall
appear on the Note register. If the Company fails to mail such notice within ten
(10) days after acceptance of appointment by the successor trustee, the
successor trustee shall cause such notice to be mailed at the expense of the
Company.

SECTION 8.12. SUCCESSION BY MERGER, ETC. Any corporation into which the Trustee
may be merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or consolidation to which the
Trustee shall be a party, or any corporation succeeding to all or substantially
all of the corporate trust business of the Trustee (including the administration
of the trust created by this Indenture), shall be the successor to the Trustee
hereunder without the execution or filing of any paper or any further act on the
part of any of the parties hereto, provided that in the case of any corporation
succeeding to all or substantially all of the corporate trust business

                                      -47-
<PAGE>

of the Trustee such corporation shall be qualified under the provisions of
Section 8.8 and eligible under the provisions of Section 8.9.

        In case at the time such successor to the Trustee shall succeed to the
trusts created by this Indenture, any of the Notes shall have been authenticated
but not delivered, any such successor to the Trustee may adopt the certificate
of authentication of any predecessor trustee or authenticating agent appointed
by such predecessor trustee, and deliver such Notes so authenticated; and in
case at that time any of the Notes shall not have been authenticated, any
successor to the Trustee or any authenticating agent appointed by such successor
trustee may authenticate such Notes in the name of the successor trustee; and in
all such cases such certificates shall have the full force that is provided in
the Notes or in this Indenture; provided, however, that the right to adopt the
certificate of authentication of any predecessor Trustee or authenticate Notes
in the name of any predecessor Trustee shall apply only to its successor or
successors by merger, conversion or consolidation.

SECTION 8.13. PREFERENTIAL COLLECTION OF CLAIMS. If and when the Trustee shall
be or become a creditor of the Company (or any other obligor upon the Notes),
the Trustee shall be subject to the provisions of the Trust Indenture Act
regarding the collection of the claims against the Company (or any such other
obligor).

SECTION 8.14. TRUSTEE'S APPLICATION FOR INSTRUCTIONS FROM THE COMPANY. Any
application by the Trustee for written instructions from the Company (other than
with regard to any action proposed to be taken or omitted to be taken by the
Trustee that affects the rights of the holders of the Notes or holders of Senior
Debt under this Indenture, including, without limitation, under Article IV
hereof) may, at the option of the Trustee, set forth in writing any action
proposed to be taken or omitted by the Trustee under this Indenture and the date
on and/or after which such action shall be taken or such omission shall be
effective. The Trustee shall not be liable for any action taken by, or omission
of, the Trustee in accordance with a proposal included in such application on or
after the date specified in such application (which date shall not be less than
three (3) Business Days after the date any officer of the Company actually
receives such application, unless any such officer shall have consented in
writing to any earlier date) unless prior to taking any such action (or the
effective date in the case of an omission), the Trustee shall have received
written instructions in response to such application specifying the action to be
taken or omitted.

                                   ARTICLE IX

                           CONCERNING THE NOTEHOLDERS

SECTION 9.1. ACTION BY NOTEHOLDERS. Whenever in this Indenture it is provided
that the holders of a specified percentage in aggregate principal amount of the
Notes may take any action (including the making of any demand or request, the
giving of any notice, consent or waiver or the taking of any other action), the
fact that at the time of taking any such action, the holders of such specified
percentage have joined therein may be evidenced (a) by any instrument or any
number of instruments of similar tenor executed by Noteholders in person or by
agent or proxy appointed in writing, or (b) by the record of the holders of
Notes voting in favor thereof at any meeting of Noteholders duly

                                      -48-
<PAGE>

called and held in accordance with the provisions of Article X, or (c) by a
combination of such instrument or instruments and any such record of such a
meeting of Noteholders. Whenever the Company or the Trustee solicits the taking
of any action by the holders of the Notes, the Company or the Trustee may fix in
advance of such solicitation, a date as the record date for determining holders
entitled to take such action. The record date shall be not more than fifteen
(15) days prior to the date of commencement of solicitation of such action.

SECTION 9.2. PROOF OF EXECUTION BY NOTEHOLDERS. Subject to the provisions of
Sections 8.1, 8.2 and 10.5, proof of the execution of any instrument by a
Noteholder or its agent or proxy shall be sufficient if made in accordance with
such reasonable rules and regulations as may be prescribed by the Trustee or in
such manner as shall be satisfactory to the Trustee. The holding of Notes shall
be proved by the registry of such Notes or by a certificate of the Note
registrar.

        The record of any Noteholders' meeting shall be proved in the manner
provided in Section 10.6.

SECTION 9.3. WHO ARE DEEMED ABSOLUTE OWNERS. The Company, the Trustee, any
paying agent, any conversion agent and any Note registrar may deem the person in
whose name such Note shall be registered upon the Note register to be, and may
treat it as, the absolute owner of such Note (whether or not such Note shall be
overdue and notwithstanding any notation of ownership or other writing thereon)
for the purpose of receiving payment of or on account of the principal of,
premium, if any, and interest on such Note, for conversion of such Note and for
all other purposes; and neither the Company nor the Trustee nor any paying agent
nor any conversion agent nor any Note registrar shall be affected by any notice
to the contrary. All such payments so made to any holder for the time being, or
upon his order, shall be valid, and, to the extent of the sum or sums so paid,
effectual to satisfy and discharge the liability for monies payable upon any
such Note.

SECTION 9.4. COMPANY-OWNED NOTES DISREGARDED. In determining whether the holders
of the requisite aggregate principal amount of Notes have concurred in any
direction, consent, waiver or other action under this Indenture, Notes which are
owned by the Company or any other obligor on the Notes or any Affiliate of the
Company or of any other obligor on the Notes shall be disregarded and deemed not
to be outstanding for the purpose of any such determination; provided that for
the purposes of determining whether the Trustee shall be protected in relying on
any such direction, consent, waiver or other action only Notes which a
Responsible Officer knows are so owned shall be so disregarded. Notes so owned
which have been pledged in good faith may be regarded as outstanding for the
purposes of this Section 9.4 if the pledgee shall establish to the satisfaction
of the Trustee the pledgee's right to vote such Notes and that the pledgee is
not the Company, any other obligor on the Notes or any Affiliate of the Company
or of any such other obligor. In the case of a dispute as to such right, any
decision by the Trustee taken upon the advice of counsel shall be full
protection to the Trustee. Upon request of the Trustee, the Company shall
furnish to the Trustee promptly an Officers' Certificate listing and identifying
all Notes, if any, known by the Company to be owned or held by or for the
account of any of the above described persons; and, subject to Section 8.1, the
Trustee shall be entitled to accept such Officers' Certificate as conclusive
evidence

                                      -49-
<PAGE>

of the facts therein set forth and of the fact that all Notes not listed therein
are outstanding for the purpose of any such determination.

SECTION 9.5. REVOCATION OF CONSENTS; FUTURE HOLDERS BOUND. At any time prior to
(but not after) the evidencing to the Trustee, as provided in Section 9.1, of
the taking of any action by the holders of the percentage in aggregate principal
amount of the Notes specified in this Indenture in connection with such action,
any holder of a Note which is shown by the evidence to be included in the Notes
the holders of which have consented to such action may, by filing written notice
with the Trustee at its Corporate Trust Office and upon proof of holding as
provided in Section 9.2, revoke such action so far as concerns such Note. Except
as aforesaid, any such action taken by the holder of any Note shall be
conclusive and binding upon such holder and upon all future holders and owners
of such Note and of any Notes issued in exchange or substitution therefor,
irrespective of whether any notation in regard thereto is made upon such Note or
any Note issued in exchange or substitution therefor.

                                    ARTICLE X

                              NOTEHOLDERS' MEETINGS

SECTION 10.1. PURPOSE OF MEETINGS. A meeting of Noteholders may be called at any
time and from time to time pursuant to the provisions of this Article X for any
of the following purposes:

            (i) to give any notice to the Company or to the Trustee or to give
any directions to the Trustee permitted under this Indenture, or to consent to
the waiving of any default or Event of Default hereunder and its consequences,
or to take any other action authorized to be taken by Noteholders pursuant to
any of the provisions of Article VII;

            (ii) to remove the Trustee and nominate a successor trustee pursuant
to the provisions of Article VIII;

            (iii) to consent to the execution of an indenture or indentures
supplemental hereto pursuant to the provisions of Section 11.2; or

            (iv) to take any other action authorized to be taken by or on behalf
of the holders of any specified aggregate principal amount of the Notes under
any other provision of this Indenture or under applicable law.

SECTION 10.2. CALL OF MEETINGS BY TRUSTEE. The Trustee may at any time call a
meeting of Noteholders to take any action specified in Section 10.1, to be held
at such time and at such place as the Trustee shall determine. Notice of every
meeting of the Noteholders, setting forth the time and the place of such meeting
and in general terms the action proposed to be taken at such meeting and the
establishment of any record date pursuant to Section 9.1, shall be mailed to
holders of Notes at their addresses as they shall appear on the Note register.
Such notice shall also be mailed to the

                                      -50-
<PAGE>

Company. Such notices shall be mailed not less than twenty (20) nor more than
ninety (90) days prior to the date fixed for the meeting.

        Any meeting of Noteholders shall be valid without notice if the holders
of all Notes then outstanding are present in person or by proxy or if notice is
waived before or after the meeting by the holders of all Notes outstanding, and
if the Company and the Trustee are either present by duly authorized
representatives or have, before or after the meeting, waived notice.

SECTION 10.3. CALL OF MEETINGS BY COMPANY OR NOTEHOLDERS. In case at any time
the Company, pursuant to a resolution of its Board of Directors, or the holders
of at least ten percent (10%) in aggregate principal amount of the Notes then
outstanding, shall have requested the Trustee to call a meeting of Noteholders,
by written request setting forth in reasonable detail the action proposed to be
taken at the meeting, and the Trustee shall not have mailed the notice of such
meeting within twenty (20) days after receipt of such request, then the Company
or such Noteholders may determine the time and the place for such meeting and
may call such meeting to take any action authorized in Section 10.1, by mailing
notice thereof as provided in Section 10.2.

SECTION 10.4. QUALIFICATIONS FOR VOTING. To be entitled to vote at any meeting
of Noteholders a person shall (a) be a holder of one or more Notes on the record
date pertaining to such meeting, or (b) be a person appointed by an instrument
in writing as proxy by a holder of one or more Notes, on the record date
pertaining to such meeting. The only persons who shall be entitled to be present
or to speak at any meeting of Noteholders shall be the persons entitled to vote
at such meeting and their counsel and any representatives of the Trustee and its
counsel and any representatives of the Company and its counsel.

SECTION 10.5. REGULATIONS. Notwithstanding any other provisions of this
Indenture, the Trustee may make such reasonable regulations as it may deem
advisable for any meeting of Noteholders, in regard to proof of the holding of
Notes 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 think fit.

        The Trustee shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the
Company or by Noteholders as provided in Section 10.3, in which case the Company
or the Noteholders 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 holders of a majority in principal
amount of the Notes represented at the meeting and entitled to vote at the
meeting.

        Subject to the provisions of Section 9.4, at any meeting each Noteholder
or proxyholder shall be entitled to one vote for each $1,000 principal amount of
Notes held or represented by him; provided, however, that no vote shall be cast
or counted at any meeting in respect of any Note 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 other than by virtue of Notes held by
him or

                                      -51-
<PAGE>

instruments in writing as aforesaid duly designating him as the proxy to vote on
behalf of other Noteholders. Any meeting of Noteholders duly called pursuant to
the provisions of Section 10.2 or 10.3 may be adjourned from time to time by the
holders of a majority of the aggregate principal amount of Notes represented at
the meeting, whether or not constituting a quorum, and the meeting may be held
as so adjourned without further notice.

SECTION 10.6. VOTING. The vote upon any resolution submitted to any meeting of
Noteholders shall be by written ballot on which shall be subscribed the
signatures of the holders of Notes or of their representatives by proxy and the
outstanding principal amount of the Notes 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 in duplicate of
the proceedings of each meeting of Noteholders 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 mailed as
provided in Section 10.2 or Section 10.3. The record shall show the principal
amount of the Notes voting in favor of or against any resolution. The record
shall be signed and verified by the affidavits of the permanent chairman and
secretary of the meeting and one of the duplicates shall be delivered to the
Company and the other 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.

