Document:

exv4w1

 

EXHIBIT 4.1

 

 

 

SLM CORPORATION

Floating Rate Convertible

Senior Debentures due 2035

INDENTURE

 

Dated as of May 20, 2003

JPMORGAN CHASE BANK

TRUSTEE

 

 

 

 

EXHIBIT 4.1

SLM CORPORATION

CROSS REFERENCE SHEET*

THIS CROSS REFERENCE SHEET SHOWS THE LOCATION IN THE INDENTURE OF THE
PROVISIONS INSERTED PURSUANT TO SECTION 310-318(a), INCLUSIVE, OF THE TIA.

	 	 	 	 	 
	 	 	 	Sections of
	TRUST INDENTURE ACT	 	 	Indenture
	
	 	 	

	310(a)(1)(2)	 	 	
5.09	 
	
	
	
	

	(3)(4)	 	 	
Inapplicable	 
	
	
	
	

	(5)	 	 	
5.09	 
	
	
	
	

	(b)	 	 	
5.07 and 5.09	 
	
	
	
	

	(b)(1)(A)(C)	 	 	
Inapplicable	 
	
	
	
	

	(c)	 	 	
Inapplicable	 
	
	
	
	

	311(a)(b)	 	 	
5.10	 
	
	
	
	

	(c)	 	 	
Inapplicable	 
	
	
	
	

	313(a)	 	 	
6.03	 
	
	
	
	

	(b)(1)	 	 	
Inapplicable	 
	
	
	
	

	(2)	 	 	
6.03	 
	
	
	
	

	(c)	 	 	
17.03	 
	
	
	
	

	(d)	 	 	
6.03	 
	
	
	
	

	314(a)	 	 	6.04, 0 and 17.03	 
	
	
	
	

	(b)	 	 	
Inapplicable	 
	
	
	
	

	(c)(1)(2)	 	 	
1.02	 
	
	
	
	

	(3)	 	 	
Inapplicable	 
	
	
	
	

	(d)	 	 	
Inapplicable	 
	
	
	
	

	(e)	 	 	
1.02	 
	
	
	
	

	315(a)(b)(d)	 	 	
5.01	 
	
	
	
	

	(b)	 	 	
5.05	 
	
	
	
	

	(e)	 	 	
4.14	 
	
	
	
	

	316(a)(1)	 	 	
4.12 and 4.13	 
	
	
	
	

	(2)	 	 	
Inapplicable	 
	
	
	
	

	(b)	 	 	
4.08	 
	
	
	
	

	(c)	 	 	
1.04(e)	 
	
	
	
	

	317(a)	 	 	
4.03 and 4.04	 
	
	
	
	

	(b)	 	 	
9.03	 
	
	
	
	

	318(a)(c)	 	 	
1.04(e)	 
	
	
	
	

	(b)	 	 	
Inapplicable	 

	*	 	The Cross Reference Sheet is not part of the Indenture.

 

 

TABLE OF CONTENTS

ARTICLE 1

Definitions And Other Provisions of General Application

	 	 	 	 	 	 	 
	Section 1.01.	 	
Certain Terms Defined
	 	 	1	 
	
	
	
	

	Section 1.02.	 	
Compliance Certificates and Opinions
	 	 	9	 
	
	
	
	

	Section 1.03.	 	
Forms of Documents Delivered to Trustee
	 	 	9	 
	
	
	
	

	Section 1.04.	 	
Acts of Holder
	 	 	10	 
	
	
	
	

	Section 1.05.	 	
Conflict with Trust Indenture Act of 1939
	 	 	11	 
	
	
	
	

	Section 1.06.	 	
Effect of Headings and Table of Contents
	 	 	11	 
	
	
	
	

	Section 1.07.	 	
Separability Clause
	 	 	11	 
	
	
	
	

	Section 1.08.	 	
Benefits of Indenture
	 	 	11	 
	
	
	
	

	Section 1.09.	 	
Legal Holidays
	 	 	11	 

ARTICLE 2

The Securities

	 	 	 	 	 	 	 
	Section 2.01.	 	
Form and Dating
	 	 	11	 
	
	
	
	

	Section 2.02.	 	
Execution and Authentication
	 	 	12	 
	
	
	
	

	Section 2.03.	 	
Registrar, Paying Agent, Conversion Agent and Calculation Agent
	 	 	13	 
	
	
	
	

	Section 2.04.	 	
Paying Agent to Hold Money and Securities in Trust
	 	 	13	 
	
	
	
	

	Section 2.05.	 	
Transfer and Exchange
	 	 	14	 
	
	
	
	

	Section 2.06.	 	
Replacement Securities
	 	 	15	 
	
	
	
	

	Section 2.07.	 	
Outstanding Securities; Determinations of Holders’ Actions
	 	 	16	 
	
	
	
	

	Section 2.08.	 	
Temporary Securities
	 	 	16	 
	
	
	
	

	Section 2.09.	 	
Cancellation
	 	 	17	 
	
	
	
	

	Section 2.10.	 	
Persons Deemed Owners
	 	 	17	 
	
	
	
	

	Section 2.11.	 	
Global Securities
	 	 	17	 
	
	
	
	

	Section 2.12.	 	
Legends
	 	 	18	 
	
	
	
	

	Section 2.13.	 	
Payment of Interest; Interest Rights Preserved
	 	 	19	 
	
	
	
	

	Section 2.14.	 	
CUSIP Numbers
	 	 	21	 
	
	
	
	

	Section 2.15.	 	
Calculation of Tax Original Issue Discount
	 	 	21	 
	
	
	
	

	Section 2.16.	 	
Tax Confidentiality Waiver
	 	 	21	 

ARTICLE 3

Satisfaction and Discharge

	 	 	 	 	 	 	 
	Section 3.01.	 	
Discharge of Liability on Securities
	 	 	22	 
	
	
	
	

	Section 3.02.	 	
Repayment of Moneys Held by Trustee
	 	 	22	 

ARTICLE 4

Remedies

	 	 	 	 	 	 	 
	Section 4.01.	 	
Events of Default
	 	 	22	 
	
	
	
	

	Section 4.02.	 	
Acceleration of Maturity; Rescission and Annulment
	 	 	23	 

i

 

	 	 	 	 	 	 	 
	
	
	
	

	Section 4.03.	 	
Collection of Indebtedness and Suits for Enforcement by
Trustee
	 	 	25	 
	
	
	
	

	Section 4.04.	 	
Trustee May File Proofs of Claim
	 	 	25	 
	
	
	
	

	Section 4.05.	 	
Trustee May Enforce Claims Without Possession of Securities
	 	 	26	 
	
	
	
	

	Section 4.06.	 	
Application of Money Collected
	 	 	26	 
	
	
	
	

	Section 4.07.	 	
Limitation on Suits
	 	 	26	 
	
	
	
	

	Section 4.08.	 	
Unconditional Right of Holders to Receive Principal and
Interest
	 	 	27	 
	
	
	
	

	Section 4.09.	 	
Restoration of Right and Remedies
	 	 	27	 
	
	
	
	

	Section 4.10.	 	
Rights and Remedies Cumulative
	 	 	27	 
	
	
	
	

	Section 4.11.	 	
Delay or Omission Not Waiver
	 	 	28	 
	
	
	
	

	Section 4.12.	 	
Control by Holders
	 	 	28	 
	
	
	
	

	Section 4.13.	 	
Waiver of Past Defaults
	 	 	28	 
	
	
	
	

	Section 4.14.	 	
Undertaking for Costs
	 	 	28	 
	
	
	
	

	Section 4.15.	 	
Waiver of Stay or Extension Laws
	 	 	29	 

ARTICLE 5

The Trustee

	 	 	 	 	 	 	 
	Section 5.01.	 	
Duties of Trustee
	 	 	29	 
	
	
	
	

	Section 5.02.	 	
Rights of Trustee
	 	 	30	 
	
	
	
	

	Section 5.03.	 	
Individual Rights of Trustee
	 	 	32	 
	
	
	
	

	Section 5.04.	 	
Trustee’s Disclaimer
	 	 	32	 
	
	
	
	

	Section 5.05.	 	
Notice of Defaults
	 	 	32	 
	
	
	
	

	Section 5.06.	 	
Compensation and Indemnity
	 	 	32	 
	
	
	
	

	Section 5.07.	 	
Replacement of Trustee
	 	 	33	 
	
	
	
	

	Section 5.08.	 	
Successor Trustee by Merger
	 	 	34	 
	
	
	
	

	Section 5.09.	 	
Eligibility; Disqualification
	 	 	34	 
	
	
	
	

	Section 5.10.	 	
Preferential Collection of Claims Against Company
	 	 	34	 
	
	
	
	

	Section 5.11.	 	
Authenticating Agent
	 	 	34	 

ARTICLE 6

Holders’ Lists and Reports by Trustee and Company

	 	 	 	 	 	 	 
	Section 6.01.	 	
Company to Furnish Trustee Information as to Names and
Addresses of Holders
	 	 	35	 
	
	
	
	

	Section 6.02.	 	
Preservation of Information; Communications to Holders
	 	 	36	 
	
	
	
	

	Section 6.03.	 	
Reports by Trustee
	 	 	37	 
	
	
	
	

	Section 6.04.	 	
Reports by Company
	 	 	37	 

ARTICLE 7

Consolidation, Merger, Sale or Conveyance

	 	 	 	 	 	 	 
	Section 7.01.	 	
Consolidations and Mergers of Company Permitted Subject to
Certain Conditions
	 	 	38	 
	
	
	
	

	Section 7.02.	 	
Rights and Duties of Successor Entity
	 	 	38	 

ii

 

ARTICLE 8

Supplemental Indentures

	 	 	 	 	 	 	 
	Section 8.01.	 	
Supplemental Indentures Without Consent of Holder
	 	 	38	 
	
	
	
	

	Section 8.02.	 	
Supplemental Indentures with Consent of Holders
	 	 	39	 
	
	
	
	

	Section 8.03.	 	
Execution of Supplemental Indentures
	 	 	41	 
	
	
	
	

	Section 8.04.	 	
Effect of Supplemental Indentures
	 	 	41	 
	
	
	
	

	Section 8.05.	 	
Reference in Securities to Supplemental Indentures
	 	 	41	 

ARTICLE 9

Covenants of the Company

	 	 	 	 	 	 	 
	Section 9.01.	 	
Payment of Principal, Premium and Interest
	 	 	41	 
	
	
	
	

	Section 9.02.	 	
Maintenance of Office or Agency
	 	 	42	 
	
	
	
	

	Section 9.03.	 	
Money for Securities Payments to Be Held in Trust
	 	 	42	 
	
	
	
	

	Section 9.04.	 	
Compliance Certificate
	 	 	43	 
	
	
	
	

	Section 9.05.	 	
Restrictions on Liens
	 	 	43	 
	
	
	
	

	Section 9.06.	 	
Calculation of Original Issue Discount
	 	 	44	 
	
	
	
	

	Section 9.07.	 	
Further Instruments and Acts
	 	 	44	 
	
	
	
	

	Section 9.08.	 	
Obligation to Conduct Remarketing
	 	 	44	 
	
	
	
	

	Section 9.09.	 	
Notice by Company of Satisfaction of Conditions Precedent
	 	 	44	 

ARTICLE 10

Redemption of Securities

	 	 	 	 	 	 	 
	Section 10.01.	 	
Right to Redeem; Notices to Trustee
	 	 	44	 
	
	
	
	

	Section 10.02.	 	
Selection of Securities to Be Redeemed
	 	 	45	 
	
	
	
	

	Section 10.03.	 	
Notice of Redemption
	 	 	45	 
	
	
	
	

	Section 10.04.	 	
Effect of Notice of Redemption
	 	 	46	 
	
	
	
	

	Section 10.05.	 	
Deposit of Redemption Price
	 	 	46	 
	
	
	
	

	Section 10.06.	 	
Securities Redeemed in Part
	 	 	46	 
	
	
	
	

	Section 10.07.	 	
Conversion Arrangement on Call for Redemption
	 	 	46	 

ARTICLE 11

Conversion

	 	 	 	 	 	 	 
	Section 11.01.	 	
Conversion Rights
	 	 	47	 
	
	
	
	

	Section 11.02.	 	
Conversion Rights Based on Common Stock Price
	 	 	48	 
	
	
	
	

	Section 11.03.	 	
Conversion Rights upon Credit Rating Events
	 	 	48	 
	
	
	
	

	Section 11.04.	 	
Conversion Rights upon Notice of Redemption
	 	 	48	 
	
	
	
	

	Section 11.05.	 	
Conversion Rights upon Occurrence of Certain Corporate
Transactions
	 	 	48	 
	
	
	
	

	Section 11.06.	 	
Conversion upon Satisfaction of Trading Price Condition
	 	 	48	 
	
	
	
	

	Section 11.07.	 	
Conversion Procedures
	 	 	50	 
	
	
	
	

	Section 11.08.	 	
Fractional Shares
	 	 	52	 
	
	
	
	

	Section 11.09.	 	
Taxes on Conversion
	 	 	52	 
	
	
	
	

	Section 11.10.	 	
Reservation of Shares, Shares to Be Fully Paid; Compliance
with Governmental Requirements; Listing of Common Stock
	 	 	52	 

iii

 

	 	 	 	 	 	 	 
	
	
	
	

	Section 11.11.	 	
Adjustment of Conversion Rate
	 	 	53	 
	
	
	
	

	Section 11.12.	 	
Adjustment for Tax Purposes
	 	 	62	 
	
	
	
	

	Section 11.13.	 	
Notice of Certain Transactions
	 	 	62	 
	
	
	
	

	Section 11.14.	 	
Effect of Reclassification, Consolidation, Merger or Sale on
Conversion Privilege
	 	 	62	 
	
	
	
	

	Section 11.15.	 	
Trustee’s Disclaimer
	 	 	63	 
	
	
	
	

	Section 11.16.	 	
Rights Issued in Respect of Common Stock Issued upon
Conversion
	 	 	63	 
	
	
	
	

	Section 11.17.	 	
Company Determination Final
	 	 	64	 

ARTICLE 12

Purchase at Option of Holders

	 	 	 	 	 	 	 
	Section 12.01.	 	
Right to Require Purchase
	 	 	64	 
	
	
	
	

	Section 12.02.	 	
Purchase Procedures
	 	 	64	 
	
	
	
	

	Section 12.03.	 	
Effect of Purchase Notice
	 	 	65	 
	
	
	
	

	Section 12.04.	 	
Deposit of Purchase Price
	 	 	66	 
	
	
	
	

	Section 12.05.	 	
Securities Purchased in Part
	 	 	66	 
	
	
	
	

	Section 12.06.	 	
Repayment to the Company
	 	 	67	 

ARTICLE 13

Purchase at Option of Holder Upon a Change In Control

	 	 	 	 	 	 	 
	Section 13.01.	 	
Right to Require Purchase
	 	 	67	 
	
	
	
	

	Section 13.02.	 	
Effect of Change in Control Purchase Notice
	 	 	70	 
	
	
	
	

	Section 13.03.	 	
Deposit of Change in Control Purchase Price
	 	 	71	 
	
	
	
	

	Section 13.04.	 	
Securities Purchased in Part
	 	 	71	 
	
	
	
	

	Section 13.05.	 	
Repayment to the Company
	 	 	72	 

ARTICLE 14

Contingent Interest

	 	 	 	 	 	 	 
	Section 14.01.	 	
Contingent Interest
	 	 	72	 
	
	
	
	

	Section 14.02.	 	
Payment of Contingent Interest
	 	 	74	 
	
	
	
	

	Section 14.03.	 	
Notice of Contingent Interest
	 	 	74	 

ARTICLE 15

Yield Reset and Remarketing

	 	 	 	 	 	 	 
	Section 15.01.	 	
Remarketing Reset Event
	 	 	74	 
	
	
	
	

	Section 15.02.	 	
Reset of the Yield and Conversion Rate
	 	 	74	 
	
	
	
	

	Section 15.03.	 	
Remarketing Procedures
	 	 	75	 
	
	
	
	

	Section 15.04.	 	
Right to Require Purchase
	 	 	76	 

ARTICLE 16

Immunity of Incorporators, Stockholders, Officers, Directors and Employees

	 	 	 	 	 	 	 
	Section 16.01.	 	
Exemption from Individual Liability
	 	 	77	 

iv

 

ARTICLE 17

Miscellaneous Provisions

	 	 	 	 	 
	Section 17.01.   Successors and Assigns of Company Bound by Indenture	 	 	
78	 
	
	
	
	

	Section 17.02.   Acts of Board, Committee or Officer of Successor Corporation
Valid	 	 	
78	 
	
	
	
	

	Section 17.03.   Required Notices or Demands	 	 	
78	 
	
	
	
	

	Section 17.04.   GOVERNING LAW	 	 	
79	 
	
	
	
	

	Section 17.05.   Indenture May Be Executed in Counterparts	 	 	
79	 
	
	
	
	

	 	 	 	 	 
	
	
	
	

	ANNEX A – Form of Global Security	 	 	 	 

v

 

EXHIBIT 4.1

     INDENTURE, dated as of the 20th day of May, 2003, between SLM CORPORATION,
a Delaware corporation (the “Company”), and JPMORGAN CHASE BANK, a national
banking association organized under the laws of the United States (the
“Trustee”).

     WHEREAS, for its lawful corporate purposes, the Company deems it necessary
to issue its securities and has duly authorized the execution and delivery of
this Indenture to provide for the issuance of its Floating Rate Convertible
Senior Debentures due 2035 (the “Securities”).

     NOW, THEREFORE, THIS INDENTURE WITNESSETH:

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

ARTICLE 1

Definitions And Other Provisions of General Application

     Section 1.01. Certain Terms Defined. Definitions.

     “Accreted Interest” means, for any Interest Period for any Security as of
any date of determination, (i) the Accreted Principal Amount of such Security
at the beginning of the Interest Period in which such date occurs, multiplied
by (ii) the Applicable Yield for such Interest Period, multiplied by (iii) the
quotient of the actual number of days elapsed from and including the first day
of such Interest Period, to but excluding the date of determination divided by
360; provided that the Accreted Interest for any full Interest Period shall be
calculated by reference to the actual number of days in such Interest Period
divided by 360.

     “Accreted Principal Amount” means, for any Security as of any date of
determination, (i) the Original Principal Amount of such Security, plus (ii)
the sum of the Accreted Interest for each Interest Period concluding on or
prior to such date, plus (iii) the Accreted Interest for the Interest Period in
which such date occurs as of the date of determination.

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

     “Applicable Stock Price” means (i) in respect of a Conversion Date, the
average of the Closing Sale Prices per share of Common Stock over the
five-Trading Day period starting the third Trading Day following such
Conversion Date and (ii) in respect of a Remarketing Reset Event, the average
of the Closing Sale Prices per share of Common Stock over the five Trading Day
period ending on the Trading Day immediately preceding a Remarketing Reset
Event Date. If an issuance, distribution, subdivision or combination of the
Common Stock to which Section 11.11 applies occurs during the period applicable
for calculating Applicable Stock Price,

 

 

then Applicable Stock Price shall be
calculated for such period in a manner determined by the Board of Directors to
reflect the impact of such issuance, distribution, subdivision or combination
on the Closing Sale Price of the Common Stock during such period.

     “Applicable Yield” means (1) prior to July 25, 2007, 0%, (2) unless a
Remarketing Reset Event occurs, from and after July 25, 2007, for any Interest
Period, a rate equal to 3-Month LIBOR determined on the LIBOR Determination
Date relating to the LIBOR Reset Date for such Interest Period, minus .05% and
(3) if a Remarketing Reset Event occurs, from and after such Remarketing Reset
Event Date, for any Interest Period, the Reset Yield for such Interest Period;
provided that in no event shall the Applicable Yield be less than 0%.

     “Board of Directors ” means either the board of directors of the Company
or any duly authorized committee of such board.

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

     “Business Day” means any day other than a Saturday, a Sunday or a day on
which banking institutions in The City of New York are authorized or required
by law, regulation or executive order to close.

     “Capital Stock” means, as to shares of a corporation, outstanding shares
of stock of any class, whether now or hereafter authorized, irrespective of
whether such class shall be limited to a fixed sum or percentage in respect of
the rights of the holders thereof to participate in dividends and in the
distribution of assets upon the voluntary liquidation, dissolution or winding
up of such corporation.

     “Closing Sale Price” of the shares of Common Stock on any date means the
closing sale price per share (or, if no closing sale price is reported, the
average of the closing bid and ask prices or, if more than one in either case,
the average of the average closing bid and the average closing ask prices) on
such date as reported on the principal United States securities exchange on
which shares of Common Stock are traded or, if the shares of Common Stock are
not listed on a United States national or regional securities exchange, as
reported by Nasdaq or by the National Quotation Bureau Incorporated. In the
absence of such quotations, the Company shall be entitled to determine the
Closing Sale Price on the basis it considers appropriate. The Closing Sale
Price shall be determined without reference to extended or after hours trading.

     “Commission” means the Securities and Exchange Commission.

     “Common Stock” shall mean the shares of Common Stock, $0.20 par value, of
the Company as it exists on the date of this Indenture or any other shares of
capital stock of the Company into which the Common Stock shall be reclassified
or changed.

     “Company” means the party named as the “Company” in the first paragraph of
this Indenture until a successor replaces it pursuant to the applicable
provisions of this Indenture and, thereafter, shall mean such successor. The
foregoing sentence shall likewise apply to any such subsequent successor or
successors.

2

 

     “Company Request” or “Company Order” means a written request or order
signed in the name of the Company by any Officer and delivered to the Trustee.

     “Contingent Interest” means such cash interest payable as described in
Article 14.

     “Conversion Price” means, as of any date of determination, a dollar amount
derived by dividing the Accreted Principal Amount as of such date of $1,000
Original Principal Amount of Securities by the Conversion Rate then in effect.

     “Conversion Rate” with respect to any Conversion Date means 5.0524 shares
of Common Stock subject to adjustment as set for in Article 11.

     “Corporate Trust Office” means the principal office of the Trustee at
which at any time its corporate trust business shall be administered, which
office at the date hereof is located at JPMorgan Chase Bank, 4 New York Plaza,
New York, New York 10004-2477, Attention: Capital Markets Financial Services,
or such other address as the Trustee may designate from time to time by notice
to the Holders and the Company, or the principal corporate trust office of any
successor Trustee (or such other address as a successor Trustee may designate
from time to time by notice to the Holders and the Company).

     “Custodian” means any Person appointed by the Trustee to act as custodian
of Global Securities for the Depositary. The Trustee initially appoints itself
as Custodian.

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

     “Exchange Act” means the Securities Exchange Act of 1934, as amended, and
the rules and regulations of the Commission promulgated thereunder.

     “Global Security” or “Global Securities” means Securities that are in the
form of the Securities attached hereto as Annex A.

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

     “Indenture ” means this Indenture, as amended or supplemented from time to
time in accordance with the terms hereof, including the provisions of the TIA
that are deemed to be a part hereof.

     “Interest Payment Date” means January 25, April 25, July 25 and October 25
of each year, subject to Section 1.09, commencing July 25, 2003, until July 25,
2007.

     “Interest Period” means (1) prior to July 25, 2007, the period from and
including the most recent Interest Payment Date to which interest has been paid
or duly made available for payment (or May 20, 2003 if no interest has been
paid or been duly made available for payment) to, but excluding, the next
succeeding Interest Payment Date, or any earlier Change in Control Purchase
Date, (2) unless a Remarketing Reset Event occurs, from and after July 25,
2007, the period from and including each LIBOR
Reset Date to but excluding the next succeeding LIBOR

3

 

Reset Date, or, if earlier, the Stated Maturity, any
Redemption Date, any Purchase Date or any Change in Control Purchase Date, and
(3) if a Remarketing Reset Event occurs, from and after such Remarketing Reset
Event Date, the period from and including the applicable Remarketing Reset
Event Date to but excluding the next succeeding Remarketing Reset Event Date,
or, if earlier, the Stated Maturity or any Remarketing Purchase Date.

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

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

     “LIBOR Determination Date” means the day that is two London and New York
City business days before the related LIBOR Reset Date.

     “LIBOR Reset Date” means January 25, April 25, July 25 and October 25 of
each year, commencing July 25, 2003; provided that, if any LIBOR Reset Date
would otherwise be a day that is not a Business Day, such LIBOR Reset Date
shall be postponed to the next succeeding Business Day, except, if such
Business Day falls in the next succeeding calendar month, such LIBOR Reset Date
will be the immediately preceding Business Day.

     “Liquidated Damages” means the Liquidated Damages Amount (as defined in
the Registration Rights Agreement).

     “London banking day” means a day on which commercial banks are open for
business, including dealings in United States dollars, in London.

     “Maximum Conversion Rate” means 8.8417 shares of Common Stock, subject to
adjustment as set forth in Article 11.

     “Moneyline Telerate Page 3750” means the display on Moneyline Telerate (or
any successor service) on such page (or any other page as may replace such page
on such service) for the purpose of displaying the London interbank rates of
major banks for United States dollars.

     “Nasdaq” means the National Association of Securities Dealers Automated
Quotation System.

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

     “Officer’s Certificate ” means a written certificate containing the
information specified in Section 1.02, signed in the name of the Company by any
one Officer and delivered to the Trustee. An Officer’s Certificate given
pursuant to Section 9.04 need not contain the information specified in Section
1.02.

     “Opinion of Counsel” means a written opinion containing the information
specified in Section 1.02 from legal counsel that is delivered to the Trustee.
The counsel may be an employee of, or counsel to, the Company.

4

 

     “Original Principal Amount ” of a Security means the stated Original
Principal Amount as set forth on the face of such Security.

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

     “Predecessor Security” of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 2.06 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.

     “Principal Subsidiary ” means the Company’s wholly owned Subsidiary,
Student Loan Marketing Association.

     “Purchase Agreement” means the Purchase Agreement, dated as of May 14,
2003 among the Company and J.P. Morgan Securities Inc., Merrill Lynch, Pierce,
Fenner & Smith Incorporated and Morgan Stanley & Co. Incorporated, as initial
purchasers.

     “Redemption Date” means the date specified for redemption of the
Securities in accordance with the terms of the Securities and this Indenture.

     “Redemption Price” means, when used with respect to any Security to be
redeemed, 100% of the Accreted Principal Amount of such Security as of the
Redemption Date, plus accrued and unpaid interest (including Contingent
Interest and Liquidated Damages, if any) to, but excluding, the Redemption
Date.

     “Registration Rights Agreement ” means the Registration Rights Agreement,
dated as of May 20, 2003 among the Company, J.P. Morgan Securities Inc.,
Merrill Lynch, Pierce, Fenner & Smith Incorporated and Morgan Stanley & Co.
Incorporated, as the initial purchasers named in the Purchase Agreement.

     “Regular Record Date” for the interest payable on any Interest Payment
Date means the January 10, April 10, July 10 or October 10, as the case may be,
immediately preceding such Interest Payment Date.

     “Remarketing Agent” means the remarketing agent appointed by the Company
and any successor or replacement remarketing agent appointed by the Company.

     “Remarketing Agreement” means, with respect to a remarketing on a
Remarketing Reset Event Date, the remarketing agreement entered into between
the Company and the Remarketing Agent with respect to the remarketing of
Securities on such Remarketing Reset Event Date.

     “Remarketing Purchase Date ” means a Remarketing Reset Event Date on which
the Company is required to purchase Securities pursuant to Section 15.04.

5

 

     “Remarketing Purchase Price ” has the meaning set forth in Section 15.04.

     “Remarketing Reset Event” has the meaning set forth in Section 15.01.

     “Remarketing Reset Event Date” means July 25 of 2007, 2011, 2015, 2019,
2023, 2027 and 2031 or, if any such day is not a Business Day, the immediately
succeeding Business Day.

     “Required Remarketing Date” has the meaning set forth in Section 15.03.

     “Reset Yield” has the meaning set forth in Section 15.02.

     “Responsible Officer”, when used with respect to the Trustee, means any
officer within the corporate trust department (or any successor group)
including without limitation any vice president, any assistant vice president,
any trust officer or any other officer of the Trustee customarily performing
functions similar to those performed by any of the above-designated officers
and also means, with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of his knowledge of and
familiarity with the particular subject and who shall have direct
responsibility for the administration of this Indenture.

     “Rule 144A” means Rule 144A under the Securities Act (or any successor
provision), as it may be amended from time to time.

     “Securities” or “Security” means any of the Company’s Floating Rate
Convertible Senior Debentures due 2035, issued under this Indenture.

     “Securities Act” means the Securities Act of 1933, as amended, and the
rules and regulations of the Commission promulgated thereunder.

     “Security Register” means the register maintained by the Registrar that
evidences ownership of the Securities.

     “Special Record Date” means, for the payment of any Defaulted Interest,
the date fixed by the Trustee pursuant to Section 2.13.

     “Stated Maturity” means July 25, 2035.

     “Subsidiary ” means any corporation more than 50% of the outstanding
shares of Voting Stock, except for directors’ qualifying shares, of which shall
at the time be owned, directly or indirectly, by the Company or by one or more
of the Subsidiaries, or by the Company and one or more other Subsidiaries.

     “Tax Original Issue Discount” means the amount of ordinary interest income
on a Security that must be accrued as original issue discount for U.S. Federal
income tax purposes pursuant to Treasury Regulations Section 1.1275-4 or any
successor provision.

     “3-month LIBOR,” as determined by the Calculation Agent, means with
respect to any Interest Period:

6

 

		
	 	     (a) the rate for three- month deposits in United States dollars
commencing on the related LIBOR Reset Date, that appears on the Moneyline
Telerate Page 3750 as of 11:00 A.M., London time, on the LIBOR
Determination Date, or
	 
	 	     (b) if no rate appears on Moneyline Telerate Page 3750, 3-month
LIBOR will be determined on the basis of the offered rates at which U.S.
dollar deposits having a maturity of three months, beginning on the LIBOR
Reset Date in that market at that time are offered by four major banks in
the London interbank market at approximately 11:00 a.m., London time, on
that LIBOR Determination Date to leading banks in the London interbank
market. The Calculation Agent will select the four banks and request the
principal London office of each of those banks to provide a quotation of
its rate. If at least two quotations are provided, 3-month LIBOR for
that LIBOR Determination Date will be the average of those quotations, or
	 
	 	     (c) if fewer than two quotations are provided as described above,
3-month LIBOR will be the average of the rates quoted by three major
banks at approximately 11:00 A.M., in New York City, on that LIBOR
Determination Date for loans in U.S. dollars to leading European banks
having a maturity of three months, beginning on the relevant LIBOR Reset
Date. The Calculation Agent will select the three banks referred to
above, or
	 
	 	     (d) if fewer than three banks selected by the Calculation Agent are
quoting as mentioned above, 3-month LIBOR will remain LIBOR then in
effect on that LIBOR Determination Date.