SECTION 10.7. NO DELAY OF RIGHTS BY MEETING. Nothing in this Article X contained
shall be deemed or construed to authorize or permit, by reason of any call of a
meeting of Noteholders or any rights expressly or impliedly conferred hereunder
to make such call, any hindrance or delay in the exercise of any right or rights
conferred upon or reserved to the Trustee or to the Noteholders under any of the
provisions of this Indenture or of the Notes.

                                   ARTICLE XI

                             SUPPLEMENTAL INDENTURES

SECTION 11.1. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF NOTEHOLDERS. The
Company, when authorized by the resolutions of the Board of Directors, and the
Trustee may from time to time and at any time enter into an indenture or
indentures supplemental hereto for one or more of the following purposes:

        (a) to make provision with respect to the conversion rights of the
holders of Notes pursuant to the requirements of Section 15.6 and the redemption
obligations of the Company pursuant to the requirements of Section 3.5(e);

                                      -52-
<PAGE>

        (b) subject to Article IV, to convey, transfer, assign, mortgage or
pledge to the Trustee as security for the Notes, any property or assets;

        (c) to evidence the succession of another person to the Company, or
successive successions, and the assumption by the successor person of the
covenants, agreements and obligations of the Company pursuant to Article XII;

        (d) to add to the covenants of the Company such further covenants,
restrictions or conditions as the Board of Directors and the Trustee shall
consider to be for the benefit of the holders of Notes, and to make the
occurrence, or the occurrence and continuance, of a default in any such
additional covenants, restrictions or conditions a default or an Event of
Default permitting the enforcement of all or any of the several remedies
provided in this Indenture as herein set forth; provided, however, that in
respect of any such additional covenant, restriction or condition such
supplemental indenture may provide for a particular period of grace after
default (which period may be shorter or longer than that allowed in the case of
other defaults) or may provide for an immediate enforcement upon such default or
may limit the remedies available to the Trustee upon such default;

        (e) to provide for the issuance under this Indenture of Notes in coupon
form (including Notes registrable as to principal only) and to provide for
exchangeability of such Notes with the Notes issued hereunder in fully
registered form and to make all appropriate changes for such purpose;

        (f) to cure any ambiguity or to correct or supplement any provision
contained herein or in any supplemental indenture that may be defective or
inconsistent with any other provision contained herein or in any supplemental
indenture, or to make such other provisions in regard to matters or questions
arising under this Indenture that shall not materially adversely affect the
interests of the holders of the Notes;

        (g) to evidence and provide for the acceptance of appointment hereunder
by a successor Trustee with respect to the Notes; or

        (h) to modify, eliminate or add to the provisions of this Indenture to
such extent as shall be necessary to effect the qualifications of this Indenture
under the Trust Indenture Act, or under any similar federal statute hereafter
enacted.

        Upon the written request of the Company, accompanied by a copy of the
resolutions of the Board of Directors certified by its Secretary or Assistant
Secretary authorizing the execution of any supplemental indenture, the Trustee
is hereby authorized to join with the Company in the execution of any such
supplemental indenture, to make any further appropriate agreements and
stipulations that may be therein contained and to accept the conveyance,
transfer and assignment of any property thereunder, but the Trustee shall not be
obligated to, but may in its discretion, enter into any supplemental indenture
that affects the Trustee's own rights, duties or immunities under this Indenture
or otherwise.

                                      -53-
<PAGE>

        Any supplemental indenture authorized by the provisions of this Section
11.1 may be executed by the Company and the Trustee without the consent of the
holders of any of the Notes at the time outstanding, notwithstanding any of the
provisions of Section 11.2.

        Notwithstanding any other provision of the Indenture or the Notes, the
Registration Rights Agreement and the obligation to pay Additional Interest
thereunder may be amended, modified or waived in accordance with the provisions
of the Registration Rights Agreement.

SECTION 11.2. SUPPLEMENTAL INDENTURE WITH CONSENT OF NOTEHOLDERS. With the
consent (evidenced as provided in Article IX) of the holders of not less than a
majority in aggregate principal amount of the Notes at the time outstanding, the
Company, when authorized by the resolutions of the Board of Directors, and the
Trustee may from time to time and at any time enter into an indenture or
indentures supplemental hereto for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Indenture or
any supplemental indenture or of modifying in any manner the rights of the
holders of the Notes; provided, however, that no such supplemental indenture
shall (i) extend the fixed maturity of any Note, or reduce the rate or extend
the time of payment of interest thereon, or reduce the principal amount thereof
or premium, if any, thereon, or reduce any amount payable on redemption thereof,
or impair the right of any Noteholder to institute suit for the payment thereof,
or make the principal thereof or interest or premium, if any, thereon payable in
any coin or currency other than that provided in the Notes, or modify the
provisions of this Indenture with respect to the subordination of the Notes in a
manner materially adverse to the Noteholders, or change the obligation of the
Company to redeem any Note upon the happening of a Fundamental Change in a
manner adverse to the holder of Notes, or impair the right to convert the Notes
into Common Stock subject to the terms set forth herein, including Section 15.6,
in each case, without the consent of the holder of each Note so affected, (ii)
reduce the aforesaid percentage of Notes, the holders of which are required to
consent to (a) reduce the quorum or voting requirements under this Indenture or
(b) reduce the percentage of aggregate principal amount of outstanding Notes
required for consent to any modification of this Indenture, in each case,
without the consent of the holders of all Notes then outstanding or (iii) modify
any provisions of this Section or Section 7.7, except to increase any such
percentage or to provide that certain provisions of this Indenture cannot be
modified or waived, without the consent of the holders of each Note so affected.

        Upon the written request of the Company, accompanied by a copy of the
resolutions of the Board of Directors certified by its Secretary or Assistant
Secretary authorizing the execution of any such supplemental indenture, and upon
the filing with the Trustee of evidence of the consent of Noteholders as
aforesaid, the Trustee shall join with the Company in the execution of such
supplemental indenture unless such supplemental indenture affects the Trustee's
own rights, duties or immunities under this Indenture or otherwise, in which
case the Trustee may in its discretion, but shall not be obligated to, enter
into such supplemental indenture.

        It shall not be necessary for the consent of the Noteholders under this
Section 11.2 to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such consent shall approve the
substance thereof.

                                      -54-
<PAGE>

SECTION 11.3. EFFECT OF SUPPLEMENTAL INDENTURE. Any supplemental indenture
executed pursuant to the provisions of this Article XI shall comply with the
Trust Indenture Act, as then in effect; provided that this Section 11.3 shall
not require such supplemental indenture or the Trustee to be qualified under the
Trust Indenture Act prior to the time such qualification is in fact required
under the terms of the Trust Indenture Act or the Indenture has been qualified
under the Trust Indenture Act, nor shall it constitute any admission or
acknowledgment by any party to such supplemental indenture that any such
qualification is required prior to the time such qualification is in fact
required under the terms of the Trust Indenture Act or the Indenture has been
qualified under the Trust Indenture Act. Upon the execution of any supplemental
indenture pursuant to the provisions of this Article XI, this Indenture shall be
and be deemed to be modified and amended in accordance therewith and the
respective rights, limitation of rights, obligations, duties and immunities
under this Indenture of the Trustee, the Company and the holders of Notes shall
thereafter be determined, exercised and enforced hereunder subject in all
respects to such modifications and amendments and all the terms and conditions
of any such supplemental indenture shall be and be deemed to be part of the
terms and conditions of this Indenture for any and all purposes.

SECTION 11.4. NOTATION ON NOTES. Notes authenticated and delivered after the
execution of any supplemental indenture pursuant to the provisions of this
Article XI may bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company or the Trustee shall
so determine, new Notes so modified as to conform, in the opinion of the Trustee
and the Board of Directors, to any modification of this Indenture contained in
any such supplemental indenture may, at the Company's expense, be prepared and
executed by the Company, authenticated by the Trustee (or an authenticating
agent duly appointed by the Trustee pursuant to Section 16.11) and delivered in
exchange for the Notes then outstanding, upon surrender of such Notes then
outstanding.

SECTION 11.5. EVIDENCE OF COMPLIANCE OF SUPPLEMENTAL INDENTURE TO BE FURNISHED
TRUSTEE. Prior to entering into any supplemental indenture, the Trustee may
request an Officers' Certificate and an Opinion of Counsel as conclusive
evidence that any supplemental indenture executed pursuant hereto complies with
the requirements of this Article XI.

                                   ARTICLE XII

                CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE

SECTION 12.1. COMPANY MAY CONSOLIDATE ETC. ON CERTAIN TERMS. Subject to the
provisions of Section 12.2, nothing contained in this Indenture or in any of the
Notes shall prevent any consolidation or merger of the Company with or into any
other person or persons (whether or not affiliated with the Company), or
successive consolidations or mergers in which the Company or its successor or
successors shall be a party or parties, or shall prevent any sale, conveyance or
lease (or successive sales, conveyances or leases) of all or substantially all
of the property of the Company, to any other person (whether or not affiliated
with the Company), authorized to acquire and operate the same and that shall be
organized under the laws of the United States of America, any state thereof or

                                      -55-
<PAGE>
the District of Columbia; provided that upon any such consolidation, merger,
sale, conveyance or lease, the due and punctual payment of the principal of and
premium, if any, and interest (including Additional Interest, if any) on all of
the Notes, according to their tenor, and the due and punctual performance and
observance of all of the covenants and conditions of this Indenture to be
performed by the Company, shall be expressly assumed, by supplemental indenture
satisfactory in form to the Trustee, executed and delivered to the Trustee by
the person (if other than the Company) formed by such consolidation, or into
which the Company shall have been merged, or by the person that shall have
acquired or leased such property, and such supplemental indenture shall provide
for the applicable conversion rights set forth in Section 15.6.

SECTION 12.2. SUCCESSOR CORPORATION TO BE SUBSTITUTED. In case of any such
consolidation, merger, sale, conveyance or lease and upon the assumption by the
successor person, by supplemental indenture, executed and delivered to the
Trustee and satisfactory in form to the Trustee, of the due and punctual payment
of the principal of and premium, if any, and interest on all of the Notes and
the due and punctual performance of all of the covenants and conditions of this
Indenture to be performed by the Company, such successor person shall succeed to
and be substituted for the Company, with the same effect as if it had been named
herein as the party of the first part. Such successor person thereupon may cause
to be signed, and may issue either in its own name or in the name of LSI Logic
Corporation any or all of the Notes issuable hereunder which theretofore shall
not have been signed by the Company and delivered to the Trustee; and, upon the
order of such successor person instead of the Company and subject to all the
terms, conditions and limitations in this Indenture prescribed, the Trustee
shall authenticate and shall deliver, or cause to be authenticated and
delivered, any Notes which previously shall have been signed and delivered by
the officers of the Company to the Trustee for authentication, and any Notes
which such successor person thereafter shall cause to be signed and delivered to
the Trustee for that purpose. All the Notes so issued shall in all respects have
the same legal rank and benefit under this Indenture as the Notes theretofore or
thereafter issued in accordance with the terms of this Indenture as though all
of such Notes had been issued at the date of the execution hereof. In the event
of any such consolidation, merger, sale, conveyance or lease, the person named
as the "Company" in the first paragraph of this Indenture or any successor which
shall thereafter have become such in the manner prescribed in this Article XII
may be dissolved, wound up and liquidated at any time thereafter and such person
shall be released from its liabilities as obligor and maker of the Notes and
from its obligations under this Indenture.

        In case of any such consolidation, merger, sale, conveyance or lease,
such changes in phraseology and form (but not in substance) may be made in the
Notes thereafter to be issued as may be appropriate.

SECTION 12.3. OPINION OF COUNSEL TO BE GIVEN TRUSTEE. The Trustee shall receive
an Officers' Certificate and an Opinion of Counsel as conclusive evidence that
any such consolidation, merger, sale, conveyance or lease and any such
assumption complies with the provisions of this Article XII.

                                  ARTICLE XIII

                                      -56-
<PAGE>

                     SATISFACTION AND DISCHARGE OF INDENTURE

SECTION 13.1. DISCHARGE OF INDENTURE. When (a) the Company shall deliver to the
Trustee for cancellation all Notes theretofore authenticated (other than any
Notes which have been destroyed, lost or stolen and in lieu of or in
substitution for which other Notes shall have been authenticated and delivered)
and not theretofore canceled, or (b) all the Notes not theretofore canceled or
delivered to the Trustee for cancellation shall have become due and payable, or
are by their terms to become due and payable within one year or are to be called
for redemption within one year under arrangements satisfactory to the Trustee
for the giving of notice of redemption, and the Company shall deposit with the
Trustee, in trust, funds sufficient to pay at maturity or upon redemption of all
of the Notes (other than any Notes which shall have been mutilated, destroyed,
lost or stolen and in lieu of or in substitution for which other Notes shall
have been authenticated and delivered) not theretofore canceled or delivered to
the Trustee for cancellation, including principal and premium, if any, and
interest due or to become due to such date of maturity or redemption date, as
the case may be, accompanied by a verification report, as to the sufficiency of
the deposited amount, from an independent certified accountant or other
financial professional satisfactory to the Trustee, and if 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 Notes, (ii) rights hereunder of Noteholders to receive payments of
principal of and premium, if any, and interest on, the Notes and the other
rights, duties and obligations of Noteholders, 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 written demand of the Company accompanied by an Officers' Certificate and an
Opinion of Counsel as required by Section 16.5 and at the cost and expense of
the Company, shall execute proper instruments acknowledging satisfaction of and
discharging this Indenture; the Company, however, hereby agreeing to reimburse
the Trustee 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 Notes.

SECTION 13.2. DEPOSITED MONIES TO BE HELD IN TRUST BY TRUSTEE. Subject to
Section 13.4, all monies deposited with the Trustee pursuant to Section 13.1,
provided such deposit was not in violation of Article IV, shall be held in trust
for the sole benefit of the Noteholders and not to be subject to the
subordination provisions of Article IV, and such monies shall be applied by the
Trustee to the payment, either directly or through any paying agent (including
the Company if acting as its own paying agent), to the holders of the particular
Notes 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 and
interest and premium, if any.

SECTION 13.3. PAYING AGENT TO REPAY MONIES HELD. Upon the satisfaction and
discharge of this Indenture, all monies then held by any paying agent of the
Notes (other than the Trustee) shall, upon written request of the Company, be
repaid to it or paid to the Trustee, and thereupon such paying agent shall be
released from all further liability with respect to such monies.

                                      -57-
<PAGE>

SECTION 13.4. RETURN OF UNCLAIMED MONIES. Subject to the requirements of
applicable law, any monies deposited with or paid to the Trustee for payment of
the principal of, premium, if any, or interest on Notes and not applied but
remaining unclaimed by the holders of Notes for two years after the date upon
which the principal of, premium, if any, or interest on such Notes, as the case
may be, shall have become due and payable, shall be repaid to the Company by the
Trustee on demand and all liability of the Trustee shall thereupon cease with
respect to such monies; and the holder of any of the Notes shall thereafter look
only to the Company for any payment which such holder may be entitled to collect
unless an applicable abandoned property law designates another person.

SECTION 13.5. REINSTATEMENT. If the Trustee or the paying agent is unable to
apply any money in accordance with Section 13.2 by reason of any order or
judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, the Company's obligations under this
Indenture and the Notes shall be revived and reinstated as though no deposit had
occurred pursuant to Section 13.1 until such time as the Trustee or the paying
agent is permitted to apply all such money in accordance with Section 13.2;
provided, however, that if the Company makes any payment of interest on or
principal of any Note following the reinstatement of its obligations, the
Company shall be subrogated to the rights of the holders of such Notes to
receive such payment from the money held by the Trustee or paying agent.

                                   ARTICLE XIV

         IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS

SECTION 14.1. INDENTURE AND NOTES SOLELY CORPORATE OBLIGATIONS. No recourse for
the payment of the principal of or premium, if any, or interest on any Note, or
for any claim based thereon or otherwise in respect thereof, and no recourse
under or upon any obligation, covenant or agreement of the Company in this
Indenture or in any supplemental indenture or in any Note, or because of the
creation of any indebtedness represented thereby, shall be had against any
incorporator, stockholder, employee, agent, officer, or director or subsidiary,
as such, past, present or future, of the Company or of any successor person,
either directly or through the Company or any successor person, whether by
virtue of any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise; it being expressly understood that all such
liability is hereby expressly waived and released as a condition of, and as a
consideration for, the execution of this Indenture and the issue of the Notes.

                                   ARTICLE XV

                               CONVERSION OF NOTES

SECTION 15.1. RIGHT TO CONVERT. Subject to and upon compliance with the
provisions of this Indenture, including without limitation Article IV, the
holder of any Note shall have the right, at its option, at any time after
original issuance thereof through the close of business on the final maturity
date of the Notes (except that, with respect to any Note or portion of a Note
which shall be called for redemption, such right shall terminate, except as
provided in Section 15.2 or Section 3.4, at the close

                                      -58-
<PAGE>

of business on the Business Day next preceding the date fixed for redemption of
such Note or portion of a Note unless the Company shall default in payment due
upon redemption thereof) to convert the principal amount of any such Note, or
any portion of such principal amount which is $1,000 or an integral multiple
thereof, into that number of fully paid and non-assessable shares of Common
Stock (as such shares shall then be constituted) obtained by dividing the
principal amount of the Note or portion thereof surrendered for conversion by
the Conversion Price in effect at such time, by surrender of the Note so to be
converted in whole or in part in the manner provided, together with any funds
required by Section 15.2. A Note in respect of which a holder is exercising its
option to require repurchase upon a Fundamental Change pursuant to Section 3.5
may be converted only if such holder withdraws its election to exercise in
accordance with Section 3.5. A holder of Notes is not entitled to any rights of
a holder of Common Stock until such holder has converted his Notes to Common
Stock, and only to the extent such Notes are deemed to have been converted to
Common Stock under this Article XV.

SECTION 15.2. EXERCISE OF CONVERSION PRIVILEGE; ISSUANCE OF COMMON STOCK ON
CONVERSION; NO ADJUSTMENT FOR INTEREST OR DIVIDENDS. In order to exercise the
conversion privilege with respect to any Note in certificated form, the holder
of any such Note to be converted in whole or in part shall surrender such Note,
duly endorsed, at an office or agency maintained by the Company pursuant to
Section 5.2, accompanied by the funds, if any, required by the penultimate
paragraph of this Section 15.2, and shall give written notice of conversion in
the form provided on the Notes (or such other notice which is acceptable to the
Company) to the office or agency that the holder elects to convert such Note or
the portion thereof specified in said notice. Such notice shall also state the
name or names (with address or addresses) in which the certificate or
certificates for shares of Common Stock which shall be issuable on such
conversion shall be issued, and shall be accompanied by transfer taxes, if
required pursuant to Section 15.7. Each such Note surrendered for conversion
shall, unless the shares issuable on conversion are to be issued in the same
name as the registration of such Note, be duly endorsed by, or be accompanied by
instruments of transfer in form satisfactory to the Company duly executed by,
the holder or his duly authorized attorney.

        In order to exercise the conversion privilege with respect to any
interest in a Note in global form, the holder must complete the appropriate
instruction form for conversion pursuant to the Depository's book-entry
conversion program, deliver by book-entry delivery an interest in such Note in
global form, furnish appropriate endorsements and transfer documents if required
by the Company or the Trustee or conversion agent, and pay the funds, if any,
required by this Section 15.2 and any transfer taxes if required pursuant to
Section 15.7.

        As promptly as practicable after satisfaction of the requirements for
conversion set forth above, subject to compliance with any restrictions on
transfer if shares issuable on conversion are to be issued in a name other than
that of the Noteholder (as if such transfer were a transfer of the Note or Notes
(or portion thereof) so converted), the Company shall issue and shall deliver to
such holder at the office or agency maintained by the Company for such purpose
pursuant to Section 5.2, a certificate or certificates for the number of full
shares of Common Stock issuable upon the

                                      -59-
<PAGE>

conversion of such Note or portion thereof in accordance with the provisions of
this Article and a check or cash in respect of any fractional interest in
respect of a share of Common Stock arising upon such conversion, as provided in
Section 15.3. In case any Note of a denomination greater than $1,000 shall be
surrendered for partial conversion, and subject to Section 2.3, the Company
shall execute and the Trustee shall authenticate and deliver to the holder of
the Note so surrendered, without charge to him, a new Note or Notes in
authorized denominations in an aggregate principal amount equal to the
unconverted portion of the surrendered Note.

        Each conversion shall be deemed to have been effected as to any such
Note (or portion thereof) on the date on which the requirements set forth above
in this Section 15.2 have been satisfied as to such Note (or portion thereof),
and the person in whose name any certificate or certificates for shares of
Common Stock shall be issuable upon such conversion shall be deemed to have
become on said date the holder of record of the shares represented thereby;
provided, however, that any such surrender on any date when the stock transfer
books of the Company shall be closed shall constitute the person in whose name
the certificates are to be issued as the record holder thereof for all purposes
on the next succeeding day on which such stock transfer books are open, but such
conversion shall be at the Conversion Price in effect on the date upon which
such Note shall be surrendered.

        Any Note or portion thereof surrendered for conversion during the period
from the close of business on the record date for any interest payment date to
the close of business on the Business Day next preceding the following interest
payment date shall (unless such Note or portion thereof being converted shall
have been called for redemption) be accompanied by payment, in New York Clearing
House funds or other funds acceptable to the Company, of an amount equal to the
accrued but unpaid interest otherwise payable on such interest payment date on
the principal amount being converted. Except as provided above in this Section
15.2, no payment or other adjustment shall be made for unpaid interest accrued
on any Note converted or for unpaid dividends on any shares issued upon the
conversion of such Note as provided in this Article.

        Upon the conversion of an interest in a Note in global form, the Trustee
(or other conversion agent appointed by the Company), or the Custodian at the
direction of the Trustee (or other conversion agent appointed by the Company),
shall make a notation on such Note in global form as to the reduction in the
principal amount represented thereby. The Company shall notify the Trustee in
writing of any conversions of Notes effected through any conversion agent other
than the Trustee.

SECTION 15.3. CASH PAYMENTS IN LIEU OF FRACTIONAL SHARES. No fractional shares
of Common Stock or scrip representing fractional shares shall be issued upon
conversion of Notes. If more than one Note shall be surrendered for conversion
at one time by the same holder, the number of full shares which shall be
issuable upon conversion shall be computed on the basis of the aggregate
principal amount of the Notes (or specified portions thereof to the extent
permitted hereby) so surrendered. If any fractional share of stock would be
issuable upon the conversion of any Note or Notes, the Company shall make an
adjustment and payment therefor in cash at the current market price thereof to
the holder of Notes. The current market price of a share of Common Stock shall
be

                                      -60-
<PAGE>

the Closing Price on the last Business Day immediately preceding the day on
which the Notes (or specified portions thereof) are deemed to have been
converted.

SECTION 15.4. CONVERSION PRICE. The conversion price shall be as specified in
the form of Note (herein called the "Conversion Price") attached as Exhibit A
hereto, subject to adjustment as provided in this Article XV.

SECTION 15.5. ADJUSTMENT OF CONVERSION PRICE. The Conversion Price shall be
adjusted from time to time by the Company 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
next 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 the numerator of which shall be the number of
shares of Common Stock outstanding at the close of business on the date fixed
for such determination and the denominator shall be the sum of such number of
shares and the total number of shares constituting such dividend or other
distribution, such reduction to become effective immediately after the opening
of business on the day following the date fixed for such determination. The
Company will not pay any dividend or make any distribution on shares of Common
Stock held in the treasury of the Company. If any dividend or distribution of
the type described in this Section 15.5(a) is declared but not so paid or made,
the Conversion Price shall again be adjusted to the Conversion Price that would
then be in effect if such dividend or distribution had not been declared.