     “TIA” means the Trust Indenture Act of 1939 as in effect on the date of
this Indenture, provided, however, that in the event the TIA is amended after
such date, TIA means, to the extent required by any such amendment, the TIA as
so amended.

     “Trading Day” means a day during which trading in securities generally
occurs on the New York Stock Exchange or, if the Common Stock is not listed on
the New York Stock Exchange, on the principal other national or regional
securities exchange on which the Common Stock is then listed or, if the Common
Stock is not listed on a national or regional securities exchange, on Nasdaq
or, if the Common Stock is not quoted on Nasdaq, on the principal other market
on which the Common Stock is then traded.

     “Trading Price” means, on any date, the average of the secondary market
bid quotations for the Securities obtained by the Calculation Agent on behalf
of the Trustee for $10,000,000 Original Principal Amount of Securities at
approximately 3:30 p.m., New York City time, on such date from three
independent nationally recognized securities dealers selected by the Company;
provided that if at least three such bids cannot reasonably be obtained by the
Calculation Agent on behalf of the Trustee, but two bids are obtained, then the
average of the two bids shall be used, and if only one such bid can reasonably
be obtained by the Calculation Agent on behalf of the Trustee, one bid shall be
used; and provided further that if the Calculation Agent on behalf of the
Trustee cannot reasonably obtain at least one bid for $10,000,000 Original
Principal Amount of Securities from a nationally recognized securities dealer
or, in the Company’s reasonable judgment, the bid quotation or quotations are
not indicative of the

7

 

secondary market value of the Securities, then (i), for
purposes of Article 11, the Trading Price per $1,000 Original Principal Amount
of Securities shall be deemed to be less than 98% of the product of (a) the
Conversion Rate on such date (determined using the Closing Sale Price on such
date rather than the Applicable Stock Price) and (b) the Closing Sale Price on
such date and (ii) for purposes of Article 14, the Trading Price per $1,000
Original Principal Amount of Securities will equal (a) the then applicable
Conversion Rate multiplied by (b) the Applicable Stock Price.

     “Trustee” means the party named as the “Trustee” in the first paragraph of
this Indenture until a successor replaces it pursuant to the applicable
provisions of this Indenture and, thereafter, shall mean such successor. The
foregoing sentence shall likewise apply to any subsequent such successor or
successors.

     “Voting
Stock”, as applied to the stock (or the equivalent thereof) of any
corporation, means stock (or the equivalent thereof) of any class or classes,
however designated, having ordinary voting power for the election of a majority
of the directors of such corporation, other than stock (or such equivalent)
having such power only by reason of the happening of a contingency.

     (b)  Other Definitions.

	 	 	 
	 	 	Defined in
	Term	 	Defined in Section
	
	 	

	“Act”	 	
1.04(a)
	
	
	
	

	“Adjustment Event”	 	
11.11(m)
	
	
	
	

	“Agent Members”	 	
2.11(f)
	
	
	
	

	“applicants”	 	
6.02(b)
	
	
	
	

	“Associate”	 	
13.01
	
	
	
	

	“Calculation Agent”	 	
2.03
	
	
	
	

	“Change in Control”	 	
13.01(a)
	
	
	
	

	“Change in Control Purchase Date”	 	
13.01(a)
	
	
	
	

	“Change in Control Purchase Notice”	 	
13.01(c)
	
	
	
	

	“Change in Control Purchase Price”	 	
13.01(a)
	
	
	
	

	“Conversion Agent”	 	
2.03
	
	
	
	

	“Conversion Date”	 	
11.07
	
	
	
	

	“Current Market Price”	 	
11.11(i)
	
	
	
	

	“Defaulted Interest”	 	
2.13
	
	
	
	

	“Depositary”	 	
2.01
	
	
	
	

	“Determination Date”	 	
11.11(m)
	
	
	
	

	“Distributed Securities”	 	
11.11(d)
	
	
	
	

	“Event of Default”	 	
4.01
	
	
	
	

	“Ex-Dividend Date”	 	
11.11(g)
	
	
	
	

	“Ex-Dividend Time”	 	
11.05
	
	
	
	

	“Expiration Time”	 	
11.11(f)
	
	
	
	

	“Failed Remarketing”	 	
15.03(d)
	
	
	
	

	“Fair Market Value”	 	
11.11(i)
	
	
	
	

	“Fitch”	 	
11.03

8

 

	 	 	 
	 	 	Defined in
	Term	 	Defined in Section
	
	 	

	
	
	
	

	“Legend”	 	
2.05(f)
	
	
	
	

	“Moody’s”	 	
11.03
	
	
	
	

	“Notice of Default”	 	
4.01(c)
	
	
	
	

	“Notice of Remarketing”	 	
15.03(a)
	
	
	
	

	“Paying Agent”	 	
2.03
	
	
	
	

	“Principal Value Conversion”	 	
11.06(b)
	
	
	
	

	“Purchase Date”	 	
12.01(a)
	
	
	
	

	“Purchase Notice”	 	
12.02
	
	
	
	

	“Purchase Price”	 	
12.02
	
	
	
	

	“Purchased Shares”	 	
11.11(f)
	
	
	
	

	“QIB”	 	
2
	
	
	
	

	“Record Date”	 	
11.11(i)
	
	
	
	

	“Registrar”	 	
2.03
	
	
	
	

	“Rights”	 	
11.16
	
	
	
	

	“Rights Agreement”	 	
11.16
	
	
	
	

	“S&P”	 	
11.03
	
	
	
	

	“Trigger Event”	 	
11.11(d)

     Section 1.02. Compliance Certificates and Opinions. Upon any application
or request by the Company to the Trustee to take any action under any provision
of this Indenture, the Company shall furnish to the Trustee an Officer’s
Certificate stating that all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with by the
Company and, if requested by the Trustee, an Opinion of Counsel stating that in
the opinion of such counsel all such conditions precedent, if any, have been
complied with, except that in the case of any such application or request as to
which the furnishing of such documents is specifically required by any
provision of this Indenture relating to such particular application or request,
no additional certificate or opinion need be furnished.

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

		
	 	     (i) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
	 
	 	     (ii) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
	 
	 	     (iii) a statement that, in the opinion of each such individual, he has
made such examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such covenant or condition has been
complied with; and (iv) a statement as to whether or not, in the opinion of
each such individual, such condition or covenant has been complied with.

     Section 1.03. Forms of Documents Delivered to Trustee. In any case where
several matters are required to be certified by, or covered by an opinion of,
any specified Person, it is not necessary that all such matters be certified
by, or covered by the opinion of, only one such

9

 

Person, or that they be so
certified or covered by only one document, but one such Person may certify or
give an opinion with respect to some matters and one or more other such Persons
as to other matters, and any such Person may certify or give an opinion as to
such matters in one or several documents.

     Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer actually knows that the
certificate or opinion or representations with respect to the matters upon
which his certificate or opinion is based are erroneous. Any such certificate
or Opinion of Counsel may be based, insofar as it relates to factual matters,
upon a certificate or opinion of, or representations by, an officer or officers
of the Company stating that the information with respect to such factual
matters is in the possession of the Company, unless such counsel knows, or in
the exercise of reasonable care (but without having made an investigation
specifically for the purpose of rendering such opinion) should know, that the
certificate or opinion or representations with respect to such matters are
erroneous.

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

     Section 1.04. Acts of Holder. (a) Any request, demand, authorization,
direction, notice, consent, waiver or other action provided by this Indenture
to be given or taken by Holders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Holders in person or
by an agent duly appointed in writing; and, except as herein otherwise
expressly provided, such action shall become effective when such instrument or
instruments are delivered to the Trustee and, where it is hereby expressly
required, to the Company. Such instrument or instruments (and the action
embodied therein and evidenced thereby) are herein sometimes referred to as the
“Act” of the Holders signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing any such agent
shall be sufficient for any purpose of this Indenture and (subject to Section
5.01) conclusive in favor of the Trustee and the Company, if made in the manner
provided in this Section.

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

     (c)  The ownership of Securities shall be proved by the Security Register.

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

     (e)  The Company may, but shall not be obligated to, set a record date for
purposes of determining the identity of Holders entitled to vote or consent to
any action by vote or consent authorized or permitted under this Indenture. If
a record date is fixed, those persons who were Holders of Securities at such
record date (or their duly designated proxies), and only those

10

 

persons, shall
be entitled to take such action by vote or consent or to revoke any vote or
consent previously given, whether or not such persons continue to be Holders
after such record date. No action approved by such vote or consent shall be
taken more than six months after such record date.

     Section 1.05. Conflict with Trust Indenture Act of 1939. If any provision
hereof limits, qualifies or conflicts with a provision of the TIA that is
required under the TIA to be part of and govern this Indenture, the TIA shall
control. If any provision of this Indenture modifies or excludes any provision
of the TIA that may be so modified or excluded, such provision shall be deemed
either to apply to this Indenture so modified or to be excluded, as the case
may be.

     Section 1.06. Effect of Headings and Table of Contents. The Article and
Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.

     Section 1.07. Separability Clause. In case any provision in this
Indenture or in any Security shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.

     Section 1.08. Benefits of Indenture. Nothing in this Indenture or in the
Securities, express or implied, shall give to any Person, other than the
parties hereto and their successors hereunder and the Holders, any benefit or
any legal or equitable right, remedy or claim under this Indenture.

     Section 1.09. Legal Holidays. Subject to the next two succeeding
sentences, if any specified date (including a date for giving notice) on which
action is to be taken under this Indenture is a Legal Holiday, the action shall
be taken on the next succeeding day that is not a Legal Holiday. In any case
where an Interest Payment Date (other than an Interest Payment Date coinciding
with the Stated Maturity or earlier Redemption Date, Purchase Date, Remarketing
Purchase Date or Change in Control Purchase Date) of a Security falls on a day
that is not a Business Day, such Interest Payment Date will be postponed to the
next succeeding Business Day and no interest on such payment will accrue for
the period from and after the Interest Payment Date to such next succeeding
Business Day. If the Stated Maturity, Redemption Date, Purchase Date,
Remarketing Purchase Date or Change in Control Purchase Date of a Security
would fall on a day that is not a Business Day, the required payment of
interest, if any, and principal will be made on the next succeeding Business
Day and no interest on such payment will accrue for the period from and after
the Stated Maturity, Redemption Date, Purchase Date, Remarketing Purchase Date
or Change in Control Purchase Date to such next succeeding Business Day.

ARTICLE 2

The Securities

     Section 2.01. Form and Dating. The Securities designated “Floating Rate
Convertible Senior Debentures due 2035” of the Company shall be substantially
in the form set forth in Annex A hereto, which is incorporated into and shall
be deemed a part of this Indenture, with such appropriate insertions,
omissions, substitutions and other variations as are required or

11

 

permitted by
the Indenture, and may have such letters, numbers or other marks of
identification and such legends or endorsements placed thereon as may be
required to comply with the rules of any securities exchange or as may,
consistently herewith, be determined by the officers of the Company executing
the Securities, as evidenced by their execution of the Securities. Each
Security shall be dated the date of its authentication.

     All of the Securities are initially being offered and sold to qualified
institutional buyers as defined in Rule 144A (collectively, “QIBs” or
individually a “QIB”) in reliance on Rule 144A under the Securities Act and
shall be issued initially in the form of one or more restricted Global
Securities, which shall be deposited on behalf of the purchasers of the
Securities represented thereby with the Trustee, or any Custodian, as custodian
for the depositary, The Depository Trust Company (such depositary, or any
successor thereto, being hereinafter referred to as the “Depositary ”), and
registered in the name of its nominee, Cede & Co., duly executed by the Company
and authenticated by the Trustee as hereinafter provided.

     Each Global Security shall represent such of the outstanding Securities as
shall be specified therein and each shall provide that it shall represent the
aggregate Original Principal Amount of outstanding Securities from time to time
endorsed thereon and that the aggregate Original Principal Amount of
outstanding Securities represented thereby may from time to time be reduced or
increased, as appropriate, to reflect exchanges, redemptions, purchases or
conversions of such Securities. Any endorsement of a Global Security to
reflect the amount of any increase or decrease in the Original Principal Amount
of outstanding Securities represented thereby shall be made by the Trustee or
Custodian in accordance with the standing instructions and procedures existing
between the Depositary and the Trustee or Custodian.

     Certificated Securities shall be issued only under the limited
circumstances provided in Section 2.11(b) hereof.

     Section 2.02. Execution and Authentication. The Securities shall be
executed by the Company by any Officer. The signature of any Officer on the
Securities may be manual or facsimile.

     Securities bearing the manual or facsimile signatures of individuals who
were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of authentication of such Securities.

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

     The Trustee shall authenticate and deliver Securities for original issue
in an aggregate Original Principal Amount of $2,000,000,000 (up to
$2,300,000,000 if the Initial Purchasers’

12

 

option set forth in the Purchase
Agreement is exercised in full) upon a Company Order without any further action
by the Company. The Securities shall be issued only in registered form without
coupons and only in denominations of $1,000 Original Principal Amount and any
integral multiple thereof. The aggregate Original Principal Amount of
Securities outstanding at any time may not exceed the amount set forth in the
first sentence of this paragraph, subject to the parenthetical set forth
therein, except as provided in Section 2.06.

     Section 2.03. Registrar, Paying Agent, Conversion Agent and Calculation
Agent. The Company shall maintain an office or agency where Securities may be
presented for registration of transfer or for exchange (“Registrar”), an office
or agency where Securities may be presented for purchase or payment (“Paying
Agent”) and an office or agency where Securities may be presented for
conversion (“Conversion Agent”). The Registrar shall keep a register of the
Securities and of their transfer and exchange. The Company may have one or
more co-registrars, one or more additional paying agents and one or more
additional conversion agents. The term Paying Agent includes any additional
paying agent and the term Conversion Agent includes any additional conversion
agent.

     The Company shall also appoint an agent to perform the calculations
required pursuant to this Indenture (the “Calculation Agent”).

     The Company shall notify the Trustee of the name and address of any such
agent. If the Company fails to maintain a Registrar, Paying Agent, Calculation
Agent or Conversion Agent, the Trustee shall act as such and shall be entitled
to appropriate compensation therefor pursuant to Section 5.06. The Company or
any Subsidiary or an Affiliate of either of them may act as Paying Agent,
Registrar, Calculation Agent, Conversion Agent or co-registrar.

     The Company initially appoints itself as Calculation Agent, and JPMorgan
Chase Bank as Registrar, Conversion Agent and Paying Agent in connection with
the Securities.

     Section 2.04. Paying Agent to Hold Money and Securities in Trust. Except
as otherwise provided herein, on or prior to each due date of payments in
respect of any Security, the Company shall deposit with the Paying Agent a sum
of money (in immediately available funds if deposited on the due date) or, if
applicable, Common Stock sufficient to make such payments when so becoming due.
The Company shall require each Paying Agent (other than the Trustee) to agree
in writing that the Paying Agent shall hold in trust for the benefit of Holders
and/or the Trustee all money and Common Stock held by the Paying Agent for the
making of payments in respect of the Securities and shall notify the Trustee of
any default by the Company in making any such payment. At any time during the
continuance of any such default, the Paying Agent shall, upon the written
request of the Trustee, forthwith pay to the Trustee all money and Common Stock
so held in trust. If the Company, a Subsidiary or an Affiliate of either of
them acts as Paying Agent, it shall segregate the money and Common Stock held
by it as Paying Agent and hold it as a separate trust fund. The Company at any
time may require a Paying Agent to pay all money and Common Stock held by it to
the Trustee and to account for any funds and Common Stock disbursed by it.
Upon doing so, the Paying Agent shall have no further liability for the money
or Common Stock.

13

 

     Section 2.05. Transfer and Exchange. Subject to Section 2.11 hereof,
upon surrender for registration of transfer of any Security, together with a
written instrument of transfer satisfactory to the Registrar duly executed by
the Holder or such Holder’s attorney duly authorized in writing, at the office
or agency of the Company designated as Registrar or coregistrar pursuant to
Section 2.03, the Company shall execute, and the Trustee shall authenticate and
deliver, in the name of the designated transferee or transferees, one or more
new Securities of any authorized denomination or denominations, of a like
aggregate Original Principal Amount. The Company shall not charge a service
charge for any registration of transfer or exchange, but the Company may
require payment of a sum sufficient to pay all taxes, assessments or other
governmental charges that may be imposed in connection with the transfer or
exchange of the Securities from the Holder requesting such transfer or
exchange.

     The Company shall not be required to make, and the Registrar need not
register, transfers or exchanges of Securities selected for redemption (except,
in the case of Securities to be redeemed in part, the portion thereof not to be
redeemed) or any Securities in respect of which a Purchase Notice or Change in
Control Purchase Notice has been given and not withdrawn by the Holder thereof
in accordance with the terms of this Indenture (except, in the case of
Securities to be purchased in part, the portion thereof not to be purchased) or
any Securities for a period of 15 days before the mailing of a notice of
redemption of Securities to be redeemed.

     (b)  Notwithstanding any provision to the contrary herein, so long as a
Global Security remains outstanding and is held by or on behalf of the
Depositary, transfers of a Global Security, in whole or in part, shall be made
only in accordance with Section 2.11 and this Section 2.05(b).

     Transfers of a Global Security shall be limited to transfers of such
Global Security in whole, or in part, to nominees of the Depositary or to a
successor of the Depositary or such successor’s nominee.

     (c)  Successive registrations and registrations of transfers and exchanges
as aforesaid may be made from time to time as desired, and each such
registration shall be noted on the register for the Securities.

     (d)  Any Registrar appointed pursuant to Section 2.03 hereof shall provide
to the Trustee such information as the Trustee may reasonably require in
connection with the delivery by such Registrar of Securities upon transfer or
exchange of Securities.

     (e)  No Registrar shall be required to make registrations of transfer or
exchange of Securities during any periods designated in the text of the
Securities or in this Indenture as periods during which such registration of
transfers and exchanges need not be made.

     (f)  If Securities are issued upon the transfer, exchange or replacement of
Securities subject to restrictions on transfer and bearing the legends on the
form of Security attached hereto as Annex A setting forth such restrictions
(collectively, the “Legend”), or if a request is made to remove the Legend on a
Security, the Securities so issued shall bear the Legend, or the Legend shall
not be removed, as the case may be, unless there is delivered to the Company
and the Registrar such satisfactory evidence, which shall include an Opinion of
Counsel, as may be reasonably required by the Company and the Registrar, that
neither the Legend nor the

14

 

restrictions on transfer set forth therein are
required to ensure that transfers thereof comply with the provisions of Rule
144A or Rule 144 under the Securities Act or that such Securities are not
“restricted” within the meaning of Rule 144 under the Securities Act. Upon (i)
provision of such satisfactory evidence, or (ii) notification by the Company to
the Trustee and Registrar of the sale of such Security pursuant to a
registration statement that is effective at the time of such sale, the Trustee,
at the written direction of the Company, shall authenticate and deliver a
Security that does not bear the Legend. If the Legend is removed from the face
of a Security and the Security is subsequently held by an Affiliate of the
Company, the Legend shall be reinstated. Any shares of Common Stock issued
upon conversion of Securities that bear the Legend shall bear a restricted
legend substantially identical to the Legend (except that such Legend shall not
refer to any shares of Common Stock issuable upon conversion of Securities).

     (g)  Nothing in this Indenture or in the Securities shall prohibit the sale
or other transfer of any Securities (including beneficial interests in Global
Securities) to the Company or any of its Subsidiaries, which Securities shall
thereupon be canceled in accordance with Section 2.09 of this Indenture.

     Section 2.06. Replacement Securities. If (a) any mutilated Security is
surrendered to the Trustee, or (b) the Company and the Trustee receive evidence
to their satisfaction of the destruction, loss or theft of any Security, and
there is delivered to the Company and the Trustee such security or indemnity as
may be required by them to save each of them harmless, then, in the absence of
notice to the Company or the Trustee that such Security has been acquired by a
bona fide purchaser, the Company shall execute and upon its written request the
Trustee shall authenticate and deliver, in exchange for any such mutilated
Security or in lieu of any such destroyed, lost or stolen Security, a new
Security of like tenor and Original Principal Amount, bearing a number not
contemporaneously outstanding.

     In case any such mutilated, destroyed, lost or stolen Security has become
or is about to become due and payable, or is about to be purchased by the
Company pursuant to Articles 12 or 13 hereof, the Company in its discretion
may, instead of issuing a new Security, pay or purchase such Security, as the
case may be.

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

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

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

15

 

     Section 2.07. Outstanding Securities; Determinations of Holders’ Actions.
Securities outstanding at any time are all the Securities authenticated by the
Trustee except for those canceled by it, those delivered to it for
cancellation, those delivered to it pursuant to Section 2.06 and those
described in this Section 2.07 as not outstanding. A Security does not cease
to be outstanding because the Company or an Affiliate thereof holds the
Security; provided, however, that in determining whether the Holders of the
requisite Original Principal Amount of Securities have given or concurred in
any request, demand, authorization, direction, notice, consent or waiver
hereunder, Securities owned by the Company or any other obligor upon the
Securities or any Affiliate of the Company or such other obligor shall be
disregarded and deemed not to be outstanding, except that, in determining
whether the Trustee shall be protected in relying upon any such request,
demand, authorization, direction, notice, consent or waiver, only Securities
which a Responsible Officer of the Trustee actually knows to be so owned shall
be so disregarded. Subject to the foregoing, only Securities outstanding at
the time of such determination shall be considered in any such determination
(including, without limitation, determinations pursuant to Articles 4 and 8).

     If a Security is replaced pursuant to Section 2.06, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Security is held by a bona fide purchaser.

     If the Paying Agent holds, in accordance with this Indenture, on a
Redemption Date, or on the Business Day following a Purchase Date, a
Remarketing Purchase Date or a Change in Control Purchase Date, or on Stated
Maturity, money or securities, if permitted hereunder, sufficient to pay
Securities payable on that date, then immediately after such Redemption Date,
Purchase Date, Change in Control Purchase Date or Stated Maturity, as the case
may be, such Securities shall cease to be outstanding and interest (including
Contingent Interest and Liquidated Damages, if any) on such Securities shall
cease to accrue; provided that if such Securities are to be redeemed, notice of
such redemption has been duly given pursuant to this Indenture or provision
therefor satisfactory to the Trustee has been made.

     If a Security is converted in accordance with Article 11, then from and
after the time of conversion on the Conversion Date, such Security shall cease
to be outstanding and interest (including Contingent Interest, if any) shall
cease to accrue on such Security.

     Section 2.08. Temporary Securities. Pending the preparation of definitive
Securities, the Company may execute, and upon Company Order the Trustee shall
authenticate and deliver, temporary Securities which are printed, lithographed,
typewritten, mimeographed or otherwise produced, in any authorized
denomination, substantially of the tenor of the definitive Securities in lieu
of which they are issued and with such appropriate insertions, omissions,
substitutions and other variations as the officers executing such Securities
may determine, as conclusively evidenced by their execution of such Securities.

     If temporary Securities are issued, the Company will cause definitive
Securities to be prepared without unreasonable delay. After the preparation of
definitive Securities, the temporary Securities shall be exchangeable for
definitive Securities upon surrender of the temporary Securities at the office
or agency of the Company designated for such purpose pursuant to Section 2.03,
without charge to the Holder. Upon surrender for cancellation of any

16

 

one or
more temporary Securities the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor a like Original Principal Amount
of definitive Securities of authorized denominations. Until so exchanged the
temporary Securities shall in all respects be entitled to the same benefits
under this Indenture as definitive Securities.

     Section 2.09. Cancellation. All Securities surrendered for payment,
purchase by the Company pursuant to Article 12, Article 13 and Section 15.04,
conversion, redemption or registration of transfer or exchange shall, if
surrendered to any person other than the Trustee, be delivered to the Trustee
and shall be promptly canceled by it. The Company may at any time deliver to
the Trustee for cancellation any Securities previously authenticated and
delivered hereunder which the Company may have acquired in any manner
whatsoever, and all Securities so delivered shall be promptly canceled by the
Trustee. The Company may not issue new Securities to replace Securities it has
paid or delivered to the Trustee for cancellation or that any Holder has
converted pursuant to Article 11. No Securities shall be authenticated in lieu
of or in exchange for any Securities canceled as provided in this Section,
except as expressly permitted by this Indenture. All canceled Securities held
by the Trustee shall be disposed of by the Trustee in accordance with its
customary practice.

     Section 2.10. Persons Deemed Owners. Prior to due presentment of a
Security for registration of transfer, the Company, the Trustee and any agent
of the Company or the Trustee may treat the Person in whose name such Security
is registered as the owner of such Security for the purpose of receiving
payment of principal of the Security or the payment of any Redemption Price,
Purchase Price, Remarketing Purchase Price or Change in Control Purchase Price
in respect thereof, and interest thereon, for the purpose of conversion and for
all other purposes whatsoever, whether or not such Security be overdue, and
neither the Company, the Trustee nor any agent of the Company or the Trustee
shall be affected by notice to the contrary.

     Section 2.11. Global Securities. Notwithstanding any other provisions
of this Indenture or the Securities, transfers of a Global Security, in whole
or in part, shall be made only in accordance with Section 2.05 and this Section
2.11. A Global Security may not be transferred, in whole or in part, to any
Person other than the Depositary or a nominee or any successor thereof, and no
such transfer to any such other Person may be registered; provided that this
clause (a) shall not prohibit any transfer of a Security that is issued in
exchange for a Global Security but is not itself a Global Security. No
transfer of a Security to any Person shall be effective under this Indenture
unless and until such Security has been registered in the name of such Person.

     (b)  Notwithstanding any other provisions of this Indenture or the
Securities, a Global Security shall not be exchanged in whole or in part for a
Security registered in the name of any Person other than the Depositary or one
or more nominees thereof, provided that a Global Security may be exchanged for
Securities registered in the names of any person designated by the Depositary
in the event that (i) the Depositary has notified the Company that it is
unwilling or unable to continue as Depositary for such Global Security or such
Depositary has ceased to be a “clearing agency” registered under the Exchange
Act or other applicable statute or regulation, and a successor Depositary is
not appointed by the Company within 90 days after the Company receives such
notice or becomes aware of such condition or (ii) the Company decides to
discontinue the use of the system of book-entry transfer through the Depositary
(or any successor

17

 

Depositary). Any Global Security exchanged pursuant to
clause (i) above shall be so exchanged in whole and not in part, and any Global
Security exchanged pursuant to clause (iii) above may be exchanged in whole or
from time to time in part as directed by the Depositary. Any Security issued
in exchange for a Global Security or any portion thereof shall be a Global
Security; provided that any such Security so issued that is registered in the
name of a Person other than the Depositary or a nominee thereof shall not be a
Global Security.

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

     (d)  Subject to the provisions of Section 2.11(f) below, the registered
Holder may grant proxies and otherwise authorize any Person, including Agent
Members (as defined below) and persons that may hold interests through Agent
Members, to take any action which a Holder is entitled to take under this
Indenture or the Securities.

     (e)  In the event of the occurrence of any of the events specified in
Section 2.11(b) above, the Company will promptly make available to the Trustee
a reasonable supply of certificated Securities in definitive, fully registered
form, without interest coupons.

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

     Section 2.12. Legends. (a) Subject to the succeeding paragraph, every
Security shall be subject to the restrictions on transfer provided in the
Legend including the delivery of a certification or an Opinion of Counsel as
set forth in the Legend, if so requested by the Company or the Registrar.

18

 

     (b)  The restrictions imposed by the Legend upon the transferability of any
Security shall cease and terminate when such Security has been sold pursuant to
an effective registration statement under the Securities Act or transferred in
compliance with Rule 144 under the Securities Act (or any successor provision
thereto) or, if earlier, upon the expiration of the holding period applicable
to sales thereof under Rule 144(k) under the Securities Act (or any successor
provision). Any Security as to which such restrictions on transfer shall have
expired in accordance with their terms or shall have terminated may, upon a
surrender of such Security for exchange to the Registrar in accordance with the
provisions of this Section 2.12 (accompanied, in the event that such
restrictions on transfer have terminated by reason of a transfer in compliance
with Rule 144 or any successor provision, by an opinion of counsel having
substantial experience in practice under the Securities Act and otherwise
reasonably acceptable to the Company, addressed to the Company and the
Registrar and in form acceptable to the Company, to the effect that the
transfer of such Security has been made in compliance with Rule 144 or such
successor provision), be exchanged for a new Security, of like tenor and
aggregate Original Principal Amount, which shall not bear the restrictive
Legend. The Company shall inform the Trustee of the effective date of any
registration statement registering the Securities under the Securities Act.
The Trustee and the Registrar shall not be liable for any action taken or
omitted to be taken by it in good faith in accordance with the aforementioned
opinion of counsel or registration statement.

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

     Section 2.13. Payment of Interest; Interest Rights Preserved. Interest,
including any Contingent Interest, on any Security that is payable, and is
punctually paid or duly provided for, on any Interest Payment Date shall be
paid to the Person in whose name that Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest at the office or agency of the Company maintained for such
purpose pursuant to Section 9.02. However, the Company may make such interest
payments by check payable to or upon the written order of the Person entitled
thereto pursuant to Section 17.03, to the address of such Person as it appears
on the Security Register; provided that payment by wire transfer of immediately
available funds will be required with respect to principal of and interest
(including Contingent Interest, if any) on all Global Securities and all
Securities of Holders of more than $25,000,000 aggregate Original Principal
Amount of Securities that have requested such method of payment and provided
wire transfer instructions to the Company or the Paying Agent.

     Any interest or Contingent Interest on any Security which is payable but
is not punctually paid or duly provided for on any Interest Payment Date
(herein called “Defaulted Interest”) shall forthwith cease to be payable to the
Holder on the relevant Regular Record Date by virtue of having been such
Holder, and such Defaulted Interest may be paid by the Company, at its election
in each case, as provided in clause (a) or (b) below:

     (a)  The Company may elect to make payment of any Defaulted Interest to the
Persons in whose names the Securities (or Predecessor Securities) 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
proposed to be paid on each Security and the date of the proposed payment,

19

 

and
at the same time the Company shall deposit with the Trustee an amount of money
equal to the aggregate amount proposed to be paid in respect of such Defaulted
Interest or shall make arrangements satisfactory to the Trustee for such
deposit on or 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 15 days and not less than 10 days prior to the date of the
proposed payment and not less than 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 Holder of Securities at his address as it appears in the Security
Register, not less than 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 Securities (or Predecessor Securities) are
registered at the close of business on such Special Record Date and shall no
longer be payable pursuant to the following clause (b).

     (b)  The Company may make payment of any Defaulted Interest on the
Securities in any other lawful manner not inconsistent with the requirements of
any securities exchange on which such Securities may be listed, and upon such
notice as may be required by such exchange, 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.

     On conversion of a Holder’s Securities, such Holder shall not receive any
cash payment of interest. Except as set forth in the next succeeding
paragraph, the Company’s delivery to a Holder of the full number of shares of
Common Stock into which a Security is convertible, together with any cash
payment for such Holder’s fractional shares, or cash or a combination of cash
and Common Stock in lieu thereof, shall be deemed to satisfy the Company’s
obligation to pay the Accreted Principal Amount of the Security and to satisfy
the Company’s obligation to pay accrued but unpaid interest (including
Contingent Interest, if any) attributable to the period from the most recent
Interest Payment Date through the Conversion Date.

     Notwithstanding the above, if any Securities are converted after the close
of business on any Regular Record Date but prior to the next succeeding
Interest Payment Date, Holders of such Securities at the close of business on
such Regular Record Date will receive the interest payable on such Securities
on the corresponding Interest Payment Date notwithstanding the conversion.

     Such Securities, upon surrender for conversion, will be accompanied by
payment to the Company or its order, in New York Clearing House funds or other
funds acceptable to the Company, of an amount equal to the interest payable on
such Interest Payment Date with respect to the Original Principal Amount of
Securities or portions thereof being surrendered for conversion; provided that
no such payment need be made if (1) the Company has specified a Redemption Date
that is after the close of business on a Regular Record Date and prior to the
date three Business Days following the next Interest Payment Date to which such
Regular Record Date relates, (2) the Company has specified a Change in Control
Purchase Date during such period or (3) only to the extent of overdue interest
or overdue Contingent Interest, any

20

 

overdue interest or overdue Contingent
Interest exists on the Conversion Date with respect to the Securities
converted.

     Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.

     Section 2.14. CUSIP Numbers. The Company in issuing the Securities may
use “CUSIP” numbers (if then generally in use), and, if so, the Trustee shall
use “CUSIP” numbers in notices of redemption as a convenience to Holders;
provided that any such notice may state that no representation is made as to
the correctness of such numbers either as printed on the Securities or as
contained in any notice of a redemption and that reliance may be placed only on
the other identification numbers printed on the Securities, and any such
redemption shall not be affected by any defect in or omission of such numbers.
The Company will promptly notify the Trustee of any change in the CUSIP
numbers.

     Section 2.15. Calculation of Tax Original Issue Discount. The Company
agrees, and by acceptance of a beneficial interest in a Security each Holder
and each beneficial owner of a Security agrees, to treat, for U.S. federal
income tax purposes, the Securities as debt instrument s that are subject to
Treasury Regulations Section 1.1275-4. For U.S. federal income tax purposes,
the Company agrees, and by acceptance of a beneficial interest in a Security
each Holder and any beneficial owner of a Security shall be deemed to agree, to
treat the fair market value of the Common Stock received upon the conversion of
a Security as a contingent payment for purposes of Treasury Regulations Section
1.1275-4 and to accrue interest with respect to outstanding Securities as
original issue discount for U.S. federal income tax purposes (i.e., Tax
Original Issue Discount) according to the “noncontingent bond method,” set
forth in Section 1.1275-4(b) of the Treasury Regulations, using the comparable
yield of 5.625% compounded quarterly and the projected payment schedule as
determined by the Company. Holders or beneficial owners may obtain a copy of
the projected payment schedule by contacting the Company: SLM Corporation,
11600 Sallie Mae Drive, Reston, Virginia 20193, Attention: Vice President
Finance.

     The Company acknowledges and agrees, and by acceptance of a beneficial
interest in a Security each Holder and any beneficial owner of a Security shall
be deemed to acknowledge and agree, that (i) the comparable yield referred to
above is the annual yield the Company would pay, as of the Issue Date, on a
noncontingent, nonconvertible, fixed-rate debt instrument with terms and
conditions otherwise similar to those of the Securities and (ii) the comparable
yield and the schedule of projected payments that a Holder or beneficial owner
may obtain as described above do not constitute a representation by the Company
regarding the actual amounts that will be paid on the Securities or the value
of the Common Stock into which the Securities may be converted.

     Section 2.16. Tax Confidentiality Waiver. All Persons may disclose to any
and all Persons, without limitation of any kind, the U.S. federal income tax
treatment and tax structure of the Securities as defined in Section 1.6011-4 of
the U.S. Treasury Regulations, any fact necessary to understanding the U.S.
federal

21

 

income tax treatment of the Securities, and all materials of any kind
(including opinions or other tax analyses) relating to such U.S. federal income
tax treatment, provided that, to ensure confidentiality reasonably necessary to
comply with securities laws, no disclosure may be made of the name of the
Company or information that would permit identification of the Company.

ARTICLE 3

Satisfaction and Discharge

     Section 3.01. Discharge of Liability on Securities. When (i) the Company
delivers to the Trustee or any Paying Agent all outstanding Securities (other
than Securities replaced pursuant to Section 2.06 of the Indenture) for
cancellation or (ii) all outstanding Securities have become due and payable,
whether at Stated Maturity, any Redemption Date, any Purchase Date, any
Remarketing Purchase Date, a Change in Control Purchase Date, or upon
conversion or otherwise, and the Company deposits with the Trustee, any Paying
Agent or the Conversion Agent, if applicable, cash or, if expressly permitted
by the terms of the Securities, Common Stock sufficient to pay all amounts due
and owing on all outstanding Securities (other than Securities replaced
pursuant to Section 2.06), and if in either case the Company pays all other
sums payable hereunder by the Company, then this Indenture shall, subject to
Section 5.06, cease to be of further effect, except for the indemnification of
the Trustee, which shall survive such satisfaction and discharge. The Trustee
shall join in the execution of a document prepared by the Company acknowledging
satisfaction and discharge of this Indenture on demand of the Company
accompanied by an Officer’s Certificate and Opinion of Counsel and at the
reasonable cost and expense of the Company.

     Section 3.02. Repayment of Moneys Held by Trustee. Any moneys deposited
with the Trustee or any Paying Agent for the payment of the principal of or
interest on any Security and not applied but remaining unclaimed by the Holders
for two years after the date upon which the principal of or interest on such
Security shall have become due and payable, shall be repaid to the Company by
the Trustee or such Paying Agent on demand; and the Holder of any of the
Securities entitled to receive such payment shall thereafter look only to the
Company for the payment thereof and all liability of the Trustee or such Paying
Agent with respect to such moneys shall thereupon cease.

ARTICLE 4

Remedies

     Section 4.01. Events of Default. “Event of Default”, wherever used herein
with respect to the Securities, means any one of the following events (whatever
the reason for such Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of law, pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):

		
	 	     (a) a default in the payment of the Accreted Principal Amount,
Redemption Price, Purchase Price, Remarketing Purchase Price or Change in
Control Purchase Price with respect to any Security when such payment
becomes due and payable pursuant to the terms hereof; or

22

 

		
	 	     (b) default in the payment of any interest (including Contingent
Interest and Liquidated Damages, if any) upon any Security when it
becomes due and payable, and continuance of such default for a period of
30 days; or
	 
	 	     (c) default in the performance, or breach, of any covenant or
warranty of the Company in this Indenture (other than a covenant or
warranty a default in whose performance or whose breach is elsewhere in
this Section specifically dealt with), and continuance of such default or
breach for a period of 60 days after there as been given by registered or
certified mail, to the Company by the Trustee, or to the Company and the
Trustee by the Holders of at least 25% in aggregate Original Principal
Amount of the Securities then outstanding a written notice specifying
such default or breach and requiring it to be remedied and stating that
such notice is a “Notice of Default” hereunder; or
	 
	 	     (d) the entry by a court having jurisdiction in the premises of
Article 1 a decree or order for relief in respect of the Company in an
involuntary case or proceeding under any applicable Federal or state
bankruptcy, insolvency, reorganization or other similar law or Article 2
a decree or order adjudging the Company a bankrupt or insolvent, or
approving as properly filed a petition seeking reorganization,
arrangement, adjustment or composition of or in respect of the Company
under any applicable Federal or state law, or appointing a custodian,
receiver, liquidator, assignee, trustee, sequestrator or other similar
official of the Company or of any substantial part of its property, or
ordering the winding up or liquidation of its affairs, and the
continuance of any such decree or order for relief or any such other
decree or order unstayed and in effect for a period of 60 consecutive
days; or
	 
	 	     (e) the commencement by the Company of a voluntary case or
proceeding under any applicable Federal or state bankruptcy, insolvency,
reorganization or other similar law or of any other case or proceeding to
be adjudicated a bankrupt or insolvent, or the consent by it to the entry
of a decree or order for relief in respect of the Company in an
involuntary case or proceeding under any applicable Federal or state
bankruptcy, insolvency, reorganization or other similar law or to the
commencement of any bankruptcy or insolvency case or proceeding against
it, or the filing by it of a petition or answer or consent seeking
reorganization or relief under any applicable Federal or State law, or
the consent by it to the filing of such petition or to the appointment of
or taking possession by a custodian, receiver, liquidator, assignee,
trustee, sequestrator or similar official of the Company or of any
substantial part of its property, or the making by it of an assignment
for the benefit of creditors, or the admission by it in writing of its
inability to pay its debts generally as they become due, or the taking of
corporate action by the Company in furtherance of any such action.

     Section 4.02. Acceleration of Maturity; Rescission and Annulment. If an
Event of Default (other than an Event of Default specified in Section 4.01(d)
or 4.01(e)) occurs and is continuing, the Trustee by notice to the Company or
the Holders of at least 25% in aggregate Original Principal Amount of the
Securities at the time outstanding by written notice to the Company and the
Trustee, may declare the Accreted Principal Amount of the Securities through
the date of such declaration, and any accrued and unpaid interest (including
Contingent Interest

23

 

and Liquidated Damages, if any) through the date of such declaration, on
all the Securities to be immediately due and payable. Upon such a declaration,
such Accreted Principal Amount, and such accrued and unpaid interest (including
Contingent Interest and Liquidated Damages, if any) shall be due and payable
immediately. If an Event of Default specified in Section 4.01(d) or 4.01(e)
occurs and is continuing, the Accreted Principal Amount, and any accrued and
unpaid interest (including Contingent Interest and Liquidated Damages, if any)
on all the Securities to the date of the occurrence of such Event of Default
shall become and be immediately due and payable without any declaration or
other act on the part of the Trustee or any Holders.

     At any time after such a declaration of acceleration with respect to
Securities has been made and before a judgment or decree for payment of the
money due has been obtained by the Trustee as hereinafter in this Article
provided, the Holders of a majority in Original Principal Amount of the
Securities then outstanding, by written notice to the Company and the Trustee,
may rescind and annul such declaration and its consequences if

		
	 	     (i) the Company has paid or deposited with the Trustee a sum
sufficient to pay

		
	 	     (A) all overdue interest (including Contingent Interest and
Liquidated Damages, if any) on all Securities,

		
	 	     (B) the Accreted Principal Amount of the Securities that have
become due otherwise than by such declaration of acceleration and
interest thereon at the rate or rates prescribed therefor in such
Securities or, if no such rate or rates are so prescribed, at the
rate borne by the Securities during the period of such default, or
if such default is after July 25, 2007, the Applicable Yield of
the Securities during the period of such default,

		
	 	     (C) to the extent that payment of such interest is
enforceable under applicable law, interest upon overdue interest
or overdue Contingent Interest to the date of such payment or
deposit at the rate or rates prescribed therefor in such
Securities or, if no such rate or rates are so prescribed, at the
rate borne by the Securities during the period of such default, or
if such default is after July 25, 2007, the Applicable Yield of
the Securities during the period of such default, and

		
	 	     (D) all sums paid or advanced by the Trustee hereunder and
the reasonable compensation, expenses, disbursements and advances
of the Trustee, its agents and counsel;

     and

		
	 	     (ii) all Events of Default with respect to the Securities, other
than the nonpayment of the Accreted Principal Amount of the Securities
that have become due solely by such declaration of acceleration, have
been cured or waived as provided in Section 4.13.

     No such waiver or rescission and annulment shall affect any subsequent default
or impair any right consequent thereon.

 

      Section 4.03. Collection of Indebtedness and Suits for Enforcement by
Trustee. The Company covenants that (i) in case default shall be made in the
payment of any installment of interest (including Contingent Interest and
Liquidated Damages, if any) on any Security, as and when the same shall become
due and payable, and such default shall have continued for a period of 30 days,
or (ii) in case default shall be made in the payment of the Accreted Principal
Amount of any Security when the same becomes due in accordance with the terms
thereof, upon demand of the Trustee, the Company will pay to the Trustee, for
the benefit of the Holders of such Securities, the whole amount that then shall
have become due and payable on all such Securities for principal or interest
(including Contingent Interest and Liquidated Damages, if any), or both, as the
case may be, with interest upon the overdue principal and (to the extent that
payment of such interest is enforceable under applicable law) upon overdue
installments of interest at the rate borne by the Securities during the period
of such default; and, in addition thereto, such further amount as shall be
sufficient to cover reasonable compensation to the Trustee, its agents,
attorneys and counsel, and all other expenses and liabilities incurred, and all
advances made, by the Trustee except as a result of its own negligence or
willful misconduct.

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

      Section 4.04. Trustee May File Proofs of Claim. In case of the pendency
of any receivership, insolvency, liquidation, bankruptcy, reorganization,
arrangement, adjustment, composition or other judicial proceeding relative to
the Company or any other obligor upon the Securities or the property of the
Company or of such other obligor or their creditors, the Trustee (irrespective
of whether the Accreted Principal Amount, Redemption Price, Purchase Price,
Remarketing Purchase Price, Change in Control Purchase Price or interest
(including Contingent Interest and Liquidated Damages, if any) in respect of
the Securities shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Trustee shall have
made any demand on the Company for the payment of any such amount) shall be
entitled and empowered, by intervention in such proceeding or otherwise,

     (i)     to file and prove a claim for the entire Accreted Principal
Amount, Redemption Price, Purchase Price, Remarketing Purchase Price,
Change in Control Purchase Price and interest (including Contingent
Interest and Liquidated Damages, if any) owing and unpaid in respect of
the Securities and to file such other papers or documents as may be
necessary or advisable in order to have the claims of the Trustee
(including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and of
the Holders allowed in such judicial proceeding; and

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

25

 

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the Holders,
to pay to the Trustee any amount due it for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel,
and any other amounts due the Trustee under Section 5.06.

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

      Section 4.05. Trustee May Enforce Claims Without Possession of Securities.
All rights of action and claims under this Indenture or the Securities may be
prosecuted and enforced by the Trustee without the possession of any of the
Securities or the production thereof in any proceeding relating thereto, and
any such 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 Securities in respect of which such
judgment has been recovered.

      Section 4.06. Application of Money Collected. Any money collected by the
Trustee pursuant to this Article shall be applied in the following order:

     FIRST:     To the payment of all amounts due the Trustee under Section
5.06;

     SECOND:     To the payment of the amounts then due and unpaid for
Accreted Principal Amount, Redemption Price, Purchase Price, Remarketing
Purchase Price, Change in Control Purchase Price and interest (including
Contingent Interest and Liquidated Damages, if any) on the Securities in
respect of which or for the benefit of which such money has been
collected, ratably, without preference or priority of any kind, according
to the amounts due and payable on such Securities; and

     THIRD:     To the payment of the remainder, if any, to the Company or
as a court of competent jurisdiction may direct.

      Section 4.07. Limitation on Suits. No Holder of any Security shall have
any right to institute any proceeding, judicial or otherwise, with respect to
this Indenture, or for the appointment of a receiver or trustee, or for any
other remedy hereunder, unless

     (i)     such Holder shall have previously given written notice to the
Trustee of a continuing Event of Default with respect to the Securities;

     (ii)     the Holders of not less than 25% in aggregate Original
Principal Amount of the outstanding Securities shall have made written
request to the Trustee to institute proceedings in respect of such Event
of Default in its own name as Trustee hereunder;

26

 

     (iii)     such Holder or Holders shall have offered to the Trustee
reasonable indemnity satisfactory to it as it may require against the
costs, expenses and liabilities to be incurred in compliance with such
request;

     (iv)     the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity shall have failed to institute any such
proceeding; and

     (v)     no direction inconsistent with such written request shall have
been given to the Trustee pursuant to Section 4.12 during such 60-day
period by the Holders of a majority in Original Principal Amount of the
outstanding Securities;

it being understood and intended that no one or more of such Holders 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 of
such Holders, or to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable and common benefit of
all of such Holders.

      Section 4.08. Unconditional Right of Holders to Receive Principal and
Interest. Notwithstanding any other provision in this Indenture, the Holder of
any Security shall have the right, which is absolute and unconditional, to
receive payment of the Accreted Principal Amount, Redemption Price, Purchase
Price, Remarketing Purchase Price, Change in Control Purchase Price and
interest (including Contingent Interest and Liquidated Damages, if any) on such
Security after the respective due dates expressed in such Security, and to
convert the Securities in accordance with Article 11, and to institute suit for
the enforcement of any such payment on or after such respective dates, and such
rights shall not be impaired without the consent of such Holder.

      Section 4.09. Restoration of Right and Remedies. If the Trustee or any
Holder has instituted any proceeding to enforce any right or remedy under this
Indenture and such proceeding has been discontinued or abandoned for any
reason, or has been determined adversely to the Trustee or to such Holder, then
and in every such case, subject to any determination in such proceeding, the
Company, the Trustee and the Holders shall be restored severally and
respectively to their former positions hereunder and thereafter all rights and
remedies of the Trustee and the Holders shall continue as though no such
proceeding had been instituted.

      Section 4.10. Rights and Remedies Cumulative. Except as otherwise
provided with respect to the replacement or payment of mutilated, destroyed,
lost or stolen Securities in the last paragraph of Section 2.06, no right or
remedy herein conferred upon or reserved to the Trustee or to the Holders is
intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at
law or in equity or otherwise. The assertion or employment of any right or
remedy hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.

27

 

      Section 4.11. Delay or Omission Not Waiver. No delay or omission of the
Trustee or of any Holder of any Securities to exercise any right or remedy
accruing upon any Event of Default shall impair any such right or remedy or
constitute a waiver of any such Event of Default or an acquiescence therein.
Every right and remedy given by this Article or by law to the Trustee or to the
Holders may be exercised from time to time, and as often as may be deemed
expedient, by the Trustee or by the Holders, as the case may be.

      Section 4.12. Control by Holders. The Holders of a majority in aggregate
Original Principal Amount of the outstanding Securities 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, with respect to the Securities; provided, however, that

     (i)     such direction shall not be in conflict with any rule of law or
with this Indenture,

     (ii)     the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction,

     (iii)     such direction is not unduly prejudicial to the rights of
Holders not taking part in such direction, and

     (iv)     such direction would not involve the Trustee in personal
liability, as the Trustee, upon being advised by counsel, shall
reasonably determine.

      Section 4.13. Waiver of Past Defaults. The Holders of at least a majority
in aggregate Original Principal Amount of the outstanding Securities may on
behalf of the Holders of all the Securities by notice to the Trustee waive any
past default hereunder with respect to such Securities and its consequences,
except a Default:

     (i)     that is an Event of Default described in Section 4.01(a) or
4.01(b); or

     (ii)     in respect of a covenant or provision hereof which under
Article 8 cannot be modified or amended without the consent of the Holder
of each outstanding Security; or

     (iii)     that constitutes a failure to convert any Security in
accordance with the terms of Article 11.

      Upon any such waiver, such Default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every purpose
of this Indenture, and the Company, the Trustee and Holders shall be restored
to their former positions and rights hereunder, respectively; but no such
waiver shall extend to any subsequent or other Default or impair any right
consequent thereon.

      Section 4.14. Undertaking for Costs. All parties to this Indenture agree,
and each Holder of any Security 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, suffered or omitted by it as Trustee, the

28

 

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 and expenses, against any party litigant
in such suit, having due regard to the merits and good faith of the claims or
defenses made by such party litigant; but the provisions of this Section shall
not apply to any suit instituted by the Company, to any suit instituted by the
Trustee, to any suit instituted by any Holder, or group of Holders, holding in
the aggregate more than 10% in Original Principal Amount of the outstanding
Securities, or to any suit instituted by any Holder pursuant to Section 4.08.
This Section 4.14 shall be in lieu of Section 315(e) of the TIA and such
Section 315(e) is hereby expressly excluded from this Indenture, as permitted
by the TIA.

      Section 4.15. Waiver of Stay or Extension Laws. The Company covenants (to
the extent that it may lawfully do so) that it will not at any time insist
upon, or plead, or in any manner whatsoever claim or take the benefit or
advantage of, any stay or extension law wherever enacted, now or at any time
hereafter in force, which would prohibit or forgive the Company from paying all
or any portion of the Accreted Principal Amount, Redemption Price, Purchase
Price, Remarketing Purchase Price, Change in Control Purchase Price or interest
(including Contingent Interest and Liquidated Damages, if any) in respect of
Securities, as contemplated herein, or which may affect the covenants or the
performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution
of every such power as though no such law had been enacted.

ARTICLE 5

The Trustee

      Section 5.01. Duties of Trustee. If an Event of Default has occurred
and is continuing, the Trustee shall exercise the rights, duties and powers
vested in it by this Indenture and use the same degree of care and skill in its
exercise as a prudent person would exercise or use under the circumstances in
the conduct of such person’s own affairs.

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

     (i)     the Trustee need perform only those duties that are specifically
set forth in this Indenture, and no implied covenants or obligations
shall be read into this Indenture against the Trustee; and

     (ii)     in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon notices, certificates, opinions,
or other documents furnished to the Trustee and conforming to the
requirements of this Indenture. However, in case of any such
certificates, opinions, or other documents which by provision hereof are
specifically required to be furnished to the Trustee, the Trustee shall
examine such notices, certificates, opinions, or other documents to
determine whether or not they conform to the requirements of this
Indenture (but need not confirm or investigate the accuracy of
mathematical calculations or other facts stated therein).

29

 

      This Section 5.01(b) shall be in lieu of Section 315(a) of the TIA and
such Section 315(a) is hereby expressly excluded from this Indenture, as
permitted by the TIA.

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

     (i)     this paragraph (c) does not limit the effect of paragraph (b) of
this Section 5.01;

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

     (iii)     the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 4.02 and Section 4.12.

      Subparagraphs (c)(i), (ii) and (iii) shall be in lieu of Sections
315(d)(1), 315(d)(2) and 315(d)(3) of the TIA and such Sections 315(d)(1),
315(d)(2) and 315(d)(3) are hereby expressly excluded from this Indenture, as
permitted by the TIA.

      (d)     Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b), (c), (e) and (f) of this Section
5.01.

      (e)     The Trustee may refuse to perform any duty or exercise any right or
power or extend or risk its own funds or otherwise incur any financial
liability unless it receives indemnity satisfactory to it against any loss,
liability or expense.

      (f)     Notwithstanding anything herein to the contrary, in no event shall the
Trustee be responsible for the monitoring of the satisfaction, discharge or
waiver of any of the conditions precedent to the Redemption of the Securities,
Conversion, Purchase at the option of Holders, Purchase at the Option of Holder
Upon a Change in Control, Contingent Interest or Yield Reset and Remarketing
pursuant to Articles 10 through 15 or any provisions relating thereto.

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

      Section 5.02. Rights of Trustee. Subject to its duties and
responsibilities under the TIA,

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

      (b)     Before the Trustee acts or refrains from acting, it may require a
Company Request or Company Order, an Officer’s Certificate or an Opinion of
Counsel. The Trustee shall not be

30

 

liable for any action it takes or omits to
take in good faith in reliance on such Officer’s Certificate or Opinion of
Counsel.

      (c)     The Trustee may act through agents and attorneys.

      (d)     Subject to the provisions of Section 5.01(c), the Trustee shall not be
liable for any action it takes or omits to take in good faith which it believes
to be authorized or within it s rights or powers.

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

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

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

      (h)     The Trustee shall not be liable for any action taken, suffered, or
omitted to be taken by it in good faith and reasonably believed by it to be
authorized or within the discretion or rights or powers conferred upon it by
this Indenture.

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

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

      (k)     The Trustee may request that the Company deliver an Officer’s
Certificate setting forth the names of individuals and/or titles of officers
authorized at such time to take specified actions pursuant to this Indenture,
which Officer’s Certificate may be signed by any person authorized to sign an
Officer’s Certificate, including any person specified as so authorized in any
such certificate previously delivered and not superseded.

31

 

      Section 5.03. Individual Rights of Trustee. The Trustee in its individual
or any other capacity may become the owner or pledgee of Securities and may
otherwise deal with the Company or its Affiliates with the same rights it would
have if it were not Trustee. Any Paying Agent, Registrar, Conversion Agent or
co-registrar may do the same with like rights. However, the Trustee must
comply with Sections 5.09 and 5.10.

      Section 5.04. Trustee’s Disclaimer. The Trustee makes no representation
as to the validity or adequacy of this Indenture or the Securities, it shall
not be accountable for the Company’s use or application of the proceeds from
the Securities, it shall not be responsible for any statement in the
registration statement for the Securities under the Securities Act or in the
Indenture or the Securities (other than its certificate of authentication), or
the determination as to which beneficial owners are entitled to receive any
notices hereunder.

      Section 5.05. Notice of Defaults. If a Default occurs and if it is known
to the Trustee, the Trustee shall give to each Holder notice of the Default
within 90 days after it occurs unless such Default shall have been cured or
waived before the giving of such notice. Except in the case of a Default
described in Section 4.01(b) or (a), the Trustee may withhold the notice if and
so long as a committee of its Responsible Officers in good faith determines
that withholding the notice is in the interests of Holders. The second
sentence of this Section 5.05 shall be in lieu of the proviso to Section 315(b)
of the TIA and such proviso is hereby expressly excluded from this Indenture,
as permitted by the TIA.

      Section 5.06. Compensation and Indemnity. The Company agrees:

     (a)     to pay to the Trustee from time to time such compensation as the
Company and the Trustee shall from time to time agree in writing for all
services rendered by it hereunder (which compensation shall not be
limited (to the extent permitted by law) by any provision of law in
regard to the compensation of a trustee of an express trust);

     (b)     to reimburse the Trustee upon its request for all reasonable
expenses, disbursements and advances incurred or made by the Trustee in
accordance with the performance of its duties under this Indenture
(including the reasonable compensation and the expenses, advances and
disbursements of its agents and counsel), except any such expense,
disbursement or advance as shall be determined to have been caused by its
own negligence or willful misconduct; and

     (c)     to indemnify the Trustee or any predecessor trustee and their
agents for, and to hold them harmless against, any loss, damage, claim,
liability, cost or expense (including reasonable attorneys’ fees and
expenses and taxes (other than taxes based upon, measured by or
determined by the income of the Trustee)) incurred without negligence or
willful misconduct on its part, arising out of or in connection with the
acceptance or administration of this trust, including the costs and
expenses of defending itself against any claim (whether asserted by the
Company, any Holder or any other Person) or liability in connection with
the exercise or performance of any of its powers or duties hereunder.

32

 

      The Trustee shall notify the Company promptly of any claim for which it
may seek indemnity, but the omission so to notify the Company promptly shall
not relieve the Company from any liability which it may have to the Trustee
under this Section. The Company shall defend the claim, and the Trustee shall
cooperate in the defense. The Trustee may have separate counsel, and the
Company shall pay the reasonable fees and expenses of such counsel. The
Company need not pay for any settlement made without its consent, which consent
shall not be unreasonably withheld or delayed.

      To secure the Company’s payment obligations in this Section 5.06, the
Trustee shall have a lien prior to the Securities on all money or property held
or collected by the Trustee, except that held in trust to pay the Accreted
Principal Amount, Redemption Price, Purchase Price, Remarketing Purchase Price,
Change in Control Purchase Price or interest, if any, as the case may be, on
particular Securities.

      The Company’s payment obligations pursuant to this Section 5.06 shall
survive the discharge of this Indenture and resignation or removal of the
Trustee. When the Trustee incurs expenses after the occurrence of a Default
specified in Section 4.01(d) or Section 4.01(e), the expenses, including the
reasonable fees and expenses of its counsel, are intended to constitute
expenses of administration under any bankruptcy or insolvency law.

      Section 5.07. Replacement of Trustee.

      The Trustee may resign by so notifying the Company; provided, however, no such
resignation shall be effective until a successor Trustee has accepted its
appointment pursuant to this Section 5.07. The Holders of a majority in
aggregate Original Principal Amount of the Securities at the time outstanding
may remove the Trustee by so notifying the Trustee and the Company. The
Company shall remove the Trustee if:

     (a)     the Trustee fails to comply with Section 5.09;

     (b)     the Trustee is adjudged bankrupt or insolvent;

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

     (d)     the Trustee otherwise becomes incapable of acting.

      In addition, the Company may remove the Trustee if the Company shall
determine by a Board Resolution that the services provided by the Trustee
hereunder may be obtained at a substantially lower cost to the Company.

      If the Trustee resigns or is removed or if a vacancy exists in the office
of Trustee for any reason, the Company shall promptly appoint a successor
Trustee.

      A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Company satisfactory in form and substance
to the retiring Trustee and the Company. Thereupon the resignation or removal
of the retiring Trustee shall become effective, and the successor Trustee shall
have all the rights, powers and duties of the Trustee under this Indenture.
The successor Trustee shall mail a notice of its succession to Holders. The
retiring

33

 

Trustee shall upon payment of its charges hereunder promptly transfer
all property held by it as Trustee to the successor Trustee, subject to the
lien provided for in Section 5.06.

      If a successor Trustee does not take office within 30 days after the
retiring Trustee resigns or is removed, the retiring Trustee (at the expense of
the Company), the Company or the Holders of a majority in aggregate Original
Principal Amount of the Securities at the time outstanding may petition at the
expense of the Company any court of competent jurisdiction for the appointment
of a successor Trustee.

      If the Trustee fails to comply with Section 5.09 any Holder may petition
any court of competent jurisdiction for the removal of the Trustee and the
appointment of a successor Trustee.

      Section 5.08. Successor Trustee by Merger. If the Trustee consolidates
with, merges or converts into, or transfers all or substantially all its
corporate trust business or assets to, another corporation, the resulting,
surviving or transferee corporation without any further act shall be the
successor Trustee; provided that such corporation shall otherwise be qualified
and eligible under this Article.