        (b) In case the Company shall issue rights or warrants to all holders of
its outstanding shares of Common Stock entitling them (for a period expiring
within forty-five (45) days after the date fixed for determination of
stockholders entitled to receive such rights or warrants) to subscribe for or
purchase shares of Common Stock at a price per share less than the Current
Market Price (as defined below) on the date fixed for determination of
stockholders entitled to receive such rights or warrants, 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 the date fixed
for determination of stockholders entitled to receive such rights or warrants by
a fraction of which the numerator shall be the number of shares of Common Stock
outstanding at the close of business on the date fixed for determination of
stockholders entitled to receive such rights and warrants plus the number of
shares which the aggregate offering price of the total number of shares so
offered would purchase at such Current Market Price, and of which the
denominator shall be the number of shares of Common Stock outstanding on the
date fixed for determination of stockholders entitled to receive such rights and
warrants plus the total number of additional shares of Common Stock offered for
subscription or purchase. Such adjustment shall be successively made whenever
any such rights and warrants are issued, and shall become effective immediately
after the opening of business on the day next following the date fixed for
determination of stockholders entitled to receive such rights or warrants. To
the extent that shares of Common Stock are not delivered after the expiration of
such rights or warrants, the Conversion Price shall be readjusted to the
Conversion Price which would then be in

                                      -61-
<PAGE>

effect had the adjustments made upon the issuance of such rights or warrants
been made on the basis of delivery of only the number of shares of Common Stock
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 by the Company for such
rights or warrants, the value of such consideration, if other than cash, to be
determined by the Board of Directors (whose determination shall be conclusive
and described in a resolution of the Board of Directors).

        (c) In case 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 next 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 next 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 next following the day upon which such subdivision or
combination becomes effective.

        (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 15.5(a)
applies) or evidences of its indebtedness or assets (including securities, but
excluding any rights or warrants referred to in Section 15.5(b), and excluding
any dividend or distribution (x) paid exclusively in cash or (y) referred to in
Section 15.5(a) (any of the foregoing hereinafter in this Section 15.5(d) called
the "Securities")), then, in each such case (unless the Company elects to
reserve such Securities for distribution to the Noteholders upon the conversion
of the Notes so that any such holder converting Notes will receive upon such
conversion, in addition to the shares of Common Stock to which such holder is
entitled, the amount and kind of such Securities which such holder would have
received if such holder had converted its Notes into Common Stock immediately
prior to the Record Date (as defined in Section 15.5(h) for such distribution of
the Securities)), the Conversion Price shall be reduced so that the same shall
be equal to the price determined by multiplying the Conversion Price in effect
on the Record Date with respect to such distribution by a fraction of which the
numerator shall be the Current Market Price per share of the Common Stock on
such Record Date less the fair market value (as determined by the Board of
Directors, whose determination shall be conclusive, and described in a
resolution of the Board if Directors) on such Record Date of the portion of the
Securities so distributed applicable to one share of Common Stock and the
denominator shall be the Current Market Price per share of the Common Stock on
such Record Date, such reduction to become effective immediately prior to the
opening of business on the day next following such Record Date; provided,
however, that if such Securities consist of shares of common stock of a
Subsidiary of the Company, the Company may, at

                                      -62-
<PAGE>

its option and in lieu of the foregoing adjustment, elect to reserve the pro
rata portion of such Securities so that each Holder of Securities shall have the
right to receive upon conversion the amount of such shares of common stock of
such Subsidiary that such Holder of Securities would have received if such
Holder of Securities had converted such Securities on the Record Date; provided,
further, that in the event 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 per share of the Common
Stock on such Record Date, in lieu of the foregoing adjustment, adequate
provision shall be made so that each Noteholder shall have the right to receive
upon conversion the amount of Securities such holder would have received had
such holder converted each Note on such Record Date. In the event that such
dividend or distribution is not so paid or made, the Conversion Price shall
again be adjusted to be the Conversion Price which would then be in effect if
such dividend or distribution had not been declared. If the Board of Directors
determines the fair market value of any distribution for purposes of this
Section 15.5(d) by reference to the actual or when issued trading market for any
securities, it must in doing so consider the prices in such market over the same
period used in computing the Current Market Price of the Common Stock.

        Under the provisions of the Company's Preferred Shares Rights Plan (the
"Rights Plan"), upon conversion of the Notes into Common Stock, to the extent
that the Rights Plan is still in effect upon such conversion, the holders of
Notes will receive, in addition to the Common Stock, the rights described
therein (whether or not the rights have separated from the Common Stock at the
time of conversion), subject to the limitations set forth in the Rights Plan.
Any distribution of rights or warrants pursuant to a Rights Plan complying with
the requirements set forth in the immediately preceding sentence of this
paragraph shall not constitute a distribution of rights or warrants pursuant to
this Section 15.5(d).

        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 15.5 (and no adjustment to the Conversion Price under
this Section 15.5 will be required) until the occurrence of the earliest Trigger
Event, whereupon such rights and warrants shall be deemed to have been
distributed and an appropriate adjustment (if any is required) to the Conversion
Price shall be made under this Section 15.5(d). If any such right or warrant,
including any such existing rights or warrants distributed prior to the date of
this Indenture, are subject to events, upon the occurrence of which such rights
or warrants become exercisable to purchase different securities, evidences of
indebtedness or other assets, then the date of the occurrence of any and each
such event shall be deemed to be the date of distribution and record date with
respect to new rights or warrants with such rights (and a termination or
expiration of the existing rights or warrants without exercise by any of the
holders thereof). In addition, in the event of any distribution (or deemed
distribution) of rights or warrants, or any Trigger Event or other event (of the
type described in the preceding sentence) with

                                      -63-
<PAGE>

respect thereto that was counted for purposes of calculating a distribution
amount for which an adjustment to the Conversion Price under this Section 15.5
was made, (1) in the case of any such rights or warrants which shall all have
been redeemed or repurchased without exercise by any holders thereof, the
Conversion Price shall be readjusted upon such final redemption or repurchase to
give effect to such distribution or Trigger Event, as the case may be, as though
it were a cash distribution, equal to the per share redemption or repurchase
price received by a holder or holders of Common Stock with respect to such
rights or warrants (assuming such holder had retained such rights or warrants),
made to all holders of Common Stock as of the date of such redemption or
repurchase, and (2) in the case of such rights or warrants which shall have
expired or been terminated without exercise by any holders thereof, the
Conversion Price shall be readjusted as if such rights and warrants had not been
issued.

        For purposes of this Section 15.5(d) and Sections 15.5(a) and (b), any
dividend or distribution to which this Section 15.5(d) is applicable that also
includes shares of Common Stock, or rights or warrants to subscribe for or
purchase shares of Common Stock (or both), shall be deemed instead to be (1) a
dividend or distribution of the evidences of indebtedness, assets or shares of
capital stock other than such shares of Common Stock or rights or warrants to
purchase shares of Common Stock (and any Conversion Price reduction required by
this Section 15.5(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 or such rights or warrants (and any further Conversion Price
reduction required by Sections 15.5(a) and (b) 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 "the date fixed for the determination of
stockholders entitled to receive such dividend or other distribution" and "the
date fixed for such determination" within the meaning of Sections 15.5(a) and
(b), respectively, 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
date fixed for such determination" within the meaning of Section 15.5(a).

        (e) In case the Company shall, by dividend or otherwise, distribute to
all holders of its Common Stock cash (excluding (x) any quarterly cash dividend
on the Common Stock to the extent the aggregate cash dividend per share of
Common Stock in any fiscal quarter does not exceed the greater of (A) the amount
per share of Common Stock of the next preceding quarterly cash dividend on the
Common Stock to the extent that such preceding quarterly dividend did not
require any adjustment of the Conversion Price pursuant to this Section 15.5(e)
(as adjusted to reflect subdivisions or combinations of the Common Stock), and
(B) 3.75% of the arithmetic average of the Closing Price (determined as set
forth in Section 15.5(h)) during the ten Trading Days (as defined in Section
15.5(h)) immediately prior to the date of declaration of such dividend, and (y)
any dividend or distribution in connection with the liquidation, dissolution or
winding up of the Company, whether voluntary or involuntary), then, in such
case, the Conversion Price shall be reduced so that the same shall equal the
price determined by multiplying the Conversion Price in effect immediately prior
to the close of business on the Record Date for such dividend or distribution,
as the case may be, by a fraction the numerator of which shall be the Current
Market Price of the Common Stock on such Record Date less the amount of cash so
distributed (and not excluded as provided above)

                                      -64-
<PAGE>

applicable to one share of Common Stock and the denominator shall be such
Current Market Price of the Common Stock, such reduction to be effective
immediately prior to the opening of business on the day next following such
Record Date; provided, however, that in the event the portion of the cash so
distributed applicable to one share of Common Stock is equal to or greater than
the Current Market Price of the Common Stock on such Record Date, in lieu of the
foregoing adjustment, adequate provision shall be made so that each Noteholder
shall have the right to receive upon conversion the amount of cash such holder
would have received had such holder converted each Note on such Record Date. In
the event that such dividend or distribution is not so paid or made, the
Conversion Price shall again be adjusted to be the Conversion Price which would
then be in effect if such dividend or distribution had not been declared. If any
adjustment is required to be made as set forth in this Section 15.5(e) as a
result of a distribution that is a quarterly dividend, such adjustment shall be
based upon the amount by which such distribution exceeds the amount of the
quarterly cash dividend permitted to be excluded pursuant hereto. If an
adjustment is required to be made as set forth in this Section 15.5(e) above as
a result of a distribution that is not a quarterly dividend, such adjustment
shall be based upon the full amount of the distribution.

        (f) In case a tender or exchange offer made by the Company or any
Subsidiary for all or any portion of the Common Stock shall expire and such
tender or exchange offer (as amended upon the expiration thereof) shall require
the payment to stockholders of consideration per share of Common Stock having a
fair market value (as determined by the Board of Directors, whose determination
shall be conclusive and described in a resolution of the Board of Directors)
that as of the last time (the "Expiration Time") tenders or exchanges may be
made pursuant to such tender or exchange offer (as it may be amended) exceeds
the Current Market Price of the Common Stock on the Trading Day next succeeding
the Expiration Time, 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 Expiration Time by a fraction of which the numerator
shall be 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 and the denominator shall be the sum of (x) 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 (y) the
product of the number of shares of Common Stock outstanding (less any Purchased
Shares) at the Expiration Time and the Current Market Price of the Common Stock
on the Trading Day next succeeding the Expiration Time, such reduction to become
effective immediately prior to the opening of business on the day next following
the Expiration Time. In the event that the Company is obligated to purchase
shares pursuant to any such tender or exchange 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.

                                      -65-
<PAGE>

        (g) In case of a tender or exchange offer made by a person other than
the Company or any Subsidiary for an amount which increases the offeror's
ownership of Common Stock to more than twenty-five percent (25%) of the Common
Stock outstanding and shall involve the payment by such person of consideration
per share of Common Stock having a fair market value (as determined by the Board
of Directors, whose determination shall be conclusive, and described in a
resolution of the Board of Directors) at the last time (the "Offer Expiration
Time") tenders or exchanges may be made pursuant to such tender or exchange
offer (as it shall have been amended) that exceeds the Current Market Price of
the Common Stock on the Trading Day next succeeding the Offer Expiration Time,
and in which, as of the Offer Expiration Time the Board of Directors is not
recommending rejection of the offer, 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 Offer Expiration Time by a fraction of
which the numerator shall be the number of shares of Common Stock outstanding
(including any tendered or exchanged shares) at the Offer Expiration Time
multiplied by the Current Market Price of the Common Stock on the Trading Day
next succeeding the Offer Expiration Time and the denominator shall be the sum
of (x) 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 Offer Expiration Time (the
shares deemed so accepted, up to any such maximum, being referred to as the
"Accepted Purchased Shares") and (y) the product of the number of shares of
Common Stock outstanding (less any Accepted Purchased Shares) on the Offer
Expiration Time and the Current Market Price of the Common Stock on the Trading
Day next succeeding the Offer Expiration Time, such reduction to become
effective immediately prior to the opening of business on the day next following
the Offer Expiration Time. In the event that such person is obligated to
purchase shares pursuant to any such tender or exchange offer, but such person
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. Notwithstanding the foregoing, the adjustment
described in this Section 15.5(g) shall not be made if, as of the Offer
Expiration Time, the offering documents with respect to such offer disclose a
plan or intention to cause the Company to engage in any transaction described in
Article XII.

        (h) For purposes of this Section 15.5, the following terms shall have
the meaning indicated:

            (i) "Closing Price" with respect to any securities on any day shall
mean the closing sale price regular way on such day or, in case no such sale
takes place on such day, the average of the reported closing bid and asked
prices, regular way, in each case as quoted on the New York Stock Exchange
Composite Tape, or, if such security is not listed or admitted to trading on the
New York Stock Exchange Composite Tape, on the principal national security
exchange or quotation system on which such security is quoted or listed or
admitted to trading, or, if not quoted or listed or admitted to trading on any
national securities exchange or quotation system, the average of the closing bid
and asked prices of such security on the over-the-counter market on the day in
question

                                      -66-
<PAGE>

as reported by the National Quotation Bureau Incorporated, or a similar
generally accepted reporting service, or if not so available, in such manner as
furnished by any New York Stock Exchange member firm selected from time to time
by the Board of Directors for that purpose, or a price determined in good faith
by the Board of Directors or, to the extent permitted by applicable law, a duly
authorized committee thereof, whose determination shall be conclusive.

            (ii) "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 (1) if the
"ex" date (as hereinafter defined) for any event (other than the issuance or
distribution or Fundamental Change requiring such computation) that requires an
adjustment to the Conversion Price pursuant to Section 15.5(a), (b), (c), (d),
(e), (f) or (g) 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,
(2) if the "ex" date for any event (other than the issuance, distribution or
Fundamental Change requiring such computation) that requires an adjustment to
the Conversion Price pursuant to Section 15.5(a), (b), (c), (d), (e), (f) or (g)
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 (3) if the "ex" date for the issuance, distribution or Fundamental Change
requiring such computation is prior to the day in question, after taking into
account any adjustment required pursuant to clause (1) or (2) 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 or, to the extent permitted by applicable
law, a duly authorized committee thereof in a manner consistent with any
determination of such value for purposes of Section 15.5(d), (f) or (g), whose
determination shall be conclusive and described in a resolution of the Board of
Directors or such duly authorized committee thereof, as the case may be) 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 15.5(f) or
(g), 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 or exchange offer requiring such
computation) that requires an adjustment to the Conversion Price pursuant to
Section 15.5(a), (b), (c), (d), (e), (f) or (g) occurs on or after the
Expiration Time or Offer Expiration Time, as the case may be, 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,
(1) when used 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, (2) when used with respect to any

                                      -67-
<PAGE>

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
(3) when used 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 Offer Expiration Time of such offer.

            (iii) "fair market value" shall mean the amount which a willing
buyer would pay a willing seller in an arm's length transaction.

            (iv) "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).

            (v) "Trading Day" shall mean (x) 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
another national security exchange is open for business or (y) if the applicable
security is quoted on the Nasdaq National Market, a day on which trades may be
made on thereon or (z) 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.

        (i) The Company may make such reductions in the Conversion Price, in
addition to those required by Sections 15.5 (a), (b), (c), (d), (e), (f) or (g)
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 twenty (20) days, the reduction is irrevocable during the
period and the Board of Directors shall have made a determination that such
reduction would be in the best interests of the Company, which determination
shall be conclusive. Whenever the Conversion Price is reduced pursuant to the
preceding sentence, the Company shall mail to holders of record of the Notes a
notice of the reduction at least fifteen (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.

        (j) No adjustment in the Conversion Price shall be required unless such
adjustment would require an increase or decrease of at least one percent (1%) in
such price; provided, however, that any adjustments which by reason of this
Section 15.5(j) are not required to be made shall be carried forward and taken
into account in any subsequent adjustment. All calculations under this Article
XV shall be made by the Company and shall be made to the nearest cent or to the
nearest

                                      -68-
<PAGE>

one-hundredth (1/100) of a share, as the case may be. No adjustment need be made
for rights to purchase Common Stock pursuant to a Company plan for reinvestment
of dividends or interest. To the extent the Notes become convertible into cash,
assets, property or securities (other than capital stock of the Company), no
adjustment need be made thereafter as to the cash, assets, property or such
securities. Interest will not accrue on the cash.

        (k) Whenever the Conversion Price is adjusted as herein provided, the
Company shall promptly file with the Trustee and any conversion agent other than
the Trustee an Officers' Certificate setting forth the Conversion Price after
such adjustment and setting forth a brief statement of the facts requiring such
adjustment. Unless and until a Responsible Officer of the Trustee has received
such certificate, the Trustee may assume that the Conversion Price set forth in
the form of the Note attached hereto as Exhibit A or in the most recent notice
it has received pursuant to this Section 15.5 remains in effect and has not
been, and is not required to be, changed. Promptly after delivery of such
certificate, the Company shall prepare a notice of such adjustment of the
Conversion Price setting forth the adjusted Conversion Price and the date on
which each adjustment becomes effective and shall mail such notice of such
adjustment of the Conversion Price to the holder of each Note at his last
address appearing on the Note register provided for in Section 2.5 of this
Indenture, within twenty (20) days after execution thereof. Failure to deliver
such notice shall not affect the legality or validity of any such adjustment.

        (l) In any case in which this Section 15.5 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
Note 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 15.3.

        (m) For purposes of this Section 15.5, 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.

SECTION 15.6. EFFECT OF RECLASSIFICATION, CONSOLIDATION, MERGER OR SALE. If any
of the following events occur, namely (i) any reclassification or change of the
outstanding shares of Common Stock (other than a subdivision or combination to
which Section 15.5(c) applies), (ii) any consolidation, merger or combination of
the Company with another person as a result of which holders of Common Stock
shall be entitled to receive stock, securities or other property or assets
(including cash) with respect to or in exchange for such Common Stock, or (iii)
any sale or conveyance of all or substantially all of the properties and assets
of the Company to any other person as a result of which holders of Common Stock
shall be entitled to receive stock, securities or other property or assets
(including cash) with respect to or in exchange for such Common Stock, then the
Company or the

                                      -69-
<PAGE>

successor or purchasing person, as the case may be, shall execute with the
Trustee a supplemental indenture (which shall comply with the Trust Indenture
Act as in force at the date of execution of such supplemental indenture)
providing that such Note shall be convertible into the kind and amount of shares
of stock and other securities or property or assets (including cash) receivable
upon such reclassification, change, consolidation, merger, combination, sale or
conveyance by a holder of a number of shares of Common Stock issuable upon
conversion of such Notes (assuming, for such purposes, a sufficient number of
authorized shares of Common Stock available to convert all such Notes)
immediately prior to such reclassification, change, consolidation, merger,
combination, sale or conveyance assuming such holder of Common Stock did not
exercise his rights of election, if any, as to the kind or amount of securities,
cash or other property receivable upon such reclassification, change,
consolidation, merger, combination, sale or conveyance (provided that, if the
kind or amount of securities, cash or other property receivable upon such
reclassification, change, consolidation, merger, 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 ("nonelecting share"), then for the
purposes of this Section 15.6 the kind and amount of securities, cash or other
property receivable upon such reclassification, change, consolidation, merger,
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.

        The Company shall cause notice of the execution of such supplemental
indenture to be mailed to each holder of Notes, at its address appearing on the
Note register provided for in Section 2.5 of this Indenture, within twenty (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
reclassifications, changes, consolidations, mergers, combinations, sales and
conveyances.

        If this Section 15.6 applies to any event or occurrence, Section 15.5
shall not apply.

SECTION 15.7. TAXES ON SHARES ISSUED. The issue of stock certificates on
conversions of Notes shall be made without charge to the converting Noteholder
for any tax in respect of the issue thereof. The Company shall not, however, be
required to pay any tax which may be payable in respect of any transfer involved
in the issue and delivery of stock in any name other than that of the holder of
any Note converted, and the Company shall not be required to issue or deliver
any such stock certificate unless and until the person or persons requesting the
issue thereof shall have paid to the Company the amount of such tax or shall
have established to the satisfaction of the Company that such tax has been paid.

SECTION 15.8. RESERVATION OF SHARES; SHARES TO BE FULLY PAID; COMPLIANCE WITH
GOVERNMENTAL REQUIREMENTS; LISTING OF COMMON STOCK. The Company shall provide,
free from preemptive rights, out of its authorized but unissued shares or shares
held in treasury, sufficient shares of

                                      -70-
<PAGE>

Common Stock to provide for the conversion of the Notes from time to time as
such Notes are presented for conversion.

        Before taking any action which would cause an adjustment reducing the
Conversion Price below the then par value, if any, of the shares of Common Stock
issuable upon conversion of the Notes, the Company will take all corporate
action which may, in the opinion of its counsel, be necessary in order that the
Company may validly and legally issue shares of such Common Stock at such
adjusted Conversion Price.

        The Company covenants that all shares of Common Stock which may be
issued upon conversion of Notes will upon issue be fully paid and non-assessable
by the Company and free from all taxes, liens and charges with respect to the
issue thereof.

        The Company covenants that if any shares of Common Stock to be provided
for the purpose of conversion of Notes hereunder require registration with or
approval of any governmental authority under any federal or state law before
such shares may be validly issued upon conversion, the Company will in good
faith and as expeditiously as possible endeavor to secure such registration or
approval, as the case may be.

        The Company further covenants that if at any time the Common Stock shall
be listed on the New York Stock Exchange or any other national securities
exchange or automated quotation system the Company will, if permitted by the
rules of such exchange or automated quotation system, list and keep listed, so
long as the Common Stock shall be so listed on such exchange or automated
quotation system, all Common Stock issuable upon conversion of the Notes;
provided, however, that if rules of such exchange or automated quotation system
permit the Company to defer the listing of such Common Stock until the first
conversion of the Notes into Common Stock in accordance with the provisions of
this Indenture, the Company covenants to list such Common Stock issuable upon
conversion of the Notes in accordance with the requirements of such exchange or
automated quotation system at such time.

SECTION 15.9. RESPONSIBILITY OF TRUSTEE. The Trustee and any other conversion
agent shall not at any time be under any duty or responsibility to any holder of
Notes to determine the Conversion Price or whether any facts exist which may
require any adjustment of the Conversion Price, or with respect to the nature or
extent or calculation of any such adjustment when made, or with respect to the
method employed, or herein or in any supplemental indenture provided to be
employed, in making the same. The Trustee and any other conversion agent shall
not be accountable with respect to the validity or value (or the kind or amount)
of any shares of Common Stock, or of any securities or property, which may at
any time be issued or delivered upon the conversion of any Note; and the Trustee
and any other conversion agent make no representations with respect thereto.
Neither the Trustee nor any conversion agent shall be responsible for any
failure of the Company to issue, transfer or deliver any shares of Common Stock
or stock certificates or other securities or property or cash upon the surrender
of any Note for the purpose of conversion or to comply with any of the duties,
responsibilities or covenants of the Company contained in this Article. Without
limiting the

                                      -71-
<PAGE>

generality of the foregoing, neither the Trustee nor any conversion agent shall
be under any responsibility to determine the correctness of any provisions
contained in any supplemental indenture entered into pursuant to Section 15.6
relating either to the kind or amount of shares of stock or securities or
property (including cash) receivable by Noteholders upon the conversion of their
Notes after any event referred to in such Section 15.6 or to any adjustment to
be made with respect thereto, but, subject to the provisions of Section 8.1, may
accept as conclusive evidence of the correctness of any such provisions, and
shall be protected in relying upon, the Officers' Certificate (which the Company
shall be obligated to file with the Trustee prior to the execution of any such
supplemental indenture) with respect thereto.