      Section 5.09. Eligibility; Disqualification. The Trustee shall at all
times satisfy the requirements of TIA Sections 310(a)(1) and 310(b). The
Trustee shall have a combined capital and surplus of at least $50,000,000 as
set forth in its most recent published annual report of condition. Nothing
herein contained shall prevent the Trustee from filing with the Commission the
application referred to in the penultimate paragraph of TIA Section 310(b).

      Section 5.10. Preferential Collection of Claims Against Company. The
Trustee shall comply with TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated therein.

      Section 5.11. Authenticating Agent. The Trustee may upon written Company
request appoint one or more authenticating agents (including, without
limitation, the Company or any Affiliate thereof) which shall be authorized on
behalf of the Trustee in authenticating Securities in connection with the
issue, delivery, registration of transfer, exchange, partial redemption or
repayment thereof (an “Authenticating Agent”). Wherever reference is made in
this Indenture to the authentication of Securities by the Trustee or the
Trustee’s certificate of authentication, such reference shall be deemed to
include authentication on behalf of the Trustee by an Authenticating Agent and
a certificate of authentication executed on behalf of the Trustee by an
Authenticating Agent. Each Authenticating Agent must be acceptable to the
Company and must be a corporation organized and doing business under the laws
of the United States or of any State, having a combined capital and surplus of
at least $1,000,000, authorized under such laws to do a trust business and
subject to supervision or examination by Federal or State authorities or the
equivalent foreign authority in the case of an Authenticating Agent who is not
organized and doing business under the laws of the United States or of any
State thereof or the District of Columbia.

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      Any corporation succeeding to the corporate agency business of an
authenticating agent shall continue to be an Authenticating Agent without the
execution or filing of any paper or any further act on the part of the Trustee
or such Authenticating Agent.

      An 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
an Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee promptly may appoint a successor
Authenticating Agent. Any successor Authenticating Agent upon acceptance of
its appointment hereunder shall become vested with all rights, powers and
duties of its predecessor hereunder, with like effect as if originally named as
an Authenticating Agent herein. No successor Authenticating Agent shall be
appointed unless eligible under the provisions of this Section.

      The provisions of Sections 1.04, 1.08, 2.06, 2.09, 5.02, 5.03, 5.04 and
5.06 shall be applicable to any Authenticating Agent.

      Pursuant to each appointment made under this Section, the Securities may
have endorsed thereon, in lieu of the Trustee’s certificate of authentication,
an alternate certificate of authentication in substantially the following form:

      This is one of the Securities described in the within-mentioned Indenture.

	 	 	 	 
	 	JPMORGAN CHASE BANK
	 	 	 	 
	 	By	 	 
	 	 	 	

	 	 	 	
As Authenticating Agent for the Trustee
	 	 	 	 
	 	By	 	 
	 	 	 	

	 	 	 	
Authorized Signatory
	 	 	 	 
	 	Dated	 	 
	 	 	 	

ARTICLE 6

Holders’ Lists and Reports by Trustee and Company

      Section 6.01. Company to Furnish Trustee Information as to Names and
Addresses of Holders. The Company covenants and agrees that it will furnish or
cause to be furnished to the Trustee:

     (a)     semiannually, not later than July 25 and January 25 in each
year, commencing July 25, 2004, a list, in such form as the Trustee may
reasonably require, of the names and addresses of the Holders as of a
date not more than 15 days prior to the time such list is furnished and

35

 

     (b)     at such other times as the Trustee may request in writing,
within 30 days after the receipt by the Company of any such request, a
list of similar form and content as of a date not more than 15 days prior
to the time such list is furnished; provided, however, that so long as
the Trustee is the Registrar, no such list shall be required to be
furnished.

      Section 6.02. Preservation of Information; Communications to Holders.
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 Securities (1)
contained in the most recent list furnished to it as provided in Section 6.01
and (2) received by it in the capacity of Paying Agent or Registrar (if so
acting) hereunder.

      The Trustee may destroy any list furnished to it as provided in Section
6.01 upon receipt of a new list so furnished.

      (b)     In case three or more Holders of Securities (hereinafter called
“applicants”) apply in writing to the Trustee, and furnish to the Trustee
reasonable proof that each such applicant has owned a Security of such series
for a period of at least six months preceding the date of such application, and
such application states that the applicants desire to communicate with other
Holders of Securities with respect to their rights under this Indenture or
under the Securities, and is accompanied by a copy of the form of proxy or
other communication which such applicants propose to transmit, then the Trustee
shall, within five business days after the receipt of such application, at its
election, either

     (i)     afford such applicants access to the information preserved at
the time by the Trustee in accordance with the provisions of subsection
(a) of this Section 6.02, or

     (ii)     inform such applicants as to the approximate number of Holders
of Securities whose names and addresses appear in the information
preserved at the time by the Trustee in accordance with the provisions of
subsection (a) of this Section 6.02, and as to the approximate cost of
mailing to such Holders the form of proxy or other communication, if any,
specified in such application.

      If the Trustee shall elect not to afford such applicants access to such
information, the Trustee shall, upon the written request of such applicants,
mail to each Holder of Securities whose name and address appear in the
information preserved at the time by the Trustee in accordance with the
provisions of subsection (a) of this Section 6.02, a copy of the form of proxy
or other communication which is specified in such request, with reasonable
promptness after a tender to the Trustee of the material to be mailed and of
payment, or provision for the payment, of the reasonable expenses of mailing,
unless within five days after such tender the Trustee shall mail to such
applicants and file with the Commission, together with a copy of the material
to be mailed, a written statement to the effect that, in the opinion of the
Trustee, such mailing would be contrary to the best interests of the Holders of
Securities, or would be in violation of applicable law. Such written statement
shall specify the basis of such opinion. If the Commission, after opportunity
for a hearing upon the objections specified in the written statement so filed,
shall enter an order refusing to sustain any of such objections or if, after
the entry of an order sustaining one or more of such objections, the Commission
shall find, after

36

 

notice and opportunity for hearing, that all the objections
so sustained have been met and shall enter an order so declaring, the Trustee
shall mail copies of such material to all such Holders with reasonable
promptness after the entry of such order and the renewal of such tender;
otherwise the Trustee shall be relieved of any obligation or duty to such
applicants respecting their application.

      (c)     Each and every Holder of Securities, by receiving and holding the
same, agrees with the Company and the Trustee that neither the Company nor the
Trustee or any Registrar or any Paying Agent shall be held accountable by
reason of the disclosure of any such information as to the names and addresses
of the Holders in accordance with the provisions of subsection (b) of this
Section 6.02, regardless of the source from which such information was derived,
and that the Trustee shall not be held accountable by reason of mailing any
material pursuant to a request made under said subsection (b).

      Section 6.03. Reports by Trustee. Within 60 days after each July 25
beginning with July 25, 2004, the Trustee shall mail to each Holder a brief
report dated as of such July 25 that complies with TIA Section 313(a), if
required by such Section 313(a). The Trustee also shall comply with TIA
Section 313(b).

      A copy of each report at the time of its mailing to Holders shall be filed
with the Commission and each securities exchange, if any, on which the
Securities are listed. The Company agrees to promptly notify the Trustee
whenever the Securities become listed on any securities exchange and of any
delisting thereof.

      Section 6.04. Reports by Company. The Company shall file with the
Trustee, within 20 days after it files such annual and quarterly reports,
information, documents and other reports with the Commission, copies of its
annual report and of the information, documents and other reports (or copies of
such portions of any of the foregoing as the Commission may by rules and
regulations prescribe) which the Company is required to file with the
Commission pursuant to Section 13 or 15(d) of the Exchange Act. In the event
the Company is at any time no longer subject to the reporting requirements of
Section 13 or 15(d) of the Exchange Act, it shall continue to provide the
Trustee with reports containing substantially the same information as would
have been required to be filed with the Commission had the Company continued to
have been subject to such reporting requirements. In such event, such reports
shall be provided at the times the Company would have been required to provide
reports had it continued to have been subject to such reporting requirements.
The Company also shall comply with the other provisions of TIA Section 314(a).

      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 Officer’s Certificates).

      If at any time while any of the Securities are“restricted securities”
within the meaning of Rule 144, the Company is no longer subject to the
reporting requirements of Section 13 or 15(d) of the Exchange Act, the Company
will prepare and will furnish to any Holder, any beneficial owner of Securities
and any prospective purchaser of Securities designated by a Holder or a
beneficial

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owner of Securities, promptly upon request, the information required
pursuant to Rule 144A(d)(4) (or any successor thereto) under the Securities Act
in connection with the offer, sale or transfer of Securities.

ARTICLE 7

Consolidation, Merger, Sale or Conveyance

      Section 7.01. Consolidations and Mergers of Company Permitted Subject to
Certain Conditions. The Company may consolidate or merge with or be merged
into any other Person, and may sell, transfer or lease all or substantially all
of its properties and assets to any Person so long as the following conditions
are met, if:

     (a)     the resulting or acquiring Person, if not the Company, is
organized and existing under the laws of the United States, any state
thereof or the District of Columbia, and such Person assumes, by an
indenture supplement hereto executed and delivered to the Trustee, if
applicable, all of the obligations of the Company under this Indenture
and the Securities, including performance of all obligations under this
Indenture and payment of all amounts due on the Securities;

     (b)     immediately after such transaction and giving effect to such
transaction, no Event of Default, and no event which, after notice or
lapse of time, or both, would become an Event of Default, shall have
happened and be continuing; and

     (c)     the Company has delivered to the Trustee an Officer’s
Certificate and an Opinion of Counsel each stating that such
consolidation, merger, conveyance, transfer or lease and such
supplemental indenture comply with this Article and that all conditions
precedent herein provided for relating to such transaction have been met.

      Section 7.02. Rights and Duties of Successor Entity. Upon any
consolidation with or merger into any other corporation, or any conveyance,
transfer or lease of all or substantially all of the properties and assets of
the Company substantially as an entirety in accordance with Section 7.01, the
successor entity formed by such consolidation or into which the Company is
merged or to which such conveyance, transfer or lease is made shall succeed to,
and be substituted for, and may exercise every right and power of, the Company
under this Indenture and the Securities with the same effect as if such
successor had been named as the Company herein, and thereafter, except in the
case of a lease, the Company (which term for this purpose shall mean the Person
named as the“Company” in the first paragraph of this instrument or any
successor entity which shall theretofore have become such in the manner
presented in this Article) shall be relieved of all obligations and covenants
under this Indenture and the Securities.

ARTICLE 8

Supplemental Indentures

      Section 8.01. Supplemental Indentures Without Consent of Holder. The
Company, when authorized by a Board Resolution, and the Trustee may from time
to time and at any time enter

38

 

into an indenture or indentures supplemental
hereto (which shall conform to the provisions of the TIA as in force at the
date of the execution thereof) for one or more of the following purposes:

     (i)     to evidence the succession of another corporation or entity to
the Company, or successive successions, and the assumption by the
successor corporation or entity of the covenants, agreements and
obligations of the Company under this Indenture;

     (ii)     to add to the covenants of the Company or to add additional
rights for the benefit of the Holders of Securities or to surrender any
right or power herein conferred upon the Company;

     (iii)     to cure any ambiguity, omission, defect or inconsistency
herein, to correct or supplement any provision herein or in any
supplemental indenture which may be defective or inconsistent with any
other provision herein or in any supplemental indenture, or to make such
other provisions with respect to matters or questions arising under this
Indenture, provided such action shall not adversely affect the interests
of the Holders of Securities in any material respect;

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

     (v)     to add any additional Events of Default for the benefit of the
Holders of Securities;

     (vi)     to add any additional Purchase Dates on which the Holders may
require the Company to purchase their Securities pursuant to Article 12;
and

     (vii)     to comply with any requirement of the Commission in connection
with the qualification of the Indenture under the TIA.

      Any amendment described in clause (iii) above made solely to conform this
Indenture to the final offering memorandum provided to investors in connection
with the initial offering of the Securities by the Company will not be deemed
to materially and adversely affect the interests of Holders.

      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 which may be therein contained and to accept the conveyance,
transfer, assignment, mortgage or pledge of any property thereunder.

      Any supplemental indenture authorized by the provisions of this Section
8.01 may be executed by the Company and the Trustee without the consent of the
Holders of any of the outstanding Securities, notwithstanding any of the
provisions of Section 8.02.

      Section 8.02. Supplemental Indentures with Consent of Holders. With the
consent of the Holders of at least a majority in Original Principal Amount of
the outstanding Securities, by Act

39

 

of said Holders delivered to the Company and
the Trustee, the Company, when authorized by a Board Resolution, and the
Trustee may from time to time and at any time enter into an indenture or
indentures supplemental hereto (which shall conform to the provisions of the
TIA as in force at the date of execution thereof) for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Indenture or of any supplemental indenture or of modifying in any manner
the rights of the Holders of Securities; provided, however, that no such
supplemental indenture shall, without the consent of the Holder of each
outstanding Security affected thereby:

     (i)     change the maturity of any payment of Accreted Principal Amount
of, or any installment of interest (including the payment of Contingent
Interest or Liquidated Damages, if any) on, the Securities, or

     (ii)     reduce the Original Principal Amount or Accreted Principal
Amount thereof, or

     (iii)     alter the manner or rate of accretion of principal or the
manner or rate of accrual of interest (including Contingent Interest and
Liquidated Damages), or

     (iv)     change any place of payment where, or the coin or currency in
which, the Securities or any premium or interest (including the payment
of Contingent Interest or Liquidated Damages, if any) thereon is payable,
or

     (v)     impair the right to institute suit for the enforcement of any
such payment on or after the Stated Maturity (or, in the case of
redemption or purchase, on or after the Redemption Date or the Purchase
Date, Change in Control Purchase Date or Remarketing Purchase Date, as
the case may be), or

     (vi)     adversely affect the conversion rights of the Holders under
Article 11 of this Indenture or the right of Holders to require the
Company to purchase the Securities under Article 12, Article 13 and
Section 15.04 of this Indenture or the right of Holders to elect to have
their Securities remarketed as set forth in Article 15, or the
obligations of the Company pursuant to Section 9.08, or

     (vii)     reduce the quorum or voting requirements under this Indenture,
or

     (viii)     reduce the percentage in aggregate Original Principal Amount
of the outstanding Securities, the consent of whose Holders is required
for any such modification, or the consent of whose Holders is required
for any waiver of compliance with the provisions of this Indenture or for
any waiver of an Event of Default, or

     (ix)     modify this Section 8.02, except to increase any percentages
required for approval or to provide that certain other provisions of this
Indenture cannot be modified or waived without the consent of the Holder
of each outstanding Security affected thereby.

      Upon the request of the Company accompanied by a copy of a Board
Resolution authorizing the execution of any such supplemental indenture, and
upon the filing with the

40

 

Trustee of evidence of the consent of Holders as
aforesaid, the Trustee shall join with the Company in the execution of such
supplemental indenture. It shall not be necessary for any Act of Holders under
this Section to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such Act shall approve the substance
thereof.

      Section 8.03. Execution of Supplemental Indentures. In executing, or
accepting the additional trusts created by, any supplemental indenture
permitted by this Article or the modifications thereby of the trusts created by
this Indenture, the Trustee shall be provided with, and (subject to Section
5.01) shall be fully protected in relying upon, an Opinion of Counsel stating
that the execution of such supplemental indenture is authorized or permitted by
this Indenture. The Trustee may, but shall not be obligated to enter into any
such supplemental indenture which affects the Trustee’s own rights, duties or
immunities under this Indenture or otherwise.

      Section 8.04. Effect of Supplemental Indentures. Upon the execution of
any supplemental indenture pursuant to the provisions of this Article, this
Indenture shall be and be deemed to be modified and amended in accordance
therewith, and the respective rights, limitations of rights, obligations,
duties and immunities under this Indenture of the Trustee, the Company and the
Holders 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 8.05. Reference in Securities to Supplemental Indentures.
Securities authenticated and delivered after the execution of any supplemental
indenture pursuant to this Article may, and shall if required by the Trustee,
bear a notation in form approved by the Trustee as to any matter provided for
in such supplemental indenture. If the Company shall so determine, new
Securities so modified as to conform, in the opinion of the Trustee and the
Company, to any such supplemental indenture may be prepared and executed by the
Company and authenticated and delivered by the Trustee in exchange for
outstanding Securities.

ARTICLE 9

Covenants of the Company

      Section 9.01. Payment of Principal, Premium and Interest. The Company
covenants and agrees that it will duly and punctually pay or cause to be paid
all payments in respect of the Securities in accordance with the terms of the
Securities and this Indenture. Any amounts to be given to the Trustee or
Paying Agent shall be deposited with the Trustee or Paying Agent by 10:00 a.m.
New York City time by the Company at the latest on the day such payment is due.
Accreted Principal Amount, Redemption Price, Purchase Price, Remarketing
Purchase Price, Change in Control Purchase Price and interest (including
Contingent Interest and Liquidated Damages, if any), shall be considered paid
on the applicable date due if on such date (or, in the case of a Purchase
Price, Remarketing Purchase Price or Change in Control Purchase Price, on the
Business Day following the applicable Purchase Date or Change in Control
Purchase Date, as the case may be) the Trustee or the Paying Agent holds, in
accordance with this Indenture,

41

 

money or securities, if permitted hereunder,
designated for and sufficient to pay all such amounts then due.

      Section 9.02. Maintenance of Office or Agency. The Company shall maintain
an office or agency of the Trustee, Registrar, Paying Agent and Conversion
Agent where the Securities may be presented or surrendered for payment, where
the Securities may be surrendered for registration of transfer or exchange,
where the Securities may be surrendered for purchase, redemption or conversion
and where notices and demands to or upon the Company in respect of the
Securities and this Indenture may be served. The office of the Paying Agent,
at JPMorgan Chase Bank, 4 New York Plaza, New York, New York 10004-2477,
Attention: Structured Finance Services, shall initially be such office or
agency for all of the aforesaid purposes. The Company will give prompt written
notice to the Trustee of the location, and any change in the location, of such
office or agency. 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 of the Trustee, and the Company hereby
appoints the Trustee as its agent to receive all such presentations,
surrenders, notices and demands.

      The Company may also from time to time designate one or more other offices
or agencies where the Securities may be presented or surrendered for any or all
such purposes and may from time to time rescind such designations.

      Section 9.03. Money for Securities Payments to Be Held in Trust. If the
Company shall at any time act as its own Paying Agent with respect to the
Securities, it will, on or before each due date of the Accreted Principal
Amount, Redemption Price, Purchase Price, Remarketing Purchase Price, Change in
Control Purchase Price and interest (including Contingent Interest and
Liquidated Damages, if any) on any of the Securities, segregate and hold in
trust for the benefit of the Persons entitled thereto a sum sufficient to pay
such sums so becoming due until such sums shall be paid to such Persons or
otherwise disposed of as herein provided. The Company will promptly notify the
Trustee of any failure by the Company to take such action or failure so to act.

      Whenever the Company shall have one or more Paying Agents for the
Securities, it will, on or prior to each due date of the Accreted Principal
Amount, Redemption Price, Purchase Price, Remarketing Purchase Price, Change in
Control Purchase Price and interest (including Contingent Interest and
Liquidated Damages, if any) on any Securities, deposit with a Paying Agent a
sum sufficient to pay such amounts so becoming due, such sum to be held in
trust for the benefit of the Persons entitled to such amounts, and (unless such
Paying Agent is the Trustee) the Company will promptly notify the Trustee of
its action or failure so to act.

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

     (i)     hold all sums held by it for the payment of the Accreted
Principal Amount, Redemption Price, Purchase Price, Remarketing Purchase
Price, Change in Control Purchase Price and interest (including
Contingent Interest and Liquidated Damages, if

42

 

any) on the Securities
(whether such sums have been paid to it by the Company or by any other
obligor on the Securities) in trust for the benefit of the Persons
entitled thereto;

     (ii)     give the Trustee notice of any failure by the Company (or any
other obligor upon the Securities) to make any payment of the Accreted
Principal Amount, Redemption Price, Purchase Price, Remarketing Purchase
Price, Change in Control Purchase Price and interest (including
Contingent Interest and Liquidated Damages, if any) on the Securities
when the same shall be due and payable; and

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

      Anything in this Section to the contrary notwithstanding, the Company may,
at any time, for the purpose of obtaining satisfaction and discharge of this
Indenture, or for any other reason, pay, or by Company Order direct any Paying
Agent to pay, to the Trustee all sums held in trust by the Company or such
Paying Agent, such sums to be held by the Trustee upon the same trusts as those
upon which such sums were held by the Company or such Paying Agent; and, upon
such payment by any Paying Agent to the Trustee, such Paying Agent shall be
released from all further liability with respect to such money.

      Section 9.04. Compliance Certificate. The Company will deliver to the
Trustee, on or before a date not more than 120 days after the end of each
fiscal year ending after the date hereof, an Officer’s Certificate, stating, as
to each officer signing such certificate, whether or not to the best of his
knowledge the Company is in default in the performance and observance of any of
the terms, provisions and conditions hereof (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 thereof of which he
may have knowledge.

      Section 9.05. Restrictions on Liens. If at any time the Company
mortgages, pledges or otherwise subjects to any lien, the whole or any part of
the Capital Stock of the Principal Subsidiary, except as provided in this
Section 9.05, the Company shall secure the outstanding Securities, and any
other obligations of the Company which may then be outstanding and entitled to
the benefit of a covenant similar in effect to this covenant, either on a
priority basis or equally and ratably with the indebtedness or obligations
secured by such mortgage, pledge, or lien, for as long as any such indebtedness
or obligation is so secured. The foregoing covenant does not apply in the
event the Board of Directors determines, in its sole discretion, that such
mortgage, pledge or lien on the Capital Stock of the Principal Subsidiary could
not reasonably be expected to detract or interfere in any material respect from
the fair market value of such Capital Stock or the control of such Capital
Stock by the Company. Notwithstanding the foregoing, nothing contained in this
Indenture is intended to prevent the Company from mortgaging, pledging, or
subjecting to any lien, any of the other properties or assets of the Company,
or from selling or otherwise disposing of any of the properties or assets of
the Company, including the Capital Stock of the Principal Subsidiary.

43

 

      Except as noted above, the Company may put liens on its interests in its
Subsidiaries, and may sell or otherwise dispose of its interests in any of its
Subsidiaries, including its Principal Subsidiary.

      Section 9.06. Calculation of Original Issue Discount. The Company shall
file with the Trustee promptly at the end of each calendar year (i) a written
notice specifying the amount of original issue discount (including daily rates
and accrual periods) accrued on the Securities as of the end of such year and
(ii) such other specific information relating to such original issue discount
as may then be reasonably requested by the Trustee and relevant under the
Internal Revenue Code of 1986, as amended from time to time.

      Section 9.07. Further Instruments and Acts. The Company will execute and
deliver such further instruments and do such further acts as may be reasonably
necessary or proper or as the Trustee may request to carry out more effectively
the purposes of this Indenture.

      Section 9.08. Obligation to Conduct Remarketing. The Company shall
appoint a Remarketing Agent and enter into a remarketing agreement at least 30
calendar days prior to each Remarketing Reset Event Date.

      (b)     The Company shall use its reasonable best efforts to effect the
remarketing of the Securities as described in Article 15. If in the judgment
of counsel to the Company or counsel to the Remarketing Agent a registration
statement is required to effect the Remarketing, the Company shall use its
reasonable best efforts to (i) ensure that a registration statement covering
the Accreted Principal Amount of all Securities to be remarketed will be
effective in a form that will enable the Re marketing Agent to rely on it in
connection with the Remarketing or (ii) effect such Remarketing pursuant to
Rule 144A or any other applicable exemption from registration requirements
under the Securities Act.

      Section 9.09. Notice by Company of Satisfaction of Conditions Precedent.
The Company shall provide, and the Trustee shall be entitled to rely upon,
written notice to the Trustee of the satisfaction of the conditions precedent
to the Redemption of the Securities, Conversion, Purchase at the Option of
Holders, Purchase at the Option of Holder Upon a Change in Control, Contingent
Interest or Yield Reset and Remarketing pursuant to Articles 10 through 15, at
least five Business Days in advance of the Trustee taking any required action
thereunder.

ARTICLE 10

Redemption of Securities

      Section 10.01. Right to Redeem; Notices to Trustee. Prior to July 25,
2007, the Securities shall not be redeemable at the option of the Company.
Beginning on July 25, 2007, the Securities shall be redeemable for cash at any
time as a whole, or from time to time in part, at the option of the Company, at
the Redemption Price; provided that if the Redemption Date is an Interest
Payment Date, accrued and unpaid interest (including Contingent Interest or
Liquidated Damages, if any) shall be paid to the Holder of record as of the
applicable Regular Record Date, rather than to the Holder presenting the
Security for redemption. If the Company elects to redeem Securities, it shall
notify the Trustee in writing of the Redemption Date, the Original Principal
Amount of Securities to be redeemed and the Redemption Price.

44

 

      Notwithstanding the foregoing, if a Remarketing Reset Event occurs and the
Company has not given notice of redemption of the Securities prior to such
Remarketing Reset Event Date, the Securities shall not thereafter be redeemable
at the option of the Company until on or after the next Remarketing Reset Event
Date.

      The Company shall give the notice to the Trustee provided for in this
Section 10.01 by a Company Order at least 35 days before the Redemption Date.

      Section 10.02. Selection of Securities to Be Redeemed. If less than all
the Securities are to be redeemed, the Trustee shall select the Securities to
be redeemed by lot, pro rata or by any other method the Trustee considers fair
and appropriate (so long as such method is not prohibited by the rules of any
stock exchange on which the Securities are then listed). The Trustee shall
make the selection at least 15 days, but not more than 60 days, before the
Redemption Date from outstanding Securities not previously called for
redemption. The Trustee may select for redemption portions of the Original
Principal Amount of Securities that have denominations larger than $1,000.
Securities and portions of them the Trustee selects shall be in Original
Principal Amounts of $1,000 or an integral multiple of $1,000. Provisions of
this Indenture that apply to Securities called for redemption also apply to
portions of Securities called for redemption. The Trustee shall notify the
Company promptly of the Securities or portions of Securities to be redeemed.

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

      Section 10.03. Notice of Redemption. At least 30 days but not more than
60 days before a Redemption Date, the Company shall mail a notice of redemption
by first-class mail, postage prepaid, to each Holder of Securities to be
redeemed.

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

     (a)     the Redemption Date;

     (b)     the Redemption Price;

     (c)     the Conversion Rate;

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

     (e)     that Securities called for redemption may be converted at any
time before the close of business on the Business Day immediately
preceding the Redemption Date;

     (f)     that Holders who want to convert Securities must satisfy the
requirements set forth in the applicable provisions of the Securities;

45

 

     (g)     whether the Company will deliver cash, Common Stock or a
combination of cash and Common Stock in the event a Holder converts
Securities called for redemption;

     (h)     that Securities called for redemption must be surrendered to the
Paying Agent to collect the Redemption Price;

     (i)     if fewer than all the outstanding Securities are to be redeemed,
the certificate number and Original Principal Amounts of the particular
Securities to be redeemed;

     (j)     that, unless the Company defaults in making payment of such
Redemption Price, interest (including Contingent Interest and Liquidated
Damages, if any) on Securities called for redemption will cease to accrue
on and after the Redemption Date; and

     (k)     the CUSIP number of the Securities.

      At the Company’s request, the Trustee shall give the notice of redemption
in the Company’s name and at the Company’s expense, provided that the Company
makes such request at least three Business Days prior to such notice of
redemption.

      Section 10.04. Effect of Notice of Redemption. Once notice of redemption
is given, Securities called for redemption become due and payable on the
Redemption Date and at the Redemption Price stated in the notice, except for
Securities which are converted in accordance with the terms of this Indenture.
Upon surrender to the Paying Agent, such Securities shall be paid at the
Redemption Price stated in the notice.

      Section 10.05. Deposit of Redemption Price. Prior to 10:00 a.m., New York
City time on the Redemption Date, the Company shall deposit with the Paying
Agent (or if the Company or a Subsidiary or an Affiliate of either of them is
the Paying Agent, shall segregate and hold in trust) money sufficient to pay
the Redemption Price of all Securities to be redeemed on that date other than
Securities or portions of Securities called for redemption which on or prior
thereto have been delivered by the Company to the Trustee for cancellation or
have been converted. The Paying Agent shall as promptly as practicable return
to the Company any money not required for that purpose because of conversion of
Securities pursuant to Article 11. If such money is the n held by the Company
in trust and is not required for such purpose it shall be discharged from such
trust.

      Section 10.06. Securities Redeemed in Part. Upon surrender of a Security
that is redeemed in part, the Company shall execute and the Trustee shall
authenticate and deliver to the Holder a new Security in an authorized
denomination equal in Original Principal Amount to the unredeemed portion of
the Security surrendered.

      Section 10.07. Conversion Arrangement on Call for Redemption. In
connection with any redemption of Securities, the Company may arrange for the
purchase and conversion of any Securities called for redemption by an agreement
with one or more investment bankers or other purchasers to purchase such
Securities by paying to a Paying Agent in trust for the Holders, on or

46

 

before
11:00 a.m. New York City time on the Redemption Date, an amount that, together
with any amounts deposited with such Paying Agent by the Company for the
redemption of such Securities, is not less than the Redemption Price of such
Securities. Notwithstanding anything to the contrary contained in this
Article, the obligation of the Company to pay the Redemption Price of such
Securities shall be deemed to be satisfied and discharged to the extent such
amount is so paid by such purchasers; provided, however, that nothing in this
Section 10.07 shall relieve the Company of its obligation to pay the Redemption
Price of the Securities called for redemption. If such an agreement is entered
into, any Securities called for redemption and not surrendered for conversion
by the Holders thereof prior to the relevant Redemption Date may, at the option
of the Company upon written notice to the Trustee, be deemed, to the fullest
extent permitted by law, acquired by such purchasers from such Holders and
(notwithstanding anything to the contrary contained in Article 11) surrendered
by such purchasers for conversion, all as of immediately prior to the close of
business on the Business Day immediately prior to the Redemption Date, subject
to payment of the above amount as aforesaid. The Paying Agent shall hold and
pay to the Holders whose Securities are selected for redemption any such amount
paid to it for purchase in the same manner as it would money deposited with it
by the Company for the redemption of the Securities. Without the Paying
Agent’s prior written consent, no arrangement between the Company and such
purchasers for the purchase and conversion of any Securities shall increase or
otherwise affect any of the powers, duties, responsibilities or obligations of
the Paying Agent as set forth in this Indenture, and the Company agrees to
indemnify the Paying Agent from, and hold it harmless against, any loss,
liability or expense arising out of or in connection with any such arrangement
for the purchase and conversion of any Securities between the Company and such
purchasers, including the costs and expenses incurred by the Paying Agent in
the defense of any claim or liability reasonably incurred without negligence or
bad faith on its part arising out of or in connection with the exercise or
performance of any of its powers, duties, responsibilities or obligations under
this Indenture, in accordance with the indemnity provisions applicable to the
Trustee set forth herein.

ARTICLE 11

Conversion

      Section 11.01. Conversion Rights. The Securities shall be convertible in
accordance with their terms and in accordance with and subject to this Article
into a number of shares of Common Stock per $1,000 Original Principal Amount of
Securities equal to the Conversion Rate.

      A Holder of a Security otherwise entitled to a fractional share upon the
conversion thereof shall receive cash in an amount equal to the value of such
fractional share based on the Closing Sale Price on the Trading Day immediately
preceding such conversion. Upon a conversion, the Company may deliver cash or
a combination of cash and Common Stock in lieu of Common Stock, as described in
Section 11.07.

      Upon determination that Holders are or will be entitled to convert their
Securities pursuant to this Article 11, the Company shall issue a press release
and publish such determination on the Company’s Web site on the World Wide Web.

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      Holders may surrender Securities for conversion into shares of Common
Stock only if at least one of the conditions described in Sections 11.02
through 11.06 is satisfied. In addition, a Security in respect of which a
Holder has delivered a Purchase Notice or Change in Control Purchase Notice
exercising the option of such Holder to require the Company to purchase such
Security may be converted only if such notice of exercise is withdrawn in
accordance with the terms of the Indenture.

      Section 11.02. Conversion Rights Based on Common Stock Price. At any time
after September 30, 2003 during a calendar quarter, Securities may be
surrendered for conversion into shares of Common Stock in integral multiples of
$1,000 Original Principal Amount, if the Closing Sale Price of the Common Stock
for at least 20 Trading Days in a period of 30 consecutive Trading Days ending
on the last Trading Day of the preceding calendar quarter is more than 130% of
the Conversion Price as of the last day of such calendar quarter.

      Section 11.03. Conversion Rights upon Credit Rating Events. Securities may be
surrendered for conversion in integral multiples of $1,000 Original Principal
Amount any time after the earlier of (a) the date the Securities are assigned a
credit rating by Standard & Poor’s Ratings Services, a division of The
McGraw-Hill Companies Inc., and its successors (“S&P”), Moody’s Investors
Service, Inc. and its successors (“Moody’s”) and Fitch, Inc and its successors
(“Fitch”) or (b) June 30, 2003, during any period in which (1) the credit
rating assigned to the Securities by S&P is below BBB+, (2) the credit rating
assigned to the Securities by Moody’s is below Baa1, (3) the credit rating
assigned to the Securities by Fitch is below BBB+ or (4) no credit rating is
assigned to the Securities by any two of S&P, Moody’s and Fitch. The
Securities will cease to be convertible pursuant to this Section 11.03 during
any period or periods in which all of the credit ratings are increased above
such levels.

      Section 11.04. Conversion Rights upon Notice of Redemption. Holders may
surrender for conversion in integral multiples of $1,000 Original Principal
Amount any Securities called for redemption under Article 10 hereof at any time
prior to the close of business on the Business Day immediately preceding the
Redemption Date, even if the Securities are not otherwise convertible at such
time.

      Section 11.05. Conversion Rights upon Occurrence of Certain Corporate
Transactions. If the Company is a party to a consolidation, merger or binding
share exchange pursuant to which shares of Common Stock would be converted into
cash, securities or other property as set forth in Section 11.14(ii), any
Security may be surrendered for conversion in integral multiples of $1,000
Original Principal Amount at any time from and after the date that is 15 days
prior to the anticipated effective date of the transaction until 15 days after
the actual date of such transaction and, at the effective time of the
transaction, the right to convert a Security into shares of Common Stock shall
be changed into a right to convert such Security into the kind and amount of
cash, securities or other property of the Company or another person that the
Holder would have received if the Holder had converted such Security
immediately prior to the transaction.

      If the Company distributes to all holders of Common Stock (1) rights or
warrants entitling them to purchase, for a period expiring within 45 days of
the record date for such distribution, Common Stock at less than the average
Closing Sale Price for the 10 Trading Days

48

 

preceding the declaration date for
such distribution, or (2) cash, assets, debt securities or rights to purchase
the Company’s securities, which distribution has a per share value exceeding
10% of the Closing Sale Price of the Common Stock on the Trading Day
immediately preceding the declaration date for such distribution, the
Securities may be surrendered for conversion in integral multiples of $1,000
Original Principal Amount beginning on the date that the Company gives notice
to the Holders of such right, which shall not be less than 20 days prior to the
time (“Ex-Dividend Time”) immediately prior to the commencement of
“ex-dividend” trading for such distribution on the New York Stock Exchange or
such other principal national or regional exchange or market on which the
Common Stock is then listed or quoted for such dividend or distribution, and
Securities may be surrendered for conversion at any time thereafter until the
earlier of close of business on the Business Day prior to the Ex-Dividend Time
and the date the Company announces that such dividend or distribution will not
take place. Notwithstanding the foregoing, Holders shall not have the right to
surrender Securities for conversion pursuant to this Section 11.05 if they will
otherwise participate in the distribution described above without first
converting Securities into Common Stock.

      Section 11.06. Conversion upon Satisfaction of Trading Price Condition.
Securities may be surrendered for conversion in integral multiples of $1,000
Original Principal Amount any time during the five Business Day period after
any five consecutive Trading Day period in which the Trading Price per $1,000
Original Principal Amount of the Securities for each day of such five Trading
Day period was less than 98% of the product of the Closing Sale Price of the
Common Stock and the Conversion Rate as of such Trading Day.

      (b)     Notwithstanding the foregoing, if, on the date of any conversion
pursuant to Section 11.06(a) on or after July 25, 2031, the Closing Sale Price
of the Common Stock is greater than the Conversion Price, the Holders of
Securities surrendered for conversion shall receive, in lieu of Common Stock
based on the Conversion Rate, cash or Common Stock or a combination of cash and
Common Stock, at the Company’s option, with a value equal to the Accreted
Principal Amount of Securities plus accrued and unpaid interest, if any,
including Contingent Interest, if any, as of the Conversion Date (“Principal
Value Conversion”). If a Holder surrenders its Securities for a Principal
Value Conversion, the Company shall notify such Holder by the second Trading
Day following the Conversion Date that it is a Principal Value Conversion and
whether the Company will pay such Holder all or a portion of the Accreted
Principal Amount plus accrued and unpaid Contingent Interest, if any, in cash,
Common Stock or a combination of cash and Common Stock, and in what percentage.
Any Common Stock delivered upon a Principal Value Conversion will be valued at
the greater of the Conversion Price on the Conversion Date and the Applicable
Stock Price as of the Conversion Date. The Company will pay such Holder any
portion of the Accreted Principal Amount plus accrued and unpaid Contingent
Interest, if any, to be paid in cash and deliver Common Stock with respect to
any portion of the Accreted Principal Amount plus accrued and unpaid Contingent
Interest, if any, to be paid in Common Stock, no later than the third Business
Day following the determination of the stock value in accordance with the
preceding sentence of this Section 11.06(b).

      (c)     In connection with any conversion pursuant to this Section 11.06, the
Calculation Agent shall not have any obligation to determine the Trading Price
of the Securities unless the Company has requested such determination and the
Company shall have no obligation to make

49

 

such request unless a Holder provides
the Company with reasonable evidence that the Trading Price per Security would
be less than 98% of the product of the Closing Sale Price of the Common Stock
and the number of shares of Common Stock issuable upon conversion of such
Security. At such time, the Company shall instruct the Calculation Agent to
determine the Trading Price of the Securities beginning on the next Trading Day
and on each successive Trading Day until the Trading Price per such Security is
greater than or equal to 98% of the product of the Closing Sale Price of the
Common Stock and the Conversion Rate as of such Trading Day (determined based
on such Closing Sale Price rather than the Applicable Stock Price).

      Section 11.07. Conversion Procedures. To convert a Security, a Holder
must (a) complete and manually sign the Conversion Notice or a facsimile of the
Conversion Notice on the back of the Security and deliver such notice to the
Conversion Agent, (b) surrender the Security to the Conversion Agent, (c)
furnish appropriate endorsements and transfer documents if required by the
Registrar or the Conversion Agent, (d) pay any transfer or similar tax, if
required and (e) if required, pay funds equal to the interest payable on the
next Interest Payment Date. The date on which the Holder satisfies all of
those requirements is the “Conversion Date”.  Except as set forth in Section
11.06, within two Business Days following the Conversion Date, the Company
shall deliver to the Holder, through the Conversion Agent, written notice of
whether such Securities shall be converted into Common Stock or paid in cash or
a combination of cash and Common Stock (unless the Company shall have already
done so pursuant to a notice of redemption pursuant to Section 10.03 in respect
of a Conversion Date occurring before the Redemption Date set forth in such
notice). If the Company shall have notified the Holder that all of such
Securities shall be converted into Common Stock or a combination of cash and
Common Stock, or if such conversion is a Principal Value Conversion, the
Company directly or through its stock registrar shall deliver to the Holder
through the Conversion Agent, no later than the third Business Day following
the date on which the Applicable Stock Price is determined, a certificate for
or other evidence of the number of whole shares of Common Stock issuable upon
the conversion and, if applicable, cash in lieu of such Common Stock and cash
in lieu of any fractional shares pursuant to 11.08. Except as otherwise
provided in this Article 11, if the Company shall have notified the Holder that
all or a portion of such Security shall be paid solely in cash, the Company
shall deliver to the Holder surrendering such Security the amount of cash per
Security (or a portion of a Security) equal to the Applicable Stock Price
multiplied by the Conversion Rate in effect with respect to such Conversion
Date no later than the tenth Business Day following such Conversion Date.
Except as otherwise provided in this Article 11, the Company may not change its
election with respect to the consideration to be delivered upon conversion of a
Security once the Company has notified the Holder in accordance with this
paragraph. Anything herein to the contrary notwithstanding, in the case of
Global Securities, Conversion Notices may be delivered and such Securities may
be surrendered for conversion in accordance with the applicable procedures of
the Depositary as in effect from time to time. The Person in whose name the
Common Stock certificate is registered shall be deemed to be a shareholder of
record at the close of business on the date on which the Applicable Stock Price
is determined with respect to the applicable Conversion Date; provided,
however, that if any such date is a date when the stock transfer books of the
Company are closed, such Person shall be deemed a shareholder of record as of
the next date on which the stock transfer books of the Company are open.

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      No payment or adjustment shall be made for dividends on, or other
distributions with respect to, any Common Stock except as provided in this
Article. On conversion of a Security, except for conversion during the period
from the close of business on any Regular Record Date immediately preceding any
Interest Payment Date to the close of business on the Business Day immediately
preceding such Interest Payment Date, in which case the Holder on such Regular
Record Date shall receive the interest payable on such Interest Payment Date,
that portion of accrued and unpaid interest, including Contingent Interest, if
any, on the converted Security attributable to the period from the most recent
Interest Payment Date (or, if no Interest Payment Date has occurred, from the
Issue Date) through the Conversion Date shall not be cancelled, extinguished or
forfeited, but rather shall be deemed to be paid in full to the Holder thereof
through delivery of the Common Stock (together with the cash payment, if any,
in lieu of fractional shares), or cash or a combination of cash and Common
Stock in lieu thereof, in exchange for the Security being converted pursuant to
the provisions hereof, and the fair market value of such shares of Common Stock
(together with any such cash payment in lieu of fractional shares), or cash or
a combination of cash and Common Stock in lieu thereof, shall be treated as
issued, to the extent thereof, first in exchange for accrued and unpaid
interest (including Contingent Interest, if any) accrued through the Conversion
Date and the balance, if any, of such fair market value of such Common Stock
(and any such cash payment), or cash in lieu thereof, shall be treated as
issued in exchange for the Accreted Principal Amount of the Security being
converted pursuant to the provisions hereof.

      The Company agrees, and by acceptance of a beneficial interest in a
Security each Holder and each beneficial owner of a Security agrees, to treat,
for United States federal income tax purposes, the fair market value of the
Common Stock received upon the conversion of a Security (together with any cash
payment in lieu of fractional shares) or cash, or a combination of cash and
Common Stock as a contingent payment on the Security for purposes of Treasury
Regulations Section 1.1275-4.

      If a Holder converts more than one Security at the same time, the number
of shares of Common Stock issuable upon the conversion shall be based on the
aggregate Original Principal Amount of Securities converted.

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

      Securities or portions thereof surrendered for conversion after the close
of business on any Regular Record Date but prior to the next succeeding
Interest Payment Date, Holders of such Securities at the close of business on
such Regular Record Date will receive the interest payable on such Securities
on the corresponding Interest Payment Date notwithstanding the conversion.
Such Securities, upon surrender for conversion, will be accompanied by payment
to the Company or its order, in New York Clearing House funds or other funds
acceptable to the Company, of an amount equal to the interest payable on such
Interest Payment Date with respect to the Original Principal Amount of
Securities or portions thereof being surrendered for conversion; provided that
no such payment need be made if (1) the Company has specified a Redemption Date
that is after the close of business on a Regular Record Date and prior to the

51

 

date the three Business Days following the next Interest Payment Date to which
such Regular Record Date relates, (2) the Company has specified a Change in
Control Purchase Date during such period or (3) only to the extent of overdue
interest or overdue Contingent Interest, any overdue interest or overdue
Contingent Interest exists on the Conversion Date with respect to the
Securities converted.

      The Holders’ rights to convert Securities into Common Stock are subject to
the Company’s right to elect instead to pay each such Holder the amount of cash
determined pursuant to this Article (or an equivalent amount in a combination
of cash and shares of Common Stock), in lieu of delivering such Common Stock;
provided, however, that if an Event of Default (other than a default in a cash
payment upon conversion of the Securities) shall have occurred and be
continuing, the Company shall deliver Common Stock in accordance with this
Article, whether or not the Company has delivered a notice pursuant to this
Section 11.07 to the effect that the Securities would be paid in cash or a
combination of cash and Common Stock.

      If the Securities are remarketed on any Remarketing Reset Event Date
pursuant to Article 15, the conditions to conversion set forth in this Article
11, must be satisfied thereafter or the Securities may not be converted.

      Section 11.08. Fractional Shares. The Company shall not issue a
fractional share of Common Stock upon conversion of a Security. Instead, the
Company will deliver cash for the current market value of the fractional share.
The current market value of a fractional share of Common Stock shall equal, to
the nearest 1/1,000th of a share, the Closing Sale Price of the Common Stock on
the Trading day immediately preceding the Conversion Date and rounding the
product to the nearest whole cent.

      Section 11.09. Taxes on Conversion. If a Holder converts a Security, the
Company shall pay any documentary, stamp or similar issue or transfer tax due
on the issue of shares of Common Stock upon such conversion. However, the
Holder shall pay any such tax which is due because the Holder requests the
shares to be issued in a name other than the Holder’s name. The Conversion
Agent may refuse to deliver the certificate representing the Common Stock being
issued in a name other than the Holder’s name until the Conversion Agent
receives a sum sufficient to pay any tax which will be due because the shares
are to be issued in a name other than the Holder’s name. Nothing herein shall
preclude any tax withholding required by law or regulation.

      Section 11.10. 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 Common Stock to provide for
the conversion of the Securities from time to time as such Securities are
presented for conversion.

      (b)     Before taking any action which would cause an adjustment increasing
the Conversion Rate to an amount that would cause the Conversion Price to be
reduced below the then par value, if any, of the shares of Common Stock
issuable upon conversion of the Securities, the Company will take all corporate
action which may, in the opinion of its counsel, be necessary

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in order that the
Company may validly and legally issue shares of such Common Stock at such
adjusted Conversion Rate.

      (c)     (i) The Company covenants that all shares of Common Stock which may be
issued upon conversion of Securities 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.

          (ii)     The Company covenants that, if any shares of Common Stock to be
provided for the purpose of conversion of Securities 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, to the extent then
permitted by the rules and interpretations of the Securities and Exchange
Commission (or any successor thereto), endeavor to secure such registration or
approval, as the case may be.

      (d)     The Company further covenants that, if at any time the Common Stock
shall be listed on the NYSE 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 Security; provided, however,
that, if the 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 Securities into Common Stock in accordance with the provisions of this
Indenture, the Company covenants to list such Common Stock issuable upon
conversion of the Securities in accordance with the requirements of such
exchange or automated quotation system at such time.

      Section 11.11. Adjustment of Conversion Rate. The Conversion Rate 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 Rate shall be increased so that the same
shall equal the rate determined by multiplying the Conversion Rate in
effect at the opening of business on the date following the date fixed
for the determination of stockholders entitled to receive such dividend
or other distribution by a fraction,

     (i)     the numerator of which shall be the sum of the number of
shares of Common Stock outstanding at the close of business on the
date fixed for the determination of stockholders entitled to
receive such dividend or other distribution plus the total number
of shares of Common Stock constituting such dividend or other
distribution; and

     (ii)     the denominator of which shall be the number of shares of
Common Stock outstanding at the close of business on the date fixed
for such determination,

such increase to become effective immediately after the opening of
business on the day following the date fixed for such determination. If
any dividend or distribution of the

53

 

type described in this Section
11.11(a) is declared but not so paid or made, the Conversion Rate shall
again be adjusted to the Conversion Rate that would then be in effect 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 fortyfive (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 average of the Closing Sale Prices of the Common
Stock for the 10 Trading Days preceding the declaration date for such
distribution, the Conversion Rate shall be increased so that the same
shall equal the rate determined by multiplying the Conversion Rate in
effect immediately prior to the date fixed for determination of
stockholders entitled to receive such rights or warrants by a fraction,

     (i)     the numerator of which shall be the number of shares of
Common Stock outstanding on the date fixed for determination of
stockholders entitled to receive such rights or warrants plus the
total number of additional shares of Common Stock offered for
subscription or purchase, and

     (ii)     the denominator of which shall be the sum of 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 or warrants plus the number of shares that the
aggregate offering price of the total number of shares so offered
would purchase at a price equal to the average of the Closing Sale
Prices of the Common Stock for the 10 Trading Days preceding the
declaration date for such distribution.

     Such adjustment shall be successively made whenever any such rights
or warrants are issued, and shall become effective immediately after the
opening of business on the day 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 Rate shall be readjusted to
the Conversion Rate that would then be in effect had the adjustments made
upon the issuance of such rights or warrants been made on the basis of
delivery of only the number of shares of Common Stock actually delivered.
If such rights or warrants are not so issued, the Conversion Rate shall
again be adjusted to be the Conversion Rate that would then be in effect
if 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 a price less than the average of the
Closing Sale Prices of the Common Stock for the 10 Trading Days preceding
the declaration date for such distribution, 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 and any amount payable on exercise or conversion
thereof, the value of such consideration, if other than cash, to be
determined by the Board of Directors.

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

     (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 or evidences of its indebtedness or assets (including
securities, but excluding (x) any rights or warrants referred to in
Section 11.11(b), (y) any dividend or distribution (I) paid exclusively
in cash or (II) referred to in Section 11.11(a) and (z) any distribution
referred to in Section 11.11(g)) (any of the foregoing hereinafter in
this Section 11.11(d) called the “Distributed Securities”)), then, in
each such case, the Conversion Rate shall be increased so that the same
shall be equal to the rate determined by multiplying the Conversion Rate
in effect on the Record Date with respect to such distribution by a
fraction,

     (i)     the numerator of which shall be the Current Market Price
on such Record Date; and

     (ii)     the denominator of which shall be the Current Market
Price 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 of Directors) on the
Record Date of the portion of the Distributed Securities so
distributed applicable to one share of Common Stock,

such adjustment to become effective immediately prior to the opening of
business on the day following such Record Date; provided that if the then
Fair Market Value (as so determined) of the portion of the Distributed
Securities so distributed applicable to one share of Common Stock is
equal to or greater than the Current Market Price on the Record Date, in
lieu of the foregoing adjustment, adequate provision shall be made so
that each Holder shall have the right to receive upon conversion the
amount of Distributed Securities such holder would have received had such
holder converted each Security on the Record Date. If such dividend or
distribution is not so paid or made, the Conversion Rate shall again be
adjusted to be the Conversion Rate that 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 11.11(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 on the applicable Record Date.

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     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
11.11 (and no adjustment to the Conversion Rate under this Section 11.11
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 Rate shall be made under this Section 11.11(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 respect thereto
that was counted for purposes of calculating a distribution amount for
which an adjustment to the Conversion Rate under this Section 11.11 was
made, (1) in the case of any such rights or warrants that shall all have
been redeemed or repurchased without exercise by any holders thereof, the
Conversion Rate shall be readjusted upon such final redemption or
repurchase to give effect to such distribution or Trigger Event, as the
case may be, as though it were a cash distribution, equal to the per
share redemption or repurchase price received by a holder 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 that shall have expired or been
terminated without exercise thereof, the Conversion Rate shall be
readjusted as if such expired or terminated rights and warrants had not
been issued.

     For purposes of this Section 11.11(d) and Section 11.11(a) and (b),
any dividend or distribution to which this Section 11.11(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 (and any Conversion Rate adjustment
required by this Section 11.11(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 Rate adjustment required by Sections 11.11(a)
and 11.11(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”, “the date fixed
for the determination of stockholders entitled to receive such rights or
warrants” and “the date fixed for such determination” within the meaning
of Section 11.11(a) and 11.11(b) and (B) any shares of Common Stock
included

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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 11.11(a).

     (e)     In case the Company shall, by dividend or otherwise, distribute
to all holders of its Common Stock cash, excluding any dividend or
distribution in connection with the liquidation, dissolution or winding
up of the Company, whether voluntary or involuntary, to the extent that
the aggregate amount of cash distributions per share of Common Stock in
any twelve month period exceeds the greater of (x) the annualized 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 Rate pursuant to this
Section 11.11(e) (as adjusted to reflect subdivisions, or combinations of
the Common Stock), and (y) 10% of the average of the Closing Sale Price
during the ten Trading Days immediately prior to the date of declaration
of such dividend, then, in such case, the Conversion Rate shall be
increased so that the same shall equal the rate determined by multiplying
the Conversion Rate in effect immediately prior to the close of business
on such record date by a fraction,

     (i)     the numerator of which shall be the Current Market Price
on such record date; and

     (ii)     the denominator of which shall be the Current Market
Price on such record date less the amount of cash so distributed
(including only the amount of cash distributed in excess of the
threshold set forth above) applicable to one share of Common Stock,

such adjustment to be effective immediately prior to the opening of
business on the day following the record date; provided that if the
portion of the cash so distributed applicable to one share of Common
Stock is equal to or greater than the Current Market Price on the record
date, in lieu of the foregoing adjustment, adequate provision shall be
made so that each Holder shall have the right to receive upon conversion
the amount of cash such holder would have received had such holder
converted each Security on the Record Date. If such dividend or
distribution is not so paid or made, the Conversion Rate shall again be
adjusted to be the Conversion Rate that 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 11.11(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
11.11(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

57

 

“Expiration Time”) tenders or exchanges may be made pursuant to such
tender or exchange offer (as it may be amended) exceeds the Closing Sale
Price of a share of Common Stock on the Trading Day next succeeding the
Expiration Time, the Conversion Rate shall be increased so that the same
shall equal the rate determined by multiplying the Conversion Rate in
effect immediately prior to the Expiration Time by a fraction,

     (i)     the numerator of which 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 Closing Sale Price of a share of Common Stock on the
Trading Day next succeeding the Expiration Time, and

     (ii)     the denominator of which shall be the number of shares of
Common Stock outstanding (including any tendered or exchanged
shares) at the Expiration Time multiplied by the Closing Sale Price
of a share of Common Stock on the Trading Day next succeeding the
Expiration Time,

such adjustment to become effective immediately prior to the opening of
business on the day following the Expiration Time. If 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 Rate shall again be adjusted to be the Conversion Rate that
would then be in effect if such tender or exchange offer had not been
made.

     (g)     If the Company pays a dividend or makes a distribution to all
holders of its Common Stock consisting of capital stock of any class or
series, or similar equity interests, of or relating to a Subsidiary or
other business unit of the Company, the Conversion Rate shall be
increased so that the same shall be equal to the rate determined by
multiplying the Conversion Rate in effect on the Record Date with respect
to such distribution by a fraction,

     (i)     the numerator of which shall be the sum of (A) the average
of the Closing Sale Prices of the Common Stock for the ten (10)
Trading Days commencing on and including the fifth Trading Day
after the date on which “exdividend trading” commences for such
dividend or distribution on The New York Stock Exchange or such
other national or regional exchange or market which such securities
are then listed or quoted (the “Ex-Dividend Date”) plus (B) the
fair market value of the securities distributed in respect of each
share of Common Stock for which this Section 11.11(g) applies and
shall equal the number of securities distributed in respect of each
share of Common Stock multiplied by the average of the closing sale
prices of those securities distributed for the ten (10) Trading
Days commencing on and including the fifth Trading Day after the
Ex-Dividend Date; and

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     (ii)     the denominator of which shall be the average of the
Closing Sale Prices of the Common Stock for the ten (10) Trading
Days commencing on and including the fifth Trading Day after the
Ex-Dividend Date,

such adjustment to become effective immediately prior to the opening of
business on the day following fifteenth Trading Day after the Ex-Dividend
Date; provided that if (x) the average of the Closing Sale Prices of the
Common Stock for the ten (10) Trading Days commencing on and including
the fifth Trading Day after the Ex-Dividend Date minus (y) the fair
market value of the securities distributed in respect of each share of
Common Stock for which this Section 11.11(g) applies (as calculated in
Section 11.11(g)(ii)(B) above) is less than $1.00, then the adjustment
provided by for by this Section 11.11(g) shall not be made and in lieu
thereof the provisions of Section 11.14 shall apply to such distribution.

     (h)     If any adjustment or readjustment is made to the Conversion Rate
pursuant to this Section 11.11, the same proportional adjustment shall be
made to the Maximum Conversion Rate.

     (i)     For purposes of this Section 11.11, the following terms shall
have the meaning indicated:

     (i)     “Current Market Price” shall mean the average of the daily
Closing Sale Prices per share of Common Stock for the ten
consecutive Trading Days selected by the Company commencing no more
than 30 Trading Days before and ending not later than the earlier
of such date of determination and the day before the “ex” date with
respect to the issuance, distribution, subdivision or combination
requiring such computation immediately prior to the date in
question. For purpose 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
Sale Price was obtained without the right to receive such issuance
or distribution, and (2) when used with respect to any subdivision
or combination of shares of Common Stock, means the first date on
which the Common Stock trades, regular way, on such exchange or in
such market after the time at which such subdivision or combination
becomes effective.

        If another issuance, distribution, subdivision or combination to
which Section 11.11 applies occurs during the period applicable for
calculating “Current Market Price” pursuant to the definition in the
preceding paragraph, “Current Market Price” shall be calculated for such
period in a manner determined by the Board of Directors to reflect the
impact of such issuance, distribution, subdivision or combination on the
Closing Sale Price of the Common Stock during such period.

     (ii)     “Fair Market Value” shall mean the amount which a
willing buyer would pay a willing seller in an arm’s- length
transaction.

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     (iii)     “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).

     (j)     The Company may make such increases in the Conversion Rate in
addition to those required by Section 11.11(a), (b), (c), (d), (e) or (f)
as the Board of Directors considers to be advisable to avoid or diminish
any income tax to holders of Common Stock or rights to purchase Common
Stock resulting from any dividend or distribution of stock (or rights to
acquire stock) or from any event treated as such for income tax purposes.

     To the extent permitted by applicable law, the Company from time to
time may increase the Conversion Rate by any amount for any period of
time if the period is at least twenty (20) days, the increase is
irrevocable during the period and the Board of Directors shall have made
a determination that such increase would be in the best interests of the
Company, which determination shall be conclusive. Whenever the
Conversion Rate is increased pursuant to the preceding sentence, the
Company shall give the Trustee notice of the increase at least fifteen
(15) days prior to the date the increased Conversion Rate takes effect,
and such notice shall state the increased Conversion Rate (and the
Maximum Conversion Rate) and the period during which they will be in
effect.

     (k)     No adjustment in the Conversion Rate (and the Maximum Conversion
Rate) shall be required unless such adjustment would require an increase
or decrease of at least one percent (1%) in such rate; provided that any
adjustments that by reason of this Section 11.11(k) are not required to
be made shall be carried forward and taken into account in any subsequent
adjustment. All calculations under this Article 11 shall be made by the
Company and shall be made to the nearest cent or to the nearest one-ten
thousandth (1/10,000) 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 or, except as set forth in this
Article 11, for any issuance of Common Stock or convertible or
exchangeable securities or rights to purchase Common Stock or convertible
or exchangeable securities. To the extent the Securities become
convertible into cash, assets, property or securities (other than capital
stock of the Company), subject to Section 11.14, no adjustment need be
made thereafter as to the cash, assets, property or such securities.
Interest will not accrue on any cash into which the Securities are
convertible.

     (l)     Whenever the Conversion Rate (and the Maximum Conversion Rate)
is adjusted as herein provided, the Company shall promptly file with the
Trustee and any Conversion Agent other than the Trustee an Officer’s
Certificate setting forth the Conversion Rate (and the Maximum Conversion
Rate) after such adjustment and setting forth a brief statement of the
facts requiring such adjustment. Unless and until a

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Responsible Officer
of the Trustee or Conversion Agent shall have received such Officer’s
Certificate, the Trustee or Conversion Agent, as the case may be, shall
not be deemed to have knowledge of any adjustment of the Conversion Rate
(and the Maximum Conversion Rate) and may assume that the last Conversion
Rate (and the Maximum Conversion Rate) of which it has knowledge is still
in effect. Promptly after delivery of such certificate, the Company
shall prepare a notice of such adjustment of the Conversion Rate (and the
Maximum Conversion Rate) setting forth the adjusted Conversion Rate (and
the Maximum Conversion Rate) and the date on which each adjustment
becomes effective and shall mail such notice of such adjustment of the
Conversion Rate (and the Maximum Conversion Rate) to the Holder of each
Security at his last address appearing on the Security Register within
twenty (20) days after execution thereof. Failure to deliver such notice
shall not affect the legality or validity of any such adjustment.