SECTION 15.10.NOTICE TO HOLDERS PRIOR TO CERTAIN ACTIONS. In case:

        (a) the Company shall declare a dividend (or any other distribution) on
its Common Stock that would require an adjustment in the Conversion Price
pursuant to Section 15.5; or

        (b) the Company shall authorize the granting to the holders of all or
substantially all of its Common Stock of rights or warrants to subscribe for or
purchase any share of any class or any other rights or warrants; or

        (c) of any reclassification or reorganization of the Common Stock of the
Company (other than a subdivision or combination of its outstanding Common
Stock, or a change in par value, or from par value to no par value, or from no
par value to par value), or of any consolidation or merger to which the Company
is a party and for which approval of any stockholders of the Company is
required, or of the sale or transfer of all or substantially all of the assets
of the Company or any Significant Subsidiary; or

        (d) of the voluntary or involuntary dissolution, liquidation or winding
up of the Company or any Significant Subsidiary;

        the Company shall cause to be filed with the Trustee and to be mailed to
each holder of Notes at his address appearing on the Note register provided for
in Section 2.5 of this Indenture, as promptly as possible but in any event at
least fifteen (15) days prior to the applicable date hereinafter specified, a
notice stating (x) the date on which a record is to be taken for the purpose of
such dividend, distribution or 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 or rights are to be determined, or (y) the date
on which such reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding up is expected to become effective or occur,
and the date as of which it is expected that holders of Common Stock of record
shall be entitled to exchange their Common Stock for securities or other
property deliverable upon such reclassification, consolidation, merger, sale,
transfer, dissolution, liquidation or winding up. Failure to give such notice,
or any defect therein, shall not affect the legality or validity of such
dividend, distribution, reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding up. Unless and until a Responsible Officer
of the Trustee has received such notice, the Trustee shall not be deemed to have
knowledge of the facts and statements made therein.

                                      -72-
<PAGE>

                                   ARTICLE XVI

                            MISCELLANEOUS PROVISIONS

SECTION 16.1. PROVISIONS BINDING ON COMPANY'S SUCCESSORS. All the covenants,
stipulations, promises and agreements by the Company contained in this Indenture
shall bind its successors and assigns whether so expressed or not.

SECTION 16.2. OFFICIAL ACTS BY SUCCESSOR CORPORATION. Any act or proceeding by
any provision of this Indenture authorized or required to be done or performed
by any board, committee or officer of the Company shall and may be done and
performed with like force and effect by the like board, committee or officer of
any person that shall at the time be the lawful sole successor of the Company.

SECTION 16.3. ADDRESSES FOR NOTICES, ETC. Any notice or demand which by any
provision of this Indenture is required or permitted to be given or served by
the Trustee or by the holders of Notes on the Company shall be deemed to have
been sufficiently given or made, for all purposes, if given or served by being
deposited postage prepaid by registered or certified mail in a post office
letter box addressed (until another address is filed by the Company with the
Trustee) to LSI Logic Corporation, 1551 McCarthy Boulevard, Milpitas, California
95035, Attention: General Counsel. Any notice, direction, request or demand
hereunder to or upon the Trustee shall be deemed to have been sufficiently given
or made, for all purposes, if given or served by being deposited postage prepaid
by registered or certified mail in a post office letter box addressed to the
Corporate Trust Office, which office is, at the date as of which this Indenture
is dated, located at 633 West 5th Street, 12th Floor, Los Angeles, CA 90071,
Attention: Corporate Trust Department (LSI Logic Corporation 4.00% Convertible
Subordinated Notes due 2006).

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

        Any notice or communication mailed to a Noteholder shall be mailed to
him by first class mail, postage prepaid, at his address as it appears on the
Note register and shall be sufficiently given to him if so mailed within the
time prescribed.

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

SECTION 16.4. GOVERNING LAW. This Indenture and each Note shall be deemed to be
a contract made under the laws of the State of New York, and for all purposes
shall be construed in accordance with the laws of the State of New York.

SECTION 16.5. EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT; CERTIFICATES TO
TRUSTEE. Upon any application or demand by the Company to the Trustee to take
any action under any of the

                                      -73-
<PAGE>

provisions 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 have been complied with.

        Each certificate or opinion provided for in this Indenture and delivered
to the Trustee with respect to compliance with a condition or covenant provided
for in this Indenture shall include (1) a statement that the person making such
certificate or opinion has read such covenant or condition; (2) a brief
statement as to the nature and scope of the examination or investigation upon
which the statement or opinion contained in such certificate or opinion is
based; (3) a statement that, in the opinion of such person, 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 or not, in the opinion of such
person, such condition or covenant has been complied with.

SECTION 16.6. LEGAL HOLIDAYS. In any case where the date of maturity of interest
on or principal of the Notes or the date fixed for redemption of any Note will
not be a Business Day, then payment of such interest on or principal of the
Notes need not be made on such date, but may be made on the next succeeding
Business Day with the same force and effect as if made on the date of maturity
or the date fixed for redemption, and no interest shall accrue for the period
from and after such date.

SECTION 16.7. TRUST INDENTURE ACT. This Indenture is hereby made subject to, and
shall be governed by, the provisions of the Trust Indenture Act required to be
part of and to govern indentures qualified under the Trust Indenture Act;
provided, however, that, unless otherwise required by law, notwithstanding the
foregoing, this Indenture and the Notes issued hereunder shall not be subject to
the provisions of subsections (a)(1), (a)(2), and (a)(3) of Section 314 of the
Trust Indenture Act as now in effect or as hereafter amended or modified;
provided, further, that this Section 16.7 shall not require this Indenture or
the Trustee to be qualified under the Trust Indenture Act prior to the time such
qualification is in fact required under the terms of the Trust Indenture Act,
nor shall it constitute any admission or acknowledgment by any party to the
Indenture that any such qualification is required prior to the time such
qualification is in fact required under the terms of the Trust Indenture Act. If
any provision hereof limits, qualifies or conflicts with another provision
hereof which is required to be included in an indenture qualified under the
Trust Indenture Act, such required provision shall control.

SECTION 16.8. NO SECURITY INTEREST CREATED. Nothing in this Indenture or in the
Notes, expressed or implied, shall be construed to constitute a security
interest under the Uniform Commercial Code or similar legislation, as now or
hereafter enacted and in effect, in any jurisdiction where property of the
Company or its subsidiaries is located.

SECTION 16.9. BENEFITS OF INDENTURE. Nothing in this Indenture or in the Notes,
expressed or implied, shall give to any person, other than the parties hereto,
any paying agent, any authenticating

                                      -74-
<PAGE>

agent, any Note registrar and their successors hereunder, the holders of Notes
and the holders of Senior Debt, any benefit or any legal or equitable right,
remedy or claim under this Indenture.

SECTION 16.10.TABLE OF CONTENTS, HEADINGS, ETC. The table of contents and the
titles and headings of the articles and sections of this Indenture have been
inserted for convenience of reference only, are not to be considered a part
hereof, and shall in no way modify or restrict any of the terms or provisions
hereof.

SECTION 16.11.AUTHENTICATING AGENT. The Trustee may appoint an authenticating
agent which shall be authorized to act on its behalf and subject to its
direction in the authentication and delivery of Notes in connection with the
original issuance thereof and transfers and exchanges of Notes hereunder,
including under Sections 2.4, 2.5, 2.6, 2.7, 3.3 and 3.5, as fully to all
intents and purposes as though the authenticating agent had been expressly
authorized by this Indenture and those Sections to authenticate and deliver
Notes. For all purposes of this Indenture, the authentication and delivery of
Notes by the authenticating agent shall be deemed to be authentication and
delivery of such Notes "by the Trustee" and a certificate of authentication
executed on behalf of the Trustee by an authenticating agent shall be deemed to
satisfy any requirement hereunder or in the Notes for the Trustee's certificate
of authentication. Such authenticating agent shall at all times be a person
eligible to serve as trustee hereunder pursuant to Section 8.9.

        Any corporation into which any authenticating agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, consolidation or conversion to which any authenticating agent
shall be a party, or any corporation succeeding to the corporate trust business
of any authenticating agent, shall be the successor of the authenticating agent
hereunder, if such successor corporation is otherwise eligible under this
Section 16.11, without the execution or filing of any paper or any further act
on the part of the parties hereto or the authenticating agent or such successor
corporation.

        Any authenticating agent may at any time resign by giving written notice
of resignation to the Trustee and to the Company. The Trustee may at any time
terminate the agency of any authenticating agent by giving written notice of
termination to such authenticating agent and to the Company. Upon receiving such
a notice of resignation or upon such a termination, or in case at any time any
authenticating agent shall cease to be eligible under this Section, the Trustee
shall either promptly appoint a successor authenticating agent or itself assume
the duties and obligations of the former authenticating agent under this
Indenture, and upon such appointment of a successor authenticating agent, if
made, shall give written notice of such appointment of a successor
authenticating agent to the Company and shall mail notice of such appointment of
a successor authenticating agent to all holders of Notes as the names and
addresses of such holders appear on the Note register.

        The Trustee agrees to pay to the authenticating agent from time to time
reasonable compensation for its services (to the extent pre-approved by the
Company in writing), and the

                                      -75-
<PAGE>

Trustee shall be entitled to be reimbursed by the Company for such pre-approved
payments, subject to Section 8.6.

        The provisions of Sections 8.2, 8.3, 8.4, 9.3 and this Section 16.11
shall be applicable to any authenticating agent.

SECTION 16.12. EXECUTION IN COUNTERPARTS. This Indenture may be executed in any
number of counterparts, each of which shall be an original, but such
counterparts shall together constitute but one and the same instrument.

        State Street Bank and Trust Company of California, N.A., hereby accepts
the trusts in this Indenture declared and provided, upon the terms and
conditions hereinabove set forth.

                                      -76-
<PAGE>

        IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed.

                                             LSI LOGIC CORPORATION

                                             By:  /s/ Bryon Look
                                                --------------------------------
                                                Name:  Bryon Look
                                                Title: Executive Vice President
                                                       & CEO

                                             STATE STREET BANK AND TRUST COMPANY
                                             OF CALIFORNIA, N.A.
                                             as Trustee

                                             By:  /s/ Joni D'Amico
                                                --------------------------------
                                                Name:  Joni D'Amico
                                                Title: Vice President

<PAGE>

                                    EXHIBIT A

        [For Global Note only:

        UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) (THE
"DEPOSITORY," WHICH TERM INCLUDES ANY SUCCESSOR DEPOSITARY FOR THE CERTIFICATES)
TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH
OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY AND
ANY PAYMENT HEREON IS MADE TO CEDE & CO. (OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY), 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.]

        THE NOTE EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE 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
ACQUISITION HEREOF, THE HOLDER: (1) REPRESENTS THAT IT IS A "QUALIFIED
INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT OF 1933 OR
AN INSTITUTIONAL ACCREDITED INVESTOR WITHIN THE MEANING OF RULE 501(A)(1), (2),
(3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT; (2) AGREES THAT IT WILL NOT
WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THIS NOTE RESELL OR OTHERWISE
TRANSFER THE NOTE EVIDENCED HEREBY OR THE COMMON STOCK ISSUABLE UPON CONVERSION
OF SUCH SECURITY EXCEPT (A) TO LSI LOGIC CORPORATION OR ANY SUBSIDIARY THEREOF,
(B) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE
SECURITIES ACT OF 1933, (C) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED
BY RULE 144 UNDER THE SECURITIES ACT OF 1933 (IF AVAILABLE), (D) TO AN
INSTITUTIONAL INVESTOR THAT IS AN ACCREDITED INVESTOR WITHIN THE MEANING OF RULE
501(A)(1) , (2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT PURSUANT TO
AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT (IF AVAILABLE), (E)
PURSUANT TO AND IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT, OR (F)
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(C) OR 2(F)
ABOVE) A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.

                                      A-1
<PAGE>

                              LSI LOGIC CORPORATION

                  4.00% CONVERTIBLE SUBORDINATED NOTE DUE 2006

No: _______                                                     CUSIP: _________

        LSI LOGIC CORPORATION, a corporation duly organized and validly existing
under the laws of the State of Delaware (herein called the "Company"), which
term includes any successor corporation under the Indenture referred to on the
reverse hereof, for value received hereby promises to pay to ___________ or
registered assigns, the principal sum of _____________ ($__________) (which
principal amount may from time to time be increased or decreased to such other
principal amounts (which, taken together with the principal amounts of all other
outstanding Notes, shall not exceed $450,000,000 in the aggregate at any time,
unless the Purchaser exercises its option to purchase additional notes, in which
case the principal amount of the outstanding Notes shall not exceed
$517,500,000) by adjustments made on the records of the Trustee hereinafter
referred to in accordance with the Indenture) on November 1, 2006, at the office
or agency of the Company maintained for that purpose in accordance with the
terms of the Indenture, or, at the option of the holder of this Note, at the
Corporate Trust Office, in such coin or currency of the United States of America
as at the time of payment shall be legal tender for the payment of public and
private debts, and to pay interest, semi-annually on May 1 and November 1, of
each year, commencing May 1, 2002, on said principal sum at said office or
agency, in like coin or currency, at the rate per annum of 4.00% from October
30, 2001 and thereafter to maturity from the May 1 or November 1, as the case
may be, next preceding the date of this Note to which interest has been paid or
duly provided for, unless the date hereof is a date to which interest has been
paid or duly provided for, in which case from the date of this Note, or unless
no interest has been paid or duly provided for on the Notes, in which case from
October 30, 2001, until payment of said principal sum has been made or duly
provided for. Notwithstanding the foregoing, if the date hereof is after any May
1 or November 1, as the case may be, and before the next following May 1 or
November 1, this Note shall bear interest from such May 1 or November 1;
provided, however, that if the Company shall default in the payment of interest
due on such May 1 or November 1, then this Note shall bear interest from the
next preceding May 1 or November 1, to which interest has been paid or duly
provided for or, if no interest has been paid or duly provided for on such Note,
from October 30, 2001. The interest payable on the Note pursuant to the
Indenture on any May 1 or November 1 will be paid to the person entitled thereto
as it appears in the Note register at the close of business on the record date,
which shall be the April 15 or October 15 (whether or not a Business Day) next
preceding such May 1 or November 1, as provided in the Indenture; provided that
any such interest not punctually paid or duly provided for shall be payable as
provided in the Indenture. Interest may, at the option of the Company, be paid
either (i) by check mailed to the registered address of such person (provided
that the holder of Notes with an aggregate principal amount in excess of
$10,000,000 shall, at the written election of such holder, be paid by wire
transfer in immediately available funds) or (ii) by transfer to an account
maintained by such person located in the United States.

                                      A-2
<PAGE>

        Reference is made to the further provisions of this Note set forth on
the reverse hereof, including, without limitation, provisions subordinating the
payment of principal of and premium, if any, and interest on the Notes to the
prior payment in full of all Senior Debt, as defined in the Indenture, and
provisions giving the holder of this Note the right to convert this Note into
Common Stock of the Company on the terms and subject to the limitations referred
to on the reverse hereof and as more fully specified in the Indenture. Such
further provisions shall for all purposes have the same effect as though fully
set forth at this place.

        This Note shall not be valid or become obligatory for any purpose until
the certificate of authentication hereon shall have been manually signed by the
Trustee or a duly authorized authenticating agent under the Indenture.

<PAGE>

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

                                             LSI LOGIC CORPORATION

                                             By:
                                                --------------------------------
                                                Name:
                                                Title:

                                             Attest:
                                                    ----------------------------
                                                    Name:
                                                    Title:

Dated:  October 30, 2001

TRUSTEE'S CERTIFICATE OF AUTHENTICATION

This is one of the Notes described in the within-named Indenture.

STATE STREET BANK AND TRUST COMPANY
OF CALIFORNIA, N.A.
as Trustee

By:
   -------------------------------
      Authorized Signatory

<PAGE>

                                 REVERSE OF NOTE

                              LSI LOGIC CORPORATION

                  4.00% CONVERTIBLE SUBORDINATED NOTE DUE 2006

        This Note is one of a duly authorized issue of Notes of the Company,
designated as its 4.00% Convertible Subordinated Notes due 2006 (herein called
the "Notes"), limited to the aggregate principal amount of $450,000,000
($517,500,000 if the Purchaser exercises in full its option to purchase
additional Notes) issued and to be issued under and pursuant to an indenture
dated as of October 30, 2001 (herein called the "Indenture"), between the
Company and State Street Bank and Trust Company of California, N.A., as trustee
(herein called the "Trustee"), to which Indenture and all indentures
supplemental thereto reference is hereby made for a description of the rights,
limitations of rights, obligations, duties and immunities thereunder of the
Trustee, the Company and the holders of the Notes.

        In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of, premium, if any, and accrued
interest (including Additional Interest, if any) on all Notes may be declared,
and upon said declaration shall become, due and payable, in the manner, with the
effect and subject to the conditions provided in the Indenture.

        The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the holders of not less than a majority in
aggregate principal amount of the Notes at the time outstanding, evidenced as in
the Indenture provided, to execute supplemental indentures adding any provisions
to or changing in any manner or eliminating any of the provisions of the
Indenture or of any supplemental indenture or modifying in any manner the rights
of the holders of the Notes; provided, however, that no such supplemental
indenture shall (i) extend the fixed maturity of any Note, or reduce the rate or
extend the time of payment of interest thereon, or reduce the principal amount
thereof or premium, if any, thereon, or reduce any amount payable on redemption
thereof, or impair the right of any Noteholder to institute suit for the payment
thereof, or make the principal thereof or interest or premium, if any, thereon
payable in any coin or currency other than that provided in the Note, or modify
the provisions of the Indenture with respect to the subordination of the Notes
in a manner adverse to the Noteholders in any material respect, or change the
obligation of the Company to repurchase any Note upon the happening of a
Fundamental Change in a manner adverse to the holder of the Notes, or impair the
right to convert the Notes into Common Stock subject to the terms set forth in
the Indenture, including Section 15.6 thereof, without the consent of the holder
of each Note so affected or (ii) reduce the aforesaid percentage of Notes, the
holders of which are required to consent to any such supplemental indenture,
without the consent of the holders of all Notes then outstanding. It is also
provided in the Indenture that, prior to any declaration accelerating the
maturity of the Notes, the holders of a majority in aggregate principal amount
of the Notes at the time outstanding may on behalf of the holders of all of the
Notes waive any past default or Event of Default under the Indenture and its
consequences except a default in the payment of interest (including Additional
Interest, if any) or any premium on or the principal of any of the Notes,

<PAGE>

a default in the payment of redemption or repurchase price pursuant to Article
III or a failure by the Company to convert any Notes into Common Stock of the
Company. Any such consent or waiver by the holder of this Note (unless revoked
as provided in the Indenture) shall be conclusive and binding upon such holder
and upon all future holders and owners of this Note and any Notes which may be
issued in exchange or substitute hereof, irrespective of whether or not any
notation thereof is made upon this Note or such other Notes.

        The indebtedness evidenced by the Notes is, to the extent and in the
manner provided in the Indenture, expressly subordinate and subject in right of
payment to the prior payment in full of all Senior Debt of the Company, as
defined in the Indenture, whether outstanding at the date of the Indenture or
thereafter incurred, and this Note is issued subject to the provisions of the
Indenture with respect to such subordination. Each holder of this Note, by
accepting the same, agrees to and shall be bound by such provisions and
authorizes the Trustee on its behalf to take such action as may be necessary or
appropriate to effectuate the subordination so provided and appoints the Trustee
his attorney-in-fact for such purpose.

        No reference herein to the Indenture and no provision of this Note or of
the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and any premium, if any, and
interest (including Additional Interest, if any) on this Note at the place, at
the respective times, at the rate and in the coin or currency herein prescribed.

        Interest on the Notes shall be computed on the basis of a 360-day year
of twelve 30-day months.

        The Notes are issuable in registered form without coupons in
denominations of $1,000 and any integral multiple of $1,000. At the office or
agency of the Company referred to on the face hereof, and in the manner and
subject to the limitations provided in the Indenture, without payment of any
service charge but with payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any registration or
exchange of Notes, Notes may be exchanged for a like aggregate principal amount
of Notes of other authorized denominations.

        The Notes will not be redeemable at the option of the Company prior to
November 6, 2004. At any time on or after November 6, 2004, and prior to
maturity, the Notes may be redeemed at the option of the Company as a whole, or
from time to time in part, upon mailing a notice of such redemption not less
than 30 days before the date fixed for redemption to the holders of Notes at
their last registered addresses, all as provided in the Indenture, at the
following optional redemption prices (expressed as percentages of the principal
amount), together in each case with accrued but unpaid interest (including
Additional Interest, if any) to, but excluding, the date fixed for redemption:

        If redeemed during the period beginning November 6, 2004 and ending on
October 31, 2005, at a redemption price of 101.6%, 100.8% if redeemed during the
12-month period beginning November 1, 2005, and 100% at November 1, 2006;
provided that if the date fixed for redemption is on May 1 or November 1, then
the interest payable on such date shall be paid to the holder of record on the
next preceding April 15 or October 15, respectively.

<PAGE>

        The Notes are not subject to redemption through the operation of any
sinking fund.

        If a Fundamental Change (as defined in the Indenture) occurs at any time
prior to the final maturity date of the Notes, the Notes will be redeemable on
the 30th day after notice thereof at the option of the holder. Such repayment
shall be made at a price equal to 100% of the principal amount to be
repurchased. The Company shall also pay accrued but unpaid interest, if any
(including Additional Interest, if any) on such Notes to, but excluding, the
Repurchase Date; provided that if such Repurchase Date is May 1 or November 1,
then the interest payable on such date shall be paid to the holder of record of
the Note on the next preceding April 15 or October 15. The Company shall mail to
all holders of record of the Notes a notice of the occurrence of a Fundamental
Change and of the repurchase right arising as a result thereof on or before the
10th day after the occurrence of such Fundamental Change. For a Note to be so
repurchased at the option of the holder, the Company must receive at the office
or agency of the Company maintained for that purpose in accordance with the
terms of the Indenture, such Note with the form entitled "Option to Elect
Repayment Upon a Fundamental Change" on the reverse thereof duly completed,
together with such Notes duly endorsed for transfer, on or before the 30th day
after the date of such notice (or if such 30th day is not a Business Day, the
immediately preceding Business Day).

        Subject to the provisions of the Indenture, the holder hereof has the
right, at its option, at any time after the date of original issuance hereof
through the close of business on the final maturity date of this Note, or, as to
all or any portion hereof called for redemption, prior to the close of business
on the Business Day immediately preceding the date fixed for redemption (unless
the Company shall default in payment due upon redemption thereof), to convert
the principal hereof or any portion of such principal which is $1,000 or an
integral multiple thereof into that number of shares of the Company's Common
Stock, as said shares shall be constituted at the date of conversion, obtained
by dividing the principal amount of this Note or portion thereof to be converted
by the Conversion Price of $26.339 or such Conversion Price as adjusted from
time to time as provided in the Indenture, upon surrender of this Note, together
with a conversion notice as provided in the Indenture, to the Company at the
office or agency of the Company maintained for that purpose in accordance with
the terms of the Indenture, or at the option of such holder, the Corporate Trust
Office, and, unless the shares issuable on conversion are to be issued in the
same name as this Note, duly endorsed by, or accompanied by instruments of
transfer in form satisfactory to the Company duly executed by, the holder or by
his duly authorized attorney. No adjustment in respect of interest or dividends
will be made upon any conversion; provided, however, that if this Note shall be
surrendered for conversion during the period from the close of business on any
record date for the payment of interest to the close of business on the Business
Day next preceding the interest payment date, this Note (unless it or the
portion being converted shall have been called for redemption) must be
accompanied by an amount, in New York Clearing House funds or other funds
acceptable to the Company, equal to the interest payable on such interest
payment date on the principal amount being converted. No fractional shares will
be issued upon any conversion, but an adjustment in cash will be made, as
provided in the Indenture, in respect of any fraction of a share which would
otherwise be issuable upon the surrender of any Note or Notes for conversion.

<PAGE>

        Any Notes called for redemption, unless surrendered for conversion on or
before the close of business on the business day preceding the date fixed for
redemption, may be deemed to be purchased from the holder of such Notes at an
amount equal to the applicable redemption price, together with accrued but
unpaid interest (including Additional Interest, if any) to (but excluding) the
date fixed for redemption, by one or more investment bankers or other purchasers
who may agree with the Company to purchase such Notes from the holders thereof
and convert them into Common Stock of the Company and to make payment for such
Notes as aforesaid to the Trustee in trust for such holders.