     (m)     In any case in which this Section 11.11 provides that an
adjustment shall become effective immediately after (1) a record date or
Record Date for an event, (2) the date fixed for the determination of
stockholders entitled to receive a dividend or distribution pursuant to
Section 11.11(a), (3) a date fixed for the determination of stockholders
entitled to receive rights or warrants pursuant to Section 11.11(b), or
(4) the Expiration Time for any tender or exchange offer pursuant to
Section 11.11(f) (each a “Determination Date”), the Company may elect to
defer until the occurrence of the applicable Adjustment Event (as
hereinafter defined) (x) issuing to the holder of any Security converted
after such Determination Date and before the occurrence of such
Adjustment Event, the additional shares of Common Stock or other
securities issuable upon such conversion by reason of the adjustment
required by such Adjustment Event over and above the Common Stock
issuable upon such conversion before giving effect to such adjustment and
(y) paying to such holder any amount in cash in lieu of any fraction
pursuant to Section 11.08. For purposes of this Section 11.11(m), the
term “Adjustment Event” shall mean:

     (i)     in any case referred to in clause (1) hereof, the
occurrence of such event,

     (ii)     in any case referred to in clause (2) hereof, the date
any such dividend or distribution is paid or made,

     (iii)     in any case referred to in clause (3) hereof, the date
of expiration of such rights or warrants, and

     (iv)     in any case referred to in clause (4) hereof, the date a
sale or exchange of Common Stock pursuant to such tender or
exchange offer is consummated and becomes irrevocable.

     (n)     For purposes of this Section 11.11, the number of shares of
Common Stock at any time outstanding shall not include shares held in the
treasury of the Company, unless such treasury shares participate in any
distribution or dividend that requires an adjustment pursuant to this
Section 11.11, but shall include shares issuable in respect of scrip
certificates issued in lieu of fractions of shares of Common Stock.

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      Section 11.12. Adjustment for Tax Purposes. The Company shall be entitled
to make such increases in the Conversion Rate (and the Maximum Conversion
Rate), in addition to those required by Section 11.11, if the Board of
Directors deems it to be advisable in order that any stock dividends,
subdivisions of shares, distributions of rights to purchase stock or securities
or distributions of securities convertible into or exchangeable for stock
hereafter made by the Company to its stockholders shall not be taxable.

      Section 11.13. Notice of Certain Transactions. In the event that:

     (i)     the Company takes any action which would require an adjustment
in the Conversion Rate;

     (ii)     the Company takes any action that requires a supplemental
indenture pursuant to Section 11.14; or

     (iii)     there is a dissolution or liquidation of the Company;

the Company shall mail to Holders and file with the Trustee a notice stating
the proposed record or effective date, as the case may be. The Company shall
mail the notice at least fifteen days before such date. Failure to mail such
notice or any defect therein shall not affect the validity of any transaction
referred to in clause (i), (ii) or (iii) of this Section 11.13.

      Section 11.14. Effect of Reclassification, Consolidation, Merger or Sale
on Conversion Privilege. 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 11.11(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,
other 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, other securities or other property or assets (including cash)
with respect to or in exchange for such Common Stock, then the Company or the
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 each Security shall be convertible into the kind and amount of
shares of stock, other securities or other 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 Securities (assuming, for such purposes,
a sufficient number of authorized shares of Common Stock are available to
convert all such Securities) 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 stock, other securities or other property or assets
(including cash) receivable upon such reclassification, change, consolidation,
merger, combination, sale or conveyance (provided that, if the kind or amount
of stock, other securities or other property or assets (including cash)
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

62

 

exercised
(“non-electing share”), then for the purposes of this Section 11.14 the kind
and amount of stock, other securities or other property or assets (including
cash) receivable upon such reclassification, change, consolidation, merger,
combination, sale or conveyance for each nonelecting 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 11.

      The Company shall cause notice of the execution of such supplemental
indenture to be mailed to each Holder of Securities, at its address appearing
on the Security register, within twenty (20) days after execution thereof and
shall issue a press release containing such information and publish such
information on its website on the World Wide Web. 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 11.14 applies to any event or occurrence, Section 11.11
shall not apply.

      Section 11.15. Trustee’s Disclaimer. The Trustee shall have no duty to
determine when an adjustment under this Article should be made, how it should
be made or what such adjustment should be, but may accept as conclusive
evidence of that fact or the correctness of any such adjustment, and shall be
protected in relying upon, an Officer’s Certificate including the Officer’s
Certificate with respect thereto which the Company is obligated to file with
the Trustee pursuant to Section 11.11(l). The Trustee makes no representation
as to the validity or value of any securities or assets issued upon conversion
of Securities, and the Trustee shall not be responsible for the Company’s
failure to comply with any provisions of this Article.

      The Trustee shall not be under any responsibility to determine the
correctness of any provisions contained in any supplemental indenture executed
pursuant to Section 11.14, but may accept as conclusive evidence of the
correctness thereof, and shall be fully protected in relying upon, the
Officer’s Certificate with respect thereto which the Company is obligated to
file with the Trustee pursuant to Section 11.11(l).

      Section 11.16. Rights Issued in Respect of Common Stock Issued upon
Conversion. Each share of Common Stock issued upon conversion of Securities
pursuant to this Article 11 shall be entitled to receive the appropriate number
of common stock or preferred stock purchase rights, as the case may be (the
“Rights”), if any, that shares of Common Stock are entitled to receive and the
certificates representing the Common Stock issued upon such conversion shall
bear such legends, if any, in each case as may be provided by the terms of any
shareholder rights agreement adopted by the Company, as the same may be amended
from time to time (in each case, a “Rights Agreement”). Provided that such
Rights Agreement requires that each share of Common Stock issued upon
conversion of Securities at any time prior to the distribution of separate
certificates representing the Rights be entitled to receive such Rights, then,
notwithstanding anything else to the contrary in this Article 11, there shall
not be any adjustment to the conversion privilege or Conversion Rate (and
the Maximum Conversion Rate) as a result of the issuance of Rights, but an
adjustment to the Conversion Rate (and as applicable, the

63

 

Maximum Conversion
Rate) shall be made pursuant to Section 11.11(d) upon the separation of the
Rights from the Common Stock.

      Section 11.17. Company Determination Final. Any determination that the
Company or the Board of Directors must make pursuant to Sections 11.07, 11.08,
11.11, 11.12 or 11.14 shall be conclusive.

ARTICLE 12

Purchase at Option of Holders

      Section 12.01. Right to Require Purchase. Unless a Remarketing Reset
Event occurs and there is a successful remarketing on such Remarketing Reset
Event Date, each Holder has the right to require the Company to purchase all or
a portion of the Securities held by such Holder on July 25, 2007, 2011, 2015,
2019, 2023, 2027 and 2031, or if any such day is not a Business Day, on the
immediately succeeding Business Day (each, a “Purchase Date”), if the
Securities are not immediately convertible into Common Stock on such Purchase
Date. If there is a Failed Remarketing or a remarketing does not occur because
the Company gives notice of redemption, then a Holder may require the Company
to purchase all or a portion of the Securities held by such Holder.

      (b)     The Company shall give notice of each Purchase Date and of the
procedures set forth in Section 12.02 that each Holder must follow to exercise
its purchase right to each Holder at its address set forth in the Security
Register and to the Depositary, not later than 21 Business Days prior to each
Purchase Date.

      Section 12.02. Purchase Procedures. If the Holders have the right to
require the purchase of Securities pursuant to Section 12.01, the Company shall
purchase such Securities for cash at a Purchase Price equal to 100% of the
Accreted Principal Amount thereof, plus accrued and unpaid interest, (including
Contingent Interest, if any) to, but excluding, the Purchase Date (the
“Purchase Price”) (provided that if the Purchase Date is an Interest Payment
Date, any accrued and unpaid interest and Contingent Interest shall be paid to
the Holder of record as of the applicable Regular Record Date, rather than to
the Holder presenting the Security for purchase), at the option of the Holder
thereof, upon:

     (a)     delivery to the Paying Agent by the Holder of a written notice
of purchase (a “Purchase Notice”) at any time from the opening of
business on the date that is 21 Business Days prior to a Purchase Date
until the close of business on such Purchase Date stating:

     (i)     if a certificated Security has been issued, the
certificate number of the Security which the Holder will deliver to
be purchased or if not, such information as may be required under
applicable procedures of the Depositary,

     (ii)     the portion of the Original Principal Amount of the
Security which the Holder will deliver to be purchased, which
portion must be $1,000 or an integral multiple thereof, and

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     (iii)     that such Security shall be purchased as of the
applicable Purchase Date pursuant to this Article 12; and

     (b) delivery of such Security to the Paying Agent prior to, on or
after the Purchase Date (together with all necessary endorsements) at the
offices of the Paying Agent, such delivery being a condition to receipt
by the Holder of the Purchase Price therefor; provided, however, that
such Purchase Price shall be so paid pursuant to this Article only if the
Security so delivered to the Paying Agent shall conform in all respects
to the description thereof in the related Purchase Notice.

      The Company shall purchase from the Holder thereof, pursuant to this
Article, a portion of a Security if the Original Principal Amount of such
portion is $1,000 or an integral multiple of $1,000. Provisions of this
Indenture that apply to the purchase of all of a Security also apply to the
purchase of such portion of such Security.

      Any purchase by the Company contemplated pursuant to the provisions of
this Article shall be consummated by the payment of the Purchase Price to be
received by the Holder in cash promptly following the later of the Purchase
Date and the time of delivery of the Security as set forth in Section 12.04.

      Notwithstanding anything herein to the contrary, any Holder delivering to
the Paying Agent the Purchase Notice contemplated by this Section 12.02 shall
have the right to withdraw such Purchase Notice at any time prior to the close
of business on the Purchase Date by delivery of a written notice of withdrawal
to the Paying Agent in accordance with Section 12.03.

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

      The Company may, at its option, specify additional dates on which Holders
will have the right to require it to purchase all or a portion of the
Securities held by such Holder upon written notice to the Paying Agent, the
Trustee and the Holders. Such notice shall specify the additional dates upon
which the Company shall be required to purchase the Securities at the option of
the Holders and shall be delivered to the Paying Agent, the Trustee and the
Holders no less than 25 Business Days prior to the earliest purchase date
specified in such notice.

      Section 12.03. Effect of Purchase Notice. Upon receipt by the Paying
Agent of the Purchase Notice specified in Section 12.02(a), the Holder of the
Security in respect of which such Purchase Notice was given shall (unless such
Purchase Notice is withdrawn as specified in the following two paragraphs)
thereafter be entitled to receive solely the Purchase Price with respect to
such Security. Such Purchase Price shall be paid to such Holder, subject to
receipt of funds by the Paying Agent, promptly following the later of (x) the
Purchase Date with respect to such Security (provided the conditions in Section
12.02 have been satisfied) and (y) the time of delivery of such Security to the
Paying Agent by the Holder thereof in the manner required by Section 12.02.
Securities in respect of which a Purchase Notice has been given by the Holder
thereof may not be converted pursuant to Article 11 hereof on or after the date
of the delivery of such Purchase Notice unless such Purchase Notice has first
been validly withdrawn as specified in the following two paragraphs.

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     A Purchase Notice may be withdrawn by means of a written notice of
withdrawal delivered to the office of the Paying Agent in accordance with the
Purchase Notice at any time prior to the close of business on the applicable
Purchase Date specifying:

     (i) if certificated Securities have been issued, the certificate
number of the Security in respect of which such notice of withdrawal is
being submitted, or if not, such information as may be required under
appropriate procedures of the Depositary;

     (ii) the Original Principal Amount of the Security with respect to
which such notice of withdrawal is being submitted; and

     (iii) the Original Principal Amount, if any, of such Security that
remain subject to the original Purchase Notice and have been or will be
delivered for purchase by the Company.

     There shall be no purchase of any Securities pursuant to this Article 12
if there has occurred (prior to, on or after, as the case may be, the giving,
by the Holders of such Securities, of the required Purchase Notice) and is
continuing an Event of Default (other than a default in the payment of the
Purchase Price with respect to such Securities). The Paying Agent will
promptly return to the respective Holders thereof any Securities (x) with
respect to which a Purchase Notice has been withdrawn in compliance with this
Indenture, or (y) held by it during the continuance of an Event of Default
(other than a default in the payment of the Purchase Price with respect to such
Securities) in which case, upon such return, the Purchase Notice with respect
thereto shall be deemed to have been withdrawn.

     Section 12.04. Deposit of Purchase Price. Prior to 11:00 a.m. (New York
City time) on the Business Day immediately following the Purchase Date, the
Company shall deposit with the Trustee or with the Paying Agent an amount of
cash (in immediately available funds if deposited on such Business Day)
sufficient to pay the aggregate Purchase Price of all of the Securities or
portions thereof which are to be purchased as of the Purchase Date. The manner
in which the deposit required by this Section 12.04 is made by the Company
shall be at the option of the Company, provided, however, that such deposit
shall be made in a manner such that the Trustee or a Paying Agent shall have
immediately available funds on the date of deposit.

     If a Paying Agent holds, in accordance with the terms hereof, cash
sufficient to pay the Purchase Price of any Security for which a Purchase
Notice has been tendered and not withdrawn in accordance with this Indenture on
the Business Day following the Purchase Date then, immediately after such
Purchase Date, such Security will cease to be outstanding, interest (including
Contingent Interest and Liquidated Damages, if any) will cease to accrue and
the rights of the Holder in respect thereof shall terminate (other than the
right to receive the Purchase Price as aforesaid).

     Section 12.05. Securities Purchased in Part. Any Security which is to be
purchased only in part shall be surrendered at the office of the Paying Agent
(with, if the Company, the Paying Agent or the Trustee so requires, due

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 endorsement by, or a written instrument of transfer in form satisfactory
to the Company, the Paying Agent or the Trustee duly executed by, the Holder
thereof or such Holder’s attorney duly authorized in writing) and the Company
shall execute and the Trustee, or any Authenticating Agent, shall authenticate
and deliver to the Holder of such Security, without service charge except for
any taxes to be paid by the Holder in the event a Security is registered under
a new name, a new Security or Securities, of any authorized denomination as
requested by such Holder in aggregate Original Principal Amount equal to, and
in exchange for, the portion of the Original Principal Amount of the Security
so surrendered which is not purchased.

     Section 12.06. Repayment to the Company. The Trustee and the Paying Agent
shall return to the Company any cash that remains unclaimed for two years,
subject to applicable unclaimed property law, together with interest, if any,
thereon held by them for the payment of the Purchase Price, provided, however,
that to the extent that the aggregate amount of cash or Common Stock deposited
by the Company pursuant to Section 12.04 exceeds the aggregate Purchase Price
of the Securities or portions thereof which the Company is obligated to
purchase as of the Purchase Date, then promptly after the Business Day
following the Purchase Date, the Trustee or the Paying Agent, as applicable,
shall return any such excess to the Company. Thereafter, any Holder entitled
to payment must look to the Company for payment as general creditors, unless an
applicable abandoned property law designates another Person.

ARTICLE 13

Purchase at Option of Holder Upon a Change In Control

     Section 13.01. Right to Require Purchase. (a) If at any time prior to
Stated Maturity that Securities remain outstanding there shall occur a Change
in Control, Securities shall be purchased by the Company in integral multiples
of $1,000 Original Principal Amount at the option of the Holders thereof as of
the date specified by the Company that is not less than 20 Business Days nor
more than 35 Business Days after the occurrence of the Change in Control (the
“Change in Control Purchase Date ”) subject to satisfaction by or on behalf of
any Holder of the requirements set forth in subsection (c) of this Section
13.01. The purchase price of such Securities (the “Change in Control Purchase
Price”) shall be equal to 100% of the Accreted Principal Amount of the
Securities to be purchased plus accrued and unpaid interest (including
Contingent Interest and Liquidated Damages, if any) to, but excluding, the
Change in Control Purchase Date, unless such Change in Control Purchase Date
falls after a Regular Record Date and on or prior to the corresponding Interest
Payment Date, in which case the Company shall pay the full amount of accrued
and unpaid interest (including Contingent Interest and Liquidated Damages, if
any) payable on such Interest Payment Date to the holder of record at the close
of business on such Regular Record Date.

     A “Change in Control” shall be deemed to have occurred at such time as
either of the following events shall occur:

     (i) There shall be consummated any consolidation or merger of the
Company pursuant to which the Common Stock would be converted into cash,
securities or other property, in each case other than a consolidation or
merger of the Company in which the holders of the Common Stock
immediately prior to the consolidation or merger have, directly or
indirectly, at least a majority of the total voting power in the
aggregate of all

67

 

     classes of capital stock of the continuing or surviving
corporation immediately after such consolidation or merger; or

     (ii) There is a report filed on Schedule 13D or TO (or any successor
schedule, form or report under the Exchange Act), disclosing that any
person, including such person’s Affiliates or Associates (for the
purposes of this Section 13.01 only, as the term “person” is used in
Section 13(d)(3) or Section 14(d)(2) of the Exchange Act) has become the
beneficial owner (as the term “beneficial owner” is defined under Rule
13d-3 or any successor rule or regulation promulgated under the Exchange
Act) of 50% or more of the voting power of the Common Stock or other
Capital Stock into which the Common Stock is reclassified or changed;
provided, however, that a person shall not be deemed beneficial owner of,
or to own beneficially, any securities tendered pursuant to a tender or
exchange offer made by or on behalf of such person or any of such
person’s Affiliates or Associates until such tendered securities are
accepted for purchase or exchange thereunder, or any securities if such
beneficial ownership (1) arises solely as a result of a revocable proxy
delivered in response to a proxy or consent solicitation made pursuant to
the applicable rules and regulations under the Exchange Act, and (2) is
not also then reportable on Schedule 13D (or any successor schedule)
under the Exchange Act.

     Notwithstanding the foregoing provisions of this Section 13.01, a Change
in Control shall not be deemed to have occurred by virtue of the Company, any
Subsidiary, any employee stock ownership plan or any other employee benefit
plan of the Company or any Subsidiary, or any person holding Common Stock for
or pursuant to the terms of any such employee benefit plan, filing or becoming
obligated to file a report under or in response to Schedule 13D or Schedule TO
(or any successor schedule, form or report) under the Exchange Act disclosing
beneficial ownership by it of shares of Common Stock, whether in excess of 50%
or otherwise.

     “Associate” shall have the meaning ascribed to such term in Rule 12b-2 of
the General Rules and Regulations under the Exchange Act, as in effect on the
date hereof.

     (b) Within 10 Business Days after the occurrence of a Change in Control,
the Company shall mail a written notice of the Change in Control to the Trustee
and any Paying Agent and to each Holder.

     The notice shall include the form of a Change in Control Purchase Notice
to be completed by the Holder and shall state:

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

     (ii) the date by which the Change in Control Purchase Notice
pursuant to this Section 13.01 must be given;

     (iii) the Change in Control Purchase Date;

     (iv) the Change in Control Purchase Price that will be accrued and
payable with respect to the Securities as of the Change in Control
Purchase Date;

68

 

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

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

     (vii) the Conversion Rate, the Maximum Conversion Rate and the
current Conversion Rate (using the Applicable Stock Price as determined
as of the Business Day prior to the date on which the notice pursuant to
this Section 13.01(b) is mailed by the Company to the Trustee or Paying
Agent (assuming a Conversion Date eight Trading Days prior to such date),
and any adjustments thereto;

     (viii) that Securities as to which a Change in Control Purchase
Notice has been given may be converted into Common Stock pursuant to
Article 11 only to the extent that the Change in Control Purchase Notice
has been withdrawn in accordance with the terms of this Indenture;

     (ix) the procedures that the Holder must follow to exercise rights
under this Section 13.01;

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

     (xi) that the Holder must satisfy the requirements set forth in the
Securities in order to convert the Securities; and

     (xii) the last date on which the purchase right may be exercised.

     If any of the Securities is in the form of a Global Security, then the
Company shall modify such notice to the extent necessary to accord with the
procedures of the Depositary applicable to the purchase of Global Securities.

     (c) A Holder may exercise its rights specified in subsection (a) of this
Section 13.01 upon delivery of a written notice (which shall be in
substantially the form included as an attachment to the Securities and which
may be delivered by letter, overnight courier, hand delivery, facsimile
transmission or in any other written form and, in the case of Global
Securities, may be delivered electronically or by other means in accordance
with the Depositary’s customary procedures) of the exercise of such rights (a
“Change in Control Purchase Notice”) to any Paying Agent at any time prior to
the close of business on the Change in Control Purchase Date.

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

     The Company shall purchase from the Holder thereof, pursuant to this
Section 13.01, a portion of a Security if the Original Principal Amount of such
portion is $1,000 or an integral multiple of $1,000. Provisions of this
Indenture that apply to the purchase of all of a Security pursuant to Section
13.01 through Section 13.05 also apply to the purchase of such portion of such
Security.

69

 

     Any purchase by the Company contemplated pursuant to the provisions of
this Section 13.01 shall be consummated by the delivery of the consideration to
be received by the Holder promptly following the later of the Change in Control
Purchase Date and the time of delivery of the Security to the Paying Agent in
accordance with this Section 13.01 as set forth in Section 13.02.

     Notwithstanding anything herein to the contrary, any Holder delivering to
a Paying Agent the Change in Control Purchase Notice contemplated by this
subsection (c) shall have the right to withdraw such Change in Control Purchase
Notice in whole or as to a portion thereof that is an Original Principal Amount
of $1,000 or an integral multiple thereof at any time prior to the close of
business on the Change in Control Purchase Date by delivery of a written notice
of withdrawal to the Paying Agent in accordance with Section 13.02.

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

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

     Section 13.02. Effect of Change in Control Purchase Notice. Upon receipt
by any Paying Agent of the Change in Control Purchase Notice specified in
Section 13.01(c), the Holder of the Security in respect of which such Change in
Control Purchase Notice was given shall (unless such Change in Control Purchase
Notice is withdrawn as specified below) thereafter be entitled to receive the
Change in Control Purchase Price with respect to such Security. Such Change in
Control Purchase Price shall be paid to such Holder promptly following the
later of (a) the Change in Control Purchase Date with respect to such Security
(provided the conditions in Section 13.01(c) have been satisfied) and (b) the
time of delivery of such Security to a Paying Agent by the Holder thereof in
the manner required by Section 13.01(c). Securities in respect of which a
Change in Control Purchase Notice has been given by the Holder thereof may not
be converted into Common Stock on or after the date of the delivery of such
Change in Control Purchase Notice unless such Change in Control Purchase Notice
has first been validly withdrawn as specified in the following paragraph.

     A Change in Control Purchase Notice may be withdrawn by means of a written
notice of withdrawal delivered to the office of the Paying Agent in accordance
with the Change in Control Purchase Notice at any time prior to the close of
business on the Business Day before the applicable Change in Control Purchase
Date specifying:

     (i) if certificated Securities have been issued, the certificate
numbers for Securities in respect of which such notice of withdrawal is
being submitted, or if not, such information as required by the
Depositary;

     (ii) the Original Principal Amount, in integral multiples of $1,000,
of the Securities with respect to which such notice of withdrawal is
being submitted; and

70

 

     (iii) the Original Principal Amount, if any, of such Securities that
remain subject to the original Change in Control Purchase Notice and have
been or will be delivered for purchase by the Company.

     There shall be no purchase of any Securities pursuant to this Article if
there has occurred (prior to, on or after, as the case may be, the giving, by
the Holders of such Securities, of the required Change in Control Purchase
Notice) and is continuing an Event of Default (other than a default in the
payment of the Change in Control Purchase Price with respect to such
Securities). The Paying Agent will promptly return to the respective Holders
thereof any Securities (x) with respect to which a Change in Control Purchase
Notice has been withdrawn in compliance with this Indenture, or (y) held by it
during the continuance of an Event of Default (other than a default in the
payment of the Change in Control Purchase Price with respect to such
Securities) in which case, upon such return, the Change in Control Purchase
Notice with respect thereto shall be deemed to have been withdrawn.

     Section 13.03. Deposit of Change in Control Purchase Price. On or before
11:00 a.m. New York City time on the Business Day immediately following the
Change in Control Purchase Date, the Company shall deposit with the Trustee or
with a Paying Agent an amount of cash (in immediately available funds if
deposited on such Business Day) sufficient to pay the aggregate Change in
Control Purchase Price of all the Securities or portions thereof that are to be
purchased as of such Change in Control Purchase Date. The manner in which the
deposit required by this Section 13.03 is made by the Company shall be at the
option of the Company, provided, however, that such deposit shall be made in a
manner such that the Trustee or a Paying Agent shall have immediately available
funds on the date of such deposit.

     If a Paying Agent holds, in accordance with the terms hereof, money
sufficient to pay the Change in Control Purchase Price of any Security for
which a Change in Control Purchase Notice has been tendered and not withdrawn
in accordance with this Indenture on the Business Day following the Change in
Control Purchase Date then, immediately following the Change in Control
Purchase Date, such Security will cease to be outstanding, interest (including
Contingent Interest and Liquidated Damages, if any) will cease to accrue and
the rights of the Holder in respect thereof shall terminate (other than the
right to receive the Change in Control Purchase Price). The Company shall
publicly announce the Original Principal Amount of Securities purchased as a
result of such Change in Control on or as soon as practicable after the Change
in Control Purchase Date.

     Section 13.04. Securities Purchased in Part. Any Security that is to be purchased only in part shall be surrendered
at the office of a Paying Agent and promptly after the Change in Control
Purchase Date the Company shall execute and the Trustee, or any Authenticating
Agent, shall authenticate and deliver to the Holder of such Security, without
service charge (other than amounts to be paid in respect of applicable transfer
taxes), a new Security or Securities, of such authorized denomination or
denominations in integral multiples of $1,000 Original Principal Amount as may
be requested by such Holder, in aggregate Original Principal Amount equal to,
and in exchange for, the portion of the Original Principal Amount of the
Security so surrendered that is not purchased.

71

 

     Section 13.05. Repayment to the Company. The Trustee and the Paying Agent
shall return to the Company any cash that remains unclaimed for two years,
subject to applicable unclaimed property law, together with interest, if any,
thereon held by them for the payment of the Change in Control Purchase Price;
provided, however, that to the extent that the aggregate amount of cash
deposited by the Company pursuant to Section 13.03 exceeds the aggregate Change
in Control Purchase Price of the Securities or portions thereof which the
Company is obligated to purchase as of the Change in Control Purchase Date,
then on the Business Day following the Purchase Date, the Trustee or Paying
Agent, as applicable, shall return any such excess to the Company. Thereafter,
any Holder entitled to payment must look to the Company for payment as general
creditors, unless an applicable abandoned property law designates another
Person.

ARTICLE 14

Contingent Interest

     Section 14.01. Contingent Interest. (a) The Company will pay Contingent
Interest to Holders during any Interest Period commencing on or after July 25,
2007, only if (x) the average Trading Price of the Securities for the five
Trading Day measurement period immediately preceding the first day of the
applicable Interest Period (the “Measurement Period”) equals 130% or more of
the Accreted Principal Amount of the Securities as of the first day of such
Interest Period, (y) the Securities are immediately convertible into Common
Stock on the first day of such Measurement Period and (z) the Securities are
then redeemable at the option of the Company. The amount of Contingent
Interest payable in any Interest Period pursuant to this Section 14.01(a) will
be equal to the Conversion Rate multiplied by the Payment Factor for such
Interest Period. The “Payment Factor” for each Interest Period is set forth in
the table below, subject to adjustment for any subdivisions, combinations or
certain reclassifications of shares of the Common Stock.

	 	 	 	 	 
	Interest Period Commencing	 	Payment Factor
	
	 	

	July 25, 2007
	 	 	0.37	 
	October 25, 2007
	 	 	0.37	 
	January 25, 2008
	 	 	0.40	 
	April 25, 2008
	 	 	0.40	 
	July 25, 2008
	 	 	0.40	 
	October 25, 2008
	 	 	0.40	 
	January 25, 2009
	 	 	0.44	 
	April 25, 2009
	 	 	0.44	 
	July 25, 2009
	 	 	0.44	 
	October 25, 2009
	 	 	0.44	 
	January 25, 2010
	 	 	0.49	 
	April 25, 2010
	 	 	0.49	 
	July 25, 2010
	 	 	0.49	 
	October 25, 2010
	 	 	0.49	 
	January, 25, 2011
	 	 	0.54	 
	April 25, 2011
	 	 	0.54	 
	July 25, 2011
	 	 	0.54	 
	October 25, 2011
	 	 	0.54	 
	January 25, 2012
	 	 	0.59	 
	April 25, 2012
	 	 	0.59	 
	July 25, 2012
	 	 	0.59	 
	October 25, 2012
	 	 	0.59	 
	January 25, 2013
	 	 	0.65	 
	April 25, 2013
	 	 	0.65	 
	July 25, 2013
	 	 	0.65	 
	October 25, 2013
	 	 	0.65	 
	January 25, 2014
	 	 	0.71	 
	April 25, 2014
	 	 	0.71	 
	July 25, 2014
	 	 	0.71	 
	October 25, 2014
	 	 	0.71	 
	January 25, 2015
	 	 	0.78	 
	April 25, 2015
	 	 	0.78	 
	July 25, 2015
	 	 	0.78	 
	October 25, 2015
	 	 	0.78	 

72

 

	 	 	 	 	 
	Interest Period Commencing	 	Payment Factor
	
	 	

	January 25, 2016
	 	 	0.86	 
	April 25, 2016
	 	 	0.86	 
	July 25, 2016
	 	 	0.86	 
	October 25, 2016
	 	 	0.86	 
	January 25, 2017
	 	 	0.95	 
	April 25, 2017
	 	 	0.95	 
	July 25, 2017
	 	 	0.95	 
	October 25, 2017
	 	 	0.95	 
	January 25, 2018
	 	 	1.04	 
	April 25, 2018
	 	 	1.04	 
	July 25, 2018
	 	 	1.04	 
	October 25, 2018
	 	 	1.04	 
	January 25, 2019
	 	 	1.15	 
	April 25, 2019
	 	 	1.15	 
	July 25, 2019
	 	 	1.15	 
	October 25, 2019
	 	 	1.15	 
	January 25, 2020
	 	 	1.26	 
	April 25, 2020
	 	 	1.26	 
	July 25, 2020
	 	 	1.26	 
	October 25, 2020
	 	 	1.26	 
	January 25, 2021
	 	 	1.39	 
	April 25, 2021
	 	 	1.39	 
	July 25, 2021
	 	 	1.39	 
	October 25, 2021
	 	 	1.39	 
	January 25, 2022
	 	 	1.53	 
	April 25, 2022
	 	 	1.53	 
	July 25, 2022
	 	 	1.53	 
	October 25, 2022
	 	 	1.53	 
	January 25, 2023
	 	 	1.68	 
	April 25, 2023
	 	 	1.68	 
	July 25, 2023
	 	 	1.68	 
	October 25, 2023
	 	 	1.68	 
	January 25, 2024
	 	 	1.85	 
	April 25, 2024
	 	 	1.85	 
	July 25, 2024
	 	 	1.85	 
	October 25, 2024
	 	 	1.85	 
	January 25, 2025
	 	 	2.04	 
	April 25, 2025
	 	 	2.04	 
	July 25, 2025
	 	 	2.04	 
	October 25, 2025
	 	 	2.04	 
	January, 25, 2026
	 	 	2.24	 
	April 25, 2026
	 	 	2.24	 
	July 25, 2026
	 	 	2.24	 
	October 25, 2026
	 	 	2.24	 
	January 25, 2027
	 	 	2.46	 
	April 25, 2027
	 	 	2.46	 
	July 25, 2027
	 	 	2.46	 
	October 25, 2027
	 	 	2.46	 
	January 25, 2028
	 	 	2.71	 
	April 25, 2028
	 	 	2.71	 
	July 25, 2028
	 	 	2.71	 
	October 25, 2028
	 	 	2.71	 
	January 25, 2029
	 	 	2.98	 
	April 25, 2029
	 	 	2.98	 
	July 25, 2029
	 	 	2.98	 
	October 25, 2029
	 	 	2.98	 
	January 25, 2030
	 	 	3.28	 
	April 25, 2030
	 	 	3.28	 
	July 25, 2030
	 	 	3.28	 
	October 25, 2030
	 	 	3.28	 
	January 25, 2031
	 	 	3.61	 
	April 25, 2031
	 	 	3.61	 
	July 25, 2031
	 	 	3.61	 
	October 25, 2031
	 	 	3.61	 
	January 25, 2032
	 	 	3.97	 
	April 25, 2032
	 	 	3.97	 
	July 25, 2032
	 	 	3.97	 
	October 25, 2032
	 	 	3.97	 
	January 25, 2033
	 	 	4.36	 
	April 25, 2033
	 	 	4.36	 
	July 25, 2033
	 	 	4.36	 
	October 25, 2033
	 	 	4.36	 
	January 25, 2034
	 	 	4.80	 
	April 25, 2034
	 	 	4.80	 
	July 25, 2034
	 	 	4.80	 
	October 25, 2034
	 	 	4.80	 
	January 25, 2035
	 	 	5.28	 
	April 25, 2035
	 	 	5.28	 

     (b) The Company will pay an additional amount of Contingent Interest (in
addition to Contingent Interest payable pursuant to Section 14.01(a)) to
Holders during any Interest Period commencing on or after July 25, 2007, only
if (x) the average Trading Price of the Securities for the applicable
Measurement Period equals 200% or more of the Accreted Principal Amount of the
Securities as of the first day of such Interest Period, (y) the Securities are
immediately convertible into Common Stock on the first day of such Measurement
Period, and (z) the

73

 

Securities are then redeemable at the option of the
Company. The additional amount of Contingent Interest payable in any Interest
Period pursuant to this Section 14.01(b) will be equal to .0625% of the average
Trading Price of the Securities for the applicable Measurement Period.

     Section 14.02. Payment of Contingent Interest. The Company shall pay
Contingent Interest owed pursuant to Section 14.01(a) or (b) for any Interest
Period on the Interest Payment Date immediately succeeding the applicable
Interest Period (whether or not interest on the Securities is otherwise payable
on such Interest Payment Date), to Holders of Securities as of the Regular
Record Date relating to such Interest Payment Date.

     Section 14.03. Notice of Contingent Interest. (a) As soon as practicable
following the first Business Day of an Interest Period for which Contingent
Interest will be payable pursuant to Section 14.01(a) or (b), the Company shall
issue a press release containing this information and publish the information
on its website on the World Wide Web.

     (a) On any Interest Payment Date on which Contingent Interest is payable
pursuant to this Article 14, the Company shall issue a press release stating
the amount of such Contingent Interest and setting forth the manner in which
such amount was calculated, and publish such information on its website on the
World Wide Web.

ARTICLE 15

Yield Reset and Remarketing

     Section 15.01. Remarketing Reset Event. A Remarketing Reset Event will
occur if the average of the Closing Sale Prices of the Common Stock over the
five Trading Day period ending on the Trading Day immediately preceding any
Remarketing Reset Event Date is less than the Conversion Price as of such
Trading Day (a “Remarketing Reset Event”). If a Remarketing Reset Event
occurs, then, following such Remarketing Reset Event Date, the Conversion Rate
and the yield on the Securities will be reset on such Remarketing Reset Event
Date, and the right of Holders to
require the Company to purchase Securities on a Purchase Date or upon a
Change in Control shall cease, subject to Section 15.02.

     Section 15.02. Reset of the Yield and Conversion Rate. (a) The yield on
the Securities will be reset by the Remarketing Agent on each Remarketing Reset
Event Date to 3-month LIBOR adjusted by an applicable spread (the “Reset
Yield”) for the applicable Interest Period (as defined in clause (3) of the
definition thereof) necessary for the proceeds from the remarketing of the
Securities, net of any fee to the Remarketing Agent, to be 100% of Accreted
Principal Amount, as of such Remarketing Reset Event Date, of the Securities
remarketed; provided that the Reset Yield shall not exceed the maximum rate
permitted by law and shall not be less than 0% per annum. The Conversion Rate
will be reset to equal the Accreted Principal Amount of the Securities on such
Remarketing Reset Event Date divided by 175% of the Applicable Stock Price;
provided that in no event will the Conversion Rate exceed the Maximum
Conversion Rate.

     Notwithstanding the forgoing, if the Company gives notice of Redemption
with respect to Securities prior to a Remarketing Reset Event Date, no
remarketing of those Securities will occur and the terms of those Securities
will not be reset.

74

 

     (b) Notwithstanding the foregoing, if (i) Holders of less than $50 million
aggregate Original Principal Amount of Securities elect to have their
Securities remarketed on any Remarketing Reset Event Date pursuant to Section
15.03 or (ii) a Failed Remarketing occurs on any Remarketing Reset Event Date,
the Reset Yield shall be the yield necessary, in the judgment of the
Remarketing Agent based on bids from at least three independent nationally
recognized securities dealers selected by the Remarketing Agent, for the
Securities to trade at a price equal to 100% of the Accreted Principal Amount
thereof as of such Remarketing Reset Event Date. If the Remarketing Agent is
not able to obtain bids from at least three independent nationally recognized
securities dealers on a Remarketing Reset Event Date, the Reset Yield shall be
the Reset Yield in effect on the previous Remarketing Reset Event Date, or if
no previous Remarketing Reset Event Date has occurred, the regular interest
rate or Applicable Yield in effect for the Securities immediately prior to the
applicable Remarketing Reset Event Date.

     (c) By approximately 4:30 p.m., New York City time, on any Remarketing
Reset Event Date, the Remarketing Agent shall notify the Company, the Trustee,
the Paying Agent and the Depositary of the Reset Yield and the reset Conversion
Rate. The Company shall issue a press release stating such Reset Yield and
reset Conversion Rate and publish such information on its website on the World
Wide Web.

     Section 15.03. Remarketing Procedures. (a) On any Remarketing Reset
Event Date, each Holder of Securities will have the right to elect to have its
Securities remarketed by notice to the Paying Agent on or prior to the Business
Day immediately prior to any Remarketing Reset Event Date of the Original
Principal Amount of Securities such Holder wants to have remarketed if a
Remarketing Reset Event occurs. Following the occurrence of a Remarketing
Reset Event, each Holder, whether or not such Holder elected to have its
Securities remarketed on any prior Remarketing Reset Event
Date, may elect to participate in a remarketing only by notice to the
Paying Agent on or prior to the third Business Day prior to the applicable
Remarketing Reset Event Date (a “Notice of Remarketing ”).

     (b) If on any Remarketing Reset Event Date a Remarketing Reset Event
occurs and Holders of at least $50 million aggregate Original Principal Amount
of Securities have elected to have their Securities remarketed (a “Required
Remarketing Date”), the Remarketing Agent shall conduct such remarketing in
accordance with the terms of the Remarketing Agreement and this Indenture.

     (c) If the Securities are successfully remarketed by the Remarketing Agent
on any Required Remarketing Date, the Remarketing Agent shall deduct any fee
specified in the Remarketing Agreement from the proceeds of such remarketing
and remit the remaining proceeds, which shall be at least 100% of the Accreted
Principal Amount of the Securities remarketed, to the Holders who elected to
participate in such remarketing as promptly as possible following the
applicable Required Remarketing Date.

     (d) If, by 4:00 p.m., New York City time, on any Required Remarketing
Date, the Remarketing Agent is unable to remarket all Securities for which an
election to remarket has been made or a condition precedent in the Remarketing
Agreement shall not have been fulfilled, a failed remarketing (“Failed
Remarketing ”) shall be deemed to have occurred. In the event of a Failed
Remarketing, the Company shall issue a press release regarding such Failed

75

 

Remarketing and stating the aggregate Original Principal Amount of Securities
that the Company will repurchase as required pursuant to Section 15.04(a) and
publish such information on its website on the World Wide Web.

     (e) The Company will request, not later than 20 Business Days prior to
each date by which Holders are required to give notice pursuant to Section
15.03(a), that the Depositary notify its participants of the potential
remarketing of the Securities, the procedures a beneficial owner must follow to
elect to participate in such remarketing, the date by which such election must
be made and the right of the beneficial owners of Securities to require the
Company to purchase Securities if there is a Failed Remarketing. The Company
will also issue a press release and publish such information on its website on
the World Wide Web.

     (f) Securities in respect of which a Notice of Remarketing has been given
by the Holder thereof may not be converted pursuant to Article 11 hereof on or
after the date of the delivery of such Notice of Remarketing unless such Notice
of Remarketing has first been validly withdrawn as specified below.

     A Notice of Remarketing may be withdrawn by means of a written notice of
withdrawal delivered to the office of the Paying Agent in accordance with the
Notice of Remarketing at any time prior to the close of business on the
applicable Remarketing Reset Event Date specifying:

     (i) if certificated Securities have been issued, the certificate
numbers for Securities in respect of which such notice of withdrawal is
being submitted, or if not, such information as required by the
Depositary;

     (ii) the Original Principal Amount, in integral multiples of $1,000,
of the Securities with respect to which such notice of withdrawal is
being submitted; and

     (iii) the Original Principal Amount, if any, of such Securities that
remain subject to the original Notice of Remarketing and have been or
will be delivered for purchase by the Company.

     (g) If the Securities are successfully remarketed by the Remarketing Agent
on any Required Remarketing Date, the conditions to conversion pursuant to
Article 11 hereof, must be satisfied thereafter or the Securities may not be
converted.

     Section 15.04. Right to Require Purchase. (a) If a Failed Remarketing
occurs on any Remarketing Reset Event Date, each Holder of Securities will have
the right to require the Company to purchase all or a portion of its Securities
on such Remarketing Reset Event Date for cash. The Company shall purchase such
Securities at a purchase price (the “Remarketing Purchase Price”) equal to 100%
of the Accreted Principal Amount thereof as of the applicable Remarketing Reset
Event Date, plus accrued and unpaid interest (including Contingent Interest and
Liquidated Damages, if any) to, but excluding such Remarketing Reset Event
Date. Each Holder must notify the Paying Agent on or prior to the Business Day
immediately preceding each Remarketing Reset Event Date of the aggregate
Original Principal Amount of Securities it wants the Company to repurchase in
the event of a Failed Remarketing. The Holders of Securities who elect to
participate in any remarketing will be deemed to have elected to exercise

76

 

their
right to require the Company to purchase the aggregate Original Principal
Amount of Securities for which they elected remarketing.

     (b) If Holders elect to have less than $50 million aggregate Original
Principal Amount of Securities remarketed on any Remarketing Reset Event Date,
there will not be a remarketing and such Holders who elected remarketing, but
only such Holders, will have the right to require to the Company to purchase
all or a portion of its Securities on such Remarketing Reset Event Date for
cash. Such Holders are deemed to exercise such right with respect to the
aggregate Original Principal Amount of Securities for which they elected
remarketing. The Company shall purchase such Securities at the Remarketing
Purchase Price.

     (c) The procedures set forth in Sections 12.04 through 12.06 shall apply
to the purchase of Securities by the Company pursuant to Sections 15.04(a) or
(b), mutatis mutandis, except references to Purchase Date and Purchase Price
shall be deemed to refer instead to Remarketing Purchase Date and Remarketing
Purchase Price, respectively.

     (d) Securities in respect of which a purchase notice pursuant to Section
15.04(a) has been given by the Holder thereof may not be converted pursuant to
Article 11 hereof on or after the date of the delivery of such Notice of
Remarketing unless such Purchase Notice has first been validly withdrawn as
specified below.

     A purchase notice pursuant to Section 15.04(a) may be withdrawn by means
of a written notice of withdrawal delivered to the office of the Paying Agent
at any time prior to the close of business on the applicable Remarketing Reset
Event Date specifying:

     (i) if certificated Securities have been issued, the certificate
numbers for Securities in respect of which such notice of withdrawal is
being submitted, or if not, such information as required by the
Depositary;

     (ii) the Original Principal Amount, in integral multiples of $1,000,
of the Securities with respect to which such notice of withdrawal is
being submitted; and

     (iii) the Original Principal Amount, if any, of such Securities that
remain subject to the original purchase notice and have been or will be
delivered for purchase by the Company.

ARTICLE 16

Immunity of Incorporators, Stockholders, Officers, Directors and Employees

     Section 16.01. Exemption from Individual Liability. No recourse under or
upon any obligation, covenant or agreement of this Indenture, or of any
Security, or for any claim based thereon or otherwise in respect thereof, shall
be had against any incorporator, stockholder, officer, director or employee, as
such, past, present or future, of the Company or of any successor corporation,
either directly or through the Company, 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 this Indenture and the
obligations issued hereunder are solely corporate obligations of the Company
(or any successor corporation as set forth in

77

 

Section 7.02 of this Indenture),
and that no such personal liability whatever shall attach to, or is or shall be
incurred by, the incorporators, stockholders, officers, directors or employees,
as such, of the Company or of any successor corporation, or any of them,
because of the creation of the indebtedness hereby authorized, or under or by
reason of the obligations, covenants or agreements contained in this Indenture
or in any of the Securities or implied therefrom; and that any and all such
personal liability, either at common law or in equity or by constitution or
statute, of, and any and all such rights and claims against, every such
incorporator, stockholders, officer, director or employee, as such, because of
the creation of the indebtedness hereby authorized, or under or by reason of
the obligations, covenants or agreements contained in this Indenture or in any
of the Securities or implied therefrom, are hereby expressly waived and
released as a condition of, and as a consideration for, the execution of this
Indenture and the issue of such Securities.

ARTICLE 17

Miscellaneous Provisions

     Section 17.01. Successors and Assigns of Company Bound by Indenture. All
the covenants, stipulations, promises and agreements in this Indenture
contained by or in behalf of the Company shall bind its successors and assigns,
whether so expressed or not.

     Section 17.02. Acts of Board, Committee or Officer of Successor
Corporation Valid. 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 corporation that shall at that time be
the successor of the Company.

     Section 17.03. Required Notices or Demands. 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 to or on the Company may be given or served by
being mailed postage prepaid in the United States addressed (until another
address is filed by the Company with the Trustee), as follows: SLM
Corporation, 11600 Sallie Mae Drive, Reston, VA 20193, Attention: Michael
Sheehan. Any notice, direction, request or demand by the Company or by any
Holder to or upon the Trustee may be given or made, for all purposes, by being
mailed postage prepaid in the United States addressed to the Corporate Trust
Office of the Trustee. Any notice required or permitted to be mailed to a
Holder by the Company or the Trustee pursuant to the provisions of this
Indenture shall be deemed to be properly mailed by being mailed postage prepaid
in the United States addressed to such Holder at the address of such Holder as
shown on the Security Register. In any case, where notice to Holders is given
by mail, neither the failure to mail such notice, nor any defect in any notice
so mailed, to any particular Holder shall affect the sufficiency of such notice
with respect to other Holders.

     Where this Indenture provides for notice in any manner, such notice may be
waived in writing by the Person entitled to receive such notice, either before
or after the event, and such waiver shall be the equivalent of such notice.
Waivers of notice by Holders shall be filed with the Trustee, but such filing
shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver.

78

 

     In case, by reason of the suspension of or irregularities in regular mail
service, it shall be impractical to mail notice of any event to Holders when
such notice is required to be given pursuant to any provision of this
Indenture, then any manner of giving such notice as shall be satisfactory to
the Trustee shall be deemed to be a sufficient giving of such notice.

     Section 17.04. GOVERNING LAW. THE LAWS OF THE STATE OF NEW YORK SHALL
GOVERN THIS INDENTURE AND THE SECURITIES, WITHOUT REGARD TO PRINCIPLES OF
CONFLICT OF LAWS.

     Section 17.05. Indenture May Be Executed in Counterparts. This Indenture
may be executed in any number of counterparts, each of which when so executed
shall be deemed an original; and all such counterparts shall together
constitute but one and the same instrument.

79

 

     IN WITNESS WHEREOF, the undersigned, being duly authorized, have executed
this Indenture on behalf of the respective parties hereto as of the date first
above written.

	 	 	 	 	 
	 	 	SLM CORPORATION
	 	 	 	 	 
	 	 	
By:
	 	/s/ JOHN F. REMONDI
	 	 	 	 	

	 	 	 	 	Name: John F. Remondi
	 	 	 	 	Title: Executive Vice President, Finance
	 	 	 	 	 
	 	 	JPMORGAN CHASE BANK
	 	 	 	 	 
	 	 	
By:
	 	/s/ DANIEL C. BROWN, JR.
	 	 	 	 	

	 	 	 	 	Name: Daniel C. Brown, Jr.
	 	 	 	 	Title: Vice President

80

 

[FORM OF FACE OF GLOBAL SECURITY]

     FOR PURPOSES OF SECTIONS 1272, 1273 AND 1275 OF THE INTERNAL REVENUE CODE
OF 1986, AS AMENDED, THIS SECURITY IS BEING ISSUED WITH ORIGINAL ISSUE DISCOUNT
AND THE ISSUE DATE OF THIS SECURITY IS MAY 20, 2003. IN ADDITION, THIS
SECURITY IS SUBJECT TO U.S. FEDERAL INCOME TAX REGULATIONS GOVERNING CONTINGENT
PAYMENT DEBT INSTRUMENTS. FOR PURPOSES OF SECTIONS 1272, 1273 AND 1275 OF THE
INTERNAL REVENUE CODE, THE COMPARABLE YIELD OF THIS SECURITY IS 5.625%,
COMPOUNDED QUARTERLY (WHICH WILL BE TREATED AS THE YIELD TO MATURITY FOR U.S.
FEDERAL INCOME TAX PURPOSES).

     SLM CORPORATION (THE “COMPANY”) AGREES, AND BY ACCEPTING A BENEFICIAL
OWNERSHIP INTEREST IN THIS SECURITY EACH HOLDER AND ANY BENEFICIAL OWNER OF
THIS SECURITY AGREE, FOR U.S. FEDERAL INCOME TAX PURPOSES (1) TO TREAT THIS
SECURITY AS A DEBT INSTRUMENT THAT IS SUBJECT TO TREAS. REG. SEC. 1.1275-4 (THE
“CONTINGENT DEBT REGULATIONS”), (2) TO TREAT THE FAIR MARKET VALUE OF ANY STOCK
RECEIVED UPON ANY CONVERSION OF THIS SECURITY OR UPON A PURCHASE OF THIS
SECURITY AT THE HOLDER’S OPTION AS A CONTINGENT PAYMENT FOR PURPOSES OF THE
CONTINGENT DEBT REGULATIONS, AND (3) TO ACCRUE INTEREST WITH RESPECT TO THE
SECURITY AS ORIGINAL ISSUE DISCOUNT FOR U.S. FEDERAL INCOME TAX PURPOSES
ACCORDING TO THE “NONCONTINGENT BOND METHOD,” SET FORTH IN THE CONTINGENT DEBT
REGULATIONS, AND (4) TO BE BOUND BY THE COMPANY’S DETERMINATION OF THE
“COMPARABLE YIELD” AND “PROJECTED PAYMENT SCHEDULE,” WITHIN THE MEANING OF THE
CONTINGENT DEBT REGULATIONS, WITH RESPECT TO THIS SECURITY. THE COMPANY AGREES
TO PROVIDE PROMPTLY TO THE HOLDER OF THIS SECURITY, UPON WRITTEN REQUEST, THE
ISSUE PRICE, AMOUNT OF TAX ORIGINAL ISSUE DISCOUNT, ISSUE DATE, YIELD TO
MATURITY, COMPARABLE YIELD AND PROJECTED PAYMENT SCHEDULE. ANY SUCH WRITTEN
REQUEST SHOULD BE SENT TO THE COMPANY AT THE FOLLOWING ADDRESS: SLM
CORPORATION, 11600 SALLIE MAE DRIVE, RESTON, VA 20193, ATTENTION: VICE
PRESIDENT OF FINANCE.

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

A-1

 

     TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE,
BUT NOT IN PART, TO NOMINEES OF THE DEPOSITORY TRUST COMPANY, OR TO A SUCCESSOR
THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL
SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS
SET FORTH IN ARTICLE TWO OF THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.

     THIS SECURITY AND THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION OF
THIS SECURITY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS. NEITHER THIS
SECURITY, THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION OF THIS SECURITY
NOR ANY INTEREST OR PARTICIPATION HEREIN OR THEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, REGISTRATION.

     THE HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF, AGREES TO OFFER,
SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE “RESALE
RESTRICTION TERMINATION DATE”) WHICH IS TWO YEARS AFTER THE LATER OF THE
ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY
AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF
SUCH SECURITY) ONLY (A) TO THE COMPANY OR ANY SUBSIDIARY OR AFFILIATE THEREOF,
(B) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE
144A, TO A PERSON IT REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER”
AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHICH NOTICE
IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (C) PURSUANT
TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE
SECURITIES ACT OR (D) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE RIGHTS OF THE
COMPANY AND THE WITHIN MENTIONED TRUSTEE PRIOR TO ANY SUCH OFFER, SALE OR
TRANSFER PURSUANT TO CLAUSE (D) TO REQUIRE THE DELIVERY OF AN OPINION OF
COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM,
AND IN EACH OF THE FOREGOING CASES, A CERTIFICATE OF TRANSFER IN THE FORM
APPEARING ON THE OTHER SIDE OF THIS SECURITY IS COMPLETED AND DELIVERED BY THE
TRANSFEROR TO THE TRUSTEE. THIS LEGEND WILL BE REMOVED AFTER THE RESALE
RESTRICTION TERMINATION DATE UPON THE REQUEST OF THE HOLDER AND THE DELIVERY OF
AN OPINION OF COUNSEL, CERTIFICATES AND/OR OTHER INFORMATION SATISFACTORY TO
THE COMPANY.

A-2

 

SLM CORPORATION

	 	 	 
	 	 	
Floating Rate Convertible Senior Debentures due 2035
	 	 	 
	No. R-1	 	
Original Principal Amount: $2,000,000,000
	Issue Date: May 20, 2003	 	
CUSIP: 78442PAB2

     SLM CORPORATION, a Delaware corporation (the “Company”), for value
received, hereby promises to pay to Cede & Co., or registered assigns, the
Accreted Principal Amount (as defined in the Indenture referred to on the
reverse side of this Security) on July 25, 2035.

     This Security shall bear interest and Accreted Interest (as defined in the
Indenture) as specified on the reverse side of this Security and in the
Indenture. Contingent Interest, if any, on this Security, will be payable as
specified on the reverse side of this Security and in the Indenture.

     This Security is convertible, is subject to redemption at the option of
the Company or purchase at the option of the Holder hereof and is subject to
remarketing, all as specified on the reverse side of this Security and in the
Indenture.

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

A-3

 

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

	 	 	 	 	 
	 	 	SLM CORPORATION
	 	 	 	 	 
	 	 	
By:	 	 
	 	 	

	 	 	 	 	
Name:
	 	 	 	 	
Title:
	 	 	 	 	 
	Attest:	 	 	 	 
	 	 	 	 	 
	

Name:	 	 	 	 
	Title:	 	 	 	 
	 	 	 	 	 
	TRUSTEE’S CERTIFICATE OF AUTHENTICATION

JPMORGAN CHASE BANK., as Trustee,

certifies that this is one of the Securities referred

to in the within-mentioned Indenture.
	 	 	 	 
	 	 	 	 	 
	By:	 	 	 	 
	
	 	 	 	 
	Authorized Signature	 	 	 	 
	 	 	 	 	 
	OR	 	 	 	 
	 	 	 	 	 
	_________________________,

as Authenticating Agent for the Trustee	 	 	 	 
	 	 	 	 	 
	By:	 	 	 	 
	
	 	 	 	 
	Authorized Signature	 	 	 	 
	 	 	 	 	 
	Dated: May 20, 2003	 	 	 	 

A-4

 

REVERSE SIDE OF SECURITY

Floating Rate Convertible Senior Debentures due 2035

     This Security is one of a duly authorized issue of securities of the
Company (herein called the “Securities”) limited in aggregate Original
Principal Amount to $2,000,000,000 ($2,300,000,000 Original Principal Amount if
the Initial Purchasers’ option is exercised in full), issued under an
Indenture, dated as of May 20, 2003 (the “Indenture”), between the Company and
JPMorgan Chase Bank, as Trustee (the “Trustee”, which term includes any
successor trustee under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights, limitations of rights, duties and immunities thereunder of the Company,
the Trustee and the Holders of the Securities and of the terms upon which the
Securities are, and are to be, authenticated and delivered. Capitalized terms
used and not otherwise defined in this Security are used as defined in the
Indenture.

1. Interest.

     This Security will bear interest from May 20, 2003 or from the most recent
date to which interest has been paid or duly provided for, quarterly in arrears
on January 25, April 25, July 25 and October 25 of each year (each, an
“Interest Payment Date”), subject to Section 1.09 of the Indenture, commencing
July 25, 2003 , at the rate per annum equal to 3-month LIBOR, reset quarterly
on each LIBOR Reset Date, minus 0.05%, to but excluding July 25, 2007 for all
interest periods other than the initial interest period. For the initial
interest period from and including May 20, 2003 to but excluding July 25, 2003,
the regular interest rate on the Securities is 1.2487%. Regardless of the
level of 3-month LIBOR, however, the annual rate of interest on the Securities
will never be less than zero. Interest on this Security shall be calculated on
the basis of a 360-day year and the actual number of days elapsed during the
related Interest Period. Interest payable on this Security on any Interest
Payment Date will include interest for the immediately preceding Interest
Period. The interest so payable and punctually paid or duly provided for on
any Interest Payment Date will, as provided in such Indenture, be paid to the
Person in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such
interest, which shall be the January 10, April 10, July 10 or October 10, as
the case may be, immediately preceding the relevant Interest Payment Date. Any
interest which is payable, but is not punctually paid or duly provided for, on
any Interest Payment Date shall forthwith cease to be payable to the registered
Holder hereof on the relevant Regular Record Date by virtue of having been such
Holder, and may be paid to the Person in whose name this Security (or one or
more Predecessor Securities) is registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest to be fixed by
the Company, notice whereof shall be given to the Holders of Securities not
less than 10 days prior to such Special Record Date, or may be paid at any time
in any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities may be listed, and upon such notice
as may be required by such exchange, all as more fully provided in the
Indenture.

     From and after July 25, 2007, the Company will no longer be required to
pay regular cash interest. Contingent Interest, if any, will be payable in
addition to the Accreted Principal

A-5

 

 Amount. The Original Principal Amount of this Security shall accrete
daily at the Applicable Yield for each Interest Period, which shall be 0% prior
to July 25, 2007.

2. Contingent Interest.

     From and after July 25, 2007, the Company will pay Contingent Interest on
this Security under the circumstances and in the amounts described in Article
14 of the Indenture. Such Contingent Interest, if any, shall be payable
quarterly in arrears on each Interest Payment Date to the Holder of this
Security as of the close of business on the Regular Record Date relating to
such Interest Payment Dates.

3. Interest on Overdue Amounts.

     If the Accreted Principal Amount hereof or any portion of such Accreted
Principal Amount is not paid when due (whether upon acceleration pursuant to
Section 4.02 of the Indenture, upon the dates set for payment of the Redemption
Price, Purchase Price or Change in Control Purchase Price, Remarketing Purchase
Price, or upon the Stated Maturity of this Security) or if interest due hereon
(including Contingent Interest and Liquidated Damages, if any) (or any portion
of such interest), is not paid when due, then in each such case the overdue
amount shall, to the extent permitted by law, bear interest at the rate then
borne by this Security or, if any overdue amount exists on or after July 25,
2007, at the Applicable Yield of this Security for the applicable Interest
Period, compounded at the end of such Interest Period, which interest shall
accrue from the date such overdue amount was originally due to the date payment
of such amount, including interest thereon, has been made or duly provided for.
All such interest shall be payable as set forth in the Indenture.

4. Method of Payment.

     Subject to the terms and conditions of the Indenture, the Company will
make payments in respect of Redemption Price, Purchase Price, Remarketing
Purchase Price, Change in Control Purchase Price and at Stated Maturity to
Holders who surrender Securities to a Paying Agent to collect such payments in
respect of the Securities; provided that if any Redemption Date, Purchase Date,
Remarketing Purchase Date or Change in Control Date is an Interest Payment
Date, accrued and unpaid interest (including Contingent Interest and Liquidated
Damages, if any) shall be paid to the Holder of record as of the applicable
Regular Record Date. The Company will pay cash amounts in money of the United
States that at the time of payment is legal tender for payment of public and
private debts. However, the Company may make such cash payments by check
payable in such money; provided that payment by wire transfer of immediately
available funds will be required with respect to principal of and interest
(including Contingent Interest, if any) on all Global Securities and all
Securities of Holders of more than $25,000,000 aggregate Original Principal
Amount of Securities that have requested such method of payment and provided
wire transfer instructions to the Company or the Paying Agent. If any Interest
Payment Date (other than an Interest Payment Date coinciding with the Stated
Maturity or earlier Redemption Date, Purchase Date, Remarketing Purchase Date
or Change in Control Purchase Date) falls on a day that is not a Business Day,
such Interest Payment Date will be postponed to the next succeeding Business
Day and no interest on such payment will accrue for the period from and after
the Interest Payment Date to such next succeeding Business Day. If the

A-6

 

 Stated Maturity, Redemption Date, Purchase Date, Remarketing Purchase Date
or Change in Control Purchase Date of this Security would fall on a day that is
not a Business Day, the required payment of interest, if any, and principal
will be made on the next succeeding Business Day and no interest on such
payment will accrue and no principal will accrete for the period from and after
the Stated Maturity, Redemption Date, Purchase Date, Remarketing Purchase Date
or Change in Control Purchase Date to such next succeeding Business Day.