        Upon due presentment for registration of transfer of this Note at the
office or agency of the Company maintained for that purpose in accordance with
the terms of the Indenture, or at the option of the holder of this Note, at the
Corporate Trust Office, a new Note or Notes of authorized denominations for an
equal aggregate principal amount will be issued to the transferee in exchange
thereof; subject to the limitations provided in the Indenture, without charge
except for any tax or other governmental charge imposed in connection therewith.

        The Company, the Trustee, any authenticating agent, any paying agent,
any conversion agent and any Note registrar may deem and treat the registered
holder hereof as the absolute owner of this Note (whether or not this Note shall
be overdue and notwithstanding any notation of ownership or other writing hereon
made by anyone other than the Company or any Note registrar), for the purpose of
receiving payment hereof, or on account hereof, for the conversion hereof and
for all other purposes, and neither the Company nor the Trustee nor any other
authenticating agent nor any paying agent nor any other conversion agent nor any
Note registrar shall be affected by any notice to the contrary. All payments
made to or upon the order of such registered holder shall, to the extent of the
sum or sums paid, satisfy and discharge liability for monies payable on this
Note.

        No recourse for the payment of the principal of or any premium or
interest on this Note, or for any claim based hereon or otherwise in respect
hereof; and no recourse under or upon any obligation, covenant or agreement of
the Company in the Indenture or any indenture supplemental thereto or in any
Note, or because of the creation of any indebtedness represented thereby, shall
be had against any incorporator, stockholder, employee, agent, officer or
director or subsidiary, as such, past, present or future, of the Company or of
any successor corporation, either directly or through the Company or 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 hereof and as part of the consideration for
the issue hereof, expressly waived and released.

        This Note shall be deemed to be a contract made under the laws of New
York, and for all purposes shall be construed in accordance with the laws of New
York.

        The holders of this Note are entitled to the benefits of a Registration
Rights Agreement, dated as of October 30, 2001, between the Company and the
Purchaser.

        Terms used in this Note and defined in the Indenture are used herein as
therein defined.

<PAGE>

                                  ABBREVIATIONS

        The following abbreviations, when used in the inscription of the face of
this Note, shall be construed as though they were written out in full according
to applicable laws or regulations:

TEN COM - as tenants in common  UNIF GIFT MIN ACT--___________ Custodian
TEN ENT - as tenant by the      ____________
entireties                                         (Cust)
JT TEN - as joint tenants with  (Minor)
         right of survivorship  under Uniform Gifts to Minors Act
         and not as tenants in  _________________________________________
         common                                    (State)

                    Additional abbreviations may also be used
                          though not in the above list.

<PAGE>

                                CONVERSION NOTICE

To: LSI Logic Corporation

        The undersigned registered owner of this Note hereby irrevocably
exercises the option to convert this Note, or the portion hereof (which is
$1,000 or an integral multiple thereof) below designated, into shares of Common
Stock of LSI Logic Corporation in accordance with the terms of the Indenture
referred to in this Note, and directs that the shares issuable and deliverable
upon such conversion, together with any check in payment for fractional shares
and any Notes 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 Note not converted are to be
issued in the name of a person other than the undersigned, the undersigned will
check the appropriate box below and pay all transfer taxes payable with respect
thereto. Any amount required to be paid to the undersigned on account of
interest accompanies this Note.

        Dated: ________________

                                          --------------------------------------

                                          --------------------------------------
                                          Signature(s)

                                          Signature(s) must be guaranteed by a
                                          commercial bank or trust company or a
                                          member firm of a major stock exchange
                                          if shares of Common Stock are to be
                                          issued, or Notes to be delivered,
                                          other than to and in the name of the
                                          registered holder.

                                          --------------------------------------
                                          Signature Guarantee

<PAGE>

Fill in for registration of shares of Common Stock if to be issued, and Notes if
to be delivered, other than to and in the name of the registered holder:

--------------------------------------
 (Name)

--------------------------------------
 (Street Address)

--------------------------------------
 (City, State and Zip Code)

Please print name and address

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

Social Security or Other Taxpayer
Identification Number______________

<PAGE>

                           OPTION TO ELECT REPURCHASE
                            UPON A FUNDAMENTAL CHANGE

TO: LSI LOGIC CORPORATION

        The undersigned registered owner of this Note hereby irrevocably
acknowledges receipt of a notice from LSI Logic Corporation (the "Company") as
to the occurrence of a Fundamental Change with respect to the Company and
requests and instructs the Company to repay the entire principal amount of this
Note, or the portion thereof (which is $1,000 or an integral multiple thereof)
below designated, in accordance with the terms of the Indenture referred to in
this Note at the price of 100% of such entire principal amount or portion
thereof, together with accrued but unpaid interest to, but excluding, such date,
to the registered holder hereof.

Dated:___________________              _________________________________________

                                       _________________________________________
                                       Signature(s)

                                       NOTICE: The above signatures of the
                                       holder(s) hereof must correspond with the
                                       name as written upon the face of the Note
                                       in every particular without alteration or
                                       enlargement or any change whatever.

                                       Principal amount to be redeemed (if less
                                       than all):

                                              $_________

                                       _________________________________________
                                       Social Security or Other Taxpayer
                                       Identification Number

<PAGE>

                                   ASSIGNMENT

        For value received ______________________________ hereby sell(s),
assign(s) and transfer(s) unto ______________________________ (Please insert
social security or other Taxpayer Identification Number of assignee) the within
Note, and hereby irrevocably constitutes and appoints _________________________
attorney to transfer the said Note on the books of the Company, with full power
of substitution in the premises.

        In connection with any transfer of the Note within the period prior to
the expiration of the holding period applicable to sales thereof under Rule
144(k) under the Securities Act (or any successor provision) (other than any
transfer pursuant to a registration statement that has been declared effective
under the Securities Act), the undersigned confirms that such Note is being
transferred:

        [ ]   To LSI Logic Corporation or a subsidiary thereof, or

        [ ]   Pursuant to and in compliance with Rule 144A under the Securities
Act of 1933, as amended; or

        [ ]   To an Institutional Accredited Investor pursuant to and in
compliance with the Securities Act of 1933, as amended;

        [ ]   Pursuant to and in compliance with Rule 144 under the Securities
Act of 1933, as amended; or

        [ ]   Pursuant to and in compliance with Regulation S under the
Securities Act of 1933, as amended;

and unless the box below is checked, the undersigned confirms that such Note is
not being transferred to an "affiliate" of the Company as defined in Rule 144
under the Securities Act of 1933, as amended (an "Affiliate").

        [ ]   The transferee is an Affiliate of the Company.

Dated:___________                   ____________________________________________

                                    ____________________________________________
                                    Signature(s)

                                    Signature(s) must be guaranteed by a
                                    commercial bank or trust company or a member
                                    firm of a major stock exchange if shares

<PAGE>

                                    of Common Stock are to be issued, or Notes
                                    to be delivered, other than to or in the
                                    name of the registered holder.

                                    ____________________________________________
                                    Signature Guarantee

NOTICE: The signature on the conversion notice, the option to elect repayment
upon a Fundamental Change or the assignment must correspond with the name as
written upon the face of the Note in every particular without alteration or
enlargement or any change whatever.

<PAGE>

                                    EXHIBIT B

LSI Logic Corporation
1551 McCarthy Boulevard
Milpitas, California 95035

State Street Bank and Trust Company
of California, N.A.
633 West 5th Street
12th Floor
Los Angeles, CA 90071
Attn:  Corporate Trust Department

Ladies/Gentlemen:

        We are delivering this letter in connection with an offering by LSI
Logic Corporation of 4.00% Convertible Subordinated Notes due 2006 (the "Notes),
which are convertible into shares of Common Stock, $.01 par value (the "Common
Stock"), all as described in the Offering Memorandum (the "Offering Memorandum")
relating to the offering.

        We hereby confirm that:

        1. we are an "accredited investor" within the meaning of Rule 501(a)(1),
(2) or (3) under the Securities Act of 1933, as amended (the "Securities Act"),
or an entity in which all of the equity owners are accredited investors within
the meaning of Rule 501(a)(1), (2) or (3) under the Securities Act (an
"Institutional Accredited Investor");

        2. (A) any purchase of Notes by us will be for our own account or for
the account of one or more other Institutional Accredited Investors or as
fiduciary for the account of one or more trusts, each of which is an "accredited
investor" within the meaning of Rule 501(a)(7) under the Securities Act and for
each of which we exercise sole investment discretion or (B) we are a "bank,"
within the meaning of Section 3(a)(2) of the Securities Act, or a "savings and
loan association" or other institution described in Section 3(a)(5)(A) of the
Securities Act that is acquiring Notes as fiduciary for the account of one or
more institutions for which we exercise sole investment discretion;

        3. in the event that we purchase any Notes, we will acquire Notes having
a minimum principal amount of not less than $200,000 for our own account or for
any separate account for which we are acting;

        4. we have such knowledge and experience in financial and business
matters that we are capable of evaluating the merits and risks of purchasing
Notes;

        5. we are not acquiring Notes with a view to distribution thereof or
with any present intention of offering or selling Notes or the Common Stock
issuable upon conversion thereof, except

                                      B-1
<PAGE>

as permitted below; provided that the disposition of our property and property
of any accounts for which we are acting as fiduciary shall remain at all times
within our control; and

        6. we have received a copy of the Offering Memorandum and acknowledge
that we have had access to such financial and other information, and have been
afforded the opportunity to ask such questions of representatives of the Company
and receive answers thereto, as we deem necessary in connection with our
decision to purchase Notes.

        We understand that the Notes are being offered in a transaction not
involving any public offering within the United States within the meaning of the
Securities Act and that the Notes and the Common Stock issuable upon conversion
thereof have not been registered under the Securities Act, and we agree, on our
own behalf and on behalf of each account for which we acquire any Notes, that if
in the future we decide to resell or otherwise transfer such Notes or the Common
Stock issuable upon conversion thereof, such Notes or Common Stock may be resold
or otherwise transferred only (i) to the Company or any subsidiary thereof, (ii)
to a person who is a "qualified institutional buyer" (as defined in Rule 144A
under the Securities Act) in a transaction meeting the requirements of Rule
144A, (iii) to an Institutional Accredited Investor that, prior to such
transfer, furnishes to the Trustee for the Notes (or in the case of Common
Stock, the transfer agent therefor) a signed letter containing certain
representations and agreements relating to the restrictions on transfer of such
securities (the form of which letter can be obtained from the Trustee or
transfer agent, as the case may be), (iv) pursuant to the exemption from
registration provided by Rule 144 under the Securities Act (if applicable), (v)
pursuant to and in compliance with Regulation S under the Securities Act, or
(vi) 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 in each case, in accordance with any applicable securities
laws of any State of the United States or any other applicable jurisdiction and
in accordance with the legends set forth on the Notes or the Common Stock
issuable upon conversion thereof. We further agree to provide any person
purchasing any of the Notes or the Common Stock issuable upon conversion thereof
(other than pursuant to clause (vi) above) from us a notice advising such
purchaser that resales of such securities are restricted as stated herein. We
understand that the Trustee or transfer agent for the Notes and the Common Stock
will not be required to accept for registration of transfer any Notes or Common
Stock issued upon conversion of the Notes except upon presentation of evidence
satisfactory to the Company that the foregoing restrictions on transfer have
been complied with. We further understand that certificates representing any
Notes (or any Note in global form) and any Common Stock issued upon conversion
of the Notes (other than pursuant to clause (vi) above) will bear a legend
reflecting the substance of this paragraph.

        We acknowledge that the Company, others and you will rely upon our
confirmations, acknowledgments and agreements set forth herein, and we agree to
notify you promptly in writing if any of our representations or warranties
herein ceases to be accurate and complete.

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

                                      B-2
<PAGE>

                                             ___________________________________
                                             (Name of Purchaser)

                                             By:________________________________
                                             Name:______________________________
                                             Title:_____________________________
                                             Address:___________________________
                                             ___________________________________
                                             ___________________________________

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