5. Paying Agent, Conversion Agent, Calculation Agent and Registrar.

     Initially, the Company will act as Calculation Agent and JPMorgan Chase
Bank will act as Paying Agent, Conversion Agent and Registrar. The Company may
appoint and change any Paying Agent, Conversion Agent, Calculation Agent,
Registrar or co-registrar without notice, other than notice to the Trustee.
The Company or any of its Subsidiaries or any of their Affiliates may act as
Paying Agent, Conversion Agent, Calculation Agent, Registrar or co-registrar.

6. Indenture.

     The terms of the Securities include those stated in the Indenture and
those made part of the Indenture by reference to the Trust Indenture Act of
1939, as in effect from time to time (the “TIA”). The Securities are subject
to all such terms, and Holders are referred to the Indenture and the TIA for a
statement of those terms.

     The Securities are general unsecured obligations. The Indenture does not
limit other indebtedness of the Company, secured or unsecured.

7. Redemption at the Option of the Company.

     No sinking fund is provided for the Securities. Prior to July 25, 2007,
the Securities shall not be redeemable at the option of the Company. Beginning
on July 25, 2007 and until Stated Maturity, the Securities are redeemable for
cash as a whole, or from time to time in part, at the option of the Company at
a Redemption Price equal to 100% of the Accreted Principal Amount of the
Securities, plus accrued and unpaid interest (including Contingent Interest and
Liquidated Damages, if any) to, but excluding, the Redemption Date, as provided
in Article 10 of the Indenture.

     If a Remarketing Reset Event has occurred, and the Securities are
successfully remarketed, the Securities will not be redeemable at the option of
the Company until on or after the next Remarketing Reset Event Date.

     If the Company redeems less than all of the outstanding Securities, the
Trustee will select the Securities to be redeemed (i) by lot; (ii) pro rata; or
(iii) by another method the Trustee considers fair and appropriate. If the
Trustee selects a portion of a Holder’s Securities for partial redemption and
the Holder converts a portion of the same Securities, the converted portion
shall be deemed to be from the portion selected for redemption.

A-7

 

8. Notice of Redemption.

     Notice of redemption will be mailed at least 30 days but not more than 60
days before the Redemption Date to each Holder of Securities to be redeemed at
the Holder’s registered address. If money sufficient to pay the Redemption
Price of all Securities (or portions thereof) to be redeemed on the Redemption
Date is deposited with the Paying Agent prior to or on the Redemption Date,
immediately after such Redemption Date interest shall cease to accrue and
principal will cease to accrete on such Securities or portions thereof.
Securities in denominations larger than $1,000 Original Principal Amount may be
redeemed in part but only in integral multiples of $1,000.

9. Purchase by the Company at the Option of the Holder.

     Unless a Remarketing Reset Event occurs and there is a successful
remarketing on such Remarketing Reset Event Date, each Holder has the right to
require the Company to purchase the Securities held by such Holder on July 25,
2007, 2011, 2015, 2019, 2023, 2027 and 2031, or if any such day is not a
Business Day, the next succeeding Business Day (each, a “Purchase Date”), if
this Security is not immediately convertible into Common Stock on such Purchase
Date. If there is a Failed Remarketing or a remarketing does not occur as a
result of a notice of redemption by the Company, Holders may require the
Company to purchase all or a portion of their Securities. If required by any
Holder, the Company shall purchase Securities for cash at a Purchase Price
equal to 100% of the Accreted Principal Amount thereof, plus accrued and unpaid
interest (including Contingent Interest and Liquidated Damages, if any) to, but
excluding, the Purchase Date, upon delivery of a Purchase Notice containing the
information set forth in the Indenture, at any time from the opening of
business on the date that is 21 Business Days prior to such Purchase Date until
the close of business on such Purchase Date and upon delivery of the Securities
to the Paying Agent by the Holder as set forth in the Indenture.

     At the option of the Holder and subject to the terms and conditions of the
Indenture, the Company shall purchase all or a portion of the Securities held
by such Holder as of the date that is not less than 20 nor more than 35
Business Days after the occurrence of a Change in Control of the Company
occurring prior to Stated Maturity for a Change in Control Purchase Price equal
to 100% of the Accreted Principal Amount thereof, plus accrued and unpaid
interest (including Contingent Interest and Liquidated Damages, if any) to, but
excluding, the Change in Control Purchase Date, unless such Change in Control
Purchase Date falls after a Regular Record Date and on or prior to the
corresponding Interest Payment Date, in which case the Company shall pay the
full amount of accrued and unpaid interest (including Contingent Interest and
Liquidated Damages, if any) payable on such Interest Payment Date to the Holder
at the close of business on such Regular Record Date.

     Holders have the right to withdraw any Purchase Notice or Change in
Control Purchase Notice, as the case may be, by delivering to the Paying Agent
a written notice of withdrawal in accordance with the provisions of the
Indenture.

     As provided in the Indenture, if cash sufficient to pay the Purchase
Price, Remarketing Purchase Price or Change in Control Purchase Price, as the
case may be, of all Securities or portions thereof to be purchased as of the
Purchase Date, Remarketing Purchase Date or the

A-8

 

 Change in Control Purchase Date, as the case may be, is deposited with the
Paying Agent on the Business Day following the Purchase Date, Remarketing
Purchase Date or the Change in Control Purchase Date, as the case may be, all
interest (including Contingent Interest, if any) ceases to accrue and principal
ceases to accrete on such Securities (or portions thereof) immediately after
such Purchase Date, Remarketing Purchase Date or Change in Control Purchase
Date, as the case may be, and the Holder thereof shall have no other rights as
such (other than the right to receive the Purchase Price, Remarketing Purchase
Price or Change in Control Purchase Price, as the case may be, upon surrender
of such Security).

10. Conversion.

     Subject to the terms of the Indenture, the Holder of a Security may
convert the Security into shares of Common Stock at the Conversion Rate under
the circumstances set forth in Sections 11.02, 11.03, 11.04, 11.05 and 11.06 of
the Indenture. A Security in respect of which a Holder has delivered a
Purchase Notice or a Change in Control Purchase Notice exercising the option of
such Holder to require the Company to purchase such Security may be converted
only if such notice of exercise is withdrawn in accordance with the terms of
the Indenture. The Conversion Rate for the Securities on any Conversion Date
shall be determined as set forth in the Indenture.

     The Company shall deliver cash in lieu of any fractional share of Common
Stock.

     A Holder’s right to convert the Securities into Common Stock of the
Company is also subject to the Company’s right to elect to pay such Holder the
amount of cash set forth in the next succeeding sentence in lieu of delivering
all or part of such Common Stock; provided, however, that if such payment of
cash is not permitted pursuant to the provisions of the Indenture, the Company
shall deliver Common Stock (and cash in lieu of fractional shares of Common
Stock) in accordance with the Indenture, whether or not the Company has
delivered a notice pursuant to the Indenture to the effect that the Securities
will be paid in cash. If the Company shall elect to make such payment in
shares of Common Stock or a combination of cash and Common Stock, the Company
shall deliver, directly or through its stock registrar, to the Holder through
the Conversion Agent, no later than the third Business Day following the date
on which the Applicable Stock Price is determined, a certificate for, or other
evidence of, the number of whole shares of Common Stock issuable upon the
conversion and, if applicable, cash in lieu of such Common Stock and cash in
lieu of any fractional shares. If, however, the Company shall elect to make
all or a portion of such payment solely in cash, the Company shall deliver to
the Holder surrendering a Security the amount of cash per Security (or a
portion of a Security) equal to the Applicable Stock Price multiplied by the
Conversion Rate in effect with respect to such Conversion Date no later than
the tenth Business Day following such Conversion Date. The payments referred
to in the preceding two sentences shall be subject to the limitations set forth
in Section 11.06(b) of the Indenture.

     If an Event of Default (other than a default in a cash payment upon
conversion of the Securities) shall have occurred and be continuing, the
Company shall deliver Common Stock in accordance with the terms of the
Indenture, whether or not the Company has delivered a notice pursuant to
Section 11.07 of the Indenture to the effect that the Securities would be paid
in cash or a combination of cash and Common Stock.

A-9

 

     A Holder may convert a portion of a Security if the Original Principal
Amount of such portion is $1,000 or an integral multiple of $1,000. No payment
or adjustment shall be made for dividends on the Common Stock except as
provided in the Indenture. On conversion of a Security, except for conversion
during the period from the close of business on any Regular Record Date
immediately preceding any Interest Payment Date to the close of business on the
Business Day immediately preceding such Interest Payment Date, in which case
the Holder on such Regular Record Date shall receive the interest payable on
such Interest Payment Date, that portion of accrued and unpaid interest
(including Contingent Interest, if any) on the converted Security attributable
to the period from the most recent Interest Payment Date (or, if no Interest
Payment Date has occurred, from the Issue Date) through the Conversion Date
shall not be cancelled, extinguished or forfeited, but rather shall be deemed
to be paid in full to the Holder thereof through delivery of the Common Stock
(together with the cash payment, if any, in lieu of fractional shares), or cash
in lieu thereof, in exchange for the Security being converted pursuant to the
provisions hereof.

     Securities or portions thereof surrendered for conversion after the close
of business on any Regular Record Date but prior to the next succeeding
Interest Payment Date, Holders of such Securities at the close of business on
such Regular Record Date will receive the interest payable on such Securities
on the corresponding Interest Payment Date notwithstanding the conversion.
Such Securities, upon surrender for conversion, will be accompanied by payment
to the Company or its order, in New York Clearing House funds or other funds
acceptable to the Company, of an amount equal to the interest payable on such
Interest Payment Date with respect to the Original Principal Amount of
Securities or portions thereof being surrendered for conversion; provided that
no such payment need be made if (1) the Company has specified a Redemption Date
that is after the close of business on a Regular Record Date and prior to the
date the three Business Days following the next Interest Payment Date to which
such Regular Record Date relates, (2) the Company has specified a Change in
Control Purchase Date during such period or (3) only to the extent of overdue
interest or overdue Contingent Interest, any overdue interest or overdue
Contingent Interest exists on the Conversion Date with respect to the
Securities converted.

     No fractional shares will be issued upon conversion; in lieu thereof, an
amount will be paid in cash based upon the Closing Sale Price of the Common
Stock on the Trading Day immediately preceding the Conversion Date.

     The Company agrees, and each Holder and any beneficial owner of a Security
by its purchase thereof agrees, to treat, for U.S. federal income tax purposes,
the fair market value of the Common Stock received upon the conversion of a
Security (together with any cash payment in lieu of fractional shares) or cash,
or a combination of cash and Common Stock as a contingent payment on the
Security for purposes of Treasury Regulations Section 1.1275-4.

     To convert a Security, a Holder must (a) complete and manually sign the
conversion notice set forth below or a facsimile thereof and deliver such
notice to the Conversion Agent, (b) surrender the Security to the Conversion
Agent, (c) furnish appropriate endorsements and transfer documents (including
any certification that may be required under applicable law) if required by the
Conversion Agent, (d) pay any transfer or similar tax, if required and (e) if
required pay funds equal to the interest payable on the next Interest Payment
Date.

A-10

 

     The Conversion Rate will be adjusted as set forth in Article 11 of the
Indenture.

11. Conversion Arrangement on Call for Redemption.

     Any Securities called for redemption, unless surrendered for conversion
before the close of business on the Business Day immediately preceding the
Redemption Date, may be deemed to be purchased from the Holders of such
Securities at an amount not less than the Redemption Price, by one or more
investment bankers or other purchasers who may agree with the Company to
purchase such Securities from the Holders, to convert them into Common Stock of
the Company and to make payment for such Securities to the Trustee in trust for
such Holders.

12. Denominations; Transfer; Exchange.

     The Securities are in fully registered form, without coupons, in
denominations of $1,000 of Original Principal Amount and integral multiples of
$1,000. A Holder may transfer or exchange Securities in accordance with the
Indenture. The Registrar may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and to pay any taxes and fees
required by law or permitted by the Indenture. The Registrar need not transfer
or exchange any Securities selected for redemption (except, in the case of a
Security to be redeemed in part, the portion of the Security not to be
redeemed) or any Securities in respect of which a Purchase Notice or Change in
Control Purchase Notice has been given and not withdrawn (except, in the case
of a Security to be purchased in part, the portion of the Security not to be
purchased) or any Securities for a period of 15 days before the mailing of a
notice of redemption of Securities to be redeemed.

13. Persons Deemed Owners.

     The registered Holder of this Security may be treated as the owner of this
Security for all purposes.

14. Unclaimed Money or Securities.

     The Trustee and the Paying Agent shall return to the Company upon written
request any money or securities held by them for the payment of any amount with
respect to the Securities that remains unclaimed for two years subject to
applicable unclaimed property law. After return to the Company, Holders
entitled to the money or securities must look to the Company for payment as
general creditors unless an applicable abandoned property law designates
another person.

15. Amendment; Waiver.

     Subject to certain exceptions set forth in the Indenture, (i) the
Indenture or the Securities may be amended with the written consent of the
Holders of at least a majority in aggregate Original Principal Amount of the
Securities at the time outstanding and (ii) certain Defaults may be waived with
the written consent of the Holders of a majority in aggregate Original
Principal Amount of the Securities at the time outstanding. The Company and
the Trustee may amend the Indenture under certain circumstances without the
consent of the Holders, as described in the Indenture.

A-11

 

16. Defaults and Remedies.

     If an Event of Default occurs and is continuing, the Trustee, or the
Holders of at least 25% in aggregate Original Principal Amount of the
Securities at the time outstanding, may declare all the Securities to be due
and payable immediately. Certain events of bankruptcy or insolvency are Events
of Default which will result in the Securities becoming due and payable
immediately upon the occurrence of such Events of Default.

     Holders may not enforce the Indenture or the Securities except as provided
in the Indenture. The Trustee may refuse to enforce the Indenture or the
Securities unless it receives reasonable indemnity or security. Subject to
certain limitations, Holders of a majority in aggregate Original Principal
Amount of the Securities at the time outstanding may direct the Trustee in its
exercise of any trust or power. The Trustee may withhold from Holders notice
of any continuing Default (except a Default in payment of amounts specified in
clause (a) or (b) of Section 4.01 of the Indenture) if it determines that
withholding notice is in their interests.

17. Yield Reset and Remarketing.

     If a Remarketing Reset Event occurs, then following the applicable
Remarketing Reset Event Date, the yield and the Conversion Rate on the
Securities will be reset on such Remarketing Reset Event Date and the right of
the Holder to require the Company to purchase Securities on a Purchase Date or
upon a Change in Control shall cease.

     On each Remarketing Reset Event Date, the Conversion Rate will be reset to
equal the Accreted Principal Amount of the Securities on such Remarketing Reset
Event Date divided by 175% of the Applicable Stock Price; provided that in no
event will the Conversion Rate exceed the Maximum Conversion Rate. The yield
on the Securities shall be reset to the Reset Yield and the Securities shall be
remarketed at the option of the Holder, as provided in Article 15 of the
Indenture.

     If a Failed Remarketing occurs on any Remarketing Reset Event Date or the
Company gives notice of redemption prior to the Remarketing Reset Event Date,
each Holder of Securities will have the right to require the Company to
purchase all or a portion of its Securities on such Remarketing Reset Event
Date for cash. The Company shall purchase such Securities at a purchase price
equal to 100% of the Accreted Principal Amount thereof as of the applicable
Remarketing Reset Event Date, plus accrued and unpaid interest (including
Contingent Interest and Liquidated Damages, if any) to, but excluding such
Remarketing Reset Event Date as provided in the Indenture.

     If Holders elect pursuant to the Indenture to have less than $50 million
aggregate Original Principal Amount of Securities remarketed on any Remarketing
Reset Event Date, there will not be a remarketing and such Holders, but only
such Holders, will have the right to require the Company to purchase all or a
portion of its Securities on such Remarketing Reset Event Date for cash. The
Company shall purchase such Securities at a purchase price equal to 100% of the
Accreted Principal Amount thereof as of the applicable Remarketing Reset Event
Date, plus accrued and unpaid interest (including Contingent Interest and
Liquidated Damages, if any) to, but excluding such Remarketing Reset Event Date
as provided in the Indenture.

A-12

 

18. Trustee Dealings with the Company.

     Subject to certain limitations imposed by the TIA, the Trustee under the
Indenture, in its individual or any other capacity, may become the owner or
pledgee of Securities and may otherwise deal with and collect obligations owed
to it by the Company or its Affiliates and may otherwise deal with the Company
or its Affiliates with the same rights it would have if it were not Trustee.

19. No Recourse Against Others.

     A director, officer, employee or stockholder, as such, of the Company
shall not have any liability for any obligations of the Company under the
Securities or the Indenture or for any claim based on, in respect of or by
reason of such obligations or their creation. By accepting a Security, each
Holder waives and releases all such liability. The waiver and release are part
of the consideration for the issue of the Securities.

20. Authentication.

     This Security shall not be valid until an authorized signatory of the
Trustee or any Authenticating Agent manually signs the Trustee’s Certificate of
Authentication on the other side of this Security.

21. Abbreviations.

     Customary abbreviations may be used in the name of a Holder or an
assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entireties), JT TEN (=joint tenants with right of survivorship and not as
tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors
Act).

22. GOVERNING LAW.

     THE LAWS OF THE STATE OF NEW YORK SHALL GOVERN THE INDENTURE AND THIS
SECURITY, WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS.

     

     The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture.

	 	SLM Corporation

11600 Sallie Mae Drive

Reston, VA 20193

     Attention: Michael Sheehan

A-13

 

     Schedule I

[Include Schedule I only for a Global Security]

SLM CORPORATION

Floating Rate Convertible Senior Debenture Due 2035

No. __________

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	Authorized
	 	 	 	 	 	 	Notation Explaining	 	Signature of
	 	 	 	 	 	 	Original Principal	 	Trustee or
	Date	 	Original Principal Amount	 	Amount Recorded	 	Custodian
	
	 	
	 	
	 	

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

A-14

 

ASSIGNMENT FORM

To assign this Security, fill in the form below:

     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
Security, and hereby irrevocably constitutes and appoints
_______________ attorney to transfer said Security on
the books of the Company, with full power of substitution in the premises.

     In connection with any transfer of the Security 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 Security is being
transferred:

	 	 	 
	o	 	
To SLM Corporation (the “Company”) or a subsidiary or affiliate
thereof; or
	 	 	 
	o	 	
To a “qualified institutional buyer” in compliance with Rule 144A
under the Securities Act of 1933, as amended; or
	 	 	 
	o	 	
Pursuant to a Registration Statement which has been declared
effective under the Securities Act of 1933, as amended, and which
continues to be effective at the time of transfer; or
	 	 	 
	o	 	
Pursuant to and in compliance with another available exemption from
the registration requirements of the Securities Act of 1933, as
amended.

     Unless one of the boxes is checked, the Trustee or Registrar will refuse
to register any of the Securities evidenced by this certificate in the name of
any person other than the registered holder thereof.

	 	 	 
	Dated:______________________________	 	 
	 	 	 
	 	 	 
	 	 	

	 	 	 
	 	 	

Signature(s)
	 	 	 
	 	 	
Signature(s) must be guaranteed by an
“eligible guarantor institution” meeting
the requirements of the Security registrar,
which requirements include membership or
participation in the Security Transfer
Agent Medallion Program (“STAMP”) or such
other “signature guarantee program” as may
be determined by the Security registrar in
addition

B-1

 

	 	 	 
	 	 	
to, or in substitution for, STAMP, al in
accordance with the Securities Exchange Act
of 1934, as amended.
	 	 	 
	 	 	

Signature Guarantee

B-2

 

CONVERSION NOTICE

     To convert this Security into Common Stock of the Company, check the box:

     To convert only part of this Security, state the Original Principal Amount to
be converted (which must be $1,000 or an integral multiple of $1,000): $ ____________________________________

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

(Insert other person’s soc. sec. or tax ID no.)

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

Your

Signature: _________________________________________________

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

C-1

 

PURCHASE NOTICE

TO:     SLM CORPORATION

     The undersigned registered owner of this Security hereby irrevocably
acknowledges receipt of a notice from SLM Corporation (the “Company”) regarding
the right of holders to elect to require the Company to purchase the Securities
and requests and instructs the Company to purchase the entire Original
Principal Amount of this Security, or portion thereof (which is $1,000 Original
Principal Amount or an integral multiple thereof) designated below, in
accordance with the terms of the Indenture at the price of 100% of the Accreted
Principal Amount or proportional portion thereof, together with accrued
interest (including Contingent Interest and Liquidated Damages, if any) to, but
excluding, the Purchase Date, to the registered holder hereof. Capitalized
terms used herein but not defined shall have the meanings ascribed to such
terms in the Indenture. The Securities shall be purchased by the Company as of
the applicable Purchase Date or Remarketing Purchase Date pursuant to the terms
and conditions specified in the Indenture. This election is made pursuant to:

	 	 	 
	[  ]	 	
Article 12, Purchase at Option of Holders at July 25, 2007, 2011, 2015, 2019, 2023, 2027 and 2031,
	 	 	 
	or	 	 
	 	 	 
	[  ]	 	
Section 15.04(a), Right to Require Repurchase Upon a Failed Remarketing.
	 	 	 
	 	 	
Dated:
	 	 	 
	 	 	
Signature(s):

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

     Security Certificate Number (if applicable):

     Original Principal Amount to be purchased (if less than all):

     Social Security or Other Taxpayer Identification Number:

D-1

 

OPTION OF HOLDER TO ELECT PURCHASE ON CHANGE IN CONTROL

TO:     SLM CORPORATION

     The undersigned registered owner of this Security hereby irrevocably
acknowledges receipt of a notice from SLM Corporation (the “Company”) regarding
the right of holders to elect to require the Company to purchase the Securities
upon a Change in Control and requests and instructs the Company pursuant to
Section 13.01 to purchase the entire Original Principal Amount of this
Security, or portion thereof (which is $1,000 Original Principal Amount or an
integral multiple thereof) designated below, in accordance with the terms of
the Indenture at the price of 100% of the Accreted Principal Amount or
proportional portion thereof, together with accrued interest (including
Contingent Interest and Liquidated Damages, if any) to, but excluding, the
Change in Control Purchase Date, to the registered holder hereof. Capitalized
terms used herein but not defined shall have the meanings ascribed to such
terms in the Indenture. The Securities shall be repurchased by the Company as
of the Change in Control Purchase Date pursuant to the terms and conditions
specified in the Indenture.

     Dated:

     Signature(s):

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

     Security Certificate Number (if applicable):

     Original Principal Amount to be purchased (if less than all):

     Social Security or Other Taxpayer Identification Number:

E-1

 

ELECTION TO REMARKET SECURITIES

TO:     JPMORGAN CHASE BANK

The undersigned registered owner of this Security hereby elects to have
remarketed the entire Original Principal Amount of this Security, or portion
thereof (which is $1,000 Original Principal Amount or an integral multiple
thereof) designated below, on the next Remarketing Reset Event Date if a
Remarketing Reset Event occurs in accordance with the terms of the Indenture
and the Remarketing Agreement. Capitalized terms used herein but not defined
shall have the meanings ascribed to such terms in the Indenture. The
undersigned acknowledged that in the event of a Failed Remarketing, a notice of
Redemption by the Company or the failure of Holders of at least $50 million
aggregate Original Principal Amount of Securities to elect remarketing, this
election also serves as an election to require the Company to purchase the
Securities in accordance with the terms of the Indenture at the price of 100%
of the Accreted Principal Amount or proportional portion thereof, together with
accrued interest (including Contingent Interest and Liquidated Damages, if any)
to, but excluding, the Remarketing Purchase 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 Security in every particular without
alteration or enlargement or any change whatever.

     Security Certificate Number (if applicable):

     Original Principal Amount to be purchased (if less than all):

     Social Security or Other Taxpayer Identification Number:

F-1exv10w61

 

EXHIBIT 10.61

AGREEMENT BETWEEN USEC INC. AND JAMES R. MELLOR

          THIS AGREEMENT is made as of July 22, 2003, by and between USEC Inc., a
corporation organized and existing under the laws of the state of Delaware
(hereinafter called “USEC”), and James R. Mellor, an individual (hereinafter
called the “Consultant”).

          IN CONSIDERATION of the mutual promises set forth herein, the parties
hereby agree as follows:

1.       The term of this Agreement shall be from July 28, 2003 through July 27,
2004, unless sooner terminated pursuant to the terms hereof.

2.       While this Agreement is in effect, the Consultant shall perform certain work
and services relating to USEC’s policies, procedures, commercial practices,
external affairs, strategic planning under the terms and conditions hereinafter
set forth.

3.       While this Agreement is in effect, USEC shall compensate the Consultant at a
fixed price of Three Hundred Fifty Thousand Dollars ($350,000), payable in 12
equal monthly installments to be paid thirty (30) days after the last of each
month falling, in whole or in part, during the term of this Agreement,
excluding July 2003. USEC shall reimburse the Consultant for reasonable and
necessary travel and living expenses incurred by the Consultant in the
performance of the services described herein. Compensation for expenses shall
be made once monthly upon the Consultant’s furnishing to USEC a written
statement specifying such expenses. Payment terms shall be net 30 days.

4.       In the performance of the work and services hereunder, the Consultant shall
act solely as an independent contractor and not as an employee of USEC. All
taxes applicable to any amounts paid by USEC to the Consultant under this
Agreement shall be the Consultant’s liability and USEC shall not withhold nor
pay any amounts for federal, state or municipal income tax, special security,
unemployment or worker’s compensation. In accordance with current law, USEC
shall annually file with the Internal Revenue Service a Form 1099-MISC, U.S.
Information Return for Recipients of Miscellaneous Income, reflecting the gross
annual payments by USEC to the Consultant pursuant to this Agreement, net of
any reimbursed expenses incurred by the Consultant on behalf of USEC. The
Consultant hereby acknowledges personal income tax liability for the
self-employment tax imposed by Section 1401 of the Internal Revenue Code, and
the payment, when applicable, of estimated quarterly taxes on Internal Revenue
Service Form 1040-ES, declaration of estimated tax by individuals.

5.       All reports, findings, recommendations, data, memoranda or documents,
arising of out and relating to the services performed under this Agreement are
(and shall continue to be after the expiration of this Agreement) the property
of USEC or its assigns, and USEC shall have the exclusive rights to such
materials. The use of these materials in any manner by USEC or its assigns
shall not result in any additional claim for compensation by the Consultant.
The Consultant shall hold confidential all information developed by or
communicated to the Consultant in the performance of the services, whether
described in this Agreement, in any scheduled executed pursuant hereto or
otherwise, other than information that is already in the public domain or that
becomes publicly available other than through an unauthorized disclosure by the
Consultant. Nothing herein shall preclude disclosure of confidential
information to officers, employees or directors of USEC and its subsidiaries
and affiliates, or to attorneys, advisers and consultants of USEC who are under
an obligation to USEC to keep such information confidential.

1

 

6.       By entering into this Agreement with USEC, the Consultant represents that he
presently has no conflicting interests, agreements or obligations with any
other party. The Consultant shall promptly notify USEC in writing if a change
in circumstances creates, or appears likely to create, a conflict with the
Consultant’s obligations hereunder or an appearance that such a conflict
exists.

7.       The Consultant hereby releases USEC from any and all liability for damage to
property or loss thereof, personal injury or death during the term of this
Agreement (and any extensions thereof) or thereafter, sustained by the
Consultant as a result of performing the services under this Agreement or
arising out of the performance of such services; provided, however, that the
foregoing release shall not apply to the extent such damage, loss, injury or
death is caused by or results from the negligence of USEC, its agents or
employees. Nothing herein shall deemed to limit the obligation of USEC, or any
USEC subsidiary or affiliate, to indemnify the Consultant under USEC’s articles
of incorporation or by-laws or under any indemnification agreement entered into
with the Consultant concerning the Consultant’s services as a director of USEC
or any USEC subsidiary or affiliate.

8.       If the services to be performed by the Consultant include access to
classified material or areas, the Consultant shall comply with all applicable
security laws, regulations, orders and requirements. The Consultant shall
submit a confidential report to USEC immediately whenever for any cause he has
reason to believe that there is either (a) an active danger of espionage or
sabotage affecting any work under such government contracts, or (b) a violation
or threatened violation of any applicable security law, regulation, order or
requirement concerning the classified material or areas.

9.       Either party may terminate this Agreement, for any reason or no reason, at
any time by a written notice to the other party. Such termination shall take
effect immediately upon receipt of a termination notice by the other party,
unless a different termination date is stated in the notice. Upon termination
of the Agreement, all work and services being performed under this Agreement
shall cease. USEC shall have no liability or obligation for any performance by
the Consultant after a termination takes effect.

10.     The Consultant may not assign this Agreement, nor may the Consultant
delegate or subcontract the performance or obligations imposed hereunder
without the consent of USEC.

11.     The Consultant has no authority whatever, express or implied, by virtue of
this Agreement to commit USEC in any way to perform in any manner or to pay
money for services or material.

12.     This Agreement is to be governed by the laws of the State of Delaware.

13.     The whole and entire agreement of the parties is set forth in this
Agreement and the parties are not bound by any agreements, understandings or
conditions otherwise than as expressly set forth herein.

14.     This Agreement may not be changed or modified in any manner except by a
writing mutually signed by the parties or their respective successors and
permitted assigns.

15.     Any notice, request, demand, claim or other communication related to this
Agreement shall be in writing and delivered by hand or transmitted by
telecopier, registered mail (postage prepaid), or overnight courier to the
other party at the following number and addresses:

2

 

	 	 	 
	If to USEC:	 	
President and Chief Executive Officer
	 	 	
USEC Inc.
	 	 	
6903 Rockledge Drive
	 	 	
Bethesda, MD 20817-1818
	 	 	 
	If to Consultant:	 	
James R. Mellor
	 	 	
At his current address in USEC’s records

16.     Nothing herein shall be deemed to limit or modify any duty or obligation
that the Consultant may have as a director of USEC or any of its affiliates or
subsidiaries.

          IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first written above.

	 	 	 	 	 
	 	 	USEC Inc.
	 	 	 	 	 
	 	 	
By:
	 	/s/ William H. Timbers
	 	 	 	 	

	 	 	 	 	William H. Timbers
	 	 	 	 	President and Chief Executive Officer
	 	 	 	 	 
	 	 	CONSULTANT
	 	 	 	 	 
	 	 	 	 	/s/ James R. Mellor
	 	 	 	 	

	 	 	 	 	James R. Mellor

3

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